For the purposes of this part:
(a) ED means all organizational units of the Department of Education.
(b) Embossing Seal means a display of the form and content of the Official Seal made on a die so that the Seal can be embossed on paper or other media.
(c) Official Seal means the original(s) of the Seal showing the exact form, content, and colors.
(d) Replica means a copy of the Official Seal displaying the identical form, content, and colors.
(e) Reproduction means a copy of the Official Seal displaying the form and content, reproduced in only one color.
(f) Secretary means the Secretary of Education.
The Official Seal of the Department of Education is described as follows: Standing upon a mound, an oak tree with black trunk and limbs and green foliage in front of a gold rising sun, issuing gold rays on a light blue disc, enclosed by a dark blue border with gold edges bearing the inscription “DEPARTMENT OF EDUCATION” above a star at either side of the words “UNITED STATES OF AMERICA” in smaller letters in the base; letters and stars in white. The Offical Seal of the Department is modified when used in reproductions in black and white and when embossed. As so modified, it appears below.
The Secretary and the Secretary's designees are authorized to affix the Official Seal, replicas, reproductions, and embossing seals to appropriate documents, certifications, and other material for all purposes as authorized by this section.
(a) Use by any person or organization outside of the Department may be made only with the Department's prior written approval.
(b) Requests by any person or organization outside of the Department for permission to use the Seal must be made in writing to Director of Public Affairs, U.S. Department of Education, 400 Maryland Avenue, SW., Washington, DC 20202, and must specify, in detail, the exact use to be made. Any permission granted applies only to the specific use for which it was granted and is not to be construed as permission for any other use.
(c) In regard to internal use, replicas may be used only:
(1) For display in or adjacent to ED facilities, in Departmental auditoriums, presentation rooms, hearing rooms, lobbies, and public document rooms;
(2) In offices of senior officials;
(3) For official awards, certificates, medals, and plaques;
(4) For electronic media, motion picture film, video tape and other audiovisual media prepared by or for ED and attributed thereto;
(5) On official publications which represent the achievements or mission of ED;
(6) In non-ED facilities in connection with events and displays sponsored by ED, and public appearances of the Secretary or other senior ED officials; and
(7) For other internal purposes as determined by the Director for Management;
(d) In regard to internal use, reproductions may be used only—
(1) On ED letterhead stationery;
(2) On official ED identification cards, security, and other approved credentials;
(3) On business cards for ED employees;
(4) On official ED signs;
(5) On official publications or graphics issued by and attributed to ED, or joint statements of ED with one or more other Federal agencies, State or local governments, or foreign governments;
(6) On official awards, certificates, and medals;
(7) On electronic media, motion picture film, video tape, and other audiovisual media prepared by or for ED and attributed thereto; and
(8) For other internal purposes as determined by the Director for Management.
(e) Embossing seals may be used only internally—
(1) On ED legal documents, including interagency or intergovernmental agreements, agreements with State or local governments, foreign patent applications, certification(s) of true copies, and similar documents;
(2) On official awards and certificates; and
(3) For other purposes as determined by the General Counsel or the Director for Management.
(f) Falsely making, forging, counterfeiting, mutilating, or altering the Official Seal, replicas, reproductions, or embossing seals, or knowingly using or possessing with fraudulent intent and altered official seal, replica, reproduction or embossing seal is punishable under 18 U.S.C. 506.
(g) Any person using the Official Seal, replicas, reproductions, or embossing seals in a manner inconsistent with the provisions of this part is subject to the provisions of 18 U.S.C. 1017, which states penalties for the wrongful use of an Official Seal, and to other provisions of law as applicable.
Summons, complaints, subpoenas, and other process which are required to be served on or delivered to the Secretary of Education shall be delivered to the General Counsel or a Deputy General Counsel, by mail at 400 Maryland Avenue SW., Washington, DC 20202 or by personal service at that address. The persons above designated are authorized to accept service of such process.
This part contains the regulations that the United States Department of Education follows in processing requests for records under the Freedom of Information Act, as amended, 5 U.S.C. 552. These regulations must be read in conjunction with the FOIA, including its exemptions to disclosure, and, when appropriate, in conjunction with the Privacy Act of 1974, as amended, 5 U.S.C. 552a, and its implementing regulations in 34 CFR part 5b.
As used in this part:
(a) Act or FOIA means the Freedom of Information Act, as amended, 5 U.S.C. 552.
(b) Department means the United States Department of Education.
(c) Component means each separate bureau, office, board, division, commission, service, administration, or other organizational entity of the Department.
(d) FOIA request means a written request for agency records that reasonably describes the agency records sought, made by any person, including a member of the public (U.S. or foreign citizen/entity), partnership, corporation, association, and foreign or domestic governments (excluding Federal agencies).
(e)(1) Agency records are documentary materials regardless of physical form or characteristics that—
(i) Are either created or obtained by the Department; and
(ii) Are under the Department's control at the time it receives a FOIA request.
(2) Agency records include—
(i) Records created, stored, and retrievable in electronic format;
(ii) Records maintained for the Department by a private entity under a records management contract with the Federal Government; and
(iii) Documentary materials preserved by the Department as evidence of the organization, functions, policies, decisions, procedures, operations or other activities of the Department or because of the informational value of data contained therein.
(3) Agency records do not include tangible, evidentiary objects or equipment; library or museum materials made or acquired and preserved solely for reference or exhibition purposes; extra copies of documents preserved only for convenience of reference; stocks of publications; and personal records created for the convenience of an individual and not used to conduct Department business or incorporated into the Department's record keeping system or files.
(a) Electronic inspection. (1) Pursuant to 5 U.S.C. 552(a)(2), the Department makes available for public inspection in an electronic format the following records created on or after November 1, 1996:
(i) Final opinions and orders in adjudications;
(ii) Statements of policy and interpretations adopted by the Department and not published in the
(iii) Administrative staff manuals and instructions affecting the public; and
(iv) Copies of all agency records regardless of form or format released to the public pursuant to a FOIA request that the Department determines are likely to be the subject of future FOIA requests or have been requested three or more times.
(2) The Department currently makes the agency records described in paragraph (a)(1) of this section available for public inspection in an electronic format through its electronic reading room located on the Department's FOIA website at http://www2.ed.gov/policy/gen/leg/foia/readingroom.html.
(b) Public reading room. The Department may maintain a public reading room containing the agency records described in paragraph (a)(1) of this section. The Department's public reading room is currently located at the National Library of Education, 400 Maryland Avenue SW, Plaza Level (Level B), Washington, DC 20202-0008. To visit the public reading room, members of the public can contact the Department's FOIA Service Center via email at EDFOIAManager@ed.gov.
(c) Hard copies. For any agency records that are not made available for public inspection in the
(a) General. The Department discloses business information it obtains from a submitter under the Act in accordance with this section.
(b) Definitions. For purposes of this section:
(1) Business information means commercial or financial information obtained by the Department from a submitter that may be protected from disclosure under 5 U.S.C. 552(b)(4) (Exemption 4 of the Act).
(2) Submitter means any person or entity (including corporations; State, local, and tribal governments; and foreign governments) from whom the Department obtains business information.
(c) Designation of business information.
(1) A submitter must use good faith efforts to designate, by appropriate markings, either at the time of submission or at a reasonable time thereafter, any portion of its submission that it considers to be business information protected from disclosure under Exemption 4 of the Act.
(2) A submitter's designations are not binding on the Department and will expire 10 years after the date of the submission unless the submitter requests, and provides justification for, a longer designation period.
(3) A blanket designation on each page of a submission that all information contained on the page is protected from disclosure under Exemption 4 presumptively will not be considered a good faith effort.
(d) Notice to submitters. Except as provided in paragraph (g) of this section, the Department promptly notifies a submitter whenever a FOIA request or administrative appeal is made under the Act seeking disclosure of the information the submitter has designated in good faith as business information protected from disclosure under paragraph (c) of this section, or the Department otherwise has reason to believe that it may be required to disclose information sought to be designated by the submitter as business information protected from disclosure under Exemption 4 of the Act. This notice includes either a description of the business information requested or copies of the requested agency records or portions of agency records containing the requested business information as well as a time period, consistent with § 5.21(c), within which the submitter can object to the disclosure pursuant to paragraph (e) of this section.
(e) Opportunity to object to disclosure.
(1) If a submitter objects to disclosure, it must submit to the Department a detailed written statement specifying all grounds under Exemption 4 of the Act for denying access to the information, or a portion of the information sought.
(2) A submitter's failure to object to the disclosure by the deadline established by the Department in the notice provided under paragraph (d) of this section constitutes a waiver of the submitter's right to object to disclosure under paragraph (e) of this section.
(3) A submitter's response to a notice from the Department under paragraph (d) of this section may itself be subject to disclosure under the Act.
(f) Notice of intent to disclose. The Department considers a submitter's objections and submissions made in support thereof in deciding whether to disclose business information sought to be protected by the submitter. Whenever the Department decides to disclose information over a submitter's objection, the Department gives the submitter written notice, which includes:
(1) A statement of the reasons why the submitter's objections to disclosure were not sustained.
(2) A description of the information to be disclosed.
(3) A specified disclosure date that is a reasonable time subsequent to the notice.
(g) Exceptions to notice requirements. The notice requirements of paragraph (d) of this section do not apply if—
(1) The Department does not disclose the business information of the submitter;
(2) The Department has previously lawfully published the information;
(3) The information has been made available to the public by the requester or by third parties;
(4) Disclosure of the information is required by statute (other than the Act) or regulation issued in accordance with the requirements of Executive Order 12600 (52 FR 23781, 3 CFR, 1987 Comp., p. 235); or
(5) The designation made by the submitter under paragraph (c) of this section appears obviously frivolous, except that, in such case, the Department must provide the submitter with written notice of any final administrative disclosure determination in accordance with paragraph (f) of this section.
(h) Notice of FOIA lawsuit. Whenever a requester files a lawsuit seeking to compel the disclosure of a submitter's business information, the Department promptly notifies the submitter.
(i) Corresponding notice to requester. The Department notifies the requester whenever it notifies a submitter of its opportunity to object to disclosure, of the Department's intent to disclose requested information designated as business information by the submitter, or of the filing of a lawsuit.
(j) Notice of reverse FOIA lawsuit. Whenever a submitter files a lawsuit seeking to prevent the disclosure of the submitter's information, the Department promptly notifies the requester, and advises the requester that its request will be held in abeyance until the lawsuit initiated by the submitter is resolved.
In response to a FOIA request, the Department produces only those agency records that are not already publicly available and that are in existence at the time it receives a request. The Department does not create new agency records in response to a FOIA request by, for example, extrapolating information from existing agency records, reformatting available information, preparing new electronic programs or databases, or creating data through calculations of ratios, proportions, percentages, trends, frequency distributions, correlations, or comparisons.
The Department does not destroy agency records that are the subject of a pending FOIA request, appeal, or lawsuit.
(a) Making a FOIA request. Any FOIA request for an agency record must be in writing, must include a valid electronic mail or physical address, and must be transmitted to the Department as indicated on the Department's website. See www.ed.gov/policy/gen/leg/foia/request_foia.html.
(b) Description of agency records sought. A FOIA request must reasonably describe the agency record sought, to enable Department personnel to locate the agency record or records with a reasonable amount of effort. Whenever possible, a FOIA request should describe the type of agency record requested, the subject matter of the agency record, the date, if known, or general time period when it was created, and the person or office that created it. Requesters who have detailed information that would assist in identifying and locating the agency records sought are urged to provide this information to the Department to expedite the handling of a FOIA request.
(c) FOIA request deemed insufficient. If the Department determines that a FOIA request does not reasonably describe the agency record or records sought, the FOIA request will be deemed insufficient under the Act. In that case, the Department informs the requester of the reason the FOIA request is insufficient and, at the Department's option, either administratively closes the FOIA request as insufficient without determining whether to grant the FOIA request or provides the requester an opportunity to modify the FOIA request to meet the requirements of this section.
(d) Verification of identity. In compliance with the Privacy Act of 1974, as amended, 5 U.S.C. 552a, FOIA requests for agency records pertaining to the requester, a minor, or an individual who is legally incompetent must include verification of the requester's identity pursuant to 34 CFR 5b.5.
(a) Acknowledgements of FOIA requests. The Department promptly notifies the requester when it receives a FOIA request.
(b) Consultation and referrals. When the Department receives a FOIA request for a record or records created by or otherwise received from another agency of the Federal Government, it either responds to the FOIA request after consultation with the other agency, or refers the FOIA request to the other agency for processing. When the Department refers a FOIA request to another agency for processing, the Department will so notify the requester.
(c) Decisions on FOIA requests. The Department determines whether to comply with a FOIA request within 20 working days after the appropriate component of the Department first receives the request. This time period commences on the date that the request is received by the appropriate component of the Department, but commences no later than 10 calendar days after the request is received by the component of the Department designated pursuant to § 5.20(a) to receive FOIA requests for agency records. The Department's failure to comply with these time limits constitutes exhaustion of the requester's administrative remedies for the purposes of judicial action to compel disclosure.
(d) Requests for additional information. The Department may make one request for additional information from the requester and toll the 20-day period while awaiting receipt of the additional information.
(e) Extension of time period for processing a FOIA request. The Department may extend the time period for processing a FOIA request only in unusual circumstances, as described in paragraphs (e)(1) through (3) of this section, in which case the Department notifies the requester of the extension in writing. For extensions of more than 10 additional working days, the Department must also notify the requester, in writing, of the right to seek dispute resolution services from the Office of Government Information Services. A notice of extension affords the requester the opportunity either to modify its FOIA request so that it may be processed within the 20-day time limit, or to arrange with the Department an alternative time period within which the FOIA request will be processed. For the purposes of this section, unusual circumstances include:
(1) The need to search for and collect the requested agency records from field facilities or other establishments that are separate from the office processing the request.
(2) The need to search for, collect, and review and process voluminous agency records responsive to the FOIA request.
(3) The need to consult with another agency or two or more agency components having a substantial interest in the determination on the FOIA request.
(f) FOIA Public Liaison and FOIA Requester Service Center. The Department's FOIA Public Liaison assists in the resolution of disputes between the requester and the Department. The Department provides information about the status of a FOIA request to the requester through the Department's FOIA Requester Service Center. Contact information for the Department's FOIA Public Liaison and FOIA Requester Service Center may be found at http://www.ed.gov/policy/gen/leg/foia/contacts.html.
(g) Notification of determination. Once the Department makes a determination to grant a FOIA request in whole or in part, it notifies the requester in writing of its decision and of the right to seek assistance from the Department's FOIA Public Liaison.
(h) Denials of FOIA requests.
(1) Only Departmental officers or employees delegated the authority to deny a FOIA request may deny a FOIA request on behalf of the Department.
(2)(i) The Department notifies the requester in writing of any decision to deny a FOIA request in whole or in part. Denials under this paragraph can include the following: A determination to deny access in whole or in part to any agency record responsive to a request; a determination that a requested agency record does not exist or cannot be located in the Department's records; a determination that a requested agency record is not readily retrievable or reproducible in the form or format sought by the requester; a determination that what has been requested is not a record subject to the FOIA; a determination on any disputed fee matter, including a denial of a request for a fee waiver; and a denial of a request for expedited processing.
(ii) All determinations denying a FOIA request in whole or in part are signed by an officer or employee designated under paragraph (h)(1) of this section, and include:
(A) The name and title or position of the denying officer or employee.
(B) A brief statement of the reason or reasons for the denial, including any exemptions applicable under the Act.
(C) An estimate of the volume of agency records or information denied, by number of pages or other reasonable estimate (except where the volume of agency records or information denied is apparent from deletions made on agency records disclosed in part, or providing an estimate would harm an interest protected by an applicable exemption under the Act).
(D) Where an agency record has been disclosed only in part, an indication of the exemption under the Act justifying the redaction in the agency record (unless providing this information would harm an interest protected by an applicable exemption under the Act).
(E) A statement notifying the requester of the right to seek assistance from the Department's FOIA Public Liaison.
(F) A statement notifying the requester of the right to seek dispute resolution services from the Department's FOIA Public Liaison or the Office of Government Information Services.
(G) A statement of appeal rights and a list of requirements for filing an appeal under § 5.40.
(i) Timing of responses to FOIA requests.
(1) Multitrack processing.
The Department may use two or more processing tracks to distinguish between simple and more complex FOIA requests based on one or more of the following: the time and work necessary to process the FOIA request, the volume of agency records responsive to the FOIA request, and whether the FOIA request qualifies for expedited processing as described in paragraph (i)(2) of this section.
(2) Expedited processing.
(i) The Department gives expedited treatment to FOIA requests and appeals whenever the Department determines that a FOIA request involves one or more of the following:
(A) A circumstance in which the lack of expedited treatment could reasonably be expected to pose an imminent threat to the life or physical safety of an individual.
(B) The urgent need of a person primarily engaged in disseminating information to inform the public about an actual or alleged Federal Government activity; or
(C) Other circumstances that the Department determines demonstrate a compelling need for expedited processing.
(ii) A requester may ask for expedited processing at the time of the initial FOIA request or at any time thereafter.
(iii) A request for expedited processing must contain a detailed explanation of the basis for the request, and must be accompanied by a statement certifying the truth of the circumstances alleged or other evidence of the requester's compelling need acceptable to the Department.
(iv) The Department makes a determination whether to grant or deny a request for expedited processing within 10 calendar days of its receipt by the component of the Department designated pursuant to § 5.20(a) to receive FOIA requests for agency records, and processes FOIA requests accepted for expedited processing as soon as practicable and on a priority basis.
The Department assesses fees for processing FOIA requests in accordance with § 5.32(a), except where fees are limited under § 5.32(b) or where a waiver or reduction of fees is granted under § 5.33. Requesters must pay fees by check or money order made payable to the U.S. Department of Education, and must include the FOIA request number on the check or money order. The Department retains full discretion to limit or adjust fees.
(a) Commercial use request means a request from or on behalf of a FOIA requester seeking information for a use or purpose that furthers the requester's commercial, trade, or profit interests, which can include furthering those interests through litigation. For the purpose of assessing fees under the Act, the Department determines, whenever reasonably possible, the use to which a requester will put the requested agency records.
(b) Direct costs mean those expenses that an agency actually incurs in searching for and duplicating (and, in the case of commercial use FOIA requests, reviewing) agency records to respond to a FOIA request. Direct costs include, for example, the pro rata salary of the employee(s) performing the work (i.e., basic rate of pay plus 16 percent) and the cost of operating duplication machinery. The Department's other overhead expenses are not included in direct costs.
(c) Duplication means making a copy of the agency record, or of the information in it, as necessary to respond to a FOIA request. Copies can be made in several forms and formats, including paper and electronic records. The Department honors a requester's specified preference as to form or format of disclosure, provided that the agency record is readily reproducible with reasonable effort in the requested form or format.
(d) Educational institution means a preschool, a public or private elementary or secondary school, an institution of undergraduate higher education, an institution of graduate higher education, an institution of professional education, or an institution of vocational education, that operates a program of scholarly research. To qualify as an educational institution under this part, a requester must demonstrate that an educational institution authorized the request and that the agency records are not sought for individual or commercial use, but are instead sought to further scholarly research. A request for agency records for the purpose of affecting a requester's application for, or prospect of obtaining, new or additional grants, contracts, or similar funding is presumptively a commercial use request.
(e) Noncommercial scientific institution means an institution that is operated solely for the purpose of conducting scientific research, the results of which are not intended to promote any particular product or industry. A noncommercial scientific institution does not operate for a “commercial use”, as the term is defined in paragraph (a) of this section. To qualify as a noncommercial scientific institution under this part, a requester must demonstrate that a noncommercial scientific institution authorized the request and that the agency records are sought to further scientific research and not for a commercial use. A request for agency records for the purpose of affecting a requester's application for, or prospect of obtaining, new or additional grants, contracts, or similar funding is presumptively a commercial use request.
(f) Representative of the news media, or news media requester, means any person or entity that gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience. For the purposes of this section, the term “news” means information about current events or information that would be of current interest to the public. Examples of news media entities include television or radio stations broadcasting to the public at large and publishers of periodicals that qualify as disseminators of news and make their products available for purchase by, subscription by, or free distribution to the general public. To be regarded as a representative of the news media, a “freelance” journalist must demonstrate a solid basis for expecting publication, such as a publication contract or a past publication record. For inclusion in this category, a requester must not be seeking the requested agency records for a commercial use.
(g) Review means the examination of an agency record located in response to a FOIA request to determine whether any portion of the record is exempt from disclosure under the Act. Reviewing the record includes processing the agency record for disclosure and making redactions and other preparations for disclosure. Review costs are recoverable even if an agency record ultimately is not disclosed. Review time includes time spent considering any formal objection to disclosure but does not include time spent resolving general legal or policy issues regarding the application of exemptions under the Act.
(h) Search means the process of looking for and retrieving agency records or information responsive to a FOIA request. Searching includes page-by-page or line-by-line identification of information within agency records and reasonable efforts to locate and retrieve information from agency records maintained in electronic form or format, provided that such efforts do not significantly interfere with the operation of the Department's automated information systems.
(a) Fees. In responding to FOIA requests, the Department charges the following fees (in accordance with the Office of Management and Budget's “Uniform FOIA Fee Schedule and Guidelines,” 52 FR 10012 (March 27, 1987)), unless it has granted a waiver or reduction of fees under § 5.33 and subject to the limitations set forth in paragraph (b) of this section:
(1) Search. The Department charges search fees, subject to the limitations of paragraph (b) of this section. Search time includes time spent searching, regardless of whether the search results in the location of responsive agency records and, if so, whether such agency records are released to the requester under the Act. The requester will be charged the direct costs, as defined in § 5.31(b), of the search. In the case of computer searches for agency records, the Department charges the requester for the direct cost of conducting the search, subject to the limitations set forth in paragraph (b) of this section.
(2) Review. (i) The Department charges fees for initial agency record review at the same rate as for searches, subject to the limitations set forth in paragraph (b) of this section.
(ii) No fees are charged for review at the administrative appeal level except in connection with—
(A) The review of agency records other than agency records identified as responsive to the FOIA request in the initial decision; and
(B) The Department's decision regarding whether to assert that an exemption exists under the Act that was not cited in the decision on the initial FOIA request.
(iii) Review fees are not assessed for FOIA requests other than those made for a “commercial use,” as the term is defined in § 5.31(a).
(3) Duplication. The Department charges duplication fees at the rate of $0.20 per page for paper photocopies of agency records, $3.00 per CD for documents recorded on CD, and at the direct cost for duplication for electronic copies and other forms of duplication, subject to the limitations of paragraph (b) of this section.
(b) Limitations on fees.
(1) Fees are limited to charges for document duplication when agency records are not sought for commercial use and the request is made by—
(i) An educational or noncommercial scientific institution, whose purpose is scholarly or scientific research; or
(ii) A representative of the news media.
(2) For FOIA requests other than commercial use FOIA requests, the Department provides the first 100 pages of agency records released (or the cost equivalent) and the first two hours of search (or the cost equivalent) without charge, pursuant to 5 U.S.C. 552(a)(4)(A)(iv)(II).
(3) Whenever the Department calculates that the fees assessable for a FOIA request under paragraph (a) of this section total $25.00 or less, the Department processes the FOIA request without charge to the requester.
(4) If the Department has failed to comply with any time limit in 5 U.S.C. 552(a)(4)(A)(viii)(I), the Department may not assess search fees, except as otherwise provided in this paragraph. If the Department has determined that unusual circumstances (as described in § 5.21(e)) apply, it may assess search fees (or, for requesters with preferred fee status, it may assess duplication fees) if the Department gives the requester timely written notice under § 5.21(e) and responds to the FOIA request within 10 additional working days. If unusual circumstances apply and more than 5,000 pages are necessary to respond to the request, the Department may assess search fees (or, for requesters with preferred fee status, duplication fees) if the Department gives the requester timely written notice under § 5.21(e) and the Department discussed with the requester via written mail, electronic mail, or telephone (or made not less than three good-faith attempts to do so) how the requester could effectively limit the scope of the request.
(c) Notice of anticipated fees in excess of $25. When the Department estimates or determines that the fees for processing a FOIA request will total more than $25 and the requester has not stated a willingness to pay such fees, the Department notifies the requester of the anticipated amount of fees before processing the FOIA request. If the Department can readily anticipate fees for processing only a portion of a request, the Department advises the requester that the anticipated fee is for processing only a portion of the request. When the Department has notified a requester of anticipated fees greater than $25, the Department does not further process the request until the requester agrees in writing to pay the anticipated total fee.
(d) Charges for other services. When the Department chooses as a matter of administrative discretion to provide a special service, such as certification of agency records, it charges the requester the direct cost of providing the service.
(e) Charging interest. The Department charges interest on any unpaid bill assessed at the rate provided in 31 U.S.C. 3717. In charging interest, the Department follows the provisions of the Debt Collection Act of 1982, as amended (Pub. L. 97-365), and its administrative procedures, including the use of consumer reporting agencies, collection agencies, and offset.
(f) Aggregating FOIA requests. When the Department reasonably believes that a requester, or a group of requesters acting together, is attempting to divide a FOIA request into a series of FOIA requests for the purpose of avoiding or reducing otherwise applicable fees, the Department may aggregate such FOIA requests for the purpose of assessing fees. The Department does not aggregate multiple FOIA requests involving unrelated matters.
(g) Advance payments.
(1) For FOIA requests other than those described in paragraphs (g)(2) and (g)(3) of this section, the Department does not require the requester to pay fees in advance.
(2) Where the Department estimates or determines that fees for processing a FOIA request will total more than $250, it may require the requester to pay the fees in advance, except where the Department receives a satisfactory assurance of full payment from a requester with a history of prompt payment of FOIA fees.
(3) The Department may require a requester who has previously failed to pay a properly assessed FOIA fee within 30 calendar days of the billing date to pay in advance the full amount of estimated or actual fees before it further processes a new or pending FOIA request from that requester.
(4) When the Department requires advance payment of estimated or assessed fees, it does not consider the FOIA request received and does not further process the FOIA request until payment is received.
(h) Tolling. When necessary for the Department to clarify issues regarding fee assessment with the FOIA requester, the time limit for responding to the FOIA request is tolled until the Department resolves such issues with the requester.
(i) Other statutory requirements. The fee schedule of this section does not apply to fees charged under any statute that specifically requires an agency to set and collect fees for producing particular types of agency records.
(a) The Department processes a FOIA request for agency records without charge or at a charge less than that established under § 5.32(a) when the Department determines that—
(1) Disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government; and
(2) Disclosure of the information is not primarily in the commercial interest of the requester.
(b) To determine whether a FOIA request is eligible for waiver or reduction of fees pursuant to paragraph (a)(1) of this section, the Department considers the following factors:
(1) Whether the subject of the request specifically concerns identifiable operations or activities of the government.
(2) Whether the disclosable portions of the requested information will be meaningfully informative in relation to the subject matter of the request.
(3) The disclosure's contribution to public understanding of government operations, i.e., the understanding of the public at large, as opposed to an individual or a narrow segment of interested persons (including whether the requester has expertise in the subject area of the FOIA request as well as the intention and demonstrated ability to disseminate the information to the public).
(4) The significance of the disclosure's contribution to public understanding of government operations or activities, i.e., the public's understanding of the subject matter existing prior to the disclosure must be likely to be enhanced significantly by the disclosure.
(c) To determine whether a FOIA request is eligible for waiver or reduction of fees pursuant to paragraph (a)(2) of this section, the Department considers the following factors:
(1) The existence of the requester's commercial interest, i.e., whether the requester has a commercial interest that would be furthered by the requested disclosure.
(2) If a commercial interest is identified, whether the commercial interest of the requester is sufficiently large in comparison with the public interest in disclosure, that disclosure is primarily in the commercial interest of the requester.
(d) When the fee waiver requirements are met only with respect to a portion of a FOIA request, the Department waives or reduces fees only for that portion of the request.
(e) A requester seeking a waiver or reduction of fees must submit evidence demonstrating that the FOIA request meets all the criteria listed in paragraphs (a) through (c) of this section.
(f) A requester must seek a fee waiver for each FOIA request for which a waiver is sought. The Department does not grant standing fee waivers but considers each fee waiver request independently on its merits.
(a) In general. A requester may seek an administrative review of an adverse determination on the FOIA request made by the requester by submitting an appeal of the determination to the Department. Adverse determinations include denials of access to agency records, in whole or in part; “no agency records” responses; and adverse fee decisions, including denials of requests for fee waivers, and all aspects of fee assessments.
(b) Appeal requirements. A requester must submit an appeal within 90 calendar days of the date on the adverse determination letter issued by the Department or, where the requester has received no determination, at any time after the due date for such determination. An appeal must be in writing and must include a detailed statement of all legal and factual bases for the appeal.
(c) Determination on appeal. (1) The Department makes a written determination on an administrative appeal within 20 working days after receiving the appeal. The time limit may be extended in accordance with § 5.21(c) through (e). The Department's failure to comply with time limits set forth in this section constitutes exhaustion of the requester's administrative remedies for the purposes of initiating judicial action to compel disclosure.
(2) The Department's determination on an appeal constitutes the Department's final action on the FOIA request. Any Department determination denying an appeal in whole or in part includes the reasons for the denial, including any exemptions asserted under the Act, and notice of the requester's right to seek judicial review of the determination in accordance with 5 U.S.C. 552(a)(4). Where the Department makes a determination to grant an appeal in whole or in part, it processes the FOIA request subject to the appeal in accordance with the determination on appeal.
As used in this part:
(a) Access means availability of a record to a subject individual.
(b) Agency means the Department of Education.
(c) Department means the Department of Education.
(d) Disclosure means the availability or release of a record to anyone other than the subject individual.
(e) Individual means a living person who is a citizen of the United States or an alien lawfully admitted for permanent residence. It does not include persons such as sole proprietorships, partnerships, or corporations. A business firm which is identified by the name of one or more persons is not an individual within the meaning of this part.
(f) Maintain means to maintain, collect, use, or disseminate when used in connection with the term “record”; and, to have control over or responsibility for a system of records when used in connection with the term “system of records.”
(g) Notification means communication to an individual whether he is a subject individual.
(h) Record means any item, collection, or grouping of information about an individual that is maintained by the Department, including but not limited to the individual's education, financial transactions, medical history, and criminal or employment history and that contains his name, or an identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print or a photograph. When used in this part, record means only a record which is in a system of records.
(i) Responsible Department official means that officer who is listed in a notice of a system of records as the system manager for a given system of records or another individual listed in the notice of a system of records to whom requests may be made, or the designee of either such officer or individual.
(j) Routine use means the disclosure of a record outside the Department, without the consent of the subject individual, for a purpose which is compatible with the purpose for which the record was collected. It includes disclosures required to be made by statute other than the Freedom of Information Act, 5 U.S.C. 552. It does not include disclosures which are permitted to be made without the consent of the subject individual which are not compatible with the purpose for which it was collected such as disclosures to the Bureau of the Census, the General Accounting Office, or to Congress.
(k) Secretary means the Secretary of Education.
(l) Statistical record means a record maintained for statistical research or reporting purposes only and not maintained to make determinations about a particular subject individual.
(m) Subject individual means that individual to whom a record pertains.
(n) System of records means any group of records under the control of the Department from which a record is retrieved by personal identifier such as the name of the individual, number, symbol or other unique retriever assigned to the individual. Single records or groups of records which are not retrieved by a personal identifier are not part of a system of records. Papers maintained by individual employees of the Department which are prepared, maintained, or discarded at the discretion of the employee and which are not subject to the Federal Records Act, 44 U.S.C. 2901, are not part of a system of records; Provided, That such personal papers are not used by the employee or the Department to determine any rights, benefits, or privileges of individuals.
(a) This part implements section 3 of the Privacy Act of 1974, 5 U.S.C. 552a (hereinafter referred to as the Act), by establishing agency policies and procedures for the maintenance of records. This part also establishes agency policies and procedures under which a subject individual may be given notification of or access to a record pertaining to him and policies and procedures under which a subject individual may have his record corrected or amended if he believes that his record is not accurate, timely, complete, or relevant or necessary to accomplish a Department function.
(b) All components of the Department are governed by the provisions of this part. Also governed by the provisions of this part are advisory committees and councils within the meaning of the Federal Advisory Committee Act which provide advice to (1) any official or component of the Department or (2) the President and for which the Department has been delegated responsibility for providing services.
(c) Employees of the Department governed by this part include all regular and special government employees of the Department; experts and consultants whose temporary (not in excess of 1 year) or intermittent services have been procured by the Department by contract pursuant to 3109 of title 5, United States Code; volunteers where acceptance of their services are authorized by law; those individuals performing gratuitous services as permitted under conditions prescribed by the Office of Personnel Management; and, participants in work-study or training programs.
(d) This part does not:
(1) Make available to a subject individual records which are not retrieved by that individual's name or other personal identifier.
(2) Make available to the general public records which are retrieved by a subject individual's name or other personal identifier or make available to the general public records which would otherwise not be available to the general public under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.
(3) Govern the maintenance or disclosure of, notification of or access to, records in the possession of the Department which are subject to regulations of another agency, such as personnel records subject to the regulations of the Office of Personnel Management.
(4) Apply to grantees, including State and local governments or subdivisions thereof, administering federally funded programs.
(5) Make available records compiled by the Department in reasonable anticipation of court litigation or formal administrative proceedings. The availability of such records to the general public or to any subject individual or party to such litigation or proceedings shall be governed by applicable constitutional principles, rules of discovery, and applicable regulations of the Department.
It is the policy of the Department to protect the privacy of individuals to the fullest extent possible while nonetheless permitting the exchange of records required to fulfill the administrative and program responsibilities of the Department, and responsibilities of the Department for disclosing records which the general public is entitled to have under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.
(a) No record will be maintained by the Department unless:
(1) It is relevant and necessary to accomplish a Department function required to be accomplished by statute or Executive Order;
(2) It is acquired to the greatest extent practicable from the subject individual when maintenance of the record may result in a determination about the subject individual's rights, benefits or privileges under Federal programs;
(3) The individual providing the record is informed of the authority for providing the record (including whether the providing of the record is mandatory or voluntary, the principal purpose for maintaining the record, the routine uses for the record, what effect his refusal to provide the record may have on him), and if the record is not required by statute or Executive Order to be provided by the individual, he agrees to provide the record.
(b) No record will be maintained by the Department which describes how an individual exercises rights guaranteed by the First Amendment unless expressly authorized (1) by statute, or (2) by the subject individual, or (3) unless pertinent to and within the scope of an authorized law enforcement activity.
(a) Times, places, and manner of requesting notification of or access to a record. (1) Any individual may request notification of a record. He may at the same time request access to any record pertaining to him. An individual may be accompanied by another individual of his choice when he requests access to a record in person; Provided, That he affirmatively authorizes the presence of such other individual during any discussion of a record to which access is requested.
(2) An individual making a request for notification of or access to a record shall address his request to the responsible Department official and shall verify his identity when required in accordance with paragraph (b)(2) of this section. At the time the request is made, the individual shall specify which systems of records he wishes to have searched and the records to which he wishes to have access. He may also request that copies be made of all or any such records. An individual shall also provide the responsible Department official with sufficient particulars to enable such official to distinguish between records on subject individuals with the same name. The necessary particulars are set forth in the notices of systems of records.
(3) An individual who makes a request in person may leave with any responsible Department official a request for notification of or access to a record under the control of another responsible Department official; Provided, That the request is addressed in writing to the appropriate responsible Department official.
(b) Verification of identity—(1) When required. Unless an individual, who is making a request for notification of or access to a record in person, is personally known to the responsible Department official, he shall be required to verify his identity in accordance with paragraph (b)(2) of this section if:
(i) He makes a request for notification of a record and the responsible Department official determines that the mere disclosure of the existence of the record would be a clearly unwarranted invasion of privacy if disclosed to someone other than the subject individual; or,
(ii) He makes a request for access to a record which is not required to be disclosed to the general public under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.
(2) Manner of verifying identity. (i) An individual who makes a request in person shall provide to the responsible Department official at least one piece of tangible identification such as a driver's license, passport, alien or voter registration card, or union card to verify his identity. If an individual does not have identification papers to verify his identity, he shall certify in writing that he is the individual who he claims to be and that he understands that the knowing and willful request for or acquisition of a record pertaining to an individual under false pretenses is a criminal offense under the Act subject to a $5,000 fine.
(ii) Except as provided in paragraph (b)(2)(v) of this section, an individual who does not make a request in person shall submit a notarized request to the responsible Department official to verify his identity or shall certify in his request that he is the individual who he claims to be and that he understands that the knowing and willful request for or acquisition of a record pertaining to an individual under false pretenses is a criminal offense under the Act subject to a $5,000 fine.
(iii) An individual who makes a request on behalf of a minor or legal incompetent as authorized under § 5b.10 of this part shall verify his relationship to the minor or legal incompetent, in addition to verifying his own identity, by providing a copy of the minor's birth certificate, a court order, or other competent evidence of guardianship to the responsible Department official; except that, an individual is not required to verify his relationship to the minor or legal incompetent when he is not required to verify his own identity or when evidence of his relationship to the minor or legal incompetent has been previously given to the responsible Department official.
(iv) An individual shall further verify his identity if he is requesting notification of or access to sensitive records. Any further verification shall parallel the record to which notification or access is being sought. Such further verification may include such particulars as the individual's years of attendance at a particular educational institution, rank attained in the uniformed services, date or place of birth, names of parents, or an occupation.
(v) An individual who makes a request by telephone shall verify his identity by providing to the responsible Department official identifying particulars which parallel the record to which notification or access is being sought. If the responsible Department official determines that the particulars provided by telephone are insufficient, the requester will be required to submit the request in writing or in person. Telephone requests will not be accepted where an individual is requesting notification of or access to sensitive records.
(c) Granting notification of or access to a record. (1) Subject to the provisions governing exempt systems in § 5b.11 of this part, a responsible Department official, who receives a request for notification of or access to a record and, if required, verification of an individual's identity, will review the request and grant notification or access to a record, if the individual requesting access to the record is the subject individual.
(2) If the responsible Department official determines that there will be a delay in responding to a request because of the number of requests being processed, a breakdown of equipment, shortage of personnel, storage of records in other locations, etc., he will so inform the individual and indicate when notification or access will be granted.
(3) Prior to granting notification of or access to a record, the responsible Department official may at his discretion require an individual making a request in person to reduce his request to writing if the individual has not already done so at the time the request is made.
(a) Any subject individual may request that his record be corrected or amended if he believes that the record is not accurate, timely, complete, or relevant or necessary to accomplish a Department function. A subject individual making a request to amend or correct his record shall address his request to the responsible Department official in writing; except that, the request need not be in writing if the subject individual makes his request in person and the responsible Department official corrects or amends the record at that time. The subject individual shall specify in each request:
(1) The system of records from which the record is retrieved;
(2) The particular record which he is seeking to correct or amend;
(3) Whether he is seeking an addition to or a deletion or substitution of the record; and,
(4) His reasons for requesting correction or amendment of the record.
(b) A request for correction or amendment of a record will be acknowledged within 10 working days of its receipt unless the request can be processed and the subject individual informed of the responsible Department official's decision on the request within that 10 day period.
(c) If the responsible Department official agrees that the record is not accurate, timely, or complete based on a preponderance of the evidence, the record will be corrected or amended. The record will be deleted without regard to its accuracy, if the record is not relevant or necessary to accomplish the Department function for which the record was provided or is maintained. In either case, the subject individual will be informed in writing of the correction, amendment, or deletion and, if accounting was made of prior disclosures of the record, all previous recipients of the record will be informed of the corrective action taken.
(d) If the responsible Department official does not agree that the record should be corrected or amended, the subject individual will be informed in writing of the refusal to correct or amend the record. He will also be informed that he may appeal the refusal to correct or amend his record § 5b.8 of this part.
(e) Requests to correct or amend a record governed by the regulation of another government agency, e.g., Office of Personnel Management, Federal Bureau of Investigation, will be forwarded to such government agency for processing and the subject individual will be informed in writing of the referral.
(a) Processing the appeal. (1) A subject individual who disagrees with a refusal to correct or amend his record may appeal the refusal in writing. All appeals shall be made to the Secretary.
(2) An appeal will be completed within 30 working days from its receipt by the appeal authority; except that, the appeal authority may for good cause extend this period for an additional 30 days. Should the appeal period be extended, the subject individual appealing the refusal to correct or amend the record will be informed in writing of the extension and the circumstances of the delay. The subject individual's request to amend or correct the record, the responsible Department official's refusal to correct or amend, and any other pertinent material relating to the appeal will be reviewed. No hearing will be held.
(3) If the appeal authority agrees that the record subject to the appeal should be corrected or amended, the record will be amended and the subject individual will be informed in writing of the correction or amendment. Where an accounting was made of prior disclosures of the record, all previous recipients of the record will be informed of the corrective action taken.
(4) If the appeal is denied, the subject individual will be informed in writing:
(i) Of the denial and the reasons for the denial;
(ii) That he has a right to seek judicial review of the denial; and,
(iii) That he may submit to the responsible Department official a concise statement of disagreement to be associated with the disputed record and disclosed whenever the record is disclosed.
(b) Notation and disclosure of disputed records. Whenever a subject individual submits a statement of disagreement to the responsible Department official in accordance with paragraph (a)(4)(iii) of this section, the record will be noted to indicate that it is disputed. In any subsequent disclosure, a copy of the subject individual's statement of disagreement, will be disclosed with the record. If the responsible Department official deems it appropriate, a concise statement of the appeal authority's reasons for denying the subject individual's appeal may also be disclosed with the record. While the subject individual will have access to this statement of reasons, such statement will not be subject to correction or amendment. Where an accounting was made of prior disclosures of the record, all previous recipients of the record will be provided a copy of the subject individual's statement of disagreement, as well as the statement, if any, of the appeal authority's reasons for denying the subject individual's appeal.
(a) Consent to disclosure by a subject individual. (1) Except as provided in paragraph (b) of this section authorizing disclosures of records without consent, no disclosure of a record will be made without the consent of the subject individual. In each case the consent, whether obtained from the subject individual at the request of the Department or whether provided to the Department by the subject individual on his own initiative, shall be in writing. The consent shall specify the individual, organizational unit or class of individuals or organizational units to whom the record may be disclosed, which record may be disclosed and, where applicable, during which time frame the record may be disclosed (e.g., during the school year, while the subject individual is out of the country, whenever the subject individual is receiving specific services). A blanket consent to disclose all of a subject individual's records to unspecified individuals or organizational units will not be honored. The subject individual's identity and, where applicable (e.g., where a subject individual gives consent to disclosure of a record to a specific individual), the identity of the individual to whom the record is to be disclosed shall be verified.
(2) A parent or guardian of any minor is not authorized to give consent to a disclosure of the minor's medical record.
(b) Disclosures without the consent of the subject individual. The disclosures listed in this paragraph may be made without the consent of the subject individual. Such disclosures are:
(1) To those officers and employees of the Department who have a need for the record in the performance of their duties. The responsible Department official may upon request of any officer or employee, or on his own initiative, determine what constitutes legitimate need.
(2) Required to be disclosed under the Freedom of Information Act, 5 U.S.C. 552, and part 5 of this title.
(3) For a routine use as defined in paragraph (j) of § 5b.1. Routine uses will be listed in any notice of a system of records. Routine uses published in appendix B are applicable to more than one system of records. Where applicable, notices of systems of records may contain references to the routine uses listed in appendix B. appendix B will be published with any compendium of notices of systems of records.
(4) To the Bureau of the Census for purposes of planning or carrying out a census or survey or related activity pursuant to the provisions of title 13 U.S.C.
(5) To a recipient who has provided the agency with advance written assurance that the record will be used solely as a statistical research or reporting record; Provided, That, the record is transferred in a form that does not identify the subject individual.
(6) To the National Archives of the United States as a record which has sufficient historical or other value to warrant its continued preservation by the United States Government, or for evaluation by the Administrator of General Services or his designee to determine whether the record has such value.
(7) To another government agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of such government agency or instrumentality has submitted a written request to the Department specifying the record desired and the law enforcement activity for which the record is sought.
(8) To an individual pursuant to a showing of compelling circumstances affecting the health or safety of any individual if a notice of the disclosure is transmitted to the last known address of the subject individual.
(9) To either House of Congress, or to the extent of matter within its jurisdiction, any committee or subcommittee thereof, any joint committee of Congress or subcommittee of any such joint committee.
(10) To the Comptroller General, or any of the Comptroller General's authorized representatives, in the course of the performance of the duties of the General Accounting Office.
(11) Pursuant to the order of a court of competent jurisdiction.
(c) Accounting of disclosures. (1) An accounting of all disclosures of a record will be made and maintained by the Department for 5 years or for the life of the record, whichever is longer; except that, such an accounting will not be made:
(i) For disclosures under paragraphs (b) (1) and (2) of this section; and,
(ii) For disclosures made with the written consent of the subject individual.
(2) The accounting will include:
(i) The date, nature, and purpose of each disclosure; and
(ii) The name and address of the person or entity to whom the disclosure is made.
(3) Any subject individual may request access to an accounting of disclosures of a record. The subject individual shall make a request for access to an accounting in accordance with the procedures in § 5b.5 of this part. A subject individual will be granted access to an accounting of the disclosures of a record in accordance with the procedures of this part which govern access to the related record. Access to an accounting of a disclosure of a record made under paragraph (b)(7) of this section may be granted at the discretion of the responsible Department official.
For the purpose of this part, a parent or guardian of any minor or the legal guardian or any individual who has been declared incompetent due to physical or mental incapacity or age by a court of competent jurisdiction is authorized to act on behalf of an individual or a subject individual. Except as provided in paragraph (b)(2) of § 5b.5, of this part governing procedures for verifying an individual's identity, an individual authorized to act on behalf of a minor or legal incompetent will be viewed as if he were the individual or subject individual.
(a) General policy. The Act permits an agency to exempt certain types of systems of records from some of the Act's requirements. It is the policy of the Department to exercise authority to exempt systems of records only in compelling cases.
(b) Specific systems of records exempted under (j)(2). The Department exempts the Investigative Files of the Inspector General ED/OIG (18-10-01) and the Hotline Complaint Files of the Inspector General ED/OIG (18-10-04) systems of records from the following provisions of 5 U.S.C. 552a and this part:
(1) 5 U.S.C. 552a(c)(3) and § 5b.9(a)(1) and (c)(3) of this part, regarding access to an accounting of disclosures of a record.
(2) 5 U.S.C. 552a(c)(4) and §§ 5b.7(c) and 5b.8(b) of this part, regarding notification to outside parties and agencies of correction or notation of dispute made in accordance with 5 U.S.C. 552a(d).
(3) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification or access to records and correction or amendment of records.
(4) 5 U.S.C. 552a(e)(1) and § 5b.4(a)(1) of this part, regarding maintaining only relevant and necessary information.
(5) 5 U.S.C. 552a(e)(2) and § 5b.4(a)(2) of this part, regarding collection of information from the subject individual.
(6) 5 U.S.C. 552a(e)(3) and § 5b.4(a)(3) of this part, regarding notice to individuals asked to provide information to the Department.
(7) 5 U.S.C. 552a(e)(4) (G), (H), and (I), regarding inclusion of information in the system notice about procedures for notification, access, correction, and source of records.
(8) 5 U.S.C. 552a(e)(5), regarding maintaining records with requisite accuracy, relevance, timeliness, and completeness.
(9) 5 U.S.C. 552a(e)(8), regarding service of notice on subject individual if a record is made available under compulsory legal process if that process becomes a matter of public record.
(10) 5 U.S.C. 552a(g), regarding civil remedies for violation of the Privacy Act.
(c) Specific systems of records exempted under (k)(2). (1) The Department exempts the Investigative Files of the Inspector General ED/OIG (18-10-01), the Hotline Complaint Files of the Inspector General ED/OIG (18-10-04), and the Office of Inspector General Data Analytics System (ODAS) (18-10-02) from the following provisions of 5 U.S.C. 552a and this part to the extent that these systems of records consist of investigatory material and complaints that may be included in investigatory material compiled for law enforcement purposes:
(i) 5 U.S.C. 552a(c)(3) and § 5b.9(c)(3) of this part, regarding access to an accounting of disclosures of records.
(ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification of and access to records and correction or amendment of records.
(iii) 5 U.S.C. 552a(e)(1) and § 5b.4(a)(1) of this part, regarding the requirement to maintain only relevant and necessary information.
(iv) 5 U.S.C. 552a(e)(4) (G), (H), and (I), regarding inclusion of information in the system notice about procedures for notification, access, correction, and source of records.
(2) The Department exempts the Complaint Files and Log, Office for Civil Rights (18-08-01) from the following provisions of 5 U.S.C. 552a and this part:
(i) 5 U.S.C. 552a(c)(3) and § 5b.9(c)(3) of this part, regarding access to an accounting of disclosures of records.
(ii) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification of and access to records and correction or amendment of records.
(iii) 5 U.S.C. 552a(e)(4) (G) and (H), regarding inclusion of information in the system notice about procedures for notification, access, and correction of records.
(d) Specific systems of records exempted under (k)(5). The Department exempts the Investigatory Material Compiled for Personnel Security and Suitability Purposes (18-05-17) system of records from the following provisions of 5 U.S.C. 552a and this part:
(1) 5 U.S.C. 552a(c)(3) and § 5b.9(c)(3) of this part, regarding access to an accounting of disclosures of records.
(2) 5 U.S.C. 552a(d) (1) through (4) and (f) and §§ 5b.5(a)(1) and (c), 5b.7, and 5b.8 of this part, regarding notification of and access to records and correction or amendment of records.
(3) 5 U.S.C. 552a(e)(4) (G) and (H), regarding inclusion of information in the system notice about procedures for notification, access, and correction of records.
(e) Basis for exemptions taken under (j)(2), (k)(2), and (k)(5). The reason the Department took each exemption described in this section is stated in the preamble for the final rulemaking document under which the exemption was promulgated. These final rulemaking documents were published in the
(f) Notification of or access to records in exempt systems of records. (1) If a system of records is exempt under this section, an individual may nonetheless request notification of or access to a record in that system. An individual shall make requests for notification of or access to a record in an exempt system or records in accordance with the procedures of § 5b.5 of this part.
(2) An individual will be granted notification of or access to a record in an exempt system but only to the extent that notification or access would not reveal the identity of a source who furnished the record to the Department under an express promise, and, prior to September 27, 1975, an implied promise, that his identity would be held in confidence if—
(i) The record is in a system of records or that portion of a system of records that is exempt under subsection (k)(2), but not under subsection (j)(2), of the Act and the individual has been, as a result of the maintenance of the record, denied a right, privilege, or benefit to which he or she would otherwise be eligible; or
(ii) The record is in a system of records that is exempt under subsection (k)(5) of the Act.
(3) If an individual is not granted notification of or access to a record in a system of records exempt under subsections (k)(2) (but not under subsection (j)(2)) and (k)(5) of the Act in accordance with this paragraph, he or she will be informed that the identity of a confidential source would be revealed if notification of or access to the record were granted to the individual.
(g) Discretionary actions by the responsible Department official. Unless disclosure of a record to the general public is otherwise prohibited by law, the responsible Department official may, in his or her discretion, grant notification of or access to a record in a system of records that is exempt under this section. Discretionary notification of or access to a record in accordance with this paragraph will not be a precedent for discretionary notification of or access to a similar or related record and will not obligate the responsible Department official to exercise his or her discretion to grant notification of or access to any other record in a system of records that is exempt under this section.
(a) All contracts entered into on or after September 27, 1975 which require a contractor to maintain or on behalf of the Department to maintain, a system of records to accomplish a Department function must contain a provision requiring the contractor to comply with the Act and this part.
(b) All unexpired contracts entered into prior to September 27, 1975 which require the contractor to maintain or on behalf of the Department to maintain, a system of records to accomplish a Department function will be amended as soon as practicable to include a provision requiring the contractor to comply with the Act and this part. All such contracts must be so amended by July 1, 1976 unless for good cause the appeal authority identified in § 5b.8 of this part authorizes the continuation of the contract without amendment beyond that date.
(c) A contractor and any employee of such contractor shall be considered employees of the Department only for the purposes of the criminal penalties of the Act, 5 U.S.C. 552a(i), and the employee standards of conduct listed in appendix A of this part where the contract contains a provision requiring the contractor to comply with the Act and this part.
(d) This section does not apply to systems of records maintained by a contractor as a result of his management discretion, e.g., the contractor's personnel records.
(a) Policy. Where applicable, fees for copying records will be charged in accordance with the schedule set forth in this section. Fees may only be charged where an individual requests that a copy be made of the record to which he is granted access. No fee may be charged for making a search of the system of records whether the search is manual, mechanical, or electronic. Where a copy of the record must be made in order to provide access to the record (e.g., computer printout where no screen reading is available), the copy will be made available to the individual without cost.
(b) Fee schedule. The fee schedule for the Department is as follows:
(1) Copying of records susceptible to photocopying—$.10 per page.
(2) Copying records not susceptible to photocopying (e.g., punch cards or magnetic tapes)—at actual cost to be determined on a case-by-case basis.
(3) No charge will be made if the total amount of copying does not exceed $25.
(a) General. All employees are required to be aware of their responsibilities under the Privacy Act of 1974, 5 U.S.C. 552a. Regulations implementing the Act are set forth in 34 CFR 5b. Instruction on the requirements of the Act and regulation shall be provided to all new employees of the Department. In addition, supervisors shall be responsible for assuring that employees who are working with systems of records or who undertake new duties which require the use of systems of records are informed of their responsibilities. Supervisors shall also be responsible for assuring that all employees who work with such systems of records are periodically reminded of the requirements of the Act and are advised of any new provisions or interpretations of the Act.
(b) Penalties. (1) All employees must guard against improper disclosure of records which are governed by the Act. Because of the serious consequences of improper invasions of personal privacy, employees may be subject to disciplinary action and criminal prosecution for knowing and willful violations of the Act and regulation. In addition, employees may also be subject to disciplinary action for unknowing or unwillful violations, where the employee had notice of the provisions of the Act and regulations and failed to inform himself sufficiently or to conduct himself in accordance with the requirements to avoid violations.
(2) The Department may be subjected to civil liability for the following actions undertaken by its employees:
(a) Making a determination under the Act and §§ 5b.7 and 5b.8 of the regulation not to amend an individual's record in accordance with his request, or failing to make such review in conformity with those provisions;
(b) Refusing to comply with an individual's request for notification of or access to a record pertaining to him;
(c) Failing to maintain any record pertaining to any individual with such accuracy, relevance, timeliness, and completeness as is necessary to assure fairness in any determination relating to the qualifications, character, rights, or opportunities of, or benefits to the individual that may be made on the basis of such a record, and consequently a determination is made which is adverse to the individual; or
(d) Failing to comply with any other provision of the Act or any rule promulgated thereunder, in such a way as to have an adverse effect on an individual.
(3) “An employee may be personally subject to criminal liability as set forth below and in 5 U.S.C. 552a (i):
(a) Any officer or employee of an agency, who by virtue of his employment or official position, has possession of, or access to, agency records which contain individually identifiable information the disclosure of which is prohibited by the Act or by rules or regulations established thereunder, and who, knowing that disclosure of the specific material is so prohibited, willfully discloses the material in any manner to any person or agency not entitled to receive it, shall be guilty of a misdemeanor and fined not more than $5,000.”
(b) “Any officer or employee of any agency who willfully maintains a system of records without meeting the notice requirements [of the Act] shall be guilty of a misdemeanor and fined not more than $5,000.”
(c) Rules Governing Employees Not Working With Systems of Records. Employees whose duties do not involve working with systems of records will not generally disclose to any one, without specific authorization from their supervisors, records pertaining to employees or other individuals which by reason of their official duties are available to them. Notwithstanding the above, the following records concerning Federal employees are a matter of public record and no further authorization is necessary for disclosure:
(1) Name and title of individual.
(2) Grade classification or equivalent and annual rate of salary.
(3) Position description.
(4) Location of duty station, including room number and telephone number.
(d) Rules governing employees whose duties require use or reference to systems of records. Employees whose official duties require that they refer to, maintain, service, or otherwise deal with systems of records (hereinafter referred to as “Systems Employees”) are governed by the general provisions. In addition, extra precautions are required and systems employees are held to higher standards of conduct.
(1) Systems Employees shall:
(a) Be informed with respect to their responsibilities under the Act;
(b) Be alert to possible misuses of the system and report to their supervisors any potential or actual use of the system which they believe is not in compliance with the Act and regulation;
(c) Make a disclosure of records within the Department only to an employee who has a legitimate need to know the record in the course of his official duties;
(d) Maintain records as accurately as practicable.
(e) Consult with a supervisor prior to taking any action where they are in doubt whether such action is in conformance with the Act and regulation.
(2) Systems Employees shall not:
(a) Disclose in any form records from a system of records except (1) with the consent or at the request of the subject individual; or (2) where its disclosure is permitted under § 5b.9 of the regulation.
(b) Permit unauthorized individuals to be present in controlled areas. Any unauthorized individuals observed in controlled areas shall be reported to a supervisor or to the guard force.
(c) Knowingly or willfully take action which might subject the Department to civil liability.
(d) Make any arrangements for the design development, or operation of any system of records without making reasonable effort to provide that the system can be maintained in accordance with the Act and regulation.
(e) Contracting officers. In addition to any applicable provisions set forth above, those employees whose official duties involve entering into contracts on behalf of the Department shall also be governed by the following provisions:
(1) Contracts for design, or development of systems and equipment. No contract for the design or development of a system of records, or for equipment to store, service or maintain a system of records shall be entered into unless the contracting officer has made reasonable effort to ensure that the product to be purchased is capable of being used without violation of the Act or regulation. Special attention shall be given to provision of physical safeguards.
(2) Contracts for the operation of systems and equipment. No contract for the design or development of a system of whom he feels appropriate, of all proposed contracts providing for the operation of systems of records shall be made prior to execution of the contracts to determine whether operation of the system of records is for the purpose of accomplishing a Department function. If a determination is made that the operation of the system is to accomplish a Department function, the contracting officer shall be responsible for including in the contract appropriate provisions to apply the provisions of the Act and regulation to the system, including prohibitions against improper release by the contractor, his employees, agents, or subcontractors.
(3) Other service contracts. Contracting officers entering into general service contracts shall be responsible for determining the appropriateness of including provisions in the contract to prevent potential misuse (inadvertent or otherwise) by employees, agents, or subcontractors of the contractor.
(f) Rules Governing Responsible Department Officials. In addition to the requirements for Systems Employees, responsible Department officials shall:
(1) Respond to all requests for notification of or access, disclosure, or amendment of records in a timely fashion in accordance with the Act and regulation;
(2) Make any amendment of records accurately and in a timely fashion;
(3) Inform all persons whom the accounting records show have received copies of the record prior to the amendments of the correction; and
(4) Associate any statement of disagreement with the disputed record, and
(a) Transmit a copy of the statement to all persons whom the accounting records show have received a copy of the disputed record, and
(b) Transmit that statement with any future disclosure.
(1) In the event that a system of records maintained by this agency to carry out its functions indicates a violation or potential violation of law, whether civil, criminal or regulatory in nature, and whether arising by general statute or particular program statute, or by regulation, rule or order issued pursuant thereto, the relevant records in the system of records may be referred, as a routine use, to the appropriate agency, whether federal, or foreign, charged with the responsibility of investigating or prosecuting such violation or charged with enforcing or implementing the statute, or rule, regulation or order issued pursuant thereto.
(2) Referrals may be made of assignments of research investigators and project monitors to specific research projects to the Smithsonian Institution to contribute to the Smithsonian Science Information Exchange, Inc.
(3) In the event the Department deems it desirable or necessary, in determining whether particular records are required to be disclosed under the Freedom of Information Act, disclosure may be made to the Department of Justice for the purpose of obtaining its advice.
(4) A record from this system of records may be disclosed as a “routine use” to a federal, state or local agency maintaining civil, criminal or other relevant enforcement records or other pertinent records, such as current licenses, if necessary to obtain a record relevant to an agency decision concerning the hiring or retention of an employee, the issuance of a security clearance, the letting of a contract, or the issuance of a license, grant or other benefit.
(5) In the event that a system of records maintained by this agency to carry out its function indicates a violation or potential violation of law, whether civil, criminal or regulatory in nature, and whether arising by general statute or particular program statute, or by regulation, rule or order issued pursuant thereto, the relevant records in the system of records may be referred, as a routine use, to the appropriate agency, whether state or local charged with the responsibility of investigating or prosecuting such violation or charged with enforcing or implementing the statute, or rule, regulation or order issued pursuant thereto.
(6) Where federal agencies having the power to subpoena other federal agencies' records, such as the Internal Revenue Service or the Civil Rights Commission, issue a subpoena to the Department for records in this system of records, the Department will make such records available.
(7) Where a contract between a component of the Department and a labor organization recognized under E.O. 11491 provides that the agency will disclose personal records relevant to the organization's mission, records in this system of records may be disclosed to such organization.
(8) Where the appropriate official of the Department, pursuant to the Department's Freedom of Information Regulation determines that it is in the public interest to disclose a record which is otherwise exempt from mandatory disclosure, disclosure may be made from this system of records.
(9) The Department contemplates that it will contract with a private firm for the purpose of collating, analyzing, aggregating or otherwise refining records in this system. Relevant records will be disclosed to such a contractor. The contractor shall be required to maintain Privacy Act safeguards with respect to such records.
(10) To individuals and organizations, deemed qualified by the Secretary to carry out specific research solely for the purpose of carrying out such research.
(11) Disclosures in the course of employee discipline or competence determination proceedings.
Inventions developed through the resources and activities of the Department are a potential resource of great value to the public. It is the policy of the Department:
(a) To safeguard the public interest in inventions developed by Department employees, contractors and grantees with the aid of public funds and facilities;
(b) To encourage and recognize individual and cooperative achievement in research and investigations; and
(c) To establish a procedure, consistent with pertinent statutes, Executive orders and general Government regulations, for the determination of rights and obligations relating to the patenting of inventions.
It is the general policy of the Department that the results of Department research should be made widely, promptly and freely available to other research workers and to the public. This availability can generally be adequately preserved by the dedication of a Government-owned invention to the public. Determinations to file a domestic patent application on inventions in which the Department has an interest will be made where the circumstances indicate that this is desirable in the public interest, and if it is practicable to do so. Department determinations not to apply for a domestic patent on employee inventions are subject to review and approval by the Commissioner of Patents. Except where deemed necessary for protecting the patent claim, the fact that a patent application has been or may be filed will not require any departure from normal policy regarding the dissemination of the results of Department research.
(a) Licenses to practice inventions covered by patents and pending patent applications owned by the U.S. Government as represented by this Department will generally be royalty free, revocable and nonexclusive. They will normally be issued to all applicants and will generally contain no limitations or standards relating to the quality or testing of the products to be manufactured, sold, or distributed thereunder.
(b) Where it appears however that the public interest will be served under the circumstances of the particular case by licenses which impose conditions, such as those relating to quality or testing of products, requirement of payment of royalties to the Government, etc., or by the issuance of limited exclusive licenses by the Secretary after notice and opportunity for hearing thereon, such licenses may be issued.
Central files and records shall be maintained of all inventions, patents, and licenses in which the Department has an interest, together with a record of all licenses issued by the Department under such patents. Invention reports required from employees or others for the purpose of obtaining determinations of ownership, and documents and information obtained for the purpose of prosecuting patent applications shall be confidential and shall be disclosed only as required for official purposes or with the consent of the inventor.
As used in this part, the term Government employee means any officer or employee, civilian or military, except such part-time employees or part-time consultants as may be excluded therefrom by a determination made in writing by the head of the employee's office or constituent organization, pursuant to an exemption approved by the Commissioner of Patents that to include him or them would be impracticable or inequitable, given the reasons therefor. A person shall not be considered to be a part-time employee or part-time consultant for this purpose unless the terms of his employment contemplate that he shall work for less than the minimum number of hours per day, or less than a minimum number of days per week, or less than the minimum number of weeks per year, regularly required of full-time employees of his class.
Every Department employee is required to report to the Secretary in accordance with the procedures established therefor, every invention made by him (whether or not jointly with others) which bears any relation to his official duties or which was made in whole or in any part during working hours, or with any contribution of Government facilities, equipment, material, funds, or information, or of time or services of other Government employees on official duty.
The determination of the ownership of the domestic right, title, and interest in and to an invention which is or may be patentable, made by a Government employee while under the administrative jurisdiction of the Department, will be made in writing by the Secretary in accordance with the provisions of Executive Order 10096 and Government-wide regulations issued thereunder by the Commissioner of Patents as follows:
(a) The Government as represented by the Secretary shall obtain the entire domestic right, title and interest in and to all inventions made by any Government employee (1) during working hours, or (2) with a contribution by the Government of facilities, equipment, materials, funds, or information, or of time or services of other Government employees on official duty, or (3) which bear a direct relation to or are made in consequence of the official duties of the inventor.
(b) In any case where the contribution of the Government, as measured by any one or more of the criteria set forth in paragraph (a) of this section, to the invention is insufficient equitably to justify a requirement of assignment to the Government of the entire domestic right, title and interest in and to such invention, or in any case where the Government has insufficient interest in an invention to obtain the entire domestic right, title, and interest therein (although the Government could obtain same under paragraph (a) of this section), the Department, subject to the approval of the Commissioner, shall leave title to such invention in the employee, subject, however, to the reservation to the Government of a nonexclusive, irrevocable, royalty-free license in the invention with power to grant licenses for all governmental purposes, such reservation to appear, where practicable, in any patent, domestic or foreign, which may issue on such invention.
(c) In applying the provisions of paragraphs (a) and (b) of this section, to the facts and circumstances relating to the making of any particular invention, it shall be presumed that an invention made by an employee who is employed or assigned (1) to invent or improve or perfect any art, machine, manufacture, or composition of matter, (2) to conduct or perform research, development work, or both, (3) to supervise, direct, coordinate, or review Government financed or conducted research, development work, or both, or (4) to act in a liaison capacity among governmental or nongovernmental agencies or individuals engaged in such work, falls within the provisions of paragraph (a) of this section, and it shall be presumed that any invention made by any other employee falls within the provisions of paragraph (b) of this section. Either presumption may be rebutted by a showing of the facts and circumstances and shall not preclude a determination that these facts and circumstances justify leaving the entire right, title and interest in and to the invention in the Government employee, subject to law.
(d) In any case wherein the Government neither (1) obtains the entire domestic right, title and interest in and to an invention pursuant to the provisions of paragraph (a) of this section, nor (2) reserves a nonexclusive, irrevocable, royalty-free license in the invention, with power to grant licenses for all governmental purposes, pursuant to the provisions of paragraph (b) of this section, the Government shall leave the entire right, title and interest in and to the invention in the Government employee, subject to law.
In any case where it is determined that all domestic rights should be assigned to the Government, it shall further be determined, pursuant to Executive Order 9865 and Government-wide regulations issued thereunder, that the Government shall reserve an option to require the assignment of such rights in all or in any specified foreign countries. In case where the inventor is not required to assign the patent rights in any foreign country or countries to the Government or the Government fails to exercise its option within such period of time as may be provided by regulations issued by the Commissioner of Patents, any application for a patent which may be filed in such country or countries by the inventor or his assignee shall nevertheless be subject to a nonexclusive, irrevocable, royalty-free license to the Government for all governmental purposes, including the power to issue sublicenses for use in behalf of the Government and/or in furtherance of the foreign policies of the Government.
The employee-inventor shall be notified in writing of the Department's determination of the rights to his invention and of his right of appeal, if any. Notice need not be given if the employee stated in writing that he would agree to the determination of ownership which was in fact made.
An employee who is aggrieved by a determination of the Department may appeal to the Commissioner of Patents, pursuant to section 4(d) of Executive Order 10096, as amended by Executive Order 10930, and regulations issued thereunder, by filing a written appeal with the Commissioner, in duplicate, and a copy of the appeal with the Secretary within 30 days (or such longer period as the Commissioner may, for good cause, fix in any case) after receiving written notice of such determination.
(a) Except as provided in paragraph (c) of this section, this part establishes the procedures to be followed when the Department or any employee of the Department receives a demand for—
(1) Testimony by an employee concerning—
(i) Records contained in the files of the Department;
(ii) Information relating to records contained in the files of the Department; or
(iii) Information or records acquired or produced by the employee in the course of his or her official duties or because of the employee's official status; or
(2) The production or disclosure of any information or records referred to in paragraph (a)(1) of this section.
(b) This part does not create any right or benefit, substantive or procedural, enforceable by any person against the Department.
(c) This part does not apply to—
(1) Any proceeding in which the United States is a party before an adjudicative authority;
(2) A demand for testimony or records made by either House of Congress or, to the extent of matter within its jurisdiction, any committee or subcommittee of Congress; or
(3) An appearance by an employee in his or her private capacity in a legal proceeding in which the employee's testimony does not relate to the mission or functions of the Department.
The following definitions apply to this part:
Adjudicative authority includes, but is not limited to—
(1) A court of law or other judicial forums; and
(2) Mediation, arbitration, or other forums for dispute resolution.
Demand includes a subpoena, subpoena duces tecum, request, order, or other notice for testimony or records arising in a legal proceeding.
Department means the U.S. Department of Education.
Employee means a current or former employee or official of the Department or of an advisory committee of the Department, including a special government employee, unless specifically provided otherwise in this part.
Legal proceeding means—
(1) A proceeding before an adjudicative authority;
(2) A legislative proceeding, except for a proceeding before either House of Congress or before any committee or subcommittee of Congress, to the extent of matter within the committee's or subcommittee's jurisdiction; or
(3) An administrative proceeding.
Secretary means the Secretary of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
Testimony means statements made in connection with a legal proceeding, including but not limited to statements in court or other forums, depositions, declarations, affidavits, or responses to interrogatories.
United States means the Federal Government of the United States and any of its agencies or instrumentalities.
(a) A demand for testimony of an employee or a demand for records issued pursuant to the rules governing the legal proceeding in which the demand arises—
(1) Must be in writing; and
(2) Must state the nature of the requested testimony or records, why the information sought is unavailable by any other means, and the reason why the release of the information would not be contrary to an interest of the Department or the United States”.
(b) Service of a demand for testimony of an employee must be made on the employee whose testimony is demanded, with a copy simultaneously delivered to the General Counsel, U.S. Department of Education, Office of the General Counsel, 400 Maryland Avenue, SW., room 6E300, Lyndon Baines Johnson Building, Washington, DC 20202-2100.
(c) Service of a demand for records, as described in § 8.5(a)(1), must be made on an employee who has custody of the records, with a copy simultaneously delivered to the General Counsel at the address listed in paragraph (b) of this section. For assistance in identifying the custodian of the specific records demanded, contact the Records Officer, Information Policy and Standards Team, Regulatory Information Management Services, Office of Management, U.S. Department of Education, 400 Maryland Avenue, SW., room 9161, PCP, Washington, DC 20202-4753.
(a) After an employee receives a demand for testimony, the employee shall immediately notify the Secretary and request instructions.
(b) An employee may not give testimony without the prior written authorization of the Secretary.
(c)(1) The Secretary may allow an employee to testify if the Secretary determines that the demand satisfies the requirements of § 8.3 and that granting permission—
(i) Would be appropriate under the rules of procedure governing the matter in which the demand arises and other applicable laws, rules, and regulations; and
(ii) Would not be contrary to an interest of the United States, which includes furthering a public interest of the Department and protecting the human and financial resources of the United States.
(2) The Secretary may establish conditions under which the employee may testify.
(d) If a response to a demand for testimony is required before the Secretary determines whether to allow an employee to testify, the employee or counsel for the employee shall—
(1) Inform the court or other authority of the regulations in this part; and
(2) Request that the demand be stayed pending the employee's receipt of the Secretary's instructions.
(e) If the court or other authority declines the request for a stay, or rules that the employee must comply with the demand regardless of the Secretary's instructions, the employee or counsel for the employee shall respectfully decline to comply with the demand, citing United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951), and the regulations in this part.
(a)(1) After an employee receives a demand for records issued pursuant to the rules governing the legal proceeding in which the demand arises, the employee shall immediately notify the Secretary and request instructions.
(2) If an employee receives any other demand for records, the Department—
(i) Considers the demand to be a request for records under the Freedom of Information Act; and
(ii) Handles the demand under rules governing public disclosure, as established in 34 CFR part 5.
(b) An employee may not produce records in response to a demand as described in paragraph (a)(1) of this section without the prior written authorization of the Secretary.
(c) The Secretary may make these records available if the Secretary determines that the demand satisfies the requirements of § 8.3 and that disclosure—
(1) Would be appropriate under the rules of procedure governing the matter in which the demand arises and other applicable laws, rules, and regulations; and
(2) Would not be contrary to an interest of the United States, which includes furthering a public interest of the Department and protecting the human and financial resources of the United States.
(d) If a response to a demand for records as described in paragraph (a)(1) of this section is required before the Secretary determines whether to allow an employee to produce those records, the employee or counsel for the employee shall—
(1) Inform the court or other authority of the regulations in this part; and
(2) Request that the demand be stayed pending the employee's receipt of the Secretary's instructions.
(e) If the court or other authority declines the request for a stay, or rules that the employee must comply with the demand regardless of the Secretary's instructions, the employee or counsel for the employee shall respectfully decline to comply with the demand, citing United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951), and the regulations in this part.
This part is applicable to surplus Federal real property located within any State that is appropriate for assignment to, or that has been assigned to, the Secretary by the Administrator for transfer for educational purposes, as provided for in section 203(k) of the Federal Property and Administrative Services Act of 1949, as amended, 63 Stat. 377 (40 U.S.C. 471 et seq.).
(a) Definitions in the Act. The following terms used in this part are defined in section 472 of the Act:
(b) Definitions in the Education Department General Administrative Regulations (EDGAR). The following terms used in this part are defined in 34 CFR 77.1:
(c) Other definitions: The following definitions also apply to this part:
Abrogation means the procedure the Secretary may use to release the transferee of surplus Federal real property from the covenants, conditions, reservations, and restrictions contained in the conveyance instrument before the term of the instrument expires.
Act means the Federal Property and Administrative Services Act of 1949, as amended, 63 Stat. 377 (40 U.S.C. 471 et seq.).
Applicant means an eligible entity as described in § 12.5 that formally applies to be a transferee or lessee of surplus Federal real property, using a public benefit allowance (PBA) under the Act.
Lessee, except as used in § 12.14(a)(5), means an entity that is given temporary possession, but not title, to surplus Federal real property by the Secretary for educational purposes.
Nonprofit institution means any institution, organization, or association, whether incorporated or unincorporated—
(1) The net earnings of which do not inure or may not lawfully inure to the benefit of any private shareholder or individual; and
(2) That has been determined by the Internal Revenue Service to be tax-exempt under section 501(c)(3) of title 26.
Off-site property means surplus buildings and improvements—including any related personal property—that are capable of being removed from the underlying land and that are transferred by the Secretary without transferring the underlying real property.
On-site property means surplus Federal real property, including any related personal property—other than off-site property.
Period of restriction means that period during which the surplus Federal real property transferred for educational purposes must be used by the transferee or lessee in accordance with covenants, conditions, and any other restrictions contained in the conveyance instrument.
Program and plan of use means the educational activities to be conducted by the transferee or lessee using the surplus Federal real property, as described in the application for that property.
Public benefit allowance (“PBA”) means the credit, calculated in accordance with appendix A to this part, given to a transferee or lessee which is applied against the fair market value of the surplus Federal real property at the time of the transfer or lease of such property in exchange for the proposed educational use of the property by the transferee or lessee.
Related personal property means any personal property—
(1) That is located on and is an integral part of, or incidental to the operation of, the surplus Federal real property; or
(2) That is determined by the Administrator to be otherwise related to the surplus Federal real property.
Surplus Federal real property means the property assigned or suitable for assignment to the Secretary by the Administrator for disposal under the Act.
Transfer means to sell and convey title to surplus Federal real property for educational purposes as described in this part.
Transferee means that entity which has purchased and acquired title to the surplus Federal real property for educational purposes pursuant to section 203(k) of the Act.
The following regulations apply to this program:
(a) 34 CFR parts 100, 104, and 106.
(b) 41 CFR part 101-47.
(c) 34 CFR part 85.
The Secretary notifies potential applicants of the availability of surplus Federal real property for transfer for educational uses in accordance with 41 CFR 101-47.308-4.
The following entities may apply for surplus Federal real property:
(a) A State.
(b) A political subdivision or instrumentality of a State.
(c) A tax-supported institution.
(d) A nonprofit institution.
(e) Any combination of these entities.
An application for surplus Federal real property must—
(a) Contain a program and plan of use;
(b) Contain a certification from the applicant that the proposed program is not in conflict with State or local zoning restrictions, building codes, or similar limitations;
(c) Demonstrate that the proposed program and plan of use of the surplus Federal real property is for a purpose that the applicant is authorized to carry out;
(d) Demonstrate that the applicant is able, willing, and authorized to assume immediate custody, use, care, and maintenance of the surplus Federal real property;
(e) Demonstrate that the applicant is able, willing, and authorized to pay the administrative expenses incident to the transfer or lease;
(f) Demonstrate that the applicant has the necessary funds, or the ability to obtain those funds immediately upon transfer or lease, to carry out the proposed program and plan of use for the surplus Federal real property;
(g) Demonstrate that the applicant has an immediate need and ability to use all of the surplus Federal real property for which it is applying;
(h) Demonstrate that the surplus Federal real property is needed for educational purposes at the time of application and that it is so needed for the duration of the period of restriction;
(i) Demonstrate that the surplus Federal real property is suitable or adaptable to the proposed program and plan of use; and
(j) Provide information requested by the Secretary in the notice of availability, including information of the effect of the proposed program and plan of use on the environment.
(a) If there is more than one applicant for the same surplus Federal real property, the Secretary transfers or leases the property to the applicant whose proposed program and plan of use the Secretary determines provides the greatest public benefit, using the criteria contained in appendix A to this part that broadly address the weight given to each type of entity applying and its proposed program and plan of use. (See example in § 12.10(d)).
(b) If, after applying the criteria described in paragraph (a) of this section, two or more applicants are rated equally, the Secretary transfers or leases the property to one of the applicants after—
(1) Determining the need for each applicant's proposed educational use at the site of the surplus Federal real property;
(2) Considering the quality of each applicant's proposed program and plan of use; and
(3) Considering each applicant's ability to carry out its proposed program and plan of use.
(c) If the Secretary determines that the surplus Federal real property is capable of serving more than one applicant, the Secretary may apportion it to fit the needs of as many applicants as is practicable.
(d)(1) The Secretary generally transfers surplus Federal real property to a selected applicant that meets the requirements of this part.
(2) Alternatively, the Secretary may lease surplus Federal real property to a selected applicant that meets the requirements of this part if the Secretary determines that a lease will promote the most effective use of the property consistent with the purposes of this part or if having a lease is otherwise in the best interest of the United States, as determined by the Secretary.
(a) The Secretary transfers or leases surplus Federal real property using transfer or lease instruments that the Secretary prescribes.
(b) The transfer or lease instrument contains the applicable terms and conditions described in this part and any other terms and conditions the Secretary or Administrator determines are appropriate or necessary.
The Secretary transfers or leases surplus Federal real property on an “as is, where is,” basis without warranty of any kind.
(a) The Secretary calculates a PBA in accordance with the provisions of appendix A to this part taking into account the nature of the applicant, and the need for, impact of, and type of program and plan of use for the property, as described in that appendix.
(b) The following are illustrative examples of how a PBA would be calculated and applied under appendix A:
(1) Entity A is a specialized school that has had a building destroyed by fire, and that has existing facilities determined by the Secretary to be between 26 and 50% inadequate. It is proposing to use the surplus Federal real property to add a new physical education program. Entity A would receive a basic PBA of 70%, a 10% hardship organization allowance, a 20% allowance for inadequacy of existing school plant facilities, and a 10% utilization allowance for introduction of new instructional programs. Entity A would have a total PBA of 110%. If Entity A is awarded the surplus Federal real property, it would not be required to pay any cash for the surplus Federal real property, since the total PBA exceeds 100%.
(2) Entity B proposes to use the surplus Federal real property for nature walks. Because this qualifies as an outdoor educational program, Entity B would receive a basic PBA of 40%. If Entity B is awarded the surplus Federal real property, it would be required to pay 60% of the fair market value of the surplus Federal real property in cash at the time of the transfer.
(3) Entity C is an accredited university, has an ROTC unit, and proposes to use the surplus Federal real property for a school health clinic and for special education of the physically handicapped. Entity C would receive a basic PBA of 50% (as a college or university), a 20% accreditation organization allowance (accredited college or university), a 10% public service training organization allowance (ROTC), a 10% student health and welfare utilization allowance (school health clinic), and a 10% service to the handicapped utilization allowance (education of the physically handicapped). Entity C would have a total PBA of 100%. If Entity C is awarded the surplus Federal real property, it would not be required to pay any cash for the surplus Federal real property, since the total PBA is 100%.
(4) Entities A, B, and C all submit applications for the same surplus Federal real property. Unless the Secretary decides to apportion it, the Secretary transfers or leases the surplus Federal real property to Entity A, since its proposed program and plan of use has the highest total PBA.
The Secretary directs the transferee or lessee to comply with applicable provisions of the following statutes and Executive Orders prior to, or immediately upon, transfer or lease, as applicable:
(a) National Environmental Policy Act of 1969, 42 U.S.C. 4332.
(b) National Historic Preservation Act of 1966, 16 U.S.C. 470.
(c) National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq.
(d) Floodplain Management, Exec. Order No. 11988, 42 FR 26951 (May 25, 1977).
(e) Protection of Wetlands, Exec. Order No. 11990, 42 FR 26961 (May 25, 1977).
(f) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000(d)(1) et seq.
(g) Title IX of the Education Amendments of 1972, 20 U.S.C. 1681 et seq.
(h) Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794 et seq.
(i) Age Discrimination Act of 1975, 42 U.S.C. 1601 et seq.
(j) Any other applicable Federal or State laws and Executive Orders.
(a) General terms and conditions for transfers and leases. The following general terms and conditions apply to transfers and leases of surplus Federal real property under this part:
(1) For the period provided in the transfer or lease instrument, the transferee or lessee shall use all of the surplus Federal real property it receives solely and continuously for its approved program and plan of use, in accordance with the Act and these regulations, except that—
(i) The transferee or lessee has twelve (12) months from the date of transfer to place this surplus Federal real property into use, if the Secretary did not, at the time of transfer, approve in writing construction of major new facilities or major renovation of the property;
(ii) The transferee or lessee has thirty-six (36) months from the date of transfer to place the surplus Federal real property into use, if the transferee or lessee proposes construction of major new facilities or major renovation of the property and the Secretary approves it in writing at the time of transfer; and
(iii) The Secretary may permit use of the surplus Federal real property at any time during the period of restriction by an entity other than the transferee or lessee in accordance with § 12.13.
(2) The transferee or lessee may not modify its approved program and plan of use without the prior written consent of the Secretary.
(3) The transferee or lessee may not sell, lease or sublease, rent, mortgage, encumber, or otherwise dispose of all or a portion of the surplus Federal real property or any interest therein without the prior written consent of the Secretary.
(4) A transferee or lessee shall pay all administrative costs incidental to the transfer or lease including, but not limited to—
(i) Transfer taxes;
(ii) Surveys;
(iii) Appraisals;
(iv) Inventory costs;
(v) Legal fees;
(vi) Title search;
(vii) Certificate or abstract expenses;
(viii) Decontamination costs;
(ix) Moving costs;
(x) Recordation expenses;
(xi) Other closing costs; and
(xii) Service charges, if any, provided for by an agreement between the Secretary and the applicable State agency for Federal Property Assistance.
(5) The transferee or lessee shall protect the residual financial interest of the United States in the surplus Federal real property by insurance or such other means as the Secretary directs.
(6) The transferee or lessee shall file with the Secretary reports on its maintenance and use of the surplus Federal real property and any other reports required by the Secretary in accordance with the transfer or lease instrument.
(7) Any other term or condition that the Secretary determines appropriate or necessary.
(b) Additional terms and conditions for on-site transfers. The terms and conditions in the transfer, including those in paragraph (a) of this section, apply for a period not to exceed thirty (30) years.
(c) Additional terms and conditions for off-site transfers. (1) The terms and conditions in the transfer, including those in paragraph (a) of this section, apply for a period equivalent to the estimated economic life of the property conveyed for a transfer of off-site surplus Federal real property.
(2) In addition to the terms and conditions contained in paragraph (c) of this section, the Secretary may also require the transferee of off-site surplus Federal real property—
(i) To post performance bonds;
(ii) To post performance guarantee deposits; or
(iii) To give such other assurances as may be required by the Secretary or the holding agency to ensure adequate site clearance.
(d) Additional terms and conditions for leases. In addition to the terms and conditions contained in paragraph (a) of this section, the Secretary requires, for leases of surplus Federal real property, that all terms and conditions apply to the initial lease agreement, and any renewal periods, unless specifically excluded in writing by the Secretary.
(a) By eligible entities. A transferee or lessee may permit the use of all or a portion of the surplus Federal real property by another eligible entity as described in § 12.5, only upon those terms and conditions the Secretary determines appropriate if—
(1) The Secretary determines that the proposed use would not substantially limit the program and plan of use by the transferee or lessee and that the use will not unduly burden the Department;
(2) The Secretary's written consent is obtained by the transferee or lessee in advance; and
(3) The Secretary approves the use instrument in advance and in writing.
(b) By ineligible entities. A transferee or lessee may permit the use of a portion of the surplus Federal real property by an ineligible entity, one not described in § 12.5, only upon those terms and conditions the Secretary determines appropriate if—
(1) In accordance with paragraph (a) of this section, the Secretary makes the required determination and approves both the use and the use instrument;
(2) The use is confined to a portion of the surplus Federal real property;
(3) The use does not interfere with the approved program and plan of use for which the surplus Federal real property was conveyed; and
(4) Any rental fees or other compensation for use are either remitted directly to the Secretary or are applied to purposes expressly approved in writing in advance by the Secretary.
(a) General sanctions for noncompliance. The Secretary imposes any or all of the following sanctions, as applicable, to all transfers or leases of surplus Federal real property:
(1) If all or a portion of, or any interest in, the transferred or leased surplus Federal real property is not used or is sold, leased or subleased, encumbered, disposed of, or used for purposes other than those in the approved program and plan of use, without the prior written consent of the Secretary, the Secretary may require that—
(i) All revenues and the reasonable value of other benefits received by the transferee or lessee directly or indirectly from that use, as determined by the Secretary, be held in trust by the transferee or lessee for the United States subject to the direction and control of the Secretary;
(ii) Title or possession to the transferred or leased surplus Federal real property and the right to immediate possession revert to the United States;
(iii) The surplus Federal real property be transferred or leased to another eligible entity as the Secretary directs;
(iv) The transferee or lessee abrogate the conditions and restrictions in the transfer or lease instrument in accordance with the provisions of § 12.15;
(v) The transferee or lessee place the surplus Federal real property into immediate use for an approved purpose and extend the period of restriction in the transfer or lease instrument for a term equivalent to the period during which the property was not fully and solely used for an approved use; or
(vi) The transferee or lessee comply with any combination of the sanctions described in paragraph (a)(1) or (a)(3) of this section.
(2) If title or possession reverts to the United States for noncompliance or is voluntarily reconveyed, the Secretary may require the transferee or lessee—
(i) To reimburse the United States for the decrease in value of the transferred or leased surplus Federal real property not due to—
(A) Reasonable wear and tear;
(B) Acts of God; or
(C) Reasonable alterations made by the transferee or lessee to adapt the surplus Federal real property to the approved program and plan of use for which it was transferred or leased;
(ii) To reimburse the United States for any costs incurred in reverting title or possession;
(iii) To forfeit any cash payments made by the transferee or lessee against the purchase or lease price of surplus Federal real property transferred;
(iv) To take any other action directed by the Secretary; or
(v) To comply with any combination of the provisions of paragraph (a)(3) of this section.
(3) If the transferee or lessee does not put the surplus Federal real property into use within the applicable time limitation in § 12.12(a), the Secretary may require the transferee or lessee to make cash payments to the Secretary equivalent to the current fair market rental value of the surplus Federal real property for each month during which the program and plan of use has not been implemented.
(4) If the Secretary determines that a lessee of a transferee or a sublessee of a lessee is not complying with a term or condition of the lease, or if the lessee voluntarily surrenders the premises, the Secretary may require termination of the lease.
(b) Additional sanction for noncompliance with off-site transfer. In addition to the sanctions in paragraph (a) of this section, if the Secretary determines that a transferee is not complying with a term or condition of a transfer of off-site surplus Federal real property, the Secretary may require that the unearned PBA become immediately due and payable in cash to the United States.
(a) The Secretary may, in the Secretary's sole discretion, abrogate the conditions and restrictions in the transfer or lease instrument if—
(1) The transferee or lessee submits to the Secretary a written request that the Secretary abrogate the conditions and restrictions in the conveyance instrument as to all or any portion of the surplus Federal real property;
(2) The Secretary determines that the proposed abrogation is in the best interests of the United States;
(3) The Secretary determines the terms and conditions under which the Secretary will consent to the proposed abrogation; and
(4) The Secretary transmits the abrogation to the Administrator and there is no disapproval by the Administrator within thirty (30) days after notice to the Administrator.
(b) The Secretary abrogates the conditions and restrictions in the transfer or lease instrument upon a cash payment to the Secretary based on the formula contained in the transfer or lease instrument and any other terms and conditions the Secretary deems appropriate to protect the interest of the United States.
| Classification | Percent allowed | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Basic public benefit allowance | Organization allowances | Utilization allowances | Maximum public benefit allowance 4 | ||||||||||
| Accreditation | Federal impact | Public service training | Hardship | Inadequacy of existing school plant facilities | Introduction of new instructional programs | Student health and welfare | Research | Service to handicapped | |||||
| 10-25% | 26-50% | 51-100% | |||||||||||
| Elementary or high schools | 70 | 10 | 10 | 10 | 10 | 20 | 30 | 10 | 10 | 10 | 10 | 100 | |
| Colleges or Universities | 50 | 20 | 10 | 10 | 10 | 20 | 30 | 10 | 10 | 10 | 10 | 100 | |
| Specialized schools | 70 | 10 | 10 | 10 | 20 | 30 | 10 | 10 | 10 | 10 | 100 | ||
| Public libraries or educational museums | 2 100 | 2 100 | |||||||||||
| School outdoor education | 40 | 10 | 3 10 | 10 | 70 | ||||||||
| Central administrative and/or service centers | 80 | 80 | |||||||||||
| Non-profit educational research organizations | 50 | 20 | 10 | 10 | 10 | 10 | 100 | ||||||
2 Applicable when this is the primary use to be made of the property. The public benefit allowance for the overall program is applicable when such facilities are conveyed as a minor component of other facilities.
3 This 10% may include an approvable recreation program which will be accessible to the public and entirely compatible with, but subordinate to, the educational program.
4 This column establishes the maximum discount from the fair market value for payment due from the transferee at the time of the transfer. This column does not apply for purposes of ranking applicants to determine to which applicant the property will be transferred. Competitive rankings are based on the absolute total of public benefit allowance points and are not limited to the 100% ceiling.
Elementary or High School means an elementary school (including a kindergarten), high school, junior high school, junior-senior high school or elementary or secondary school system, that provides elementary or secondary education as determined under State law. However, it does not include a nursery school even though it may operate as part of a school system.
College or University means a non-profit or public university or college, including a junior college, that provides postsecondary education.
Specialized School means a vocational school, area trade school, school for the blind, or similar school.
Public Library means a public library or public library service system, not a school library or library operated by non-profit, private organizations or institutions that may be open to the general public. School libraries receive the public benefit allowance in the appropriate school classification.
Educational Museum means a museum that conducts courses on a continuing, not ad hoc, basis for students who receive credits from accredited postsecondary education institutions or school systems.
School Outdoor Education means a separate facility for outdoor education as distinguished from components of a basic school. Components of a school such as playgrounds and athletic fields receive the basic allowance applicable for that type of school. The outdoor education must be located reasonably near the school system and may be open to and used by the general public, but only if the educational program for which the property is conveyed is given priority of use. This category does not include components of the school such as playgrounds and athletic fields, that are utilized during the normal school year, and are available to all students.
Central Administrative and/or Service Center means administrative office space, equipment storage areas, and similar facilities.
Basic Public Benefit Allowance means an allowance that is earned by an applicant that satisfies the requirements of § 12.10 of this part.
Accreditation means an allowance that is earned by any postsecondary educational institution, including a vocational or trade school, that is accredited by an accrediting agency recognized by the Secretary under 34 CFR part 602.
Federal Impact means an allowance that is earned by any local educational agency (LEA) qualifying for Federal financial assistance as the result of the impact of certain Federal activities upon a community, such as the following under Public Law 81-874 and Public Law 81-815: to any LEA charged by law with responsibility for education of children who reside on, or whose parents are employed on, Federal property, or both; to any LEA to which the Federal Government has caused a substantial and continuing financial burden as the result of the acquisition of a certain amount of Federal property since 1938; or to any LEA that urgently needs minimum school facilities due to a substantial increase in school membership as the result of new or increased Federal activities.
Public Services Training means an allowance that is earned if the applicant has cadet or ROTC units or other personnel training contracts for the Federal or State governments. This is given to a school system only if the particular school receiving the property furnishes that training.
Hardship means an allowance earned by an applicant that has suffered a significant facility loss because of fire, storm, flood, other disaster, or condemnation. This allowance is also earned if unusual conditions exist such as isolation or economic factors that require special consideration.
Inadequacies of Existing Facilities means an allowance that is earned on a percentage basis depending on the degree of inadequacy considering both public and nonpublic facilities. Overall plant requirements are determined based on the relationship between the maximum enrollment accommodated in the present facilities, excluding double and night sessions and the anticipated enrollment if the facilities are transferred. Inadequacies may be computed for a component school unit such as a school farm, athletic field, facility for home economics, round-out school site, cafeteria, auditorium, teacherages, faculty housing, etc., only if the component is required to meet State standards. In that event, the State Department of Education will be required to provide a certification of the need. Component school unit inadequacies may only be related to a particular school and not to the entire school system.
Introduction of New Instructional Programs means an allowance that is earned if the proposed use of the property indicates that new programs will be added at a particular school. Examples of these new programs include those for vocational education, physical education, libraries, and similar programs.
Student Health and Welfare means an allowance that is earned if the proposed program and plan of use of the property provides for cafeteria, clinic, infirmary, bus loading shelters, or other uses providing for the well-being and health of students and eliminating safety and health hazards.
Research means an allowance that is earned if the proposed use of the property will be predominantly for research by faculty or graduate students under school auspices, or other primary educational research.
Service to Handicapped means an allowance that is earned if the proposed program and plan of use for the property will be for special education for the physically or mentally handicapped.
Regulations and procedures for complying with the Uniform Relocation Assistance Act of 1970 (Pub. L. 91-646, 84 Stat. 1894, 42 U.S.C. 4601) as amended by the SUrface Transportation and Uniform Relocation Assistance Act of 1987 (Title IV of Pub. L. 100-17, 101 Stat. 264-255, 42 U.S.C. 4601 note) are set forth in 49 CFR part 24.
(a) The Equal Access to Justice Act (the Act) provides for the award of fees and other expenses to applicants that—
(1) Are prevailing parties in adversary adjudications before the Department of Education; and
(2) Meet all other conditions of eligibility contained in this part.
(b) An eligible applicant, as described in paragraph (a) of this section, is entitled to receive an award unless—
(1) The adjudicative officer, the Civil Rights Reviewing Authority (CRRA), or the Secretary on review, determines that—
(i) The Department's position was substantially justified; or
(ii) Special circumstances make an award unjust; or
(2) The adversary adjudication is under judicial review, in which case the applicant may receive an award only as described in § 21.11.
(c) The determination under paragraph (b)(1)(i) of this section is based on the administrative record, as a whole, made during the adversary adjudication for which fees and other expenses are sought.
The Act applies to any adversary adjudication covered under this part pending or commenced before the Department on or after August 5, 1985.
The following definitions apply to this part:
Act means the Equal Access to Justice Act.
Adjudicative officer means the Administrative Law Judge, hearing examiner, or other deciding official who presided at the underlying adversary adjudication.
Adversary adjudication means a proceeding—
(1) Conducted by the Department for the formulation of an order or decision arising from a hearing on the record under the Administrative Procedure Act (5 U.S.C. 554);
(2) Listed in § 21.10; and
(3) In which the position of the Department was represented by counsel or other representative who entered an appearance and participated in the proceeding.
Application subject to the jurisdiction of the CRRA means an application for fees and expenses based on an underlying proceeding conducted under 34 CFR parts 100, 101, 104, 106, or 110.
CRRA means the Civil Rights Reviewing Authority, the reviewing authority established by the Secretary to consider applications under 34 CFR parts 100, 101, 104, 106, and 110.
Department means the U.S. Department of Education.
Department's counsel means counsel for the Department of Education or another Federal agency.
Employee means:
(1) A person who regularly performs services for an applicant—
(i) For remuneration; and
(ii) Under the applicant's direction and control.
(2) A part-time or seasonal employee who performs services for an applicant—
(i) For renumeration; and
(ii) Under the applicant's direction and control.
Fees and other expenses means an eligible applicant's reasonable fees and expenses—
(1) Related to the issues on which it was the prevailing party in the adversary adjudication; and
(2) Further described in §§ 21.33 and 21.50.
Party means a “person” or a “party” as those terms are defined in the Administrative Procedure Act (5 U.S.C. 551(3)), including an individual, partnership, corporation, association, unit of local government, or public or private organization that meets the requirements in § 21.20. The term does not include an agency of the Federal Government.
Position of the Department means, in addition to the position taken by the Department in the adversary adjudication, the action or failure to act by the Department upon which the adversary adjudication is based.
Secretary means the Secretary of the U.S. Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
The Act covers adversary adjudications under section 554 of title 5 of the United States Code. These include the following:
(a) Compliance proceedings under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
(b) Compliance and enforcement proceedings under the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.).
(c) Compliance proceedings under title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.).
(d) Compliance proceedings under section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794).
(e) Withholding proceedings under section 1001 of Pub. L. 100-297 (Hawkins-Stafford) (20 U.S.C. 2833).
(f) Proceedings under any of the following:
(1) Section 5(g) of Pub. L. 81-874 (Financial Assistance for Local Educational Agencies in Areas Affected by Federal Activity) (20 U.S.C. 240(g)).
(2) Sections 6(c) or 11(a) of Pub. L. 81-815 (an act relating to the construction of school facilities in areas affected by Federal activities and for other purposes) (20 U.S.C. 636(c) or 641(a)).
(3) Section 6 of Pub. L. 95-563 (Contract Disputes Act of 1978) (41 U.S.C. 605).
(4) Part E of the General Education Provisions Act (20 U.S.C. 1234 et seq.).
(g) Other adversary adjudications that fall within the coverage of the Act.
If a court reviews the underlying decision of an adversary adjudication covered under this part, an award of fees and other expenses may be made only under 28 U.S.C. 2412 (awards in certain judicial proceedings).
The following types of parties that prevail in adversary adjudications are eligible to apply under the Act for an award of fees and other expenses:
(a) An individual who has a net worth of not more than $2 million.
(b) Any owner of an unincorporated business who has—
(1) A net worth of not more than $7 million, including both personal and business interests; and
(2) Not more than 500 employees.
(c) A charitable or other tax-exempt organization—
(1) As described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)(3)); and
(2) Having not more than 500 employees.
(d) A cooperative association—
(1) As defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141(a)); and
(2) Having not more than 500 employees.
(e) Any other partnership, corporation, association, unit of local government, or organization that has—
(1) A net worth of not more than $7 million; and
(2) Not more than 500 employees.
(a) The adjudicative officer shall determine an applicant's net worth and number of employees as of the date the adversary adjudication was initiated.
(b) In determining eligibility, the adjudicative officer shall include the net worth and number of employees of the applicant and all of the affiliates of the applicant.
(c) For the purposes of paragraph (b) of this section, the adjudicative officer shall consider the following as an affiliate:
(1) Any individual, corporation, or other entity that directly or indirectly owns or controls a majority of the voting shares or other interest of the applicant;
(2) Any corporation or other entity of which the applicant directly or indirectly owns or controls a majority of the voting shares or other interest; and
(3) Any entity with a financial relationship to the applicant that, in the determination of the adjudicative officer, constitutes an affiliation for the purposes of paragraph (b) of this section.
(d) In determining the number of employees of an applicant and its affiliates, the adjudicative officer shall count part-time employees on a proportional basis.
If an applicant is a party in an adversary adjudication primarily on behalf of one or more persons or entities that are ineligible under this part, then the applicant is not eligible for an award.
(a) In order to be considered for an award under this part, an applicant may file its application when it prevails in an adversary adjudication—or in a significant and discrete substantive portion of an adversary adjudication—but no later than 30 days after the Department's final disposition of the adversary adjudication.
(b) In the case of a review or reconsideration of a decision in which an applicant has prevailed or believes it has prevailed, the adjudicative officer shall stay the proceedings on the application pending final disposition of the underlying issue.
(c) For purposes of this part, final disposition of the adversary adjudication means the latest of—
(1) The date on which an initial decision or other recommended disposition of the merits of the proceeding by an adjudicative officer becomes administratively final;
(2) The date of an order disposing of any petitions for reconsideration of the final order in the adversary adjudication;
(3) If no petition for reconsideration is filed, the last date on which that type of petition could have been filed; or
(4) The date of a final order or any other final resolution of a proceeding—such as a settlement or voluntary dismissal—that is not subject to a petition for reconsideration.
(a) In its application for an award of fees and other expenses, an applicant shall include the following:
(1) Information adequate to show that the applicant is a prevailing party in an adversary adjudication or in a significant and discrete substantive portion of an adversary adjudication.
(2) A statement that the adversary adjudication is covered by the Act according to § 21.10.
(3) An allegation that the position of the Department was not substantially justified, including a description of the specific position.
(4) Unless the applicant is a qualified tax-exempt organization or a qualified agricultural cooperative association, information adequate to show that the applicant qualifies under the requirements of §§ 21.20 and 21.21 regarding net worth. The information, if applicable, shall include a detailed exhibit of the net worth of the applicant—and its affiliates as described in § 21.21—as of the date the proceeding was initiated.
(5)(i) The total amount of fees and expenses sought in the award; and
(ii) An itemized statement of—
(A) Each expense; and
(B) Each fee, including the actual time expended for this fee and the rate at which the fee was computed.
(6) A written verification under oath or affirmation or under penalty of perjury from each attorney representing the applicant stating—
(i) The rate at which the fee submitted by the attorney was computed; and
(ii) The actual time expended for the fee.
(7) A written verification under oath, affirmation, or under penalty of perjury that the information contained in the application and any accompanying material is true and complete to the best of the applicant's information and belief.
(b) The adjudicative officer may require the applicant to submit additional information.
(a) In a proceeding on an application, the public record ordinarily includes the information showing the net worth of the applicant.
(b) However, if an applicant objects to public disclosure of any portion of the information and believes there are legal grounds for withholding it from disclosure, the applicant may submit directly to the adjudicative officer—
(1) The information the applicant wishes withheld in a sealed envelope labeled “Confidential Financial Information;” and
(2) A motion to withhold the information from public disclosure.
(c) The motion must—
(1) Describe the information the applicant is requesting be withheld; and
(2) Explain in detail—
(i) Why that information falls within one or more of the specific exemptions from mandatory disclosure under the Freedom of Information Act;
(ii) Why public disclosure of the information would adversely affect the applicant; and
(iii) Why disclosure is not required in the public interest.
(d)(1) The applicant shall serve on Department's counsel a copy of the material referred to in paragraph (c) of this section.
(2) The applicant is not required to give a copy of that material to any other party to the proceeding.
(e)(1) If the adjudicative officer finds that the information should not be withheld from public disclosure, the information is placed in the public record of the proceeding.
(2) If the adjudicative officer finds that the information should be withheld from public disclosure, any request to inspect or copy the information is treated in accordance with the Department's established procedures under the Freedom of Information Act (34 CFR part 5).
(a) A prevailing party may apply for an award of fees and other expenses incurred by the party in connection with—
(1) An adversary adjudication; or
(2) A significant and discrete substantive portion of an adversary adjudication.
(b) If a proceeding includes issues covered by the Act and issues excluded from coverage, the applicant may apply only for an award of fees and other expenses related to covered issues.
(c) Allowable fees and expenses include the following, as applicable:
(1) An award of fees based on rates customarily charged by attorneys, agents, and expert witnesses.
(2) An award for the reasonable expenses of the attorney, agent, or expert witness as a separate item if the attorney, agent, or expert witness ordinarily charges clients separately for those expenses.
(3) The cost of any study, analysis, engineering report, test, or project related to the preparation of the applicant's case in the adversary adjudication.
(d) The calculation of fees and expenses as provided for under paragraph (c) of this section shall be in accordance with the standards for awards as described in § 21.50(a) through (c).
(a) Except as provided in § 21.32 and in applications subject to the jurisdiction of the CRRA, an applicant shall—
(1) File with the adjudicative officer its application and any related documents; and
(2) Serve on all parties to the adversary adjudication copies of its application and any related documents.
(b)(1) In an application subject to the jurisdiction of the CRRA, the applicant shall—
(i) File with the CRRA its application and any other related documents; and
(ii) Serve on all parties to the adversary adjudication copies of its application and any related documents.
(2) In applications subject to § 21.40(b)(1), the CRRA shall direct the adjudicative officer to issue an initial decision within 30 days of the completion of the proceedings on the application. The adjudicative officer shall conduct proceedings under the procedures of §§ 21.41-21.44.
(a)(1) Within 30 days after receiving an application for an award under this part, the Department's counsel may file an answer to the application.
(2) The Department's counsel may request an extension of time for filing the Department's answer.
(3) The adjudicative officer shall grant the request for an extension if the Department's counsel shows good cause for the request.
(b)(1) The Department's answer must—
(i) Explain any objections to the award requested; and
(ii) Identify the facts relied on in support of the position of the Department.
(2) If the answer is based on any alleged facts not in the record of the adversary adjudication, the Department's counsel shall include with the answer either—
(i) Supporting affidavits; or
(ii) A request for further proceedings under § 21.44.
(c)(1) If the Department's counsel and the applicant believe that the issues in the application can be settled, they may jointly file a statement of their intent to negotiate a settlement.
(2)(i) The filing of a statement of an intent to negotiate extends the time for filing an answer for 30 days.
(ii) The adjudicative officer shall grant further extensions if the Department's counsel and the applicant jointly request those extensions.
(a) Within 15 days after receiving an answer, an applicant may file a reply.
(b) If the applicant's reply is based on any alleged facts not in the record of the adversary adjudication, the applicant shall include with the reply either—
(1) Supporting affidavits; or
(2) A request for further proceedings under § 21.44.
(a) Any party to a proceeding, other than an applicant or the Department's counsel, may file comments on—
(1) The application within 30 days after the applicant files the application;
(2) The answer within 30 days after the counsel files the answer; or
(3) Both, if the comments are filed within the time period specified in paragraphs (a)(1) and (a)(2) of this section.
(b) The commenting party may not participate further in proceedings on the application unless the adjudicative officer determines that further participation is necessary to permit full exploration of matters raised in the comments.
(a) The adjudicative officer shall make the determination of an award on the basis of the written record.
(b)(1) However, the adjudicative officer may order further proceedings on his or her own initiative or at the request of the applicant or the Department's counsel.
(2) The adjudicative officer may order further proceedings only if he or she determines that those proceedings are necessary for full and fair resolution of issues arising from the application.
(3) If further proceedings are ordered, the adjudicative officer shall determine the scope of those proceedings, which may include such proceedings as informal conferences, oral arguments, additional written submissions, discovery, or an evidentiary hearing.
(4) An adjudicative officer may not order discovery or an evidentiary hearing for the issue of whether or not the Department's position was substantially justified.
(c) If the applicant or the Department's counsel requests the adjudicative officer to order further proceedings, the request must—
(1) Specify the information sought or the disputed issues; and
(2) Explain why the additional proceedings are necessary to obtain that information or resolve those issues.
(a) In determining the reasonableness of the amount sought as an award of fees and expenses for an attorney, agent, or expert witness, the adjudicative officer shall consider one or more of the following:
(1)(i) If the attorney, agent, or expert witness is in private practice, his or her customary fee for similar services; or
(ii) If the attorney, agent, or expert witness is an employee of the applicant, the fully allocated cost of the services.
(2) The prevailing rate for similar services in the community in which the attorney, agent, or expert witness ordinarily performs services.
(3) The time the attorney, agent, or expert witness actually spent on the applicant's behalf with respect to the adversary adjudication.
(4) The time the attorney, agent, or expert witness reasonably spent in light of the difficulty or complexity of the covered issues in the adversary adjudication.
(5) Any other factors that may bear on the value of the services provided by the attorney, agent, or expert witness.
(b) The adjudicative officer may not grant—
(1) An award for the fee of an attorney or agent in excess of $75.00 per hour; or
(2) An award to compensate an expert witness in excess of the highest rate at which the Department pays expert witnesses.
(c) The adjudicative officer may also determine whether—
(1) Any study, analysis, engineering report, text, or project for which the applicant seeks an award was necessary for the preparation of the applicant's case in the adversary adjudication; and
(2) The costs claimed by the applicant for this item or items are reasonable.
(d) The adjudicative officer may not make an award to an eligible party if the adjudicative officer, the CRRA, or the Secretary on review finds that, based on a review of the administrative record as a whole—
(1) The position of the Department, as defined in § 21.3, was substantially justified; or
(2) Special circumstances make an award unjust.
(e) The adjudicative officer may reduce or deny an award to the extent that the applicant engaged in conduct that unduly or unreasonably protracted the adversary adjudication.
(f) If an applicant is entitled to an award because the applicant prevailed over another agency of the United States that participated in a proceeding before the Department and that agency's position was not substantially justified, the adjudicative officer shall determine whether to make the award, or an appropriate portion of the award, against that agency. For the purpose of this determination, the requirements of this subpart apply.
(a) In applications not subject to the jurisdiction of the CRRA, the adjudicative officer shall issue an initial decision on an application within 30 days after completion of proceedings on the application.
(b) The initial decision must include the following:
(1) Written findings, including sufficient supporting explanation, on—
(i) The applicant's status as a prevailing party;
(ii) The applicant's eligibility;
(iii) Whether the position of the Department was substantially justified;
(iv) Whether special circumstances make an award unjust;
(v) If applicable, whether the applicant engaged in conduct that unduly or unreasonably protracted the adversary adjudication; and
(vi) Other factual issues raised in the adversary adjudication.
(2) A statement of the amount awarded, including an explanation—with supporting information—for any difference between the amount requested by the applicant and the amount awarded.
(3) A statement of the applicant's right to request review by the Secretary under § 21.54.
(4) A statement of the applicant's right under § 21.56 to seek judicial review of the final award determination.
(c) The explanation referred to in paragraph (b)(2) of this section may include—
(1) Whether the amount requested was reasonable; and
(2) The extent to which the applicant unduly or unreasonably protracted the adversary adjudication.
(a) If the application is subject to the jurisdiction of the CRRA, the adjudicative officer shall issue the initial decision within 30 days after completion of the proceedings.
(b) The initial decision must include the information required under § 21.51(b). However, instead of the information required under § 21.51(b)(3), the initial decision must inform the applicant of—
(1) Its right to request review by the CRRA; and
(2) Its right to request review by the Secretary of the CRRA's final decision.
(c) If the applicant or the Department's counsel appeals the adjudicative officer's initial decision, the appeal must be submitted to the CRRA, in writing, within 30 days after the initial decision is issued.
(d) If the applicant or the Department's counsel does not appeal the adjudicative officer's initial decision to the CRRA and the Secretary does not decide to review the initial decision under § 21.54(a), the initial decision becomes the Department's final decision 60 days after it is issued by the officer.
(a) In an application subject to the jurisdiction of the CRRA, the CRRA shall, within 30 days after receipt of the written appeal—
(1) Issue a final decision on the appeal of the adjudicative officer's initial decision; or
(2) Remand the application to the adjudicative officer for further proceedings.
(b) The CRRA shall review the initial decision on the basis of the written record of the proceedings on the application. This includes but is not limited to—
(1) The written request; and
(2) The adjudicative officer's findings as described in § 21.51(b).
(c) The CRRA shall act on the review by either—
(1) Issuing a final decision on the application; or
(2) Remanding the application to the adjudicative officer for further proceedings.
(d) If the CRRA issues a final decision, the CRRA's decision must include—
(1) Written findings, including supporting explanation, on—
(i) The applicant's status as a prevailing party;
(ii) The applicant's eligibility;
(iii) Whether the position of the Department was substantially justified;
(iv) Whether special circumstances make an award unjust;
(v) Whether the applicant engaged in conduct that unduly or unreasonably protracted the adversary adjudication; and
(vi) Other factual issues raised in the adversary adjudication.
(2) A statement of the amount awarded, including an explanation—with supporting information—for any difference between the amount requested by the applicant and the amount awarded.
(3) A statement of the applicant's right to request review by the Secretary under § 21.54.
(4) A statement of the applicant's right under § 21.56 to seek judicial review of the final award determination.
(e) The explanation referred to in paragraph (d)(2) of this section may include—
(1) Whether the amount requested was reasonable; and
(2) The extent to which the applicant unduly or unreasonably protracted the adversary adjudication.
(a) The Secretary may decide to review—
(1) An initial decision made by an adjudicative officer in a proceeding not subject to CRRA review;
(2) An initial decision made by an adjudicative officer in a proceeding subject to CRRA review that was not appealed to the CRRA; or
(3) A final decision made by the CRRA under § 21.53.
(b)(1) The Secretary does not review a final decision made by an adjudicative officer of the General Services Administration Board of Contract Appeals.
(2) The Secretary or a party to the proceedings may seek reconsideration of the final decision by an adjudicative officer of the General Services Administration Board of Contract Appeals on the fee application in accordance with 48 CFR 6101.32.
(c) The Secretary decides to review a decision under § 21.54(a) either—
(1) Upon receipt of a written request for review by an applicant or Department's counsel; or
(2) Upon the Secretary's own motion.
(d) If the applicant or the Department's counsel seeks a review, the request must be submitted to the Secretary, in writing, within 30 days of—
(1) An initial decision in a proceeding not subject to CRRA review; or
(2) A final decision of the CRRA.
(e) The Secretary decides whether to accept or reject a request for review of an initial decision made by the adjudicative officer in a proceeding not subject to CRRA review or a final decision of the CRRA within 30 days after receipt of a request for review.
(f) The Secretary may decide on his own motion to review a decision made under § 21.54(a) within 60 days of the initial decision by the adjudicative officer or a final decision of the CRRA.
(g) If the Secretary decides to review the adjudicative officer's initial decision or the CRRA's final decision—
(1) The Secretary reviews the adjudicative officer's initial decision or the CRRA's final decision on the basis of the written record of the proceedings on the application. This includes, but is not restricted to—
(i) The written request for review;
(ii) The adjudicative officer's findings as described in § 21.51(b); and
(iii) If applicable, the final decision of the CRRA, if any; and
(2) The Secretary either—
(i) Issues a final decision; or
(ii) Remands the application to the adjudicative officer or the CRRA for further proceedings.
(h) If the Secretary issues a final decision, the Secretary's decision—
(1) Is in writing;
(2) States the reasons for the decision; and
(3) If the decision is adverse to the applicant, advises the applicant of its right to petition for judicial review under § 21.56.
If the Secretary takes no action under § 21.54—
(a) The adjudicative officer's initial decision on the application becomes the Department's final decision 60 days after it is issued by the adjudicative officer; or
(b) The CRRA's decision on the application becomes the Department's final decision 60 days after it is issued by the CRRA.
If the applicant is dissatisfied with the award determination in the final decision under §§ 21.52-21.55, the applicant may seek judicial review of that determination under 5 U.S.C. 504(c)(2) within 30 days after that determination was made.
To receive payment, an applicant granted an award under the Act must submit to the Financial Management Service of the Department—
(a) A request for payment signed by the applicant or its duly authorized agent;
(b) A copy of the final decision granting the award; and
(c) A statement that—
(1) The applicant will not seek review of the decision in the United States courts; or
(2) The process for seeking review of the award has been completed.
If an applicant, its agent, or its attorney accepts payment of any award or settlement in conjunction with an application under this part, that acceptance—
(a) Is final and conclusive with respect to that application; and
(b) Constitutes a complete release of any further claim against the United States with respect to that application.
(a) The Secretary may take one or more of the following actions to collect a debt owed to the United States:
(1) Collect the debt under the procedures authorized in the regulations in this part.
(2) Refer the debt to the General Accounting Office for collection.
(3) Refer the debt to the Department of Justice for compromise, collection, or litigation.
(4) Take any other action authorized by law.
(b) In taking any of the actions listed in paragraph (a) of this section, the Secretary complies with the requirements of the Federal Claims Collection Standards (FCCS) at 4 CFR parts 101-105 that are not inconsistent with the requirements of this part.
(c) The Secretary may—
(1) Collect the debt under the offset procedures in subpart C of this part;
(2) Report a debt to a consumer reporting agency under the procedures in subpart C of this part;
(3) Charge interest on the debt as provided in the FCCS;
(4) Impose upon a debtor a charge based on the costs of collection as determined under subpart E of this part;
(5) Impose upon a debtor a penalty for failure to pay a debt when due under subpart E of this part;
(6) Compromise a debt, or suspend or terminate collection of a debt, under subpart F of this part;
(7) Take any other actions under the procedures of the FCCS in order to protect the United States Government's interests; or
(8) Use any combination of the procedures listed in this paragraph (c) as may be appropriate in a particular case.
(a)(1) The Secretary takes an action referred to under § 30.1(a) in accordance with—
(i) 31 U.S.C. chapter 37, subchapters I and II;
(ii) Other applicable statutory authority; or
(iii) The common law.
(2) If collection of a debt in a particular case is not authorized under one of the authorities described in paragraph (a)(1) of this section, the Secretary may collect the debt under any other available authority under which collection is authorized.
(b) The Secretary does not use a procedure listed in § 30.1(c) to collect a debt, or a certain type of debt, if—
(1) The procedure is specifically prohibited under a Federal statute; or
(2) A separate procedure other than the procedure described under § 30.1(c) is specifically required under—
(i) A contract, grant, or other agreement;
(ii) A statute other than 31 U.S.C. 3716; or
(iii) Other regulations.
(a)(1)(i) Sections 30.20-30.31 establish the general procedures used by the Secretary to collect debts by administrative offset.
(ii) The Secretary uses the procedures established under other regulations, including § 30.33, What procedures does the Secretary follow for IRS tax refund offsets?, 34 CFR part 31, Salary Offset for Federal Employees Who Are Indebted to the United States Under Programs Administrated by the Secretary of Education, and 34 CFR part 32, Salary Offset to Recover Overpayments of Pay or Allowances from Department of Education Employees, if the conditions requiring application of those special procedures exists.
(2) The word “offset” is used in this subpart to refer to the collection of a debt by administrative offset.
(b) The Secretary does not rely on 31 U.S.C. 3716 as authority for offset if:
(1) The debt is owed by a State or local government;
(2) The debt, or the payment against which offset would be taken, arises under the Social Security Act;
(3) The debt is owed under:
(i) The Internal Revenue Code of 1954; or
(ii) The tariff laws of the United States; or
(4) The right to collect the debt first accrued more than ten years before initiation of the offset.
(c)(1) The Secretary may rely on 31 U.S.C. 3716 as authority for offset of a debt to which paragraph (b)(4) of this section would otherwise apply if facts material to the Government's right to collect the debt were not known and could not reasonably have been known by the official or officials of the Government who are charged with the responsibility to discover and collect the debt.
(2) If paragraph (c)(1) of this section applies, the Secretary may rely on 31 U.S.C. 3716 as authority for offset up to 10 years after the date that the official or officials described in that paragraph first knew or reasonably should have known of the right of the United States to collect the debt.
(d) The Secretary determines when the right to collect a debt first accrued under the existing law regarding accrual of debts such as 28 U.S.C. 2415.
(a) The Secretary may offset a debt if:
(1) The debt is liquidated or certain in amount; and
(2) Offset is feasible and not otherwise prohibited.
(b)(1) Whether offset is feasible is determined by the Secretary in the exercise of sound discretion on a case-by-case basis, either:
(i) For each individual debt or offset; or
(ii) For each class of similar debts or offsets.
(2) The Secretary considers the following factors in making this determination:
(i) Whether offset can be practically and legally accomplished.
(ii) Whether offset will further and protect the interests of the United States.
(c) The Secretary may switch advance funded grantees to a reimbursement payment system before initiating an offset.
(a)(1) Except as provided in §§ 30.28 and 30.29, the Secretary provides a debtor with written notice of the Secretary's intent to offset before initiating the offset.
(2) The Secretary mails the notice to the debtor at the current address of the debtor, as determined by the Secretary from information regarding the debt maintained by the Department.
(b) The written notice informs the debtor regarding:
(1) The nature and amount of the debt;
(2) The Secretary's intent to collect the debt by offset;
(3) The debtor's opportunity to:
(i) Inspect and copy Department records pertaining to the debt;
(ii) Obtain a review within the Department of the existence or amount of the debt; and
(iii) Enter into a written agreement with the Secretary to repay the debt;
(4) The date by which the debtor must request an opportunity set forth under paragraph (b)(3) of this section; and
(5) The Secretary's decision, in appropriate cases, to switch the debtor from advance funding to a reimbursement payment system.
(c)(1) In determining whether a debtor has requested an opportunity set forth under paragraph (b)(3) of this section in a timely manner, the Secretary relies on:
(i) A legibly dated U.S. Postal Service postmark for the debtor's request; or
(ii) A legibly stamped U.S. Postal service mail receipt for debtor's request.
(2) The Secretary does not rely on either of the following as proof of mailing;
(i) A private metered postmark.
(ii) A mail receipt that is not dated by the U.S. Postal Service.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method for proof of mailing, a debtor should check with its local post office.
(d) If a debtor previously has been notified of the Secretary's intent to offset or offered an opportunity to take any of the actions set forth in paragraph (b)(3) of this section in connection with the same debt, the Secretary may offset without providing the debtor with an additional notice of intent or opportunity to take any of those actions under these offset procedures.
(a) If a debtor wants to inspect and copy Department documents relating to the debt, the debtor must:
(1) File a written request to inspect and copy the documents within 20 days after the date of the notice provided under § 30.22; and
(2) File the request at the address specified in that notice.
(b) A request filed under paragraph (a) of this section must contain:
(1) All information provided to the debtor in the notice under § 30.22 or § 30.33(b) that identifies the debtor and the debt, including the debtor's Social Security number and the program under which the debt arose, together with any corrections of that identifying information; and
(2) A reasonably specific identification of the records the debtor wishes to have available for inspection and copying.
(c) The Secretary may decline to provide an opportunity to inspect and copy records if the debtor fails to request inspection and copying in accordance with this section.
(a) If a debtor wants a review within the Department of the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii), the debtor must:
(1) File a request for review within 20 days after the date of the notice provided under § 30.22; and
(2) File a request at the address specified in that notice.
(b) A request filed under paragraph (a) of this section must contain:
(1) All information provided to the debtor in the notice under § 30.22 or § 30.33(b) that identifies the debtor and the particular debt, including the debtor's Social Security number and the program under which the debt arose, together with any corrections of that identifying information; and
(2) An explanation of the reasons the debtor believes that the notice the debtor received under § 30.22 or § 30.33(b) inaccurately states any facts or conclusions relating to the debt.
(c) The Secretary may decline to provide an opportunity for review of a debt if the debtor fails to request the review in accordance with this section.
(d)(1) The debtor shall:
(i) File copies of any documents relating to the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) that the debtor wishes the Secretary to consider in the review;
(ii) File the documents at the address specified in that notice, and
(iii) File the documents no later than:
(A) 20 days after the date of the notice provided under § 30.22; or
(B) If the debtor has requested an opportunity to inspect and copy records under § 30.23 within the time period specified in that section, 15 days after the date on which the Secretary makes available to the debtor the relevant, requested records.
(2) The Secretary may decline to consider any reasons or documents that the debtor fails to provide in accordance with paragraphs (b) and (d) of this section.
(e) If the Secretary bases the review on only the documentary evidence, the Secretary:
(1) Reviews the documents submitted by the debtor and other relevant evidence; and
(2) Notifies the debtor in writing of the Secretary's decision regarding the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) and, if appropriate, the question of waiver of the debt.
(a) If a debtor wants the Secretary to conduct the review requested under § 30.24 as an oral hearing, the debtor must file a written request for an oral hearing together with the request for review filed under § 30.24(a).
(b) A request filed under paragraph (a) of this section must contain the following in addition to the information filed under § 30.24(b):
(1) An explanation of reason(s) why the debtor believes the Secretary cannot resolve the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) through a review of the documentary evidence.
(2) An identification of:
(i) The individuals that the debtor wishes to have testify at the oral hearing;
(ii) The specific issues identified in the notice regarding which each individual is prepared to testify; and
(iii) The reasons why each individual's testimony is necessary to resolve the issue.
(c) The Secretary grants a debtor's request for an oral hearing regarding the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) only if:
(1)(i) A statute authorizes or requires the Secretary to consider waiver of the indebtedness involved;
(ii) The debtor files a request for waiver of the indebtedness with the request for review filed under paragraph (a)(1) of this section; and
(iii) The question of waiver of the indebtedness turns on an issue of credibility or veracity; or
(2) The Secretary determines that the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) cannot be resolved by review of only the documentary evidence.
(d) Notwithstanding paragraph (b) of this section, the Secretary may deny oral hearings for a class of similar debts if:
(1) The issues identified in the notice under § 30.22(b)(3)(ii) or 30.33(b)(3)(ii) for which an oral hearing was requested, or the issue of waiver, rarely involve issues of credibility or veracity; and
(2) The Secretary determines that review of the documentary evidence is ordinarily an adequate means to correct mistakes.
(e) The Secretary may decline to consider any reasons that the debtor fails to provide in accordance with paragraph (b)(1) of this section.
(a) The oral hearing under § 30.25 is not a formal evidentiary hearing subject to 5 U.S.C. 554, unless required by law.
(b) If the Secretary grants an oral hearing, the Secretary notifies the debtor in writing of:
(1) The time and place for the hearing;
(2) The debtor's right to representation; and
(3) The debtor's right to present and cross examine witnesses.
(c) If the Secretary grants an oral hearing, the Secretary designates an official to:
(1) Govern the conduct of the hearing;
(2) Take all necessary action to avoid unreasonable delay in the proceedings;
(3) Review the evidence presented at the hearing, the documents submitted by the debtor, and other relevant evidence; and
(4) After considering the evidence, notify the debtor in writing of the official's decision regarding the issues identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii) and, if appropriate, the question of waiver of the debt.
(d) The official designated under paragraph (c) of this section may decline to hear any witnesses or testimony not identified by the debtor in accordance with § 30.25(b)(2).
(e) The decision of the designated official under paragraph (c) of this section constitutes the final decision of the Secretary.
(a) If a debtor wants an opportunity to enter into a written agreement to repay a debt on terms acceptable to the Secretary, the debtor must:
(1) File a request to enter into such agreement within 20 days after the date of the notice provided under § 30.22; and
(2) File the request at the address specified in the notice.
(b) A request filed under paragraph (a) of this section must contain all information provided to the debtor in the notice under § 30.22 or § 30.33(b) that identifies the debtor and the debt, including the debtor's Social Security number and the program under which the debt arose, together with any corrections of that identifying information.
(c) If the Secretary receives a request filed in accordance with this section, the Secretary may enter into a written agreement requiring repayment in accordance with 4 CFR 102.11, instead of offsetting the debt.
(d) In deciding whether to enter into the agreement, the Secretary may consider:
(1) The Government's interest in collecting the debt; and
(2) Fairness to the debtor.
(e)(1) A debtor that enters into a repayment agreement with the Secretary under this section waives any right to further review by the Secretary of the issues relating to the original debt identified in the notice under § 30.22(b)(3)(ii) or § 30.33(b)(3)(ii).
(2) If a debtor breaches a repayment agreement, the Secretary may offset, or, under § 30.30, refer to another agency for offset:
(i) The amount owing under the agreement; or
(ii) The entire original debt, to the extent not repaid.
(a) The Secretary may offset before completing the procedures otherwise required by §§ 30.22-30.27 if:
(1) Failure to offset would substantially prejudice the Government's ability to collect the debt; and
(2) The amount of time remaining before the payment by the United States which is subject to offset does not reasonably permit completion of the procedures under §§ 30.22-30.27.
(b) If the Secretary offsets under paragraph (a) of this section, the Secretary:
(1) Promptly completes the procedures under §§ 30.22-30.27 after initiating the offset; and
(2) Refunds any amounts recovered under the offset that are later found not to be owed to the United States.
The Secretary may initiate offset to collect a debt owed another Federal agency if:
(a) An official of that agency certifies in writing:
(1) That the debtor owes a debt to the United States;
(2) The amount of the debt; and
(3) That the agency has complied with 4 CFR 102.3; and
(b) For offsets under 31 U.S.C. 3716, the Secretary makes an independent determination that the offset meets the standards under § 30.21(a)(2).
(a) The Secretary may request another Federal agency to offset a debt owed under a program or activity of the Department if the Secretary certifies in writing to the other Federal agency:
(1) That the debtor owes a debt to the United States;
(2) The amount of the debt; and
(3) That the Secretary has complied with 4 CFR 102.3.
(b) Before providing the certification required under paragraph (a) of this section, the Secretary complies with the procedures in §§ 30.20-30.27.
If the Secretary collects more than one debt of a debtor by administrative offset, the Secretary applies the recovered funds to satisfy those debts based on the Secretary's determination of the best interests of the United States, determined by the facts and circumstances of the particular case.
(a) If a named person owes a debt under a program or activity of the Department, the Secretary may refer the debt for offset to the Secretary of the Treasury after complying with the procedures in §§ 30.20-30.28, as modified by this section.
(b) Notwithstanding § 30.22(b), the notice sent to a debtor under § 30.22 informs the debtor that:
(1) The debt is past due;
(2) The Secretary intends to refer the debt for offset to the Secretary of Treasury;
(3) The debtor has an opportunity to:
(i) Inspect and copy Department records regarding the existence, amount, enforceability, or past-due status of the debt;
(ii) Obtain a review within the Department of the existence, amount, enforceability, or past-due status of the debt;
(iii) Enter into a written agreement with the Secretary to repay the debt; and
(4) The debtor must take an action set forth under paragraph (b)(3) by a date specified in the notice.
(c) Notwithstanding § 30.23(a), if a debtor wants to inspect and copy Department records regarding the existence, amount, enforceability, or past-due status of the debt, the debtor must:
(1) File a written request to inspect and copy the records within 20 days after the date of the notice provided under § 30.22; and
(2) File the request at the address specified in that notice.
(d) Notwithstanding the time frame under § 30.24(a), if a debtor wants a review under that paragraph, the debtor must file a request for review at the address specified in the notice by the later of:
(1) Sixty-five days after the date of the notice provided under § 30.22;
(2) If the debtor has requested an opportunity to inspect and copy records within the time period specified in paragraph (c) of this section, 15 days after the date on which the Secretary makes available to the debtor the relevant, requested records; or
(3) If the debtor has requested a review within the appropriate time frame under paragraph (d) (1) or (2) of this section and the Secretary has provided an initial review by a guarantee agency, seven days after the date of the initial determination by the guarantee agency.
(e) Notwithstanding the time frames under § 30.24(d), a debtor shall file the documents specified under that paragraph with the request for review.
(f) Notwithstanding the time frame under § 30.27(a), a debtor must agree to repay the debt under terms acceptable to the Secretary and make the first payment due under the agreement by the latest of:
(1) The seventh day after the date of decision of the Secretary if the debtor requested a review under § 30.24;
(2) The sixty-fifth day after the date of the notice under § 30.22(b), if the debtor did not request a review under § 30.24, or an opportunity to inspect and copy records of the Department under § 30.23; or
(3) The fifteenth day after the date on which the Secretary made available relevant records regarding the debt, if the debtor filed a timely request under § 30.23(a).
(a)(1) The Secretary reports information regarding debts arising under a program or activity of the Department and held by the Department to consumer reporting agencies, in accordance with the procedures described in this section.
(2) The term consumer reporting agency, as used in this section, has the same meaning as provided in 31 U.S.C. 3701(a)(3).
(b) Before reporting information on a debt to a consumer reporting agency, the Secretary follows the procedures set forth in § 30.33.
(a) The Secretary may charge a debtor for the costs associated with the collection of a particular debt. These costs include, but are not limited to—
(1) Salaries of employees performing Federal loan servicing and debt collection activities;
(2) Telephone and mailing costs;
(3) Costs for reporting debts to credit bureaus;
(4) Costs for purchase of credit bureau reports;
(5) Costs associated with computer operations and other costs associated with the maintenance of records;
(6) Bank charges;
(7) Collection agency costs;
(8) Court costs and attorney fees; and
(9) Costs charged by other Governmental agencies.
(b) Notwithstanding any provision of State law, if the Secretary uses a collection agency to collect a debt on a contingent fee basis, the Secretary charges the debtor, and collects through the agency, an amount sufficient to recover—
(1) The entire amount of the debt; and
(2) The amount that the Secretary is required to pay the agency for its collection services.
(c)(1) The amount recovered under paragraph (b) of this section is the entire amount of the debt, multiplied by the following fraction:
(2) In paragraph (c)(1) of this section, cr equals the commission rate the Department pays to the collection agency.
(d) If the Secretary uses more than one collection agency to collect similar debts, the commission rate (cr) described in paragraph (c)(2) of this section is calculated as a weighted average of the commission rates charged by all collection agencies collecting similar debts, computed for each fiscal year based on the formula
(1) Xi equals the dollar amount of similar debts placed by the Department with an individual collection agency as of the end of the preceding fiscal year;
(2) Yi equals the commission rate the Department pays to that collection agency for the collection of the similar debts;
(3) Z equals the dollar amount of similar debts placed by the Department with all collection agencies as of the end of the preceding fiscal year; and
(4) N equals the number of collection agencies with which the Secretary has placed similar debts as of the end of the preceding fiscal year.
(e) If a debtor has agreed under a repayment or settlement agreement with the Secretary to pay costs associated with the collection of a debt at a specified amount or rate, the Secretary collects those costs in accordance with the agreement.
(f) The Secretary does not impose collection costs against State or local governments under paragraphs (a) through (d) of this section.
(a) If a debtor does not make a payment on a debt, or portion of a debt, within 90 days after the date specified in the first demand for payment sent to the debtor, the Secretary imposes a penalty on the debtor.
(b)(1) The amount of the penalty imposed under paragraph (a) of this section is 6 percent per year of the amount of the delinquent debt.
(2) The penalty imposed under this section runs from the date specified in the first demand for payment to the date the debt (including the penalty) is paid.
(c) If a debtor has agreed under a repayment or settlement agreement with the Secretary to pay a penalty for failure to pay a debt when due, or has such an agreement under a grant or contract under which the debt arose, the Secretary collects the penalty in accordance with the agreement, grant, or contract.
(d) The Secretary does not impose a penalty against State or local governments under paragraphs (a) and (b) of this section.
(a) For a debt of any amount based on a loan, the Secretary may refrain from collecting interest or charging administrative costs or penalties to the extent that compromise of these amounts is appropriate under the standards for compromise of a debt contained in 4 CFR part 103.
(b) For a debt not based on a loan the Secretary may waive, or partially waive, the charging of interest, or the collection of administrative costs or penalties, if—
(1) Compromise of these amounts is appropriate under the standards for compromise of a debt contained in 4 CFR part 103; or
(2) The Secretary determines that the charging of interest or the collection of administrative costs or penalties is—
(i) Against equity and good conscience; or
(ii) Not in the best interests of the United States.
(c) The Secretary may exercise waiver under paragraph (b)(1) of this section without regard to the amount of the debt.
(d) The Secretary may exercise waiver under paragraph (b)(2) of this section if—
(1) The Secretary has accepted an installment plan under 4 CFR 102.11;
(2) There is no indication of fault or lack of good faith on the part of the debtor; and
(3) The amount of interest, administrative costs, and penalties is such a large portion of the installments that the debt may never be repaid if that amount is collected.
(e)(1) The Secretary does not charge interest on any portion of a debt, other than a loan, owed by a person subject to 31 U.S.C. 3717 if the debt is paid within 30 days after the date of the first demand for payment.
(2) The Secretary may extend the period under paragraph (e)(1) of this section if the Secretary determines that the extension is appropriate.
(a)(1) The Secretary uses the standards in the FCCS, 31 CFR part 902, to determine whether compromise of a debt is appropriate if the debt arises under a program administered by the Department, unless compromise of the debt is subject to paragraph (b) of this section.
(2) If the amount of the debt is more than $100,000, or such higher amount as the Department of Justice may prescribe, the Secretary refers a proposed compromise of the debt to the Department of Justice for approval, unless the compromise is subject to paragraph (b) of this section or the debt is one described in paragraph (e) of this section.
(b) Under the provisions in 34 CFR 81.36, the Secretary may enter into certain compromises of debts arising because a recipient of a grant or cooperative agreement under an applicable Department program has spent some of these funds in a manner that is not allowable. For purposes of this section, neither a program authorized under the Higher Education Act of 1965, as amended (HEA), nor the Impact Aid Program is an applicable Department program.
(c)(1) The Secretary uses the standards in the FCCS, 31 CFR part 903, to determine whether suspension or termination of collection action on a debt is appropriate.
(2) Except as provided in paragraph (e), the Secretary—
(i) Refers the debt to the Department of Justice to decide whether to suspend or terminate collection action if the amount of the debt outstanding at the time of the referral is more than $100,000 or such higher amount as the Department of Justice may prescribe; or
(ii) May suspend or terminate collection action if the amount of the debt outstanding at the time of the Secretary's determination that suspension or termination is warranted is less than or equal to $100,000 or such higher amount as the Department of Justice may prescribe.
(d) In determining the amount of a debt under paragraph (a), (b), or (c) of this section, the Secretary deducts any partial payments or recoveries already received, and excludes interest, penalties, and administrative costs.
(e)(1) Subject to paragraph (e)(2) of this section, under the provisions of 31 CFR part 902 or 903, the Secretary may compromise a debt in any amount, or suspend or terminate collection of a debt in any amount, if the debt arises under the Federal Family Education Loan Program authorized under title IV, part B, of the HEA, the William D. Ford Federal Direct Loan Program authorized under title IV, part D of the HEA, or the Perkins Loan Program authorized under title IV, part E, of the HEA.
(2) The Secretary refers a proposed compromise, or suspension or termination of collection, of a debt that exceeds $1,000,000 and that arises under a loan program described in paragraph (e)(1) of this section to the Department of Justice for review. The Secretary does not compromise, or suspend or terminate collection of, a debt referred to the Department of Justice for review until the Department of Justice has provided a response to that request.
(f) The Secretary refers a proposed resolution of a debt to the Government Accountability Office (GAO) for review and approval before referring the debt to the Department of Justice if—
(1) The debt arose from an audit exception taken by GAO to a payment made by the Department; and
(2) The GAO has not granted an exception from the GAO referral requirement.
(g) Nothing in this section precludes—
(1) A contracting officer from exercising his authority under applicable statutes, regulations, or common law to settle disputed claims relating to a contract; or
(2) The Secretary from redetermining a claim.
(h) Nothing in this section authorizes the Secretary to compromise, or suspend or terminate collection of, a debt—
(1) Based in whole or in part on conduct in violation of the antitrust laws; or
(2) Involving fraud, the presentation of a false claim, or misrepresentation on the part of the debtor or any party having an interest in the claim.
(a) General. The Secretary establishes the standards and procedures in this part that apply to the offset from disposable pay of a current or former Federal employee or from amounts payable from the Federal retirement account of a former Federal employee to recover a debt owed the United States under a program adminstered by the Secretary of Education.
(b) Exclusions. This part does not apply to—
(1) Offsets under 34 CFR part 32 to recover for overpayments of pay or allowances to an employee of the Department;
(2) Offsets under 34 CFR part 30; or
(3) Offsets under section 124 of Pub. L. 97-276 to collect debts owed to the United States on judgments.
(c) Reports to consumer reporting agency. The Secretary may report a debt to a consumer reporting agency after notifying the employee, in accordance with 34 CFR 30.35, of the intention to report the debt, and after providing the employee an opportunity to inspect documents, receive a hearing, and enter into a repayment agreement under this part.
As used in this part:
Agency means—
(1) An Executive agency as defined in 5 U.S.C. 105, including the U.S. Postal Service and the U.S. Postal Rate Commission;
(2) A military department as defined in 5 U.S.C. 102;
(3) An agency or court in the judicial branch, including a court as defined in 28 U.S.C. 610, the District Court for the Northern Mariana Islands, and the Judicial Panel on Multidistrict Litigation;
(4) An agency of the legislative branch, including the U.S. Senate and the U.S. House of Representatives; and
(5) Any other independent establishment that is an entity of the Federal Government.
Days refer to calendar days.
Department means the Education Department.
Disposable pay means the amount that remains from an employee's pay after required deductions for Federal, State, and local income taxes; Social Security taxes, including Medicare taxes; Federal retirement programs; premiums for basic life insurance and health insurance benefits; and such other deductions that are required by law to be withheld.
Employee means a current or former employee of an agency. In the case of an offset proposed to collect a debt owed by a deceased employee, the references in this part to the employee shall be read to refer to the payee of benefits from the Federal retirement account or other pay of the employee.
Federal retirement account means an account of an employee under the Civil Service Retirement System or the Federal Employee Retirement System.
Offset means a deduction from the pay of an employee, or a payment due from the Federal retirement account of an employee, to satisfy a debt.
Pay means basic pay, special pay, incentive pay, retired pay, retainer pay, or, in the case of an individual not entitled to basic pay, other authorized pay, including severance pay or lump sum payments for accrued annual leave, and amounts payable from the Federal retirement account of an employee.
Secretary means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
(a) At least 65 days before initiating an offset against the pay of an employee, the Secretary sends a written notice to the employee stating—
(1) The nature and amount of the debt;
(2) A demand for payment of the debt;
(3) The manner in which the Secretary charges interest, administrative costs, and penalties on the debt;
(4) The Secretary's intention to collect the debt by offset against—
(i) 15 percent of the employee's current disposable pay; and
(ii) If the debt cannot be satisfied by offset against current disposable pay, a specified amount of severance pay, a lump sum annual leave payment, a final salary check, or payments from the Federal retirement account of the employee;
(5) The amount, frequency, approximate beginning date and duration of the proposed offset;
(6) The employee's opportunity to—
(i) Inspect and copy Department records pertaining to the debt;
(ii) Obtain a pre-offset hearing before a hearing official who is not under the control or supervision of the Secretary regarding the existence or amount of the debt, or the proposed offset schedule; and
(iii) Enter into a written agreement with the Secretary to repay the debt;
(7) The date by which the employee must request an opportunity set forth under paragraph (a)(6) of this section;
(8) The grounds for objecting to collection of the debt by offset;
(9) The applicable hearing procedures and requirements;
(10) That the Secretary grants any request for access to records, for a hearing, or for a satisfactory repayment agreement made by an employee;
(11) That the Secretary does not delay the start of the proposed offset, or suspend an offset already commenced, unless—
(i) An employee makes the request for access to records or for a hearing, or enters into a repayment agreement that is acceptable to the Secretary, before the deadlines described in this part; or
(ii) An employee requests a hearing after the deadlines established in § 31.5(a), but submits evidence satisfactory to the Secretary that the request was not made in a timely manner because the employee did not have notice of the proposed offset, or was prevented from making the request by factors beyond his or her control, until after the deadlines had passed;
(12) That a final decision on the hearing will be issued not later than 60 days after the date on which the employee files a request for a hearing under § 31.5, unless a delay in the proceedings is granted at the request of the employee;
(13) That submission by the employee of knowingly false statements, representations or evidence may subject the employee to applicable disciplinary procedures, or civil or criminal penalties; and
(14) That any amounts paid or collected by offset on a debt later determined to be unenforceable or canceled will be refunded to the employee.
(b)(1) In determining whether an employee has requested an opportunity set forth under paragraph (a)(6) of this section in a timely manner, the Secretary relies on—
(i) A legibly dated U.S. Postal Service postmark for the employee's request; or
(ii) A legibly stamped U.S. Postal Service mail receipt for the employee's request.
(2) The Secretary does not rely on either of the following as proof of mailing:
(i) A private metered postmark.
(ii) A mail receipt that is not dated by the U.S. Postal Service.
(c) Payment by offset under this part of all or part of a debt does not constitute an acknowledgment of the debt or a waiver of rights available to the employee under this part or other applicable law if the employee has not agreed in writing to the offset.
(a) The Secretary makes available for inspection and copying before offset under this part those Department documents that relate to the debt, if the employee—
(1) Files a written request to inspect and copy the documents within 20 days of the date of the pre-offset notice under § 31.3, and
(2) Files the request at the address specified in that notice.
(b) A request filed under paragraph (a)(1) of this section must contain—
(1) All information provided to the employee in the pre-offset notice under § 31.3 that identifies the employee and the debt, including the employee's Social Security number and the program under which the debt arose, together with any corrections of that identifying information; and
(2) A reasonably specific identification of the documents that the employee wishes to have available for inspection and copying.
(c) The Secretary makes available documents for inspection and copying upon request by the employee. However, the Secretary may initiate an offset before making the requested documents available if the employee fails to request inspection and copying in accordance with this section.
(a) Deadlines. (1) The Secretary provides a hearing before offset on the existence, amount, or enforceability of the debt described in the pre-offset notice provided under § 31.3, or on the amount or frequency of the offsets as proposed in that notice, if the employee—
(i) Files a request for the hearing within the later of—
(A) 65 days after the date of the pre-offset notice provided under § 31.3; or
(B) 15 days after the date on which the Secretary makes available to the employee the relevant, requested documents if the employee had requested an opportunity to inspect and copy documents within 20 days of the date of the pre-offset notice provided under § 31.3; and
(ii) Files a request at the address specified in that notice.
(2) The Secretary provides a hearing upon request by the employee. However, if the employee does not submit, within the deadlines in paragraph (a)(1) of this section, a request that meets the requirements of paragraphs (b) and (c) of this section, the Secretary does not delay the start of an offset, or suspend an offset already commenced, unless the employee submits evidence satisfactory to the Secretary that the request was not made in a timely manner because the employee did not have notice of the proposed offset, or was otherwise prevented from making the request by factors beyond his or her control, until after the deadlines had passed.
(b) Contents of request for a hearing. A request for a hearing must contain—
(1) All information provided to the employee in the pre-offset notice under § 31.3 that identifies the employee and the particular debt, including the employee's Social Security number and the program under which the debt arose, together with any corrections needed with regard to that identifying information;
(2) An explanation of the reasons why the employee believes that—
(i) The debt as stated in the pre-offset notice is not owing or is not enforceable by offset; or
(ii) The amount of the proposed offset described in the pre-offset notice will cause extreme financial hardship to the employee;
(3) If the employee contends that the amount of the proposed offset will cause extreme financial hardship under the standards set forth in § 31.8(b)—
(i) An alternative offset proposal;
(ii) An explanation, in writing, showing why the offset proposed in the notice would cause an extreme financial hardship for the employee; and
(iii) Documents that show for the employee and for the spouse and dependents of the employee, for the one-year period preceding the Secretary's notice and for the repayment period proposed by the employee in his or her offset schedule—
(A) Income from all sources,
(B) Assets,
(C) Liabilities,
(D) Number of dependents,
(E) Expenses for food, housing, clothing, and transportation,
(F) Medical expenses, and
(G) Exceptional expenses, if any; and
(4) Copies of all documents that the employee wishes to have considered to support the objections raised by the employee regarding the enforceability of the debt or the claim of extreme financial hardship.
(c) Request for oral hearing. (1) If the employee wants the hearing to be conducted as an oral hearing, the employee must submit a request that contains the information listed in paragraph (b) and must include with the request—
(i) An explanation of reasons why the employee believes that the issues raised regarding the enforceability of the debt or a claim of extreme financial hardship cannot be resolved adequately by a review of the written statements and documents provided with the request for a hearing;
(ii) An identification of—
(A) The individuals that the employee wishes to have testify at the oral hearing;
(B) The specific issues about which each individual is prepared to testify; and
(C) The reasons why each individual's testimony is necessary to resolve the issue.
(2) The Secretary grants a request for an oral hearing if—
(i) The employee files a request for an oral hearing that meets the requirements of paragraphs (b) and (c) of this section; and
(ii) The Secretary determines that the issues raised by the employee require a determination of the credibility of testimony and cannot be adequately resolved by a review of the written statements and documents submitted by the employee and documents contained in the Department's records relating to the debt.
(3) The Secretary may decline a request for an oral hearing if the Secretary accepts the employee's proffer of testimomy made in the request for an oral hearing under paragraph (c)(1) of this section, and considers the facts at issue to be established as stated by the employee in the request.
(4) If the Secretary grants a request for an oral hearing, the Secretary—
(i) Notifies the employee in writing of—
(A) The date, time, and place of the hearing;
(B) The name and address of the hearing official;
(C) The employee's right to be represented at the hearing by counsel or other representatives;
(D) The employee's right to present and cross-examine witnesses; and
(E) The employee's right to waive the requested oral hearing and receive a hearing in the written record; and
(ii) Provides the hearing official with a copy of all written statements submitted by the employee with the request for a hearing, and all documents pertaining to the debt or the amount of the offset contained in the Department's files on the debt or submitted with the request for a hearing.
(d) Employee choice of oral hearing or hearing on written submissions. An employee who has been sent notice under paragraph (c)(4) that an oral hearing will be provided must, within 15 days of the date of that notice, state in writing to the hearing official and the Secretary—
(1) Whether the employee intends to proceed with the oral hearing, or wishes a decision based on the written record; and
(2) Any changes in the list of the witnesses the employee proposes to produce for the hearing, or the facts about which a witness will testify.
(e) Dismissal of request for hearing. The Secretary considers the employee to have waived the request for a hearing of any kind—
(1) If an employee does not provide the hearing official in a timely manner the written statement required under paragraph (d) of this section; or
(2) If the employee does not appear for a scheduled oral hearing.
(a) If the Secretary grants a request for an oral hearing, the Secretary selects the time, date, and location of the hearing. The Secretary selects, to the extent feasible, the location that is most convenient for the employee.
(b) For a current military employee, the Secretary selects the time, date, and location of the hearing after consultation with the Secretary of Defense.
(c) For a current Coast Guard employee, the Secretary selects the time, date, and location of the hearing after consultation with the Secretary of Transportation.
(d) For an employee not described in paragraph (a) or (b) of this section, the hearing will be held in Washington, DC, or in one of the following cities: Boston, Philadelphia, New York, Atlanta, Chicago, Dallas, Kansas City, Denver, San Francisco, or Seattle.
(a) Independence of hearing official. A hearing provided under this part is conducted by a hearing official who is not under the supervision or control of the Secretary, except that this prohibition does not apply to the Department's administrative law judges.
(b) Lack of subpoena authority or formal discovery. (1) Neither the hearing official nor the Secretary has authority to issue subpoenas to compel the production of documents or to compel the attendance of witnesses at an oral hearing under this part. The Secretary will attempt to make available during an oral hearing the testimony of a current official of the Department if—
(i) The employee had identified the official in the request for a hearing under § 31.5(b) and demonstrated that the testimony of the official is necessary to resolve adequately an issue of fact raised by the employee in the request for a hearing; and
(ii) The Secretary determines that the responsibilities of the official permit his or her attendance at the hearing.
(2) If the Secretary determines that the testimony of a Department official is necessary, but that the official cannot attend an oral hearing to testify, the Secretary attempts to make the official available for testimony at the hearing by means of a telephone conference call.
(3) No discovery is available in a proceeding under this part except as provided in § 31.4.
(c) Hearing on written submissions. If a hearing is conducted on the written submissions, the hearing official reviews documents and responses submitted by the Secretary and the employee under § 31.5.
(d) Conduct of oral hearing. (1) The hearing official conducts an oral hearing as an informal proceeding. The official—
(i) Administers oaths to witnesses;
(ii) Regulates the course of the hearing;
(iii) Considers the introduction of evidence without regard to the rules of evidence applicable to judicial proceedings; and
(iv) May exclude evidence that is redundant, or that is not relevant to those issues raised by the employee in the request for hearing under § 31.5 that remain in dispute.
(2) An oral hearing is generally open to the public. However, the hearing official may close all or any portion of the hearing if doing so is in the best interest of the employee or the public.
(3) The hearing official may conduct an oral hearing by telephone conference call—
(i) If the employee is located in a city outside the Washington, DC Metropolitan area.
(ii) At the request of the employee.
(iii) At the discretion of the hearing official.
(4) No written record is created or maintained of an oral hearing provided under this part.
(e) Burden of proof. In any hearing under this part—
(1) The Secretary bears the burden of proving, by a preponderance of the evidence, the existence and amount of the debt, and the failure of the employee to repay the debt, as the debt is described in the pre-offset notice provided under § 31.3; and
(2) The employee bears the burden of proving, by a preponderance of the evidence—
(i) The existence of any fact that would establish that the debt described in the pre-offset notice is not enforceable by offset; and
(ii) The existence of any fact that would establish that the amount of the proposed offset would cause an extreme financial hardship for the employee.
(a) Enforceability of debt by offset. In deciding whether the Secretary has established that the debt described in the pre-offset under § 31.3 is owed by the employee, or whether the employee has established that the debt is not enforceable by offset, the hearing official shall apply the principles in this paragraph.
(1) The statutes and Department regulations authorizing and implementing the program under which the debt arose must be applied in accordance with official written interpretations by the Department.
(2) The principles of res judicata and collateral estoppel apply to resolution of disputed facts in those instances in which the debt or material facts in dispute have been the subject of prior judicial decision.
(3) The act or omission of an institution of higher education at which the employee was enrolled does not constitute a defense to repayment of an obligation with regard to a grant or loan under a program authorized under Title IV of the Higher Education Act or similar authority, except to the extent that—
(i) The act or omission constitutes a defense to the debt under applicable Federal or State law;
(ii) The institution owed the employee a refund under its refund policy and failed to pay that refund to the employee or to a lender holding a loan made to the employee; or
(iii) The institution ceased teaching activity while the employee was in attendance and during the academic period for which the grant or loan was made, and failed to refund to the employee or holder of a loan to the employee a proportionate amount of the grant or loan funds used to pay tuition and other institutional charges for that academic period.
(4)(i) A debt otherwise established as owed by the employee is enforceable by offset under this part if the Secretary sends the pre-offset notice for the debt within the ten year period following the later of—
(A) The date on which the Secretary acquired the debt by assignment or referral, or
(B) The date of a subsequent partial payment reaffirming the debt.
(ii) Periods during which the statute of limitations applicable to a lawsuit to collect the debt has been tolled under 11 U.S.C. 108, 28 U.S.C. 2416, 50 U.S.C. App. 525, or other authority are excluded from the calculation of the ten year period described in paragraph (a)(4)(i) of this section.
(b) Extreme financial hardship. (1) In deciding whether an employee has established that the amount of the proposed offset would cause extreme financial hardship to the employee, the hearing official shall determine whether the credible, relevant evidence submitted demonstrates that the proposed offset would prevent the employee from meeting the costs necessarily incurred for essential subsistence expenses of the employee and his or her spouse and dependents.
(2) For purposes of this determination, essential subsistence expenses include costs incurred only for food, housing, clothing, essential transportation and medical care.
(3) In making this determination, the hearing official shall consider—
(i) The income from all sources of the employee, and his or her spouse and dependents;
(ii) The extent to which the assets of the employee and his or her spouse and dependents are available to meet the offset and the essential subsistence expenses;
(iii) Whether these essential subsistence expenses have been minimized to the greatest extent possible;
(iv) The extent to which the employee and his or her spouse and dependents can borrow to satisfy the debt to be collected by offset or to meet essential expenses; and
(v) The extent to which the employee and his or her spouse and dependents have other exceptional expenses that should be taken into account, and whether these expenses have been minimized.
(a) The hearing official issues a written opinion within sixty days of the date on which the employee filed a request for a hearing under § 31.5, unless a delay in the proceedings has been granted at the request of the employee. In the opinion, the hearing official states his or her decision and the findings of fact and conclusions of law on which the decision is based.
(b) If the hearing official finds that a portion of the debt described in the pre-offset notice under § 31.3 is not enforceable by offset, the official shall state in the opinion that portion which is enforceable by offset.
(c) If the hearing official finds that the amount of the offset proposed in the pre-offset notice will cause an extreme financial hardship for the employee, the hearing official shall establish an offset schedule that will result in the repayment of the debt in the shortest period of time without producing an extreme financial hardship for the employee.
(a) The Secretary does not initiate an offset under this part if the employee agrees in writing to repay the debt under terms acceptable to the Secretary and makes the first payment due under the agreement on or before the latest of—
(1) The seventh day after the date of the decision of the hearing official, if the employee timely requested a hearing under § 31.5 (a) and (d);
(2) The sixty-fifth day after the date of the pre-offset notice under § 31.3 if the employee did not timely request either a hearing in accordance with § 31.5 (a) and (d) or an opportunity to inspect and copy documents related to the debt under § 31.4; or
(3) The fifteenth day after the date on which the Secretary made available documents related to the debt, if the employee filed a timely request for documents under § 31.4.
(b) In the agreement, the Secretary and the employee may agree to satisfaction of the debt from sources other than an offset under this part, or may modify the amount proposed to be offset in the pre-offset notice or estimated in the decision of the hearing official.
(c) If the employee does not enter into a repayment agreement acceptable to the Secretary within the deadlines in this section, the Secretary may initiate an offset under this part. The Secretary continues to collect by offset until an employee enters in a satisfactory repayment agreement for the debt. The Secretary suspends an offset already commenced under circumstances described in § 31.5(a)(2).
(a) The Secretary attempts to collect debts under this part within the shortest time authorized under—
(1) The offset schedule proposed in the pre-offset notice, unless modified by agreement or by the decision of a hearing official;
(2) A written repayment agreement with the employee; or
(3) The offset schedule established in the decision of the hearing official.
(b) In proposing an offset schedule under § 31.3 or establishing a repayment agreement under § 31.10, the Secretary also considers the expected period of Federal employment of the employee.
(c) Unless the Secretary determines, in his discretion, to delay or suspend collection, the Secretary effects an offset under this part—
(1) According to the terms agreed to by the employee pursuant to a timely request under § 31.10 to enter into a repayment agreement; or,
(2) After the deadlines in § 31.10(b) for requesting a repayment agreement with the Secretary.
(d) If the employee retires, resigns, or leaves Federal employment before the debt is satisfied, the Secretary collects the amount necessary to satisfy the debt by offset from subsequent payments of any kind, including a final salary payment or a lump sum annual leave payment, due the employee on the date of separation. If the debt cannot be satisfied by offset from any such final payment due the employee on the date of separation, the Secretary collects the debt from later payments of any kind due the employee in accordance with the provisions of 4 CFR 102.4.
(e) The Secretary effects an offset under this part against payments owing to an employee of another Federal agency after completion of the requirements of this part, in accordance with the provisions of 5 CFR 550.1108.
(a) The Secretary establishes the standards and procedures in this part that apply to the deductions through offset from disposable pay of a current or former employee of the Department of Education to recover overpayments of pay or allowances.
(b) This part does not apply to—
(1) Recovery through offset of an indebtedness to the United States by an employee of the Department under a program administered by the Secretary of Education covered under 34 CFR part 31;
(2) The offset of an indebtedness to the United States by a Federal employee to satisfy a judgment obtained by the United States against that employee in a court of the United States;
(3) The offset of any payment to an employee of the Department of Education which is expressly allowed under statutes other than 5 U.S.C. 5514, except as to offsets of severance pay and/or lump sum annual leave payments as authorized under 31 U.S.C. 3716;
(4) Offsets under 34 CFR part 30; or
(5) An employee election of coverage or of a change of coverage under a Federal benefits program which requires periodic deductions from pay if the amount to be recovered was accumulated over four pay periods or less.
The following definitions apply to this part:
Department means the Department of Education.
Disposable pay means the amount that remains from an employee's pay after required deductions for Federal, State, and local income taxes; Social Security taxes, including Medicare taxes; Federal retirement programs; premiums for health and basic life insurance benefits; and such other deductions that are required by law to be withheld.
Employee means a current or former employee of the Department.
Former employee means a former employee of the Department who is entitled to pay from the Department or another agency.
Pay means basic pay, special pay, incentive pay, retired pay, retainer pay, or, in the case of an individual not entitled to basic pay, other authorized pay, including severance pay and/or lump sum payments for accrued annual leave.
Paying agency means a Federal agency currently employing an individual and authorizing the payment of his or her current pay.
Secretary means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
At least 30 days before initiating a deduction from the disposable pay of an employee to recover an overpayment of pay or allowances, the Secretary sends a written notice to the employee stating—
(a) The origin, nature and amount of the overpayment;
(b) How interest is charged and administrative costs and penalties will be assessed, unless excused under 31 U.S.C. 3716;
(c) A demand for repayment, providing for an opportunity for the employee to enter into a written repayment agreement with the Department;
(d) Where a waiver of repayment is authorized by law, the employee's right to request a waiver;
(e) The Department's intention to deduct 15 percent of the employee's disposable pay, or a specified amount if the disposable pay is severance pay and/or a lump sum annual leave payment, to recover the overpayment if a waiver is not granted by the Secretary and the employee fails to repay the overpayment or enter into a written repayment agreement;
(f) The amount, frequency, approximate beginning date and duration of the intended deduction;
(g) If Government records on which the determination of overpayment are not attached, how those records will be made available to the employee for inspection and copying;
(h) The employee's right to request a pre-offset hearing concerning the existence or amount of the overpayment or an involuntary repayment schedule;
(i) The applicable hearing procedures and requirements, including a statement that a timely petition for hearing will stay commencement of collection proceedings and that a final decision on the hearing will be issued not later than 60 days after the hearing petition is filed, unless a delay is requested and granted;
(j) That any knowingly false or frivolous statements, representations or evidence may subject the employee to applicable disciplinary procedures, civil or criminal penalties; and
(k) That where amounts paid or deducted are later waived or found not owed, unless otherwise provided by law, they will be promptly refunded to the employee.
(a) Voluntary repayment agreement. Within 7 days of receipt of the written notice under § 32.3, the employee may submit a request to the Secretary to arrange for a voluntary repayment schedule. To arrange for a voluntary repayment schedule, the employee shall submit a financial statement and sign a written repayment agreement approved by the Secretary. An employee who arranges for a voluntary repayment schedule may nonetheless request a waiver of the overpayment under paragraph (b) of this section.
(b) Waiver. An employee seeking a waiver of collection of the debt that is authorized by law must request the waiver in writing to the Secretary within 10 days of receipt of the written notice under § 32.3. The employee must state why he or she believes a waiver should be granted.
(c) Involuntary repayment schedule. If the employee claims that the amount of the involuntary deduction will cause extreme financial hardship and should be reduced, he or she must submit a written explanation and a financial statement signed under oath or affirmation to the Secretary within 10 days of receipt of the written notice under § 32.3. An employee who fails to submit this financial information in a timely manner waives the right to object to the involuntary repayment schedule at a hearing under § 32.5. The Secretary notifies the employee, in writing, whether the Secretary will reduce the rate of the involuntary deduction.
(a) An employee who wishes a review of the existence or amount of the overpayment or an involuntary repayment schedule may request a pre-offset hearing. The pre-offset hearing does not review:
(1) The denial of a waiver of repayment under 5 U.S.C. 5584;
(2) The involuntary repayment schedule or financial hardship caused by the amount of the involuntary deduction from the employee's disposable pay, unless the employee has submitted the financial statement and written explanation required under § 32.4(c); and
(3) The determination under paragraph (b) of this section that the pre-offset hearing is on the written submissions.
(b) Unless the Secretary determines that a matter reviewable under paragraph (a) of this section turns on an issue of credibility or veracity or cannot be resolved by a review of the documentary evidence, the pre-offset hearing is on the written submissions.
(c) A pre-offset hearing is based on the written submissions for overpayments arising from:
(1) A termination of a temporary promotion;
(2) A cash award;
(3) An erroneous salary rate;
(4) Premature granting of a within-grade increase;
(5) A lump sum payment for annual leave;
(6) Unauthorized appointment to a position;
(7) An error on time and attendance records; or
(8) Other circumstances where the Secretary determines that an oral hearing is not required.
(d) The hearing is conducted by a hearing official who is not under the supervision or control of the Secretary, except that this prohibition does not apply to the Department's administrative law judges.
(e) Formal discovery between the parties is not provided.
(a) Except for an employee who has requested a waiver of collection of the debt under § 32.4(b), an employee who wishes a pre-offset hearing must request the hearing within 15 days of receipt of the written notice given under § 32.3. The Secretary waives the 15-day requirement if the employee shows that the delay was because of circumstances beyond his or her control or because of failure to receive notice and lack of knowledge of the time limit.
(b) An employee who has requested a waiver under § 32.4(b) may request a hearing within 10 days of receipt of a determination by the Secretary denying a waiver.
(c) The request for a hearing must:
(1) Be in writing;
(2) State why the employee:
(i) Contests the existence or amount of the overpayment; or
(ii) Claims that the involuntary repayment schedule will cause extreme financial hardship;
(3) Include all documents on which the employee is relying, other than those provided by the Secretary under § 32.3; any document which is a statement of an individual must be in the form of an affidavit; and
(4) Be submitted to the designated hearing official with a copy to the Secretary.
(d) If the employee timely requests a pre-offset hearing or the timelines are waived under paragraph (a) of this section, the Secretary:
(1) Notifies the employee whether the employee may elect an oral hearing; and
(2) Provides the hearing official with a copy of all records on which the determination of the overpayment and any involuntary repayment schedule are based.
(e) An employee who has been given the opportunity to elect an oral hearing and who does elect an oral hearing must notify the hearing official and the Secretary of his or her election in writing within 7 days of receipt of the notice under paragraph (d)(1) of this section and must identify all proposed witnesses and all facts and evidence about which they will testify.
(f) Where an employee requests an oral hearing, the hearing official notifies the Secretary and the employee of the date, time, and location of the hearing. However:
(1) The employee subsequently may elect to have the hearing based only on the written submissions by notifying the hearing official and the Secretary at least 3 calendar days before the date of the oral hearing. The hearing official may waive the 3-day requirement for good cause when the employee notifies the hearing official before the date of the hearing; and
(2) The request for a hearing of an employee who fails to appear at the oral hearing must be dismissed and the Secretary's decision affirmed.
(a) Oral hearings are informal in nature. The Secretary and the employee, through their representatives, and by reference to the documentation submitted, explain their case. The employee may testify on his or her own behalf, subject to cross examination. Other witnesses may be called to testify only where the hearing official determines that their testimony is relevant and not redundant.
(b) The hearing official shall:
(1) Conduct a fair and impartial hearing; and
(2) Preside over the course of the hearing, maintain decorum, and avoid delay in the disposition of the hearing.
(c) The employee may represent himself or herself or may be represented by another person at the hearing. The employee may not be represented by a person whose representation creates an actual or apparent conflict of interest.
(d) Oral hearings are open to the public. However, the hearing official may close all or any portion of the hearing where to do so is in the best interests of the employee or the public.
(e) Oral hearings may be conducted by conference call—
(1) If the employee is located in a city outside the Washington, DC Metropolitan area;
(2) At the request of the employee; or
(3) At the discretion of the hearing official.
If a hearing is to be held on the written submissions, the hearing official reviews the records and responses submitted by the Secretary and the employee under § 32.6.
(a) The hearing official issues a written decision stating the facts supporting the nature and origin of the debt and the hearing official's analysis, findings and conclusions as to the amount of the debt and the repayment schedule within 60 days of filing of the employee's request for a pre-offset hearing, unless the employee requests, and the hearing official grants, a delay in the proceedings.
(b) The hearing official decides whether the Secretary's determination of the existence and the amount of the overpayment or the extreme financial hardship caused by the involuntary repayment schedule is clearly erroneous. A determination is clearly erroneous if although there is evidence to support the determination, the hearing official, considering the record as a whole, is left with a definite and firm conviction that a mistake was made.
(c) In making the decision, the hearing official is governed by applicable Federal statutes, rules and regulations.
(d) The hearing official decides the issue of extreme financial hardship caused by the involuntary repayment schedule only where the employee has submitted the financial statement and written explanation required under § 32.4(c). Where the hearing official determines that the involuntary repayment schedule creates extreme financial hardship, he or she must establish a schedule that alleviates the financial hardship but may not reduce the involuntary repayment schedule to a deduction of zero percent.
(a) Debts must be collected in one lump sum where possible. If the employee does not agree to a lump sum that exceeds 15 percent of disposable pay, the debt must be collected in installment deductions at officially established pay intervals in the amount established under:
(1) A voluntary repayment agreement;
(2) An involuntary repayment schedule where no hearing is requested; or
(3) The schedule established under the written hearing decision.
(b) Installment deductions must be made over a period not greater than the anticipated period of employment, except as provided under paragraph (d) of this section. If possible, the installment payment must be sufficient in size and frequency to liquidate the debt in, at most, three years. Installment payments of less than $25 may be accepted only in the most unusual circumstances.
(c) Deductions must begin:
(1) After the employee has entered a voluntary repayment schedule;
(2) If a waiver is requested under § 32.4(b), after the employee has been denied a waiver by the Secretary; or
(3) If a hearing is requested under § 32.5, after a written decision.
(d) If the employee retires or resigns or his or her employment ends before collection of the debt is completed, the amount necessary to liquidate the debt must be offset from subsequent payments of any nature (for example, final salary payment and/or lump sum annual leave payment) due the employee on the date of separation. If the debt cannot be liquidated by offset from any such final payment due the employee on the date of separation, the debt must be liquidated by administrative offset pursuant to 31 U.S.C. 3716 from later payments of any kind due the employee, where appropriate. After the Secretary has complied with the procedures in this part, the Secretary may refer the debt to a paying agency for collection by offset under 5 CFR 550.1108.
(e) Interest, penalties and administrative costs on debts collected under this part must be assessed, in accordance with the provisions of 4 CFR 102.13.
(f) An employee's payment, whether voluntary or involuntary, of all or any portion of an alleged debt collected pursuant to this part may not be construed as a waiver of any rights which the employee may have under this part or any other provision of law, except as otherwise provided by law.
(g) Amounts paid or deducted pursuant to this part by an employee for a debt that is waived or otherwise found not owing to the United States or which the Secretary is ordered to refund must be promptly refunded to the employee.
(a) Basis. This part implements the Program Fraud Civil Remedies Act of 1986, Pub. L. No. 99-509, 6101 through 6104, 100 Stat. 16674 (October 21, 1986), to be codified at 31 U.S.C. 3801 through 3812. This law (31 U.S.C. 3809) requires each Federal department head to promulgate regulations necessary to implement the provisions of the statute.
(b) Purpose. This part:
(1) Establishes administrative procedures for imposing civil penalties and assessments against persons who make, submit, or present, or cause to be made, submitted, or presented, false, fictitious, or fraudulent claims or written statements to the Department or to its agents; and
(2) Specifies the hearing and appeal rights of persons subject to allegations of liability for those penalties and assessments.
As used in this part:
ALJ means an Administrative Law Judge in the Department appointed pursuant to 5 U.S.C. 3105 or detailed to the Department pursuant to 5 U.S.C. 3344.
Benefits, as used in the definition of “statement,” means anything of value, including but no limited to any advantage, preference, privilege, license, permit, favorable decision, ruling, status, or loan guarantee.
Claim means any request, demand, or submission:
(a) Made to the Department for property, services, or money (including money representing grants, cooperative agreements, loans, insurance, or benefits);
(b) Made to a recipient of property, services, or money from the Department or to a party to a contract or agreement with the Department:
(1) For property or services if the United States:
(i) Provided the property or services;
(ii) Provided any portion of the funds for the purchase of the property or services; or
(iii) Will reimburse the recipient or party for the purchase of the property or services; or
(2) For the payment of money (including money representing grants, cooperative agreements, loans, insurance, or benefits) if the United States:
(i) Provided any portion of the money requested or demanded;
(ii) Will reimburse the recipient or party for any portion of the money paid on that request or demand; or
(iii) Will guarantee or reinsure any portion of a loan made by the party; or
(c) Made to the Department which has the effect of decreasing an obligation to pay or account for property, services, or money.
Complaint means the administrative complaint served by the reviewing official on the defendant under § 33.7.
Defendant means any person alleged in a complaint under § 33.7 to be liable for a civil penalty or assessment under § 33.3.
Department means the United States Department of Education.
Department head means the Secretary or Under Secretary of the United States Department of Education.
Government means the United States Government.
Individual means a natural person.
Initial decision means the written decision of the ALJ required by § 33.10 or § 33.37, and includes a revised initial decision issued following a remand or a motion for reconsideration.
Investigating official means the Inspector General of the Department or an officer or employee of the Office of the Inspector General designated by the Inspector General and serving in a position for which the rate of basic pay is not less than the minimum rate of basic pay for grade GS-16 under the General Schedule.
Knows or has reason to know, means that a person, with respect to a claim or statement:
(a) Has actual knowledge that the claim or statement is false, fictitious, or fraudulent;
(b) Acts in deliberate ignorance of the truth or falsity of the claim or statement; or
(c) Acts in reckless disregard of the truth or falsity of the claim or statement.
Makes includes the terms presents, submits, and causes to be made, presented, or submitted.
Person means any individual, partnership, corporation, association, or private organization.
Representative means:
(a) An attorney who is a member in good standing of the bar of any State, territory, possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico; or
(b) Any other person designated by a party in writing, provided that the designation includes a certification that the party understands the nature and consequences of an administrative enforcement action under this part, and that he or she has the right to representation by counsel or to self-representation.
Reviewing official means the General Counsel of the Department or his or her designee who is:
(a) Not subject to supervision by, or required to report to, the investigating official; and
(b) Not employed in the organizational unit of the Department in which the investigating official is employed; and
(c) Serving in a position for which the rate of basic pay is not less than the minimum rate of basic pay for grade GS-16 under the General Schedule.
Statement means any representation, certification, affirmation, document, record, or accounting or bookkeeping entry made:
(a) With respect to a claim or to obtain the approval or payment of a claim (including relating to eligibility to make a claim); or
(b) With respect to (including relating to eligibility for):
(1) A contract with, or a bid or proposal for a contract with; or
(2) A grant, cooperative agreement, loan, or benefit from;
(a) Claims. (1) Any person who makes a claim that the person knows or has reason to know:
(i) Is false, fictitious, or fraudulent;
(ii) Includes or is supported by any written statement which asserts a material fact which is false, fictitious, or fraudulent;
(iii) Includes or is supported by any written statement that:
(A) Omits a material fact;
(B) Is false, fictitious, or fraudulent as a result of such omission; and
(C) Is a statement in which the person making such statement has a duty to include such material fact; or
(iv) Is for payment for the provision of property or services which the person has not provided as claimed;
(2) Each voucher, invoice, claim form, or other individual request or demand for property, services, or money constitutes a separate claim.
(3) A claim is considered made to the Department, a recipient, or party when that claim is actually made to an agent, fiscal intermediary, or other entity, including any State or political subdivision thereof, acting for or on behalf of the Department, a recipient, or party.
(4) Each claim for property, services, or money is subject to a civil penalty regardless of whether the property, services, or money is actually delivered or paid.
(5) If the Government has made any payment (including transferred property or provided services) on a claim, a person subject to a civil penalty under paragraph (a)(1) of this section is also subject to an assessment of not more than twice the amount of that claim or that portion thereof that is determined to be in violation of paragraph (a)(1) of this section. The assessment is in lieu of damages sustained by the Government because of that claim.
(b) Statements. (1) Any person who makes a written statement that:
(i) The person knows or has reason to know:
(A) Asserts a material fact which is false, fictitious, or fraudulent; or
(B) Is false, fictitious, or fraudulent because it omits a material fact that the person making the statement has a duty to include in the statement; and
(ii) Contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement;
(2) Each written representation, certification, or affirmation constitutes a separate statement.
(3) A statement is considered made to the Department when the statement is actually made to an agent, fiscal intermediary, or other entity, including any State or political subdivision thereof, acting for or on behalf of the Department.
(c) No proof of specific intent to defraud is required to establish liability under this section.
(d) In any case in which it is determined that more than one person is liable for making a claim or statement under this section, each of those persons may be held liable for a civil penalty under this section.
(e) In any case in which it is determined that more than one person is liable for making a claim under this section of which the Government has made payment (including transferred property or provided services), an assessment may be imposed against any of those persons or jointly and severally against any combination of those persons.
(a) If an investigating official concludes that a subpoena pursuant to the authority conferred by 31 U.S.C. 3604(a) is warranted:
(1) The subpoena so issued must notify the person to whom it is addressed of the authority under which the subpoena is issued and must identify the records or documents sought;
(2) The investigating official may designate a person to act on his or her behalf to receive the documents sought; and
(3) The person receiving the subpoena is required to tender to the investigating official or the person designated to receive the documents a certification that the documents sought have been produced, or that the documents are not available and the reasons therefore, or that the documents, suitably identified, have been withheld based upon the assertion of an identified privilege.
(b) If the investigating official concludes that an action under the Program Fraud Civil Remedies Act may be warranted, the investigating official shall submit a report containing the findings and conclusions of the investigation to the reviewing official.
(c) Nothing in this section precludes or limits an investigating official's discretion to refer allegations directly to the Department of Justice for suit under the False Claims Act or other civil relief, or to defer or postpone a report or referral to the reviewing official to avoid interference with a criminal investigation or prosecution.
(d) Nothing in this section modifies any responsibility of an investigating official to report violations of criminal law to the Attorney General.
(a) If, based on the report of the investigating official under § 33.4(b), the reviewing official determines that there is adequate evidence to believe that a person is liable under § 33.3 of this part, the reviewing official transmits to the Attorney General a written notice of the reviewing official's intention to issue a complaint under § 33.7.
(b) The notice must include—
(1) A statement of the reviewing official's reasons for issuing a complaint;
(2) A statement specifying the evidence that supports the allegations of liability;
(3) A description of the claims or statements upon which the allegations of liability are based;
(4) An estimate of the amount of money or the value of property, services, or other benefits requested or demanded in violation of § 33.3;
(5) A statement of any exculpatory or mitigating circumstances that may relate to the claims or statements known by the reviewing official or the investigating official; and
(6) A statement that there is a reasonable prospect of collecting an appropriate amount of penalties and assessments. Such a statement may be based upon information then known or an absence of any information indicating that the person may be unable to pay such an amount.
(a) The reviewing official may issue a complaint under § 33.7 only if—
(1) The Department of Justice approves the issuance of a complaint in a written statement described in 31 U.S.C. 3803(b)(1); and
(2) In the case of allegations of liability under § 33.3(a) with respect to a claim, the reviewing official determines that, with respect to that claim or a group of related claims submitted at the same time the claim is submitted (as defined in paragraph (b) of this section), the amount of money or the value of property or services demanded or requested in violation of § 33.3(a) does not exceed $150,000.
(b) For the purposes of this section, a related group of claims submitted at the same time includes only those claims arising from the same transaction (e.g., grant, cooperative agreement, loan, application, or contract) that are submitted simultaneously as part of a single request, demand, or submission.
(c) Nothing in this section may be construed to limit the reviewing official's authority to join in a single complaint against a person claims that are unrelated or were not submitted simultaneously, regardless of the amount of money, or the value of property or services, demanded or requested.
(a) On or after the date the Department of Justice approves the issuance of a complaint in accordance with 31 U.S.C. 3803(b)(1), the reviewing official may serve a complaint on the defendant, as provided in § 33.8.
(b) The complaint must state:
(1) The allegations of liability against the defendant, including the statutory basis for liability, an identification of the claims or statements that are the basis for the alleged liability, and the reasons why liability allegedly arises from those claims or statements;
(2) The maximum amount of penalties and assessments for which the defendant may be held liable;
(3) Instructions for filing an answer to request a hearing, including a specific statement of the defendant's right to request a hearing by filing an answer and to be represented by a representative; and
(4) That failure to file an answer within 30 days of service of the complaint will result in the imposition of the maximum amount of penalties and assessments without right to appeal, as provided in § 33.10.
(c) At the same time the reviewing official serves the complaint, he or she shall serve the defendant with a copy of the regulations in this part.
(a) Service of a complaint must be made by certified or registered mail or by delivery in any manner authorized by Rule 4(d) of the Federal Rules of Civil Procedure. Service is complete upon receipt.
(b) Proof of service, stating the name and address of the person on whom the complaint was served, and the manner and date of service, may be made by:
(1) Affidavit of the individual serving the complaint by delivery;
(2) An acknowledged United States Postal Service return receipt card; or
(3) Written acknowledgment of receipt by the defendant or his representative.
(a) The defendant may request a hearing by filing an answer with the reviewing official within 30 days of service of the complaint. An answer is deemed to be a request for hearing.
(b) In the answer, the defendant:
(1) Shall admit or deny each of the allegations of liability made in the complaint;
(2) Shall state any defense on which the defendant intends to rely;
(3) May state any reasons why the defendant contends that the penalties and assessments should be less than the statutory maximum; and
(4) Shall state the name, address, and telephone number of the person authorized by the defendant to act as defendant's representative, if any.
(c) If the defendant is unable to file an answer meeting the requirements of paragraph (b) of this section within the time provided, the defendant may, before the expiration of 30 days from service of the complaint, file with the reviewing official a general answer denying liability and requesting a hearing, and a request for an extension of time within which to file an answer meeting the requirements of paragraph (b) of this section. The reviewing official shall file promptly with the ALJ the complaint, the general answer denying liability, and the request for an extension of time as provided in § 33.11 for good cause shown, the ALJ may grant the defendant up to 30 additional days within which to file an answer meeting the requirements of paragraph (b) of this section.
(a) If the defendant does not file an answer within the time prescribed in § 33.9(a), the reviewing official may refer the complaint to the ALJ.
(b) Upon the referral of the complaint, the ALJ shall promptly serve on defendant in the manner prescribed in § 33.8, a notice that an initial decision will be issued under this section.
(c) The ALJ shall assume the facts alleged in the complaint to be true and, if those facts establish liability under § 33.3, the ALJ shall issue an initial decision imposing the maximum amount of penalties and assessments allowed under the statute.
(d) Except as otherwise provided in this section, by failing to file a timely answer the defendant waives any right to further review of the penalties and assessments imposed under paragraph (c) of this section, and the initial decision becomes final and binding upon the parties 30 days after it is issued.
(e) If, before such an initial decision becomes final, the defendant files a motion with the ALJ seeking to reopen on the grounds that extraordinary circumstances prevented the defendant from filing an answer, the initial decision must be stayed pending the ALJ's decision on the motion.
(f) If, on such a motion, the defendant can demonstrate extraordinary circumstances excusing the failure to file a timely answer, the ALJ shall withdraw the initial decision under paragraph (c) of this section, if such a decision has been issued, and shall grant the defendant an opportunity to answer the complaint.
(g) A decision of the ALJ denying a defendant's motion under paragraph (e) of this section is not subject to reconsideration under § 33.38.
(h) The defendant may appeal to the Department head the decision denying a motion to reopen by filing a notice of appeal with the Department head within 15 days after the ALJ denies the motion. The timely filing of a notice of appeal stays the initial decision until the Department head decides the issue.
(i) If the defendant files a timely notice of appeal with the Department head, the ALJ shall forward the record of the proceeding to the Department head.
(j) The Department head decides expeditiously whether extraordinary circumstances excuse the defendant's failure to file a timely answer based solely on the record before the ALJ.
(k) If the Department head decides that extraordinary circumstances excuse the defendant's failure to file a timely answer, the Department head remands the case to the ALJ with instructions to grant the defendant an opportunity to answer.
(l) If the Department head decides that the defendant's failure to file a timely answer is not excused, the Department head reinstates the initial decision of the ALJ, which becomes final and binding upon the parties 30 days after the Department head issues that decision.
Upon receipt of an answer, the reviewing official shall file the complaint and answer with the ALJ.
(a) When the ALJ receives the complaint and answer, the ALJ shall promptly serve a notice of hearing upon the defendant in the manner prescribed by § 33.8. At the same time, the ALJ shall send a copy of the notice to the representative for the Government.
(b) The notice must include:
(1) The tentative time and place, and the nature of the hearing;
(2) The legal authority and jurisdiction under which the hearing is to be held;
(3) The matters of fact and law to be asserted;
(4) A description of the procedures for the conduct of the hearing;
(5) The name, address, and telephone number of the representative of the Government and of the defendant, if any; and
(6) Such other matters as the ALJ deems appropriate.
(a) The parties to the hearing are the defendant and the Department.
(b) Pursuant to 31 U.S.C. 3730(c)(5), a private plaintiff under the False Claims Act may participate in these proceedings to the extent authorized by the provisions of that Act.
(a) The investigating official, the reviewing official, and any employee or agent of the Department who takes part in investigating, preparing, or presenting a particular case may not, in that case or a factually related case:
(1) Participate in the hearing as the ALJ;
(2) Participate or advise in the initial decision or the review of the initial decision by the Department head, except as a witness or a representative in public proceedings; or
(3) Make the collection of penalties and assessments under 31 U.S.C. 3806.
(b) The ALJ may not be responsible to, or subject to the supervision or direction of, the investigating official or the reviewing official.
(c) Except as provided in paragraph (a) of this section, the representative for the Government may be employed anywhere in the Department, including in the offices of either the investigating official or the reviewing official.
No party or person (except employees of the ALJ's office) may communicate in any way with the ALJ on any matter at issue in a case, unless on notice and opportunity for all parties to participate. This provision does not prohibit a person or party from inquiring about the status of a case or asking routine questions concerning administrative functions or procedures.
(a) A reviewing official or ALJ in a particular case may disqualify himself or herself at any time.
(b) A party may file with the ALJ a motion for disqualification of a reviewing official or an ALJ. That motion must be accompanied by an affidavit alleging personal bias or other reason for disqualification.
(c) The motion and affidavit must be filed promptly upon the party's discovery of reasons requiring disqualification, or the objections are deemed waived.
(d) The affidavit must state specific facts that support the party's belief that personal bias or other reason for disqualification exists and the time and circumstances of the party's discovery of those facts. It must be accompanied by a certificate of the representative of record that it is made in good faith.
(e) Upon the filing of the motion and affidavit, the ALJ shall not proceed further in the case until he or she resolves the matter of disqualification in accordance with paragraph (f) of this section.
(f)(1) If the ALJ determines that a reviewing official is disqualified, the ALJ shall dismiss the complaint without prejudice.
(2) If the ALJ disqualifies himself or herself, the case must be reassigned promptly to another ALJ.
(3) If the ALJ denies a motion to disqualify, the Department head may determine the matter only as part of his or her review of the initial decision upon appeal, if any.
Except as otherwise limited by this part, all parties may:
(a) Be accompanied, represented, and advised by a representative (as defined in § 33.2);
(b) Participate in any conference held by the ALJ:
(c) Conduct discovery under § 33.21;
(d) Agree to stipulations of fact or law, which must be made part of the record;
(e) Present evidence relevant to the issues at the hearing;
(f) Present and cross-examine witnesses;
(g) Present oral arguments at the hearing as permitted by the ALJ; and
(h) Submit written briefs and proposed findings of fact and conclusions of law after the hearing.
(a) The ALJ shall conduct a fair and impartial hearing, avoid delay, maintain order, and assure that a record of the proceeding is made.
(b) The ALJ has the authority to:
(1) Set and change the date, time, and place of the hearing upon reasonable notice to the parties;
(2) Disqualify a non-attorney representative (designated as described in the § 33.2 definitions of “representative”) if the ALJ determines that the representative is incapable of rendering reasonably effective assistance;
(3) Continue or recess the hearing in whole or in part for a reasonable period of time;
(4) Hold conferences to identify or simplify the issues, or to consider other matters that may aid in the expeditious disposition of the proceeding;
(5) Administer oaths and affirmations;
(6) Issue subpoenas requiring the attendance of witnesses and the production of documents at depositions or at hearings;
(7) Rule on motions and other procedural matters;
(8) Regulate the scope and timing of discovery;
(9) Regulate the course of the hearing and the conduct of representatives and parties;
(10) Examine witnesses;
(11) Receive, rule on, exclude, or limit evidence;
(12) Upon motion of a party, take official notice of facts;
(13) Upon motion of a party, decide cases, in whole or in part, by summary judgment if there is no disputed issue of material fact;
(14) Conduct any conference, argument, or hearing on motions in person or by telephone; and
(15) Exercise such other authority as is necessary to carry out the responsibilities of the ALJ under this part.
(c) The ALJ does not have the authority to find Federal statutes or regulations invalid.
(a) The ALJ may schedule perhearing conferences as appropriate.
(b) Upon the motion of any party, the ALJ shall schedule at least one perhearing conference at a reasonable time in advance of the hearing.
(c) The ALJ may use prehearing conferences to discuss the following:
(1) Simplification of the issues.
(2) The necessity or desirability of amendments to the pleadings, including the need for a more definite statement.
(3) Stipulations, admissions of fact or as to the contents and authenticity of documents.
(4) Whether the parties can agree to submission of the case on a stipulated record.
(5) Whether a party chooses to waive appearance at an oral hearing and to submit only documentary evidence (subject to the objection of other parties) and written argument.
(6) Limitation of the number of witnesses.
(7) Scheduling dates for the exchange of witness lists and of proposed exhibits.
(8) Discovery.
(9) The time and place for the hearing.
(10) Such other matters as may tend to expedite the fair and just disposition of the proceedings.
(d) The ALJ may issue an order containing all matters agreed upon by the parties or ordered by the ALJ at a prehearing conference.
(a) Upon written request to the reviewing official, the defendant may review any relevant and material documents, transcripts, records, and other materials that relate to the allegations set out in the complaint and upon which the findings and conclusions of the investigating official under § 33.4(b) are based, unless those documents are subject to a privilege under Federal law. Upon payment of fees for duplication, the defendant may obtain copies of the documents.
(b) Upon written request to the reviewing official, the defendant also may obtain a copy of all exculpatory information in the possession of the reviewing official or investigating official relating to the allegations in the complaint, even if it is contained in a document that would otherwise be privileged. If the document would otherwise be privileged, only that portion containing exculpatory information must be disclosed.
(c) The notice sent to the Attorney General from the reviewing official as described in § 33.5 is not discoverable under any circumstances.
(d) The defendant may file a motion to compel disclosure of the documents subject to the provisions of this section. Such a motion may only be filed with the ALJ following the filing of an answer pursuant to § 33.9.
(a) The following types of discovery are authorized:
(1) Requests for production of documents for inspection and copying.
(2) Requests for admissions of the authenticity of any relevant document or of the truth of any relevant fact.
(3) Written interrogatories.
(4) Depositions.
(b) For the purpose of this section and §§ 33.22 and 33.23, the term “documents” includes information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence. Nothing contained in this part may be interpreted to require the creation of a document.
(c) Unless mutually agreed to by the parties, discovery is available only as ordered by the ALJ. The ALJ shall regulate the timing of discovery.
(d) Motions for discovery. (1) A party seeking discovery may file a motion with the ALJ. Such a motion shall be accompanied by a copy of the requested discovery, or in the case of depositions, a summary of the scope of the proposed deposition.
(2) Within ten days of service, a party may file an opposition to the motion or a motion for protective order, or both, as provided in § 33.24.
(3) The ALJ may grant a motion for discovery only if he finds that the discovery sought:
(i) Is necessary for the expeditious, fair, and reasonable determination of the issues;
(ii) Is not unduly costly or burdensome;
(iii) Will not unduly delay the proceeding; and
(iv) Does not seek privileged information.
(4) The burden of showing that discovery should be allowed is on the party seeking discovery.
(5) The ALJ may grant discovery subject to a protective order under § 33.24.
(e) Depositions. (1) If a motion for deposition is granted, the ALJ shall issue a subpoena for the deponent, which may require the deponent to produce documents. The subpoena must specify the time and place at which the deposition will be held.
(2) The party seeking to depose shall serve the subpoena in the manner prescribed in § 33.8.
(3) The deponent may file with the ALJ a motion to quash the subpoena or a motion for a protective order within ten days of service.
(4) The party seeking to depose shall provide for the taking a verbatim transcript of the deposition, which the party shall make available to all other parties for inspection and copying.
(f) Each party shall bear its own costs of discovery.
(a) At least 15 days before the hearing or at such other time as may be ordered by the ALJ, the parties shall exchange witness lists, copies of prior statements of proposed witnesses, and copies of proposed hearing exhibits, including copies of any written statements that the party intends to offer in lieu of live testimony in accordance with § 33.33(b). At the time these documents are exchanged, any party that is permitted by the ALJ to rely on the transcript of deposition testimony in lieu of live testimony at the hearing, shall provide each other party with a copy of the specific pages of the transcript it intends to introduce.
(b) If a party objects, the ALJ shall not admit into evidence the testimony of any witness whose name does not appear on the witness list or any exhibit not provided to the opposing party as provided in paragraph (a) of this Section unless the ALJ finds good cause for the failure or that there is no prejudice to the objecting party.
(c) Unless another party objects within the time set by the ALJ, documents exchanged in accordance with paragraph (a) of this section are deemed to be authentic for the purpose of admissibility at the hearing.
(a) A party wishing to procure the appearance and testimony of any individual at the hearing may request that the ALJ issue a subpoena.
(b) A subpoena requiring the attendance and testimony of an individual may also require the individual to produce documents at the hearing.
(c) A party seeking a subpoena shall file a written request therefor not less than 15 days before the date fixed for the hearing unless otherwise allowed by the ALJ for good cause shown. The request must specify any documents to be produced and must designate the witnesses and describe their address and location with sufficient particularity to permit the witnesses to be found.
(d) The subpoena must specify the time and place at which a witness is to appear and any documents the witness is to produce.
(e) The party seeking the subpoena shall serve it in the manner prescribed in § 33.8. A subpoena on a party or upon an individual under the control of a party may be served by first class mail.
(f) A party or the individual to whom the subpoena is directed may file with the ALJ a motion to quash the subpoena within ten days after service or on or before the time specified in the subpoena for compliance if is is less then ten days after service.
(a) A party or a prospective witness or deponent may file a motion for a protective order with respect to discovery sought by an opposing party or with respect to the hearing, seeking to limit the availability or disclosure of evidence.
(b) In issuing a protective order, the ALJ may take any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following:
(1) That the discovery not be had.
(2) That the discovery may be had only on specified terms and conditions, including a designation of the time or place.
(3) That the discovery may be had only through a method of discovery other than that requested.
(4) That certain matters not be inquired into, or that the scope of discovery be limited to certain matters.
(5) That the discovery be conducted with no one present except persons designated by the ALJ.
(6) That the contents of discovery or evidence be sealed.
(7) That a deposition after being sealed be opened only by order of the ALJ.
(8) That a trade secret or other confidential research, development, commercial information, or facts pertaining to any criminal investigation, proceeding, or other administrative investigation not be disclosed or be disclosed only in a designated way.
(9) That the parties simultaneously file specified documents or information enclosed in sealed envelopes to be opened as directed by the ALJ.
The party requesting a subpoena shall pay the cost of the fees and mileage of any witness subpoenaed in the amounts that would be payable to a witness in a proceeding in United States District Court. A check for witness fees and mileage must accompany the subpoena when served, except that if a subpoena is issued on behalf of the authority, a check for witness fees and mileage need not accompany the subpoena.
(a) Form. (1) Documents filed with the ALJ must include an original and two copies.
(2) Every pleading and paper filed in the proceeding must contain a caption setting for the title of the action, the case number assigned by the ALJ, and a designation of the paper (e.g., motion to quash subpoena).
(3) Every pleading and paper must be signed by, and must contain the address and telephone number of the party or the person on whose behalf the paper was filed, or his or her representative.
(4) Papers are considered filed when they are mailed. Date of mailing may be established by a certificate from the party or its representative or by proof that the document was sent by certified or registered mail.
(b) Service. A party filing a document with the ALJ shall, at the time of filing, serve a copy of the document on every other party. Service upon any party of any document other than those required to be served as prescribed in § 33.8 shall be made by delivering a copy, or by placing a copy of the document in the United States mail, postage prepaid and addressed, to the party's last known address. If a party is represented by a representative, service must be made upon the representative in lieu of the actual party.
(c) Proof of service. A certificate of the individual serving the document by personal delivery or by mail, setting forth the manner of service, is proof of service.
(a) In computing any period of time under this part or in an order issued under this part, the time begins with the day following the act, event, or default, and includes the last day of the period, unless it is a Saturday, Sunday, or legal holiday observed by the Federal Government, in which event it includes the next business day.
(b) If the period of time allowed is less than seven days, intermediate Saturdays, Sundays, and legal holidays observed by the Federal Government are excluded from the computation.
(c) If a document has been served or issued by placing it in the mail, an additional five days is added to the time permitted for any response.
(a) Any application to the ALJ for an order or ruling must be by motion. Motions must state the relief sought, the authority relied upon, and the facts alleged, and must be filed with the ALJ and served on all other parties.
(b) Except for motions made during a prehearing conference or at the hearing, all motions must be in writing. The ALJ may require that oral motions be reduced to writing.
(c) Within 15 days after a written motion is served, or such other time as may be fixed by the ALJ, any party may file a response to the motion.
(d) The ALJ may not grant a written motion before the time for filing responses to the motion has expired, except upon consent of the parties or following a hearing on the motion, but may overrule or deny the motion without awaiting a response.
(e) The ALJ shall make a reasonable effort to dispose of all outstanding motions prior to the beginning of the hearing.
(a) The ALJ may sanction a person, including any party or representative for—
(1) Failing to comply with an order, rule, or procedure governing the proceeding;
(2) Failing to prosecute or defend an action; or
(3) Engaging in other misconduct that interferes with the speedy, orderly, or fair conduct of the hearing.
(b) Any sanction, including but not limited to those listed in paragraphs (c), (d), and (e) of this section must reasonably relate to the severity and nature of the failure or misconduct.
(c) If a party fails to comply with an order, including an order for taking a deposition, the production of evidence within the party's control, or a request for admission, the ALJ may—
(1) Draw an inference in favor of the requesting party with regard to the information sought;
(2) In the case of requests for admission, deem each matter of which an admission is requested to be admitted;
(3) Prohibit the party failing to comply with the order from introducing evidence concerning, or otherwise relying upon testimony relating to, the information sought; and
(4) Strike any part of the pleadings or other submissions of the party failing to comply with the request.
(d) If a party fails to prosecute or defend an action under this part commenced by service of a notice of hearing, the ALJ may dismiss the action or may issue an initial decision imposing penalties and assessments.
(e) The ALJ may refuse to consider any motion, request, response, brief, or other document that is not filed in a timely fashion.
(a) The ALJ shall conduct a hearing on the record in order to determine whether the defendant is liable for a civil penalty or assessment under § 33.3 and, if so, the appropriate amount of the civil penalty or assessment considering any aggravating or mitigating factors.
(b) The Department shall prove a defendant's liability and any aggravating factors by a preponderance of the evidence.
(c) The defendant shall prove any affirmative defenses and any mitigating factors by a preponderance of the evidence.
(d) The hearing must be open to the public unless otherwise ordered by the ALJ for good cause shown.
(a) In determining an appropriate amount of civil penalties and assessments, the ALJ and the Department head, upon appeal, evaluate any circumstances that mitigate or aggravate the violation and articulate in their opinions the reasons that support the penalties and assessments they impose. Because of the intangible costs of fraud, the expense of investigating fraudulent conduct, and the need to deter others who might be similarly tempted, ordinarily double damages and a significant civil penalty is imposed.
(b) Although not exhaustive, the following factors are among those that may influence the ALJ and the Department head in determining the amount of penalties and assessments to impose with respect to the misconduct (i.e., the false, fictitious, or fraudulent claims or statements) charged in the complaint:
(1) The number of false, fictitious, or fraudulent claims or statements.
(2) The time period over which such claims or statements were made.
(3) The degree of the defendent's culpability with respect to the misconduct.
(4) The amount of money or the value of the property, services, or benefit falsely claimed.
(5) The value of the Government's actual loss as a result of the misconduct, including foreseeable consequential damages and the costs of investigation.
(6) The relationship of the amount imposed as civil penalties to the amount of the Government's loss.
(7) The potential or actual impact of the misconduct upon national defense, public health or safety, or public confidence in the management of Government programs and operations, including particularly the impact on the intended beneficiaries of such programs.
(8) Whether the defendant has engaged in a pattern of the same or similar misconduct.
(9) Whether the defendant attempted to conceal the misconduct.
(10) The degree to which the defendant has involved others in the misconduct or in concealing it.
(11) If the misconduct of employees or agents is imputed to the defendant, the extent to which the defendant's practices fostered or attempted to preclude the misconduct.
(12) Whether the defendant cooperated in or obstructed an investigation of the misconduct.
(13) Whether the defendant assisted in identifying and prosecuting other wrongdoers.
(14) The complexity of the program or transaction, and the degree of the defendant's sophistication with respect to it, including the extent of the defendant's prior participation in the program or in similar transactions.
(15) Whether the defendant has been found, in any criminal, civil, or administrative proceeding to have engaged in similar misconduct or to have dealt dishonestly with the Government of the United States or of a State, directly or indirectly.
(16) The need to deter the defendant and others from engaging in the same or similar misconduct.
(c) Nothing in this section may be construed to limit the ALJ or the Department head from considering any other factors that in any given case may mitigate or aggravate the offense for which penalties and assessments are imposed.
(a) The hearing may be held:
(1) In any judicial district of the United States in which the defendant resides or transacts business;
(2) In any judicial district of the United States in which the claim or statement in issue was made; or
(3) In such other place as may be agreed upon by the defendant and the ALJ.
(b) Each party must have the opportunity to present argument with respect to the location of the hearing.
(c) The hearing must be held at the place and at the time ordered by the ALJ.
(a) Except as provided in paragraph (b) of this section, testimony at the hearing must be given orally by witnesses under oath or affirmation.
(b) At the discretion of the ALJ, testimony may be admitted in the form of a written statement or deposition. Any such written statement must be provided to all other parties along with the last known address of the witness, in a manner that allows sufficient time for other parties to subpoena the witness for cross-examination at the hearing. Prior written statements of witnesses proposed to testify at the hearing and deposition transcripts must be exchanged as provided in § 33.22(a).
(c) The ALJ shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to:
(1) Make the interrogation and presentation effective for the ascertainment of the truth;
(2) Avoid needless consumption of time; and
(3) Protect witnesses from harassment or undue embarrassment.
(d) The ALJ shall permit the parties to conduct such cross-examination as may be required for a full and true disclosure of the facts.
(e) At the discretion of the ALJ, a witness may be cross-examined on matters relevant to the proceeding without regard to the scope of his or her direct examination. To the extent permitted by the ALJ, cross-examination on matters outside the scope of direct examination must be conducted in the manner of direct examination and may proceed by leading questions only if the witness is a hostile witness, an adverse party, or a witness identified with an adverse party.
(f) Upon motion of any party, the ALJ shall order witnesses excluded so that they cannot hear the testimony of other witnesses. This rule does not authorize exclusion of—
(1) A party who is an individual;
(2) In the case of a party that is not an individual, an officer or employee of the party appearing for the party pro se or designated by the party's representative; or
(3) An individual whose presence is shown by a party to be essential to the presentation of its case, including an individual employed by the Government engaged in assisting the representative for the Government.
(a) The ALJ shall determine the admissibility of evidence.
(b) Except as provided in this part, the ALJ is not bound by the Federal Rules of Evidence. However, the ALJ may apply the Federal Rules of Evidence if appropriate, e.g., to exclude unreliable evidence.
(c) The ALJ shall exclude irrelevant and immaterial evidence.
(d) Although relevant, evidence may be excluded if its probative value is substantially outweighted by the danger of unfair prejudice, confusion of the issues, or by considerations of undue delay or needless presentation of cumulative evidence.
(e) Although relevant, evidence may be excluded if it is privileged under Federal law.
(f) Evidence concerning offers of compromise or settlement are inadmissible to the extend provided in Rule 408 of the Federal Rules of Evidence.
(g) The ALJ shall permit the parties to introduce rebuttal witnesses and evidence.
(h) All Documents and other evidence offered or taken for the record must be open to examination by all parties, unless otherwise ordered by the ALJ pursuant to § 33.24.
(a) The hearing must be recorded and transcribed. Transcripts may be obtained following the hearing from the ALJ at a cost not to exceed the actual cost of duplication.
(b) The transcript of testimony, exhibits and other evidence admitted at the hearing, and all papers and requests filed in the proceeding constitute the record for the decision by the ALJ and the Department head.
(c) The record may be inspected and copied (upon payment of a reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant to § 33.24.
The ALJ may require the parties to file post-hearing briefs. In any event, any party may file a post-hearing brief. The ALJ shall fix the time for filing these briefs, not to exceed 60 days from the date the parties receive the transcript of the hearing or, if applicable, the stipulated record. The briefs may be accompanied by proposed findings of fact and conclusions of law. The ALJ may permit the parties to file reply briefs.
(a) The ALJ shall issue an initial decision, based only on the record, that contains findings of fact, conclusions of law, and the amount of any penalties and assessments imposed.
(b) The findings of fact must include a finding on each of the following issues:
(1) Whether the claims or statements identified in the complaint, or any portions of the complaint, violate § 33.3.
(2) If the person is liable for penalties or assessments, the appropriate amount of any such penalties or assessments considering any mitigating or aggravating factors that the ALJ finds in the case, such as those described in § 33.31.
(c) The ALJ shall promptly serve the initial decision on all parties within 90 days after the time for submission of post-hearing briefs and reply briefs (if permitted) has expired. The ALJ shall at the same time serve all parties with a statement describing the right of any defendant determined to be liable for a civil penalty or assessment to file a motion for reconsideration with the ALJ or a notice of appeal with the Department head. If the ALJ fails to meet the deadline contained in this paragraph, he or she shall notify the parties of the reasons for the delay and shall set a new deadline.
(d) Unless the initial decision of the ALJ is timely appealed to the Department head, or a motion for reconsideration of the initial decision is timely filed, the initial decision shall constitute the final decision of the Department head and shall be final and binding on the parties 30 days after it is issued by the ALJ.
(a) Except as provided in paragraph (d) of this section, any party may file a motion for reconsideration of the initial decision within 20 days of receipt of the initial decision. If service was made by mail, receipt is presumed to be five days from the date of mailing in the absence of contrary proof.
(b) Every motion under paragraph (a) of this section must set forth the matters claimed to have been erroneously decided and the nature of the alleged errors. The motion must be accompanied by a supporting brief.
(c) Responses to the motion are allowed only upon request to the ALJ.
(d) No party may file a motion for reconsideration of an initial decision that has been revised in response to a previous motion for reconsideration.
(e) The ALJ may dispose of a motion for reconsideration by denying it or by issuing a revised initial decision.
(f) If the ALJ denies a motion for reconsideration, the initial decision shall constitute the final decision of the Department head and shall be final and binding on the parties 30 days after the ALJ denies the motion, unless the initial decision is timely appealed to the Department head in accordance with § 33.39.
(g) If the ALJ issues a revised initial decision, that decision shall constitute the final decision of the Department head and shall be final and binding on the parties 30 days after it is issued, unless it is timely appealed to the Department head in accordance with § 33.39.
(a) Any defendant who has filed a timely answer and who is determined in an initial decision to be liable for a civil penalty or assessment may appeal the decision to the Department head by filing a notice of appeal with the Department head in accordance with this section.
(b)(1) A notice of appeal may be filed at any time within 30 days after the ALJ issues a final decision. However, if another party files a motion for reconsideration under § 33.38, consideration of the appeal shall be stayed automatically pending resolution of the motion for reconsideration.
(2) If a motion for reconsideration is timely filed, a notice of appeal may be filed within 30 days after the ALJ denies the motion or issues a revised initial decision, whichever applies.
(3) The Department head may extend the initial 30-day period for an additional 30 days if the defendant files with the Department head a request for an extension within the initial 30-day period and shows good cause.
(c) If the defendant files a timely notice of appeal with the Department head, and the time for filing motions for reconsideration under § 33.38 has expired, the ALJ shall forward the record of the proceeding to the Department head.
(d) A notice of appeal must be accompanied by a written brief specifying exceptions to the initial decision and reasons supporting the exceptions.
(e) The representative for the Government may file a brief in opposition to exceptions within 30 days of receiving the notice of appeal and accompanying brief.
(f) There is no right to appear personally before the Department head.
(g) There is no right to appeal any interlocutory ruling by the ALJ.
(h) In reviewing the initial decision, the Department head does not consider any objection that was not raised before the ALJ unless a demonstration is made of extraordinary circumstances causing the failure to raise the objection.
(i) If any party demonstrates to the satisfaction of the Department head that additional evidence not presented at such hearing is material and that there were reasonable grounds for the failure to present that evidence at the hearing, the Department head shall remand the matter to the ALJ for consideration of the additional evidence.
(j) The Department head affirms, reduces, reverses, compromises, remands, or settles any penalty or assessment, determined by the ALJ in any initial decision.
(k) The Department head promptly serves each party to the appeal with a copy of the decision of the Department head and a statement describing the right of any person determined to be liable for a penalty or assessment to seek judicial review.
(l) Unless a petition for review is filed as provided in 31 U.S.C. 3805, after a defendant has exhausted all administrative remedies under this part and within 60 days after the date on which the Department head serves the defendant with a copy of the Department head's decision, a determination that a defendant is liable under § 33.3 is final and is not subject to judicial review.
If at any time the Attorney General or an Assistant Attorney General designated by the Attorney General transmits to the Department head a written finding that continuation of the administrative process described in this part with respect to a claim or statement may adversely affect any pending or potential criminal or civil action related to such claim or statement, the Department head stays the process immediately. The Department head orders the process resumed only upon receipt of the written authorization of the Attorney General.
(a) An initial decision is stayed automatically pending disposition of a motion for reconsideration or of an appeal to the Department head.
(b) No administrative stay is available following a final decision of the Department head.
Section 3805 of title 31, United States Code, authorizes judicial review by an appropriate United States District Court of a final decision of the Department head imposing penalties or assessments under this part and specifies the procedures for the review.
Section 3806 and 3808(b) of title 31, United States Code, authorize actions for collection of civil penalties and assessments imposed under this part and specify the procedures for those actions.
The amount of any penalty or assessment that has become final, or for which a judgment has been entered under § 33.42 or § 33.43, or any amount agreed upon in a compromise or settlement under § 33.46, may be collected by administrative offset under 31 U.S.C. 3716, except that an administrative offset may not be under this section against a refund of an overpayment of Federal taxes, then or later owing by the United States to the defendant.
All amounts collected pursuant to this part are deposited as miscellaneous receipts in the Treasury of the United States, except as provided in 31 U.S.C. 3806(g).
(a) Parties may make offers of compromise or settlement at any time.
(b) The reviewing official has the exclusive authority to compromise or settle a case under this part at any time after the date on which the reviewing official is permitted to issue a complaint and before the date on which the ALJ issues an initial decision.
(c) The Department head has exclusive authority to compromise or settle a case under this part at any time after the date on which the ALJ issues an initial decision, except during the pendency of any review under § 33.42 or during the pendency of any action to collect penalties and assessments under § 33.43.
(d) The Attorney General has exclusive authority to compromise or settle a case under this part during the pendency of any review under § 33.42 or of any action to recover penalties and assessments under 31 U.S.C. 3806.
(e) The investigating official may recommend settlement terms to the reviewing official, the Department head, or the Attorney General, as appropriate. The reviewing official may recommend settlement terms to the Department head, or the Attorney General, as appropriate.
(f) Any compromise or settlement must be in writing.
(a) The notice of hearing with respect to a claim or statement must be served in the manner specified in § 33.8 within six years after the date on which the claim or statement is made.
(b) If the defendant fails to file a timely answer, service of a notice under § 33.10(b) is deemed a notice of hearing for purposes of this section.
(c) The statute of limitations may be extended by agreement of the parties.
This part establishes procedures the Department of Education uses to collect money from a debtor's disposable pay by means of administrative wage garnishment to satisfy delinquent debt owed to the United States.
(a) This part applies to collection of any financial obligation owed to the United States that arises under a program we administer.
(b) This part applies notwithstanding any provision of State law.
(c) We may compromise or suspend collection by garnishment of a debt in accordance with applicable law.
(d) We may use other debt collection remedies separately or in conjunction with administrative wage garnishment to collect a debt.
(e) To collect by offset from the salary of a Federal employee, we use the procedures in 34 CFR part 31, not those in this part.
As used in this part, the following definitions apply:
Administrative debt means a debt that does not arise from an individual's obligation to repay a loan or an overpayment of a grant received under a student financial assistance program authorized under Title IV of the Higher Education Act.
Business day means a day Monday through Friday, unless that day is a Federal holiday.
Certificate of service means a certificate signed by an authorized official of the U.S. Department of Education (the Department) that indicates the nature of the document to which it pertains, the date we mail the document, and to whom we are sending the document.
Day means calendar day. For purposes of computation, the last day of a period will be included unless that day is a Saturday, a Sunday, or a Federal legal holiday; in that case, the last day of the period is the next business day after the end of the period.
Debt or claim means any amount of money, funds, or property that an appropriate official of the Department has determined an individual owes to the United States under a program we administer.
Debtor means an individual who owes a delinquent nontax debt to the United States under a program we administer.
Disposable pay. This term—
(a)(1) Means that part of a debtor's compensation for personal services, whether or not denominated as wages, from an employer that remains after the deduction of health insurance premiums and any amounts required by law to be withheld.
(2) For purposes of this part, “amounts required by law to be withheld” include amounts for deductions such as social security taxes and withholding taxes, but do not include any amount withheld under a court order; and
(b) Includes, but is not limited to, salary, bonuses, commissions, or vacation pay.
Employer. This term—
(a) Means a person or entity that employs the services of another and that pays the latter's wages or salary;
(b) Includes, but is not limited to, State and local governments; and
(c) Does not include an agency of the Federal Government.
Financial hardship means an inability to meet basic living expenses for goods and services necessary for the survival of the debtor and his or her spouse and dependents.
Garnishment means the process of withholding amounts from an employee's disposable pay and paying those amounts to a creditor in satisfaction of a withholding order.
We means the United States Department of Education.
Withholding order. (a) This term means any order for withholding or garnishment of pay issued by this Department, another Federal agency, a State or private non-profit guaranty agency, or a judicial or administrative body.
(b) For purposes of this part, the terms “wage garnishment order” and “garnishment order” have the same meaning as “withholding order.”
You means the debtor.
(a) We may start proceedings to garnish your wages whenever we determine that you are delinquent in paying a debt owed to the United States under a program we administer.
(b) We start garnishment proceedings by sending you a written notice of the proposed garnishment.
(c) At least 30 days before we start garnishment proceedings, we mail the notice by first class mail to your last known address.
(d)(1) We keep a copy of a certificate of service indicating the date of mailing of the notice.
(2) We may retain this certificate of service in electronic form.
In a notice of proposed garnishment, we inform you of—
(a) The nature and amount of the debt;
(b) Our intention to collect the debt through deductions from pay until the debt and all accumulated interest, penalties, and collection costs are paid in full; and
(c) An explanation of your rights, including those in § 34.6, and the time frame within which you may exercise your rights.
Before starting garnishment, we provide you the opportunity—
(a) To inspect and copy our records related to the debt;
(b) To enter into a written repayment agreement with us to repay the debt under terms we consider acceptable;
(c) For a hearing in accordance with § 34.8 concerning—
(1) The existence, amount, or current enforceability of the debt;
(2) The rate at which the garnishment order will require your employer to withhold pay; and
(3) Whether you have been continuously employed less than 12 months after you were involuntarily separated from employment.
(a) We consider objections to the rate or amount of withholding only if the objection rests on a claim that withholding at the proposed rate or amount would cause financial hardship to you and your dependents.
(b) We do not provide a hearing on an objection to the rate or amount of withholding if the rate or amount we propose to be withheld does not exceed the rate or amount agreed to under a repayment agreement reached within the preceding six months after a previous notice of proposed garnishment.
(c) We do not consider an objection to the rate or amount of withholding based on a claim that by virtue of 15 U.S.C. 1673, no amount of wages are available for withholding by the employer.
(a) We provide a hearing if you submit a written request for a hearing concerning the existence, amount, or enforceability of the debt or the rate of wage withholding.
(b) At our option the hearing may be an oral hearing under § 34.9 or a paper hearing under § 34.10.
(a) We provide an oral hearing if you—
(1) Request an oral hearing; and
(2) Show in the request a good reason to believe that we cannot resolve the issues in dispute by review of the documentary evidence, by demonstrating that the validity of the claim turns on the credibility or veracity of witness testimony.
(b) If we determine that an oral hearing is appropriate, we notify you how to receive the oral hearing.
(c)(1) At your option, an oral hearing may be conducted either in-person or by telephone conference.
(2) We provide an in-person oral hearing with regard to administrative debts only in Washington D.C.
(3) We provide an in-person oral hearing with regard to debts based on student loan or grant obligations only at our regional service centers in Atlanta, Chicago, or San Francisco.
(4) You must bear all travel expenses you incur in connection with an in-person hearing.
(5) We bear the cost of any telephone calls we place in order to conduct an oral hearing by telephone.
(d)(1) To arrange the time and location of the oral hearing, we ordinarily attempt to contact you first by telephone call to the number you provided to us.
(2) If we are unable to contact you by telephone, we leave a message directing you to contact us within 5 business days to arrange the time and place of the hearing.
(3) If we can neither contact you directly nor leave a message with you by telephone—
(i) We notify you in writing to contact us to arrange the time and place of the hearing; or
(ii) We select a time and place for the hearing, and notify you in writing of the time and place set for the hearing.
(e) We consider you to have withdrawn the request for an oral hearing if—
(1) Within 15 days of the date of a written notice to contact us, we receive no response to that notice; or
(2) Within five business days of the date of a telephone message to contact us, we receive no response to that message.
We provide a paper hearing—
(a) If you request a paper hearing;
(b) If you requested an oral hearing, but we determine under § 34.9(e) that you have withdrawn that request;
(c) If you fail to appear for a scheduled oral hearing, as provided in § 34.15; or
(d) If we deny a request for an oral hearing because we conclude that, by a review of the written record, we can resolve the issues raised by your objections.
(a) A hearing request is timely if—
(1) You mail the request to the office designated in the garnishment notice and the request is postmarked not later than the 30th day following the date of the notice; or
(2) The designated office receives the request not later than the 30th day following the date of the garnishment notice.
(b) If we receive a timely written request from you for a hearing, we will not issue a garnishment order before we—
(1) Provide the requested hearing; and
(2) Issue a written decision on the objections you raised.
(c) If your written request for a hearing is not timely—
(1) We provide you a hearing; and
(2) We do not delay issuance of a garnishment order unless—
(i) We determine from credible representations in the request that the delay in filing the request for hearing was caused by factors over which you had no control; or
(ii) We have other good reason to delay issuing a garnishment order.
(d) If we do not complete a hearing within 60 days of an untimely request, we suspend any garnishment order until we have issued a decision.
(a) If you have received a decision on an objection to garnishment you may file a request for reconsideration of that decision.
(b) We do not suspend garnishment merely because you have filed a request for reconsideration.
(c) We consider your request for reconsideration if we determine that—
(1) You base your request on grounds of financial hardship, and your financial circumstances, as shown by evidence submitted with the request, have materially changed since we issued the decision so that we should reduce the amount to be garnished under the order; or
(2)(i) You submitted with the request evidence that you did not previously submit; and
(ii) This evidence demonstrates that we should reconsider your objection to the existence, amount, or enforceability of the debt.
(d)(1) If we agree to reconsider the decision, we notify you.
(2)(i) We may reconsider based on the request and supporting evidence you have presented with the request; or
(ii) We may offer you an opportunity for a hearing to present evidence.
(a)(1) A hearing official conducts any hearing under this part.
(2) The hearing official may be any qualified employee of the Department whom the Department designates to conduct the hearing.
(b)(1) The hearing official conducts any hearing as an informal proceeding.
(2) A witness in an oral hearing must testify under oath or affirmation.
(3) The hearing official maintains a summary record of any hearing.
(c) Before the hearing official considers evidence we obtain that was not included in the debt records available for inspection when we sent notice of proposed garnishment, we notify you that additional evidence has become available, may be considered by the hearing official, and is available for inspection or copying.
(d) The hearing official considers any objection you raise and evidence you submit—
(1) In or with the request for a hearing;
(2) During an oral hearing;
(3) By the date that we consider, under § 34.9(e), that a request for an oral hearing has been withdrawn; or
(4) Within a period we set, ordinarily not to exceed seven business days, after—
(i) We provide you access to our records regarding the debt, if you requested access to records within 20 days after the date of the notice under § 34.4;
(ii) We notify you that we have obtained and intend to consider additional evidence;
(iii) You request an extension of time in order to submit specific relevant evidence that you identify to us in the request; or
(iv) We notify you that we deny your request for an oral hearing.
(a)(1) We have the burden of proving the existence and amount of a debt.
(2) We meet this burden by including in the record and making available to the debtor on request records that show that—
(i) The debt exists in the amount stated in the garnishment notice; and
(ii) The debt is currently delinquent.
(b) If you dispute the existence or amount of the debt, you must prove by a preponderance of the credible evidence that—
(1) No debt exists;
(2) The amount we claim to be owed on the debt is incorrect, or
(3) You are not delinquent with respect to the debt.
(c)(1) If you object that the proposed garnishment rate would cause financial hardship, you bear the burden of proving by a preponderance of the credible evidence that withholding the amount of wages proposed in the notice would leave you unable to meet the basic living expenses of you and your dependents.
(2) The standards for proving financial hardship are those in § 34.24.
(d)(1) If you object on the ground that applicable law bars us from collecting the debt by garnishment at this time, you bear the burden of proving the facts that would establish that claim.
(2) Examples of applicable law that may prevent collection by garnishment include the automatic stay in bankruptcy (11 U.S.C. 362(a)), and the preclusion of garnishment action against a debtor who was involuntarily separated from employment and has been reemployed for less than a continuous period of 12 months (31 U.S.C. 3720D(b)(6)).
(e) The fact that applicable law may limit the amount that an employer may withhold from your pay to less than the amount or rate we state in the garnishment order does not bar us from issuing the order.
(a) If you do not appear for an in-person hearing you requested, or you do not answer a telephone call convening a telephone hearing, at the time set for the hearing, we consider you to have withdrawn your request for an oral hearing.
(b) If you do not appear for an oral hearing but you demonstrate that there was good cause for not appearing, we may reschedule the oral hearing.
(c) If you do not appear for an oral hearing you requested and we do not reschedule the hearing, we provide a paper hearing to review your objections, based on the evidence in your file and any evidence you have already provided.
(a) Date of decision. The hearing official issues a written opinion stating his or her decision, as soon as practicable, but not later than 60 days after the date on which we received the request for hearing.
(b) If we do not provide you with a hearing and render a decision within 60 days after we receive your request for a hearing—
(1) We do not issue a garnishment order until the hearing is held and a decision rendered; or
(2) If we have already issued a garnishment order to your employer, we suspend the garnishment order beginning on the 61st day after we receive the hearing request until we provide a hearing and issue a decision.
(a) The written decision is based on the evidence contained in the hearing record. The decision includes—
(1) A description of the evidence considered by the hearing official;
(2) The hearing official's findings, analysis, and conclusions regarding objections raised to the existence or amount of the debt;
(3) The rate of wage withholding under the order, if you objected that withholding the amount proposed in the garnishment notice would cause an extreme financial hardship; and
(4) An explanation of your rights under this part for reconsideration of the decision.
(b) The hearing official's decision is the final action of the Secretary for the purposes of judicial review under the Administrative Procedure Act (5 U.S.C. 701 et seq.).
(a)(1) If you fail to make a timely request for a hearing, we issue a garnishment order to your employer within 30 days after the deadline for timely requesting a hearing.
(2) If you make a timely request for a hearing, we issue a withholding order within 30 days after the hearing official issues a decision to proceed with garnishment.
(b)(1) The garnishment order we issue to your employer is signed by an official of the Department designated by the Secretary.
(2) The designated official's signature may be a computer-generated facsimile.
(c)(1) The garnishment order contains only the information we consider necessary for your employer to comply with the order and for us to ensure proper credit for payments received from your employer.
(2) The order includes your name, address, and social security number, as well as instructions for withholding and information as to where your employer must send the payments.
(d)(1) We keep a copy of a certificate of service indicating the date of mailing of the order.
(2) We may create and maintain the certificate of service as an electronic record.
(a)(1) After an employer receives a garnishment order we issue, the employer must deduct from all disposable pay of the debtor during each pay period the amount directed in the garnishment order unless this section or § 34.20 requires a smaller amount to be withheld.
(2) The amount specified in the garnishment order does not apply if other law, including this section, requires the employer to withhold a smaller amount.
(b) The employer must comply with our garnishment order by withholding the lesser of—
(1) The amount directed in the garnishment order; or—
(2) The amount specified in 15 U.S.C. 1673(a)(2) (Restriction on Garnishment); that is, the amount by which a debtor's disposable pay exceeds an amount equal to 30 times the minimum wage. (See 29 CFR 870.10.)
If a debtor's pay is subject to several garnishment orders, the employer must comply with our garnishment order as follows:
(a) Unless other Federal law requires a different priority, the employer must pay us the amount calculated under § 34.19(b) before the employer complies with any later garnishment orders, except a family support withholding order.
(b) If an employer is withholding from a debtor's pay based on a garnishment order served on the employer before our order, or if a withholding order for family support is served on an employer at any time, the employer must comply with our garnishment order by withholding an amount that is the smaller of—
(1) The amount calculated under § 34.19(b); or
(2) An amount equal to 25 percent of the debtor's disposable pay less the amount or amounts withheld under the garnishment order or orders with priority over our order.
(c)(1) If a debtor owes more than one debt arising from a program we administer, we may issue multiple garnishment orders.
(2) The total amount withheld from the debtor's pay for orders we issue under paragraph (c)(1) of this section does not exceed the amounts specified in the orders, the amount specified in § 34.19(b)(2), or 15 percent of the debtor's disposable pay, whichever is smallest.
(d) An employer may withhold and pay an amount greater than that amount in paragraphs (b) and (c) of this section if the debtor gives the employer written consent.
(a) Along with a garnishment order, we send to an employer a certification in a form prescribed by the Secretary of the Treasury.
(b) The employer must complete and return the certification to us within the time stated in the instructions for the form.
(c) The employer must include in the certification information about the debtor's employment status, payment frequency, and disposable pay available for withholding.
(a)(1) Our garnishment order indicates a reasonable period of time within which an employer must start withholding under the order.
(2) The employer must promptly pay to the Department all amounts the employer withholds according to the order.
(b) The employer may follow its normal pay and disbursement cycles in complying with the garnishment order.
(c) The employer must withhold the appropriate amount from the debtor's wages for each pay period until the employer receives our notification to discontinue wage garnishment.
(d) The employer must disregard any assignment or allotment by an employee that would interfere with or prohibit the employer from complying with our garnishment order, unless that assignment or allotment was made for a family support judgment or order.
(a) We do not garnish your wages if we have credible evidence that you—
(1) Were involuntarily separated from employment; and
(2) Have not yet been reemployed continuously for at least 12 months.
(b) You have the burden of informing us of the circumstances surrounding an involuntary separation from employment.
(a) You may object to a proposed garnishment on the ground that withholding the amount or at the rate stated in the notice of garnishment would cause financial hardship to you and your dependents. (See § 34.7)
(b) You may, at any time, object that the amount or the rate of withholding which our order specifies your employer must withhold causes financial hardship.
(c)(1) We consider an objection to an outstanding garnishment order and provide you an opportunity for a hearing on your objection only after the order has been outstanding for at least six months.
(2) We may provide a hearing in extraordinary circumstances earlier than six months if you show in your request for review that your financial circumstances have substantially changed after the notice of proposed garnishment because of an event such as injury, divorce, or catastrophic illness.
(d)(1) You bear the burden of proving a claim of financial hardship by a preponderance of the credible evidence.
(2) You must prove by credible documentation—
(i) The amount of the costs incurred by you, your spouse, and any dependents, for basic living expenses; and
(ii) The income available from any source to meet those expenses.
(e)(1) We consider your claim of financial hardship by comparing—
(i) The amounts that you prove are being incurred for basic living expenses; against
(ii) The amounts spent for basic living expenses by families of the same size and similar income to yours.
(2) We regard the standards published by the Internal Revenue Service under 26 U.S.C. 7122(c)(2) (the “National Standards”) as establishing the average amounts spent for basic living expenses for families of the same size as, and with family incomes comparable to, your family.
(3) We accept as reasonable the amount that you prove you incur for a type of basic living expense to the extent that the amount does not exceed the amount spent for that expense by families of the same size and similar income according to the National Standards.
(4) If you claim for any basic living expense an amount that exceeds the amount in the National Standards, you must prove that the amount you claim is reasonable and necessary.
(a)(1) If we conclude that garnishment at the amount or rate proposed in a notice would cause you financial hardship, we reduce the amount of the proposed garnishment to an amount that we determine will allow you to meet proven basic living expenses.
(2) If a garnishment order is already in effect, we notify your employer of any change in the amount the employer must withhold or the rate of withholding under the order.
(b) If we determine that financial hardship would result from garnishment based on a finding by a hearing official or under a repayment agreement we reached with you, this determination is effective for a period not longer than six months after the date of the finding or agreement.
(c)(1) After the effective period referred to in paragraph (b) of this section, we may require you to submit current information regarding your family income and living expenses.
(2) If we conclude from a review of that evidence that we should increase the rate of withholding or payment, we—
(i) Notify you; and
(ii) Provide you with an opportunity to contest the determination and obtain a hearing on the objection under the procedures in § 34.24.
(a)(1) A garnishment order we issue is effective until we rescind the order.
(2) If an employer is unable to honor a garnishment order because the amount available for garnishment is insufficient to pay any portion of the amount stated in the order, the employer must—
(i) Notify us; and
(ii) Comply with the order when sufficient disposable pay is available.
(b) After we have fully recovered the amounts owed by the debtor, including interest, penalties, and collection costs, we send the debtor's employer notification to stop wage withholding.
An employer may not discharge, refuse to employ, or take disciplinary action against a debtor due to the issuance of a garnishment order under this part.
(a) If a hearing official determines under §§ 34.16 and 34.17 that a person does not owe the debt described in our notice or that an administrative wage garnishment under this part was barred by law at the time of the collection action, we promptly refund any amount collected by means of this garnishment.
(b) Unless required by Federal law or contract, we do not pay interest on a refund.
(a) If an employer fails to comply with § 34.22 to withhold an appropriate amount from wages owed and payable to an employee, we may sue the employer for that amount.
(b)(1) We do not file suit under paragraph (a) of this section before we terminate action to enforce the debt as a personal liability of the debtor.
(2) However, the provision of paragraph (b)(1) of this section may not apply if earlier filing of a suit is necessary to avoid expiration of any applicable statute of limitations.
(c)(1) For purposes of this section, termination of an action to enforce a debt occurs when we terminate collection action in accordance with the FCCS, other applicable standards, or paragraph (c)(2) of this section.
(2) We regard termination of the collection action to have occurred if we have not received for one year any payments to satisfy the debt, in whole or in part, from the particular debtor whose wages were subject to garnishment.
We apply payments received through a garnishment in the following order—
(a) To costs incurred to collect the debt;
(b) To interest accrued on the debt at the rate established by—
(1) The terms of the obligation under which it arises; or
(2) Applicable law; and
(c) To outstanding principal of the debt.
The regulations in this part shall apply only to claims asserted under the Federal Tort Claims Act, as amended, 28 U.S.C. 2671-2680, for money damages against the United States for damage to or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Department of Education while acting within the scope of his office or employment.
(a) For purposes of the regulations in this part, a claim shall be deemed to have been presented when the Department of Education receives, at a place designated in paragraph (b) of this section, an executed Standard Form 95 or other written notification of an incident accompanied by a claim for money damages in a sum certain for damage to or loss of property, for personal injury, or for death, alleged to have occurred by reason of the incident. A claim which should have been presented to the Department but which was mistakenly addressed to or filed with another Federal agency, shall be deemed to be presented to the Department as of the date that the claim is received by the Department. A claim mistakenly addressed to or filed with the Department shall forthwith be transferred to the appropriate Federal agency, if ascertainable, or returned to the claimant.
(b) A claim presented in compliance with paragraph (a) of this section may be amended by the claimant at any time prior to final action by the Secretary or prior to the exercise of the claimant's option to bring suit under 28 U.S.C. 2675(a). Amendments shall be submitted in writing and signed by the claimant or his duly authorized agent or legal representative. Upon the timely filing of an amendment to a pending claim, the Department shall have 6 months in which to make a final disposition of the claim as amended and the claimant's option under 28 U.S.C. 2675(a) shall not accrue until 6 months after the filing of an amendment.
(c) Forms may be obtained and claims may be filed, with the Department of Education Claims Officer, Washington, DC 20202.
(a) A claim for injury to or loss of property may be presented by the owner of the property interest which is the subject of the claim, his duly authorized agent, or his legal representative.
(b) A claim for personal injury may be presented by the injured person, his duly authorized agent, or his legal representative.
(c) A claim based on death may be presented by the executor or administrator of the decedent's estate or by any other person legally entitled to assert such a claim under applicable state law.
(d) A claim for loss wholly compensated by an insurer with the rights of a subrogee may be presented by the insurer. A claim for loss partially compensated by an insurer with the rights of a subrogee may be presented by the insurer or the insured individually, as their respective interests appear, or jointly. Whenever an insurer presents a claim asserting the rights of a subrogee, he shall present with his claim appropriate evidence that he has the rights of a subrogee.
(e) A claim presented by an agent or legal representative shall be presented in the name of the claimant, be signed by the agent or legal representative, show the title or legal capacity of the person signing, and be accompanied by evidence of his authority to present a claim on behalf of the claimant as agent, executor, administrator, parent, guardian, or other representative.
(a) Death. In support of a claim based on death, the claimant may be required to submit the following evidence or information:
(1) An authenticated death certificate or other competent evidence showing cause of death, date of death, and age of the decedent.
(2) Decedent's employment or occupation at time of death, including his monthly or yearly salary or earnings (if any), and the duration of his last employment or occupation.
(3) Full names, addresses, birth dates, kinship, and marital status of the decedent's survivors, including identification of those survivors who were dependent for support upon the decedent at the time of his death.
(4) Degree of support afforded by the decedent to each survivor dependent upon him for support at the time of his death.
(5) Decedent's general physical and mental condition before death.
(6) Itemized bills for medical and burial expenses incurred by reason of the incident causing death, or itemized receipts of payments for such expenses.
(7) If damages for pain and suffering prior to death are claimed, a physician's detailed statement specifying the injuries suffered, duration of pain and suffering, any drugs administered for pain and the decedent's physical condition in the interval between injury and death.
(8) Any other evidence or information which may have a bearing on either the responsibility of the United States for the death or the damages claimed.
(b) Personal injury. In support of a claim for personal injury, including pain and suffering, the claimant may be required to submit the following evidence or information:
(1) A written report by his attending physician or dentist setting forth the nature and extent of the injury, nature and extent of treatment, any degree of temporary or permanent disability, the prognosis, period of hospitalization, and any diminished earning capacity. In addition, the claimant may be required to submit to a physical or mental examination by a physician employed or designated by the Department. A copy of the report of the examining physician shall be made available to the claimant upon the claimant's written request provided that claimant has, upon request, furnished the report referred to in the first sentence of this paragraph and has made or agrees to make available to the Department any other physician's reports previously or thereafter made of the physical or mental condition which is the subject matter of his claim.
(2) Itemized bills for medical, dental, and hospital expenses incurred, or itemized receipts of payment for such expenses.
(3) If the prognosis reveals the necessity for future treatment, a statement of expected duration of and expenses for such treatment.
(4) If a claim is made for loss of time from employment, a written statement from his employer showing actual time lost from employment, whether he is a full or part-time employee, and wages or salary actually lost.
(5) If a claim is made for loss of income and the claimant is self-employed, documentary evidence showing the amount of earnings actually lost.
(6) Any other evidence or information which may have a bearing on either the responsibility of the United States for the personal injury or the damages claimed.
(c) Property damage. In support of a claim for damage to or loss of property, real or personal, the claimant may be required to submit the following evidence or information:
(1) Proof of ownership.
(2) A detailed statement of the amount claimed with respect to each item of property.
(3) An itemized receipt of payment for necessary repairs or itemized written estimates of the cost of such repairs.
(4) A statement listing date of purchase, purchase price, market value of the property as of date of damage, and salvage value, where repair is not economical.
(5) Any other evidence or information which may have a bearing either on the responsibility of the United States for the injury to or loss of property or the damages claimed.
(d) Time limit. All evidence required to be submitted by this section shall be furnished by the claimant within a reasonable time. Failure of a claimant to furnish evidence necessary to a determination of his claim within three months after a request therefor has been mailed to his last known address may be deemed an abandonment of the claim. The claim may be thereupon disallowed.
When a claim is received, the Department will make such investigation as may be necessary or appropriate for a determination of the validity of the claim.
(a) Final denial of an administrative claim shall be in writing and sent to the claimant, his attorney, or legal representative by certified or registered mail. The notification of final denial may include a statement of the reasons for the denial and shall include a statement that, if the claimant is dissatisfied with the Department's action, he may file suit in an appropriate U.S. District Court not later than 6 months after the date of mailing of the notification.
(b) Prior to the commencement of suit and prior to the expiration of the 6-month period after the date of mailing, by certified or registered mail of notice of final denial of the claim as provided in 28 U.S.C. 2401(b), a claimant, his duly authorized agent, or legal representative, may file a written request with the Department for reconsideration of a final denial of a claim under paragraph (a) of this section. Upon the timely filing of a request for reconsideration the Department shall have 6 months from the date of filing in which to make a final disposition of the claim and the claimant's option under 28 U.S.C. 2675(a) to bring suit shall not accrue until 6 months after the filing of a request for reconsideration. Final Department action on a request for reconsideration shall be effected in accordance with the provisions of paragraph (a) of this section.
(a) Upon allowance of his claim, claimant or his duly authorized agent shall sign the voucher for payment, Standard Form 1145, before payment is made.
(b) When the claimant is represented by an attorney, the voucher for payment (SF 1145) shall designate both the claimant and his attorney as “payees.” The check shall be delivered to the attorney whose address shall appear on the voucher.
Acceptance by the claimant, his agent or legal representative, of any award, compromise or settlement made hereunder, shall be final and conclusive on the claimant, his agent or legal representative and any other person on whose behalf or for whose benefit the claim has been presented, and shall constitute a complete release of any claim against the United States and against any employee of the Government whose act or omission gave rise to the claim, by reason of the same subject matter.
A person who files a false claim or makes a false or fraudulent statement in a claim against the United States may be liable to a fine of not more than $10,000 or to imprisonment of not more than 5 years, or both (18 U.S.C. 287.1001), and, in addition, to a forfeiture of $2,000 and a penalty of double the loss or damage sustained by the United States (31 U.S.C. 231).
(a) An award, compromise or settlement of a claim hereunder in excess of $25,000 shall be effected only with the prior written approval of the Attorney General or his designee. For the purposes of this paragraph, a principal claim and any derivative or subrogated claim shall be treated as a single claim.
(b) An administrative claim may be adjusted, determined, compromised or settled hereunder only after consultation with the Department of Justice when, in the opinion of the Department:
(1) A new precedent or a new point of law is involved; or
(2) A question of policy is or may be involved; or
(3) The United States is or may be entitled to indemnity or contribution from a third party and the Department is unable to adjust the third party claim; or
(4) The compromise of a particular claim, as a practical matter, will or may control the disposition of a related claim in which the amount to be paid may exceed $25,000.
(c) An administrative claim may be adjusted, determined, compromised or settled only after consultation with the Department of Justice when it is learned that the United States or an employee, agent or cost plus contractor of the United States is involved in litigation based on a claim arising out of the same incident or transaction.
The purpose of this part is to make inflation adjustments to the civil monetary penalties within the jurisdiction of the Department of Education. These penalties are subject to review and adjustment as necessary at least once every 4 years in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.
The citations for the adjusted penalty provisions, a brief description of the penalty, and the adjusted maximum (and minimum, if applicable) penalty amounts are listed in Table 1 of this section.
Table 1 to § 36.2—Civil Monetary Penalty Inflation Adjustments
| Statute | Description | New maximum
(and minimum, if applicable) penalty amount |
|---|---|---|
| 20 U.S.C. 1015(c)(5) (section 131(c)(5) of the Higher Education Act of 1965 (HEA)) | Provides for a fine, as set by Congress in 1998, of up to $25,000 for failure by an institution of higher education (IHE) to provide information on the cost of higher education to the Commissioner of Education Statistics | $48,119. |
| 20 U.S.C. 1022d(a)(3) (section 205(a)(3) of the HEA) | Provides for a fine, as set by Congress in 2008, of up to $27,500 for failure by an IHE to provide information to the State and the public regarding its teacher-preparation programs | $40,080. |
| 20 U.S.C. 1082(g) (section 432(g) of the HEA) | Provides for a civil penalty, as set by Congress in 1986, of up to $25,000 for violations by lenders and guaranty agencies of title IV of the HEA, which authorizes the Federal Family Education Loan Program | $71,545. |
| 20 U.S.C. 1094(c)(3)(B) (section 487(c)(3)(B) of the HEA) | Provides for a civil penalty, as set by Congress in 1986, of up to $25,000 for an IHE's violation of title IV of the HEA, which authorizes various programs of student financial assistance | $71,545. |
| 20 U.S.C. 1228c(c)(2)(E) (section 429 of the General Education Provisions Act) | Provides for a civil penalty, as set by Congress in 1994, of up to $1,000 for an educational organization's failure to disclose certain information to minor students and their parents | $2,111. |
| 31 U.S.C. 1352(c)(1) and (c)(2)(A) | Provides for a civil penalty, as set by Congress in 1989, of $10,000 to $100,000 for recipients of Government grants, contracts, etc. that improperly lobby Congress or the executive branch with respect to the award of Government grants and contracts | $25,132 to $251,322. |
| 31 U.S.C. 3802(a)(1) and (a)(2) | Provides for a civil penalty, as set by Congress in 1986, of up to $5,000 for false claims and statements made to the Government | $14,308. |
(a)(1) The Department of Education may indemnify, in whole or in part, an employee for any verdict, judgment, or other monetary award rendered against the employee if—
(i) The conduct giving rise to the verdict, judgment, or award occurred within the scope of his or her employment with the Department; and
(ii) The indemnification is in the interest of the United States, as determined by the Secretary.
(2) The regulations in this part apply to an action pending against an ED employee as of March 30, 1989, as well as to any action commenced after that date.
(3) As used in this part, the term employee includes—
(i) A present or former officer or employee of the Department or of an advisory committee to the Department, including a special Government employee;
(ii) An employee of another Federal agency on detail to the Department; or
(iii) A student volunteer under 5 U.S.C. 3111.
(4) As used in this part the term Secretary means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
(b)(1) The Department may pay, in whole or in part, to settle or compromise a personal damage claim against an employee if—
(i) The alleged conduct giving rise to the personal damage claim occurred within the scope of employment; and
(ii) The settlement or compromise is in the interest of the United States, as determined by the Secretary.
(2) Payment under paragraph (b)(1) of this section may include reimbursement, in whole or in part, of an employee for prior payment made by the employee under a settlement or compromise that meets the requirements of this section.
(c) The Department does not indemnify or settle a personal damage claim before entry of an adverse verdict, judgment, or monetary award unless the Secretary determines that exceptional circumstances justify the earlier indemnification or settlement.
(d) Any payment under this part, either to indemnify a Department of Education employee or to settle a personal damage claim, is contingent upon the availability of appropriated funds.
(a) When an employee of the Department of Education becomes aware that an action has been filed against the employee in his or her individual capacity as a result of conduct taken within the scope of his or her employment, the employee shall immediately notify the head of his or her principal operating component and shall cooperate with appropriate officials of the Department in the defense of the action.
(b) As part of the notification in paragraph (a) of this section or at a later time, the employee may request—
(1) Indemnification to satisfy a verdict, judgment, or award entered against the employee; or
(2) Payment to satisfy the requirements of a settlement proposal.
(c)(1) The employee's request must be in writing to the head of his or her principal operating component and must be accompanied by copies of the complaint and other documents filed in the action, including the verdict, judgment, award, settlement, or settlement proposal, as appropriate.
(2)(i) As used in this section, the term principal operating component means an office in the Department headed by an Assistant Secretary, a Deputy Under Secretary, or an equivalent departmental officer who reports directly to the Secretary.
(ii) The term also includes the Office of the Secretary and the Office of the Under Secretary.
(d) The head of the employee's principal operating component submits to the General Counsel, in a timely manner, the request, together with a recommended disposition of the request.
(e) The General Counsel forwards to the Secretary for decision—
(1) The employee's request;
(2) The recommendation of the head of the employee's principal operating component; and
(3) The General Counsel's recommendation.
Employees of the Department of Education are subject to the executive branch-wide Standards of Ethical Conduct at 5 CFR part 2635 and to the Department of Education regulation at 5 CFR part 6301 which supplements the executive branch-wide standards with a requirement for employees to obtain prior approval to participate in certain outside activities. In addition, employees are subject to the executive branch-wide financial disclosure regulations at 5 CFR part 2634.
If a financial interest arises from ownership by an employee—or other person or enterprise referred to in 5 CFR 2635.402(b)(2)—of stock in a widely diversified mutual fund or other regulated investment company that in turn owns stock in another enterprise, that financial interest is exempt from the prohibition in 5 CFR 2635.402(a).
Any person in Government service should:
Put loyalty to the highest moral principles and to country above loyalty to persons, party, or Government department.
Uphold the Constitution, laws, and regulations of the United States and of all governments therein and never be a party to their evasion.
Give a full day's labor for a full day's pay; giving earnest effort and best thought to the performance of duties.
Seek to find and employ more efficient and economical ways of getting tasks accomplished.
Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept, for himself or herself or for family members, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of governmental duties.
Make no private promises of any kind binding upon the duties of office, since a Government employee has no private word which can be binding on public duty.
Engage in no business with the Government, either directly or indirectly, which is inconsistent with the conscientious performance of governmental duties.
Never use any information gained confidentially in the performance of governmental duties as a means of making private profit.
Expose corruption wherever discovered.
Uphold these principles, ever conscious that public office is a public trust.
Section 75.263 also issued under 2 CFR 200.308(e)(1).
Section 75.617 also issued under 31 U.S.C. 3504, 3505.
Section 75.740 also issued under 20 U.S.C. 1232g and 1232h.
(a) General. (1) The regulations in this part apply to each direct grant program of the Department of Education, except as specified in these regulations for direct formula grant programs, as referenced in paragraph (c)(3) of this section.
(2) The Department administers two kinds of direct grant programs. A direct grant program is either a discretionary grant program or a formula grant program other than a State-administered formula grant program covered by 34 CFR part 76.
(3) If a direct grant program does not have implementing regulations, the Secretary implements the program under the applicable statutes and regulations and, to the extent consistent with the applicable statutes and regulations, under the General Education Provisions Act and the regulations in this part. With respect to the Impact Aid Program (Title VII of the Elementary and Secondary Education Act of 1965), see 34 CFR 222.19 for the limited applicable regulations in this part.
(b) Discretionary grant programs. A discretionary grant program is one that permits the Secretary to use discretionary judgment in selecting applications for funding.
(c) Formula grant programs. (1) A formula grant program is one that entitles certain applicants to receive grants if they meet the requirements of the program. Applicants do not compete with each other for the funds, and each grant is either for a set amount or for an amount determined under a formula.
(2) The Secretary applies the applicable statutes and regulations to fund projects under a formula grant program.
(3) For specific regulations in this part that apply to the selection procedures and grant-making processes for direct formula grant programs, see §§ 75.215 and 75.230.
Note 1 to § 75.1: See 34 CFR part 76 for the general regulations that apply to programs that allocate funds by formula among eligible States.
If a program has regulations that are not consistent with part 75, the implementing regulations for that program identify the sections of part 75 that do not apply.
Eligibility to apply for a grant under a program of the Department is governed by the applicable statutes and regulations for that program.
(a) Under some programs, an applicant must show that it is a nonprofit organization.
(b) An applicant may show that it is a nonprofit organization by any of the following means:
(1) Proof that the Internal Revenue Service currently recognizes the applicant as an organization to which contributions are tax deductible under section 501(c)(3) of the Internal Revenue Code;
(2) A statement from a State taxing body or the State attorney general certifying that:
(i) The organization is a nonprofit organization operating within the State; and
(ii) No part of its net earnings may lawfully benefit any private shareholder or individual;
(3) A certified copy of the applicant's certificate of incorporation or similar document if it clearly establishes the nonprofit status of the applicant; or
(4) Any item described in paragraphs (b)(1) through (3) of this section if that item applies to a State or national parent organization, together with a statement by the State or parent organization that the applicant is a local nonprofit affiliate.
(a)(1) A faith-based organization is eligible to apply for and to receive a grant under a program of the Department on the same basis as any other private organization.
(2)(i) In the selection of grantees, the Department—
(A) May not discriminate for or against a private organization on the basis of the organization's religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization; and
(B) Must ensure that all decisions about grant awards are free from political interference, or even the appearance of such interference, and are made on the basis of merit, not on the basis of religion or religious belief, or the lack thereof.
(ii) Notices or announcements of award opportunities and notices of award or contracts must include language substantially similar to that in appendices A and B, respectively, to this part.
(3) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by the Department may require faith-based organizations to provide assurances or notices if they are not required of non-faith-based organizations. Any restrictions on the use of grant funds must apply equally to faith-based and non-faith-based organizations. All organizations that receive grants under a Department program, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws.
(4) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by the Department may disqualify faith-based organizations from applying for or receiving grants under a Department program on the basis of the organization's religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization.
(5) Nothing in this section may be construed to preclude the Department from making an accommodation, including for religious exercise, with respect to one or more program requirements on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws.
(6) The Department may not disqualify an organization from participating in any Department program for which it is eligible on the basis of the organization's indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the Department has determined that it would deny the accommodation.
(b) The provisions of § 75.532 apply to a faith-based organization that receives a grant under a program of the Department.
(c)(1) A private organization that applies for and receives a grant under a program of the Department and engages in explicitly religious activities, such as worship, religious instruction, or proselytization, must offer those activities separately in time or location from any programs or services funded by a grant from the Department. Attendance or participation in any such explicitly religious activities by beneficiaries of the programs and services funded by the grant must be voluntary.
(2) The limitations on explicitly religious activities under paragraph (c)(1) of this section do not apply to a faith-based organization that provides services to a beneficiary under a program supported only by “indirect Federal financial assistance.”
(3) For purposes of 2 CFR 3474.15, this section, §§ 75.712 and 75.714, and appendices A and B to this part, the following definitions apply:
(i) Direct Federal financial assistance means financial assistance received by an entity selected by the Government or a pass-through entity (under this part) to carry out a service (e.g., by contract, grant, or cooperative agreement). References to Federal financial assistance will be deemed to be references to direct Federal financial assistance, unless the referenced assistance meets the definition of indirect Federal financial assistance.
(ii) Indirect Federal financial assistance means financial assistance received by a service provider when the service provider is paid for services rendered by means of a voucher, certificate, or other similar means of government-funded payment provided to a beneficiary who is able to make a choice of a service provider. Federal financial assistance provided to an organization is indirect under this definition if—
(A) The government program through which the beneficiary receives the voucher, certificate, or other similar means of government-funded payment is neutral toward religion; and
(B) The organization receives the assistance wholly as the result of the genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuinely independent and private choice.
(iii) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption.
(iii) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption.
(iv) Pass-through entity means an entity, including a nonprofit or nongovernmental organization, acting under a contract, grant, or other agreement with the Federal Government or with a State or local government, such as a State administering agency, that accepts direct Federal financial assistance as a primary recipient or grantee and distributes that assistance to other organizations that, in turn, provide government-funded social services.
(v) Religious exercise has the meaning given to the term in 42 U.S.C. 2000cc-5(7)(A).
The definitions of direct Federal financial assistance and indirect Federal financial assistance do not change the extent to which an organization is considered a recipient of Federal financial assistance as those terms are defined under 34 CFR parts 100, 104, 106, and 110.
(d)(1) A faith-based organization that applies for or receives a grant under a program of the Department will retain its independence, autonomy, right of expression, religious character, and authority over its governance. A faith-based organization that receives Federal financial assistance from the Department does not lose the protections of law.
(2) A faith-based organization that applies for or receives a grant under a program of the Department may, among other things—
(i) Retain religious terms in its name;
(ii) Continue to carry out its mission, including the definition, development, practice, and expression of its religious beliefs;
(iii) Use its facilities to provide services without concealing, removing, or altering religious art, icons, scriptures, or other symbols from these facilities;
(iv) Select its board members on the basis of their acceptance of or adherence to the religious tenets of the organization; and
(v) Include religious references in its mission statement and other chartering or governing documents.
(e) An organization that receives any Federal financial assistance under a program of the Department shall not discriminate against a beneficiary or prospective beneficiary in the provision of program services, or in outreach activities related to such services, on the basis of religion or religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization's program.
(f) If a grantee contributes its own funds in excess of those funds required by a matching or grant agreement to supplement federally funded activities, the grantee has the option to segregate those additional funds or commingle them with the funds required by the matching requirements or grant agreement. However, if the additional funds are commingled, this section applies to all of the commingled funds.
(g) A religious organization's exemption from the Federal prohibition on employment discrimination on the basis of religion, in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is not forfeited when the organization receives financial assistance from the Department.
(h) The Department shall not construe these provisions in such a way as to advantage or disadvantage faith-based organizations affiliated with historic or well-established religions or sects in comparison with other religions or sects.
An individual is ineligible to receive a fellowship, scholarship, or discretionary grant funded by the Department if the individual—
(a) Is not current in repaying a debt or is in default, as that term is used in 34 CFR part 668, on a debt—
(1) Under a program administered by the Department under which an individual received a fellowship, scholarship, or loan that they are obligated to repay; or
(2) To the Federal Government under a nonprocurement transaction; and
(b) Has not made satisfactory arrangements to repay the debt.
(a) An individual who applies for a fellowship, scholarship, or discretionary grant from the Department shall provide with his or her application a certification under the penalty of perjury—
(1) That the individual is eligible under § 75.60; and
(2) That the individual has not been debarred or suspended by a judge under section 421 of the Controlled Substances Act (21 U.S.C. 862).
(b) The Secretary specifies the form of the certification required under paragraph (a) of this section.
(c) The Secretary does not award a fellowship, scholarship, or discretionary grant to an individual who—
(1) Fails to provide the certification required under paragraph (a) of this section; or
(2) Is ineligible, based on information available to the Secretary at the time the award is made.
(d) If a fellowship, scholarship, or discretionary grant is made to an individual who provided a false certification under paragraph (a) of this section, the individual is liable for recovery of the funds made available under the certification, for civil damages or penalties imposed for false representation, and for criminal prosecution under 18 U.S.C. 1001.
(a) An entity that provides a fellowship, scholarship, or discretionary grant to an individual under a grant from, or an agreement with, the Secretary shall require the individual who applies for such an award to provide with his or her application a certification under the penalty of perjury—
(1) That the individual is eligible under § 75.60; and
(2) That the individual has not been debarred or suspended by a judge under section 421 of the Controlled Substances Act (21 U.S.C. 862).
(b) An entity subject to this section may not award a fellowship, scholarship, or discretionary grant to an individual if—
(1) The individual fails to provide the certification required under paragraph (a) of this section; or
(2) The Secretary informs the entity that the individual is ineligible under § 75.60.
(c) If a fellowship, scholarship, or discretionary grant is made to an individual who provided a false certification under paragraph (a) of this section, the individual is liable for recovery of the funds made available under the certification, for civil damages or penalties imposed for false representation, and for criminal prosecution under 18 U.S.C. 1001.
(d) The Secretary may require an entity subject to this section to provide a list of the individuals to whom fellowship, scholarship, or discretionary grant awards have been made or are proposed to be made by the entity.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) Each fiscal year the Secretary publishes application notices in the
(b) The application notice for a program explains one or more of the following:
(1) How to apply for a new grant.
(2) If preapplications are used under the program, how to preapply for a new grant.
(a) The Secretary may include such information as the following in an application notice:
(1) How an applicant can obtain an application package.
(2) The amount of funds available for grants, the estimated number of those grants, the estimated amounts of those grants and, if appropriate, the maximum award amounts of those grants.
(3) If the Secretary plans to approve multi-year projects, the project period that will be approved.
(4) Any priorities established by the Secretary for the program for that year and the method the Secretary will use to implement the priorities. (See § 75.105 Annual priorities.)
(5) Where to find the regulations that apply to the program.
(6) The statutory authority for the program.
(7) The deadlines established under § 75.102 (Deadline date for applications.) and 34 CFR 79.8 (How does the Secretary provide States an opportunity to comment on proposed Federal financial assistance?).
(b) If the Secretary either requires or permits preapplications under a program, an application notice for the program explains how an applicant can get the preapplication form.
See 34 CFR 77.1—definitions of “budget period” and “project period.”
(a) The application notice for a program sets a deadline date for the transmittal of applications to the Department.
(b)-(c) [Reserved]
(d) If the Secretary allows an applicant to submit a paper application, the applicant must show one of the following as proof of mailing by the deadline date:
(1) A legibly dated U.S. Postal Service postmark.
(2) A legible mail receipt with the date of mailing stamped by the U.S. Postal Service.
(3) A dated shipping label, invoice, or receipt from a commercial carrier.
(4) Any other proof of mailing acceptable to the Secretary.
(e) If an application is mailed through the U.S. Postal Service, the Secretary does not accept either of the following as proof of mailing:
(1) A private metered postmark.
(2) A mail receipt that is not dated by the U.S. Postal Service.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, an applicant should check with its local post office.
(a) If the Secretary invites or requires preapplications under a program, the application notice for the program sets a deadline date for preapplications.
(b) An applicant shall submit its preapplication in accordance with the procedures for applications in § 75.102(d).
(a) The Secretary may make a grant only to an eligible party that submits an application.
(b) If a maximum award amount is established in a notice published in the
(c) If an applicant wants a new grant, the applicant must submit an application in accordance with the requirements in the application notice.
(a) What programs are covered by this section? This section applies to any program for which the Secretary establishes priorities for selection of applications in a particular fiscal year.
(b) How does the Secretary establish annual priorities? (1) The Secretary establishes final annual priorities by publishing the priorities in a notice in the
(2) The Secretary publishes proposed annual priorities for public comment, unless:
(i) The final annual priorities will be implemented only through invitational priorities (Cross-reference: See 34 CFR 75.105(c)(1));
(ii) The final annual priorities are chosen from a list of priorities already established in the program's regulations;
(iii) Publishing proposed annual priorities would be impracticable, unnecessary, or contrary to the public interest;
(iv) The program statute requires or authorizes the Secretary to establish specified priorities;
(v) The annual priorities are chosen from allowable activities specified in the program statute; or
(vi) The final annual priorities are developed under the exemption from rulemaking for the first grant competition under a new or substantially revised program authority pursuant to section 437(d)(1) of GEPA, 20 U.S.C. 1232(d)(1), or an exemption from rulemaking under section 681(d) of the Individuals with Disabilities Education Act, 20 U.S.C. 1481(d), section 191 of the Education Sciences Reform Act, 20 U.S.C. 9581, or any other applicable exemption from rulemaking.
(c) How does the Secretary implement an annual priority? The Secretary may choose one or more of the following methods to implement an annual priority:
(1) Invitations. The Secretary may simply invite applications that meet a priority. If the Secetary chooses this method, an application that meets the priority receives no competitive or absolute preference over applications that do not meet the priority.
(2) Competitive preference. The Secretary may give one of the following kinds of competitive preference to applications that meet a priority.
(i) The Secretary may award some or all bonus points to an application depending on the extent to which the application meets the priority. These points are in addition to any points the applicant earns under the selection criteria (see § 75.200(b)). The notice states the maximum number of additional points that the Secretary may award to an application depending upon how well the application meets the priority.
(ii) The Secretary may select an application that meets a priority over an application of comparable merit that does not meet the priority.
(3) Absolute preference. The Secretary may give an absolute preference to applications that meet a priority. The Secretary establishes a separate competition for applications that meet the priority and reserves all or part of a program's funds solely for that competition. The Secretary may adjust the amount reserved for the priority after determining the number of high-quality applications received.
See § 75.200 for a description of discretionary and formula grant programs.
An applicant may make changes to its application on or before the deadline date for submitting the application under the program.
(a) The Secretary may establish, in an application notice for a competition, one or more program performance measurement requirements, including requirements for performance measures, baseline data, or performance targets, and a requirement that applicants propose in their applications one or more of their own project-specific performance measures, baseline data, or performance targets and ensure that the applicant's project-specific performance measurement plan would, if well implemented, yield quality data.
(b) If the application notice establishes program performance measurement requirements, the applicant must also describe in the application—
(1)(i) The data collection and reporting methods the applicant would use and why those methods are likely to yield reliable, valid, and meaningful performance data; and
(ii) If the Secretary requires applicants to collect data after the substantive work of a project is complete in order to measure progress toward attaining certain performance targets, the data-collection and reporting methods the applicant would use during the post-performance period and why those methods are likely to yield quality data.
(2) The applicant's capacity to collect and report the quality of the performance data, as evidenced by quality data collection, analysis, and reporting in other projects or research.
(c) If an application notice requires applicants to propose project-specific performance measures, baseline data, or performance targets, the application must include the following, as required by the application notice:
(1) Project-specific performance measures. How each proposed project-specific performance measure would: accurately measure the performance of the project; be consistent with the program performance measures established under paragraph (a) of this section; and be used to inform continuous improvement of the project.
(2) Baseline data. (i) Why each proposed baseline is valid and reliable, including an assessment of the quality data used to establish the baseline; or
(ii) If the applicant has determined that there are no established baseline data for a particular performance measure, an explanation of why there is no established baseline and of how and when, during the project period, the applicant would establish a valid baseline for the performance measure.
(3) Performance targets. Why each proposed performance target is ambitious yet achievable compared to the baseline for the performance measure and when, during the project period, the applicant would meet the performance target(s).
(a) An application must propose a project period for the project.
(b) An application must include a narrative that describes how the applicant plans to meet each objective of the project and, as appropriate, how the applicant intends to use continuous improvement strategies in its project implementation based on periodic review of research, data, community input, or other feedback to advance the programmatic objectives most effectively and efficiently, in each budget period of the project.
(c) The Secretary may establish, in an application notice, a requirement to include a logic model or other conceptual framework.
An applicant that proposes a multi-year project shall include in its application:
(a) Information that shows why a multi-year project is needed; and
(b) A budget narrative accompanied by a budget form prescribed by the Secretary, that provides budget information for each budget period of the proposed project period.
(a) A recipient that wants to receive a continuation award shall submit a performance report that provides the most current performance and financial expenditure information, as directed by the Secretary, that is sufficient to meet the reporting requirements of 2 CFR 200.328 and 200.329 and 34 CFR 75.590 and 75.720.
(b) If a recipient fails to submit a performance report that meets the requirements of paragraph (a) of this section, the Secretary denies continued funding for the grant.
See 2 CFR 200.327, Financial reporting, and 200.328, Monitoring and reporting program performance; and 34 CFR 75.117, Information needed for a multi-year project, 75.250 through 75.253, Approval of multi-year projects, 75.590, Evaluation by the grantee, and 75.720, Financial and performance reports.
If a program requires the applicant to provide an opportunity for participation of students enrolled in private schools, the application must include the information required of subgrantees under 34 CFR 76.656.
An applicant shall submit a separate application to each program under which it wants a grant.
If an applicant is submitting an application for the same project under more than one Federal program, the applicant shall list these programs in its application. The Secretary uses this information to avoid duplicate grants for the same project.
(a) Eligible parties may apply as a group for a grant.
(b) Depending on the program under which a group of eligible parties seeks assistance, the term used to refer to the group may vary. The list that follows contains some of the terms used to identify a group of eligible parties:
(1) Combination of institutions of higher education.
(2) Consortium.
(3) Partnership.
(4) Joint applicants.
(5) Cooperative arrangements.
(c) In the case of a group application submitted in accordance with §§ 75.127 through 75.129, all parties in the group must be eligible applicants under the competition.
(a) If a group of eligible parties applies for a grant, the members of the group shall either:
(1) Designate one member of the group to apply for the grant; or
(2) Establish a separate, eligible legal entity to apply for the grant.
(b) The members of the group shall enter into an agreement that:
(1) Details the activities that each member of the group plans to perform; and
(2) Binds each member of the group to every statement and assurance made by the applicant in the application.
(c) The applicant shall submit the agreement with its application.
(a) If the Secretary makes a grant to a group of eligible applicants, the applicant for the group is the grantee and is legally responsible for:
(1) The use of all grant funds;
(2) Ensuring that the project is carried out by the group in accordance with Federal requirements; and
(3) Ensuring that indirect cost funds are determined as required under § 75.564(e).
(b) Each member of the group is legally responsible to:
(1) Carry out the activities it agrees to perform; and
(2) Use the funds that it receives under the agreement in accordance with Federal requirements that apply to the grant.
(a) When entering into a contract with implementation sites or partners, an applicant is not required to comply with the competition requirements in 2 CFR 200.320(b), if—
(1) The contract is with an entity that agrees to provide a site or sites where the applicant would conduct the project activities under the grant;
(2) The implementation sites or partner entities that the applicant proposes to use are identified in the application for the grant; and
(3) The implementation sites or partner entities are included in the application in order to meet a regulatory, statutory, or priority requirement related to the competition.
(b) When entering into a contract for data collection, data analysis, evaluation services, or essential services, an applicant may select a provider using the informal, small-purchase procurement procedures in 2 CFR 200.320(a)(2), regardless of whether that applicant would otherwise be subject to that part or whether the evaluation contract would meet the standards for a small purchase order, if—
(1) The contract is with the data collection, data analysis, evaluation service, or essential service provider;
(2) The data collection, data analysis, evaluation service, or essential service provider that the applicant proposes to use is identified in the application for the grant; and
(3) The data collection, data analysis, evaluation service, or essential service provider is identified in the application in order to meet a statutory, regulatory, or priority requirement related to the competition.
(c) If the grantee relied on the exceptions under paragraph (a) or (b) of this section, the grantee must certify in its application that any employee, officer, or agent participating in the selection, award, or administration of a contract is free of any real or apparent conflict of interest and, if the grantee relied on the exceptions of paragraph (b) of this section, that the grantee used small purchase procedures to obtain the product or service.
(d) A grantee must obtain the Secretary's prior approval for any change to an implementation site, implementation partner, or data collection, data analysis, evaluation service, or essential service provider, if the grantee relied on the exceptions under paragraph (a) or (b) of this section to select the entity.
(e) The exceptions in paragraphs (a) and (b) of this section do not extend to the other procurement requirements in 2 CFR part 200 regarding contracting by grantees and subgrantees.
(f) For the purposes of this section, essential service means a product or service directly related to the grant that would, if not provided, have a detrimental effect on the grant.
If applicable statutes and regulations require that a specific State agency be given an opportunity to comment on each application, the State and the applicant shall use the procedures in §§ 75.156-75.158 for that purpose.
See 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities) for the regulations implementing the application review procedures that States may use under E.O. 12372.
(a) Each applicant under a program covered by § 75.155 shall submit a copy of its application to the State on or before the deadline date for submitting its application to the Department.
(b) The applicant shall attach to its application a copy of its letter that requests the State to comment on the application.
A State that receives an application under § 75.156 may review and comment on the application.
(a) The Secretary may establish a deadline date for receipt of State comments on applications.
(b) The State shall make its comments in a written statement signed by an appropriate State official.
(c) The appropriate State official shall submit comments to the Secretary by the deadline date for State comments. The procedures in § 75.102(d) (how to meet a deadline) of this part apply to this submission.
(a) The Secretary considers those comments of the State that relate to:
(1) Any selection criterion that applies under the program; or
(2) Any other matter that affects the selection of projects for funding under the program.
(b) If the State fails to comment on an application on or before the deadline date for the appropriate program, the State waives its right to comment.
(c) If the applicant does not give the State an opportunity to comment, the Secretary does not select that project for a grant.
(a) The Secretary uses selection criteria to evaluate the applications submitted for new grants under a discretionary grant program.
(b) To evaluate the applications for new grants under the program, the Secretary may use—
(1) Selection criteria established under § 75.209;
(2) Selection criteria in § 75.210; or
(3) Any combination of criteria from paragraphs (b)(1) and (2) of this section.
(c)(1) The Secretary may award a cooperative agreement instead of a grant if the Secretary determines that substantial involvement between the Department and the recipient is necessary to carry out a collaborative project.
(2) The Secretary uses the selection procedures in this subpart to select recipients of cooperative agreements.
(a) In the application package or a notice published in the
(1) The selection criteria chosen; and
(2) The factors selected for considering the selection criteria, if any.
(b) If points or weights are assigned to the selection criteria or factors, the Secretary informs applicants in the application package or a notice published in the
(1) The total possible score for all of the criteria for a program; and
(2) The assigned weight or the maximum possible score for each criterion or factor under that criterion.
(c) If no points or weights are assigned to the selection criteria or selected factors, the Secretary evaluates each criterion equally and, within each criterion, each factor equally.
The Secretary may establish selection criteria and factors based on statutory or regulatory provisions that apply to the authorized program, which may include, but are not limited to, criteria and factors that reflect—
(a) Criteria contained in the program statute or regulations;
(b) Criteria in § 75.210;
(c) Allowable activities specified in the program statute or regulations;
(d) Application content requirements specified in applicable statutes and regulations;
(e) Program purposes, as described in the program statute or regulations; or
(f) Other pre-award and post-award conditions specified in the program statute or regulations.
In determining the selection criteria to evaluate applications submitted in a grant competition, the Secretary may select one or more of the following criteria and may select from among the list of optional factors under each criterion. The Secretary may define a selection criterion by selecting one or more specific factors within a criterion or assigning factors from one criterion to another criterion.
(a) Need for the project. (1) The Secretary considers the need for the proposed project.
(2) In determining the need for the proposed project, the Secretary considers one or more of the following factors:
(i) The data presented (including a comparison to local, State, regional, national, or international data) that demonstrates the issue, challenge, or opportunity to be addressed by the proposed project.
(ii) The extent to which the proposed project demonstrates the magnitude of the need for the services to be provided or the activities to be carried out by the proposed project.
(iii) The extent to which the proposed project will provide support, resources, or services; or otherwise address the needs of the target population, including addressing the needs of underserved populations most affected by the issue, challenge, or opportunity, to be addressed by the proposed project and close gaps in educational opportunity.
(iv) The extent to which the proposed project will focus on serving or otherwise addressing the needs of underserved populations.
(v) The extent to which the specific nature and magnitude of gaps or challenges are identified and the extent to which these gaps or challenges will be addressed by the services, supports, infrastructure, or opportunities described in the proposed project.
(vi) The extent to which the proposed project will prepare individuals from underserved populations for employment in fields and careers in which there are demonstrated shortages.
(b) Significance. (1) The Secretary considers the significance of the proposed project.
(2) In determining the significance of the proposed project, the Secretary considers one or more of the following factors:
(i) The extent to which the proposed project is relevant at the national level.
(ii) The significance of the problem or issue as it affects educational access and opportunity, including the underlying or related challenges for underserved populations.
(iii) The extent to which findings from the project's implementation will contribute new knowledge to the field by increasing knowledge or understanding of educational challenges, including the underlying or related challenges, and effective strategies for addressing educational challenges and their effective implementation.
(iv) The potential contribution of the proposed project to improve the provision of rehabilitative services, increase the number or quality of rehabilitation counselors, or develop and implement effective strategies for providing vocational rehabilitation services to individuals with disabilities.
(v) The likelihood that the proposed project will result in systemic change that supports continuous, sustainable, and measurable improvement.
(vi) The potential contribution of the proposed project to the development and advancement of theory, knowledge, and practices in the field of study, including the extent to which the contributions may be used by other appropriate agencies, organizations, institutions, or entities.
(vii) The potential for generalizing from the findings or results of the proposed project.
(viii) The extent to which the proposed project is likely to build local, State, regional, or national capacity to provide, improve, sustain, or expand training or services that address the needs of underserved populations.
(ix) The extent to which the proposed project involves the development or demonstration of innovative and effective strategies that build on, or are alternatives to, existing strategies.
(x) The extent to which the proposed project is innovative and likely to be more effective compared to other efforts to address a similar problem.
(xi) The likely utility of the resources (such as materials, processes, techniques, or data infrastructure) that will result from the proposed project, including the potential for effective use in a variety of conditions, populations, or settings.
(xii) The extent to which the resources, tools, and implementation lessons of the proposed project will be disseminated in ways to the target population and local community that will enable them and others (including practitioners, researchers, education leaders, and partners) to implement similar strategies.
(xiii) The potential effective replicability of the proposed project or strategies, including, as appropriate, the potential for implementation by a variety of populations or settings.
(xiv) The importance or magnitude of the results or outcomes likely to be attained by the proposed project, especially contributions toward improving teaching practice and student learning and achievement.
(xv) The importance or magnitude of the results or outcomes likely to be attained by the proposed project, especially improvements in employment, independent living services, or both, as appropriate.
(xvi) The importance or magnitude of the results or outcomes likely to be attained by the proposed project that demonstrate its impact for the targeted underserved populations in terms of breadth and depth of services.
(xvii) The extent to which the proposed project introduces an innovative approach, such as a modification of an evidence-based project component to serve different populations, an extension of an existing evidence-based project component, a unique composition of various project components to explore combined effects, or development of an emerging project component that needs further testing.
(c) Quality of the project design. (1) The Secretary considers the quality of the design of the proposed project.
(2) In determining the quality of the design of the proposed project, the Secretary considers one or more of the following factors:
(i) The extent to which the goals, objectives, and outcomes to be achieved by the proposed project are clearly specified, measurable, and ambitious yet achievable within the project period, and aligned with the purposes of the grant program.
(ii) The extent to which the design of the proposed project demonstrates meaningful community engagement and input to ensure that the project is appropriate to successfully address the needs of the target population or other identified needs and will be used to inform continuous improvement strategies.
(iii) The quality of the logic model or other conceptual framework underlying the proposed project, including how inputs are related to outcomes.
(iv) The extent to which the proposed project's logic model or other conceptual framework was developed based on engagement of a broad range of community members and partners.
(v) The extent to which the proposed project proposes specific, measurable targets, connected to strategies, activities, resources, outputs, and outcomes, and uses reliable administrative data to measure progress and inform continuous improvement.
(vi) The extent to which the design of the proposed project includes a thorough, high-quality review of the relevant literature, a high-quality plan for project implementation, and the use of appropriate methodological tools to enable successful achievement of project objectives.
(vii) The quality of the proposed demonstration design, such as qualitative and quantitative design, and procedures for documenting project activities and results for underserved populations.
(viii) The extent to which the design for implementing and evaluating the proposed project will result in information to guide possible replication of project activities or strategies, including valid and reliable information about the effectiveness of the approach or strategies employed by the project.
(ix) The extent to which the proposed development efforts include adequate quality controls, continuous improvement efforts, and, as appropriate, repeated testing of products.
(x) The extent to which the proposed project demonstrates that it is designed to build capacity and yield sustainable results that will extend beyond the project period.
(xi) The extent to which the design of the proposed project reflects the most recent and relevant knowledge and practices from research and effective practice.
(xii) The extent to which the proposed project represents an exceptional approach to meeting program purposes and requirements and serving the target population.
(xiii) The extent to which the proposed project represents an exceptional approach to any absolute priority or absolute priorities used in the competition.
(xiv) The extent to which the proposed project will integrate or build on ideas, strategies, and efforts from similar external projects to improve relevant outcomes, using existing funding streams from other programs or policies supported by community, State, and Federal resources.
(xv) The extent to which the proposed project is informed by similar past projects implemented by the applicant with demonstrated results.
(xvi) The extent to which the proposed project will include coordination with other Federal investments, as well as appropriate agencies and organizations providing similar services to the target population.
(xvii) The extent to which the proposed project is part of a comprehensive effort to improve teaching and learning and support rigorous academic standards and increased social, emotional, and educational development for students, including members of underserved populations.
(xviii) The extent to which the proposed project includes explicit plans for authentic, meaningful, and ongoing community member and partner engagement, including their involvement in planning, implementing, and revising project activities for underserved populations.
(xix) The extent to which the proposed project includes plans for consumer involvement.
(xx) The extent to which performance feedback and formative data are integral to the design of the proposed project and will be used to inform continuous improvement.
(xxi) The extent to which fellowship recipients or other project participants are to be selected on the basis of academic excellence.
(xxii) The extent to which the applicant demonstrates that it has the resources to operate the project beyond the project period, including a multiyear financial and operating model and accompanying plan; the demonstrated commitment of any partners; demonstration of broad support from community members and partners (such as State educational agencies, teachers' unions, families, business and industry, community members, and State vocational rehabilitation agencies) that are critical to the project's long-term success; or a plan for capacity-building by leveraging one or more of these types of resources.
(xxiii) The extent to which there is a plan to incorporate the project purposes, activities, or benefits into the ongoing work of the applicant beyond the end of the project period.
(xxiv) The extent to which the proposed project will increase efficiency in the use of time, staff, money, or other resources in order to improve results and increase productivity.
(xxv) The extent to which the proposed project will integrate with, or build on, similar or related efforts in order to improve relevant outcomes, using nonpublic funds or resources.
(xxvi) The extent to which the proposed project demonstrates a rationale that is aligned with the purposes of the grant program.
(xxvii) The extent to which the proposed project represents implementation of the evidence cited in support of the proposed project with fidelity.
(xxviii) The extent to which the applicant plans to allocate a significant portion of its requested funding to the evidence-based project components.
(xxix) The strength of the commitment from key decision-makers at proposed implementation sites.
(xxx) The extent to which the proposed project is supported by promising evidence.
(d) Quality of project services. (1) The Secretary considers the quality of the services to be provided by the proposed project.
(2) In determining the quality of the services to be provided by the proposed project, the Secretary considers the quality and sufficiency of strategies for ensuring equitable and adequate access and participation for project participants who experience barriers based on one or more of the following: economic disadvantage; gender; race; ethnicity; color; national origin; disability; age; language; migration; living in a rural location; experiencing homelessness or housing insecurity; involvement with the justice system; pregnancy, parenting, or caregiver status; and sexual orientation. This determination includes the steps developed and described in the form Equity For Students, Teachers, And Other Program Beneficiaries (OMB Control No. 1894-0005) (section 427 of the General Education Provisions Act (20 U.S.C. 1228a)).
(3) In addition, the Secretary considers one or more of the following factors:
(i) The extent to which the services to be provided by the proposed project were determined with input from the community to be served to ensure that they are appropriate and responsive to the needs of the intended recipients or beneficiaries, including underserved populations, of those services.
(ii) The extent to which the proposed project is supported by the target population that it is intended to serve.
(iii) The extent to which the services to be provided by the proposed project reflect up-to-date knowledge and an evidence-based project component.
(iv) The likely benefit to the intended recipients, as indicated by the logic model or other conceptual framework, of the services to be provided.
(v) The extent to which the training or professional development services to be provided by the proposed project are of sufficient quality, intensity, and duration to build recipient and project capacity in ways that lead to improvements in practice among the recipients of those services.
(vi) The extent to which the services to be provided by the proposed project are likely to provide long-term solutions to alleviate the personnel shortages that have been identified or are the focus of the proposed project.
(vii) The likelihood that the services to be provided by the proposed project will lead to meaningful improvements in the achievement of students as measured against rigorous and relevant standards.
(viii) The likelihood that the services to be provided by the proposed project will lead to meaningful improvements in early childhood and family outcomes.
(ix) The likelihood that the services to be provided by the proposed project will lead to meaningful improvements in the skills and competencies necessary to gain employment in high-quality jobs, careers, and industries or build capacity for independent living.
(x) The extent to which the services to be provided by the proposed project involve the collaboration of appropriate partners, including those from underserved populations, to maximize the effectiveness of project services.
(xi) The extent to which the services to be provided by the proposed project involve the use of efficient strategies, including the use of technology, as appropriate, and the leveraging of non-project resources.
(xii) The extent to which the services to be provided by the proposed project are focused on recipients, community members, or project participants that are most underserved as demonstrated by the data relevant to the project.
(e) Quality of the project personnel. (1) The Secretary considers the quality of the personnel who will carry out the proposed project.
(2) In determining the quality of project personnel, the Secretary considers the extent to which the applicant demonstrates that it has project personnel or a plan for hiring of personnel who are members of groups that have historically encountered barriers, or who have professional or personal experiences with barriers, based on one or more of the following: economic disadvantage; gender; race; ethnicity; color; national origin; disability; age; language; migration; living in a rural location; experiencing homelessness or housing insecurity; involvement with the justice system; pregnancy, parenting, or caregiver status; and sexual orientation.
(3) In addition, the Secretary considers one or more of the following factors:
(i) The extent to which the project director or principal investigator, when hired, has the qualifications required for the project, including formal training or work experience in fields related to the objectives of the project and experience in designing, managing, or implementing similar projects for the target population to be served by the project.
(ii) The extent to which the key personnel in the project, when hired, have the qualifications required for the proposed project, including formal training or work experience in fields related to the objectives of the project, and represent or have lived experiences of the target population.
(iii) The qualifications, including relevant training and experience, of project consultants or subcontractors.
(iv) The extent to which the proposed project team maximizes diverse perspectives, for example by reflecting the lived experiences of project participants, or relevant experience working with the target population.
(v) The extent to which the proposed planning, implementing, and evaluating project team are familiar with the assets, needs, and other contextual considerations of the proposed implementation sites.
(f) Adequacy of resources. (1) The Secretary considers the adequacy of resources for the proposed project.
(2) In determining the adequacy of resources for the proposed project, the Secretary considers one or more of the following factors:
(i) The adequacy of support for the project, including facilities, equipment, supplies, and other resources, from the applicant or the lead applicant organization.
(ii) The relevance and demonstrated commitment of each partner in the proposed project to the implementation and success of the project.
(iii) The extent to which the budget is adequate to support the proposed project and the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project.
(iv) The extent to which the costs are reasonable in relation to the number of persons to be served, the depth and intensity of services, and the anticipated results and benefits.
(v) The extent to which the costs of the proposed project would permit other entities to replicate the project.
(vi) The level of initial matching funds or other commitment from partners, indicating the likelihood for potential continued support of the project after Federal funding ends.
(vii) The potential for the purposes, activities, or benefits of the proposed project to be institutionalized into the ongoing practices and programs of the applicant, agency, or organization and continue after Federal funding ends.
(g) Quality of the management plan. (1) The Secretary considers the quality of the management plan for the proposed project.
(2) In determining the quality of the management plan for the proposed project, the Secretary considers one or more of the following factors:
(i) The feasibility of the management plan to achieve project objectives and goals on time and within budget, including clearly defined responsibilities, timelines, and milestones for accomplishing project tasks.
(ii) The adequacy of plans for ensuring the use of quantitative and qualitative data, including meaningful community member and partner input, to inform continuous improvement in the operation of the proposed project.
(iii) The adequacy of mechanisms for ensuring high-quality and accessible products and services from the proposed project for the target population.
(iv) The extent to which the time commitments of the project director and principal investigator and other key project personnel are appropriate and adequate to meet the objectives of the proposed project.
(v) How the applicant will ensure that a diversity of perspectives, including those from underserved populations, are brought to bear in the design, implementation, operation, evaluation, and improvement of the proposed project, including those of parents, educators, community-based organizations, civil rights organizations, the business community, a variety of disciplinary and professional fields, recipients or beneficiaries of services, or others, as appropriate.
(h) Quality of the project evaluation or other evidence-building. (1) The Secretary considers the quality of the evaluation or other evidence-building of the proposed project.
(2) In determining the quality of the evaluation or other evidence-building, the Secretary considers one or more of the following factors:
(i) The extent to which the methods of evaluation or other evidence-building are thorough, feasible, relevant, and appropriate to the goals, objectives, and outcomes of the proposed project.
(ii) The extent to which the methods of evaluation or other evidence-building are appropriate to the context within which the project operates and the target population of the proposed project.
(iii) The extent to which the methods of evaluation or other evidence-building are designed to measure the fidelity of implementation of the project.
(iv) The extent to which the methods of evaluation or other evidence-building include the use of objective performance measures that are clearly related to the intended outcomes of the project and will produce quality data that are quantitative and qualitative.
(v) The extent to which the methods of evaluation or other evidence-building will provide guidance for quality assurance and continuous improvement.
(vi) The extent to which the methods of evaluation or other evidence-building will provide performance feedback and provide formative, diagnostic, or interim data that is a periodic assessment of progress toward achieving intended outcomes.
(vii) The extent to which the evaluation will provide guidance about effective strategies suitable for replication or testing and potential implementation in other settings.
(viii) The extent to which the methods of evaluation will, if well implemented, produce evidence about the effectiveness of the project on relevant outcomes that would meet the What Works Clearinghouse standards without reservations, as described in the What Works Clearinghouse Handbooks.
(ix) The extent to which the methods of evaluation will, if well implemented, produce evidence about the effectiveness of the project on relevant outcomes that would meet the What Works Clearinghouse standards with or without reservations, as described in the What Works Clearinghouse Handbooks.
(x) The extent to which the methods of evaluation include an experimental study, a quasi-experimental design study, or a correlational study with statistical controls for selection bias (such as regression methods to account for differences between a treatment group and a comparison group) to assess the effectiveness of the project on relevant outcomes.
(xi) The extent to which the evaluation employs an appropriate analytic strategy to build evidence about the relationship between key project components, mediators, and outcomes and inform decisions on which project components to continue, revise, or discontinue.
(xii) The quality of the evaluation plan for measuring fidelity of implementation, including thresholds for acceptable implementation, to inform how implementation is associated with outcomes.
(xiii) The extent to which the evaluation plan includes a dissemination strategy that is likely to promote others' learning from the project.
(xiv) The extent to which the evaluator has the qualifications, including the relevant training, experience, and independence, required to conduct an evaluation of the proposed project, including experience conducting evaluations of similar methodology as proposed and with evaluations for the proposed population and setting.
(xv) The extent to which the proposed project plan includes sufficient resources to conduct the project evaluation effectively.
(xvi) The extent to which the evaluation will access and link high-quality administrative data from authoritative sources to improve evaluation quality and comprehensiveness.
(i) Strategy to scale. (1) The Secretary considers the applicant's strategy to effectively scale the proposed project for recipients, community members, and partners, including to underserved populations.
(2) In determining the applicant's strategy to effectively scale the proposed project, the Secretary considers one or more of the following factors:
(i) The quality of the strategies to reach scale by expanding the project to new populations or settings.
(ii) The applicant's capacity (such as qualified personnel, financial resources, or management capacity), together with any project partners, to bring the proposed project effectively to scale on a national or regional level during the grant period.
(iii) The applicant's capacity (such as qualified personnel, financial resources, or management capacity), together with any project partners, to further develop and bring the proposed project effectively to scale on a national level during the grant period, based on the findings of the proposed project.
(iv) The quality of the mechanisms the applicant will use to broadly disseminate information and resources on its project to support further development, adaptation, or replication by other entities to implement project components in additional settings or with other populations.
(v) The extent to which there is unmet demand for broader implementation of the project that is aligned with the proposed level of scale.
(vi) The extent to which there is a market of potential entities that will commit resources toward implementation.
(vii) The quality of the strategies to scale that take into account and are responsive to previous barriers to expansion.
(viii) The quality of the plan to deliver project services more efficiently at scale and maintain effectiveness.
(ix) The quality of the plan to develop revenue sources that will make the project self-sustaining.
(x) The extent to which the project will create reusable data and evaluation tools and techniques that facilitate expansion and support continuous improvement.
(a) If the Secretary considers an unsolicited application under 34 CFR 75.222(a)(2)(ii), the Secretary uses the selection criteria and factors, if any, used for the competition under which the application could have been funded.
(b) If the Secretary considers an unsolicited application under 34 CFR 75.222(a)(2)(iii), the Secretary selects from among the criteria in § 75.210(b), and may select from among the specific factors listed under each criterion, the criteria that are most appropriate to evaluate the activities proposed in the application.
Sections 75.216 through 75.222 describe the process the Secretary uses to select applications for new grants. All these sections apply to a discretionary grant program. However, only § 75.216 applies also to a formula grant program. (See § 75.1(b) Discretionary grant programs, § 75.1(c) Formula grant programs, and § 75.200, How applications for new discretionary grants and cooperative agreements are selected for funding; standards for use of cooperative agreements.)
The Secretary may choose not to evaluate an application if—
(a) The applicant does not comply with all of the procedural rules that govern the submission of the application; or
(b) The application does not contain the information required under the program.
(a) The Secretary selects applications for new grants on the basis of applicable statutes and regulations, the selection criteria, and any priorities or other requirements that have been published in the
(b)(1) The Secretary may use experts to evaluate the applications submitted under a program.
(2) These experts may include persons who are not employees of the Federal Government.
(c) The Secretary prepares a rank order of the applications based on the evaluation of their quality according to the selection criteria and any competitive preference points.
(d) The Secretary then determines the order in which applications will be selected for grants. The Secretary considers the following in making these determinations:
(1) The information in each application.
(2) The rank ordering of the applications.
(3) Any other information—
(i) Relevant to a criterion, priority, or other requirement that applies to the selection of applications for new grants;
(ii) Concerning the applicant's performance and use of funds under a previous award under any Department program; and
(iii) Concerning the applicant's failure under any Department program to submit a performance report or its submission of a performance report of unacceptable quality.
(a) The Secretary informs an applicant if its application—
(1) Is not evaluated; or
(2) Is not selected for funding.
(b) If an applicant requests an explanation of the reason its application was not evaluated or selected, the Secretary provides that explanation.
The Secretary may select an application for funding without following the procedures in § 75.217 if:
(a) The objectives of the project cannot be achieved unless the Secretary makes the grant before the date grants can be made under the procedures in § 75.217;
(b)(1) The application was submitted under the program's preceding competition;
(2) The application was not selected for funding because the application was mishandled or improperly processed by the Department; and
(3) The application has been rated highly enough to deserve selection under § 75.217; or
(c) The Secretary receives an unsolicited application that meets the requirements of § 75.222.
If the special circumstances of § 75.219(a) appear to exist for an application, the Secretary uses the following procedures:
(a) The Secretary assembles a board to review the application.
(b) The board consists of:
(1) A program officer of the program under which the applicant wants a grant;
(2) An employee from the Office of Finance and Operations (OFO) with responsibility for grant policy; and
(3) A Department employee who is not a program officer of the program but who is qualified to evaluate the application.
(c) The board reviews the application to decide if:
(1) The special circumstances under § 75.219(a) are satisfied;
(2) The application rates high enough, based on the selection criteria, priorities, and other requirements that apply to the program, to deserve selection; and
(3) Selection of the application will not have an adverse impact on the budget of the program.
(d) The board forwards the results of its review to the Secretary.
(e) If each of the conditions in paragraph (c) of this section is satisfied, the Secretary may select the application for funding.
(f) Even if the Secretary does not select the application for funding, the applicant may submit its application under the procedures in Subpart C of this part.
If the Secretary has documentary evidence that the special circumstances of § 75.219(b) exist for an application, the Secretary may select the application for funding.
If the Secretary receives an unsolicited application, the Secretary may consider the application under the following procedures unless the Secretary has published a notice in the
(a)(1) The Secretary determines whether the application could be funded under a competition planned or conducted for the fiscal year for which funds would be used to fund the application.
(2)(i) If the application could be funded under a competition described in paragraph (a)(1) of this section and the deadline for submission of applications has not passed, the Secretary refers the application to the appropriate competition for consideration under the procedures in § 75.217.
(ii)(A) If the application could have been funded under a competition described in paragraph (a)(1) of this section and the deadline for submission of applications has passed, the Secretary may consider the application only in exceptional circumstances, as determined by the Secretary.
(B) If the Secretary considers an application under paragraph (a)(2)(ii)(A) of this section, the Secretary considers the application under paragraphs (b) through (e) of this section.
(iii) If the application could not be funded under a competition described in paragraph (a)(1) of this section, the Secretary considers the application under paragraphs (b) through (e) of this section.
(b) If an application may be considered under paragraphs (a)(2)(ii) or (iii) of this section, the Secretary determines if—
(1) There is a substantial likelihood that the application is of exceptional quality and national significance for a program administered by the Department;
(2) The application meets the requirements of all applicable statutes and regulations that apply to the program; and
(3) Selection of the project will not have an adverse impact on the funds available for other awards planned for the program.
(c) If the Secretary determines that the criteria in paragraph (b) of this section have been met, the Secretary assembles a panel of experts that does not include any employees of the Department to review the application.
(d) The experts—
(1) Evaluate the application based on the selection criteria; and
(2) Determine whether the application is of such exceptional quality and national significance that it should be funded as an unsolicited application.
(e) If the experts highly rate the application and determine that the application is of such exceptional quality and national significance that it should be funded as an unsolicited application, the Secretary may fund the application.
To ensure prompt consideration, an applicant submitting an unsolicited application should send the application, marked “Unsolicited Application” on the outside, to U.S. Department of Education, OFO/G6 Functional Application Team, Mail Stop 5C231, 400 Maryland Avenue SW, Washington, DC 20202-4260.
(a) The Secretary may use a multiple tier review process to evaluate applications.
(b) The Secretary may refuse to review applications in any tier that do not meet a minimum cut-off score established for the prior tier.
(c) The Secretary may establish the minimum cut-off score—
(1) In the application notice published in the
(2) After reviewing the applications to determine the overall range in the quality of applications received.
(d) The Secretary may, in any tier—
(1) Use more than one group of experts to gain different perspectives on an application; and
(2) Refuse to consider an application if the application is rejected under paragraph (b) of this section by any one of the groups used in the prior tier.
(a) If the Secretary determines that special consideration of new potential grantees is appropriate, the Secretary may: provide competitive preference to applicants that meet one or more of the conditions in paragraph (b) of this section; or provide special consideration for new potential grantees by establishing one competition for those applicants that meet one or more of the conditions in paragraph (b) of this section and a separate competition for applicants that meet the corresponding conditions in paragraph (c) of this section.
(b) As used in this section, “new potential grantee” means an applicant that meets one or more of the following conditions—
(1) The applicant has never received a grant or cooperative agreement, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129 that received a grant or cooperative agreement, under the program from which it seeks funds;
(2) The applicant does not, as of the deadline date for submission of applications, have an active grant or cooperative agreement, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129 that has an active grant or cooperative agreement, under the program from which it seeks funds;
(3) The applicant has not had an active discretionary grant or cooperative agreement under the program from which it seeks funds, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129, within one of the following number of years before the deadline date for submission of applications under the program:
(i) 1 year;
(ii) 2 years;
(iii) 3 years;
(iv) 4 years;
(v) 5 years;
(vi) 6 years; or
(vii) 7 years;
(4) The applicant has not had an active discretionary grant or cooperative agreement from the Department, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129, within one of the following number of years before the deadline date for submission of applications under the program from which it seeks funds:
(i) 1 year;
(ii) 2 years;
(iii) 3 years;
(iv) 4 years;
(v) 5 years;
(vi) 6 years; or
(vii) 7 years;
(5) The applicant has not had an active contract from the Department within one of the following number of years before the deadline date for submission of applications under the program for which it seeks funds:
(i) 1 year;
(ii) 2 years;
(iii) 3 years;
(iv) 4 years;
(v) 5 years;
(vi) 6 years; or
(vii) 7 years; or
(6) Any combination of paragraphs (b)(1) through (5) of this section.
(c) As used in this section, an “application from a grantee that is not a new potential grantee” means an applicant that meets one or more of the following conditions—
(1) The applicant has received a grant or cooperative agreement, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129 that received a grant or cooperative agreement, under the program from which it seeks funds;
(2) The applicant has, as of the deadline date for submission of applications, an active grant or cooperative agreement, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129 that has an active grant or cooperative agreement, under the program from which it seeks funds;
(3) The applicant has had an active discretionary grant or cooperative agreement under the program from which it seeks funds, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129, within one of the following number of years before the deadline date for submission of applications under the program:
(i) 1 year;
(ii) 2 years;
(iii) 3 years;
(iv) 4 years;
(v) 5 years;
(vi) 6 years; or
(vii) 7 years;
(4) The applicant has had an active discretionary grant or cooperative agreement from the Department, including through membership in a group application submitted in accordance with §§ 75.127 through 75.129, within one of the following number of years before the deadline date for submission of applications under the program from which it seeks funds:
(i) 1 year;
(ii) 2 years;
(iii) 3 years;
(iv) 4 years;
(v) 5 years;
(vi) 6 years; or
(vii) 7 years;
(5) The applicant has had an active contract from the Department within one of the following number of years before the deadline date for submission of applications under the program from which it seeks funds:
(i) 1 year;
(ii) 2 years;
(iii) 3 years;
(iv) 4 years;
(v) 5 years;
(vi) 6 years; or
(vii) 7 years.
(d) For the purpose of this section, a grant, cooperative agreement, or contract is active until the end of the grant's, cooperative agreement's, or contract's project or funding period, including any extensions of those periods that extend the grantee's or contractor's authority to obligate funds.
If the Secretary determines that special consideration of applications supported by strong evidence, moderate evidence, promising evidence, or evidence that demonstrates a rationale is appropriate, the Secretary may establish a separate competition under the procedures in § 75.105(c)(3), or provide competitive preference under the procedures in § 75.105(c)(2), for applications that are supported by—
(a) Strong evidence;
(b) Moderate evidence;
(c) Promising evidence; or
(d) Evidence that demonstrates a rationale.
(a) If the Secretary determines that special consideration of rural applicants is appropriate, the Secretary may: provide competitive preference to applicants that meet one or more of the conditions in paragraph (b) of this section; or provide special consideration for rural applicants by establishing one competition for those applicants that meet one or more of the conditions in paragraph (b) of this section and a separate competition for applicants that meet the corresponding conditions in paragraph (c).
(b) As used in this section, “rural applicant” means an applicant that meets one or more of the following conditions:
(1) The applicant proposes to serve a local educational agency (LEA) that is eligible under the Small Rural School Achievement (SRSA) program or the Rural and Low-Income School (RLIS) program authorized under title V, part B of the Elementary and Secondary Education Act of 1965.
(2) The applicant proposes to serve a community that is served by one or more LEAs—
(i) With a locale code of 32, 33, 41, 42, or 43; or
(ii) With a locale code of 41, 42, or 43.
(3) The applicant proposes a project in which a majority of the schools served—
(i) Have a locale code of 32, 33, 41, 42, or 43; or
(ii) Have a locale code of 41, 42, or 43.
(4) The applicant is an institution of higher education with a rural campus setting, or the applicant proposes to serve a campus with a rural setting. Rural settings include one or more of the following: Town-Fringe, Town-Distant, Town-Remote, Rural Fringe, Rural-Distant, and Rural-Remote, as defined by the National Center for Education Statistics College Navigator search tool.
(c) As used in this section, a “non-rural applicant” means an applicant that meets one or more of the following conditions—
(1) The applicant does not propose to serve a local educational agency (LEA) that is eligible under the Small Rural School Achievement program or the Rural and Low-Income School program authorized under title V, part B of the Elementary and Secondary Education Act of 1965.
(2) The applicant does not propose to serve a community that is served by one or more LEAs—
(i) With a locale code of 32, 33, 41, 42, or 43; or
(ii) With a locale code of 41, 42, or 43.
(3) The applicant proposes a project in which a majority of the schools served—
(i) Have a locale code of 32, 33, 41, 42, or 43; or
(ii) Have a locale code of 41, 42, or 43.
(4) The applicant is not an institution of higher education with a rural campus setting, or the applicant proposes to serve a campus with a rural setting. Rural settings include one or more of the following: Town-Fringe, Town-Distant, Town-Remote, Rural Fringe, Rural-Distant, and Rural-Remote, as defined by the National Center for Education Statistics College Navigator search tool.
(a) If the Secretary selects an application under § 75.217, § 75.220, or § 75.222, the Secretary follows the procedures in §§ 75.231 through 75.236 to set the amount and determine the conditions of a grant. Sections 75.235 through 75.236 also apply to grants under formula grant programs. (See § 75.200 for more information.)
After selecting an application for funding, the Secretary may require the applicant to submit additional information.
(a) Before the Secretary sets the amount of a new grant, the Secretary does a cost analysis of the project. The Secretary:
(1) Verifies the cost data in the detailed budget for the project;
(2) Evaluates specific elements of costs; and
(3) Examines costs to determine if they are necessary, reasonable, and allowable under applicable statutes and regulations.
(b) The Secretary uses the cost analysis as a basis for determining the amount of the grant to the applicant. The cost analysis shows whether the applicant can achieve the objectives of the project with reasonable efficiency and economy under the budget in the application.
(a) Subject to any applicable matching or cost-sharing requirements, the Secretary may fund up to 100 percent of the allowable costs in the applicant's budget.
(b) In deciding what percentage of the allowable costs to fund, the Secretary may consider any other financial resources available to the applicant.
(a) The Secretary makes a grant to an applicant only after determining—
(1) The approved costs; and
(2) Any specific conditions.
(b) In awarding a cooperative agreement, the Secretary includes conditions that state the explicit character and extent of anticipated collaboration between the Department and the recipient.
(a) To make a grant, the Secretary issues a notification of grant award and sends it to the grantee.
(b) The notification of grant award sets the amount of the grant award and establishes other specific conditions, if any.
The grant obligates both the Federal Government and the grantee to the requirements that apply to the grant.
See 2 CFR 200.308, Revision of budget and program plans.
The Secretary may approve a project period of up to 60 months to perform the substantive work of a grant unless an applicable statute provides otherwise.
(a) The Secretary usually approves a budget period of not more than 12 months, even if the project has a multi-year project period.
(b) If the Secretary approves a multi-year project period, the Secretary:
(1) Makes a grant to the project for the initial budget period; and
(2) Indicates his or her intention to make contination awards to fund the remainder of the project period.
(c) If the Secretary funds a multi-year data collection period, the Secretary may fund the data collection period through separate budget periods and fund those budget periods in the same manner as those periods are funded during the project period.
(a) Continuation award. A grantee, in order to receive a continuation award from the Secretary for a budget period after the first budget period of an approved multiyear project, must—
(1) Either—
(i) Demonstrate that it has made substantial progress in achieving—
(A) The goals and objectives of the project; and
(B) The performance targets in the grantee's approved application, if the Secretary established performance measurement requirements for the grant in the application notice; or
(ii) Obtain the Secretary's approval for changes to the project that—
(A) Do not increase the amount of funds obligated to the project by the Secretary; and
(B) Enable the grantee to achieve the goals and objectives of the project and meet the performance targets of the project, if any, without changing the scope or objectives of the project;
(2) Submit all reports as required by § 75.118;
(3) Continue to meet all applicable eligibility requirements of the grant program;
(4) Maintain financial and administrative management systems that meet the requirements in 2 CFR 200.302 and 200.303; and
(5) Receive a determination from the Secretary that continuation of the project is in the best interest of the Federal Government.
(b) Information considered in making a continuation award. In determining whether the grantee has met the requirements described in paragraph (a) of this section, the Secretary may consider any relevant information regarding grantee performance. This includes considering reports required by § 75.118, performance measures established under § 75.110, financial information required by 2 CFR part 200, and any other relevant information.
(c) Funding for continuation awards. Subject to the criteria in paragraphs (a) and (b) of this section, in selecting applications for funding under a program, the Secretary gives priority to continuation awards over new grants.
(d) Budget period. If the Secretary makes a continuation award under this section—
(1) The Secretary makes the award under §§ 75.231 through 75.236; and
(2) The new budget period begins on the day after the previous budget period ends.
(e) Amount of continuation award. (1) Within the original project period of the grant and notwithstanding any requirements in 2 CFR part 200, a grantee may expend funds that have not been obligated at the end of a budget period for obligations in subsequent budget periods if—
(i) The obligation is for an allowable cost within the approved scope and objectives of the project; and
(ii) The obligation is not otherwise prohibited by applicable statutes, regulations, or the conditions of an award.
(2) The Secretary may—
(i) Require the grantee to submit a written statement describing how the funds made available under paragraph (e)(1) of this section will be used; and
(ii) Determine the amount of new funds that the Department will make available for the subsequent budget period after considering the statement the grantee provides under paragraph (e)(2)(i) of this section and any other information available to the Secretary about the use of funds under the grant.
(3) In determining the amount of new funds to make available to a grantee under this section, the Secretary considers whether the unobligated funds made available are needed to complete activities that were planned for completion in the prior budget period.
(4) A decision to reduce the amount of a continuation award under this paragraph (e) does not entitle a grantee to reconsideration under 2 CFR 200.342.
(f) Decision not to make a continuation award. The Secretary may decide not to make a continuation award if—
(1) A grantee fails to meet any of the requirements in paragraph (a) of this section; or
(2) A grantee fails to ensure that data submitted to the Department as a condition of the grant meet the definition of “quality data” in 34 CFR 77.1(c) and does not have a plan acceptable to the Secretary for addressing data-quality issues in the next budget period.
(g) Request for reconsideration. If the Secretary decides not to make a continuation award under this section, the Secretary will notify the grantee of that decision, the grounds on which it is based, and, consistent with 2 CFR 200.342, provide the grantee with an opportunity to request reconsideration of the decision.
(1) A request for reconsideration must—
(i) Be submitted in writing to the Department official identified in the notice denying the continuation award by the date specified in that notice; and
(ii) Set forth the grantee's basis for disagreeing with the Secretary's decision not to make a continuation award and include relevant supporting documentation.
(2) The Secretary will consider the request for reconsideration.
(h) No-cost extension when a continuation award is not made. If the Secretary decides not to make a continuation award under this section, the Secretary may authorize a no-cost extension of the last budget period of the grant in order to provide for the orderly closeout of the grant.
(i) A decision to reduce or not to make a continuation award does not constitute withholding. A decision by the Secretary to reduce the amount of a continuation award under paragraph (e) of this section or to not make a continuation award under paragraph (f) of this section does not constitute a withholding under section 455 of GEPA (20 U.S.C. 1234d).
(a) The Secretary may approve a data collection period for a grant for a period of up to 72 months after the end of the project period and provide funds for the data collection period for the purpose of collecting, analyzing, and reporting performance measurement data on the project.
(b) If the Secretary plans to approve a data collection period, the Secretary may inform applicants of the Secretary's intent to approve data collection periods in the application notice published for a competition or may decide to fund data collection periods after grantees have started their project periods.
(c) If the Secretary informs applicants of the intent to approve data collection periods in the notice inviting applications, the Secretary may require applicants to include in the application a budget for, and description of, a data collection period for a period of up to 72 months, as specified in the notice inviting applications, after the end of the project period.
(a) Under some of the programs covered by this part, the Secretary allots funds under a statutory or regulatory formula.
(b) Any reallotment to other grantees will be made by the Secretary in accordance with applicable statutes and regulations.
(a) One-time extension of project period without prior approval. A grantee may extend the project period of an award one time, for a period up to 12 months, without the prior approval of the Secretary, if—
(1) The grantee meets the requirements for extension in 2 CFR 200.308(e)(2); and
(2) The extension is not otherwise prohibited by statute, regulation, or the conditions of an award.
(b) Extension of project period with prior approval. At the conclusion of the project period extension authorized under paragraph (a) of this section, or in any case in which a project period extension is not authorized under paragraph (a) of this section, a grantee, with prior approval of the Secretary, may extend a project for an additional period if—
(1) The extension is not otherwise prohibited by statute, regulations, or the conditions of an award;
(2) The extension does not involve the obligation of additional Federal funds;
(3) The extension is to carry out the approved objectives and scope of the project; and
(4)(i) The Secretary determines that, due to special or unusual circumstances applicable to a class of grantees, the project periods for the grantees should be extended; or
(ii)(A) The Secretary determines that special or unusual circumstances would delay completion of the project beyond the end of the project period;
(B) The grantee requests an extension of the project period at least 45 calendar days before the end of the project period; and
(C) The grantee provides a written statement, before the end of the project period, of the reasons the extension is appropriate under paragraph (b)(4)(ii)(A) of this section and the period for which the project extension is requested.
(c) Waiver. The Secretary may waive the requirement in paragraph (b)(4)(ii) of this section if—
(1) The grantee could not reasonably have known of the need for the extension on or before the start of the 45-day period; or
(2) The failure to give notice on or before the start of the 45-day period was unavoidable.
(a)(1) The Secretary may convert a grant to a cooperative agreement or a cooperative agreement to a grant at the time a continuation award is made under § 75.253.
(2) In deciding whether to convert a grant to a cooperative agreement or a cooperative agreement to a grant, the Secretary considers the factors included in § 75.200(b) (4) and (5).
(b) The Secretary and a recipient may agree at any time to convert a grant to a cooperative agreement or a cooperative agreement to a grant, subject to the factors included in § 75.200(b) (4) and (5).
A grantee may incur pre-award costs as specified in 2 CFR 200.308(d)(1) unless—
(a) The Department regulations other than 2 CFR part 200 or a statute prohibit these costs; or
(b) The conditions of the award prohibit these costs.
A grantee may make transfers as specified in 2 CFR 200.308 unless—
(a) ED regulations other than those in 2 CFR part 200 or a statute prohibit these transfers; or
(b) The conditions of the grant prohibit these transfers.
(a) Each grantee must comply with the following statutes and regulations:
Table 1 to Paragraph (
| Subject | Statute | Regulations |
|---|---|---|
| Discrimination on the basis of race, color, or national origin | Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d | 34 CFR part 100. |
| Discrimination on the basis of disability | Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) | 34 CFR part 104. |
| Discrimination on the basis of sex | Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 | 34 CFR part 106. |
| Discrimination on the basis of age | Age Discrimination Act of 1975 (42 U.S.C. 6101 | 34 CFR part 110. |
(b)(1) Each grantee that is an institution of higher education, as defined in 20 U.S.C. 1002(a), that is public and that is legally required to abide by the First Amendment to the U.S. Constitution (hereinafter “public institution”), must also comply with the First Amendment to the U.S. Constitution, including protections for freedom of speech, association, press, religion, assembly, petition, and academic freedom, as a material condition of the Department's grant. The Department will determine that a public institution has not complied with the First Amendment only if there is a final, non-default judgment by a State or Federal court that the public institution or an employee of the public institution, acting in his or her official capacity, violated the First Amendment. A final judgment is a judgment that the public institution chooses not to appeal or that is not subject to further appeal. Absent such a final, non-default judgment, the Department will deem the public institution to be in compliance with the First Amendment.
(2) Each grantee that is a public institution also must submit to the Secretary a copy of the final, non-default judgment by that State or Federal court to conclude the lawsuit no later than 45 calendar days after such final, non-default judgment is entered.
(c)(1) Each grantee that is an institution of higher education, as defined in 20 U.S.C. 1002(a), that is private (hereinafter “private institution”) must comply with its stated institutional policies regarding freedom of speech, including academic freedom, as a material condition of the Department's grant. The Department will determine that a private institution has not complied with these stated institutional policies only if there is a final, non-default judgment by a State or Federal court to the effect that the private institution or an employee of the private institution, acting on behalf of the private institution, violated its stated institutional policy regarding freedom of speech or academic freedom. A final judgment is a judgment that the private institution chooses not to appeal or that is not subject to further appeal. Absent such a final, non-default judgment, the Department will deem the private institution to be in compliance with its stated institutional policies.
(2) Each grantee that is a private institution also must submit to the Secretary a copy of the final, non-default judgment by that State or Federal court to conclude the lawsuit no later than 45 calendar days after such final, non-default judgment is entered.
(d) As a material condition of the Department's grant, each grantee that is a public institution shall not deny to any student organization whose stated mission is religious in nature and that is at the public institution any right, benefit, or privilege that is otherwise afforded to other student organizations at the public institution (including but not limited to full access to the facilities of the public institution, distribution of student fee funds, and official recognition of the student organization by the public institution) because of the religious student organization's beliefs, practices, policies, speech, membership standards, or leadership standards, which are informed by sincerely held religious beliefs.
(e) A grantee that is a covered entity as defined in 34 CFR 108.3 shall comply with the nondiscrimination requirements of the Boy Scouts of America Equal Access Act, 20 U.S.C. 7905, 34 CFR part 108.
(a) If regulations under a program require a full-time project director, the Secretary may waive that requirement under the following conditions:
(1) The project will not be adversely affected by the waiver.
(2)(i) The project director is needed to coordinate two or more related projects; or
(ii) The project director must teach a minimum number of hours to retain faculty status.
(b) The waiver either permits the grantee:
(1) To use a part-time project director; or
(2) Not to use any project director.
(c)(1) An applicant or a grantee may request the waiver.
(2) The request must be in writing and must demonstrate that a waiver is appropriate under this section.
(3) The Secretary gives the waiver in writing. The waiver is effective on the date the Secretary signs the waiver.
See 2 CFR 200.308, Revision of budget and program plans.
(a) Subject to Federal statutes and regulations, a grantee shall use its general policies and practices when it hires, uses, and pays a consultant as part of the project staff.
(b) The grantee may not use its grant to pay a consultant unless:
(1) There is a need in the project for the services of that consultant; and
(2) The grantee cannot meet that need by using an employee rather than a consultant.
If an institution of higher education receives a grant for research or for educational services, it may pay a consultant's fee to one of its employees only in unusual circumstances and only if:
(a) The work performed by the consultant is in addition to his or her regular departmental load; and
(b)(1) The consultation is across departmental lines; or
(2) The consultation involves a separate or remote operation.
A grant may not use its grant to pay a project staff member for time or work for which that staff member is compensated from some other source of funds, consistent with the cost principles described in 2 CFR part 200.
(a) The conflict of interest regulations of the Department that apply to a grant are in § 75.525.
(b) These conflict of interest regulations do not apply to a “local government,” as defined in 2 CFR 200.64, or a “State,” as defined in 2 CFR 200.90.
(c) The regulations in § 75.525 do not apply to a grantee's procurement contracts. The conflict of interest regulations that cover those procurement contracts are in 2 CFR part 200.
(a) A grantee may not permit a person to participate in an administrative decision regarding a project if:
(1) The decision is likely to benefit that person or a member of his or her immediate family; and
(2) The person:
(i) Is a public official; or
(ii) Has a family or business relationship with the grantee.
(b) A grantee may not permit any person participating in the project to use his or her position for a purpose that is—or gives the appearance of being—motivated by a desire for a private financial gain for that person or for others.
The general principles to be used in determining costs applicable to grants and cost-type contracts under grants are specified at 2 CFR part 200, subpart E—Cost Principles.
A grantee shall ensure that the total cost to the Federal Government is not more than the amount stated in the notification of grant award.
(a) No grantee may use its grant to pay for any of the following:
(1) Religious worship, instruction, or proselytization.
(2) Equipment or supplies to be used for any of the activities specified in paragraph (a)(1) of this section.
(b) [Reserved]
No grantee may use its grant for acquisition of real property or for construction unless specifically permitted by the applicable statutes and regulations.
The Secretary may increase a grant to cover the cost of additional dependents not specified in the notice of award under § 75.235 if—
(a) Allowances for dependents are authorized by applicable statutes and regulations and are allowable under the grant; and
(b) Appropriations are available to cover the cost.
(a) The differences between direct and indirect costs and the principles for determining the general indirect cost rate that a grantee may use for grants under most programs are specified in the cost principles for—
(1) All grantees, other than hospitals and commercial (for-profit) organizations, at 2 CFR part 200, subpart E;
(2) Hospitals, at 45 CFR part 75, appendix XI; and
(3) Commercial (for-profit) organizations, at 48 CFR part 31.
(b) Except as specified in paragraph (c) of this section, a grantee must have obtained a current indirect cost rate agreement or approved cost allocation plan from its cognizant agency, to charge indirect costs to a grant. To obtain a negotiated indirect cost rate agreement or approved cost allocation plan, a grantee must submit an indirect cost rate proposal or cost allocation plan to its cognizant agency within 90 days after the date on which the Department issues the Grant Award Notification (GAN).
(c) A grantee that meets the requirements in 2 CFR 200.414(f) may elect to charge the de minimis rate of modified total direct costs (MTDC) specified in that provision, which may be used indefinitely. The de minimis rate may not be used on programs that have statutory or regulatory restrictions on the indirect cost rate. No documentation is required to justify the de minimis rate.
(1) If the grantee has established a threshold for equipment that is lower than the amount specified in the Uniform Guidance, the grantee must use that threshold to exclude equipment from the MTDC base.
(2) For purposes of the MTDC base and application of the de minimis rate, MTDC includes up to the amount specified in the definition of MTDC in the Uniform Guidance of each subaward, each year.
(d) If a grantee is required to, but does not, have a federally recognized indirect cost rate agreement or approved cost allocation plan, the Secretary may permit the grantee to charge its grant for indirect costs at a temporary rate of 10 percent of budgeted direct salaries and wages.
(e)(1) If a grantee fails to submit an indirect cost rate proposal or cost allocation plan to its cognizant agency within the required 90 days, the grantee may not charge indirect costs to its grant from the end of the 90-day period until it obtains a federally recognized indirect cost rate agreement applicable to the grant.
(2) If the Secretary determines that exceptional circumstances warrant continuation of a temporary indirect cost rate, the Secretary may authorize the grantee to continue charging indirect costs to its grant at the temporary rate specified in paragraph (d) of this section even though the grantee has not submitted its indirect cost rate proposal within the 90-day period.
(3) Once a grantee obtains a federally recognized indirect cost rate that is applicable to the affected grant, the grantee may use that indirect cost rate to claim indirect cost reimbursement for expenditures made on or after the date on which the grantee submitted its indirect cost proposal to its cognizant agency or the start of the project period, whichever is later. However, this authority is subject to the following limitations:
(i) The total amount of funds recovered by the grantee under the federally recognized indirect cost rate is reduced by the amount of indirect costs previously recovered under the temporary indirect cost rate specified in paragraph (d) of this section.
(ii) The grantee must obtain prior approval from the Secretary to shift direct costs to indirect costs in order to recover indirect costs at a higher negotiated indirect cost rate.
(iii) The grantee may not request additional funds to recover indirect costs that it cannot recover by shifting direct costs to indirect costs.
(f) The Secretary accepts a current indirect cost rate and cost allocation plan approved by a grantee's cognizant agency but may establish a restricted indirect cost rate or cost allocation plan compliant with 34 CFR 76.564 through 76.569 to satisfy the statutory requirements of certain programs administered by the Department.
(a) If the Department of Education is the cognizant agency, the Secretary approves an indirect cost rate or cost allocation plan for a grantee that is eligible and does not elect a de minimis rate, and is not a local educational agency. For the purposes of this section, the term “local educational agency” does not include a State agency.
(b) Each State educational agency, on the basis of a plan approved by the Secretary, shall approve an indirect cost rate for each local educational agency that requests it to do so.
(c) The Secretary generally approves indirect cost rate agreements annually. Indirect cost rate agreements may be approved for periods longer than a year if the Secretary determines that rates will be sufficiently stable to justify a longer rate period.
(a) Educational training grants provide funds for training or other educational services. Examples of the work supported by training grants are summer institutes, training programs for selected participants, the introduction of new or expanded courses, and similar instructional undertakings that are separately budgeted and accounted for by the sponsoring institution. These grants do not usually support activities involving research, development, and dissemination of new educational materials and methods. Training grants largely implement previously developed materials and methods and require no significant adaptation of techniques or instructional services to fit different circumstances.
(b) The Secretary uses the definition in paragraph (a) of this section to determine which grants are educational training grants.
(c)(1) Indirect cost reimbursement on a training grant is limited to the lesser of the recipient's approved indirect cost rate, or 8 percent of the modified total direct cost (MTDC) base. MTDC is defined in 2 CFR 200.1.
(2) If the grantee does not have a federally recognized indirect cost rate agreement on the date on which the training grant is awarded, the grantee may elect to use the temporary indirect cost rate authorized under § 75.560(d)(3) or a rate of 8 percent of the MTDC base. The de minimis rate may not be used on educational training programs.
(i) If the grantee has established a threshold for equipment that is lower than the amount specified in the Uniform Guidance, the grantee must use that threshold to exclude equipment from the MTDC base.
(ii) For purposes of the MTDC base and application of the 8 percent rate, MTDC includes up to the amount specified in the definition of MTDC in the Uniform Guidance of each subaward, each year.
(3) The 8 percent indirect cost rate reimbursement limit specified in paragraph (c)(1) of this section also applies when subrecipients issue subawards that fund training, as determined by the Secretary under paragraph (b) of this section.
(4) The 8 percent limit does not apply to agencies of Indian Tribal governments, local governments, and States as defined in 2 CFR 200.1.
(5) Indirect costs in excess of the 8 percent limit may not be charged directly, used to satisfy matching or cost-sharing requirements, or charged to another Federal award.
(d) A grantee using the training rate of 8 percent is required to maintain documentation to justify the 8 percent rate.
If a grantee or subgrantee decides to charge indirect costs to a program that is subject to a statutory prohibition on using Federal funds to supplant non-Federal funds, the grantee must—
(a) Use a negotiated restricted indirect cost rate or restricted cost allocation plan compliant with 34 CFR 76.564 through 76.569; or
(b) Elect to use an indirect cost rate of 8 percent of the modified total direct costs (MTDC) base if the grantee or subgrantee does not have a negotiated restricted indirect cost rate. MTDC is defined in 2 CFR 200.1. If the Secretary determines that the grantee or subgrantee would have a lower rate under 34 CFR 76.564 through 76.569, the lower rate must be used on the affected program.
(c) If the grantee has established a threshold for equipment that is lower than the amount specified in the Uniform Guidance, the grantee must use that threshold to exclude equipment from the MTDC base.
(d) For purposes of the MTDC base and application of the 8 percent rate, MTDC includes up to the amount specified in the definition of MTDC in the Uniform Guidance of each subaward, each year.
(a) Reimbursement of indirect costs is subject to the availability of funds and statutory or administrative restrictions.
(b) The application of the negotiated indirect cost rate (determination of the direct cost base) or cost allocation plan (charging methodology) must be in accordance with the agreement/plan approved by the grantee's cognizant agency.
(c) Indirect cost reimbursement is not allowable under grants for—
(1) Fellowships and similar awards if Federal financing is exclusively in the form of fixed amounts such as scholarships, stipend allowances, or the tuition and fees of an institution;
(2) Construction grants;
(3) Grants to individuals;
(4) Grants to organizations located outside the territorial limits of the United States;
(5) Grants to Federal organizations; and
(6) Grants made exclusively to support conferences.
(d) Indirect cost reimbursement on grants received under programs with statutory restrictions or other limitations on indirect costs must be made in accordance with the restrictions in 34 CFR 76.564 through 76.569 and other applicable restrictions.
(e)(1) Indirect costs for a group of eligible parties (See §§ 75.127 through 75.129) are limited to the amount derived by applying the rate of the applicant, or a restricted rate when applicable, to the direct cost base of the grant in keeping with the terms of the applicant's federally recognized indirect cost rate agreement and program requirements.
(2) If a group of eligible parties applies for a training grant under the group application procedures in §§ 75.127 through 75.129, the grant funds allocated among the members of the group are not considered subawards for the purposes of applying the indirect cost rate in § 75.562(c).
A grantee shall, to the extent possible, coordinate its project with other activities that are in the same geographic area served by the project and that serve similar purposes and target groups.
(a) If the application notice for a competition required applicants to describe how they would evaluate their projects, each grantee under that competition must demonstrate to the Department that—
(1) The evaluation meets the standards of the evaluation in the approved application for the project; and
(2) The performance measurement data collected by the grantee and used in the evaluation meet the performance measurement requirements of the approved application.
(b) If the application notice for a competition did not require applicants to describe how they would evaluate their projects, each grantee must provide information in its performance report demonstrating—
(1) The progress made by the grantee in the most recent budget period, including progress based on the performance measurement requirements for the grant, if any;
(2) The effectiveness of the grant, including fulfilling the performance measurement requirements of the approved application, if any; and
(3) The effect of the project on the participants served by the project, if any.
(c) An application notice for a competition may require each grantee under that competition to do one or more of the following:
(1) Conduct an independent evaluation;
(2) Make public the final report, including results of any required independent evaluation;
(3) Ensure that the data from the independent evaluation are made available to third-party researchers consistent with the requirements in 34 CFR part 97, Protection of Human Subjects, and other applicable laws;
(4) Submit the final evaluation to the Education Resources Information Center (ERIC), which is administered by the Institute of Education Sciences; or
(5) Submit the final performance report under the grant to ERIC.
A grantee must cooperate in any evaluation of the program by the Secretary. If requested by the Secretary, a grantee must, among other types of activities—
(a) Cooperate with the collection of information, including from all or a subset of subgrantees and potential project beneficiaries, including both participants and non-participants, through surveys, observations, administrative records, or other data collection and analysis methods. This information collection may include program characteristics, including uses of program funds, as well as beneficiary characteristics, participation, and outcomes; and
(b) Pilot its Department-funded activities with a subset of subgrantees, potential project beneficiaries, or eligible participants and allow the Department or its agent to randomly select the subset for the purpose of providing a basis for an experimental evaluation that could meet What Works Clearinghouse standards, with or without reservations.
If a grantee cooperates in a Federal evaluation of a program, the Secretary may determine that the grantee meets the evaluation requirements of the program, including § 75.590.
See 2 CFR part 200.317-200.326 for procurement requirements.
(a) As used in this section, the terms “construction” and “minor remodeling” have the meanings given those terms in 34 CFR 77.1(c).
(b) Except as provided in paragraph (c) of this section, §§ 75.600 through 75.618 apply to—
(1) An applicant that requests funds for construction or real property acquisition; and
(2) A grantee whose grant includes funds for construction or real property acquisition.
(c) Sections 75.600 through 75.618 do not apply to grantees in—
(1) Programs prohibited from using funds for construction or real property acquisition under § 75.533; and
(2) Projects determined by the Secretary to be minor remodeling under 34 CFR 77.1(c).
(a) The Secretary approves a direct grantee construction project—
(1) When the initial grant application is approved; or
(2) After the grant has been awarded.
(b) A grantee may not advertise or place the construction project on the market for bidding until after the Secretary has approved the project.
(a) In planning the construction project, a grantee—
(1) Must ensure that the design is functional, economical, and not elaborate in design or extravagant in the use of materials compared with facilities of a similar type constructed in the State or other applicable geographic area;
(2) May consider excellence of architecture and design and inclusion of works of art. A grantee must not spend more than 1 percent of the cost of the project on works of art; and
(3) May make reasonable provision, consistent with the other uses to be made of the construction, for areas that are adaptable for artistic and other cultural activities.
(b) In developing the proposed budget for the construction project, a grantee—
(1) Must ensure that sufficient funds are available to meet any non-Federal share of the cost of the construction project;
(2) May include sufficient funds for commissioning of energy, HVAC, and water systems and to train personnel in the proper operation of such building systems;
(3) For new construction and major rehabilitation projects, may consider life-cycle cost analysis for major design decisions to the extent possible;
(4) May budget for reasonable and predictable contingency costs consistent with 2 CFR 200.433; and
(5) May budget for school and community education about the construction project including its energy, environmental, and health features and benefits.
(c) Prior to approving a construction project under § 75.601, the Secretary considers a grantee's compliance with the following requirements, as applicable:
(1) Title to site (§ 75.610).
(2) Environmental impact assessment (§ 75.611).
(3) Avoidance of flood hazards (§ 75.612).
(4) Compliance with the Coastal Barrier Resources Act (§ 75.613).
(5) Preservation of historic sites (§ 75.614).
(6) Build America, Buy America Act (§ 75.615).
(7) Energy conservation (§ 75.616).
(8) Access for individuals with disabilities (§ 75.617).
(9) Safety and health standards (§ 75.618).
(a) A grantee must begin work on the construction project within a reasonable time after the Secretary has approved the project under § 75.601.
(b) A grantee must follow all applicable procurement standards in 2 CFR part 200, subpart D, when advertising or placing the project on the market for bidding.
(a) A grantee must maintain competent architectural engineering supervision and inspection at the construction site to ensure that the work conforms to the approved final working specifications.
(b) A grantee must complete the construction in accordance with the approved final working specifications unless a revision is approved.
(c) If a revision to the timeline, budget, or approved final working specifications is required, the grantee must request prior written approval consistent with 2 CFR 200.308(h).
(d) A grantee must comply with Federal laws regarding prevailing wages on construction and minor remodeling projects assisted with Department funding, including, as applicable, subchapter IV of chapter 31 of title 40, United States Code (commonly known as the “Davis-Bacon Act”; as applied through section 439 of GEPA; 20 U.S.C. 1232b) and any tribally determined prevailing wages.
(e) A grantee must submit periodic performance reports regarding the construction project containing information specified by the Secretary consistent with 2 CFR 200.329(d).
(a) A grantee must ensure that sufficient funds will be available for effective operation and maintenance of the facilities after the construction is complete.
(b) A grantee must operate and maintain the facilities in accordance with applicable Federal, State, and local requirements.
(c) A grantee must maintain all financial records, supporting documents, statistical records, and other non-Federal entity records pertinent to the construction project consistent with 2 CFR 200.334.
(a) The Secretary approves a direct grantee real property project—
(1) When the initial grant application is approved;
(2) After the grant has been awarded; or
(3) With the approval of a construction project under § 75.601.
(b) A grantee using any grant funds for real property acquisition must—
(1) Comply with the Real Property Standards of the Uniform Guidance (2 CFR 200.310 through 200.316);
(2) Not dispose of, modify the use of, or change the terms of the real property title, or other interest in the site and facilities without written permission and instructions from the Secretary;
(3) In accordance with agency directives, record the Federal interest in the title of the real property in the official real property records for the jurisdiction in which the facility is located and include a covenant in the title of the real property to ensure nondiscrimination; and
(4) Report at least annually on the status of real property in which the Federal Government retains an interest consistent with 2 CFR 200.330.
(c) A grantee is subject to the regulations on relocation assistance and real property acquisition in 34 CFR part 15 and 49 CFR part 24, as applicable.
A grantee must have or obtain a full title or other interest in the site (such as a long-term lease), including right of access, that is sufficient to ensure the grantee's undisturbed use and possession of the facilities for at least 25 years after completion of the project or for the useful life of the construction, whichever is longer.
(a) When a grantee's construction or real property acquisition project is considered a “Major Federal Action,” as defined in 40 CFR 1508.1(q), the grantee must include an assessment of the impact of the proposed construction on the quality of the environment in accordance with section 102(2)(C) of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4332(2)(C)) and Executive Order 11514 (35 FR 4247).
(b) If a grantee's construction or real property project is not considered a “Major Federal Action” under NEPA, a NEPA environmental impact assessment is not required; however—
(1) An environmental impact assessment may be required under State or local requirements; and
(2) Grantees are encouraged to perform some type of environmental assessment for projects that involve breaking ground, such as projects to expand the size of an existing building or replace an outdated building.
In planning the construction or real property project, a grantee must, consistent with Executive Order (E.O.) 11988 of May 24, 1977, E.O. 13690 of January 30, 2015, and E.O. 14030 of May 20, 2021—
(a) Evaluate flood hazards in connection with the construction;
(b) As far as practicable, avoid uneconomic, hazardous, or unnecessary use of flood plains in connection with the construction;
(c) Mitigate flood hazards through design such as elevating systems and first floor elevations above flood level plus freeboard; and
(d) Summarize remaining flood risks in a memorandum. CITA>[89 FR 70332, Aug. 29, 2024]
A grantee may not use, within the Coastal Barrier Resources System, funds made available under a program administered by the Secretary for any purpose prohibited by the Coastal Barrier Resources Act (16 U.S.C. 3501-3510).
(a) A grantee must describe the relationship of the proposed construction to, and probable effect on, any district, site, building, structure, or object that is—
(1) Included in the National Register of Historic Places; or
(2) Eligible under criteria established by the Secretary of the Interior for inclusion in the National Register of Historic Places.
(b) In deciding whether to approve a construction project, the Secretary considers—
(1) The information provided by the grantee under paragraph (a) of this section; and
(2) Any comments received by the Advisory Council on Historic Preservation (see 36 CFR part 800).
A grantee must comply with the requirements of the Build America, Buy America Act, Pub. L. 117-58, § 70901 through 70927 and implementing regulations, as applicable.
(a) To the extent practicable, a grantee must design and construct facilities to maximize the efficient use of energy. A grantee that is constructing a new school building or conducting a major rehabilitation of a school building may evaluate life-cycle costs and benefits of highly efficient, all-electric systems or a net zero energy project in the early design phase.
(b) A grantee must comply with ASHRAE 90.1-2022 in their construction project.
(c) ANSI/ASHRAE/IES Standard 90.1-2022 (I-P), Energy Standard for Sites and Buildings Except Low-Rise Residential Buildings (I-P Edition), 2022 (“ASHRAE Standard 90.1-2022”), is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. This material is available for inspection at the Department of Education (the Department) and at the National Archives and Records Administration (NARA). Contact the Department at: Department of Education, 400 Maryland Avenue SW, room 4C212, Washington, DC, 20202-8472; phone: (202) 245-6776; email: EDGAR@ed.gov. For information on the availability of this material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations or email fr.inspection@nara.gov. The material may be obtained from the American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) at American Society of Heating, Refrigerating, and Air Conditioning Engineers, Inc., 180 Technology Parkway, Peachtree Corners, GA 30092; www.ashrae.org; 404-636-8400.
A grantee must comply with the following Federal regulations on access by individuals with disabilities that apply to the construction of facilities:
(a) For residential facilities: 24 CFR part 40.
(b) For non-residential facilities: 41 CFR 102-76.60 to 102-76.95.
See 2 CFR 200.311, Real property; 200.313, Equipment; 200.314, Supplies; and 200.59, Intangible property; and 200.315, Intangible property.
In planning for and designing a construction project,
(a) A grantee must comply with the following:
(1) The standards under the Occupational Safety and Health Act of 1970 (See 29 CFR part 1910).
(2) State and local codes, to the extent that they are more stringent.
(b) A grantee may use additional standards and best practices to support health and wellbeing of students and staff.
A grantee may not charge students or school personnel for the ordinary use of equipment or supplies purchased with grant funds.
(a) Content of materials. Subject to any specific requirements that apply to its grant, a grantee may decide the format and content of project materials that it publishes or arranges to have published.
(b) Required statement. The grantee must ensure that any publication that contains project materials also contains the following statement: The contents of this [insert type of publication; such as book, report, film, website, and web page] were developed under a grant from the U.S. Department of Education (Department). The Department does not mandate or prescribe practices, models, or other activities described or discussed in this document. The contents of this [insert type of publication] may contain examples of, adaptations of, and links to resources created and maintained by another public or private organization. The Department does not control or guarantee the accuracy, relevance, timeliness, or completeness of this outside information. The content of this [insert type of publication] does not necessarily represent the policy of the Department. This publication is not intended to represent the views or policy of, or be an endorsement of any views expressed or materials provided by, any Federal agency.
As used in §§ 75.620 through 75.621, “project materials” means a copyrightable work developed with funds from a grant of the Department. (See 2 CFR 200.307 and 200.315.)
(a) Grantees must make final peer-reviewed scholarly publications resulting from research supported by Department grants available to the Education Resources Information Center (ERIC), which is administered by the Institute of Education Sciences, upon acceptance for publication.
(b) A final, peer-reviewed scholarly publication is the final version accepted for publication and includes all edits made as part of the peer review process, as well as all graphics and supplemental materials that are associated with the article.
(c) The Department will make the final, peer-reviewed scholarly publication available to the public through ERIC at the same time as the publication becomes available on the publisher's website.
(d) Grantees are responsible for ensuring that any publishing or copyright agreements concerning submitted articles fully comply with this section.
(e) Grantees must make scientific data that inform the findings in a peer-reviewed scholarly publication publicly available, consistent with requirements in 34 CFR part 97, Protection of Human Subjects, and other applicable laws.
Any patent application filed by a grantee for an invention made under a grant must include the following statement in the first paragraph:
The invention described in this application was made under a grant from the Department of Education.
See 2 CFR 200.302, Financial management, and 200.326, Contract provisions.
If applicable statutes and regulations provide for participation of students enrolled in private schools and, as applicable, their teachers or other educational personnel, and their families, the grantee must provide, as applicable, services in accordance with §§ 76.650 through 76.662.
If a grantee uses a human subject in a research project, the grantee shall protect the person from physical, psychological, or social injury resulting from the project.
See 34 CFR part 97—Protection of Human Subjects.
If a grantee uses an animal in a project, the grantee must provide the animal with proper care and humane treatment in accordance with the Animal Welfare Act.
A grantee shall comply with any Federal health or safety requirements that apply to the facilities that the grantee uses for the project.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
A grantee must comply with § 75.500, applicable statutes, regulations, Executive orders, stated institutional policies, and applications, and must use Federal funds in accordance with the U.S. Constitution and those statutes, regulations, Executive orders, stated institutional policies, and applications.
A grantee shall directly administer or supervise the administration of the project.
A grantee shall use fiscal control and fund accounting procedures that ensure proper disbursement of, and accounting for, Federal funds as required in 2 CFR part 200, subpart D—Post Federal Award Requirements.
A grantee may use grant funds only for obligations it makes during the grant period.
The following table shows when a grantee makes obligations for various kinds of property and services.
| If the obligation is for— | The obligation is made— |
|---|---|
| (a) Acquisition of real or personal property | On the date the grantee makes a binding written commitment to acquire the property. |
| (b) Personal services by an employee of the grantee | When the services are performed. |
| (c) Personnal services by a contractor who is not an employee of the grantee | On the date on which the grantee makes a binding written commitment to obtain the services. |
| (d) Performance of work other than personal services | On the date on which the grantee makes a binding written commitment to obtain the work. |
| (e) Public utility services | When the grantee receives the services. |
| (f) Travel | When the travel is taken. |
| (g) Rental of real or personal property | When the grantee uses the property. |
| (h) A pre-agreement cost that was properly approved by the Secretary under the cost principles in 2 CFR part 200, Subpart E—Cost Principles | On the first day of the project period. |
(a) A grantee may not make a subgrant under a program covered by this part unless authorized by statute or by paragraph (b) of this section.
(b) The Secretary may, through an announcement in the
(1) Designate the types of entities, e.g., State educational agencies, local educational agencies, institutions of higher education, and nonprofit organizations, to which subgrants can be awarded; and
(2) Indicate whether subgrants can be made to entities identified in an approved application or, without regard to whether the entity is identified in an approved application, have to be selected through a competitive process set out in subgranting procedures established by the grantee.
(c) If authorized under paragraph (b) of this section, a subgrant is allowed if it will be used by that entity to directly carry out project activities described in that application.
(d) The grantee, in awarding subgrants under paragraph (b) of this section, must—
(1) Ensure that subgrants are awarded on the basis of an approved budget that is consistent with the grantee's approved application and all applicable Federal statutory, regulatory, and other requirements;
(2) Ensure that every subgrant includes any conditions required by applicable law; and
(3) Ensure that subgrantees are aware of requirements imposed upon them by Federal statute and regulation, including the Federal nondiscrimination laws enforced by the Department.
(e) Grantees that are not allowed to make subgrants under paragraph (b) of this section are authorized to contract, as needed, for supplies, equipment, and other services, in accordance with 2 CFR part 200, subpart D (2 CFR 200.317 through 200.326).
(a) An organization providing social services to beneficiaries under a Department program supported by direct Federal financial assistance must give written notice to a beneficiary or prospective beneficiary of certain protections. Such notice must be given in the manner and form prescribed by the Department. This notice must state that—
(1) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice;
(2) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary;
(3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and
(4) A beneficiary or prospective beneficiary may report an organization's violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Department.
(b) The written notice described in paragraph (a) of this section must be given to a prospective beneficiary prior to the time they enroll in the program or receive services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must provide the notice at the earliest available opportunity.
(c) The Department may determine that the notice described in paragraph (a) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from the Department as to whether there are any other federally funded organizations in their area that provide the services available under the applicable program.
(d) The notice that an organization uses to notify beneficiaries or prospective beneficiaries of the rights under paragraphs (a) through (c) of this section must include language substantially similar to that in appendix C to this part.
If a grantee under a discretionary grant program of the Department has the authority under the grant to select a private organization to provide services supported by direct Federal financial assistance under the program by subgrant, contract, or other agreement, the grantee must ensure compliance with applicable Federal requirements governing contracts, grants, and other agreements with faith-based organizations, including, as applicable, §§ 75.52 and 75.532, appendices A and B to this part, and 2 CFR 3474.15. If the pass-through entity is a nongovernmental organization, it retains all other rights of a nongovernmental organization under the program's statutory and regulatory provisions.
See 2 CFR 200.327-200.337, which appear after the undesignated center heading “Performance and Financial Monitoring and Reporting.”
(a) This section applies to the reports required under—
(1) 2 CFR 200.328 (Financial reporting); and
(2) 2 CFR 200.329 (Monitoring and reporting program performance).
(b) A grantee shall submit these reports annually, unless the Secretary allows less frequent reporting.
(c) The Secretary may require a grantee to report more frequently than annually, as authorized under 2 CFR 200.207, Specific conditions, and may impose high-risk conditions in appropriate circumstances under 2 CFR 3474.10.
(d) Upon request of the Secretary, a grantee must, at the time of submission to the Secretary, post any performance and financial reports required by this section on a public-facing website maintained by the grantee, after redacting any privacy or confidential business information.
See 2 CFR 200.333-200.337, which follow the undesignated center heading “Record Retention and Access.”
A grantee shall keep records that fully show:
(a) The amount of funds under the grant;
(b) How the grantee uses the funds;
(c) The total cost of the project;
(d) The share of that cost provided from other sources; and
(e) Other records to facilitate an effective audit.
A grantee shall keep records to show its compliance with program requirements.
(a) A grantee shall keep records of significant project experiences and results.
(b) The grantee shall use the records under paragraph (a) to:
(1) Determine progress in accomplishing project objectives; and
(2) Inform periodic review and continuous improvement of the project plans; and
(3) Revise those project objectives, if necessary.
See 2 CFR 200.308, Revision of budget and program plans.
(a) Most records on present or past students are subject to the requirements of section 444 of GEPA and its implementing regulations in 34 CFR part 99. (Section 444 of GEPA (20 U.S.C. 1232g) is commonly referred to as the “Family Educational Rights and Privacy Act of 1974” or “FERPA”.)
(b) Under most programs administered by the Secretary, research, experimentation, and testing are subject to the requirements of section 445 of GEPA and its implementing regulations at 34 CFR part 98; 20 U.S.C. 1232h, commonly known as the “Protection of Pupil Rights Amendment” or “PPRA”; and the Common Rule for the protection of Human Subjects and its implementing regulations at 34 CFR part 97, as applicable.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
See 2 CFR 200.338-200.342 which follow the undesignated center heading “Remedies for Noncompliance.”
(a) No official, agent, or employee of the Department may waive any regulation that applies to a Department program, unless the regulation specifically provides that it may be waived.
(b) No act or failure to act by an official, agent, or employee of the Department can affect the authority of the Secretary to enforce regulations.
The Secretary may use the Office of Administrative Law Judges to resolve disputes. See, for cross-reference, the following:
(a) 2 CFR 200.338 (Remedies for noncompliance).
(b) 2 CFR 200.339 (Termination).
(c) 2 CFR 200.340 (Notification of termination requirement).
(d) 2 CFR 200.341 (Opportunities to object, hearings and appeals).
(e) 2 CFR 200.342 (Effects of suspension and termination).
(f) 2 CFR 200.344 (Post-closeout adjustments and continuing responsibilities).
Termination is effective on the latest of:
(a) The date of delivery to the grantee of the notice of termination;
(b) The termination date given in the notice of termination; or
(c) The date of a final decision of the Secretary under part 81 of this title.
(a) Faith-based organizations may apply for this award on the same basis as any other private organization, as set forth at, and subject to the protections and requirements of, this part and any applicable constitutional and statutory requirements, including 42 U.S.C. 2000bb et seq. The Department will not, in the selection of grantees, discriminate for or against an organization on the basis of the organization's religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization.
(b) A faith-based organization that participates in this program will retain its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law.
(c) A faith-based organization may not use direct Federal financial assistance from the Department to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. Such an organization also may not, in providing services funded by the Department, or in outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.
(a) A faith-based organization that participates in this program retains its independence from the Government and may continue to carry out its mission consistent with religious freedom and conscience protections in Federal law.
(b) A faith-based organization may not use direct Federal financial assistance from the Department to support or engage in any explicitly religious activities except when consistent with the Establishment Clause of the First Amendment and any other applicable requirements. Such an organization also may not, in providing services funded by the Department, or in outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.
Name of Organization:
Name of Program:
Contact Information for Program Staff: [provide name, phone number, and email address, if appropriate]
Because this program is supported in whole or in part by financial assistance from the U.S. Department of Education, we are required to provide you the following information:
(1) We may not discriminate against you on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.
(2) We may not require you to attend or participate in any explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) that may be offered by our organization, and any participation by you in such activities must be purely voluntary.
(3) We must separate in time or location any privately funded explicitly religious activities (including activities that involve overt religious content such as worship, religious instruction, or proselytization) from activities supported with direct Federal financial assistance.
(4) You may report violations of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the U.S. Department of Education at [insert applicable contact information].
[When required by the Department, the notice must also state:] (5) If you would like information about whether there are any other federally funded organizations that provide the services available under this program in your area, please contact the awarding agency.
This written notice must be given to you before you enroll in the program or receive services from the program, unless the nature of the service provided or exigent circumstances make it impracticable to provide such notice before we provide the actual service. In such an instance, this notice must be given to you at the earliest available opportunity.
Section 76.101 also issued under 20 U.S.C. 1221e-3, 3474, and 7844(b).
Section 76.127 also issued under 48 U.S.C. 1469a.
Section 76.128 also issued under 48 U.S.C. 1469a.
Section 76.129 also issued under 48 U.S.C. 1469a.
Section 76.130 also issued under 48 U.S.C. 1469a.
Section 76.131 also issued under 48 U.S.C. 1469a.
Section 76.132 also issued under 48 U.S.C. 1469a.
Section 76.134 also issued under 48 U.S.C. 1469a.
Section 76.136 also issued under 48 U.S.C. 1469a.
Section 76.140 also issued under 20 U.S.C. 1221e-3, 1231g(a), and 3474.
Section 76.301 also issued under 20 U.S.C. 1221e-3, 3474, and 7846(b).
Section 76.401 also issued under 20 U.S.C. 1221e-3, 1231b-2, and 3474.
Section 76.709 also issued under 20 U.S.C. 1221e-3, 1225(b), and 3474.
Section 76.710 also issued under 20 U.S.C. 1221e-3, 1225(b), and 3474.
Section 76.720 also issued under 20 U.S.C. 1221e-3, 1231a, and 3474.
Section 76.740 also issued under 20 U.S.C. 1221e-3, 1232g, 1232h, and 3474.
Section 76.783 also issued under 20 U.S.C. 1231b-2.
Section 76.785 also issued under 20 U.S.C. 7221e.
Section 76.786 also issued under 20 U.S.C. 7221e
Section 76.787 also issued under 20 U.S.C. 7221e.
Section 76.788 also issued under 20 U.S.C. 7221e.
Section 76.901 also issued under 20 U.S.C. 1234.
(a) The regulations in this part apply to each State-administered formula grant program of the Department.
(b) If a State-administered formula grant program does not have implementing regulations, the Secretary implements the program under the applicable statutes and, to the extent consistent with the authorizing statute, under the GEPA and the regulations in this part. For the purposes of this part, the term State-administered formula grant program means a program whose applicable statutes or implementing regulations provide a formula for allocating program funds among eligible States.
If a program has regulations that are not consistent with part 76, the implementing regulations for that program identify the sections of part 76 that do not apply.
(a) Under a program covered by this part, the Secretary makes a grant—
(1) To the State agency designated by applicable statutes and regulations for the program; or
(2) To the State agency designated by the State in accordance with applicable statutes and regulations.
(b) Unless prohibited by applicable statutes or regulations or by the terms and conditions of the grant award, a State may use State-administered formula grant funds—
(1) Directly;
(2) To make subgrants to eligible applicants, as determined by applicable statutes or regulations, or if applicable statutes and regulations do not address eligible subgrantees, as determined by the State; or
(3) To authorize a subgrantee to make subgrants.
(c) Grantees are responsible for monitoring subgrantees consistent with 2 CFR 200.332.
(d) Grantees, in cases where subgrants are prohibited by applicable statutes or regulations or the terms and conditions of a grant award, are authorized to contract, as needed, for supplies, equipment, and other services, in accordance with 2 CFR part 200, subpart D (2 CFR 200.317 through 200.326).
(e) No subgrant that a State chooses to make in accordance with paragraph (b) may change the amount of Federal funds for which an entity is eligible through a formula in the applicable Federal statute or regulation.
If applicable statutes and regulations authorize a State to make subgrants, the statute:
(a) Requires the State to use a formula to distribute funds;
(b) Gives the State discretion to select subgrantees through a competition among the applicants or through some other procedure; or
(c) Allows some combination of these procedures.
(a)(1) A faith-based organization is eligible to apply for and to receive a subgrant under a program of the Department on the same basis as any other private organization.
(2)(i) In the selection of subgrantees, States—
(A) May not discriminate for or against a private organization on the basis of the organization's religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization; and
(B) Must ensure that all decisions about subgrants are free from political interference, or even the appearance of such interference, and are made on the basis of merit, not on the basis of religion or religious belief, or a lack thereof.
(ii) Notices or announcements of award opportunities and notices of award or contracts must include language substantially similar to that in appendices A and B, respectively, to 34 CFR part 75.
(3) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by States in administering a Department program may require faith-based organizations to provide assurances or notices if they are not required of non-faith-based organizations. Any restrictions on the use of subgrant funds must apply equally to faith-based and non-faith-based organizations. All organizations that receive a subgrant from a State under a State-administered formula grant program of the Department, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws.
(4) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by States may disqualify faith-based organizations from applying for or receiving subgrants under a State-administered formula grant program of the Department on the basis of the organization's religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization.
(5) Nothing in this section may be construed to preclude the Department from making an accommodation, including for religious exercise, with respect to one or more program requirements on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws.
(6) Neither a State nor the Department may disqualify an organization from participating in any Department program for which it is eligible on the basis of the organization's indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the Department has determined that it would deny the accommodation.
(b) The provisions of § 76.532 apply to a faith-based organization that receives a subgrant from a State under a State-administered formula grant program of the Department.
(c)(1) A private organization that applies for and receives a subgrant under a program of the Department and engages in explicitly religious activities, such as worship, religious instruction, or proselytization, must offer those activities separately in time or location from any programs or services funded by a subgrant from a State under a State-administered formula grant program of the Department. Attendance or participation in any such explicitly religious activities by beneficiaries of the programs and services supported by the subgrant must be voluntary.
(2) The limitations on explicitly religious activities under paragraph (c)(1) of this section do not apply to a faith-based organization that provides services to a beneficiary under a program supported only by “indirect Federal financial assistance.”
(3) For purposes of 2 CFR 3474.15, this section, and §§ 76.712 and 76.714, the following definitions apply:
(i) Direct Federal financial assistance means financial assistance received by an entity selected by the Government or a pass-through entity (under this part) to carry out a service (e.g., by contract, grant, or cooperative agreement). References to “Federal financial assistance” will be deemed to be references to direct Federal financial assistance, unless the referenced assistance meets the definition of “indirect Federal financial assistance.”
(ii) Indirect Federal financial assistance means financial assistance received by a service provider when the service provider is paid for services rendered by means of a voucher, certificate, or other means of government-funded payment provided to a beneficiary who is able to make a choice of service provider. Federal financial assistance provided to an organization is indirect under this definition if—
(A) The government program through which the beneficiary receives the voucher, certificate, or other similar means of government-funded payment is neutral toward religion; and
(B) The organization receives the assistance wholly as the result of the genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuinely independent and private choice.
(iii) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption.
(iv) Pass-through entity means an entity, including a nonprofit or nongovernmental organization, acting under a contract, grant, or other agreement with the Federal Government or with a State or local government, such as a State administering agency, that accepts direct Federal financial assistance as a primary recipient or grantee and distributes that assistance to other organizations that, in turn, provide government-funded social services.
(v) Religious exercise has the meaning given to the term in 42 U.S.C. 2000cc-5(7)(A).
The definitions of direct Federal financial assistance and indirect Federal financial assistance do not change the extent to which an organization is considered a recipient of Federal financial assistance as those terms are defined under 34 CFR parts 100, 104, 106, and 110.
(d)(1) A faith-based organization that applies for or receives a subgrant from a State under a State-administered formula grant program of the Department will retain its independence, autonomy, right of expression, religious character, and authority over its governance. A faith-based organization that receives Federal financial assistance from the Department does not lose the protection of law.
(2) A faith-based organization that applies for or receives a subgrant from a State under a State-administered formula grant program of the Department may, among other things—
(i) Retain religious terms in its name;
(ii) Continue to carry out its mission, including the definition, development, practice, and expression of its religious beliefs;
(iii) Use its facilities to provide services without concealing, removing, or altering religious art, icons, scriptures, or other symbols from these facilities;
(iv) Select its board members on the basis of their acceptance of or adherence to the religious tenets of the organization; and
(v) Include religious references in its mission statement and other chartering or governing documents.
(e) An organization that receives any Federal financial assistance under a program of the Department shall not discriminate against a beneficiary or prospective beneficiary in the provision of program services, or in outreach activities related to such services, on the basis of religion or religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization's program.
(f) If a State or subgrantee contributes its own funds in excess of those funds required by a matching or grant agreement to supplement federally funded activities, the State or subgrantee has the option to segregate those additional funds or commingle them with the funds required by the matching requirements or grant agreement. However, if the additional funds are commingled, this section applies to all of the commingled funds.
(g) A religious organization's exemption from the Federal prohibition on employment discrimination on the basis of religion, in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is not forfeited when the organization receives Federal financial assistance from the Department.
(h) The Department shall not construe these provisions in such a way as to advantage or disadvantage faith-based organizations affiliated with historic or well-established religions or sects in comparison with other religions or sects.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
This subpart establishes general requirements that a State must meet to apply for a grant under a program covered by this part. Additional requirements are in applicable statutes and regulations for the program.
(a) Except as provided in paragraph (b) of this section, a State that makes subgrants to local educational agencies under a program subject to this part must have on file with the Secretary a State plan that meets the requirements of section 441 of GEPA (20 U.S.C. 1232d), which may include information about how the State intends use continuous improvement strategies in its program implementation based on periodic review of research, data, community input, and other feedback.
(b) The requirements of section 441 of GEPA do not apply to a State plan submitted for a program under the Elementary and Secondary Education Act of 1965.
As used in this part, State plan means any document that applicable statutes and regulations for a State-administered formula grant program require a State to submit in order to receive funds for the program. To the extent that any provision of this part conflicts with program-specific implementing regulations related to the plan, the program-specific implementing regulations govern.
Unless otherwise specified by statute, regulations, or the Secretary, each State plan is effective for a period of more than one fiscal year, to be determined by the Secretary or by regulations.
(a) A State shall include the following certifications in each State plan:
(1) That the plan is submitted by the State agency that is eligible to submit the plan.
(2) That the State agency has authority under State law to perform the functions of the State under the program.
(3) That the State legally may carry out each provision of the plan.
(4) That all provisions of the plan are consistent with State law.
(5) That a State officer, specified by title in the certification, has authority under State law to receive, hold, and disburse Federal funds made available under the plan.
(6) That the State officer who submits the plan, specified by title in the certification, has authority to submit the plan.
(7) That the agency that submits the plan has adopted or otherwise formally approved the plan.
(8) That the plan is the basis for State operation and administration of the program.
(b) [Reserved]
A State shall make the following documents available for public inspection:
(a) All State plans and related official materials.
(b) All approved subgrant applications.
(c) All documents that the Secretary transmits to the State regarding a program.
(a) Sections 76.125 through 76.137 of this part contain requirements for the submission of an application by an Insular Area for the consolidation of two or more grants under the programs described in paragraph (c) of this section.
(b) For the purpose of §§ 76.125-76.137 of this part the term Insular Area means the Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands.
(c) The Secretary may make an annual consolidated grant to assist an Insular Area in carrying out one or more State-administered formula grant programs of the Department, consistent with applicable law.
The following regulations apply to those programs included in a consolidated grant:
(a) The regulations in §§ 76.125 through 76.137; and
(b) The regulations that apply to each specific program included in a consolidated grant for which funds are used.
An Insular Area may apply for a consolidated grant for two or more State-administered formula grant programs . This procedure is intended to:
(a) Simplify the application and reporting procedures that would otherwise apply for each of the programs included in the consolidated grant; and
(b) Provide the Insular Area with flexibility in allocating the funds under the consolidated grant to achieve any of the purposes to be served by the programs that are consolidated.
A consolidated grant is a grant to an Insular Area for any two or more State-administered formula grant programs. The amount of the consolidated grant is the sum of the allocations the Insular Area receives under each of the programs included in the consolidated grant if there had been no consolidation.
(a) An Insular Area shall use the funds it receives under a consolidated grant to carry out, in its jurisdiction, one or more of the programs included in the grant.
(b) An Insular Area shall comply with the statutory and regulatory requirements that apply to each program under which funds from the consolidated grant are expended.
(a) The Secretary annually makes a single consolidated grant to each Insular Area that meets the requirements of §§ 76.125 through 76.137 and each program under which the grant funds are to be used and administered.
(b) The Secretary may decide that one or more programs cannot be included in the consolidated grant if the Secretary determines that the Insular Area failed to meet the program objectives stated in its plan for the previous fiscal year in which it carried out the programs.
(c) Under a consolidated grant, an Insular Area may use a single advisory council for any or all of the programs that require an advisory council.
(d) Although Pub. L. 95-134 authorizies the Secretary to consolidate grant funds that the Department awards to an Insular Area, it does not confer eligibility for any grant funds. The eligibility of a particular Insular Area to receive grant funds under a Federal education program is determined under the statutes and regulations that apply to that program.
(a) An Insular Area that desires to apply for a grant consolidating two or more State-administered formula grant programs shall submit to the Secretary an application that:
(1) Contains the assurances in § 76.132; and
(2) Meets the application requirements in paragraph (c) of this section.
(b) The submission of an application that contains these requirements and assurances takes the place of a separate State plan or other similar document required by this part or by applicable statutes and regulations for programs included in the consolidated grant.
(c) An Insular Area shall include in its consolidated grant application a program plan that:
(1) Contains a list of the State-administered formula grant programs to be included in the consolidated grant;
(2) Describes the State-administered formula grant programs under which the consolidated grant funds will be used and administered;
(3) Describes the goals, objectives, activities, and the means of evaluating program outcomes for the programs for which the Insular Area will use the funds received under the consolidated grant during the fiscal year for which it submits the application, including needs of the population that will be met by the consolidation of funds; and
(4) Contains a budget that includes a description of the allocation of funds—including any anticipated carryover funds of the program in the consolidated grant from the preceding year—among the programs to be included in the consolidated grant.
(a) An Insular Area shall include in its consolidated grant application assurances to the Secretary that it will:
(1) Follow policies and use administrative practices that will insure that non-Federal funds will not be supplanted by Federal funds made available under the authority of the programs in the consolidated grant;
(2) Comply with the requirements (except those relating to the submission of State plans or similar documents) in the applicable statutes and implementing regulations for the programs under which funds are to be used and administered, (except requirements for matching funds);
(3) Provide for proper and efficient administration of funds in accordance with the authorizing statutes and implementing regulations for those programs under which funds are to be used and administered;
(4) Provide for fiscal control and fund accounting procedures to ensure proper disbursement of, and accounting for, Federal funds received under the consolidated grant;
(5) Submit an annual report to the Secretary containing information covering the program or programs for which the grant is used and administered, including the financial and program performance information required under 2 CFR 200.328 and 200.329.
(6) Provide that funds received under the consolidated grant will be under control of, and that title to property acquired with these funds will be in, a public agency, institution, or organization. The public agency shall administer these funds and property;
(7) Keep records, including a copy of the State Plan or application document under which funds are to be spent, which show how the funds received under the consolidated grant have been spent.
(8) Adopt and use methods of monitoring and providing technical assistance to any agencies, organizations, or institutions that carry out the programs under the consolidated grant and enforce any obligations imposed on them under the applicable statutes and regulations.
(9) Evaluate the effectiveness of these programs in meeting the purposes and objectives in the applicable statutes under which program funds are used and administered;
(10) Conduct evaluations of these programs at intervals and in accordance with procedures the Secretary may prescribe; and
(11) Provide appropriate opportunities for participation by local agencies, representatives of the groups affected by the programs, and other interested institutions, organizations, and individuals in planning and operating the programs.
(b) These assurances remain in effect for the duration of the programs they cover.
(a) After an Insular Area receives a consolidated grant, it may reallocate the funds in a manner different from the allocation described in its consolidated grant application. However, the funds cannot be used for purposes that are not authorized under the programs in the consolidated grant under which funds are to be used and administered.
(b) If an Insular Area decides to reallocate the funds it receives under a consolidated grant, it shall notify the Secretary by amending its original application to include an update of the information required under § 76.131.
(a) An Insular Area may request that any State-administered formula grant programs be included in its consolidated grant and may apply separately for assistance under any other of those programs for which it is eligible.
(b) Those programs that an Insular Area decides to exclude from consolidation—for which it must submit separate plans or applications—are implemented in accordance with the applicable applicable statutes and regulations. The excluded programs are not subject to the provisions for allocation of funds among programs in a consolidated grant.
The Secretary waives all requirements for matching funds for those programs that are consolidated by an Insular Area in a consolidated grant application.
Insular Areas may only use and administer funds under State-administered formula grant programs during a fiscal year for which the Insular Area is entitled to receive funds under an appropriation for that program.
Any funds under any applicable program which are available for obligation and expenditure in the year succeeding the fiscal year for which they are appropriated must be obligated and expended in accordance with the consolidated grant application submitted by the Insular Area for that program for the succeeding fiscal year.
(a) If the Secretary determines that an amendment to a State plan is essential during the effective period of the plan, the State must make the amendment.
(b) A State must also amend a State plan if there is a significant and relevant change in the information or the assurances in the plan.
(c) If a State amends a State plan, to the extent consistent with applicable law, the State must use the same procedures as those it must use to prepare and submit a State plan, unless the Secretary prescribes different procedures for submitting amendments based on the characteristics and requirements of a particular State-administered formula grant program.
The Secretary approves a State plan if it meets the requirements of the Federal statutes and regulations that apply to the plan.
The Secretary may disapprove a State plan only after:
(a) Notifying the State;
(b) Offering the State a reasonable opportunity for a hearing; and
(c) Holding the hearing, if requested by the State.
(a) To make a grant to a State, the Secretary issues and sends to the State a notification of grant award.
(b) The notification of grant award tells the amount of the grant and provides other information about the grant.
(a) The Secretary allots program funds to a State in accordance with applicable statutes or implementing regulations for the program.
(b) Any reallotment to other States will be made by the Secretary in accordance with applicable statutes or implementing regulations for that program.
Funds that a State receives as a result of a reallotment are part of the State's grant for the appropriate fiscal year. However, the Secretary does not consider a reallotment in determining the maximum or minimum amount to which a State is entitled for a following fiscal year.
An applicant for a subgrant can find out the procedures it must follow by contacting the State agency that administers the program.
See subparts E and G of this part for the general responsibilities of the State regarding applications for subgrants.
(a) A local educational agency (LEA) that applies for a subgrant under a program subject to this part must have on file with the State an application that meets the requirements of section 442 of GEPA (20 U.S.C. 1232e).
(b) The requirements of section 442 of GEPA do not apply to an LEA's application for a program under the ESEA.
A State shall notify a subgrantee in writing of:
(a) The amount of the subgrant;
(b) The period during which the subgrantee may obligate the funds; and
(c) The Federal requirements that apply to the subgrant.
(a) Two or more eligible parties may submit a joint application for a subgrant.
(b) If the State must use a formula to distribute subgrant funds (see § 76.51), the State may not make a subgrant that exceeds the sum of the entitlements of the separate subgrantees.
(c) If the State funds the application, each subgrantee shall:
(1) Carry out the activities that the subgrantee agreed to carry out; and
(2) Use the funds in accordance with Federal requirements.
(d) Each subgrantee shall use an accounting system that permits identification of the costs paid for under its subgrant.
A subgrantee shall make any application, evaluation, periodic program plan, or report relating to each program available for public inspection.
A State that receives an application for a subgrant shall take the following steps:
(a) Review. The State shall review the application.
(b) Approval—entitlement programs. The State shall approve an application if:
(1) The application is submitted by an applicant that is entitled to receive a subgrant under the program; and
(2) The applicant meets the requirements of the applicable statutes and regulations that apply to the program.
(c) Approval—discretionary programs. The State may approve an application if:
(1) The application is submitted by an eligible applicant under a program in which the State has the discretion to select subgrantees;
(2) The applicant meets the requirements of the applicable statutes and regulations that apply to the program; and
(3) The State determines that the project should be funded under the authorizing statute and implementing regulations for the program.
(d) Disapproval—entitlement and discretionary programs. If an application does not meet the requirements of the applicable statutes and regulations that apply to a program, the State shall not approve the application.
(a) State educational agency hearing regarding disapproval of an application. When financial assistance is provided to (or through) a State educational agency (SEA) consistent with an approved State plan and the SEA takes final action by disapproving or failing to approve an application for a subgrant in whole or in part, the SEA must provide the aggrieved applicant with notice and an opportunity for a hearing regarding the SEA's disapproval or failure to approve the application.
(b) Applicant request for SEA hearing. (1) The aggrieved applicant must request a hearing within 30 days of the final action of the SEA.
(2) The aggrieved applicant's request for a hearing must include, at a minimum, a citation to the specific State or Federal statute, rule, regulation, or guideline that the SEA allegedly violated when disapproving or failing to approve the application in whole or in part and a brief description of the alleged violation.
(3) The SEA must make available, at reasonable times and places to each applicant, all records of the SEA pertaining to the SEA's failure to approve the application in whole or in part that is the subject of the applicant's request for a hearing under this paragraph (b).
(c) SEA hearing procedures. (1) Within 30 days after it receives a request that meets the requirements of paragraphs (b)(1) and (2) of this section, the SEA must hold a hearing on the record to review its action.
(2) No later than 10 days after the hearing, the SEA must issue its written ruling, including findings of fact and reasons for the ruling.
(3) If the SEA determines that its action was contrary to State or Federal statutes, rules, regulations, or guidelines that govern the applicable program, the SEA must rescind its action in whole or in part.
(d) Procedures for appeal of SEA action to the Secretary. (1) If an SEA does not rescind its final action disapproving or failing to approve an application in whole or in part after the SEA conducts a hearing consistent with paragraph (c) of this section, the applicant may appeal the SEA's final action to the Secretary.
(2) The applicant must file a notice of appeal with the Secretary within 20 days after the applicant has received the SEA's written ruling.
(3) The applicant's notice of appeal must include, at a minimum, a citation to the specific Federal statute, rule, regulation, or guideline that the SEA allegedly violated and a brief description of the alleged violation.
(4) The Secretary may issue interim orders at any time when considering the appeal, including requesting the hearing record and any additional documentation, such as additional documentation regarding the information provided pursuant to paragraph (d)(3) of this section.
(5) After considering the appeal, the Secretary issues an order either affirming the final action of the SEA or requiring the SEA to take appropriate action, if the Secretary determines that the final action of the SEA was contrary to a Federal statute, rule, regulation, or guideline that governs the applicable program.
(e) Programs administered by State agencies other than an SEA. Under programs with an approved State plan under which financial assistance is provided to (or through) a State agency that is not the SEA, that State agency is not required to comply with this section unless specifically required to do so by Federal statute or regulation.
(a) A State and a subgrantee must comply with the following statutes and regulations:
Table 1 to § 76.500(
| Subject | Statute | Regulation |
|---|---|---|
| Discrimination on the basis of race, color, or national origin | Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d through 2000d-4) | 34 CFR part 100. |
| Discrimination on the basis of sex | Title IX of the Education Amendments of 1972 (20 U.S.C. 1681-1683) | 34 CFR part 106. |
| Discrimination on the basis of handicap | Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) | 34 CFR part 104. |
| Discrimination on the basis of age | The Age Discrimination Act (42 U.S.C. 6101 | 34 CFR part 110. |
(b)(1) Each State or subgrantee that is an institution of higher education, as defined in 20 U.S.C. 1002(a), that is public and that is legally required to abide by the First Amendment to the U.S. Constitution (hereinafter “public institution”), must also comply with the First Amendment to the U.S. Constitution, including protections for freedom of speech, association, press, religion, assembly, petition, and academic freedom, as a material condition of the Department's grant. The Department will determine that a public institution has not complied with the First Amendment only if there is a final, non-default judgment by a State or Federal court that the public institution or an employee of the public institution, acting in his or her official capacity, violated the First Amendment. A final judgment is a judgment that the public institution chooses not to appeal or that is not subject to further appeal. Absent such a final, non-default judgment, the Department will deem the public institution to be in compliance with the First Amendment.
(2) Each State or subgrantee that is a public institution also must submit to the Secretary a copy of the final, non-default judgment by that State or Federal court to conclude the lawsuit no later than 45 calendar days after such final, non-default judgment is entered.
(c)(1) Each State or subgrantee that is an institution of higher education, as defined in 20 U.S.C. 1002(a), that is private (hereinafter “private institution”) must comply with its stated institutional policies regarding freedom of speech, including academic freedom. The Department will determine that a private institution has not complied with these stated institutional policies only if there is a final, non-default judgment by a State or Federal court to the effect that the private institution or an employee of the private institution, acting on behalf of the private institution, violated its stated institutional policy regarding freedom of speech or academic freedom, as a material condition of the Department's grant. A final judgment is a judgment that the private institution chooses not to appeal or that is not subject to further appeal. Absent such a final, non-default judgment, the Department will deem the private institution to be in compliance with its stated institutional policies.
(2) Each State or subgrantee that is a private institution also must submit to the Secretary a copy of the final, non-default judgment by that State or Federal court to conclude the lawsuit no later than 45 calendar days after such final, non-default judgment is entered.
(d) As a material condition of the Department's grant, each State or subgrantee that is a public institution shall not deny to any student organization whose stated mission is religious in nature and that is at the public institution any right, benefit, or privilege that is otherwise afforded to other student organizations at the public institution (including but not limited to full access to the facilities of the public institution, distribution of student fee funds, and official recognition of the student organization by the public institution) because of the religious student organization's beliefs, practices, policies, speech, membership standards, or leadership standards, which are informed by sincerely held religious beliefs.
(e) A State or subgrantee that is a covered entity as defined in 34 CFR 108.3 shall comply with the nondiscrimination requirements of the Boy Scouts of America Equal Access Act, 20 U.S.C. 7905, 34 CFR part 108.
The general principles to be used in determining costs applicable to grants, subgrants, and cost-type contracts under grants and subgrants are specified at 2 CFR part 200, subpart E—Cost Principles.
(a) No State or subgrantee may use its grant or subgrant to pay for any of the following:
(1) Religious worship, instruction, or proselytization.
(2) Equipment or supplies to be used for any of the activities specified in paragraph (a)(1) of this section.
(b) [Reserved]
No State or subgrantee may use its grant or subgrant for acquisition of real property or for construction unless specifically permitted by applicable statutes or implementing regulations for the program.
No State or subgrantee may count tuition and fees collected from students toward meeting matching, cost sharing, or maintenance of effort requirements of a program.
(a) The differences between direct and indirect costs and the principles for determining the general indirect cost rate that a grantee may use for grants under most programs are specified in the cost principles for—
(1) All grantees, other than hospitals and commercial (for-profit) organizations, at 2 CFR part 200, subpart E;
(2) Hospitals, at 45 CFR part 75, appendix IX; and
(3) Commercial (for-profit) organizations, at 48 CFR part 31.
(b) Except as specified in paragraph (c) of this section, a grantee must have a current indirect cost rate agreement or approved cost allocation plan to charge indirect costs to a grant. To obtain a negotiated indirect cost rate agreement or approved cost allocation plan, a grantee must submit an indirect cost rate proposal or cost allocation plan to its cognizant agency.
(c) A grantee that meets the requirements in 2 CFR 200.414(f) may elect to charge the de minimis rate of modified total direct costs (MTDC) specified in that provision, which may be used indefinitely. The de minimis rate may not be used on programs that have statutory or regulatory restrictions on the indirect cost rate. No documentation is required to justify the de minimis rate.
(1) If the grantee has established a threshold for equipment that is lower than the amount specified in the Uniform Guidance, the grantee must use that threshold to exclude equipment from the MTDC base.
(2) For purposes of the MTDC base and application of the 10 percent rate, MTDC includes up to the amount specified in the definition of MTDC in the Uniform Guidance of each subaward, each year.
(d) If a grantee is required to, but does not, have a federally recognized indirect cost rate or approved cost allocation plan, the Secretary may permit the grantee to charge a temporary indirect cost rate of 10 percent of budgeted direct salaries and wages.
(e)(1) If a grantee fails to submit an indirect cost rate proposal or cost allocation plan to its cognizant agency within the required 90 days, the grantee may not charge indirect costs to its grant from the end of the 90-day period until it obtains a federally recognized indirect cost rate agreement applicable to the grant.
(2) If the Secretary determines that exceptional circumstances warrant continuation of a temporary indirect cost rate, the Secretary may authorize the grantee to continue charging indirect costs to its grant at the temporary rate specified in paragraph (d) of this section even though the grantee has not submitted its indirect cost rate proposal within the 90-day period.
(3) Once a grantee obtains a federally recognized indirect cost rate that is applicable to the affected grant, the grantee may use that indirect cost rate to claim indirect cost reimbursement for expenditures made on or after the date on which the grantee submitted its indirect cost proposal to its cognizant agency or the start of the project period, whichever is later. However, this authority is subject to the following limitations:
(i) The total amount of funds recovered by the grantee under the federally recognized indirect cost rate is reduced by the amount of indirect costs previously recovered under the temporary indirect cost rate specified in paragraph (d) of this section.
(ii) The grantee must obtain prior approval from the Secretary to shift direct costs to indirect costs in order to recover indirect costs at a higher negotiated indirect cost rate.
(iii) The grantee may not request additional funds to recover indirect costs that it cannot recover by shifting direct costs to indirect costs.
(f) The Secretary accepts a negotiated indirect cost rate or approved cost allocation plan but may establish a restricted indirect cost rate or cost allocation plan compliant with §§ 76.564 through 76.569 for a grantee to satisfy the statutory requirements of certain programs administered by the Department.
(a) If the Department of Education is the cognizant agency, the Secretary approves an indirect cost rate or cost allocation plan for a State agency and for a subgrantee other than a local educational agency. For the purposes of this section, the term “local educational agency” does not include a State agency.
(b) Each State educational agency, on the basis of a plan approved by the Secretary, must approve an indirect cost rate for each local educational agency that requests it to do so.
(c) The Secretary generally approves indirect cost rate agreements annually. Indirect cost rate agreements may be approved for periods longer than a year if the Secretary determines that rates will be sufficiently stable to justify a longer rate period.
(a) Reimbursement of indirect costs is subject to the availability of funds and statutory or administrative restrictions.
(b) The application of the negotiated indirect cost rate (determination of the direct cost base) or cost allocation plan (charging methodology) must be in accordance with the agreement/plan approved by the grantee's cognizant agency.
(c) Indirect costs for joint applications and projects (see § 76.303) are limited to the amount derived by applying the rate of the applicant, or a restricted rate when applicable, to the direct cost base for the grant in keeping with the terms of the applicant's federally recognized indirect cost rate agreement and program requirements.
Sections 76.564 through 76.569 apply to programs with a statutory requirement prohibiting the use of Federal funds to supplant non-Federal funds, and to subgrants under these programs.
(a) An indirect cost rate for a grant covered by §§ 76.563 or 75.563 is determined by the following formula: Restricted indirect cost rate = (General management costs + Fixed costs) ÷ (Other expenditures).
(b) General management costs, fixed costs, and other expenditures must be determined under §§ 76.565 through 76.567.
(c) Under the programs covered by § 76.563, a grantee or subgrantee that is not a State or local government agency—
(1) Must use a negotiated restricted indirect cost rate computed under paragraph (a) of this section or cost allocation plan that complies with the formula in paragraph (a) of this section; or
(2) May elect to use an indirect cost rate of 8 percent of the modified total direct costs (MTDC) base if the grantee or subgrantee does not have a negotiated restricted indirect cost rate. MTDC is defined in 2 CFR 200.1. If the Secretary determines that the grantee or subgrantee would have a lower rate as calculated under paragraph (a) of this section, the lower rate must be used for the affected program.
(3) If the grantee has established a threshold for equipment that is lower than the amount specified in the Uniform Guidance, the grantee must use that threshold to exclude equipment from the MTDC base.
(4) For purposes of the MTDC base and application of the 8 percent rate, MTDC includes up to the amount specified in the definition of MTDC in the Uniform Guidance of each subaward, each year.
(d) Indirect costs that are unrecovered as a result of these restrictions may not be charged directly, used to satisfy matching or cost-sharing requirements, or charged to another Federal award.
(a) As used in § 76.564, general management costs means the costs of activities that are for the direction and control of the grantee's affairs that are organization-wide. An activity is not organization-wide if it is limited to one activity, one component of the grantee, one subject, one phase of operations, or other single responsibility.
(b) General management costs include the costs of performing a service function, such as accounting, payroll preparation, or personnel management, that is normally at the grantee's level even if the function is physically located elsewhere for convenience or better management. The term also includes certain occupancy and space maintenance costs as determined under § 76.568.
(c) The term does not include expenditures for—
(1) Divisional administration that is limited to one component of the grantee;
(2) The governing body of the grantee;
(3) Compensation of the chief executive officer of the grantee;
(4) Compensation of the chief executive officer of any component of the grantee; and
(5) Operation of the immediate offices of these officers.
(d) For purposes of this section—
(1) The chief executive officer of the grantee is the individual who is the head of the executive office of the grantee and exercises overall responsibility for the operation and management of the organization. The chief executive officer's immediate office includes any deputy chief executive officer or similar officer along with immediate support staff of these individuals. The term does not include the governing body of the grantee, such as a board or a similar elected or appointed governing body; and
(2) Components of the grantee are those organizational units supervised directly or indirectly by the chief executive officer. These organizational units generally exist one management level below the executive office of the grantee. The term does not include the office of the chief executive officer or a deputy chief executive officer or similar position.
As used in § 76.564, fixed costs means contributions of the grantee to fringe benefits and similar costs, but only those associated with salaries and wages that are charged as allowable indirect costs, including—
(a) Retirement, including State, county, or local retirement funds, Social Security, and pension payments;
(b) Unemployment compensation payments; and
(c) Property, employee, health, and liability insurance.
(a) As used in § 76.564, other expenditures means the grantee's total expenditures for its federally- and non-federally-funded activities in the most recent year for which data are available. The term also includes direct occupancy and space maintenance costs as determined under § 76.568 and costs related to the chief executive officers of the grantee and components of the grantee and their offices (see § 76.565(c) and (d)).
(b) The term does not include—
(1) General management costs determined under § 76.565;
(2) Fixed costs determined under § 76.566;
(3) Subawards exceeding the amount specified in the definition of Modified Total Direct Cost in the Uniform Guidance each, per year;
(4) Capital outlay;
(5) Debt service;
(6) Fines and penalties;
(7) Contingencies;
(8) Other distorting items; and
(9) Election expenses. However, the term does include election expenses that result from elections required by an applicable Federal statute.
(a) As used in the calculation of a restricted indirect cost rate, occupancy and space maintenance costs means such costs as—
(1) Building costs whether owned or rented;
(2) Janitorial services and supplies;
(3) Building, grounds, and parking lot maintenance;
(4) Guard services;
(5) Light, heat, and power;
(6) Depreciation, use allowances, and amortization; and
(7) All other related space costs.
(b) Occupancy and space maintenance costs associated with organization-wide service functions (accounting, payroll, personnel) may be included as general management costs if a space allocation or use study supports the allocation.
(c) Occupancy and space maintenance costs associated with functions that are not organization-wide must be included with other expenditures (denominator) in the indirect cost formula. These costs may be charged directly to affected programs only to the extent that statutory supplanting prohibitions are not violated. This reimbursement must be approved in advance by the Secretary.
(a) Under the programs referenced in §§ 75.563 and 76.563, the maximum amount of indirect costs recovery under a grant is determined by the following formula: Indirect costs = (Restricted indirect cost rate) × (Total direct costs of the grant minus capital outlays, subawards exceeding amount specified in the definition of Modified Total Direct Cost in the Uniform Guidance each, per year, and other distorting or unallowable items as specified in the grantee's indirect cost rate agreement)
(b) If a grantee uses a restricted indirect cost rate, the general management and fixed costs covered by that rate must be excluded by the grantee from the direct costs it charges to the grant.
A State and a subgrantee shall, to the extent possible, coordinate each of its projects with other activities that are in the same geographic area served by the project and that serve similar purposes and target groups.
A grantee shall cooperate in any evaluation of the program by the Secretary.
If a State or a subgrantee cooperates in a Federal evaluation of a program, the Secretary may determine that the State or subgrantee meets the evaluation requirements of the program.
(a) A State or a subgrantee that requests program funds for construction, or whose grant or subgrant includes funds for construction, must comply with the rules on construction that apply to applicants and grantees under 34 CFR 75.600 through 75.618.
(b) The State must perform the functions of the Secretary for subgrantee requests under 34 CFR 75.601 (Approval of the construction).
(c) The State must perform the functions that the Secretary performs under 34 CFR 75.614(b). The State may consult with the State Historic Preservation Officer and Tribal Historic Preservation Officer to identify and evaluate historic properties and assess effects. The Secretary will continue to participate in the consultation process when:
(1) The State determines that “Criteria of Adverse Effect” applies to a project;
(2) There is a disagreement between the State and the State Historic Preservation Officer or Tribal Historic Preservation Officer regarding identification and evaluation or assessment of effects;
(3) There is an objection from consulting parties or the public regarding findings, determinations, the implementation of agreed-upon provisions, or their involvement in a National Historic Preservation Act Section 106 review (see 36 CFR part 800); or
(4) There is the potential for a foreclosure situation or anticipatory demolition as specified in Section 110(k) of the National Historic Preservation Act (see 36 CFR part 800).
(d) The State must provide to the Secretary the information required under 34 CFR 75.614(a) (Preservation of historic sites).
(e) The State must submit periodic reports to the Secretary regarding the State's review and approval of construction or real property projects containing information specified by the Secretary consistent with 2 CFR 200.329(d).
If a program provides for participation by private school children, teachers or other educational personnel, and families, and the program is not otherwise governed by applicable regulations, the grantee or subgrantee must provide, as applicable, services in accordance with the requirements under §§ 76.651 through 76.662.
(a)(1) A subgrantee shall provide students enrolled in private schools with a genuine opportunity for equitable participation in accordance with the requirements in §§ 76.652-76.662 and in the authorizing statute and implementing regulations for a program.
(2) The subgrantee shall provide that opportunity to participate in a manner that is consistent with the number of eligible private school students and their needs.
(3) The subgrantee shall maintain continuing administrative direction and control over funds and property that benefit students enrolled in private schools.
(b)(1) A State shall ensure that each subgrantee complies with the requirements in §§ 76.651-76.662.
(2) If a State carries out a project directly, it shall comply with these requirements as if it were a subgrantee.
A subgrantee must consult with appropriate private school officials in accordance with the requirements in § 299.7.
A subgrantee shall determine the following matters on a basis comparable to that used by the subgrantee in providing for participation of public school students:
(a) The needs of students enrolled in private schools.
(b) The number of those students who will participate in a project.
(c) The benefits that the subgrantee will provide under the program to those students.
(a) Comparable benefits. The program benefits that a subgrantee provides for students enrolled in private schools must be comparable in quality, scope, and opportunity for participation to the program benefits that the subgrantee provides for students enrolled in public schools.
(b) Same benefits. If a subgrantee uses funds under a program for public school students in a particular attendance area, or grade or age level, the subgrantee shall insure equitable opportunities for participation by students enrolled in private schools who:
(1) Have the same needs as the public school students to be served; and
(2) Are in that group, attendance area, or age or grade level.
(c) Different benefits. If the needs of students enrolled in private schools are different from the needs of students enrolled in public schools, a subgrantee shall provide program benefits for the private school students that are different from the benefits the subgrantee provides for the public school students.
An applicant for a subgrant shall include the following information in its application:
(a) A description of how the applicant will meet the Federal requirements for participation of students enrolled in private schools.
(b) The number of students enrolled in private schools who have been identified as eligible to benefits under the program.
(c) The number of students enrolled in private schools who will receive benefits under the program.
(d) The basis the applicant used to select the students.
(e) The manner and extent to which the applicant complied with § 76.652 (consultation).
(f) The places and times that the students will receive benefits under the program.
(g) The differences, if any, between the program benefits the applicant will provide to public and private school students, and the reasons for the differences.
A subgrantee may not use program funds for classes that are organized separately on the basis of school enrollment or religion of the students if:
(a) The classes are at the same site; and
(b) The classes include students enrolled in public schools and students enrolled in private schools.
(a) A subgrantee may not use program funds to finance the existing level of instruction in a private school or to otherwise benefit the private school.
(b) The subgrantee shall use program funds to meet the specific needs of students enrolled in private schools, rather than:
(1) The needs of a private school; or
(2) The general needs of the students enrolled in a private school.
A subgrantee may use program funds to make public personnel available in other than public facilities:
(a) To the extent necessary to provide equitable program benefits designed for students enrolled in a private school; and
(b) If those benefits are not normally provided by the private school.
A subgrantee may use program funds to pay for the services of an employee of a private school if:
(a) The employee performs the services outside of his or her regular hours of duty; and
(b) The employee performs the services under public supervision and control.
(a) Under some program statutes, a public agency must keep title to and exercise continuing administrative control of all equipment and supplies that the subgrantee acquires with program funds. This public agency is usually the subgrantee.
(b) The subgrantee may place equipment and supplies in a private school for the period of time needed for the project.
(c) The subgrantee shall ensure that the equipment or supplies placed in a private school:
(1) Are used only for the purposes of the project; and
(2) Can be removed from the private school without remodeling the private school facilities.
(d) The subgrantee shall remove equipment or supplies from a private school if:
(1) The equipment or supplies are no longer needed for the purposes of the project; or
(2) Removal is necessary to avoid use of the equipment of supplies for other than project purposes.
A subgrantee shall ensure that program funds are not used for the construction of private school facilities.
If a State or a subgrantee uses a human subject in a research project, the State or subgrantee shall protect the person from physical, psychological, or social injury resulting from the project.
If a State or a subgrantee uses an animal in a project, the State or subgrantee shall provide the animal with proper care and humane treatment in accordance with the Animal Welfare Act of 1970.
A State and a subgrantee shall comply with any Federal health or safety requirements that apply to the facilities that the State or subgrantee uses for a project.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
A State and a subgrantee shall comply with § 76.500, the State plan, applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications.
A State or a subgrantee shall directly administer or supervise the administration of each project.
A State and a subgrantee shall use fiscal control and fund accounting procedures that ensure proper disbursement of and accounting for Federal funds.
(a)(1) The Secretary may establish, for a program subject to this part, a date by which a State must submit for review by the Department a State plan and any other documents required to be submitted under guidance provided by the Department under paragraph (b)(3) of this section.
(2) If the Secretary does not establish a date for the submission of State plans and any other documents required under guidance provided by the Department, the date for submission is three months before the date the Secretary may begin to obligate funds under the program.
(b)(1) This paragraph (b) describes the circumstances under which the submission date for a State plan may be deferred.
(2) If a State asks the Secretary in writing to defer the submission date for a State plan because of a Presidentially declared disaster that has occurred in that State, the Secretary may defer the submission date for the State plan and any other document required under guidance provided by the Department if the Secretary determines that the disaster significantly impairs the ability of the State to submit a timely State plan or other document required under guidance provided by the Department.
(3)(i) The Secretary establishes, for a program subject to this part, a date by which the program office must deliver guidance to the States regarding the contents of the State plan under that program.
(ii) The Secretary may only establish a date for the delivery of guidance to the States so that there are at least as many days between that date and the date that State plans must be submitted to the Department as there are days between the date that State plans must be submitted to the Department and the date that funds are available for obligation by the Secretary on July 1, or October 1, as appropriate.
(iii) If a State does not receive the guidance by the date established under paragraph (b)(3)(i) of this section, the submission date for the State plan under the program is deferred one day for each day that the guidance is late in being received by the State.
The following examples describe how the regulations in § 76.703(b)(3) would act to defer the date that a State would have to submit its State plan.
(c)(1) For the purposes of this section, the submission date of a State plan or other document is the date that the Secretary receives the plan or document.
(2) The Secretary does not determine whether a State plan is substantially approvable until the plan and any documents required under guidance provided by the Department have been submitted.
(3) The Secretary notifies a State when the Department has received the State plan and all documents required under guidance provided by the Department.
(d) If a State submits a State plan in substantially approvable form (or an amendment to the State plan that makes it substantially approvable), and submits any other document required under guidance provided by the Department, on or before the date the State plan must be submitted to the Department, the State may begin to obligate funds on the date that the funds are first available for obligation by the Secretary.
(e) If a State submits a State plan in substantially approvable form (or an amendment to the State plan that makes it substantially approvable) or any other documents required under guidance provided by the Department after the date the State plan must be submitted to the Department, and—
(1) The Department determines that the State plan is substantially approvable on or before the date that the funds are first available for obligation by the Secretary, the State may begin to obligate funds on the date that the funds are first available for obligation by the Secretary; or
(2) The Department determines that the State plan is substantially approvable after the date that the funds are first available for obligation by the Secretary, the State may begin to obligate funds on the earlier of the two following dates:
(i) The date that the Secretary determines that the State plan is substantially approvable.
(ii) The date that is determined by adding to the date that funds are first available for obligation by the Secretary—
(A) The number of days after the date the State plan must be submitted to the Department that the State plan or other document required under guidance provided by the Department is submitted; and
(B) If applicable, the number of days after the State receives notice that the State plan is not substantially approvable that the State submits additional information that makes the plan substantially approvable.
(f) Additional information submitted under paragraph (e)(2)(ii)(B) of this section must be signed by the person who submitted the original State plan (or an authorized delegate of that officer).
(g)(1) If the Department does not complete its review of a State plan during the period established for that review, the Secretary will grant pre-award costs for the period after funds become available for obligation by the Secretary and before the State plan is found substantially approvable.
(2) The period established for the Department's review of a plan does not include any day after the State has received notice that its plan is not substantially approvable.
The following examples describe how the regulations in § 76.703 would be applied in certain circumstances. For the purpose of these examples, assume that the grant program established an April 1 due date for the submission of the State plan and that funds are first available for obligation by the Secretary on July 1.
(h) After determining that a State plan is in substantially approvable form, the Secretary informs the State of the date on which it could begin to obligate funds. Reimbursement for those obligations is subject to final approval of the State plan.
(a) This section specifies the State plan requirements that must be addressed in a State plan if the State plan requirements established in statutes or regulations change on a date close to the date that State plans are due for submission to the Department.
(b)(1) A State plan must meet the following requirements:
(i) Every State plan requirement in effect three months before the date the State plan is due to be submitted to the Department under 34 CFR 76.703; and
(ii) Every State plan requirement included in statutes or regulations that will be effective on or before the date that funds become available for obligation by the Secretary and that have been signed into law or published in the
(2) If a State plan does not have to meet a new State plan requirement under paragraph (b)(1) of this section, the Secretary takes one of the following actions:
(i) Require the State to submit assurances and appropriate documentation to show that the new requirements are being followed under the program.
(ii) Extend the date for submission of State plans and approve pre-award costs as necessary to hold the State harmless.
(3) If the Secretary requires a State to submit assurances under paragraph (b)(2) of this section, the State shall incorporate changes to the State plan as soon as possible to comply with the new requirements. The State shall submit the necessary changes before the start of the next obligation period.
The following table shows when a State or a subgrantee makes obligations for various kinds of property and services.
| If the obligation is for— | The obligation is made— |
|---|---|
| (a) Acquisition of real or personal property | On the date on which the State or subgrantee makes a binding written commitment to acquire the property. |
| (b) Personal services by an employee of the State or subgrantee | When the services are performed. |
| (c) Personal services by a contractor who is not an employee of the State or subgrantee | On the date on which the State or subgrantee makes a binding written commitment to obtain the services. |
| (d) Performance of work other than personal services | On the date on which the State or subgrantee makes a binding written commitment to obtain the work. |
| (e) Public utility services | When the State or subgrantee receives the services. |
| (f) Travel | When the travel is taken. |
| (g) Rental of real or personal property | When the State or subgrantee uses the property. |
| (h) A pre-agreement cost that was properly approved by the Secretary under the cost principles in 2 CFR part 200, subpart E | On the first day of the grant or subgrant period of performance. |
(a) If applicable statutes and regulations for a program require a State to make subgrants on the basis of a formula (see § 76.51(a)), the State may not authorize an applicant for a subgrant to obligate funds until the later of the following two dates:
(1) The date that the State may begin to obligate funds under § 76.703; or
(2) The date that the applicant submits its application to the State in substantially approvable form.
(b) Reimbursement for obligations under paragraph (a) of this section is subject to final approval of the application.
(c) If applicable statutes and regulations for a program give the State discretion to select subgrantees, the State may not authorize an applicant for a subgrant to obligate funds until the subgrant is made. However, the State may approve pre-agreement costs in accordance with the cost principles in 2 CFR part 200, subpart E-Cost Principles.
(a) If a State or a subgrantee does not obligate all of its grant or subgrant funds by the end of the fiscal year for which Congress appropriated the funds, it may obligate the remaining funds during a carryover period of one additional fiscal year.
(b) The State shall return to the Federal Government any carryover funds not obligated by the end of the carryover period by the State and its subgrantees.
A State and a subgrantee shall use carryover funds in accordance with:
(a) The Federal statutes and regulations that apply to the program and are in effect for the carryover period; and
(b) Any State plan, or application for a subgrant, that the State or subgrantee is required to submit for the carryover period.
If a program is listed in the Assistance Listings and assigned an Assistance Listing Number (ALN), a State, when requesting funds under the program, shall identify that program by the ALN.
(a) An organization providing social services to beneficiaries under a Department program supported by direct Federal financial assistance must give written notice to a beneficiary or prospective beneficiary of certain protections. Such notice must be given in the manner and form prescribed by the Department. This notice must state that—
(1) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice;
(2) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary;
(3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and
(4) A beneficiary or prospective beneficiary may report an organization's violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Department.
(b) The written notice described in paragraph (a) of this section must be given to a prospective beneficiary prior to the time they enroll in the program or receive services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must provide the notice at the earliest available opportunity.
(c) The Department may determine that the notice described in paragraph (a) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from the Department, or a State agency or other entity administering the applicable program, as to whether there are any other federally funded organizations in their area that provide the services available under the applicable program.
(d) The notice that an organization uses to notify beneficiaries or prospective beneficiaries of the rights under paragraphs (a) through (c) of this section must include language substantially similar to that in appendix C to 34 CFR part 75.
If a grantee under a State-Administered Formula Grant program of the Department has the authority under the grant or subgrant to select a private organization to provide services supported by direct Federal financial assistance, as defined in § 76.52(c)(3), under the program by subgrant, contract, or other agreement, the grantee must ensure compliance with applicable Federal requirements governing contracts, grants, and other agreements with faith-based organizations, including, as applicable, §§ 76.52 and 76.532 and 2 CFR 3474.15. If the pass-through entity is a nongovernmental organization, it retains all other rights of a nongovernmental organization under the program's statutory and regulatory provisions.
(a) This section applies to a State's reports required for monitoring and continuous improvement, including 2 CFR 200.328 (Financial reporting) and 2 CFR 200.329 (Monitoring and reporting program performance), and other reports required by the Secretary and approved by the Office of Management and Budget (OMB) under the Subpart 1 of Chapter 35 (sections 3501-3521) of Title 44, U.S. Code, commonly known as the “Paperwork Reduction Act.”
(b) A State must submit these reports annually unless—
(1) The Secretary allows less frequent reporting; or
(2) The Secretary requires a State to report more frequently than annually, including reporting under 2 CFR 3474.10 and 2 CFR 200.207 (Specific conditions) and 2 CFR 3474.10 (Clarification regarding 2 CFR 200.207) or 2 CFR 200.302 Financial management and 200.303 Internal controls.
(c)(1) A State must submit these reports in the manner prescribed by the Secretary, including submitting any of these reports electronically and at the quality level specified in the data collection instrument.
(2) Failure by a State to submit reports in accordance with paragraph (c)(1) of this section constitutes a failure, under section 454 of GEPA , 20 U.S.C. 1234c, to comply substantially with a requirement of law applicable to the funds made available under that program.
(3) For reports that the Secretary requires to be submitted in an electronic manner, the Secretary may establish a transition period of up to two years following the date the State otherwise would be required to report the data in the electronic manner, during which time a State will not be required to comply with that specific electronic submission requirement, if the State submits to the Secretary—
(i) Evidence satisfactory to the Secretary that the State will not be able to comply with the electronic submission requirement specified by the Secretary in the data collection instrument on the first date the State otherwise would be required to report the data electronically;
(ii) Information requested in the report through an alternative means that is acceptable to the Secretary, such as through an alternative electronic means; and
(iii) A plan for submitting the reports in the required electronic manner and at the level of quality specified in the data collection instrument no later than the date two years after the first date the State otherwise would be required to report the data in the electronic manner prescribed by the Secretary.
A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720, in carrying out other responsibilities under the program, engaging in periodic review and continuous improvement of the State's plan, and supporting the subgrantee in engaging in periodic review and continuous improvement of the subgrantee's plan.
A State and a subgrantee shall keep records that fully show:
(a) The amount of funds under the grant or subgrant;
(b) How the State or subgrantee uses the funds;
(c) The total cost of the project;
(d) The share of that cost provided from other sources; and
(e) Other records to facilitate an effective audit.
A State and a subgrantee shall keep records to show its compliance with program requirements.
(a) A grantee must keep records of significant project experiences and results.
(b) The grantee must use the records under paragraph (a) to—
(1) Determine progress in accomplishing project objectives;
(2) Inform periodic review and continuous improvement of the project plans; and
(3) Revise those project objectives, if necessary.
(a) Most records on present or past students are subject to the requirements of section 444 of GEPA and its implementing regulations under 34 CFR part 99.(Section 444 of GEPA (20 U.S.C. 1232g) is commonly referred to as the “Family Educational Rights and Privacy Act of 1974” or “FERPA”.)
(b) Under most programs administered by the Secretary, research, experimentation, and testing are subject to the requirements of section 445 of GEPA (20 U.S.C. 1232h; commonly known as the “Protection of Pupil Rights Amendment” or “PPRA”)and its implementing regulations at 34 CFR part 98.
A State or a subgrantee may use funds under more than one program to support different parts of the same project if the State or subgrantee meets the following conditions:
(a) The State or subgrantee complies with the requirements of each program with respect to the part of the project assisted with funds under that program.
(b) The State or subgrantee has an accounting system that permits identification of the costs paid for under each program.
A State or a subgrantee may use program funds to pay up to 100 percent of the cost of a project if:
(a) The State or subgrantee is not required to match the funds; and
(b) The project can be assisted under applicable statutes and regulations.
Each State shall have procedures for reviewing and approving applications for subgrants and amendments to those applications, for providing technical assistance, for evaluating projects, and for performing other administrative responsibilities the State has determined are necessary to ensure compliance with applicable statutes and regulations.
(a) A subgrantee may request a hearing if it alleges that any of the following actions by the State educational agency violated a State or Federal statute or regulation:
(1) Ordering, in accordance with a final State audit resolution determination, the repayment of misspent or misapplied Federal funds;
(2) Terminating further assistance for an approved project; or
(3) Failing to provide funds in amounts in accordance with the requirements of applicable statutes and regulations.
(b) The procedures in 76.401(a) through (d) apply to any request for a hearing under this section.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
The regulations in this subpart implement section 4306 of the Elementary and Secondary Education Act of 1965 (ESEA), which requires States to take measures to ensure that each charter school in the State receives the funds for which it is eligible under a covered program during its first year of operation and during subsequent years in which the charter school expands its enrollment.
The regulations in this subpart apply to—
(a) State educational agencies (SEAs) and local educational agencies (LEAs) that fund charter schools under a covered program, including SEAs and LEAs located in States that do not participate in the Department's Charter School State Entity Grant Program;
(b) State agencies that are not SEAs, if they are responsible for administering a covered program. State agencies that are not SEAs must comply with the provisions in this subpart that are applicable to SEAs; and
(c) Charter schools that are scheduled to open or significantly expand their enrollment during the academic year and wish to participate in a covered program.
For purposes of this subpart—
Academic year means the regular school year (as defined by State law, policy, or practice) and for which the State allocates funds under a covered program.
Charter school has the same meaning as provided in section 4310(2) of the ESEA (20 U.S.C. 7221i(2))
Charter school LEA means a charter school that is treated as a local educational agency for purposes of the applicable covered program.
Covered program means a State-administered formula grant program, except that the term does not include a program or portion of a program under which an SEA awards subgrants on a discretionary, noncompetitive basis.
Local educational agency has the same meaning for each covered program as provided in applicable statutes and regulations for the program.
Significant expansion of enrollment means a substantial increase in the number of students attending a charter school due to a significant event that is unlikely to occur on a regular basis, such as the addition of one or more grades or educational programs in major curriculum areas. The term also includes any other expansion of enrollment that the SEA determines to be significant.
(a) Notice. At least 120 days before the date a charter school LEA is scheduled to open or significantly expand its enrollment, the charter school LEA or its authorized public chartering agency must provide its SEA with written notification of that date.
(b) Information. (1) In order to receive funds, a charter school LEA must provide to the SEA any available data or information that the SEA may reasonably require to assist the SEA in estimating the amount of funds the charter school LEA may be eligible to receive under a covered program.
(2)(i) Once a charter school LEA has opened or significantly expanded its enrollment, the charter school LEA must provide actual enrollment and eligibility data to the SEA at a time the SEA may reasonably require.
(ii) An SEA is not required to provide funds to a charter school LEA until the charter school LEA provides the SEA with the required actual enrollment and eligibility data.
(c) Compliance. Except as provided in § 76.791(a), or applicable statutes or regulations, a charter school LEA must establish its eligibility and comply with all applicable program requirements on the same basis as other LEAs.
(a) Information. Upon receiving notice under § 76.788(a) of the date a charter school LEA is scheduled to open or significantly expand its enrollment, an SEA must provide the charter school LEA with timely and meaningful information about each covered program in which the charter school LEA may be eligible to participate, including notice of any upcoming competitions under the program.
(b) Allocation of Funds. (1) An SEA must allocate funds under a covered program in accordance with this subpart to any charter school LEA that—
(i) Opens for the first time or significantly expands its enrollment during an academic year for which the State awards funds by formula or through a competition under the program;
(ii) In accordance with § 76.791(a), establishes its eligibility and complies with all applicable program requirements; and
(iii) Meets the requirements of § 76.788(a).
(2) In order to meet the requirements of this subpart, an SEA may allocate funds to, or reserve funds for, an eligible charter school LEA based on reasonable estimates of projected enrollment at the charter school LEA.
(3)(i) The failure of an eligible charter school LEA or its authorized public chartering agency to provide notice to its SEA in accordance with § 76.788(a) relieves the SEA of any obligation to allocate funds to the charter school within five months.
(ii) Except as provided in § 76.792(c), an SEA that receives less than 120 days' actual notice of the date an eligible charter school LEA is scheduled to open or significantly expand its enrollment must allocate funds to the charter school LEA on or before the date the SEA allocates funds to LEAs under the applicable covered program for the succeeding academic year.
(iii) The SEA may provide funds to the charter school LEA from the SEA's allocation under the applicable covered program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.
(a) For purposes of this subpart, an SEA must determine whether a charter school LEA is eligible to receive funds under a covered program based on actual enrollment or other eligibility data for the charter school LEA on or after the date the charter school LEA opens or significantly expands its enrollment.
(b) For the year the charter school LEA opens or significantly expands its enrollment, the eligibility determination may not be based on enrollment or eligibility data from a prior year, even if the SEA makes eligibility determinations for other LEAs under the program based on enrollment or eligibility data from a prior year.
(a) For each eligible charter school LEA that opens or significantly expands its enrollment on or before November 1 of an academic year, the SEA must implement procedures that ensure that the charter school LEA receives the proportionate amount of funds for which the charter school LEA is eligible under each covered program.
(b) For each eligible charter school LEA that opens or significantly expands its enrollment after November 1 but before February 1 of an academic year, the SEA must implement procedures that ensure that the charter school LEA receives at least a pro rata portion of the proportionate amount of funds for which the charter school LEA is eligible under each covered program. The pro rata amount must be based on the number of months or days during the academic year the charter school LEA will participate in the program as compared to the total number of months or days in the academic year.
(c) For each eligible charter school LEA that opens or significantly expands its enrollment on or after February 1 of an academic year, the SEA may implement procedures to provide the charter school LEA with a pro rata portion of the proportionate amount of funds for which the charter school LEA is eligible under each covered program.
Except as provided in §§ 76.788(b) and 76.789(b)(3):
(a) For each eligible charter school LEA that opens or significantly expands its enrollment on or before November 1 of an academic year, the SEA must allocate funds to the charter school LEA within five months of the date the charter school LEA opens or significantly expands its enrollment; and
(b)(1) For each eligible charter school LEA that opens or significantly expands its enrollment after November 1, but before February 1 of an academic year, the SEA must allocate funds to the charter school LEA on or before the date the SEA allocates funds to LEAs under the applicable covered program for the succeeding academic year.
(2) The SEA may provide funds to the charter school LEA from the SEA's allocation under the program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.
(a) Competitive programs. (1) For covered programs in which the SEA awards subgrants on a competitive basis, the SEA must provide each eligible charter school LEA in the State that is scheduled to open on or before the closing date of any competition under the program a full and fair opportunity to apply to participate in the program.
(2) An SEA is not required to delay the competitive process in order to allow a charter school LEA that has not yet opened or significantly expanded its enrollment to compete for funds under a covered program.
(b) Noncompetitive discretionary programs. The requirements in this subpart do not apply to discretionary programs or portions of programs under which the SEA does not award subgrants through a competition.
(a) An SEA that allocates more or fewer funds to a charter school LEA than the amount for which the charter school LEA is eligible, based on actual enrollment or eligibility data when the charter school LEA opens or significantly expands its enrollment, must make appropriate adjustments to the amount of funds allocated to the charter school LEA as well as to other LEAs under the applicable program.
(b) Any adjustments to allocations to charter school LEAs under this subpart must be based on actual enrollment or other eligibility data for the charter school LEA on or after the date the charter school LEA first opens or significantly expands its enrollment, even if allocations or adjustments to allocations to other LEAs in the State are based on enrollment or eligibility data from a prior year.
(a) The SEA must make any necessary adjustments to allocations under a covered program on or before the date the SEA allocates funds to LEAs under the program for the succeeding academic year.
(b) In allocating funds to a charter school LEA based on adjustments made in accordance with paragraph (a) of this section, the SEA may use funds from the SEA's allocation under the applicable covered program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.
(a) Each LEA that is responsible for funding a charter school under a covered program must comply with the requirements in this subpart on the same basis as SEAs are required to comply with the requirements in this subpart.
(b) In applying the requirements in this subpart (except for §§ 76.785, 76.786, and 76.787) to LEAs, references to SEA (or State), charter school LEA, and LEA must be read as references to LEA, charter school, and public school, respectively.
(a) No official, agent, or employee of the Department may waive any regulation that applies to a Department program unless the regulation specifically provide that it may be waived.
(b) No act or failure to act by an official, agent, or employee of the Department can affect the authority of the Secretary to enforce regulations.
(a) The Office of Administrative Law Judges, established under Part D (20 U.S.C. 1234-1234h) of GEPA, has the following functions:
(1) Recovery of funds hearings under section 452 of GEPA.
(2) Withholding hearings under section 455 of GEPA.
(3) Cease and desist hearings under section 456 of GEPA.
(4) Any other proceeding designated by the Secretary under section 451 of GEPA.
(b) The regulations of the Office of Administrative Law Judges are at 34 CFR part 81.
After a hearing by the Secretary, a State is usually entitled—generally by the statute that required the hearing—to judicial review of the Secretary's decision.
A grantee or subgrantee shall cooperate with the Secretary and the Comptroller General of the United States or any of their authorized representatives in the conduct of audits authorized by Federal law. This cooperation includes access without unreasonable restrictions to records and personnel of the grantee or subgrantee for the purpose of obtaining relevant information.
(a) [Reserved]
(b) Unless a statute or regulation provides otherwise, the following definitions in 2 CFR part 200 apply to the regulations in subtitles A and B of this title. The following terms have the definitions given those terms in 2 CFR 200.1. Phrasing given in parentheses references the term or terms used in title 34 that are consistent with the term defined in title 2.
Contract. (See definition in 2 CFR 200.1.)
Equipment. (See definition in 2 CFR 200.1.)
Federal award. (See definition in 2 CFR 200.1.) (The terms “award,” “grant,” and “subgrant”, as defined in paragraph (c) of this section, have the same meaning, depending on the context, as “Federal award” in 2 CFR 200.1.).
Period of performance. (See definition in 2 CFR 200.1.) (For discretionary grants, the Department uses the term “project period,” as defined in paragraph (c) of this section, instead of “period of performance,” to describe the period during which funds can be obligated by the grantee.).
Personal property. (See definition in 2 CFR 200.1.)
Real property. (See definition in 2 CFR 200.1.)
Recipient. (See definition in 2 CFR 200.1.)
Subaward. (See definition in 2 CFR 200.1.) (The term “subgrant,” as defined in paragraph (c) of this section, has the same meaning as “subaward” in 2 CFR 200.1).
Supplies. (See definition in 2 CFR 200.1.)
(c) Unless a statute or regulation provides otherwise, the following definitions also apply to the regulations in subtitles A and B of this title:
Acquisition means taking ownership of property, receiving the property as a gift, entering into a lease-purchase arrangement, or leasing the property. The term includes processing, delivery, and installation of property.
Ambitious means promoting continued, meaningful improvement for program participants or for other individuals or entities affected by the grant, or representing a significant advancement in the field of education research, practices, or methodologies. When used to describe a performance target, whether a performance target is ambitious depends upon the context of the relevant performance measure and the baseline for that measure.
Applicant means a party applying for a grant or subgrant under a program of the Department.
Application means a request for a grant or subgrant under a program of the Department.
Award has the same meaning as “Grant” in this paragraph (c).
Baseline means the starting point from which performance is measured and targets are set.
Budget means a recipient's financial plan for carrying out the project or program.
Budget period means an interval of time into which a project period is divided for budgetary purposes.
Construction means the preparation of drawings and specifications for a facilities project; erecting, building, demolishing, acquiring, renovating, major remodeling of, or extending a facilities project; or inspecting and supervising the construction of a facilities project. Construction does not include minor remodeling.
Continuous improvement means using plans for collecting and analyzing data about a project component's implementation and outcomes (including the pace and extent to which project outcomes are being met) to inform necessary changes throughout the project. These plans may include strategies to gather ongoing feedback from participants and stakeholders on the implementation of the project component.
Demonstrates a rationale means that there is a key project component included in the project's logic model that is supported by citations of high-quality research or evaluation findings that suggest that the project component is likely to significantly improve relevant outcomes.
Department means the U.S. Department of Education.
Director of the Institute of Education Sciences means the Director of the Institute of Education Sciences or an officer or employee of the Institute of Education Sciences acting for the Director under a delegation of authority.
ED means the U.S. Department of Education.
EDGAR means the Education Department General Administrative Regulations (34 CFR parts 75, 76, 77, 79, 81, 82, 84, 86, 97, 98, and 99).
Elementary school means a day or residential school that provides elementary education, as determined under State law.
Evaluation means an assessment using systematic data collection and analysis of one or more programs, policies, practices, and organizations intended to assess their implementation, outcomes, effectiveness, or efficiency.
Evidence-based, for the purposes of 34 CFR part 75 means the proposed project component is supported by one or more of strong evidence, moderate evidence, promising evidence, or evidence that demonstrates a rationale.
Evidence-building means a systematic plan for identifying and answering questions relevant to programs and policies through performance measurement, exploratory studies, or program evaluation.
Experimental study means a study that is designed to compare outcomes between two groups of individuals (such as students) that are otherwise equivalent except for their assignment to either a treatment group receiving a project component or a control group that does not. Randomized controlled trials, regression discontinuity design studies, and single-case design studies are the specific types of experimental studies that, depending on their design and implementation (e.g., sample attrition in randomized controlled trials and regression discontinuity design studies), can meet What Works Clearinghouse (WWC) standards without reservations as described in the WWC Handbooks:
(i) A randomized controlled trial employs random assignment of, for example, students, teachers, classrooms, or schools to receive the project component being evaluated (the treatment group) or not to receive the project component (the control group).
(ii) A regression discontinuity design study assigns the project component being evaluated using a measured variable (e.g., assigning students reading below a cutoff score to tutoring or developmental education classes) and controls for that variable in the analysis of outcomes.
(iii) A single-case design study uses observations of a single case (e.g., a student eligible for a behavioral intervention) over time in the absence and presence of a controlled treatment manipulation to determine whether the outcome is systematically related to the treatment.
Facilities means one or more structures in one or more locations.
Fiscal year means the Federal fiscal year—a period beginning on October 1 and ending on the following September 30.
GEPA means the General Education Provisions Act.
Grant means financial assistance, including cooperative agreements, that provides support or stimulation to accomplish a public purpose. 2 CFR part 200, as adopted in 2 CFR part 3474, uses the broader, undefined term “Award” to cover grants, subgrants, and other agreements in the form of money or property, in lieu of money, by the Federal Government to an eligible recipient. The term does not include—
(i) Technical assistance, which provides services instead of money;
(ii) Other assistance in the form of loans, loan guarantees, interest subsidies, or insurance;
(iii) Direct payments of any kind to individuals; and
(iv) Contracts that are required to be entered into and administered under procurement laws and regulations.
Grantee means the legal entity to which a grant is awarded and that is accountable to the Federal Government for the use of the funds provided. The grantee is the entire legal entity even if only a particular component of the entity is designated in the grant award notice (GAN). For example, a GAN may name as the grantee one school or campus of a university. In this case, the granting agency usually intends, or actually intends, that the named component assume primary or sole responsibility for administering the grant-assisted project or program. Nevertheless, the naming of a component of a legal entity as the grantee in a grant award document shall not be construed as relieving the whole legal entity from accountability to the Federal Government for the use of the funds provided. (This definition is not intended to affect the eligibility provision of grant programs in which eligibility is limited to organizations that may be only components of a legal entity.) The term “grantee” does not include any secondary recipients, such as subgrantees and contractors, that may receive funds from a grantee pursuant to a subgrant or contract.
Grant period means the period for which funds have been awarded.
Independent evaluation means an evaluation of a project component that is designed and carried out independently of, but in coordination with, the entities that develop or implement the project component.
Local educational agency means:
(i) A public board of education or other public authority legally constituted within a State for either administrative control of or direction of, or to perform service functions for, public elementary or secondary schools in:
(A) A city, county, township, school district, or other political subdivision of a State; or
(B) Such combination of school districts or counties a State recognizes as an administrative agency for its public elementary or secondary schools; or
(ii) Any other public institution or agency that has administrative control and direction of a public elementary or secondary school.
(iii) As used in 34 CFR parts 400, 408, 525, 526 and 527 (vocational education programs), the term also includes any other public institution or agency that has administrative control and direction of a vocational education program.
Logic model (also referred to as a theory of action) means a framework that identifies key project components of the proposed project (i.e., the active “ingredients” that are hypothesized to be critical to achieving the relevant outcomes) and describes the theoretical and operational relationships among the key project components and relevant outcomes.
Minor remodeling means minor alterations in a previously completed facilities project. The term also includes the extension of utility lines, such as water and electricity, from points beyond the confines of the space in which the minor remodeling is undertaken but within the confines of the previously completed facility. The term may also include related designs and drawings for these projects. The term does not include construction or renovation, structural alterations to buildings, facilities maintenance, or repairs.
Moderate evidence means evidence of effectiveness of a key project component in improving a relevant outcome for a sample that overlaps with the populations or settings proposed to receive that component, based on a relevant finding from one of the following:
(i) A practice guide prepared by the WWC using version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks reporting “strong evidence” or “moderate evidence” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC using version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks reporting “Tier 1 strong evidence” of effectiveness or “Tier 2 moderate evidence” of effectiveness or a “positive effect” on a relevant outcome based on a sample including at least 20 students or other individuals from more than one site (such as a State, county, city, local educational agency (LEA), school, or postsecondary campus), or a “potentially positive effect” on a relevant outcome based on a sample including at least 350 students or other individuals from more than one site (such as a State, county, city, LEA, school, or postsecondary campus), with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single experimental study or quasi-experimental design study reviewed and reported by the WWC most recently using version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks, or otherwise assessed by the Department using version 5.0 of the WWC Handbook, as appropriate, and that—
(A) Meets WWC standards with or without reservations;
(B) Includes at least one statistically significant and positive (i.e., favorable) effect on a relevant outcome;
(C) Includes no overriding statistically significant and negative effects on relevant outcomes reported in the study or in a corresponding WWC intervention report prepared under version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks; and
(D) Is based on a sample from more than one site (such as a State, county, city, LEA, school, or postsecondary campus) and includes at least 350 students or other individuals across sites. Multiple studies of the same project component that each meet the requirements in paragraphs (iii)(A) through (C) of this definition may together satisfy the requirement in this paragraph (iii)(D).
National level means the level of scope or effectiveness of a project component that is able to be effective in a wide variety of communities, including rural and urban areas, as well as groups with different characteristics (such as socioeconomic status, race, ethnicity, gender, disability, language, and migrant status), populations, and settings.
Nonprofit, as applied to an agency, organization, or institution, means that it is owned and operated by one or more corporations or associations whose net earnings do not benefit, and cannot lawfully benefit, any private shareholder or entity.
Nonpublic, as applied to an agency, organization, or institution, means that the agency, organization, or institution is nonprofit and is not under Federal or public supervision or control.
Peer-reviewed scholarly publication means a final peer-reviewed manuscript accepted for publication, that arises from research funded, either fully or partially, by Federal funds awarded through a Department-managed grant, contract, or other agreement. A final peer-reviewed manuscript is defined as an author's final manuscript of a peer-reviewed scholarly paper accepted for publication, including all modifications resulting from the peer review process. The final peer-reviewed manuscript is not the same as the final published article, which is defined as a publisher's authoritative copy of the paper including all modifications from the publishing peer review process, copyediting, stylistic edits, and formatting changes. However, the content included in both the final peer-reviewed manuscript and the final published article, including all findings, tables, and figures should be identical.
Performance measure means any quantitative indicator, statistic, or metric used to gauge program or project performance.
Performance target means a level of performance that an applicant would seek to meet during the course of a project or as a result of a project.
Preschool means the educational level from a child's birth to the time at which the State provides elementary education.
Private, as applied to an agency, organization, or institution, means that it is not under Federal or public supervision or control.
Project means the activity described in an application.
Project component means an activity, strategy, intervention, process, product, practice, or policy included in a project. Evidence may pertain to an individual project component or to a combination of project components (e.g., training teachers on instructional practices for English learners and follow-on coaching for these teachers).
Project period means the period established in the award document during which Federal sponsorship begins and ends (See, 2 CFR 200.1 Period of performance).
Promising evidence means evidence of the effectiveness of a key project component in improving a relevant outcome, based on a relevant finding from one of the following:
(i) A practice guide prepared by the WWC reporting “strong evidence”, “moderate evidence”, or “promising evidence” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC reporting “Tier 1 strong evidence” of effectiveness, or “Tier 2 moderate evidence” of effectiveness, or “Tier 3 promising evidence” of effectiveness, or a “positive effect,” or “potentially positive effect” on a relevant outcome, with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single study assessed by the Department, as appropriate, that—
(A) Is an experimental study, a quasi-experimental design study, or a well-designed and well-implemented correlational study with statistical controls for selection bias (such as a study using regression methods to account for differences between a treatment group and a comparison group);
(B) Includes at least one statistically significant and positive (i.e., favorable) effect on a relevant outcome; and
(C) Includes no overriding statistically significant and negative effects on relevant outcomes reported in the study or in a corresponding WWC intervention report.
Public, as applied to an agency, organization, or institution, means that the agency, organization, or institution is under the administrative supervision or control of a government other than the Federal Government.
Quality data encompasses utility, objectivity, and integrity of the information. “Utility” refers to how the data will be used, either for its intended use or other uses. “Objectivity” refers to data being accurate, complete, reliable, and unbiased. “Integrity” refers to the protection of data from being manipulated.
Quasi-experimental design study means a study using a design that attempts to approximate an experimental study by identifying a comparison group that is similar to the treatment group in important respects. This type of study, depending on design and implementation (e.g., establishment of baseline equivalence of the groups being compared), can meet WWC standards with reservations, but cannot meet WWC standards without reservations, as described in the WWC Handbooks.
Regional level means the level of scope or effectiveness of a project component that is able to serve a variety of communities within a State or multiple States, including rural and urban areas, as well as groups with different characteristics (such as socioeconomic status, race, ethnicity, gender, disability, language, and migrant status). For an LEA-based project, to be considered a regional-level project, a project component must serve students in more than one LEA, unless the project component is implemented in a State in which the State educational agency is the sole educational agency for all schools.
Relevant outcome means the student outcome(s) or other outcome(s) the key project component is designed to improve, consistent with the specific goals of the program.
Scientific data include the recorded factual material commonly accepted in the scientific community as of sufficient quality to validate and replicate research findings. Such scientific data do not include laboratory notebooks, preliminary analyses, case report forms, drafts of scientific papers, plans for future research, peer reviews, communications with colleagues, or physical objects and materials, such as laboratory specimens, artifacts, or field notes.
Secondary school means a day or residential school that provides secondary education as determined under State law. In the absence of State law, the Secretary may determine, with respect to that State, whether the term includes education beyond the twelfth grade.
Secretary means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
Service function, with respect to a local educational agency:
(i) Means an educational service that is performed by a legal entity—such as an intermediate agency:
(A)(1) Whose jurisdiction does not extend to the whole State; and
(2) That is authorized to provide consultative, advisory, or educational services to public elementary or secondary schools; or
(B) That has regulatory functions over agencies having administrative control or direction of public elementary or secondary schools.
(ii) The term does not include a service that is performed by a cultural or educational resource.
State means any of the 50 States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
State educational agency means the State board of education or other agency or officer primarily responsible for the supervision of public elementary and secondary schools in a State. In the absence of this officer or agency, it is an officer or agency designated by the Governor or State law.
Strong evidence means evidence of the effectiveness of a key project component in improving a relevant outcome for a sample that overlaps with the populations and settings proposed to receive that component, based on a relevant finding from one of the following:
(i) A practice guide prepared by the WWC using version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks reporting “strong evidence” for the corresponding practice guide recommendation;
(ii) An intervention report prepared by the WWC using version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks reporting “Tier 1 strong evidence” of effectiveness or a “positive effect” on a relevant outcome based on a sample including at least 350 students or other individuals across more than one site (such as a State, county, city, local educational agency (LEA), school, or postsecondary campus), with no reporting of a “negative effect” or “potentially negative effect” on a relevant outcome; or
(iii) A single experimental study reviewed and reported by the WWC most recently using version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks, or otherwise assessed by the Department using version 5.0 of the WWC Handbook, as appropriate, and that—
(A) Meets WWC standards without reservations;
(B) Includes at least one statistically significant and positive (i.e., favorable) effect on a relevant outcome;
(C) Includes no overriding statistically significant and negative effects on relevant outcomes reported in the study or in a corresponding WWC intervention report prepared under version 2.1, 3.0, 4.0, 4.1, or 5.0 of the WWC Handbooks; and
(D) Is based on a sample from more than one site (such as a State, county, city, LEA, school, or postsecondary campus) and includes at least 350 students or other individuals across sites. Multiple studies of the same project component that each meet the requirements in paragraphs (iii)(A) through (C) of this definition may together satisfy the requirement in this paragraph (iii)(D).
Subgrant means an award of financial assistance in the form of money, or property in lieu of money, made under a grant by a grantee to an eligible subgrantee. The term includes financial assistance when provided by contractual or any other form of legal agreement, but does not include procurement purchases, nor does it include any form of assistance that is excluded from the definitions of “Grant or Award” in this part (See 2 CFR 200.92, “Subaward”).
Subgrantee means the government or other legal entity to which a subgrant is awarded and that is accountable to the grantee for the use of the funds provided.
What Works Clearinghouse (WWC) Handbooks (WWC Handbooks) means the standards and procedures set forth in the WWC Procedures and Standards Handbook, Version 5.0, or in the WWC Standards Handbook, Version 4.0 or 4.1, or in the WWC Procedures Handbook, Version 4.0 or 4.1, the WWC Procedures and Standards Handbook, Version 3.0 or Version 2.1 (all incorporated by reference; see § 77.2). Study findings eligible for review under WWC standards can meet WWC standards without reservations, meet WWC standards with reservations, or not meet WWC standards. WWC practice guides and intervention reports include findings from systematic reviews of evidence as described in the WWC Handbooks documentation.
Work of art means an item that is incorporated into a facility primarily because of its aesthetic value.
Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. All approved incorporation by reference (IBR) material is available for inspection at the Department of Education (the Department) and the National Archives and Records Administration (NARA). Contact the Department at: Institute of Education Sciences, National Center for Education Evaluation and Regional Assistance, 550 12th Street SW, PCP-4158, Washington, DC, 20202-5900; phone: (202) 245-6940; email: Contact.WWC@ed.gov. For information on the availability of this material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations or email fr.inspection@nara.gov. The following material may be obtained from Institute of Education Sciences, 550 12th Street SW, Washington, DC, 20202; phone: (202) 245-6940; website: http://ies.ed.gov/ncee/wwc/Handbooks.
(a) What Works Clearinghouse Procedures and Standards Handbook, WWC 2022008REV, Version 5.0, August 2022; Revised December 2022; IBR approved for § 77.1.
(b) What Works Clearinghouse Standards Handbook, Version 4.1, January 2020, IBR approved for § 77.1.
(c) What Works Clearinghouse Procedures Handbook, Version 4.1, January 2020, IBR approved for § 77.1.
(d) What Works Clearinghouse Standards Handbook, Version 4.0, October 2017, IBR approved for § 77.1.
(e) What Works Clearinghouse Procedures Handbook, Version 4.0, October 2017, IBR approved for § 77.1.
(f) What Works Clearinghouse Procedures and Standards Handbook, Version 3.0, March 2014, IBR approved for § 77.1.
(g) What Works Clearinghouse Procedures and Standards Handbook, Version 2.1, September 2011, IBR approved for § 77.1.
Section 79.2 also issued under E.O. 12372.
(a) The regulations in this part implement Executive Order 12372, “Intergovernmental Review of Federal Programs,” issued July 14, 1982 and amended on April 8, 1983.
(b) These regulations are intended to foster an intergovernmental partnership and a strengthened Federalism by relying on State processes and on State, areawide, regional, and local coordination for review of proposed federal financial assistance.
(c) These regulations are intended to aid the internal management of the Department, and are not intended to create any right or benefit enforceable at law by a party against the Department or its officers.
Order means Executive Order 12372, issued July 14, 1982, amended April 8, 1983, and titled “Intergovernmental Review of Federal Programs.”
State means any of the 50 States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
(a) The Secretary publishes in the
(b) If a program or activity of the Department that provides Federal financial assistance does not have implementing regulations, the regulations in this part apply to that program or activity.
(c) The following programs and activities are excluded from coverage under this part:
(1) Proposed legislation.
(2) Regulation and budget formulation.
(3) National security matters.
(4) Procurement.
(5) Direct payments to individuals.
(6) Financial transfers for which the Department has no funding discretion or direct authority to approve specific sites or projects.
(7) Research and development that is national in scope.
(8) Assistance to federally recognized Indian tribes.
(d) In addition to the programs and activities excluded in paragraph (c) of this section, the Secretary may only exclude a Federal financial assistance program or activity from coverage under this part if the program or activity does not directly affect State or local governments.
(a) The Secretary provides opportunities for consultation by elected officials of those State and local governments that would provide the nonfederal funds for, or that would be directly affected by, proposed federal financial assistance from the Department.
(b) If a State adopts a process under the Order to review and coordinate proposed federal financial assistance, the Secretary, to the extent permitted by law:
(1) Uses the State process to determine official views of State and local elected officials;
(2) Communicates with State and local elected officials as early in a program planning cycle as is reasonably feasible to explain specific plans and actions;
(3) Makes efforts to accommodate State and local elected officials' concerns with proposed federal financial assistance that are communicated through the State process;
(4) Allows the States to simplify and consolidate existing federally required State plan submissions;
(5) Where State planning and budgeting systems are sufficient and where permitted by law, encourages the substitution of State plans for federally required State plans;
(6) Seeks the coordination of views of affected State and local elected officials in one State with those of another State when proposed federal financial assistance has an impact on interstate metropolitan urban centers or other interstate areas; and
(7) Supports State and local governments by discouraging the reauthorization or creation of any planning organization which is federally funded, which has a limited purpose, and which is not adequately representative of, or accountable to, State or local elected officials.
The Secretary, to the maximum extent practicable, consults with and seeks advice from all other substantially affected federal departments and agencies in an effort to ensure full coordination between such agencies and the Department regarding programs and activities covered under these regulations.
(a) A State may select any program or activity published in the
(b) Each State that adopts a process shall notify the Secretary of the Department's programs and activities selected for that process.
(c) A State may notify the Secretary of changes in its selections at any time. For each change, the State shall submit to the Secretary an assurance that the State has consulted with local elected officials regarding the change. The Department may establish deadlines by which States are required to inform the Secretary of changes in their program selections.
(d) The Secretary uses a State's process as soon as feasible, depending on individual programs and activities, after the Secretary is notified of its selections.
(a) [Reserved]
(b)(1) The Secretary provides notice to directly affected State, areawide, regional, and local entities in a State of proposed federal financial assistance if:
(i) The State has not adopted a process under the Order; or
(ii) The assistance involves a program or activity not selected for the State process.
(2) This notice may be made by publication in the
(a) Except in unusual circumstances, the Secretary gives State processes or directly affected State, areawide, regional, and local officials and entities—
(1) At least 30 days to comment on proposed Federal financial assistance in the form of noncompeting continuation awards; and
(2) At least 60 days to comment on proposed Federal financial assistance other than noncompeting continuation awards.
(b) The Secretary establishes a date for mailing or hand-delivering comments under paragraph (a) of this section using one of the following two procedures:
(1) If the comments relate to continuation award applications, the Secretary notifies each applicant and each State Single Point of Contact (SPOC) of the date by which SPOC comments should be submitted.
(2) If the comments relate to applications for new grants, the Secretary establishes the date in a notice published in the
(c) This section also applies to comments in cases in which the review, coordination, and communication with the Department have been delegated.
(a) The Secretary follows the procedure in § 79.10 if:
(1) A State office or official is designated to act as a single point of contact between a State process and all federal agencies, and
(2) That office or official transmits a State process recommendation, and identifies it as such, for a program selected under § 79.6.
(b)(1) The single point of contact is not obligated to transmit comments from State, areawide, regional, or local officials and entities if there is no State process recommendation.
(2) If a State process recommendation is transmitted by a single point of contact, all comments from State, areawide, regional, and local officials and entities that differ from it must also be transmitted.
(c) If a State has not established a process, or is unable to submit a State process recommendation, State, areawide, regional, and local officials and entities may submit comments to the Department.
(d) If a program or activity is not selected for a State process, State, areawide, regional, and local officials and entities may submit comments to the Department. In addition, if a State process recommendation for a nonselected program or activity is transmitted to the Department by the single point of contact, the Secretary follows the procedures of § 79.10.
(e) The Secretary considers comments which do not constitute a State process recommendation submitted under these regulations and for which the Secretary is not required to apply the procedures of § 79.10, if those comments are provided by a single point of contact, or directly to the Department by a commenting party.
(a) If a State process provides a State process recommendation to the Department through its single point of contact, the Secretary either:
(1) Accepts the recommendation;
(2) Reaches an agreement with the State; or
(3) Provides the single point of contact with a written explanation of the decision in such form as the Secretary deems appropriate. The Secretary may also supplement the written explanation by providing the explanation to the single point of contact by telephone, other telecommunication, or other means.
(b) In any explanation under paragraph (a)(3) of this section, the Secretary informs the single point of contact that:
(1) The Department will not implement its decision for at least ten days after the single point of contact receives the explanation; or
(2) The Secretary has reviewed the decision and determined that, because of unusual circumstances, the waiting period of at least ten days is not feasible.
(c) For purposes of computing the waiting period under paragraph (b)(1) of this section, a single point of contact is presumed to have received written notification 5 days after the date of mailing of the notification.
(a) The Secretary is responsible for:
(1) Identifying proposed federal financial assistance that has an impact on interstate areas;
(2) Notifying appropriate officials and entities in States which have adopted a process and which select the Department's program or activity.
(3) Making efforts to identify and notify the affected State, areawide, regional, and local officials and entities in those States that have not adopted a process under the Order or do not select the Department's program or activity;
(4) Responding under § 79.10 if the Secretary receives a recommendation from a designated areawide agency transmitted by a single point of contact, in cases in which the review, coordination, and communication with the Department have been delegated.
(b) In an interstate situation subject to this section, the Secretary uses the procedures in § 79.10 if a State process provides a State process recommendation to the Department through a single point of contact.
(a) As used in this section:
(1) Simplify means that a State may develop its own format, choose its own submission date, and select the planning period for a State plan.
(2) Consolidate means that a State may meet statutory and regulatory requirements by combining two or more plans into one document and that the State can select the format, submission date, and planning period for the consolidated plan.
(3) Substitute means that a State may use a plan or other document that it has developed for its own purposes to meet Federal requirements.
(b) If not inconsistent with law, a State may decide to try to simplify, consolidate, or substitute federally required State plans without prior approval by the Secretary.
(c) The Secretary reviews each State plan that a State has simplified, consolidated, or substituted and accepts the plan only if its contents meet federal requirements.
The regulations in this part govern the enforcement of legal requirements under applicable programs administered by the Department of Education and implement Part E of the General Education Provisions Act (GEPA).
The following definitions apply to the terms used in this part:
Administrative Law Judge (ALJ) means a judge appointed by the Secretary in accordance with section 451 (b) and (c) of GEPA.
Applicable program means any program for which the Secretary of Education has administrative responsibility, except a program authorized by—
(a) The Higher Education Act of 1965, as amended;
(b) The Act of September 30, 1950 (Pub. L. 874, 81st Congress), as amended; or
(c) The Act of September 23, 1950 (Pub. L. 815, 81st Congress), as amended.
Department means the United States Department of Education.
Disallowance decision means the decision of an authorized Departmental official that a recipient must return funds because it made an expenditure of funds that was not allowable or otherwise failed to discharge its obligation to account properly for funds. Such a decision, referred to as a “preliminary departmental decision” in section 452 of GEPA, is subject to review by the Office of Administrative Law Judges.
OES means the OHA Electronic System or any successor system designated by the Department.
Party means either of the following:
(a) A recipient that appeals a decision.
(b) An authorized Departmental official who issues a decision that is appealed.
Recipient means the recipient of a grant or cooperative agreement under an applicable program.
Secretary means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
(a) The Office of Administrative Law Judges (OALJ) established under section 451(a) of GEPA has jurisdiction to conduct the following proceedings concerning an applicable program:
(1) Hearings for recovery of funds.
(2) Withholding hearings.
(3) Cease and desist hearings.
(b) The OALJ also has jurisdiction to conduct other proceedings designated by the Secretary. If a proceeding or class of proceedings is so designated, the Department publishes a notice of the designation in the
(a) The Secretary appoints Administrative Law Judges as members of the OALJ.
(b) The Secretary appoints one of the members of the OALJ to be the chief judge. The chief judge is responsible for the efficient and effective administration of the OALJ.
(c) The chief judge assigns an ALJ to each case or class of cases within the jurisdiction of the OALJ.
(a) An ALJ assigned to a case conducts a hearing on the record. The ALJ regulates the course of the proceedings and the conduct of the parties to ensure a fair, expeditious, and economical resolution of the case in accordance with applicable law.
(b) An ALJ is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(c) An ALJ is disqualified in any case in which the ALJ has a substantial interest, has been of counsel, is or has been a material witness, or is so related to or connected with any party or the party's attorney as to make it improper for the ALJ to be assigned to the case.
(d)(1) An ALJ may disqualify himself or herself at any time on the basis of the standards in paragraph (c) of this section.
(2) A party may file a motion to disqualify an ALJ under the standards in paragraph (c) of this section. A motion to disqualify must be accompanied by an affidavit that meets the requirements of 5 U.S.C. 556(b). Upon the filing of such a motion and affidavit, the ALJ decides the disqualification matter before proceeding further with the case.
(a) A hearing on the record is a process for the orderly presentation of evidence and arguments by the parties.
(b) Except as otherwise provided in this part or in a notice of designation under § 81.3(b), an ALJ conducts the hearing entirely on the basis of briefs and other written submissions unless—
(1) The ALJ determines, after reviewing all appropriate submissions, that an evidentiary hearing is needed to resolve a material factual issue in dispute; or
(2) The ALJ determines, after reviewing all appropriate submissions, that oral argument is needed to clarify the issues in the case.
(c) At a party's request, the ALJ shall confer with the parties in person or by conference telephone call before determining whether an evidentiary hearing or an oral argument is needed.
(a) A person or organization, other than a party, that wishes to participate in a case shall file an application to participate with the ALJ assigned to the case. The application must—
(1) Identify the case in which participation is sought;
(2) State how the applicant's interest relates to the case;
(3) State how the applicant's participation would aid in the disposition of the case; and
(4) State how the applicant seeks to participate.
(b) The ALJ may permit an applicant to participate if the ALJ determines that the applicant's participation—
(1) Will aid in the disposition of the case;
(2) Will not unduly delay the proceedings; and
(3) Will not prejudice the adjudication of the parties' rights.
(c) If the ALJ permits an applicant to participate, the ALJ permits the applicant to file briefs.
(d)(1) In addition to the participation described in paragraph (c) of this section, the ALJ may permit the applicant to participate in any or all of the following ways:
(i) Submit documentary evidence.
(ii) Participate in an evidentiary hearing afforded the parties.
(iii) Participate in an oral argument afforded the parties.
(2) The ALJ may place appropriate limits on an applicant's participation to ensure the efficient conduct of the proceedings.
(e) A non-party participant shall comply with the requirements for parties in § 81.11 and § 81.12.
A party to, or other participant in, a case may be represented by counsel.
(a) An ALJ may hold conferences of the parties in person or by conference telephone call.
(b) Any conference, hearing, argument, or other proceeding at which the parties are required to appear in person is held in the Washington, DC metropolitan area unless the ALJ determines that the convenience and necessity of the parties or their representatives requires that it be held elsewhere.
A party to, or other participant in, a case may not communicate with an ALJ on any fact in issue in the case or on any matter relevant to the merits of the case unless the parties are given notice and an opportunity to participate.
(a) To obtain an order or a ruling from an ALJ, a party shall make a motion to the ALJ.
(b) Except for a request for an extension of time, a motion must be made in writing unless the parties appear in person or participate in a conference telephone call. The ALJ may require a party to reduce an oral motion to writing.
(c) Parties must file motions with the ALJ, and serve them upon the other party, as provided under § 81.12.
(d) Except for a request for an extension of time, the ALJ may not grant a party's written motion without the consent of the other party unless the other party has had at least 21 days from the date of service of the motion to respond. However, the ALJ may deny a motion without awaiting a response.
(e) The date of service of a motion is determined by the standards for determining a filing date in § 81.12(d).
(a) Method of filing. (1) Any written submission to an ALJ or the OALJ under this part, including pleadings, petitions, and motions, must be filed by submission to OES unless a party shows the ALJ good cause why its written submission cannot be filed electronically. A party filing electronically is responsible for ensuring that a complete and legible document was successfully submitted in a format for electronic filing permitted under OHA procedures.
(2) If the ALJ permits a party to file a written submission in paper format, the filing party must file the written submission with the ALJ or the OALJ by hand-delivery or regular mail.
(b) Filing date. (1) The filing date for a written submission to an ALJ or the OALJ is the date the document is—
(i) Submitted to OES; or
(ii) Hand-delivered or mailed, if the ALJ has permitted the written submission to be filed in paper format.
(2) If a scheduled filing date falls on a Saturday, Sunday, or Federal holiday, the filing deadline is the next business day.
(c) Service to other parties. (1) The filing of a written submission to OES constitutes service on other parties.
(2) If a party is permitted by the ALJ to file a written submission in paper format, the party must serve a copy of the written submission on the other party on the filing date by hand-delivery or regular mail. Any such written submission to the ALJ or OALJ must be accompanied by a statement certifying that the material was served on the other party on the filing date.
(a) Voluntary mediation is available for proceedings that are pending before the OALJ.
(b) A mediator must be independent of, and agreed to by, the parties to the case.
(c) A party may request mediation by filing a motion with the ALJ assigned to the case. The OALJ arranges for a mediator if the parties to the case agree to mediation.
(d) A party may terminate mediation at any time. Mediation is limited to 120 days unless the mediator informs the ALJ that—
(1) The parties are likely to resolve some or all of the dispute; and
(2) An extension of time will facilitate an agreement.
(e) The ALJ stays the proceedings during mediation.
(f)(1) Evidence of conduct or statements made during mediation is not admissible in any proceeding under this part. However, evidence that is otherwise discoverable may not be excluded merely because it was presented during mediation.
(2) A mediator may not disclose, in any proceeding under this part, information acquired as a part of his or her official mediation duties that relates to any fact in issue in the case or any matter relevant to the merits of the case.
(a) If the parties to a case file a joint motion requesting a stay of the proceedings for settlement negotiations, or for approval of a settlement agreement, the ALJ may grant a stay of the proceedings upon a finding of good cause.
(b) Evidence of conduct or statements made during settlement negotiations is not admissible in any proceeding under this part. However, evidence that is otherwise discoverable may not be excluded merely because it was presented during settlement negotiations.
(c) The parties may not disclose the contents of settlement negotiations to the ALJ. If the parties enter into a settlement agreement and file a joint motion to dismiss the case, the ALJ grants the motion.
(a) The Federal Rules of Evidence do not apply to proceedings under this part. However, the ALJ accepts only evidence that is—
(1) Relevant;
(2) Material;
(3) Not unduly repetitious; and
(4) Not inadmissible under § 81.13 or § 81.14.
(b) The ALJ may take official notice of facts that are generally known or capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.
(a) The parties to a case are encouraged to exchange relevant documents and information voluntarily.
(b) The ALJ, at a party's request, may order compulsory discovery described in paragraph (c) of this section if the ALJ determines that—
(1) The order is necessary to secure a fair, expeditious, and economical resolution of the case;
(2) The discovery requested is likely to elicit relevant information with respect to an issue in the case;
(3) The discovery request was not made primarily for the purposes of delay or harassment; and
(4) The order would serve the ends of justice.
(c) If a compulsory discovery is permissible under paragraph (b) of this section, the ALJ may order a party to do one or more of the following:
(1) Make relevant documents available for inspection and copying by the party making the request.
(2) Answer written interrogatories that inquire into relevant matters.
(3) Have depositions taken.
(d) The ALJ may issue a subpoena to enforce an order described in this section and may apply to the appropriate court of the United States to enforce the subpoena.
(e) The ALJ may not compel the discovery of information that is legally privileged.
(f)(1) The ALJ limits the period for discovery to not more than 90 days but may grant an extension for good cause.
(2) At a party's request, the ALJ may set a specific schedule for discovery.
The privilege of a person or governmental organization not to produce documents or provide information in a proceeding under this part is governed by the principles of common law as interpreted by the courts of the United States.
(a) The ALJ arranges for any evidentiary hearing or oral argument to be recorded and transcribed and makes the transcript available to the parties. Transcripts are made available to non-Departmental parties at a cost not to exceed the actual cost of duplication.
(b) The record of a hearing on the record consists of—
(1) All papers filed in the proceeding;
(2) Documentary evidence admitted by the ALJ;
(3) The transcript of any evidentiary hearing or oral argument; and
(4) Rulings, orders, and subpoenas issued by the ALJ.
The Equal Access to Justice Act, 5 U.S.C. 504, applies by its terms to proceedings under this part. Regulations under that statute are in 34 CFR part 21.
(a) A ruling by an ALJ may not be appealed to the Secretary until the issuance of an initial decision, except that the Secretary may, at any time prior to the issuance of an initial decision, grant review of a ruling upon either an ALJ's certification of the ruling to the Secretary for review, or the filing of a petition seeking review of an interim ruling by one or both of the parties, if—
(1) That ruling involves a controlling question of substantive or procedural law; and
(2) The immediate resolution of the question will materially advance the final disposition of the proceeding or subsequent review will be an inadequate remedy.
(b)(1) A petition for interlocutory review of an interim ruling must include the following:
(i) A brief statement of the facts necessary to an understanding of the issue on which review is sought.
(ii) A statement of the issue.
(iii) A statement of the reasons showing that the ruling complained of involves a controlling question of substantive or procedural law and why immediate review of the ruling will materially advance the disposition of the case, or why subsequent review will be an inadequate remedy.
(2) A petition may not exceed 10 pages, double-spaced, and must be accompanied by a copy of the ruling and any findings and opinions relating to the ruling.
(3)(i) The petition must be filed electronically, and served upon the ALJ and other parties, by submission to OES on behalf of the Office of the Secretary unless a party shows the Secretary good cause why the petition cannot be filed electronically.
(ii) If the Secretary permits a party to file a petition in paper format, the filing party must file the petition with the Office of Hearings and Appeals (OHA) on behalf of the Secretary by hand-delivery or regular mail. The filing party must provide a copy of the petition to the ALJ at the time the petition is filed, and a copy of the petition must be served upon the other parties by hand-delivery or regular mail.
(c) If a party files a petition under this section, the ALJ may state to the Secretary a view as to whether review is appropriate by submitting a brief statement addressing the party's petition within 10 days of the ALJ's receipt of the petition for interlocutory review. The ALJ must serve a copy of the statement on all parties by submission to OES and, if the Secretary has permitted paper filing, by hand-delivery or regular mail.
(d)(1) A party's response, if any, to a petition or certification for interlocutory review must be filed within seven days after service of the petition or certification, and may not exceed 10 pages, double-spaced, in length.
(2) A copy of the response must be filed to OES unless the party shows the Secretary good cause why the response cannot be filed electronically. If the ALJ permits a party to file a petition in paper format, the filing party must file the petition with OHA on behalf of the Secretary by hand-delivery or regular mail.
(3) If the Secretary has permitted a party to file the response in paper format, the party must file a copy of the response with the ALJ, and serve a copy of the response on all parties, on the filing date by hand delivery or regular mail.
(e)(1) A party's response, if any, to a petition or certification for interlocutory review must be filed within seven days after service of the petition or certification, and may not exceed ten pages, double-spaced, in length. A copy of the response must be filed with the ALJ by hand delivery, by regular mail, or by facsimile transmission.
(2) A party shall serve a copy of its response on all parties on the filing date by hand-delivery or regular mail. If agreed upon by the parties, service of a copy of the response may be made upon the other parties by facsimile transmission.
(f) The filing of a request for interlocutory review does not automatically stay the proceedings. Rather, a stay during consideration of a petition for review may be granted by the ALJ if the ALJ has certified or stated to the Secretary that review of the ruling is appropriate. The Secretary may order a stay of proceedings at any time after the filing of a request for interlocutory review.
(g) The Secretary notifies the parties if a petition or certification for interlocutory review is accepted, and may provide the parties a reasonable time within which to submit written argument or other existing material in the administrative record with regard to the merit of the petition or certification.
(h) If the Secretary takes no action on a request for interlocutory review within 15 days of receipt of it, the request is deemed to be denied.
(i) The Secretary may affirm, modify, set aside, or remand the ALJ's ruling.
(a) Subject to the provisions of § 81.31, an authorized Departmental official requires a recipient to return funds to the Department if—
(1) The recipient made an unallowable expenditure of funds under a grant or cooperative agreement; or
(2) The recipient otherwise failed to discharge its obligation to account properly for funds under a grant or cooperative agreement.
(b) An authorized Departmental offcial may base a decision to require a recipient to return funds upon an audit report, an investigative report, a monitoring report, or any other evidence.
A recipient that made an unallowable expenditure or otherwise failed to discharge its obligation to account properly for funds shall return an amount that—
(a) Meets the standards for proportionality in § 81.32;
(b) In the case of a State or local educational agency, excludes any amount attributable to mitigating circumstances under the standards in § 81.23; and
(c) Excludes any amount expended in a manner not authorized by law more than five years before the recipient received the notice of a disallowance decision under § 81.34.
(a)(1) A recipient that made an unallowable expenditure or otherwise failed to account properly for funds shall return an amount that is proportional to the extent of the harm its violation caused to an identifiable Federal interest associated with the program under which it received the grant or cooperative agreement.
(2) An identifiable Federal interest under paragraph (a)(1) of this section includes, but is not limited to, the following:
(i) Serving only eligible beneficiaries.
(ii) Providing only authorized services or benefits.
(iii) Complying with expenditure requirements and conditions, such as set-aside, excess cost, maintenance of effort, comparability, supplement-not-supplant, and matching requirements.
(iv) Preserving the integrity of planning, application, recordkeeping, and reporting requirements.
(v) Maintaining accountability for the use of funds.
(b) The appendix to this part contains examples that illustrate how the standards for proportionality apply. The examples present hypothetical cases and do not represent interpretations of any actual program statute or regulation.
(a) A recipient that is a State or local educational agency and that has made an unallowable expenditure or otherwise failed to account properly for funds is not required to return any amount that is attributable to the mitigating circumstances described in paragraph (b), (c), or (d) of this section.
(b) Mitigating circumstances exist if it would be unjust to compel the recovery of funds because the recipient's violation was caused by erroneous written guidance from the department. To prove mitigating circumstances under this paragraph, the recipient shall prove that—
(1) The guidance was provided in response to a specific written request from the recipient that was submitted to the Department at the address provided by notice published in the
(2) The guidance was provided by a Departmental official authorized to provide the guidance, as described by that notice;
(3) The recipient actually relied on the guidance as the basis for the conduct that constituted the violation; and
(4) The recipient's reliance on the guidance was reasonable.
(c) Mitigating circumstances exist if it would be unjust to compel the recovery of funds because the recipient's violation was caused by the Department's failure to provide timely guidance. To prove mitigating circumstances under this paragraph, the recipient shall prove that—
(1) The recipient in good faith submitted a written request for guidance with respect to the legality of a proposed expenditure or practice;
(2) The request was submitted to the Department at the address provided by notice published in the
(3) The request—
(i) Accurately described the proposed expenditure or practice; and
(ii) Included the facts necessary for the Department's determination of its legality;
(4) The request contained the certification of the chief legal officer of the appropriate State educational agency that the officer—
(i) Examined the proposed expenditure or practice; and
(ii) Believed it was permissible under State and Federal law applicable at the time of the certification;
(5) The recipient reasonably believed the proposed expenditure or practice was permissible under State and Federal law applicable at the time it submitted the request to the Department;
(6) No Departmental official authorized to provide the requested guidance responded to the request within 90 days of its receipt by the Department; and
(7) The recipient made the proposed expenditure or engaged in the proposed practice after the expiration of the 90-day period.
(d) Mitigating circumstances exist if it would be unjust to compel the recovery of funds because the recipient's violation was caused by the recipient's compliance with a judicial decree from a court of competent jurisdiction. To prove mitigating circumstances under this paragraph, the recipient shall prove that—
(1) The recipient was legally bound by the decree;
(2) The recipient actually relied on the decree when it engaged in the conduct that constituted the violation; and
(3) The recipient's reliance on the decree was reasonable.
(e) If a Departmental official authorized to provide the requested guidance responds to a request described in paragraph (c) of this section more than 90 days after its receipt, the recipient that made the request shall comply with the guidance at the earliest practicable time.
(a) If an authorized Departmental official decides that a recipient must return funds under § 81.30, the official gives the recipient written notice of a disallowance decision. The official sends the notice by certified mail, return receipt requested, or other means that ensure proof of receipt.
(b)(1) The notice must establish a prima facie case for the recovery of funds, including an analysis reflecting the value of the program services actually obtained in a determination of harm to the Federal interest.
(2) For the purpose of this section, a prima facie case is a statement of the law and the facts that, unless rebutted, is sufficient to sustain the conclusion drawn in the notice. The facts may be set out in the notice or in a document that is identified in the notice and available to the recipient.
(3) A statement that the recipient failed to maintain records required by law or failed to allow an authorized representative of the Secretary access to those records constitutes a prima facie case for the recovery of the funds affected.
(i) If the recipient failed to maintain records, the statement must briefly describe the types of records that were not maintained and identify the recordkeeping requirement that was violated.
(ii) If the recipient failed to allow access to records, the statement must briefly describe the recipient's actions that constituted the failure and identify the access requirement that was violated.
(c) The notice must inform the recipient that it may—
(1) Obtain a review of the disallowance decision by the OALJ; and
(2) Request mediation under § 81.13.
(d) The notice must describe—
(1) The time available to apply for a review of the disallowance decision; and
(2) The procedure for filing an application for review.
The Secretary or an authorized Departmental official as appropriate may, after the issuance of a disallowance decision, reduce the amount of a claim established under this subpart by—
(a) Redetermining the claim on the basis of the proper application of the law, including the standards for the measure of recovery under § 81.31, to the facts;
(b) Compromising the claim under the Federal Claims Collection Standards in 4 CFR part 103; or
(c) Compromising the claim under § 81.36, if applicable.
(a) The Secretary or an authorized Departmental official as appropriate may compromise a claim established under this subpart without following the procedures in 4 CFR part 103 if—
(1)(i) The amount of the claim does not exceed $200,000; or
(ii) The difference between the amount of the claim and the amount agreed to be returned does not exceed $200,000; and
(2) The Secretary or the official determines that—
(i) The collection of the amount by which the claim is reduced under the compromise would not be practical or in the public interest; and
(ii) The practice that resulted in the disallowance decision has been corrected and will not recur.
(b) Not less than 45 days before compromising a claim under this section, the Department publishes a notice in the
(1) The intention to compromise the claim; and
(2) That interested persons may comment on the proposed compromise.
(a) If a recipient wishes to obtain review of a disallowance decision, the recipient shall file a written application for review with the Office of Administrative Law Judges, c/o Docket Clerk, Office of Hearings and Appeals, and, as required by § 81.12(b), shall serve a copy on the applicable Departmental official who made the disallowance decision.
(b) A recipient shall file an application for review not later than 60 days after the date it receives the notice of a disallowance decision.
(c) Within 10 days after receipt of a copy of the application for review, the authorized Departmental official who made the disallowance decision shall provide the ALJ with a copy of any document identified in the notice pursuant to § 81.34(b)(2).
(d) An application for review must contain—
(1) A copy of the disallowance decision of which review is sought;
(2) A statement certifying the date the recipient received the notice of that decision;
(3) A short and plain statement of the disputed issues of law and fact, the recipient's position with respect to these issues, and the disallowed funds the recipient contends need not be returned; and
(4) A statement of the facts and the reasons that support the recipient's position.
(e) The ALJ who considers a timely application for review that substantially complies with the requirements of paragraph (c) of this section may permit the recipient to supplement or amend the application with respect to issues that were timely raised. Any requirement to return funds that is not timely appealed becomes the final decision of the Department.
(a) The ALJ assigned to the case under § 81.4 considers an application for review of a disallowance decision.
(b) The ALJ decides whether the notice of a disallowance decision meets the requirements of § 81.34, as provided by section 451(e) of GEPA.
(1) If the notice does not meet those requirements, the ALJ—
(i) Returns the notice, as expeditiously as possible, to the authorized Departmental official who made the disallowance decision;
(ii) Gives the official the reasons why the notice does not meet the requirements of § 81.34; and
(iii) Informs the recipient of the ALJ's decision by certified mail, return receipt requested.
(2) An authorized Departmental official may modify and reissue a notice that an ALJ returns.
(c) If the notice of a disallowance decision meets the requirements of § 81.34, the ALJ decides whether the application for review meets the requirements of § 81.37.
(1) If the application, including any supplements or amendments under § 81.37(d), does not meet those requirements, the disallowance decision becomes the final decision of the Department.
(2) If the application meets those requirements, the ALJ—
(i) Informs the recipient and the authorized Departmental official that the OALJ has accepted jurisdiction of the case; and
(ii) Schedules a hearing on the record.
(3) The ALJ informs the recipient of the disposition of its application for review by certified mail, return receipt requested. If the ALJ decides that the application does not meet the requirements of § 81.37, the ALJ informs the recipient of the reasons for the decision.
(a) The ALJ schedules the submission of the evidence, whether oral or documentary, to occur within 90 days of the OALJ's receipt of an acceptable application for review under § 81.37.
(b) The ALJ may waive the 90-day requirement for good cause.
If the OALJ accepts jurisdiction of a case under § 81.38, the recipient shall present its case first and shall have the burden of proving that the recipient is not required to return the amount of funds that the disallowance decision requires to be returned because—
(a) An expenditure identified in the disallowance decision as unallowable was allowable;
(b) The recipient discharged its obligation to account properly for the funds;
(c) The amount required to be returned does not meet the standards for proportionality in § 81.32;
(d) The amount required to be returned includes an amount attributable to mitigating circumstances under the standards in § 81.33; or
(e) The amount required to be returned includes an amount expended in a manner not authorized by law more than five years before the recipient received the notice of the disallowance decision.
(a) The ALJ makes an initial decision based on the record.
(b) The initial decision includes the ALJ's findings of fact, conclusions of law, and reasoning on all material issues.
(c) The OALJ transmits the initial decision to the Secretary and to the parties by submission to OES and, if filing in paper format was permitted by the ALJ, by certified mail, return receipt requested, or by another parcel service with delivery confirmation.
(d) For the purpose of this part, “initial decision” includes an ALJ's modified decision after the Secretary's remand of a case.
(a)(1) If a party seeks to obtain the Secretary's review of the initial decision of an ALJ, the party must file a petition for review by submission to OES on behalf of the Office of the Secretary unless the party shows the ALJ good cause why the petition cannot be filed electronically.
(2) If the ALJ permits a party to file a petition for review in paper format, the filing party must file the petition with the ALJ by hand-delivery or regular mail.
(b) A party must file a petition for review not later than 30 days after the date it receives the initial decision. The party is deemed to have received the initial decision on the date the initial decision is uploaded to OES or, if filing in paper format was permitted by the ALJ, the party is deemed to have received the initial decision on the delivery date indicated by the certified mail or parcel delivery records.
(c) Electronically filing a petition to OES for review constitutes service on the other party.
(d) If the ALJ has permitted the petition to be filed in paper format, then—
(1) The party must serve a copy of the petition on the other party on the filing date by hand delivery or by “overnight” or “express” mail. If agreed upon by the parties, service of a copy of the petition may be made upon the other party by a method approved by the ALJ.
(2) Any petition submitted under this section in paper format must be accompanied by a statement certifying the date that the petition was served on the other party.
(e) A petition for review of an initial decision must—
(1) Identify the initial decision for which review is sought; and
(2) Include a statement of the reasons asserted by the party for affirming, modifying, setting aside, or remanding the initial decision in whole or in part.
(f)(1) A party may respond to a petition for review of an initial decision by filing a statement of its views on the issues raised in the petition, as provided for in this section, not later than 15 days after the date it receives the petition.
(2) If the ALJ has permitted the written submission to be filed in paper format, a party must serve a copy of its statement of views on the other party by hand delivery or mail and certify that it has done so pursuant to the provisions of paragraph (d) of this section.
(g)(1) The filing date for petitions under this section is the date the document is—
(i) Electronically filed; or
(ii) Hand-delivered or mailed, if permitted to file in paper format.
(2) If a scheduled filing date falls on a Saturday, Sunday, or a Federal holiday, the filing deadline is the next business day.
(a)(1) The Secretary's review of an initial decision is based on the record of the case, the initial decision, and any proper submissions of the parties or other participants in the case.
(2) During the Secretary's review of the initial decision there shall not be any ex parte contact between the Secretary and individuals representing the Department or the recipient.
(b) The ALJ's findings of fact, if supported by substantial evidence, are conclusive.
(c) The Secretary may affirm, modify, set aside, or remand the ALJ's initial decision.
(1) If the Secretary modifies, sets aside, or remands an initial decision, in whole or in part, the Secretary's decision includes a statement of reasons that supports the Secretary's decision.
(2)(i) The Secretary may remand the case to the ALJ with instructions to make additional findings of fact or conclusions of law, or both, based on the evidence of record. The Secretary may also remand the case to the ALJ for further briefing or for clarification or revision of the initial decision.
(ii) If a case is remanded, the ALJ shall make new or modified findings of fact or conclusions of law or otherwise modify the initial decision in accordance with the Secretary's remand order.
(iii) A party may appeal a modified decision of the ALJ under the provisions of §§ 81.42 through 81.45. However, upon that review, the ALJ's new or modified findings, if supported by substantial evidence, are conclusive.
(3) The Secretary, for good cause shown, may remand the case to the ALJ to take further evidence, and the ALJ may make new or modified findings of fact and may modify the initial decision based on that new evidence. These new or modified findings of fact are likewise conclusive if supported by substantial evidence.
(a) The ALJ's initial decision becomes the final decision of the Department 60 days after the recipient receives the ALJ's decision unless the Secretary modifies, sets aside, or remands the decision during the 60-day period.
(b) If the Secretary modifies or sets aside the ALJ's initial decision, a copy of the Secretary's decision is provided to the parties by submission to OES. If the ALJ has permitted written submissions to be filed in paper format, the decision will be sent by certified mail, return receipt requested, or by another parcel service with delivery confirmation. The Secretary's decision becomes the final decision of the Department on the date it is electronically filed or, if sent via parcel delivery service, on the delivery date indicated by the certified mail or parcel delivery records.
(a) An authorized Departmental official collects a claim established under this subpart by using the standards and procedures in 34 CFR part 30.
(b) A claim established under this subpart may be collected—
(1) 30 days after a recipient receives notice of a disallowance decision if the recipient fails to file an acceptable application for review under § 81.37; or
(2) On the date of the final decision of the Department under § 81.44 if the recipient obtains review of a disallowance decision.
(c) The Department takes no collection action pending judicial review of a final decision of the Department under section 458 of GEPA.
(d) If a recipient obtains review of a disallowance decision under § 81.38, the Department does not collect interest on the claim for the period between the date of the disallowance decision and the date of the final decision of the Department under § 81.44.
(1) Ineligible beneficiaries. A State uses 15 percent of its grant to meet the special educational needs of children who were migratory, but who have not migrated for more than five years as a Federal program statute requires for eligibility to participate in the program. Result: Recovery of 15 percent of the grant—all program funds spent for the benefit of those children. Although the services were authorized, the children were not eligible to receive them.
(2) Ineligible beneficiaries. A Federal program designed to meet the special educational needs of gifted and talented children requires that at least 80 percent of the children served in any project must be identified as gifted or talented. A local educational agency (LEA) conducts a project in which 76 students are identified as gifted or talented and 24 are not. The project was designed and implemented to meet the special educational needs of gifted and talented students. Result: The LEA must return five percent of the project costs. The LEA provided authorized services for a project in which the 76 target students had to constitute at least 80 percent of the total. Thus, the maximum number of non-target students permitted was 19. Project costs relating to the remaining five students must be returned.
(3) Ineligible beneficiaries. Same as the example in paragraph (2), except that only 15 percent of the children were identified as gifted or talented. On the basis of the low percentage of these children and other evidence, the authorized Departmental official finds that the project as a whole did not address their special educational needs and was outside the purpose of the statute. Result: The LEA must return its entire award. The difference between the required percentage of gifted and talented children and the percentage actually enrolled is so substantial that, if consistent with other evidence, the official may reasonably conclude the entire grant was misused.
(4) Ineligible beneficiaries. Same as the example in paragraph (2), except that 60 percent of the children were identified as gifted or talented, and it is not clear whether the project was designed or implemented to meet the special educational needs of these children. Result: If it is determined that the project was designed and implemented to serve their special educational needs, the LEA must return 25 percent of the project costs. A project that included 60 target children would meet the requirement that 80 percent of the children served be gifted and talented if it included no more than 15 other children. Thus, while the LEA provided authorized services, only 75 percent of the beneficiaries were authorized to participate in the project (60 target children and 15 others). If the authorized Departmental official, after examining all the relevant facts, determines that the project was not designed and implemented to serve the special educational needs of gifted or talented students, the LEA must return its entire award because it did not provide services authorized by the statute.
(5) Unauthorized activities. An LEA uses ten percent of its grant under a Federal program that authorizes activities only to meet the special educational needs of educationally deprived children to pay for health services that are available to all children in the LEA. All the children who use the Federally funded health services happen to be educationally deprived, and thus eligible to receive program services. Result: Recovery of ten percent of the grant—all program funds spent for the health services. Although the children were eligible to receive program services, the health services were unrelated to a special educational need and, therefore, not authorized by law.
(6) Set-aside requirement. A State uses 22 percent of its grant for one fiscal year under a Federal adult education program to provide programs of equivalency to a certificate of graduation from a secondary school. The adult education program statute restricts those programs to no more than 20 percent of the State's grant. Result: Two percent of the State's grant must be returned. Although all 22 percent of the funds supported adult education, the State had no authority to spend more than 20 percent on secondary school equivalency programs.
(7) Set-aside requirement. A State uses eight percent of its basic State grant under a Federal vocational education program to pay for the excess cost of vocational education services and activities for handicapped individuals. The program statute requires a State to use ten percent of its basic State grant for this purpose. Result: The State must return two percent of its basic State grant, regardless of how it was used. Because the State was required to spend that two percent on services and activities for handicapped individuals and did not do so, it diverted those funds from their intended purposes, and the Federal interest was harmed to that extent.
(8) Excess cost requirement. An LEA uses funds reserved for the disadvantaged under a Federal vocational education program to pay for the cost of the same vocational education services it provides to non-disadvantaged individuals. The program statute requires that funds reserved for the disadvantaged must be used to pay only for the supplemental or additional costs of vocational education services that are not provided to other individuals and that are required for disadvantaged individuals to participate in vocational education. Result: All the funds spent on the disadvantaged must be returned. Although the funds were spent to serve the disadvantaged, the funds were available to pay for only the supplemental or additional costs of providing services to the disadvantaged.
(9) Maintenance-of-effort requirement. An LEA participates in a Federal program in fiscal year 1988 that requires it to maintain its expenditures from non-Federal sources for program purposes to receive its full allotment. The program statute requires that non-Federal funds expended in the first preceding fiscal year must be at least 90 percent of non-Federal funds expended in the second preceding fiscal year and provides for a reduction in grant amount proportional to the shortfall in expenditures. No waiver of the requirement is authorized. In fiscal year 1986 the LEA spent $100,000 from non-Federal sources for program purposes; in fiscal year 1987, only $87,000. Result: The LEA must return
(10) Supplanting prohibition. An LEA uses funds under a Federal drug education program to provide drug abuse prevention counseling to students in the eighth grade. The LEA is required to provide that same counseling under State law. Funds under the Federal program statute are subject to a supplement-not-supplant requirement. Result: All the funds used to provide the required counseling to the eighth-grade students must be returned. The Federal funds did not increase the total amount of spending for program purposes because the counseling would have been provided with non-Federal funds if the Federal funds were not available.
(11) Matching requirement. A State receives an allotment of $90,000 for fiscal year 1988 under a Federal adult education program. It expends its full allotment and $8,000 from its own resources for adult education. Under the Federal statute, the Federal share of expenditures for the State's program is 90 percent. Result: The State must return the unmatched Federal funds, or $18,000. Expenditure of a $90,000 Federal allotment required $10,000 in matching State expenditures, $2,000 more than the State's actual expenditures. At a ratio of one State dollar for every nine Federal dollars, $18,000 in Federal funds were unmatched.
(12) Application requirements. In order to receive funds under a Federal program that supports a wide range of activities designed to improve the quality of elementary and secondary education, an LEA submits an application to its State educational agency (SEA) for a subgrant to carry out school-level basic skills development programs. The LEA submits its application after conducting an assessment of the needs of its students in consultation with parents, teachers, community leaders, and interested members of the general public. The Federal program statute requires the application and consultation processes. The SEA reviews the LEA's application, determines that the proposed programs are sound and the application is in compliance with Federal law, and approves the application. After the LEA receives the subgrant, it unilaterally decides to use 20 percent of the funds for gifted and talented elementary school students—an authorized activity under the Federal statute. However, the LEA does not consult with interested parties and does not amend its application. Result: 20 percent of the LEA's subgrant must be returned. The LEA had no legal authority to use Federal funds for programs or activities other than those described in its approved application, and its actions with respect to 20 percent of the subgrant not only impaired the integrity of the application process, but caused significant harm to other Federal interests associated with the program as follows: the required planning process was circumvented because the LEA did not consult with the specified local interests; program accountability was impaired because neither the SEA nor the various local interests that were to be consulted had an opportunity to review and comment on the merits of the gifted and talented program activities, and the LEA never had to justify those activities to them; and fiscal accountability was impaired because the SEA and those various local interests were, in effect, misled by the LEA's unamended application regarding the expenditure of Federal funds.
(13) Harmless violation. Under a Federal program, a grantee is required to establish a 15-member advisory council of affected teachers, school administrators, parents, and students to assist in program design, monitoring, and evaluation. Although the law requires at least three student members of the council, a grantee's council contains only two. The project is carried out, and no damage to the project attributable to the lack of a third student member can be identified. Result: No financial recovery is required, although the grantee must take other appropriate steps to come into compliance with the law. The grantee's violation has not measurably harmed a Federal interest associated with the program.
See also Office of Management and Budget notice published at 54 FR 52306, December 20, 1989.
(a) No appropriated funds may be expended by the recipient of a Federal contract, grant, loan, or cooperative ageement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
(b) Each person who requests or receives from an agency a Federal contract, grant, loan, or cooperative agreement shall file with that agency a certification, set forth in appendix A, that the person has not made, and will not make, any payment prohibited by paragraph (a) of this section.
(c) Each person who requests or receives from an agency a Federal contract, grant, loan, or a cooperative agreement shall file with that agency a disclosure form, set forth in appendix B, if such person has made or has agreed to make any payment using nonappropriated funds (to include profits from any covered Federal action), which would be prohibited under paragraph (a) of this section if paid for with appropriated funds.
(d) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a statement, set forth in appendix A, whether that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee.
(e) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a disclosure form, set forth in appendix B, if that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee.
For purposes of this part:
(a) Agency, as defined in 5 U.S.C. 552(f), includes Federal executive departments and agencies as well as independent regulatory commissions and Government corporations, as defined in 31 U.S.C. 9101(1).
(b) Covered Federal action means any of the following Federal actions:
(1) The awarding of any Federal contract;
(2) The making of any Federal grant;
(3) The making of any Federal loan;
(4) The entering into of any cooperative agreement; and,
(5) The extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
(c) Federal contract means an acquisition contract awarded by an agency, including those subject to the Federal Acquisition Regulation (FAR), and any other acquisition contract for real or personal property or services not subject to the FAR.
(d) Federal cooperative agreement means a cooperative agreement entered into by an agency.
(e) Federal grant means an award of financial assistance in the form of money, or property in lieu of money, by the Federal Government or a direct appropriation made by law to any person. The term does not include technical assistance which provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, loan insurance, interest subsidies, insurance, or direct United States cash assistance to an individual.
(f) Federal loan means a loan made by an agency. The term does not include loan guarantee or loan insurance.
(g) Indian tribe and tribal organization have the meaning provided in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions of Indian tribes in that Act.
(h) Influencing or attempting to influence means making, with the intent to influence, any communication to or appearance before an officer or employee or any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federal action.
(i) Loan guarantee and loan insurance means an agency's guarantee or insurance of a loan made by a person.
(j) Local government means a unit of government in a State and, if chartered, established, or otherwise recognized by a State for the performance of a governmental duty, including a local public authority, a special district, an intrastate district, a council of governments, a sponsor group representative organization, and any other instrumentality of a local government.
(k) Officer or employee of an agency includes the following individuals who are employed by an agency:
(1) An individual who is appointed to a position in the Government under title 5, U.S. Code, including a position under a temporary appointment;
(2) A member of the uniformed services as defined in section 101(3), title 37, U.S. Code;
(3) A special Government employee as defined in section 202, title 18, U.S. Code; and,
(4) An individual who is a member of a Federal advisory committee, as defined by the Federal Advisory Committee Act, title 5, U.S. Code appendix 2.
(l) Person means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit or not for profit. This term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.
(m) Reasonable compensation means, with respect to a regularly employed officer or employee of any person, compensation that is consistent with the normal compensation for such officer or employee for work that is not furnished to, not funded by, or not furnished in cooperation with the Federal Government.
(n) Reasonable payment means, with respect to perfessional and other technical services, a payment in an amount that is consistent with the amount normally paid for such services in the private sector.
(o) Recipient includes all contractors, subcontractors at any tier, and subgrantees at any tier of the recipient of funds received in connection with a Federal contract, grant, loan, or cooperative agreement. The term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.
(p) Regularly employed means, with respect to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or a commitment providing for the United States to insure or guarantee a loan, an officer or employee who is employed by such person for at least 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person for receipt of such contract, grant, loan, cooperative agreement, loan insurance commitment, or loan guarantee commitment. An officer or employee who is employed by such person for less than 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person shall be considered to be regularly employed as soon as he or she is employed by such person for 130 working days.
(q) State means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, a territory or possession of the United States, an agency or instrumentality of a State, and a multi-State, regional, or interstate entity having governmental duties and powers.
(a) Each person shall file a certification, and a disclosure form, if required, with each submission that initiates agency consideration of such person for:
(1) Award of a Federal contract, grant, or cooperative agreement exceeding $100,000; or
(2) An award of a Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000.
(b) Each person shall file a certification, and a disclosure form, if required, upon receipt by such person of:
(1) A Federal contract, grant, or cooperative agreement exceeding $100,000; or
(2) A Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000,
(c) Each person shall file a disclosure form at the end of each calendar quarter in which there occurs any event that requires disclosure or that materially affects the accuracy of the information contained in any disclosure form previously filed by such person under paragraphs (a) or (b) of this section. An event that materially affects the accuracy of the information reported includes:
(1) A cumulative increase of $25,000 or more in the amount paid or expected to be paid for influencing or attempting to influence a covered Federal action; or
(2) A change in the person(s) or individual(s) influencing or attempting to influence a covered Federal action; or,
(3) A change in the officer(s), employee(s), or Member(s) contacted to influence or attempt to influence a covered Federal action.
(d) Any person who requests or receives from a person referred to in paragraphs (a) or (b) of this section:
(1) A subcontract exceeding $100,000 at any tier under a Federal contract;
(2) A subgrant, contract, or subcontract exceeding $100,000 at any tier under a Federal grant;
(3) A contract or subcontract exceeding $100,000 at any tier under a Federal loan exceeding $150,000; or,
(4) A contract or subcontract exceeding $100,000 at any tier under a Federal cooperative agreement,
(e) All disclosure forms, but not certifications, shall be forwarded from tier to tier until received by the person referred to in paragraphs (a) or (b) of this section. That person shall forward all disclosure forms to the agency.
(f) Any certification or disclosure form filed under paragraph (e) of this section shall be treated as a material representation of fact upon which all receiving tiers shall rely. All liability arising from an erroneous representation shall be borne solely by the tier filing that representation and shall not be shared by any tier to which the erroneous representation is forwarded. Submitting an erroneous certification or disclosure constitutes a failure to file the required certification or disclosure, respectively. If a person fails to file a required certification or disclosure, the United States may pursue all available remedies, including those authorized by section 1352, title 31, U.S. Code.
(g) For awards and commitments in process prior to December 23, 1989, but not made before that date, certifications shall be required at award or commitment, covering activities occurring between December 23, 1989, and the date of award or commitment. However, for awards and commitments in process prior to the December 23, 1989 effective date of these provisions, but not made before December 23, 1989, disclosure forms shall not be required at time of award or commitment but shall be filed within 30 days.
(h) No reporting is required for an activity paid for with appropriated funds if that activity is allowable under either subpart B or C.
(a) The prohibition on the use of appropriated funds, in § 82.100(a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement if the payment is for agency and legislative liaison activities not directly related to a covered Federal action.
(b) For purposes of paragraph (a) of this section, providing any information specifically requested by an agency or Congress is allowable at any time.
(c) For purposes of paragraph (a) of this section, the following agency and legislative liaison activities are allowable at any time only where they are not related to a specific solicitation for any covered Federal action:
(1) Discussing with an agency (including individual demonstrations) the qualities and characteristics of the person's products or services, conditions or terms of sale, and service capabilities; and,
(2) Technical discussions and other activities regarding the application or adaptation of the person's products or services for an agency's use.
(d) For purposes of paragraph (a) of this section, the following agencies and legislative liaison activities are allowable only where they are prior to formal solicitation of any covered Federal action:
(1) Providing any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action;
(2) Technical discussions regarding the preparation of an unsolicited proposal prior to its official submission; and,
(3) Capability presentations by persons seeking awards from an agency pursuant to the provisions of the Small Business Act, as amended by Pub. L. 95-507 and other subsequent amendments.
(e) Only those activities expressly authorized by this section are allowable under this section.
(a) The prohibition on the use of appropriated funds, in § 82.100(a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or an extension, continuation, renewal, amendment, or modification of a Federal contract, grant, loan, or cooperative agreement if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement.
(b) For purposes of paragraph (a) of this section, “professional and technical services” shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting of a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.
(c) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents.
(d) Only those services expressly authorized by this section are allowable under this section.
No reporting is required with respect to payments of reasonable compensation made to regularly employed officers or employees of a person.
(a) The prohibition on the use of appropriated funds, in § 82.100(a), does not apply in the case of any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action, if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement.
(b) The reporting requirements in § 82.110(a) and (b) regarding filing a disclosure form by each person, if required, shall not apply with respect to professional or technical services rendered directly in the preparation, submission, or negotiation of any commitment providing for the United States to insure or guarantee a loan.
(c) For purposes of paragraph (a) of this section, “professional and technical services” shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting or a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.
(d) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents.
(e) Persons other than officers or employees of a person requesting or receiving a covered Federal action include consultants and trade associations.
(f) Only those services expressly authorized by this section are allowable under this section.
(a) Any person who makes an expenditure prohibited herein shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such expenditure.
(b) Any person who fails to file or amend the disclosure form (see appendix B) to be filed or amended if required herein, shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
(c) A filing or amended filing on or after the date on which an administrative action for the imposition of a civil penalty is commenced does not prevent the imposition of such civil penalty for a failure occurring before that date. An administrative action is commenced with respect to a failure when an investigating official determines in writing to commence an investigation of an allegation of such failure.
(d) In determining whether to impose a civil penalty, and the amount of any such penalty, by reason of a violation by any person, the agency shall consider the nature, circumstances, extent, and gravity of the violation, the effect on the ability of such person to continue in business, any prior violations by such person, the degree of culpability of such person, the ability of the person to pay the penalty, and such other matters as may be appropriate.
(e) First offenders under paragraphs (a) or (b) of this section shall be subject to a civil penalty of $10,000, absent aggravating circumstances. Second and subsequent offenses by persons shall be subject to an appropriate civil penalty between $10,000 and $100,000, as determined by the agency head or his or her designee.
(f) An imposition of a civil penalty under this section does not prevent the United States from seeking any other remedy that may apply to the same conduct that is the basis for the imposition of such civil penalty.
Agencies shall impose and collect civil penalties pursuant to the provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812, insofar as these provisions are not inconsistent with the requirements herein.
The head of each agency shall take such actions as are necessary to ensure that the provisions herein are vigorously implemented and enforced in that agency.
(a) The Secretary of Defense may exempt, on a case-by-case basis, a covered Federal action from the prohibition whenever the Secretary determines, in writing, that such an exemption is in the national interest. The Secretary shall transmit a copy of each such written exemption to Congress immediately after making such a determination.
(b) The Department of Defense may issue supplemental regulations to implement paragraph (a) of this section.
(a) The head of each agency shall collect and compile the disclosure reports (see appendix B) and, on May 31 and November 30 of each year, submit to the Secretary of the Senate and the Clerk of the House of Representatives a report containing a compilation of the information contained in the disclosure reports received during the six-month period ending on March 31 or September 30, respectively, of that year.
(b) The report, including the compilation, shall be available for public inspection 30 days after receipt of the report by the Secretary and the Clerk.
(c) Information that involves intelligence matters shall be reported only to the Select Committee on Intelligence of the Senate, the Permanent Select Committee on Intelligence of the House of Representatives, and the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection.
(d) Information that is classified under Executive Order 12356 or any successor order shall be reported only to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives or the Committees on Armed Services of the Senate and the House of Representatives (whichever such committees have jurisdiction of matters involving such information) and to the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection.
(e) The first semi-annual compilation shall be submitted on May 31, 1990, and shall contain a compilation of the disclosure reports received from December 23, 1989 to March 31, 1990.
(f) Major agencies, designated by the Office of Management and Budget (OMB), are required to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives no later than with the compilations due on May 31, 1991. OMB shall provide detailed specifications in a memorandum to these agencies.
(g) Non-major agencies are requested to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives.
(h) Agencies shall keep the originals of all disclosure reports in the official files of the agency.
(a) The Inspector General, or other official as specified in paragraph (b) of this section, of each agency shall prepare and submit to Congress each year, commencing with submission of the President's Budget in 1991, an evaluation of the compliance of that agency with, and the effectiveness of, the requirements herein. The evaluation may include any recommended changes that may be necessary to strengthen or improve the requirements.
(b) In the case of an agency that does not have an Inspector General, the agency official comparable to an Inspector General shall prepare and submit the annual report, or, if there is no such comparable official, the head of the agency shall prepare and submit the annual report.
(c) The annual report shall be submitted at the same time the agency submits its annual budget justifications to Congress.
(d) The annual report shall include the following: All alleged violations relating to the agency's covered Federal actions during the year covered by the report, the actions taken by the head of the agency in the year covered by the report with respect to those alleged violations and alleged violations in previous years, and the amounts of civil penalties imposed by the agency in the year covered by the report.
The undersigned certifies, to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions.
(3) The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
The undersigned states, to the best of his or her knowledge and belief, that:
If any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this commitment providing for the United States to insure or guarantee a loan, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions.
Submission of this statement is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required statement shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
This part carries out the portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It also applies the provisions of the Act to cooperative agreements and other financial assistance awards, as a matter of Federal Government policy.
(a) Portions of this part apply to you if you are either—
(1) A recipient of an assistance award from the Department of Education; or
(2) A(n) ED awarding official. (See definitions of award and recipient in §§ 84.605 and 84.660, respectively.)
(b) The following table shows the subparts that apply to you:
| If you are . . . | see subparts . . . |
|---|---|
| (1) A recipient who is not an individual | A, B and E. |
| (2) A recipient who is an individual | A, C and E. |
| (3) A(n) ED awarding official | A, D and E. |
This part does not apply to any award that the ED Deciding Official determines that the application of this part would be inconsistent with the international obligations of the United States or the laws or regulations of a foreign government.
It will affect future contract awards indirectly if you are debarred or suspended for a violation of the requirements of this part, as described in § 84.510(c). However, this part does not apply directly to procurement contracts. The portion of the Drug-Free Workplace Act of 1988 that applies to Federal procurement contracts is carried out through the Federal Acquisition Regulation in chapter 1 of Title 48 of the Code of Federal Regulations (the drug-free workplace coverage currently is in 48 CFR part 23, subpart 23.5).
There are two general requirements if you are a recipient other than an individual.
(a) First, you must make a good faith effort, on a continuing basis, to maintain a drug-free workplace. You must agree to do so as a condition for receiving any award covered by this part. The specific measures that you must take in this regard are described in more detail in subsequent sections of this subpart. Briefly, those measures are to—
(1) Publish a drug-free workplace statement and establish a drug-free awareness program for your employees (see §§ 84.205 through 84.220); and
(2) Take actions concerning employees who are convicted of violating drug statutes in the workplace (see § 84.225).
(b) Second, you must identify all known workplaces under your Federal awards (see § 84.230).
You must publish a statement that—
(a) Tells your employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in your workplace;
(b) Specifies the actions that you will take against employees for violating that prohibition; and
(c) Lets each employee know that, as a condition of employment under any award, he or she:
(1) Will abide by the terms of the statement; and
(2) Must notify you in writing if he or she is convicted for a violation of a criminal drug statute occurring in the workplace and must do so no more than five calendar days after the conviction.
You must require that a copy of the statement described in § 84.205 be given to each employee who will be engaged in the performance of any Federal award.
You must establish an ongoing drug-free awareness program to inform employees about—
(a) The dangers of drug abuse in the workplace;
(b) Your policy of maintaining a drug-free workplace;
(c) Any available drug counseling, rehabilitation, and employee assistance programs; and
(d) The penalties that you may impose upon them for drug abuse violations occurring in the workplace.
If you are a new recipient that does not already have a policy statement as described in § 84.205 and an ongoing awareness program as described in § 84.215, you must publish the statement and establish the program by the time given in the following table:
| If . . . | then you . . . |
|---|---|
| (a) The performance period of the award is less than 30 days | must have the policy statement and program in place as soon as possible, but before the date on which performance is expected to be completed. |
| (b) The performance period of the award is 30 days or more | must have the policy statement and program in place within 30 days after award. |
| (c) You believe there are extraordinary circumstances that will require more than 30 days for you to publish the policy statement and establish the awareness program | may ask the ED awarding official to give you more time to do so. The amount of additional time, if any, to be given is at the discretion of the awarding official. |
There are two actions you must take if an employee is convicted of a drug violation in the workplace:
(a) First, you must notify Federal agencies if an employee who is engaged in the performance of an award informs you about a conviction, as required by § 84.205(c)(2), or you otherwise learn of the conviction. Your notification to the Federal agencies must—
(1) Be in writing;
(2) Include the employee's position title;
(3) Include the identification number(s) of each affected award;
(4) Be sent within ten calendar days after you learn of the conviction; and
(5) Be sent to every Federal agency on whose award the convicted employee was working. It must be sent to every awarding official or his or her official designee, unless the Federal agency has specified a central point for the receipt of the notices.
(b) Second, within 30 calendar days of learning about an employee's conviction, you must either—
(1) Take appropriate personnel action against the employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973 (29 U.S.C. 794), as amended; or
(2) Require the employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for these purposes by a Federal, State or local health, law enforcement, or other appropriate agency.
(a) You must identify all known workplaces under each ED award. A failure to do so is a violation of your drug-free workplace requirements. You may identify the workplaces—
(1) To the ED official that is making the award, either at the time of application or upon award; or
(2) In documents that you keep on file in your offices during the performance of the award, in which case you must make the information available for inspection upon request by ED officials or their designated representatives.
(b) Your workplace identification for an award must include the actual address of buildings (or parts of buildings) or other sites where work under the award takes place. Categorical descriptions may be used (e.g., all vehicles of a mass transit authority or State highway department while in operation, State employees in each local unemployment office, performers in concert halls or radio studios).
(c) If you identified workplaces to the ED awarding official at the time of application or award, as described in paragraph (a)(1) of this section, and any workplace that you identified changes during the performance of the award, you must inform the ED awarding official.
As a condition of receiving a(n) ED award, if you are an individual recipient, you must agree that—
(a) You will not engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance in conducting any activity related to the award; and
(b) If you are convicted of a criminal drug offense resulting from a violation occurring during the conduct of any award activity, you will report the conviction:
(1) In writing.
(2) Within 10 calendar days of the conviction.
(3) To the ED awarding official or other designee for each award that you currently have, unless § 84.301 or the award document designates a central point for the receipt of the notices. When notice is made to a central point, it must include the identification number(s) of each affected award.
As a(n) ED awarding official, you must obtain each recipient's agreement, as a condition of the award, to comply with the requirements in—
(a) Subpart B of this part, if the recipient is not an individual; or
(b) Subpart C of this part, if the recipient is an individual.
A recipient other than an individual is in violation of the requirements of this part if the ED Deciding Official determines, in writing, that—
(a) The recipient has violated the requirements of subpart B of this part; or
(b) The number of convictions of the recipient's employees for violating criminal drug statutes in the workplace is large enough to indicate that the recipient has failed to make a good faith effort to provide a drug-free workplace.
An individual recipient is in violation of the requirements of this part if the ED Deciding Official determines, in writing, that—
(a) The recipient has violated the requirements of subpart C of this part; or
(b) The recipient is convicted of a criminal drug offense resulting from a violation occurring during the conduct of any award activity.
If a recipient is determined to have violated this part, as described in § 84.500 or § 84.505, the Department of Education may take one or more of the following actions—
(a) Suspension of payments under the award;
(b) Suspension or termination of the award; and
(c) Suspension or debarment of the recipient under 34 CFR Part 85, for a period not to exceed five years.
The ED Deciding Official may waive with respect to a particular award, in writing, a suspension of payments under an award, suspension or termination of an award, or suspension or debarment of a recipient if the ED Deciding Official determines that such a waiver would be in the public interest. This exception authority cannot be delegated to any other official.
Award means an award of financial assistance by the Department of Education or other Federal agency directly to a recipient.
(a) The term award includes:
(1) A Federal grant or cooperative agreement, in the form of money or property in lieu of money.
(2) A block grant or a grant in an entitlement program, whether or not the grant is exempted from coverage under the Governmentwide rule 34 CFR Part 85 that implements OMB Circular A-102 (for availability, see 5 CFR 1310.3) and specifies uniform administrative requirements.
(b) The term award does not include:
(1) Technical assistance that provides services instead of money.
(2) Loans.
(3) Loan guarantees.
(4) Interest subsidies.
(5) Insurance.
(6) Direct appropriations.
(7) Veterans' benefits to individuals (i.e., any benefit to veterans, their families, or survivors by virtue of the service of a veteran in the Armed Forces of the United States).
Controlled substance means a controlled substance in schedules I through V of the Controlled Substances Act (21 U.S.C. 812), and as further defined by regulation at 21 CFR 1308.11 through 1308.15.
Conviction means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes.
Cooperative agreement means an award of financial assistance that, consistent with 31 U.S.C. 6305, is used to enter into the same kind of relationship as a grant (see definition of grant in § 84.650), except that substantial involvement is expected between the Federal agency and the recipient when carrying out the activity contemplated by the award. The term does not include cooperative research and development agreements as defined in 15 U.S.C. 3710a.
Criminal drug statute means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance.
Debarment means an action taken by a Federal agency to prohibit a recipient from participating in Federal Government procurement contracts and covered nonprocurement transactions. A recipient so prohibited is debarred, in accordance with the Federal Acquisition Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and the common rule, Government-wide Debarment and Suspension (Nonprocurement), that implements Executive Order 12549 and Executive Order 12689.
Drug-free workplace means a site for the performance of work done in connection with a specific award at which employees of the recipient are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance.
(a) Employee means the employee of a recipient directly engaged in the performance of work under the award, including—
(1) All direct charge employees;
(2) All indirect charge employees, unless their impact or involvement in the performance of work under the award is insignificant to the performance of the award; and
(3) Temporary personnel and consultants who are directly engaged in the performance of work under the award and who are on the recipient's payroll.
(b) This definition does not include workers not on the payroll of the recipient (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the payroll; or employees of subrecipients or subcontractors in covered workplaces).
Federal agency or agency means any United States executive department, military department, government corporation, government controlled corporation, any other establishment in the executive branch (including the Executive Office of the President), or any independent regulatory agency.
Grant means an award of financial assistance that, consistent with 31 U.S.C. 6304, is used to enter into a relationship—
(a) The principal purpose of which is to transfer a thing of value to the recipient to carry out a public purpose of support or stimulation authorized by a law of the United States, rather than to acquire property or services for the Federal Government's direct benefit or use; and
(b) In which substantial involvement is not expected between the Federal agency and the recipient when carrying out the activity contemplated by the award.
Individual means a natural person.
Recipient means any individual, corporation, partnership, association, unit of government (except a Federal agency) or legal entity, however organized, that receives an award directly from a Federal agency.
State means any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States.
Suspension means an action taken by a Federal agency that immediately prohibits a recipient from participating in Federal Government procurement contracts and covered nonprocurement transactions for a temporary period, pending completion of an investigation and any judicial or administrative proceedings that may ensue. A recipient so prohibited is suspended, in accordance with the Federal Acquisition Regulation for procurement contracts (48 CFR part 9, subpart 9.4) and the common rule, Government-wide Debarment and Suspension (Nonprocurement), that implements Executive Order 12549 and Executive Order 12689. Suspension of a recipient is a distinct and separate action from suspension of an award or suspension of payments under an award.
The purpose of the Drug and Alcohol Abuse Prevention regulations is to implement section 22 of the Drug-Free Schools and Communities Act Amendments of 1989, which added section 1213 to the Higher Education Act. These amendments require that, as a condition of receiving funds or any other form of financial assistance under any Federal program, an institution of higher education (IHE) must certify that it has adopted and implemented a drug prevention program as described in this part.
The Federal programs covered by this part include—
(a) All programs administered by the Department of Education under which an IHE may receive funds or any other form of Federal financial assistance; and
(b) All programs administered by any other Federal agency under which an IHE may receive funds or any other form of Federal financial assistance.
(a) An IHE shall adopt and implement a drug prevention program as described in § 86.100 to prevent the unlawful possession, use, or distribution of illicit drugs and alcohol by all students and employees on school premises or as part of any of its activities.
(b) An IHE shall provide a written certification that it has adopted and implemented the drug prevention program described in § 86.100.
An IHE shall submit to the Secretary the drug prevention program certification required by § 86.3(b).
(a) An IHE that fails to submit a drug prevention program certification is not eligible to receive funds or any other form of financial assistance under any Federal program.
(b) The effect of loss of eligibility to receive funds or any other form of Federal financial assistance is determined by the statute and regulations governing the Federal programs under which an IHE receives or desires to receive assistance.
(a) After October 1, 1990, except as provided in paragraph (b) of this section, an IHE is not eligible to receive funds or any other form of financial assistance under any Federal program until the IHE has submitted a drug prevention program certification.
(b)(1) The Secretary may allow an IHE until not later than April 1, 1991, to submit the drug prevention program certification, only if the IHE establishes that it has a need, other than administrative convenience, for more time to adopt and implement its drug prevention program.
(2) An IHE that wants to receive an extension of time to submit its drug prevention program certification shall submit a written justification to the Secretary that—
(i) Describes each part of its drug prevention program, whether in effect or planned;
(ii) Provides a schedule to complete and implement its drug prevention program; and
(iii) Explains why it has a need, other than administrative convenience, for more time to adopt and implement its drug prevention program.
(3) An IHE shall submit a request for an extension to the Secretary.
(a) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR part 77:
(b) Other definitions. The following terms used in this part are defined as follows:
Compliance agreement means an agreement between the Secretary and an IHE that is not in full compliance with its drug prevention program certification. The agreement specifies the steps the IHE will take to comply fully with its drug prevention program certification, and provides a schedule for the accomplishment of those steps. A compliance agreement does not excuse or remedy past violations of this part.
Institution of higher education means—
(1) An institution of higher education, as defined in 34 CFR 600.4;
(2) A proprietary institution of higher education, as defined in 34 CFR 600.5;
(3) A postsecondary vocational institution, as defined in 34 CFR 600.6; and
(4) A vocational school, as defined in 34 CFR 600.7.
The IHE's drug prevention program must, at a minimum, include the following:
(a) The annual distribution in writing to each employee, and to each student who is taking one or more classes for any type of academic credit except for continuing education units, regardless of the length of the student's program of study, of—
(1) Standards of conduct that clearly prohibit, at a minimum, the unlawful possession, use, or distribution of illicit drugs and alcohol by students and employees on its property or as part of any of its activities;
(2) A description of the applicable legal sanctions under local, State, or Federal law for the unlawful possession or distribution of illicit drugs and alcohol;
(3) A description of the health risks associated with the use of illicit drugs and the abuse of alcohol;
(4) A description of any drug or alcohol counseling, treatment, or rehabilitation or re-entry programs that are available to employees or students; and
(5) A clear statement that the IHE will impose disciplinary sanctions on students and employees (consistent with local, State, and Federal law), and a description of those sanctions, up to and including expulsion or termination of employment and referral for prosecution, for violations of the standards of conduct required by paragraph (a)(1) of this section. For the purpose of this section, a disciplinary sanction may include the completion of an appropriate rehabilitation program.
(b) A biennial review by the IHE of its program to—
(1) Determine its effectiveness and implement changes to the program if they are needed; and
(2) Ensure that the disciplinary sanctions described in paragraph (a)(5) of this section are consistently enforced.
The Secretary annually reviews a representative sample of IHE drug prevention programs.
If the Secretary selects an IHE for review under § 86.101, the IHE shall provide the Secretary access to personnel, records, documents and any other necessary information requested by the Secretary to review the IHE's adoption and implementation of its drug prevention program.
(a) Each IHE that provides the drug prevention program certification required by § 86.3(b) shall, upon request, make available to the Secretary and the public a copy of each item required by § 86.100(a) as well as the results of the biennial review required by § 86.100(b).
(b)(1) An IHE shall retain the following records for three years after the fiscal year in which the record was created:
(i) The items described in paragraph (a) of this section.
(ii) Any other records reasonably related to the IHE's compliance with the drug prevention program certification.
(2) If any litigation, claim, negotiation, audit, review, or other action involving the records has been started before expiration of the three-year period, the IHE shall retain the records until completion of the action and resolution of all issues that arise from it, or until the end of the regular three-year period, whichever is later.
An IHE violates this part by—
(a) Receiving any form of Federal financial assistance after becoming ineligible to receive that assistance because of failure to submit a certification in accordance with § 86.3(b); or
(b) Violating its certification. Violation of a certification includes failure of an IHE to—
(1) Adopt or implement its drug prevention program; or
(2) Consistently enforce its disciplinary sanctions for violations by students and employees of the standards of conduct adopted by an IHE under § 86.100(a)(1).
(a) If an IHE violates its certification, the Secretary may issue a response to the IHE. A response may include, but is not limited to—
(1) Provision of information and technical assistance; and
(2) Formulation of a compliance agreement designed to bring the IHE into full compliance with this part as soon as feasible.
(b) If an IHE receives any form of Federal financial assistance without having submitted a certification or violates its certification, the Secretary may impose one or more sanctions on the IHE, including—
(1) Repayment of any or all forms of Federal financial assistance received by the IHE when it was in violation of this part; and
(2) The termination of any or all forms of Federal financial assistance that—
(i)(A) Except as specified in paragraph (b)(2)(ii) of this section, ends an IHE's eligibility to receive any or all forms of Federal financial assistance. The Secretary specifies which forms of Federal financial assistance would be affected; and
(B) Prohibits an IHE from making any new obligations against Federal funds; and
(ii) For purposes of an IHE's participation in the student financial assistance programs authorized by title IV of the Higher Education Act of 1965 as amended, has the same effect as a termination under 34 CFR 668.94.
(a) The Secretary provides information or technical assistance to an IHE in writing, through site visits, or by other means.
(b) The IHE shall inform the Secretary of any corrective action it has taken within a period specified by the Secretary.
(a) If the Secretary intends to issue a response other than the formulation of a compliance agreement or the provision of information or technical assistance, the Secretary notifies the IHE in writing of—
(1) The Secretary's determination that there are grounds to issue a response other than the formulation of a compliance agreement or providing information or technical assistance; and
(2) The response the Secretary intends to issue.
(b) An IHE may submit written comments to the Secretary on the determination under paragraph (a)(1) of this section and the intended response under paragraph (a)(2) of this section within 30 days after the date the IHE receives the notification of the Secretary's intent to issue a response.
(c) Based on the initial notification and the written comments of the IHE the Secretary makes a final determination and, if appropriate, issues a final response.
(d) The IHE shall inform the Secretary of the corrective action it has taken in order to comply with the terms of the Secretary's response within a period specified by the Secretary.
(e) If an IHE does not comply with the terms of a response issued by the Secretary, the Secretary may issue an additional response or impose a sanction on the IHE in accordance with the procedures in § 86.304.
(a) A designated Department official begins a proceeding for repayment of Federal financial assistance or termination, or both, of an IHE's eligibility for any or all forms of Federal financial assistance by sending the IHE a notice by certified mail with return receipt requested. This notice—
(1) Informs the IHE of the Secretary's intent to demand repayment of Federal financial assistance or to terminate, describes the consequences of that action, and identifies the alleged violations that constitute the basis for the action;
(2) Specifies, as appropriate—
(i) The amount of Federal financial assistance that must be repaid and the date by which the IHE must repay the funds; and
(ii) The proposed effective date of the termination, which must be at least 30 days after the date of receipt of the notice of intent; and
(3) Informs the IHE that the repayment of Federal financial assistance will not be required or that the termination will not be effective on the date specified in the notice if the designated Department official receives, within a 30-day period beginning on the date the IHE receives the notice of intent described in this paragraph—
(i) Written material indicating why the repayment of Federal financial assistance or termination should not take place; or
(ii) A request for a hearing that contains a concise statement of disputed issues of law and fact, the IHE's position with respect to these issues, and, if appropriate, a description of which Federal financial assistance the IHE contends need not be repaid.
(b) If the IHE does not request a hearing but submits written material—
(1) The IHE receives no additional opportunity to request or receive a hearing; and
(2) The designated Department official, after considering the written material, notifies the IHE in writing whether—
(i) Any or all of the Federal financial assistance must be repaid; or
(ii) The proposed termination is dismissed or imposed as of a specified date.
(a) The procedures in this subpart are the exclusive procedures governing appeals of decisions by a designated Department official to demand the repayment of Federal financial assistance or terminate the eligibility of an IHE to receive some or all forms of Federal financial assistance for violations of this part.
(b) An Administrative Law Judge (ALJ) hears appeals under this subpart.
(a) The ALJ regulates the course of the proceeding and conduct of the parties during the hearing and takes all steps necessary to conduct a fair and impartial proceeding.
(b) The ALJ is not authorized to issue subpoenas.
(c) The ALJ takes whatever measures are appropriate to expedite the proceeding. These measures may include, but are not limited to—
(1) Scheduling of conferences;
(2) Setting time limits for hearings and submission of written documents; and
(3) Terminating the hearing and issuing a decision against a party if that party does not meet those time limits.
(d) The scope of the ALJ's review is limited to determining whether—
(1) The IHE received any form of Federal financial assistance after becoming ineligible to receive that assistance because of failure to submit a certification; or
(2) The IHE violated its certification.
(a) Only the designated Department official and the IHE that is the subject of the proposed termination or recovery of Federal financial assistance may be parties in a hearing under this subpart.
(b) Except as provided in this subpart, no person or organization other than a party may participate in a hearing under this subpart.
A party may be represented by counsel.
(a) A party may not communicate with an ALJ on any fact at issue in the case or on any matter relevant to the merits of the case unless the other party is given notice and an opportunity to participate.
(b)(1) To obtain an order or ruling from an ALJ, a party shall make a motion to the ALJ.
(2) Except for a request for an extension of time, a motion must be made in writing unless the parties appear in person or participate in a conference telephone call. The ALJ may require a party to reduce an oral motion to writing.
(3) If a party files a written motion, the party shall do so in accordance with § 86.405.
(4) Except for a request for an extension of time, the ALJ may not grant a party's written motion without the consent of the other party unless the other party has had at least 21 days from the date of service of the motion to respond. However, the ALJ may deny a motion without awaiting a response.
(5) The date of service of a motion is determined by the standards for determining a filing date in § 86.405(d).
(a) Any written submission under this subpart must be filed by hand-delivery, by mail, or by facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(b) If a party files a brief or other document, the party shall serve a copy of the filed material on the other party on the filing date by hand-delivery or by mail. If agreed upon by the parties, service of a document may be made upon the other party by facsimile transmission.
(c) Any written submission must be accompanied by a statement certifying the date that the filed material was filed and served on the other party.
(d)(1) The filing date for a written submission is the date the document is—
(i) Hand-delivered;
(ii) Mailed; or
(iii) Sent by facsimile transmission.
(2) If a scheduled filing date falls on a Saturday, Sunday, or Federal holiday, the filing deadline is the next Federal business day.
(e) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department.
(f) If a document is filed by facsimile transmission, the Secretary or the designated Department official, as applicable, may require the filing of a follow-up hard copy by hand-delivery or by mail within a reasonable period of time.
(a) If the parties to a case file a joint motion requesting a stay of the proceedings for settlement negotiations or for the parties to obtain approval of a settlement agreement, the ALJ grants the stay.
(b) The following are not admissible in any proceeding under this part:
(1) Evidence of conduct during settlement negotiations.
(2) Statements made during settlement negotiations.
(3) Terms of settlement offers.
(c) The parties may not disclose the contents of settlement negotiations to the ALJ. If the parties enter into a settlement agreement and file a joint motion to dismiss the case, the ALJ grants the motion.
(a) If the IHE requests a hearing by the time specified in § 86.304(a)(3), the designated Department official sets the date and the place.
(b)(1) The date is at least 15 days after the designated Department official receives the request and no later than 45 days after the request for hearing is received by the Department.
(2) On the motion of either or both parties, the ALJ may extend the period before the hearing is scheduled beyond the 45 days specified in paragraph (b)(1) of this section.
(c) No termination takes effect until after a hearing is held and a decision is issued by the Department.
(d) With the approval of the ALJ and the consent of the designated Department official and the IHE, any time schedule specified in this section may be shortened.
(a)(1) A pre-hearing conference may be convened by the ALJ if the ALJ thinks that such a conference would be useful, or if requested by—
(i) The designated Department official; or
(ii) The IHE.
(2) The purpose of a pre-hearing conference is to allow the parties to settle, narrow, or clarify the dispute.
(b) A pre-hearing conference may consist of—
(1) A conference telephone call;
(2) An informal meeting; or
(3) The submission and exchange of written material.
(a) A hearing on the record is an orderly presentation of arguments and evidence conducted by an ALJ.
(b) An ALJ conducts the hearing entirely on the basis of briefs and other written submissions unless—
(1) The ALJ determines, after reviewing all appropriate submissions, that an evidentiary hearing is needed to resolve a material factual issue in dispute; or
(2) The ALJ determines, after reviewing all appropriate submissions, that oral argument is needed to clarify the issues in the case.
(c) The hearing process may be expedited as agreed by the ALJ, the designated Department official, and the IHE. Procedures to expedite may include, but are not limited to, the following:
(1) A restriction on the number or length of submissions.
(2) The conduct of the hearing by telephone conference call.
(3) A review limited to the written record.
(4) A certification by the parties to facts and legal authorities not in dispute.
(d)(1) The formal rules of evidence and procedures applicable to proceedings in a court of law are not applicable.
(2) The designated Department official has the burden of persuasion in any proceeding under this subpart.
(3)(i) The parties may agree to exchange relevant documents and information.
(ii) The ALJ may not order discovery, as provided for under the Federal Rules of Civil Procedure, or any other exchange between the parties of documents or information.
(4) The ALJ accepts only evidence that is relevant and material to the proceeding and is not unduly repetitious.
(e) The ALJ makes a transcribed record of any evidentiary hearing or oral argument that is held, and makes the record available to—
(1) The designated Department official; and
(2) The IHE on its request and upon payment of a fee comparable to that prescribed under the Department of Education Freedom of Information Act regulations (34 CFR part 5).
(a)(1) The ALJ issues a written decision to the IHE, the designated Department official, and the Secretary by certified mail, return receipt requested, within 30 days after—
(i) The last brief is filed;
(ii) The last day of the hearing if one is held; or
(iii) The date on which the ALJ terminates the hearing in accordance with § 86.401(c)(3).
(2) The ALJ's decision states whether the violation or violations contained in the Secretary's notification occurred, and articulates the reasons for the ALJ's finding.
(3) The ALJ bases findings of fact only on evidence in the hearing record and on matters given judicial notice.
(b)(1) The ALJ's decision is the final decision of the agency. However, the Secretary reviews the decision on request of either party, and may review the decision on his or her own initiative.
(2) If the Secretary decides to review the decision on his or her own initiative, the Secretary informs the parties of his or her intention to review by written notice sent within 15 days of the Secretary's receipt of the ALJ's decision.
(c)(1) Either party may request review by the Secretary by submitting a brief or written materials to the Secretary within 20 days of the party's receipt of the ALJ's decision. The submission must explain why the decision of the ALJ should be modified, reversed, or remanded. The other party shall respond within 20 days of receipt of the brief or written materials filed by the opposing party.
(2) Neither party may introduce new evidence on review.
(d) The decision of the ALJ ordering the repayment of Federal financial assistance or terminating the eligibility of an IHE does not take effect pending the Secretary's review.
(e)(1) The Secretary reviews the ALJ's decision considering only evidence introduced into the record.
(2) The Secretary's decision may affirm, modify, reverse or remand the ALJ's decision and includes a statement of reasons for the decision.
(a)(1) An IHE whose eligibility to receive any or all forms of Federal financial assistance has been terminated may file with the Department a request for reinstatement as an eligible entity no earlier than 18 months after the effective date of the termination.
(2) In order to be reinstated, the IHE must demonstrate that it has corrected the violation or violations on which the termination was based, and that it has met any repayment obligation imposed upon it under § 86.301(b)(1) of this part.
(b) In addition to the requirements of paragraph (a) of this section, the IHE shall comply with the requirements and procedures for reinstatement of eligibility applicable to any Federal program under which it desires to receive Federal financial assistance.
(a) Except as detailed in § 97.104, this policy applies to all research involving human subjects conducted, supported, or otherwise subject to regulation by any Federal department or agency that takes appropriate administrative action to make the policy applicable to such research. This includes research conducted by Federal civilian employees or military personnel, except that each department or agency head may adopt such procedural modifications as may be appropriate from an administrative standpoint. It also includes research conducted, supported, or otherwise subject to regulation by the Federal Government outside the United States. Institutions that are engaged in research described in this paragraph and institutional review boards (IRBs) reviewing research that is subject to this policy must comply with this policy.
(b) [Reserved]
(c) Department or agency heads retain final judgment as to whether a particular activity is covered by this policy and this judgment shall be exercised consistent with the ethical principles of the Belmont Report.
(d) Department or agency heads may require that specific research activities or classes of research activities conducted, supported, or otherwise subject to regulation by the Federal department or agency but not otherwise covered by this policy comply with some or all of the requirements of this policy.
(e) Compliance with this policy requires compliance with pertinent federal laws or regulations that provide additional protections for human subjects.
(f) This policy does not affect any state or local laws or regulations (including tribal law passed by the official governing body of an American Indian or Alaska Native tribe) that may otherwise be applicable and that provide additional protections for human subjects.
(g) This policy does not affect any foreign laws or regulations that may otherwise be applicable and that provide additional protections to human subjects of research.
(h) When research covered by this policy takes place in foreign countries, procedures normally followed in the foreign countries to protect human subjects may differ from those set forth in this policy. In these circumstances, if a department or agency head determines that the procedures prescribed by the institution afford protections that are at least equivalent to those provided in this policy, the department or agency head may approve the substitution of the foreign procedures in lieu of the procedural requirements provided in this policy. Except when otherwise required by statute, Executive Order, or the department or agency head, notices of these actions as they occur will be published in the
(i) Unless otherwise required by law, department or agency heads may waive the applicability of some or all of the provisions of this policy to specific research activities or classes of research activities otherwise covered by this policy, provided the alternative procedures to be followed are consistent with the principles of the Belmont Report.
(j) Federal guidance on the requirements of this policy shall be issued only after consultation, for the purpose of harmonization (to the extent appropriate), with other Federal departments and agencies that have adopted this policy, unless such consultation is not feasible.
(k) [Reserved]
(l) Pre-2018 Requirements. Compliance dates and transition provisions:
(1) For purposes of this section, the pre-2018 Requirements means this subpart as published in the 2016 edition of the Code of Federal Regulations.
(2) 2018 Requirements. For purposes of this section, the 2018 Requirements means the Federal Policy for the Protection of Human Subjects requirements contained in this subpart. The general compliance date for the 2018 Requirements is January 21, 2019. The compliance date for § 97.114(b) (cooperative research) of the 2018 Requirements is January 20, 2020.
(3) Research subject to pre-2018 requirements. The pre-2018 Requirements shall apply to the following research, unless the research is transitioning to comply with the 2018 Requirements in accordance with paragraph (l)(4) of this section:
(i) Research initially approved by an IRB under the pre-2018 Requirements before January 21, 2019;
(ii) Research for which IRB review was waived pursuant to § 97.101(i) of the pre-2018 Requirements before January 21, 2019; and
(iii) Research for which a determination was made that the research was exempt under § 97.101(b) of the pre-2018 Requirements before January 21, 2019.
(4) Transitioning research. If, on or after July 19, 2018, an institution planning or engaged in research otherwise covered by paragraph (l)(3) of this section determines that such research instead will transition to comply with the 2018 Requirements, the institution or an IRB must document and date such determination.
(i) If the determination to transition is documented between July 19, 2018, and January 20, 2019, the research shall:
(A) Beginning on the date of such documentation through January 20, 2019, comply with the pre-2018 Requirements, except that the research shall comply with the following:
(1) Section 97.102(l) of the 2018 Requirements (definition of research) (instead of § 97.102(d) of the pre-2018 Requirements);
(2) Section 97.103(d) of the 2018 Requirements (revised certification requirement that eliminates IRB review of application or proposal) (instead of § 97.103(f) of the pre-2018 Requirements); and
(3) Section 97.109(f)(1)(i) and (iii) of the 2018 Requirements (exceptions to mandated continuing review) (instead of § 97.103(b), as related to the requirement for continuing review, and in addition to § 97.109, of the pre-2018 Requirements); and
(B) Beginning on January 21, 2019, comply with the 2018 Requirements.
(ii) If the determination to transition is documented on or after January 21, 2019, the research shall, beginning on the date of such documentation, comply with the 2018 Requirements.
(5) Research subject to 2018 Requirements. The 2018 Requirements shall apply to the following research:
(i) Research initially approved by an IRB on or after January 21, 2019;
(ii) Research for which IRB review is waived pursuant to paragraph (i) of this section on or after January 21, 2019; and
(iii) Research for which a determination is made that the research is exempt on or after January 21, 2019.
(m) Severability: Any provision of this part held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, shall be construed so as to continue to give maximum effect to the provision permitted by law, unless such holding shall be one of utter invalidity or unenforceability, in which event the provision shall be severable from this part and shall not affect the remainder thereof or the application of the provision to other persons not similarly situated or to other dissimilar circumstances.
(a) Certification means the official notification by the institution to the supporting Federal department or agency component, in accordance with the requirements of this policy, that a research project or activity involving human subjects has been reviewed and approved by an IRB in accordance with an approved assurance.
(b) Clinical trial means a research study in which one or more human subjects are prospectively assigned to one or more interventions (which may include placebo or other control) to evaluate the effects of the interventions on biomedical or behavioral health-related outcomes.
(c) Department or agency head means the head of any Federal department or agency, for example, the Secretary of HHS, and any other officer or employee of any Federal department or agency to whom the authority provided by these regulations to the department or agency head has been delegated.
(d) Federal department or agency refers to a federal department or agency (the department or agency itself rather than its bureaus, offices or divisions) that takes appropriate administrative action to make this policy applicable to the research involving human subjects it conducts, supports, or otherwise regulates (e.g., the U.S. Department of Health and Human Services, the U.S. Department of Defense, or the Central Intelligence Agency).
(e)(1) Human subject means a living individual about whom an investigator (whether professional or student) conducting research:
(i) Obtains information or biospecimens through intervention or interaction with the individual, and uses, studies, or analyzes the information or biospecimens; or (ii) Obtains, uses, studies, analyzes, or generates identifiable private information or identifiable biospecimens.
(2) Intervention includes both physical procedures by which information or biospecimens are gathered (e.g., venipuncture) and manipulations of the subject or the subject's environment that are performed for research purposes.
(3) Interaction includes communication or interpersonal contact between investigator and subject.
(4) Private information includes information about behavior that occurs in a context in which an individual can reasonably expect that no observation or recording is taking place, and information that has been provided for specific purposes by an individual and that the individual can reasonably expect will not be made public (e.g., a medical record).
(5) Identifiable private information is private information for which the identity of the subject is or may readily be ascertained by the investigator or associated with the information.
(6) An identifiable biospecimen is a biospecimen for which the identity of the subject is or may readily be ascertained by the investigator or associated with the biospecimen.
(7) Federal departments or agencies implementing this policy shall:
(i) Upon consultation with appropriate experts (including experts in data matching and re-identification), reexamine the meaning of “identifiable private information,” as defined in paragraph (e)(5) of this section, and “identifiable biospecimen,” as defined in paragraph (e)(6) of this section. This reexamination shall take place within 1 year and regularly thereafter (at least every 4 years). This process will be conducted by collaboration among the Federal departments and agencies implementing this policy. If appropriate and permitted by law, such Federal departments and agencies may alter the interpretation of these terms, including through the use of guidance.
(ii) Upon consultation with appropriate experts, assess whether there are analytic technologies or techniques that should be considered by investigators to generate “identifiable private information,” as defined in paragraph (e)(5) of this section, or an “identifiable biospecimen,” as defined in paragraph (e)(6) of this section. This assessment shall take place within 1 year and regularly thereafter (at least every 4 years). This process will be conducted by collaboration among the Federal departments and agencies implementing this policy. Any such technologies or techniques will be included on a list of technologies or techniques that produce identifiable private information or identifiable biospecimens. This list will be published in the
(f) Institution means any public or private entity, or department or agency (including federal, state, and other agencies).
(g) IRB means an institutional review board established in accord with and for the purposes expressed in this policy.
(h) IRB approval means the determination of the IRB that the research has been reviewed and may be conducted at an institution within the constraints set forth by the IRB and by other institutional and federal requirements.
(i) Legally authorized representative means an individual or judicial or other body authorized under applicable law to consent on behalf of a prospective subject to the subject's participation in the procedure(s) involved in the research. If there is no applicable law addressing this issue, legally authorized representative means an individual recognized by institutional policy as acceptable for providing consent in the nonresearch context on behalf of the prospective subject to the subject's participation in the procedure(s) involved in the research.
(j) Minimal risk means that the probability and magnitude of harm or discomfort anticipated in the research are not greater in and of themselves than those ordinarily encountered in daily life or during the performance of routine physical or psychological examinations or tests.
(k) Public health authority means an agency or authority of the United States, a state, a territory, a political subdivision of a state or territory, an Indian tribe, or a foreign government, or a person or entity acting under a grant of authority from or contract with such public agency, including the employees or agents of such public agency or its contractors or persons or entities to whom it has granted authority, that is responsible for public health matters as part of its official mandate.
(l) Research means a systematic investigation, including research development, testing, and evaluation, designed to develop or contribute to generalizable knowledge. Activities that meet this definition constitute research for purposes of this policy, whether or not they are conducted or supported under a program that is considered research for other purposes. For example, some demonstration and service programs may include research activities. For purposes of this part, the following activities are deemed not to be research:
(1) Scholarly and journalistic activities (e.g., oral history, journalism, biography, literary criticism, legal research, and historical scholarship), including the collection and use of information, that focus directly on the specific individuals about whom the information is collected.
(2) Public health surveillance activities, including the collection and testing of information or biospecimens, conducted, supported, requested, ordered, required, or authorized by a public health authority. Such activities are limited to those necessary to allow a public health authority to identify, monitor, assess, or investigate potential public health signals, onsets of disease outbreaks, or conditions of public health importance (including trends, signals, risk factors, patterns in diseases, or increases in injuries from using consumer products). Such activities include those associated with providing timely situational awareness and priority setting during the course of an event or crisis that threatens public health (including natural or man-made disasters).
(3) Collection and analysis of information, biospecimens, or records by or for a criminal justice agency for activities authorized by law or court order solely for criminal justice or criminal investigative purposes.
(4) Authorized operational activities (as determined by each agency) in support of intelligence, homeland security, defense, or other national security missions.
(m) Written, or in writing, for purposes of this part, refers to writing on a tangible medium (e.g., paper) or in an electronic format.
(a) Each institution engaged in research that is covered by this policy, with the exception of research eligible for exemption under § 97.104, and that is conducted or supported by a Federal department or agency, shall provide written assurance satisfactory to the department or agency head that it will comply with the requirements of this policy. In lieu of requiring submission of an assurance, individual department or agency heads shall accept the existence of a current assurance, appropriate for the research in question, on file with the Office for Human Research Protections, HHS, or any successor office, and approved for Federal-wide use by that office. When the existence of an HHS-approved assurance is accepted in lieu of requiring submission of an assurance, reports (except certification) required by this policy to be made to department and agency heads shall also be made to the Office for Human Research Protections, HHS, or any successor office. Federal departments and agencies will conduct or support research covered by this policy only if the institution has provided an assurance that it will comply with the requirements of this policy, as provided in this section, and only if the institution has certified to the department or agency head that the research has been reviewed and approved by an IRB (if such certification is required by § 97.103(d)).
(b) The assurance shall be executed by an individual authorized to act for the institution and to assume on behalf of the institution the obligations imposed by this policy and shall be filed in such form and manner as the department or agency head prescribes.
(c) The department or agency head may limit the period during which any assurance shall remain effective or otherwise condition or restrict the assurance.
(d) Certification is required when the research is supported by a Federal department or agency and not otherwise waived under § 97.101(i) or exempted under § 97.104. For such research, institutions shall certify that each proposed research study covered by the assurance and this section has been reviewed and approved by the IRB. Such certification must be submitted as prescribed by the Federal department or agency component supporting the research. Under no condition shall research covered by this section be initiated prior to receipt of the certification that the research has been reviewed and approved by the IRB.
(e) For nonexempt research involving human subjects covered by this policy (or exempt research for which limited IRB review takes place pursuant to § 97.104(d)(2)(iii), (d)(3)(i)(C), or (d)(7) or (8)) that takes place at an institution in which IRB oversight is conducted by an IRB that is not operated by the institution, the institution and the organization operating the IRB shall document the institution's reliance on the IRB for oversight of the research and the responsibilities that each entity will undertake to ensure compliance with the requirements of this policy (e.g., in a written agreement between the institution and the IRB, by implementation of an institution-wide policy directive providing the allocation of responsibilities between the institution and an IRB that is not affiliated with the institution, or as set forth in a research protocol).
(a) Unless otherwise required by law or by department or agency heads, research activities in which the only involvement of human subjects will be in one or more of the categories in paragraph (d) of this section are exempt from the requirements of this policy, except that such activities must comply with the requirements of this section and as specified in each category.
(b) Use of the exemption categories for research subject to the requirements of subparts B, C, and D: Application of the exemption categories to research subject to the requirements of 45 CFR part 46, subparts B, C, and D, is as follows:
(1) Subpart B. Each of the exemptions at this section may be applied to research subject to subpart B if the conditions of the exemption are met.
(2) Subpart C. The exemptions at this section do not apply to research subject to subpart C, except for research aimed at involving a broader subject population that only incidentally includes prisoners.
(3) Subpart D. The exemptions at paragraphs (d)(1), (4), (5), (6), (7), and (8) of this section may be applied to research subject to subpart D if the conditions of the exemption are met. Paragraphs (d)(2)(i) and (ii) of this section only may apply to research subject to subpart D involving educational tests or the observation of public behavior when the investigator(s) do not participate in the activities being observed. Paragraph (d)(2)(iii) of this section may not be applied to research subject to subpart D.
(c) [Reserved]
(d) Except as described in paragraph (a) of this section, the following categories of human subjects research are exempt from this policy:
(1) Research, conducted in established or commonly accepted educational settings, that specifically involves normal educational practices that are not likely to adversely impact students' opportunity to learn required educational content or the assessment of educators who provide instruction. This includes most research on regular and special education instructional strategies, and research on the effectiveness of or the comparison among instructional techniques, curricula, or classroom management methods.
(2) Research that only includes interactions involving educational tests (cognitive, diagnostic, aptitude, achievement), survey procedures, interview procedures, or observation of public behavior (including visual or auditory recording) if at least one of the following criteria is met:
(i) The information obtained is recorded by the investigator in such a manner that the identity of the human subjects cannot readily be ascertained, directly or through identifiers linked to the subjects;
(ii) Any disclosure of the human subjects' responses outside the research would not reasonably place the subjects at risk of criminal or civil liability or be damaging to the subjects' financial standing, employability, educational advancement, or reputation; or
(iii) The information obtained is recorded by the investigator in such a manner that the identity of the human subjects can readily be ascertained, directly or through identifiers linked to the subjects, and an IRB conducts a limited IRB review to make the determination required by § 97.111(a)(7).
(3)(i) Research involving benign behavioral interventions in conjunction with the collection of information from an adult subject through verbal or written responses (including data entry) or audiovisual recording if the subject prospectively agrees to the intervention and information collection and at least one of the following criteria is met:
(A) The information obtained is recorded by the investigator in such a manner that the identity of the human subjects cannot readily be ascertained, directly or through identifiers linked to the subjects;
(B) Any disclosure of the human subjects' responses outside the research would not reasonably place the subjects at risk of criminal or civil liability or be damaging to the subjects' financial standing, employability, educational advancement, or reputation; or
(C) The information obtained is recorded by the investigator in such a manner that the identity of the human subjects can readily be ascertained, directly or through identifiers linked to the subjects, and an IRB conducts a limited IRB review to make the determination required by § 97.111(a)(7).
(ii) For the purpose of this provision, benign behavioral interventions are brief in duration, harmless, painless, not physically invasive, not likely to have a significant adverse lasting impact on the subjects, and the investigator has no reason to think the subjects will find the interventions offensive or embarrassing. Provided all such criteria are met, examples of such benign behavioral interventions would include having the subjects play an online game, having them solve puzzles under various noise conditions, or having them decide how to allocate a nominal amount of received cash between themselves and someone else.
(iii) If the research involves deceiving the subjects regarding the nature or purposes of the research, this exemption is not applicable unless the subject authorizes the deception through a prospective agreement to participate in research in circumstances in which the subject is informed that he or she will be unaware of or misled regarding the nature or purposes of the research.
(4) Secondary research for which consent is not required: Secondary research uses of identifiable private information or identifiable biospecimens, if at least one of the following criteria is met:
(i) The identifiable private information or identifiable biospecimens are publicly available;
(ii) Information, which may include information about biospecimens, is recorded by the investigator in such a manner that the identity of the human subjects cannot readily be ascertained directly or through identifiers linked to the subjects, the investigator does not contact the subjects, and the investigator will not re-identify subjects;
(iii) The research involves only information collection and analysis involving the investigator's use of identifiable health information when that use is regulated under 45 CFR parts 160 and 164, subparts A and E, for the purposes of “health care operations” or “research” as those terms are defined at 45 CFR 164.501 or for “public health activities and purposes” as described under 45 CFR 164.512(b); or
(iv) The research is conducted by, or on behalf of, a Federal department or agency using government-generated or government-collected information obtained for nonresearch activities, if the research generates identifiable private information that is or will be maintained on information technology that is subject to and in compliance with section 208(b) of the E-Government Act of 2002, 44 U.S.C. 3501 note, if all of the identifiable private information collected, used, or generated as part of the activity will be maintained in systems of records subject to the Privacy Act of 1974, 5 U.S.C. 552a, and, if applicable, the information used in the research was collected subject to the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.
(5) Research and demonstration projects that are conducted or supported by a Federal department or agency, or otherwise subject to the approval of department or agency heads (or the approval of the heads of bureaus or other subordinate agencies that have been delegated authority to conduct the research and demonstration projects), and that are designed to study, evaluate, improve, or otherwise examine public benefit or service programs, including procedures for obtaining benefits or services under those programs, possible changes in or alternatives to those programs or procedures, or possible changes in methods or levels of payment for benefits or services under those programs. Such projects include, but are not limited to, internal studies by Federal employees, and studies under contracts or consulting arrangements, cooperative agreements, or grants. Exempt projects also include waivers of otherwise mandatory requirements using authorities such as sections 1115 and 1115A of the Social Security Act, as amended.
(i) Each Federal department or agency conducting or supporting the research and demonstration projects must establish, on a publicly accessible Federal Web site or in such other manner as the department or agency head may determine, a list of the research and demonstration projects that the Federal department or agency conducts or supports under this provision. The research or demonstration project must be published on this list prior to commencing the research involving human subjects.
(ii) [Reserved]
(6) Taste and food quality evaluation and consumer acceptance studies:
(i) If wholesome foods without additives are consumed, or
(ii) If a food is consumed that contains a food ingredient at or below the level and for a use found to be safe, or agricultural chemical or environmental contaminant at or below the level found to be safe, by the Food and Drug Administration or approved by the Environmental Protection Agency or the Food Safety and Inspection Service of the U.S. Department of Agriculture.
(7) Storage or maintenance for secondary research for which broad consent is required: Storage or maintenance of identifiable private information or identifiable biospecimens for potential secondary research use if an IRB conducts a limited IRB review and makes the determinations required by § 97.111(a)(8).
(8) Secondary research for which broad consent is required: Research involving the use of identifiable private information or identifiable biospecimens for secondary research use, if the following criteria are met:
(i) Broad consent for the storage, maintenance, and secondary research use of the identifiable private information or identifiable biospecimens was obtained in accordance with § 97.116(a)(1) through (4), (a)(6), and (d);
(ii) Documentation of informed consent or waiver of documentation of consent was obtained in accordance with § 97.117;
(iii) An IRB conducts a limited IRB review and makes the determination required by § 97.111(a)(7) and makes the determination that the research to be conducted is within the scope of the broad consent referenced in paragraph (d)(8)(i) of this section; and (iv) The investigator does not include returning individual research results to subjects as part of the study plan. This provision does not prevent an investigator from abiding by any legal requirements to return individual research results.
(a) Each IRB shall have at least five members, with varying backgrounds to promote complete and adequate review of research activities commonly conducted by the institution. The IRB shall be sufficiently qualified through the experience and expertise of its members (professional competence), and the diversity of its members, including race, gender, and cultural backgrounds and sensitivity to such issues as community attitudes, to promote respect for its advice and counsel in safeguarding the rights and welfare of human subjects. The IRB shall be able to ascertain the acceptability of proposed research in terms of institutional commitments (including policies and resources) and regulations, applicable law, and standards of professional conduct and practice. The IRB shall therefore include persons knowledgeable in these areas. If an IRB regularly reviews research that involves a category of subjects that is vulnerable to coercion or undue influence, such as children, prisoners, individuals with impaired decision-making capacity, or economically or educationally disadvantaged persons, consideration shall be given to the inclusion of one or more individuals who are knowledgeable about and experienced in working with these categories of subjects.
(b) Each IRB shall include at least one member whose primary concerns are in scientific areas and at least one member whose primary concerns are in nonscientific areas.
(c) Each IRB shall include at least one member who is not otherwise affiliated with the institution and who is not part of the immediate family of a person who is affiliated with the institution.
(d) No IRB may have a member participate in the IRB's initial or continuing review of any project in which the member has a conflicting interest, except to provide information requested by the IRB.
(e) An IRB may, in its discretion, invite individuals with competence in special areas to assist in the review of issues that require expertise beyond or in addition to that available on the IRB. These individuals may not vote with the IRB.
(a) In order to fulfill the requirements of this policy each IRB shall:
(1) Have access to meeting space and sufficient staff to support the IRB's review and recordkeeping duties;
(2) Prepare and maintain a current list of the IRB members identified by name; earned degrees; representative capacity; indications of experience such as board certifications or licenses sufficient to describe each member's chief anticipated contributions to IRB deliberations; and any employment or other relationship between each member and the institution, for example, full-time employee, part-time employee, member of governing panel or board, stockholder, paid or unpaid consultant;
(3) Establish and follow written procedures for:
(i) Conducting its initial and continuing review of research and for reporting its findings and actions to the investigator and the institution;
(ii) Determining which projects require review more often than annually and which projects need verification from sources other than the investigators that no material changes have occurred since previous IRB review; and
(iii) Ensuring prompt reporting to the IRB of proposed changes in a research activity, and for ensuring that investigators will conduct the research activity in accordance with the terms of the IRB approval until any proposed changes have been reviewed and approved by the IRB, except when necessary to eliminate apparent immediate hazards to the subject.
(4) Establish and follow written procedures for ensuring prompt reporting to the IRB; appropriate institutional officials; the department or agency head; and the Office for Human Research Protections, HHS, or any successor office, or the equivalent office within the appropriate Federal department or agency of
(i) Any unanticipated problems involving risks to subjects or others or any serious or continuing noncompliance with this policy or the requirements or determinations of the IRB; and
(ii) Any suspension or termination of IRB approval.
(b) Except when an expedited review procedure is used (as described in § 97.110), an IRB must review proposed research at convened meetings at which a majority of the members of the IRB are present, including at least one member whose primary concerns are in nonscientific areas. In order for the research to be approved, it shall receive the approval of a majority of those members present at the meeting.
(a) An IRB shall review and have authority to approve, require modifications in (to secure approval), or disapprove all research activities covered by this policy, including exempt research activities under § 97.104 for which limited IRB review is a condition of exemption (under § 97.104(d)(2)(iii), (d)(3)(i)(C), and (d)(7), and (8)).
(b) An IRB shall require that information given to subjects (or legally authorized representatives, when appropriate) as part of informed consent is in accordance with § 97.116. The IRB may require that information, in addition to that specifically mentioned in § 97.116, be given to the subjects when in the IRB's judgment the information would meaningfully add to the protection of the rights and welfare of subjects.
(c) An IRB shall require documentation of informed consent or may waive documentation in accordance with § 97.117.
(d) An IRB shall notify investigators and the institution in writing of its decision to approve or disapprove the proposed research activity, or of modifications required to secure IRB approval of the research activity. If the IRB decides to disapprove a research activity, it shall include in its written notification a statement of the reasons for its decision and give the investigator an opportunity to respond in person or in writing.
(e) An IRB shall conduct continuing review of research requiring review by the convened IRB at intervals appropriate to the degree of risk, not less than once per year, except as described in § 97.109(f).
(f)(1) Unless an IRB determines otherwise, continuing review of research is not required in the following circumstances:
(i) Research eligible for expedited review in accordance with § 97.110;
(ii) Research reviewed by the IRB in accordance with the limited IRB review described in § 97.104(d)(2)(iii), (d)(3)(i)(C), or (d)(7) or (8);
(iii) Research that has progressed to the point that it involves only one or both of the following, which are part of the IRB-approved study:
(A) Data analysis, including analysis of identifiable private information or identifiable biospecimens, or
(B) Accessing follow-up clinical data from procedures that subjects would undergo as part of clinical care.
(2) [Reserved]
(g) An IRB shall have authority to observe or have a third party observe the consent process and the research.
(a) The Secretary of HHS has established, and published as a Notice in the
(b)(1) An IRB may use the expedited review procedure to review the following:
(i) Some or all of the research appearing on the list described in paragraph (a) of this section, unless the reviewer determines that the study involves more than minimal risk;
(ii) Minor changes in previously approved research during the period for which approval is authorized; or
(iii) Research for which limited IRB review is a condition of exemption under § 97.104(d)(2)(iii), (d)(3)(i)(C), and (d)(7) and (8).
(2) Under an expedited review procedure, the review may be carried out by the IRB chairperson or by one or more experienced reviewers designated by the chairperson from among members of the IRB. In reviewing the research, the reviewers may exercise all of the authorities of the IRB except that the reviewers may not disapprove the research. A research activity may be disapproved only after review in accordance with the nonexpedited procedure set forth in § 97.108(b).
(c) Each IRB that uses an expedited review procedure shall adopt a method for keeping all members advised of research proposals that have been approved under the procedure.
(d) The department or agency head may restrict, suspend, terminate, or choose not to authorize an institution's or IRB's use of the expedited review procedure.
(a) In order to approve research covered by this policy the IRB shall determine that all of the following requirements are satisfied:
(1) Risks to subjects are minimized:
(i) By using procedures that are consistent with sound research design and that do not unnecessarily expose subjects to risk, and
(ii) Whenever appropriate, by using procedures already being performed on the subjects for diagnostic or treatment purposes.
(2) Risks to subjects are reasonable in relation to anticipated benefits, if any, to subjects, and the importance of the knowledge that may reasonably be expected to result. In evaluating risks and benefits, the IRB should consider only those risks and benefits that may result from the research (as distinguished from risks and benefits of therapies subjects would receive even if not participating in the research). The IRB should not consider possible long-range effects of applying knowledge gained in the research (e.g., the possible effects of the research on public policy) as among those research risks that fall within the purview of its responsibility.
(3) Selection of subjects is equitable. In making this assessment the IRB should take into account the purposes of the research and the setting in which the research will be conducted. The IRB should be particularly cognizant of the special problems of research that involves a category of subjects who are vulnerable to coercion or undue influence, such as children, prisoners, individuals with impaired decision-making capacity, or economically or educationally disadvantaged persons.
(4) Informed consent will be sought from each prospective subject or the subject's legally authorized representative, in accordance with, and to the extent required by, § 97.116.
(5) Informed consent will be appropriately documented or appropriately waived in accordance with § 97.117.
(6) When appropriate, the research plan makes adequate provision for monitoring the data collected to ensure the safety of subjects.
(7) When appropriate, there are adequate provisions to protect the privacy of subjects and to maintain the confidentiality of data.
(i) The Secretary of HHS will, after consultation with the Office of Management and Budget's privacy office and other Federal departments and agencies that have adopted this policy, issue guidance to assist IRBs in assessing what provisions are adequate to protect the privacy of subjects and to maintain the confidentiality of data.
(ii) [Reserved]
(8) For purposes of conducting the limited IRB review required by § 97.104(d)(7)), the IRB need not make the determinations at paragraphs (a)(1) through (7) of this section, and shall make the following determinations:
(i) Broad consent for storage, maintenance, and secondary research use of identifiable private information or identifiable biospecimens is obtained in accordance with the requirements of § 97.116(a)(1)-(4), (a)(6), and (d);
(ii) Broad consent is appropriately documented or waiver of documentation is appropriate, in accordance with § 97.117; and
(iii) If there is a change made for research purposes in the way the identifiable private information or identifiable biospecimens are stored or maintained, there are adequate provisions to protect the privacy of subjects and to maintain the confidentiality of data.
(b) When some or all of the subjects are likely to be vulnerable to coercion or undue influence, such as children, prisoners, individuals with impaired decision-making capacity, or economically or educationally disadvantaged persons, additional safeguards have been included in the study to protect the rights and welfare of these subjects.
Research covered by this policy that has been approved by an IRB may be subject to further appropriate review and approval or disapproval by officials of the institution. However, those officials may not approve the research if it has not been approved by an IRB.
An IRB shall have authority to suspend or terminate approval of research that is not being conducted in accordance with the IRB's requirements or that has been associated with unexpected serious harm to subjects. Any suspension or termination of approval shall include a statement of the reasons for the IRB's action and shall be reported promptly to the investigator, appropriate institutional officials, and the department or agency head.
(a) Cooperative research projects are those projects covered by this policy that involve more than one institution. In the conduct of cooperative research projects, each institution is responsible for safeguarding the rights and welfare of human subjects and for complying with this policy.
(b)(1) Any institution located in the United States that is engaged in cooperative research must rely upon approval by a single IRB for that portion of the research that is conducted in the United States. The reviewing IRB will be identified by the Federal department or agency supporting or conducting the research or proposed by the lead institution subject to the acceptance of the Federal department or agency supporting the research.
(2) The following research is not subject to this provision:
(i) Cooperative research for which more than single IRB review is required by law (including tribal law passed by the official governing body of an American Indian or Alaska Native tribe); or
(ii) Research for which any Federal department or agency supporting or conducting the research determines and documents that the use of a single IRB is not appropriate for the particular context.
(c) For research not subject to paragraph (b) of this section, an institution participating in a cooperative project may enter into a joint review arrangement, rely on the review of another IRB, or make similar arrangements for avoiding duplication of effort.
(a) An institution, or when appropriate an IRB, shall prepare and maintain adequate documentation of IRB activities, including the following:
(1) Copies of all research proposals reviewed, scientific evaluations, if any, that accompany the proposals, approved sample consent forms, progress reports submitted by investigators, and reports of injuries to subjects.
(2) Minutes of IRB meetings, which shall be in sufficient detail to show attendance at the meetings; actions taken by the IRB; the vote on these actions including the number of members voting for, against, and abstaining; the basis for requiring changes in or disapproving research; and a written summary of the discussion of controverted issues and their resolution.
(3) Records of continuing review activities, including the rationale for conducting continuing review of research that otherwise would not require continuing review as described in § 97.109(f)(1).
(4) Copies of all correspondence between the IRB and the investigators.
(5) A list of IRB members in the same detail as described in § 97.108(a)(2).
(6) Written procedures for the IRB in the same detail as described in § 97.108(a)(3) and (4).
(7) Statements of significant new findings provided to subjects, as required by § 97.116(c)(5).
(8) The rationale for an expedited reviewer's determination under § 97.110(b)(1)(i) that research appearing on the expedited review list described in § 97.110(a) is more than minimal risk.
(9) Documentation specifying the responsibilities that an institution and an organization operating an IRB each will undertake to ensure compliance with the requirements of this policy, as described in § 97.103(e).
(b) The records required by this policy shall be retained for at least 3 years, and records relating to research that is conducted shall be retained for at least 3 years after completion of the research. The institution or IRB may maintain the records in printed form, or electronically. All records shall be accessible for inspection and copying by authorized representatives of the Federal department or agency at reasonable times and in a reasonable manner.
(a) General. General requirements for informed consent, whether written or oral, are set forth in this paragraph and apply to consent obtained in accordance with the requirements set forth in paragraphs (b) through (d) of this section. Broad consent may be obtained in lieu of informed consent obtained in accordance with paragraphs (b) and (c) of this section only with respect to the storage, maintenance, and secondary research uses of identifiable private information and identifiable biospecimens. Waiver or alteration of consent in research involving public benefit and service programs conducted by or subject to the approval of state or local officials is described in paragraph (e) of this section. General waiver or alteration of informed consent is described in paragraph (f) of this section. Except as provided elsewhere in this policy:
(1) Before involving a human subject in research covered by this policy, an investigator shall obtain the legally effective informed consent of the subject or the subject's legally authorized representative.
(2) An investigator shall seek informed consent only under circumstances that provide the prospective subject or the legally authorized representative sufficient opportunity to discuss and consider whether or not to participate and that minimize the possibility of coercion or undue influence.
(3) The information that is given to the subject or the legally authorized representative shall be in language understandable to the subject or the legally authorized representative.
(4) The prospective subject or the legally authorized representative must be provided with the information that a reasonable person would want to have in order to make an informed decision about whether to participate, and an opportunity to discuss that information.
(5) Except for broad consent obtained in accordance with paragraph (d) of this section:
(i) Informed consent must begin with a concise and focused presentation of the key information that is most likely to assist a prospective subject or legally authorized representative in understanding the reasons why one might or might not want to participate in the research. This part of the informed consent must be organized and presented in a way that facilitates comprehension.
(ii) Informed consent as a whole must present information in sufficient detail relating to the research, and must be organized and presented in a way that does not merely provide lists of isolated facts, but rather facilitates the prospective subject's or legally authorized representative's understanding of the reasons why one might or might not want to participate.
(6) No informed consent may include any exculpatory language through which the subject or the legally authorized representative is made to waive or appear to waive any of the subject's legal rights, or releases or appears to release the investigator, the sponsor, the institution, or its agents from liability for negligence.
(b) Basic elements of informed consent. Except as provided in paragraph (d), (e), or (f) of this section, in seeking informed consent the following information shall be provided to each subject or the legally authorized representative:
(1) A statement that the study involves research, an explanation of the purposes of the research and the expected duration of the subject's participation, a description of the procedures to be followed, and identification of any procedures that are experimental;
(2) A description of any reasonably foreseeable risks or discomforts to the subject;
(3) A description of any benefits to the subject or to others that may reasonably be expected from the research;
(4) A disclosure of appropriate alternative procedures or courses of treatment, if any, that might be advantageous to the subject;
(5) A statement describing the extent, if any, to which confidentiality of records identifying the subject will be maintained;
(6) For research involving more than minimal risk, an explanation as to whether any compensation and an explanation as to whether any medical treatments are available if injury occurs and, if so, what they consist of, or where further information may be obtained;
(7) An explanation of whom to contact for answers to pertinent questions about the research and research subjects' rights, and whom to contact in the event of a research-related injury to the subject;
(8) A statement that participation is voluntary, refusal to participate will involve no penalty or loss of benefits to which the subject is otherwise entitled, and the subject may discontinue participation at any time without penalty or loss of benefits to which the subject is otherwise entitled; and
(9) One of the following statements about any research that involves the collection of identifiable private information or identifiable biospecimens:
(i) A statement that identifiers might be removed from the identifiable private information or identifiable biospecimens and that, after such removal, the information or biospecimens could be used for future research studies or distributed to another investigator for future research studies without additional informed consent from the subject or the legally authorized representative, if this might be a possibility; or
(ii) A statement that the subject's information or biospecimens collected as part of the research, even if identifiers are removed, will not be used or distributed for future research studies.
(c) Additional elements of informed consent. Except as provided in paragraph (d), (e), or (f) of this section, one or more of the following elements of information, when appropriate, shall also be provided to each subject or the legally authorized representative:
(1) A statement that the particular treatment or procedure may involve risks to the subject (or to the embryo or fetus, if the subject is or may become pregnant) that are currently unforeseeable;
(2) Anticipated circumstances under which the subject's participation may be terminated by the investigator without regard to the subject's or the legally authorized representative's consent;
(3) Any additional costs to the subject that may result from participation in the research;
(4) The consequences of a subject's decision to withdraw from the research and procedures for orderly termination of participation by the subject;
(5) A statement that significant new findings developed during the course of the research that may relate to the subject's willingness to continue participation will be provided to the subject;
(6) The approximate number of subjects involved in the study;
(7) A statement that the subject's biospecimens (even if identifiers are removed) may be used for commercial profit and whether the subject will or will not share in this commercial profit;
(8) A statement regarding whether clinically relevant research results, including individual research results, will be disclosed to subjects, and if so, under what conditions; and
(9) For research involving biospecimens, whether the research will (if known) or might include whole genome sequencing (i.e., sequencing of a human germline or somatic specimen with the intent to generate the genome or exome sequence of that specimen).
(d) Elements of broad consent for the storage, maintenance, and secondary research use of identifiable private information or identifiable biospecimens. Broad consent for the storage, maintenance, and secondary research use of identifiable private information or identifiable biospecimens (collected for either research studies other than the proposed research or nonresearch purposes) is permitted as an alternative to the informed consent requirements in paragraphs (b) and (c) of this section. If the subject or the legally authorized representative is asked to provide broad consent, the following shall be provided to each subject or the subject's legally authorized representative:
(1) The information required in paragraphs (b)(2), (b)(3), (b)(5), and (b)(8) and, when appropriate, (c)(7) and (9) of this section;
(2) A general description of the types of research that may be conducted with the identifiable private information or identifiable biospecimens. This description must include sufficient information such that a reasonable person would expect that the broad consent would permit the types of research conducted;
(3) A description of the identifiable private information or identifiable biospecimens that might be used in research, whether sharing of identifiable private information or identifiable biospecimens might occur, and the types of institutions or researchers that might conduct research with the identifiable private information or identifiable biospecimens;
(4) A description of the period of time that the identifiable private information or identifiable biospecimens may be stored and maintained (which period of time could be indefinite), and a description of the period of time that the identifiable private information or identifiable biospecimens may be used for research purposes (which period of time could be indefinite);
(5) Unless the subject or legally authorized representative will be provided details about specific research studies, a statement that they will not be informed of the details of any specific research studies that might be conducted using the subject's identifiable private information or identifiable biospecimens, including the purposes of the research, and that they might have chosen not to consent to some of those specific research studies;
(6) Unless it is known that clinically relevant research results, including individual research results, will be disclosed to the subject in all circumstances, a statement that such results may not be disclosed to the subject; and
(7) An explanation of whom to contact for answers to questions about the subject's rights and about storage and use of the subject's identifiable private information or identifiable biospecimens, and whom to contact in the event of a research-related harm.
(e) Waiver or alteration of consent in research involving public benefit and service programs conducted by or subject to the approval of state or local officials—(1) Waiver. An IRB may waive the requirement to obtain informed consent for research under paragraphs (a) through (c) of this section, provided the IRB satisfies the requirements of paragraph (e)(3) of this section. If an individual was asked to provide broad consent for the storage, maintenance, and secondary research use of identifiable private information or identifiable biospecimens in accordance with the requirements at paragraph (d) of this section, and refused to consent, an IRB cannot waive consent for the storage, maintenance, or secondary research use of the identifiable private information or identifiable biospecimens.
(2) Alteration. An IRB may approve a consent procedure that omits some, or alters some or all, of the elements of informed consent set forth in paragraphs (b) and (c) of this section provided the IRB satisfies the requirements of paragraph (e)(3) of this section. An IRB may not omit or alter any of the requirements described in paragraph (a) of this section. If a broad consent procedure is used, an IRB may not omit or alter any of the elements required under paragraph (d) of this section.
(3) Requirements for waiver and alteration. In order for an IRB to waive or alter consent as described in this subsection, the IRB must find and document that:
(i) The research or demonstration project is to be conducted by or subject to the approval of state or local government officials and is designed to study, evaluate, or otherwise examine:
(A) Public benefit or service programs;
(B) Procedures for obtaining benefits or services under those programs;
(C) Possible changes in or alternatives to those programs or procedures; or
(D) Possible changes in methods or levels of payment for benefits or services under those programs; and
(ii) The research could not practicably be carried out without the waiver or alteration.
(f) General waiver or alteration of consent—(1) Waiver. An IRB may waive the requirement to obtain informed consent for research under paragraphs (a) through (c) of this section, provided the IRB satisfies the requirements of paragraph (f)(3) of this section. If an individual was asked to provide broad consent for the storage, maintenance, and secondary research use of identifiable private information or identifiable biospecimens in accordance with the requirements at paragraph (d) of this section, and refused to consent, an IRB cannot waive consent for the storage, maintenance, or secondary research use of the identifiable private information or identifiable biospecimens.
(2) Alteration. An IRB may approve a consent procedure that omits some, or alters some or all, of the elements of informed consent set forth in paragraphs (b) and (c) of this section provided the IRB satisfies the requirements of paragraph (f)(3) of this section. An IRB may not omit or alter any of the requirements described in paragraph (a) of this section. If a broad consent procedure is used, an IRB may not omit or alter any of the elements required under paragraph (d) of this section.
(3) Requirements for waiver and alteration. In order for an IRB to waive or alter consent as described in this subsection, the IRB must find and document that:
(i) The research involves no more than minimal risk to the subjects;
(ii) The research could not practicably be carried out without the requested waiver or alteration;
(iii) If the research involves using identifiable private information or identifiable biospecimens, the research could not practicably be carried out without using such information or biospecimens in an identifiable format;
(iv) The waiver or alteration will not adversely affect the rights and welfare of the subjects; and
(v) Whenever appropriate, the subjects or legally authorized representatives will be provided with additional pertinent information after participation.
(g) Screening, recruiting, or determining eligibility. An IRB may approve a research proposal in which an investigator will obtain information or biospecimens for the purpose of screening, recruiting, or determining the eligibility of prospective subjects without the informed consent of the prospective subject or the subject's legally authorized representative, if either of the following conditions are met:
(1) The investigator will obtain information through oral or written communication with the prospective subject or legally authorized representative, or
(2) The investigator will obtain identifiable private information or identifiable biospecimens by accessing records or stored identifiable biospecimens.
(h) Posting of clinical trial consent form. (1) For each clinical trial conducted or supported by a Federal department or agency, one IRB-approved informed consent form used to enroll subjects must be posted by the awardee or the Federal department or agency component conducting the trial on a publicly available Federal Web site that will be established as a repository for such informed consent forms.
(2) If the Federal department or agency supporting or conducting the clinical trial determines that certain information should not be made publicly available on a Federal Web site (e.g. confidential commercial information), such Federal department or agency may permit or require redactions to the information posted.
(3) The informed consent form must be posted on the Federal Web site after the clinical trial is closed to recruitment, and no later than 60 days after the last study visit by any subject, as required by the protocol.
(i) Preemption. The informed consent requirements in this policy are not intended to preempt any applicable Federal, state, or local laws (including tribal laws passed by the official governing body of an American Indian or Alaska Native tribe) that require additional information to be disclosed in order for informed consent to be legally effective.
(j) Emergency medical care. Nothing in this policy is intended to limit the authority of a physician to provide emergency medical care, to the extent the physician is permitted to do so under applicable Federal, state, or local law (including tribal law passed by the official governing body of an American Indian or Alaska Native tribe).
(a) Except as provided in paragraph (c) of this section, informed consent shall be documented by the use of a written informed consent form approved by the IRB and signed (including in an electronic format) by the subject or the subject's legally authorized representative. A written copy shall be given to the person signing the informed consent form.
(b) Except as provided in paragraph (c) of this section, the informed consent form may be either of the following:
(1) A written informed consent form that meets the requirements of § 97.116. The investigator shall give either the subject or the subject's legally authorized representative adequate opportunity to read the informed consent form before it is signed; alternatively, this form may be read to the subject or the subject's legally authorized representative.
(2) A short form written informed consent form stating that the elements of informed consent required by § 97.116 have been presented orally to the subject or the subject's legally authorized representative, and that the key information required by § 97.116(a)(5)(i) was presented first to the subject, before other information, if any, was provided. The IRB shall approve a written summary of what is to be said to the subject or the legally authorized representative. When this method is used, there shall be a witness to the oral presentation. Only the short form itself is to be signed by the subject or the subject's legally authorized representative. However, the witness shall sign both the short form and a copy of the summary, and the person actually obtaining consent shall sign a copy of the summary. A copy of the summary shall be given to the subject or the subject's legally authorized representative, in addition to a copy of the short form.
(c)(1) An IRB may waive the requirement for the investigator to obtain a signed informed consent form for some or all subjects if it finds any of the following:
(i) That the only record linking the subject and the research would be the informed consent form and the principal risk would be potential harm resulting from a breach of confidentiality. Each subject (or legally authorized representative) will be asked whether the subject wants documentation linking the subject with the research, and the subject's wishes will govern;
(ii) That the research presents no more than minimal risk of harm to subjects and involves no procedures for which written consent is normally required outside of the research context; or
(iii) If the subjects or legally authorized representatives are members of a distinct cultural group or community in which signing forms is not the norm, that the research presents no more than minimal risk of harm to subjects and provided there is an appropriate alternative mechanism for documenting that informed consent was obtained.
(2) In cases in which the documentation requirement is waived, the IRB may require the investigator to provide subjects or legally authorized representatives with a written statement regarding the research.
Certain types of applications for grants, cooperative agreements, or contracts are submitted to Federal departments or agencies with the knowledge that subjects may be involved within the period of support, but definite plans would not normally be set forth in the application or proposal. These include activities such as institutional type grants when selection of specific projects is the institution's responsibility; research training grants in which the activities involving subjects remain to be selected; and projects in which human subjects' involvement will depend upon completion of instruments, prior animal studies, or purification of compounds. Except for research waived under § 97.101(i) or exempted under § 97.104, no human subjects may be involved in any project supported by these awards until the project has been reviewed and approved by the IRB, as provided in this policy, and certification submitted, by the institution, to the Federal department or agency component supporting the research.
Except for research waived under § 97.101(i) or exempted under § 97.104, in the event research is undertaken without the intention of involving human subjects, but it is later proposed to involve human subjects in the research, the research shall first be reviewed and approved by an IRB, as provided in this policy, a certification submitted by the institution to the Federal department or agency component supporting the research, and final approval given to the proposed change by the Federal department or agency component.
(a) The department or agency head will evaluate all applications and proposals involving human subjects submitted to the Federal department or agency through such officers and employees of the Federal department or agency and such experts and consultants as the department or agency head determines to be appropriate. This evaluation will take into consideration the risks to the subjects, the adequacy of protection against these risks, the potential benefits of the research to the subjects and others, and the importance of the knowledge gained or to be gained.
(b) On the basis of this evaluation, the department or agency head may approve or disapprove the application or proposal, or enter into negotiations to develop an approvable one.
Federal funds administered by a Federal department or agency may not be expended for research involving human subjects unless the requirements of this policy have been satisfied.
(a) The department or agency head may require that Federal department or agency support for any project be terminated or suspended in the manner prescribed in applicable program requirements, when the department or agency head finds an institution has materially failed to comply with the terms of this policy.
(b) In making decisions about supporting or approving applications or proposals covered by this policy the department or agency head may take into account, in addition to all other eligibility requirements and program criteria, factors such as whether the applicant has been subject to a termination or suspension under paragraph (a) of this section and whether the applicant or the person or persons who would direct or has/have directed the scientific and technical aspects of an activity has/have, in the judgment of the department or agency head, materially failed to discharge responsibility for the protection of the rights and welfare of human subjects (whether or not the research was subject to federal regulation).
With respect to any research project or any class of research projects the department or agency head of either the conducting or the supporting Federal department or agency may impose additional conditions prior to or at the time of approval when in the judgment of the department or agency head additional conditions are necessary for the protection of human subjects.
(a) This subpart applies to all research involving children as subjects conducted or supported by the Department of Education.
(1) This subpart applies to research conducted by Department employees.
(2) This subpart applies to research conducted or supported by the Department of Education outside the United States, but in appropriate circumstances the Secretary may, under § 97.101(i), waive the applicability of some or all of the requirements of the regulations in this subpart for that research.
(b) Exemptions in § 97.101(b)(1) and (b)(3) through (b)(6) are applicable to this subpart. The exemption in § 97.101(b)(2) regarding educational tests is also applicable to this subpart. The exemption in § 97.101(b)(2) for research involving survey or interview procedures or observations of public behavior does not apply to research covered by this subpart, except for research involving observation of public behavior when the investigator or investigators do not participate in the activities being observed.
(c) The exceptions, additions, and provisions for waiver as they appear in § 97.101(c) through (i) are applicable to this subpart.
The definitions in § 97.102 apply to this subpart. In addition, the following definitions also apply to this subpart:
(a) Children are persons who have not attained the legal age for consent to treatments or procedures involved in the research, under the applicable law of the jurisdiction in which the research will be conducted.
(b) Assent means a child's affirmative agreement to participate in research. Mere failure to object should not, absent affirmative agreement, be construed as assent.
(c) Permission means the agreement of parent(s) or guardian to the participation of their child or ward in research.
(d) Parent means a child's biological or adoptive parent.
(e) Guardian means an individual who is authorized under applicable State or local law to consent on behalf of a child to general medical care.
In addition to other responsibilities assigned to IRBs under this part, each IRB shall review research covered by this subpart and approve only research that satisfies the conditions of all applicable sections of this subpart.
ED conducts or funds research in which the IRB finds that no greater than minimal risk to children is presented, only if the IRB finds that adequate provisions are made for soliciting the assent of the children and the permission of their parents or guardians, as set forth in § 97.408.
ED conducts or funds research in which the IRB finds that more than minimal risk to children is presented by an intervention or procedure that holds out the prospect of direct benefit for the individual subject, or by a monitoring procedure that is likely to contribute to the subject's well-being, only if the IRB finds that—
(a) The risk is justified by the anticipated benefit to the subjects;
(b) The relation of the anticipated benefit to the risk is at least as favorable to the subjects as that presented by available alternative approaches; and
(c) Adequate provisions are made for soliciting the assent of the children and permission of their parents or guardians, as set forth in § 97.408.
ED conducts or funds research in which the IRB finds that more than minimal risk to children is presented by an intervention or procedure that does not hold out the prospect of direct benefit for the individual subject, or by a monitoring procedure which is not likely to contribute to the well-being of the subject, only if the IRB finds that—
(a) The risk represents a minor increase over minimal risk;
(b) The intervention or procedure presents experiences to subjects that are reasonably commensurate with those inherent in their actual or expected medical, dental, psychological, social, or educational situations;
(c) The intervention or procedure is likely to yield generalizable knowledge about the subjects' disorder or condition that is of vital importance for the understanding or amelioration of the subjects' disorder or condition; and
(d) Adequate provisions are made for soliciting assent of the children and permission of their parents or guardians, as set forth in § 97.408.
ED conducts or funds research that the IRB does not believe meets the requirements of § 97.404, § 97.405, or § 97.406 only if—
(a) The IRB finds that the research presents a reasonable opportunity to further the understanding, prevention, or alleviation of a serious problem affecting the health or welfare of children; and
(b) The Secretary, after consultation with a panel of experts in pertinent disciplines (for example: science, medicine, education, ethics, law) and following opportunity for public review and comment, has determined either that—
(1) The research in fact satisfies the conditions of § 97.404, § 97.405, or § 97.406, as applicable; or
(2)(i) The research presents a reasonable opportunity to further the understanding, prevention, or alleviation of a serious problem affecting the health or welfare of children;
(ii) The research will be conducted in accordance with sound ethical principles; and
(iii) Adequate provisions are made for soliciting the assent of children and the permission of their parents or guardians, as set forth in § 97.408.
(a) In addition to the determinations required under other applicable sections of this subpart, the IRB shall determine that adequate provisions are made for soliciting the assent of the children, if in the judgment of the IRB the children are capable of providing assent. In determining whether children are capable of assenting, the IRB shall take into account the ages, maturity, and psychological state of the children involved. This judgment may be made for all children to be involved in research under a particular protocol, or for each child, as the IRB deems appropriate. If the IRB determines that the capability of some or all of the children is so limited that they cannot reasonably be consulted or that the intervention or procedure involved in the research holds out a prospect of direct benefit that is important to the health or well-being of the children and is available only in the context of the research, the assent of the children is not a necessary condition for proceeding with the research. Even if the IRB determines that the subjects are capable of assenting, the IRB may still waive the assent requirement under circumstances in which consent may be waived in accord with § 97.116.
(b) In addition to the determinations required under other applicable sections of this subpart, the IRB shall determine, in accordance with and to the extent that consent is required by § 97.116, that adequate provisions are made for soliciting the permission of each child's parent(s) or guardian(s). If parental permission is to be obtained, the IRB may find that the permission of one parent is sufficient for research to be conducted under § 97.404 or § 97.405. If research is covered by §§ 97.406 and 97.407 and permission is to be obtained from parents, both parents must give their permission unless one parent is deceased, unknown, incompetent, or not reasonably available, or if only one parent has legal responsibility for the care and custody of the child.
(c) In addition to the provisions for waiver contained in § 97.116, if the IRB determines that a research protocol is designed for conditions or for a subject population for which parental or guardian permission is not a reasonable requirement to protect the subjects (for example, neglected or abused children), it may waive the consent requirements in subpart A of this part and paragraph (b) of this section, provided an appropriate mechanism for protecting the children who will participate as subjects in the research is substituted, and provided further that the waiver is not inconsistent with Federal, State, or local law. The choice of an appropriate mechanism depends upon the nature and purpose of the activities described in the protocol, the risk and anticipated benefit to the research subjects, and their age, maturity, status, and condition.
(d) Permission by parents or guardians must be documented in accordance with and to the extent required by § 97.117.
(e) If the IRB determines that assent is required, it shall also determine whether and how assent must be documented.
(a) Children who are wards of the State or any other agency, institution, or entity may be included in research approved under § 97.406 or § 97.407 only if that research is—
(1) Related to their status as wards; or
(2) Conducted in schools, camps, hospitals, institutions, or similar settings in which the majority of children involved as subjects are not wards.
(b) If research is approved under paragraph (a) of this section, the IRB shall require appointment of an advocate for each child who is a ward, in addition to any other individual acting on behalf of the child as guardian or in loco parentis. One individual may serve as advocate for more than one child. The advocate must be an individual who has the background and experience to act in, and agrees to act in, the best interest of the child for the duration of the child's participation in the research and who is not associated in any way (except in the role as advocate or member of the IRB) with the research, the investigator or investigators, or the guardian organization.
This part applies to any program administered by the Secretary of Education that:
(a)(1) Was transferred to the Department by the Department of Education Organization Act (DEOA); and
(2) Was administered by the Education Division of the Department of Health, Education, and Welfare on the day before the effective date of the DEOA; or
(b) Was enacted after the effective date of the DEOA, unless the law enacting the new Federal program has the effect of making section 439 of the General Education Provisions Act inapplicable.
(c) The following chart lists the funded programs to which part 98 does not apply as of February 16, 1984.
| Name of program | Authorizing statute | Implementing regulations |
|---|---|---|
| 1. High School Equivalency Program and College Assistance Migrant Program | Section 418A of the Higher Education Act of 1965 as amended by the Education Amendments of 1980 (Pub. L. 96-374) 20 U.S.C. 1070d-2) | part 206. |
| 2. Programs administered by the Commissioner of the Rehabilitative Services Administration | The Rehabilitation Act of 1973 as amended by Pub. L. 95-602 (29 U.S.C. 700, | parts 351-356, 361, 362, 365, 366, 369-375, 378, 379, 385-390, and 395. |
| 3. College housing | Title IV of the Housing Act of 1950 as amended (12 U.S.C. 1749, | part 614. |
(a) The following terms used in this part are defined in 34 CFR part 77; “Department,” “Recipient,” “Secretary.”
(b) The following definitions apply to this part:
Act means the General Education Provisions Act.
Office means the information and investigation office specified in § 98.5.
(a) All instructional material—including teachers' manuals, films, tapes, or other supplementary instructional material—which will be used in connection with any research or experimentation program or project shall be available for inspection by the parents or guardians of the children engaged in such program or project.
(b) For the purpose of this part research or experimentation program or project means any program or project in any program under § 98.1 (a) or (b) that is designed to explore or develop new or unproven teaching methods or techniques.
(c) For the purpose of the section children means persons not above age 21 who are enrolled in a program under § 98.1 (a) or (b) not above the elementary or secondary education level, as determined under State law.
(a) No student shall be required, as part of any program specified in § 98.1 (a) or (b), to submit without prior consent to psychiatric examination, testing, or treatment, or psychological examination, testing, or treatment, in which the primary purpose is to reveal information concerning one or more of the following:
(1) Political affiliations;
(2) Mental and psychological problems potentially embarrassing to the student or his or her family;
(3) Sex behavior and attitudes;
(4) Illegal, anti-social, self-incriminating and demeaning behavior;
(5) Critical appraisals of other individuals with whom the student has close family relationships;
(6) Legally recognized privileged and analogous relationships, such as those of lawyers, physicians, and ministers; or
(7) Income, other than that required by law to determine eligibility for participation in a program or for receiving financial assistance under a program.
(b) As used in paragraph (a) of this section, prior consent means:
(1) Prior consent of the student, if the student is an adult or emancipated minor; or
(2) Prior written consent of the parent or guardian, if the student is an unemancipated minor.
(c) As used in paragraph (a) of this section:
(1) Psychiatric or psychological examination or test means a method of obtaining information, including a group activity, that is not directly related to academic instruction and that is designed to elicit information about attitudes, habits, traits, opinions, beliefs or feelings; and
(2) Psychiatric or psychological treatment means an activity involving the planned, systematic use of methods or techniques that are not directly related to academic instruction and that is designed to affect behavioral, emotional, or attitudinal characteristics of an individual or group.
(a) The Secretary has designated an office to provide information about the requirements of section 439 of the Act, and to investigate, process, and review complaints that may be filed concerning alleged violations of the provisions of the section.
(b) The following is the name and address of the office designated under paragraph (a) of this section: Family Educational Rights and Privacy Act Office, U.S. Department of Education, 400 Maryland Avenue, SW., Washington, DC 20202.
The Secretary may require the recipient to submit reports containing information necessary to resolve complaints under section 439 of the Act and the regulations in this part.
(a) Only a student or a parent or guardian of a student directly affected by a violation under Section 439 of the Act may file a complaint under this part. The complaint must be submitted in writing to the Office.
(b) The complaint filed under paragraph (a) of this section must—
(1) Contain specific allegations of fact giving reasonable cause to believe that a violation of either § 98.3 or § 98.4 exists; and
(2) Include evidence of attempted resolution of the complaint at the local level (and at the State level if a State complaint resolution process exists), including the names of local and State officials contacted and significant dates in the attempted resolution process.
(c) The Office investigates each complaint which the Office receives that meets the requirements of this section to determine whether the recipient or contractor failed to comply with the provisions of section 439 of the Act.
(a) If the Office receives a complaint that meets the requirements of § 98.7, it provides written notification to the complainant and the recipient or contractor against which the violation has been alleged that the complaint has been received.
(b) The notice to the recipient or contractor under paragraph (a) of this section must:
(1) Include the substance of the alleged violation; and
(2) Inform the recipient or contractor that the Office will investigate the complaint and that the recipient or contractor may submit a written response to the complaint.
(a) The Office may permit the parties to submit further written or oral arguments or information.
(b) Following its investigations, the Office provides to the complainant and recipient or contractor written notice of its findings and the basis for its findings.
(c) If the Office finds that the recipient or contractor has not complied with section 439 of the Act, the Office includes in its notice under paragraph (b) of this section:
(1) A statement of the specific steps that the Secretary recommends the recipient or contractor take to comply; and
(2) Provides a reasonable period of time, given all of the circumstances of the case, during which the recipient or contractor may comply voluntarily.
(a) If the recipient or contractor does not comply during the period of time set under § 98.9(c), the Secretary may either:
(1) For a recipient, take an action authorized under 34 CFR part 78, including:
(i) Issuing a notice of intent to terminate funds under 34 CFR 78.21;
(ii) Issuing a notice to withhold funds under 34 CFR 78.21, 200.94(b), or 298.45(b), depending upon the applicable program under which the notice is issued; or
(iii) Issuing a notice to cease and desist under 34 CFR 78.31, 200.94(c) or 298.45(c), depending upon the program under which the notice is issued; or
(2) For a contractor, direct the contracting officer to take an appropriate action authorized under the Federal Acquisition Regulations, including either:
(i) Issuing a notice to suspend operations under 48 CFR 12.5; or
(ii) Issuing a notice to terminate for default, either in whole or in part under 48 CFR 49.102.
(b) If, after an investigation under § 98.9, the Secretary finds that a recipient or contractor has complied voluntarily with section 439 of the Act, the Secretary provides the complainant and the recipient or contractor written notice of the decision and the basis for the decision.
(a) Except as otherwise noted in § 99.10, this part applies to an educational agency or institution to which funds have been made available under any program administered by the Secretary, if—
(1) The educational institution provides educational services or instruction, or both, to students; or
(2) The educational agency is authorized to direct and control public elementary or secondary, or postsecondary educational institutions.
(b) This part does not apply to an educational agency or institution solely because students attending that agency or institution receive non-monetary benefits under a program referenced in paragraph (a) of this section, if no funds under that program are made available to the agency or institution.
(c) The Secretary considers funds to be made available to an educational agency or institution of funds under one or more of the programs referenced in paragraph (a) of this section—
(1) Are provided to the agency or institution by grant, cooperative agreement, contract, subgrant, or subcontract; or
(2) Are provided to students attending the agency or institution and the funds may be paid to the agency or institution by those students for educational purposes, such as under the Pell Grant Program and the Guaranteed Student Loan Program (titles IV-A-1 and IV-B, respectively, of the Higher Education Act of 1965, as amended).
(d) If an educational agency or institution receives funds under one or more of the programs covered by this section, the regulations in this part apply to the recipient as a whole, including each of its components (such as a department within a university).
The purpose of this part is to set out requirements for the protection of privacy of parents and students under section 444 of the General Education Provisions Act, as amended.
34 CFR 300.610 through 300.626 contain requirements regarding the confidentiality of information relating to children with disabilities who receive evaluations, services or other benefits under Part B of the Individuals with Disabilities Education Act (IDEA). 34 CFR 303.402 and 303.460 identify the confidentiality of information requirements regarding children and infants and toddlers with disabilities and their families who receive evaluations, services, or other benefits under Part C of IDEA. 34 CFR 300.610 through 300.627 contain the confidentiality of information requirements that apply to personally identifiable data, information, and records collected or maintained pursuant to Part B of the IDEA.
The following definitions apply to this part:
Act means the Family Educational Rights and Privacy Act of 1974, as amended, enacted as section 444 of the General Education Provisions Act.
Attendance includes, but is not limited to—
(a) Attendance in person or by paper correspondence, videoconference, satellite, Internet, or other electronic information and telecommunications technologies for students who are not physically present in the classroom; and
(b) The period during which a person is working under a work-study program.
Authorized representative means any entity or individual designated by a State or local educational authority or an agency headed by an official listed in § 99.31(a)(3) to conduct—with respect to Federal- or State-supported education programs—any audit or evaluation, or any compliance or enforcement activity in connection with Federal legal requirements that relate to these programs.
Biometric record, as used in the definition of personally identifiable information, means a record of one or more measurable biological or behavioral characteristics that can be used for automated recognition of an individual. Examples include fingerprints; retina and iris patterns; voiceprints; DNA sequence; facial characteristics; and handwriting.
Dates of attendance. (a) The term means the period of time during which a student attends or attended an educational agency or institution. Examples of dates of attendance include an academic year, a spring semester, or a first quarter.
(b) The term does not include specific daily records of a student's attendance at an educational agency or institution.
Directory information means information contained in an education record of a student that would not generally be considered harmful or an invasion of privacy if disclosed.
(a) Directory information includes, but is not limited to, the student's name; address; telephone listing; electronic mail address; photograph; date and place of birth; major field of study; grade level; enrollment status (e.g., undergraduate or graduate, full-time or part-time); dates of attendance; participation in officially recognized activities and sports; weight and height of members of athletic teams; degrees, honors, and awards received; and the most recent educational agency or institution attended.
(b) Directory information does not include a student's—
(1) Social security number; or
(2) Student identification (ID) number, except as provided in paragraph (c) of this definition.
(c) In accordance with paragraphs (a) and (b) of this definition, directory information includes—
(1) A student ID number, user ID, or other unique personal identifier used by a student for purposes of accessing or communicating in electronic systems, but only if the identifier cannot be used to gain access to education records except when used in conjunction with one or more factors that authenticate the user's identity, such as a personal identification number (PIN), password or other factor known or possessed only by the authorized user; and
(2) A student ID number or other unique personal identifier that is displayed on a student ID badge, but only if the identifier cannot be used to gain access to education records except when used in conjunction with one or more factors that authenticate the user's identity, such as a PIN, password, or other factor known or possessed only by the authorized user.
Disciplinary action or proceeding means the investigation, adjudication, or imposition of sanctions by an educational agency or institution with respect to an infraction or violation of the internal rules of conduct applicable to students of the agency or institution.
Disclosure means to permit access to or the release, transfer, or other communication of personally identifiable information contained in education records by any means, including oral, written, or electronic means, to any party except the party identified as the party that provided or created the record.
Early childhood education program means—
(a) A Head Start program or an Early Head Start program carried out under the Head Start Act (42 U.S.C. 9831 et seq.), including a migrant or seasonal Head Start program, an Indian Head Start program, or a Head Start program or an Early Head Start program that also receives State funding;
(b) A State licensed or regulated child care program; or
(c) A program that—
(1) Serves children from birth through age six that addresses the children's cognitive (including language, early literacy, and early mathematics), social, emotional, and physical development; and
(2) Is—
(i) A State prekindergarten program;
(ii) A program authorized under section 619 or part C of the Individuals with Disabilities Education Act; or
(iii) A program operated by a local educational agency.
Educational agency or institution means any public or private agency or institution to which this part applies under § 99.1(a).
Education program means any program that is principally engaged in the provision of education, including, but not limited to, early childhood education, elementary and secondary education, postsecondary education, special education, job training, career and technical education, and adult education, and any program that is administered by an educational agency or institution.
Education records. (a) The term means those records that are:
(1) Directly related to a student; and
(2) Maintained by an educational agency or institution or by a party acting for the agency or institution.
(b) The term does not include:
(1) Records that are kept in the sole possession of the maker, are used only as a personal memory aid, and are not accessible or revealed to any other person except a temporary substitute for the maker of the record.
(2) Records of the law enforcement unit of an educational agency or institution, subject to the provisions of § 99.8.
(3)(i) Records relating to an individual who is employed by an educational agency or institution, that:
(A) Are made and maintained in the normal course of business;
(B) Relate exclusively to the individual in that individual's capacity as an employee; and
(C) Are not available for use for any other purpose.
(ii) Records relating to an individual in attendance at the agency or institution who is employed as a result of his or her status as a student are education records and not excepted under paragraph (b)(3)(i) of this definition.
(4) Records on a student who is 18 years of age or older, or is attending an institution of postsecondary education, that are:
(i) Made or maintained by a physician, psychiatrist, psychologist, or other recognized professional or paraprofessional acting in his or her professional capacity or assisting in a paraprofessional capacity;
(ii) Made, maintained, or used only in connection with treatment of the student; and
(iii) Disclosed only to individuals providing the treatment. For the purpose of this definition, “treatment” does not include remedial educational activities or activities that are part of the program of instruction at the agency or institution; and
(5) Records created or received by an educational agency or institution after an individual is no longer a student in attendance and that are not directly related to the individual's attendance as a student.
(6) Grades on peer-graded papers before they are collected and recorded by a teacher.
Eligible student means a student who has reached 18 years of age or is attending an institution of postsecondary education.
Institution of postsecondary education means an institution that provides education to students beyond the secondary school level; “secondary school level” means the educational level (not beyond grade 12) at which secondary education is provided as determined under State law.
Parent means a parent of a student and includes a natural parent, a guardian, or an individual acting as a parent in the absence of a parent or a guardian.
Party means an individual, agency, institution, or organization.
The term includes, but is not limited to—
(a) The student's name;
(b) The name of the student's parent or other family members;
(c) The address of the student or student's family;
(d) A personal identifier, such as the student's social security number, student number, or biometric record;
(e) Other indirect identifiers, such as the student's date of birth, place of birth, and mother's maiden name;
(f) Other information that, alone or in combination, is linked or linkable to a specific student that would allow a reasonable person in the school community, who does not have personal knowledge of the relevant circumstances, to identify the student with reasonable certainty; or
(g) Information requested by a person who the educational agency or institution reasonably believes knows the identity of the student to whom the education record relates.
Record means any information recorded in any way, including, but not limited to, handwriting, print, computer media, video or audio tape, film, microfilm, and microfiche.
Secretary means the Secretary of the U.S. Department of Education or an official or employee of the Department of Education acting for the Secretary under a delegation of authority.
Student, except as otherwise specifically provided in this part, means any individual who is or has been in attendance at an educational agency or institution and regarding whom the agency or institution maintains education records.
An educational agency or institution shall give full rights under the Act to either parent, unless the agency or institution has been provided with evidence that there is a court order, State statute, or legally binding document relating to such matters as divorce, separation, or custody that specifically revokes these rights.
(a)(1) When a student becomes an eligible student, the rights accorded to, and consent required of, parents under this part transfer from the parents to the student.
(2) Nothing in this section prevents an educational agency or institution from disclosing education records, or personally identifiable information from education records, to a parent without the prior written consent of an eligible student if the disclosure meets the conditions in § 99.31(a)(8), § 99.31(a)(10), § 99.31(a)(15), or any other provision in § 99.31(a).
(b) The Act and this part do not prevent educational agencies or institutions from giving students rights in addition to those given to parents.
(c) An individual who is or has been a student at an educational institution and who applies for admission at another component of that institution does not have rights under this part with respect to records maintained by that other component, including records maintained in connection with the student's application for admission, unless the student is accepted and attends that other component of the institution.
(a)(1) Each educational agency or institution shall annually notify parents of students currently in attendance, or eligible students currently in attendance, of their rights under the Act and this part.
(2) The notice must inform parents or eligible students that they have the right to—
(i) Inspect and review the student's education records;
(ii) Seek amendment of the student's education records that the parent or eligible student believes to be inaccurate, misleading, or otherwise in violation of the student's privacy rights;
(iii) Consent to disclosures of personally identifiable information contained in the student's education records, except to the extent that the Act and § 99.31 authorize disclosure without consent; and
(iv) File with the Department a complaint under §§ 99.63 and 99.64 concerning alleged failures by the educational agency or institution to comply with the requirements of the Act and this part.
(3) The notice must include all of the following:
(i) The procedure for exercising the right to inspect and review education records.
(ii) The procedure for requesting amendment of records under § 99.20.
(iii) If the educational agency or institution has a policy of disclosing education records under § 99.31(a)(1), a specification of criteria for determining who constitutes a school official and what constitutes a legitimate educational interest.
(b) An educational agency or institution may provide this notice by any means that are reasonably likely to inform the parents or eligible students of their rights.
(1) An educational agency or institution shall effectively notify parents or eligible students who are disabled.
(2) An agency or institution of elementary or secondary education shall effectively notify parents who have a primary or home language other than English.
(a)(1) Law enforcement unit means any individual, office, department, division, or other component of an educational agency or institution, such as a unit of commissioned police officers or non-commissioned security guards, that is officially authorized or designated by that agency or institution to—
(i) Enforce any local, State, or Federal law, or refer to appropriate authorities a matter for enforcement of any local, State, or Federal law against any individual or organization other than the agency or institution itself; or
(ii) Maintain the physical security and safety of the agency or institution.
(2) A component of an educational agency or institution does not lose its status as a law enforcement unit if it also performs other, non-law enforcement functions for the agency or institution, including investigation of incidents or conduct that constitutes or leads to a disciplinary action or proceedings against the student.
(b)(1) Records of a law enforcement unit means those records, files, documents, and other materials that are—
(i) Created by a law enforcement unit;
(ii) Created for a law enforcement purpose; and
(iii) Maintained by the law enforcement unit.
(2) Records of a law enforcement unit does not mean—
(i) Records created by a law enforcement unit for a law enforcement purpose that are maintained by a component of the educational agency or institution other than the law enforcement unit; or
(ii) Records created and maintained by a law enforcement unit exclusively for a non-law enforcement purpose, such as a disciplinary action or proceeding conducted by the educational agency or institution.
(c)(1) Nothing in the Act prohibits an educational agency or institution from contacting its law enforcement unit, orally or in writing, for the purpose of asking that unit to investigate a possible violation of, or to enforce, any local, State, or Federal law.
(2) Education records, and personally identifiable information contained in education records, do not lose their status as education records and remain subject to the Act, including the disclosure provisions of § 99.30, while in the possession of the law enforcement unit.
(d) The Act neither requires nor prohibits the disclosure by an educational agency or institution of its law enforcement unit records.
(a) Except as limited under § 99.12, a parent or eligible student must be given the opportunity to inspect and review the student's education records. This provision applies to—
(1) Any educational agency or institution; and
(2) Any State educational agency (SEA) and its components.
(i) For the purposes of subpart B of this part, an SEA and its components constitute an educational agency or institution.
(ii) An SEA and its components are subject to subpart B of this part if the SEA maintains education records on students who are or have been in attendance at any school of an educational agency or institution subject to the Act and this part.
(b) The educational agency or institution, or SEA or its component, shall comply with a request for access to records within a reasonable period of time, but not more than 45 days after it has received the request.
(c) The educational agency or institution, or SEA or its component shall respond to reasonable requests for explanations and interpretations of the records.
(d) If circumstances effectively prevent the parent or eligible student from exercising the right to inspect and review the student's education records, the educational agency or institution, or SEA or its component, shall—
(1) Provide the parent or eligible student with a copy of the records requested; or
(2) Make other arrangements for the parent or eligible student to inspect and review the requested records.
(e) The educational agency or institution, or SEA or its component shall not destroy any education records if there is an outstanding request to inspect and review the records under this section.
(f) While an education agency or institution is not required to give an eligible student access to treatment records under paragraph (b)(4) of the definition of Education records in § 99.3, the student may have those records reviewed by a physician or other appropriate professional of the student's choice.
(a) Unless the imposition of a fee effectively prevents a parent or eligible student from exercising the right to inspect and review the student's education records, an educational agency or institution may charge a fee for a copy of an education record which is made for the parent or eligible student.
(b) An educational agency or institution may not charge a fee to search for or to retrieve the education records of a student.
(a) If the education records of a student contain information on more than one student, the parent or eligible student may inspect and review or be informed of only the specific information about that student.
(b) A postsecondary institution does not have to permit a student to inspect and review education records that are:
(1) Financial records, including any information those records contain, of his or her parents;
(2) Confidential letters and confidential statements of recommendation placed in the education records of the student before January 1, 1975, as long as the statements are used only for the purposes for which they were specifically intended; and
(3) Confidential letters and confidential statements of recommendation placed in the student's education records after January 1, 1975, if:
(i) The student has waived his or her right to inspect and review those letters and statements; and
(ii) Those letters and statements are related to the student's:
(A) Admission to an educational institution;
(B) Application for employment; or
(C) Receipt of an honor or honorary recognition.
(c)(1) A waiver under paragraph (b)(3)(i) of this section is valid only if:
(i) The educational agency or institution does not require the waiver as a condition for admission to or receipt of a service or benefit from the agency or institution; and
(ii) The waiver is made in writing and signed by the student, regardless of age.
(2) If a student has waived his or her rights under paragraph (b)(3)(i) of this section, the educational institution shall:
(i) Give the student, on request, the names of the individuals who provided the letters and statements of recommendation; and
(ii) Use the letters and statements of recommendation only for the purpose for which they were intended.
(3)(i) A waiver under paragraph (b)(3)(i) of this section may be revoked with respect to any actions occurring after the revocation.
(ii) A revocation under paragraph (c)(3)(i) of this section must be in writing.
(a) If a parent or eligible student believes the education records relating to the student contain information that is inaccurate, misleading, or in violation of the student's rights of privacy, he or she may ask the educational agency or institution to amend the record.
(b) The educational agency or institution shall decide whether to amend the record as requested within a reasonable time after the agency or institution receives the request.
(c) If the educational agency or institution decides not to amend the record as requested, it shall inform the parent or eligible student of its decision and of his or her right to a hearing under § 99.21.
(a) An educational agency or institution shall give a parent or eligible student, on request, an opportunity for a hearing to challenge the content of the student's education records on the grounds that the information contained in the education records is inaccurate, misleading, or in violation of the privacy rights of the student.
(b)(1) If, as a result of the hearing, the educational agency or institution decides that the information is inaccurate, misleading, or otherwise in violation of the privacy rights of the student, it shall:
(i) Amend the record accordingly; and
(ii) Inform the parent or eligible student of the amendment in writing.
(2) If, as a result of the hearing, the educational agency or institution decides that the information in the education record is not inaccurate, misleading, or otherwise in violation of the privacy rights of the student, it shall inform the parent or eligible student of the right to place a statement in the record commenting on the contested information in the record or stating why he or she disagrees with the decision of the agency or institution, or both.
(c) If an educational agency or institution places a statement in the education records of a student under paragraph (b)(2) of this section, the agency or institution shall:
(1) Maintain the statement with the contested part of the record for as long as the record is maintained; and
(2) Disclose the statement whenever it discloses the portion of the record to which the statement relates.
The hearing required by § 99.21 must meet, at a minimum, the following requirements:
(a) The educational agency or institution shall hold the hearing within a reasonable time after it has received the request for the hearing from the parent or eligible student.
(b) The educational agency or institution shall give the parent or eligible student notice of the date, time, and place, reasonably in advance of the hearing.
(c) The hearing may be conducted by any individual, including an official of the educational agency or institution, who does not have a direct interest in the outcome of the hearing.
(d) The educational agency or institution shall give the parent or eligible student a full and fair opportunity to present evidence relevant to the issues raised under § 99.21. The parent or eligible student may, at their own expense, be assisted or represented by one or more individuals of his or her own choice, including an attorney.
(e) The educational agency or institution shall make its decision in writing within a reasonable period of time after the hearing.
(f) The decision must be based solely on the evidence presented at the hearing, and must include a summary of the evidence and the reasons for the decision.
(a) The parent or eligible student shall provide a signed and dated written consent before an educational agency or institution discloses personally identifiable information from the student's education records, except as provided in § 99.31.
(b) The written consent must:
(1) Specify the records that may be disclosed;
(2) State the purpose of the disclosure; and
(3) Identify the party or class of parties to whom the disclosure may be made.
(c) When a disclosure is made under paragraph (a) of this section:
(1) If a parent or eligible student so requests, the educational agency or institution shall provide him or her with a copy of the records disclosed; and
(2) If the parent of a student who is not an eligible student so requests, the agency or institution shall provide the student with a copy of the records disclosed.
(d) “Signed and dated written consent” under this part may include a record and signature in electronic form that—
(1) Identifies and authenticates a particular person as the source of the electronic consent; and
(2) Indicates such person's approval of the information contained in the electronic consent.
(a) An educational agency or institution may disclose personally identifiable information from an education record of a student without the consent required by § 99.30 if the disclosure meets one or more of the following conditions:
(1)(i)(A) The disclosure is to other school officials, including teachers, within the agency or institution whom the agency or institution has determined to have legitimate educational interests.
(B) A contractor, consultant, volunteer, or other party to whom an agency or institution has outsourced institutional services or functions may be considered a school official under this paragraph provided that the outside party—
(1) Performs an institutional service or function for which the agency or institution would otherwise use employees;
(2) Is under the direct control of the agency or institution with respect to the use and maintenance of education records; and
(3) Is subject to the requirements of § 99.33(a) governing the use and redisclosure of personally identifiable information from education records.
(ii) An educational agency or institution must use reasonable methods to ensure that school officials obtain access to only those education records in which they have legitimate educational interests. An educational agency or institution that does not use physical or technological access controls must ensure that its administrative policy for controlling access to education records is effective and that it remains in compliance with the legitimate educational interest requirement in paragraph (a)(1)(i)(A) of this section.
(2) The disclosure is, subject to the requirements of § 99.34, to officials of another school, school system, or institution of postsecondary education where the student seeks or intends to enroll, or where the student is already enrolled so long as the disclosure is for purposes related to the student's enrollment or transfer.
Section 4155(b) of the No Child Left Behind Act of 2001, 20 U.S.C. 7165(b), requires each State to assure the Secretary of Education that it has a procedure in place to facilitate the transfer of disciplinary records with respect to a suspension or expulsion of a student by a local educational agency to any private or public elementary or secondary school in which the student is subsequently enrolled or seeks, intends, or is instructed to enroll.
(3) The disclosure is, subject to the requirements of § 99.35, to authorized representatives of—
(i) The Comptroller General of the United States;
(ii) The Attorney General of the United States;
(iii) The Secretary; or
(iv) State and local educational authorities.
(4)(i) The disclosure is in connection with financial aid for which the student has applied or which the student has received, if the information is necessary for such purposes as to:
(A) Determine eligibility for the aid;
(B) Determine the amount of the aid;
(C) Determine the conditions for the aid; or
(D) Enforce the terms and conditions of the aid.
(ii) As used in paragraph (a)(4)(i) of this section, financial aid means a payment of funds provided to an individual (or a payment in kind of tangible or intangible property to the individual) that is conditioned on the individual's attendance at an educational agency or institution.
(5)(i) The disclosure is to State and local officials or authorities to whom this information is specifically—
(A) Allowed to be reported or disclosed pursuant to State statute adopted before November 19, 1974, if the allowed reporting or disclosure concerns the juvenile justice system and the system's ability to effectively serve the student whose records are released; or
(B) Allowed to be reported or disclosed pursuant to State statute adopted after November 19, 1974, subject to the requirements of § 99.38.
(ii) Paragraph (a)(5)(i) of this section does not prevent a State from further limiting the number or type of State or local officials to whom disclosures may be made under that paragraph.
(6)(i) The disclosure is to organizations conducting studies for, or on behalf of, educational agencies or institutions to:
(A) Develop, validate, or administer predictive tests;
(B) Administer student aid programs; or
(C) Improve instruction.
(ii) Nothing in the Act or this part prevents a State or local educational authority or agency headed by an official listed in paragraph (a)(3) of this section from entering into agreements with organizations conducting studies under paragraph (a)(6)(i) of this section and redisclosing personally identifiable information from education records on behalf of educational agencies and institutions that disclosed the information to the State or local educational authority or agency headed by an official listed in paragraph (a)(3) of this section in accordance with the requirements of § 99.33(b).
(iii) An educational agency or institution may disclose personally identifiable information under paragraph (a)(6)(i) of this section, and a State or local educational authority or agency headed by an official listed in paragraph (a)(3) of this section may redisclose personally identifiable information under paragraph (a)(6)(i) and (a)(6)(ii) of this section, only if—
(A) The study is conducted in a manner that does not permit personal identification of parents and students by individuals other than representatives of the organization that have legitimate interests in the information;
(B) The information is destroyed when no longer needed for the purposes for which the study was conducted; and
(C) The educational agency or institution or the State or local educational authority or agency headed by an official listed in paragraph (a)(3) of this section enters into a written agreement with the organization that—
(1) Specifies the purpose, scope, and duration of the study or studies and the information to be disclosed;
(2) Requires the organization to use personally identifiable information from education records only to meet the purpose or purposes of the study as stated in the written agreement;
(3) Requires the organization to conduct the study in a manner that does not permit personal identification of parents and students, as defined in this part, by anyone other than representatives of the organization with legitimate interests;
(4) Requires the organization to destroy all personally identifiable information when the information is no longer needed for the purposes for which the study was conducted and specifies the time period in which the information must be destroyed.
(iv) An educational agency or institution or State or local educational authority or Federal agency headed by an official listed in paragraph (a)(3) of this section is not required to initiate a study or agree with or endorse the conclusions or results of the study.
(v) For the purposes of paragraph (a)(6) of this section, the term organization includes, but is not limited to, Federal, State, and local agencies, and independent organizations.
(7) The disclosure is to accrediting organizations to carry out their accrediting functions.
(8) The disclosure is to parents, as defined in § 99.3, of a dependent student, as defined in section 152 of the Internal Revenue Code of 1986.
(9)(i) The disclosure is to comply with a judicial order or lawfully issued subpoena.
(ii) The educational agency or institution may disclose information under paragraph (a)(9)(i) of this section only if the agency or institution makes a reasonable effort to notify the parent or eligible student of the order or subpoena in advance of compliance, so that the parent or eligible student may seek protective action, unless the disclosure is in compliance with—
(A) A Federal grand jury subpoena and the court has ordered that the existence or the contents of the subpoena or the information furnished in response to the subpoena not be disclosed;
(B) Any other subpoena issued for a law enforcement purpose and the court or other issuing agency has ordered that the existence or the contents of the subpoena or the information furnished in response to the subpoena not be disclosed; or
(C) An ex parte court order obtained by the United States Attorney General (or designee not lower than an Assistant Attorney General) concerning investigations or prosecutions of an offense listed in 18 U.S.C. 2332b(g)(5)(B) or an act of domestic or international terrorism as defined in 18 U.S.C. 2331.
(iii)(A) If an educational agency or institution initiates legal action against a parent or student, the educational agency or institution may disclose to the court, without a court order or subpoena, the education records of the student that are relevant for the educational agency or institution to proceed with the legal action as plaintiff.
(B) If a parent or eligible student initiates legal action against an educational agency or institution, the educational agency or institution may disclose to the court, without a court order or subpoena, the student's education records that are relevant for the educational agency or institution to defend itself.
(10) The disclosure is in connection with a health or safety emergency, under the conditions described in § 99.36.
(11) The disclosure is information the educational agency or institution has designated as “directory information”, under the conditions described in § 99.37.
(12) The disclosure is to the parent of a student who is not an eligible student or to the student.
(13) The disclosure, subject to the requirements in § 99.39, is to a victim of an alleged perpetrator of a crime of violence or a non-forcible sex offense. The disclosure may only include the final results of the disciplinary proceeding conducted by the institution of postsecondary education with respect to that alleged crime or offense. The institution may disclose the final results of the disciplinary proceeding, regardless of whether the institution concluded a violation was committed.
(14)(i) The disclosure, subject to the requirements in § 99.39, is in connection with a disciplinary proceeding at an institution of postsecondary education. The institution must not disclose the final results of the disciplinary proceeding unless it determines that—
(A) The student is an alleged perpetrator of a crime of violence or non-forcible sex offense; and
(B) With respect to the allegation made against him or her, the student has committed a violation of the institution's rules or policies.
(ii) The institution may not disclose the name of any other student, including a victim or witness, without the prior written consent of the other student.
(iii) This section applies only to disciplinary proceedings in which the final results were reached on or after October 7, 1998.
(15)(i) The disclosure is to a parent of a student at an institution of postsecondary education regarding the student's violation of any Federal, State, or local law, or of any rule or policy of the institution, governing the use or possession of alcohol or a controlled substance if—
(A) The institution determines that the student has committed a disciplinary violation with respect to that use or possession; and
(B) The student is under the age of 21 at the time of the disclosure to the parent.
(ii) Paragraph (a)(15) of this section does not supersede any provision of State law that prohibits an institution of postsecondary education from disclosing information.
(16) The disclosure concerns sex offenders and other individuals required to register under section 170101 of the Violent Crime Control and Law Enforcement Act of 1994, 42 U.S.C. 14071, and the information was provided to the educational agency or institution under 42 U.S.C. 14071 and applicable Federal guidelines.
(b)(1) De-identified records and information. An educational agency or institution, or a party that has received education records or information from education records under this part, may release the records or information without the consent required by § 99.30 after the removal of all personally identifiable information provided that the educational agency or institution or other party has made a reasonable determination that a student's identity is not personally identifiable, whether through single or multiple releases, and taking into account other reasonably available information.
(2) An educational agency or institution, or a party that has received education records or information from education records under this part, may release de-identified student level data from education records for the purpose of education research by attaching a code to each record that may allow the recipient to match information received from the same source, provided that—
(i) An educational agency or institution or other party that releases de-identified data under paragraph (b)(2) of this section does not disclose any information about how it generates and assigns a record code, or that would allow a recipient to identify a student based on a record code;
(ii) The record code is used for no purpose other than identifying a de-identified record for purposes of education research and cannot be used to ascertain personally identifiable information about a student; and
(iii) The record code is not based on a student's social security number or other personal information.
(c) An educational agency or institution must use reasonable methods to identify and authenticate the identity of parents, students, school officials, and any other parties to whom the agency or institution discloses personally identifiable information from education records.
(d) Paragraphs (a) and (b) of this section do not require an educational agency or institution or any other party to disclose education records or information from education records to any party except for parties under paragraph (a)(12) of this section.
(a)(1) An educational agency or institution must maintain a record of each request for access to and each disclosure of personally identifiable information from the education records of each student, as well as the names of State and local educational authorities and Federal officials and agencies listed in § 99.31(a)(3) that may make further disclosures of personally identifiable information from the student's education records without consent under § 99.33(b).
(2) The agency or institution shall maintain the record with the education records of the student as long as the records are maintained.
(3) For each request or disclosure the record must include:
(i) The parties who have requested or received personally identifiable information from the education records; and
(ii) The legitimate interests the parties had in requesting or obtaining the information.
(4) An educational agency or institution must obtain a copy of the record of further disclosures maintained under paragraph (b)(2) of this section and make it available in response to a parent's or eligible student's request to review the record required under paragraph (a)(1) of this section.
(5) An educational agency or institution must record the following information when it discloses personally identifiable information from education records under the health or safety emergency exception in § 99.31(a)(10) and § 99.36:
(i) The articulable and significant threat to the health or safety of a student or other individuals that formed the basis for the disclosure; and
(ii) The parties to whom the agency or institution disclosed the information.
(b)(1) Except as provided in paragraph (b)(2) of this section, if an educational agency or institution discloses personally identifiable information from education records with the understanding authorized under § 99.33(b), the record of the disclosure required under this section must include:
(i) The names of the additional parties to which the receiving party may disclose the information on behalf of the educational agency or institution; and
(ii) The legitimate interests under § 99.31 which each of the additional parties has in requesting or obtaining the information.
(2)(i) A State or local educational authority or Federal official or agency listed in § 99.31(a)(3) that makes further disclosures of information from education records under § 99.33(b) must record the names of the additional parties to which it discloses information on behalf of an educational agency or institution and their legitimate interests in the information under § 99.31 if the information was received from:
(A) An educational agency or institution that has not recorded the further disclosures under paragraph (b)(1) of this section; or
(B) Another State or local educational authority or Federal official or agency listed in § 99.31(a)(3).
(ii) A State or local educational authority or Federal official or agency that records further disclosures of information under paragraph (b)(2)(i) of this section may maintain the record by the student's class, school, district, or other appropriate grouping rather than by the name of the student.
(iii) Upon request of an educational agency or institution, a State or local educational authority or Federal official or agency listed in § 99.31(a)(3) that maintains a record of further disclosures under paragraph (b)(2)(i) of this section must provide a copy of the record of further disclosures to the educational agency or institution within a reasonable period of time not to exceed 30 days.
(c) The following parties may inspect the record relating to each student:
(1) The parent or eligible student.
(2) The school official or his or her assistants who are responsible for the custody of the records.
(3) Those parties authorized in § 99.31(a) (1) and (3) for the purposes of auditing the recordkeeping procedures of the educational agency or institution.
(d) Paragraph (a) of this section does not apply if the request was from, or the disclosure was to:
(1) The parent or eligible student;
(2) A school official under § 99.31(a)(1);
(3) A party with written consent from the parent or eligible student;
(4) A party seeking directory information; or
(5) A party seeking or receiving records in accordance with § 99.31(a)(9)(ii)(A) through (C).
(a)(1) An educational agency or institution may disclose personally identifiable information from an education record only on the condition that the party to whom the information is disclosed will not disclose the information to any other party without the prior consent of the parent or eligible student.
(2) The officers, employees, and agents of a party that receives information under paragraph (a)(1) of this section may use the information, but only for the purposes for which the disclosure was made.
(b)(1) Paragraph (a) of this section does not prevent an educational agency or institution from disclosing personally identifiable information with the understanding that the party receiving the information may make further disclosures of the information on behalf of the educational agency or institution if—
(i) The disclosures meet the requirements of § 99.31; and
(ii)(A) The educational agency or institution has complied with the requirements of § 99.32(b); or
(B) A State or local educational authority or Federal official or agency listed in § 99.31(a)(3) has complied with the requirements of § 99.32(b)(2).
(2) A party that receives a court order or lawfully issued subpoena and rediscloses personally identifiable information from education records on behalf of an educational agency or institution in response to that order or subpoena under § 99.31(a)(9) must provide the notification required under § 99.31(a)(9)(ii).
(c) Paragraph (a) of this section does not apply to disclosures under §§ 99.31(a)(8), (9), (11), (12), (14), (15), and (16), and to information that postsecondary institutions are required to disclose under the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, 20 U.S.C. 1092(f) (Clery Act), to the accuser and accused regarding the outcome of any campus disciplinary proceeding brought alleging a sexual offense.
(d) An educational agency or institution must inform a party to whom disclosure is made of the requirements of paragraph (a) of this section except for disclosures made under §§ 99.31(a)(8), (9), (11), (12), (14), (15), and (16), and to information that postsecondary institutions are required to disclose under the Clery Act to the accuser and accused regarding the outcome of any campus disciplinary proceeding brought alleging a sexual offense.
(a) An educational agency or institution that discloses an education record under § 99.31(a)(2) shall:
(1) Make a reasonable attempt to notify the parent or eligible student at the last known address of the parent or eligible student, unless:
(i) The disclosure is initiated by the parent or eligible student; or
(ii) The annual notification of the agency or institution under § 99.7 includes a notice that the agency or institution forwards education records to other agencies or institutions that have requested the records and in which the student seeks or intends to enroll or is already enrolled so long as the disclosure is for purposes related to the student's enrollment or transfer;
(2) Give the parent or eligible student, upon request, a copy of the record that was disclosed; and
(3) Give the parent or eligible student, upon request, an opportunity for a hearing under subpart C.
(b) An educational agency or institution may disclose an education record of a student in attendance to another educational agency or institution if:
(1) The student is enrolled in or receives services from the other agency or institution; and
(2) The disclosure meets the requirements of paragraph (a) of this section.
(a)(1) Authorized representatives of the officials or agencies headed by officials listed in § 99.31(a)(3) may have access to education records in connection with an audit or evaluation of Federal or State supported education programs, or for the enforcement of or compliance with Federal legal requirements that relate to those programs.
(2) The State or local educational authority or agency headed by an official listed in § 99.31(a)(3) is responsible for using reasonable methods to ensure to the greatest extent practicable that any entity or individual designated as its authorized representative—
(i) Uses personally identifiable information only to carry out an audit or evaluation of Federal- or State-supported education programs, or for the enforcement of or compliance with Federal legal requirements related to these programs;
(ii) Protects the personally identifiable information from further disclosures or other uses, except as authorized in paragraph (b)(1) of this section; and
(iii) Destroys the personally identifiable information in accordance with the requirements of paragraphs (b) and (c) of this section.
(3) The State or local educational authority or agency headed by an official listed in § 99.31(a)(3) must use a written agreement to designate any authorized representative, other than an employee. The written agreement must—
(i) Designate the individual or entity as an authorized representative;
(ii) Specify—
(A) The personally identifiable information from education records to be disclosed;
(B) That the purpose for which the personally identifiable information from education records is disclosed to the authorized representative is to carry out an audit or evaluation of Federal- or State-supported education programs, or to enforce or to comply with Federal legal requirements that relate to those programs; and
(C) A description of the activity with sufficient specificity to make clear that the work falls within the exception of § 99.31(a)(3), including a description of how the personally identifiable information from education records will be used;
(iii) Require the authorized representative to destroy personally identifiable information from education records when the information is no longer needed for the purpose specified;
(iv) Specify the time period in which the information must be destroyed; and
(v) Establish policies and procedures, consistent with the Act and other Federal and State confidentiality and privacy provisions, to protect personally identifiable information from education records from further disclosure (except back to the disclosing entity) and unauthorized use, including limiting use of personally identifiable information from education records to only authorized representatives with legitimate interests in the audit or evaluation of a Federal- or State-supported education program or for compliance or enforcement of Federal legal requirements related to these programs.
(b) Information that is collected under paragraph (a) of this section must—
(1) Be protected in a manner that does not permit personal identification of individuals by anyone other than the State or local educational authority or agency headed by an official listed in § 99.31(a)(3) and their authorized representatives, except that the State or local educational authority or agency headed by an official listed in § 99.31(a)(3) may make further disclosures of personally identifiable information from education records on behalf of the educational agency or institution in accordance with the requirements of § 99.33(b); and
(2) Be destroyed when no longer needed for the purposes listed in paragraph (a) of this section.
(c) Paragraph (b) of this section does not apply if:
(1) The parent or eligible student has given written consent for the disclosure under § 99.30; or
(2) The collection of personally identifiable information is specifically authorized by Federal law.
(a) An educational agency or institution may disclose personally identifiable information from an education record to appropriate parties, including parents of an eligible student, in connection with an emergency if knowledge of the information is necessary to protect the health or safety of the student or other individuals.
(b) Nothing in this Act or this part shall prevent an educational agency or institution from—
(1) Including in the education records of a student appropriate information concerning disciplinary action taken against the student for conduct that posed a significant risk to the safety or well-being of that student, other students, or other members of the school community;
(2) Disclosing appropriate information maintained under paragraph (b)(1) of this section to teachers and school officials within the agency or institution who the agency or institution has determined have legitimate educational interests in the behavior of the student; or
(3) Disclosing appropriate information maintained under paragraph (b)(1) of this section to teachers and school officials in other schools who have been determined to have legitimate educational interests in the behavior of the student.
(c) In making a determination under paragraph (a) of this section, an educational agency or institution may take into account the totality of the circumstances pertaining to a threat to the health or safety of a student or other individuals. If the educational agency or institution determines that there is an articulable and significant threat to the health or safety of a student or other individuals, it may disclose information from education records to any person whose knowledge of the information is necessary to protect the health or safety of the student or other individuals. If, based on the information available at the time of the determination, there is a rational basis for the determination, the Department will not substitute its judgment for that of the educational agency or institution in evaluating the circumstances and making its determination.
(a) An educational agency or institution may disclose directory information if it has given public notice to parents of students in attendance and eligible students in attendance at the agency or institution of:
(1) The types of personally identifiable information that the agency or institution has designated as directory information;
(2) A parent's or eligible student's right to refuse to let the agency or institution designate any or all of those types of information about the student as directory information; and
(3) The period of time within which a parent or eligible student has to notify the agency or institution in writing that he or she does not want any or all of those types of information about the student designated as directory information.
(b) An educational agency or institution may disclose directory information about former students without complying with the notice and opt out conditions in paragraph (a) of this section. However, the agency or institution must continue to honor any valid request to opt out of the disclosure of directory information made while a student was in attendance unless the student rescinds the opt out request.
(c) A parent or eligible student may not use the right under paragraph (a)(2) of this section to opt out of directory information disclosures to—
(1) Prevent an educational agency or institution from disclosing or requiring a student to disclose the student's name, identifier, or institutional email address in a class in which the student is enrolled; or
(2) Prevent an educational agency or institution from requiring a student to wear, to display publicly, or to disclose a student ID card or badge that exhibits information that may be designated as directory information under § 99.3 and that has been properly designated by the educational agency or institution as directory information in the public notice provided under paragraph (a)(1) of this section.
(d) In its public notice to parents and eligible students in attendance at the agency or institution that is described in paragraph (a) of this section, an educational agency or institution may specify that disclosure of directory information will be limited to specific parties, for specific purposes, or both. When an educational agency or institution specifies that disclosure of directory information will be limited to specific parties, for specific purposes, or both, the educational agency or institution must limit its directory information disclosures to those specified in its public notice that is described in paragraph (a) of this section.
(e) An educational agency or institution may not disclose or confirm directory information without meeting the written consent requirements in § 99.30 if a student's social security number or other non-directory information is used alone or combined with other data elements to identify or help identify the student or the student's records.
(a) If reporting or disclosure allowed by State statute concerns the juvenile justice system and the system's ability to effectively serve, prior to adjudication, the student whose records are released, an educational agency or institution may disclose education records under § 99.31(a)(5)(i)(B).
(b) The officials and authorities to whom the records are disclosed shall certify in writing to the educational agency or institution that the information will not be disclosed to any other party, except as provided under State law, without the prior written consent of the parent of the student.
As used in this part:
Alleged perpetrator of a crime of violence is a student who is alleged to have committed acts that would, if proven, constitute any of the following offenses or attempts to commit the following offenses that are defined in appendix A to this part:
Alleged perpetrator of a nonforcible sex offense means a student who is alleged to have committed acts that, if proven, would constitute statutory rape or incest. These offenses are defined in appendix A to this part.
Final results means a decision or determination, made by an honor court or council, committee, commission, or other entity authorized to resolve disciplinary matters within the institution. The disclosure of final results must include only the name of the student, the violation committed, and any sanction imposed by the institution against the student.
Sanction imposed means a description of the disciplinary action taken by the institution, the date of its imposition, and its duration.
Violation committed means the institutional rules or code sections that were violated and any essential findings supporting the institution's conclusion that the violation was committed.
(a) For the purposes of this subpart, Office means the Office of the Chief Privacy Officer, U.S. Department of Education.
(b) The Secretary designates the Office to:
(1) Investigate, process, and review complaints and violations under the Act and this part; and
(2) Provide technical assistance to ensure compliance with the Act and this part.
(c) The Secretary designates the Office of Administrative Law Judges to act as the Review Board required under the Act to enforce the Act with respect to all applicable programs. The term applicable program is defined in section 400 of the General Education Provisions Act.
If an educational agency or institution determines that it cannot comply with the Act or this part due to a conflict with State or local law, it must notify the Office within 45 days, giving the text and citation of the conflicting law. If another recipient of Department funds under any program administered by the Secretary or a third party to which personally identifiable information from education records has been non-consensually disclosed determines that it cannot comply with the Act or this part due to a conflict with State or local law, it also must notify the Office within 45 days, giving the text and citation of the conflicting law.
The Office may require an educational agency or institution, other recipient of Department funds under any program administered by the Secretary to which personally identifiable information from education records is non-consensually disclosed, or any third party outside of an educational agency or institution to which personally identifiable information from education records is non-consensually disclosed to submit reports, information on policies and procedures, annual notifications, training materials, or other information necessary to carry out the Office's enforcement responsibilities under the Act or this part.
A parent or eligible student may file a written complaint with the Office regarding an alleged violation under the Act and this part. The Office's address is: Family Policy Compliance Office, U.S. Department of Education, 400 Maryland Avenue, SW., Washington, DC 20202.
(a) A complaint must contain specific allegations of fact giving reasonable cause to believe that a violation of the Act or this part has occurred. A complaint does not have to allege that a violation is based on a policy or practice of the educational agency or institution, other recipient of Department funds under any program administered by the Secretary, or any third party outside of an educational agency or institution.
(b) The Office investigates a timely complaint filed by a parent or eligible student, or conducts its own investigation when no complaint has been filed or a complaint has been withdrawn, to determine whether an educational agency or institution or other recipient of Department funds under any program administered by the Secretary has failed to comply with a provision of the Act or this part. If the Office determines that an educational agency or institution or other recipient of Department funds under any program administered by the Secretary has failed to comply with a provision of the Act or this part, it may also determine whether the failure to comply is based on a policy or practice of the agency or institution or other recipient. The Office also investigates a timely complaint filed by a parent or eligible student, or conducts its own investigation when no complaint has been filed or a complaint has been withdrawn, to determine whether a third party outside of the educational agency or institution has failed to comply with the provisions of § 99.31(a)(6)(iii)(B) or has improperly redisclosed personally identifiable information from education records in violation of § 99.33.
(c) A timely complaint is defined as an allegation of a violation of the Act that is submitted to the Office within 180 days of the date of the alleged violation or of the date that the complainant knew or reasonably should have known of the alleged violation.
(d) The Office may extend the time limit in this section for good cause shown.
(a) The Office notifies in writing the complainant, if any, and the educational agency or institution, the recipient of Department funds under any program administered by the Secretary, or the third party outside of an educational agency or institution if it initiates an investigation under § 99.64(b). The written notice—
(1) Includes the substance of the allegations against the educational agency or institution, other recipient, or third party; and
(2) Directs the agency or institution, other recipient, or third party to submit a written response and other relevant information, as set forth in § 99.62, within a specified period of time, including information about its policies and practices regarding education records.
(b) The Office notifies the complainant if it does not initiate an investigation because the complaint fails to meet the requirements of § 99.64.
(a) The Office reviews a complaint, if any, information submitted by the educational agency or institution, other recipient of Department funds under any program administered by the Secretary, or third party outside of an educational agency or institution, and any other relevant information. The Office may permit the parties to submit further written or oral arguments or information.
(b) Following its investigation, the Office provides to the complainant, if any, and the educational agency or institution, other recipient, or third party a written notice of its findings and the basis for its findings.
(c) If the Office finds that an educational agency or institution or other recipient has not complied with a provision of the Act or this part, it may also find that the failure to comply was based on a policy or practice of the agency or institution or other recipient. A notice of findings issued under paragraph (b) of this section to an educational agency or institution, or other recipient that has not complied with a provision of the Act or this part—
(1) Includes a statement of the specific steps that the agency or institution or other recipient must take to comply; and
(2) Provides a reasonable period of time, given all of the circumstances of the case, during which the educational agency or institution or other recipient may comply voluntarily.
(d) If the Office finds that a third party outside of an educational agency or institution has not complied with the provisions of § 99.31(a)(6)(iii)(B) or has improperly redisclosed personally identifiable information from education records in violation of § 99.33, the Office's notice of findings issued under paragraph (b) of this section—
(1) Includes a statement of the specific steps that the third party outside of the educational agency or institution must take to comply; and
(2) Provides a reasonable period of time, given all of the circumstances of the case, during which the third party may comply voluntarily.
(a) If an educational agency or institution or other recipient of Department funds under any program administered by the Secretary does not comply during the period of time set under § 99.66(c), the Secretary may take any legally available enforcement action in accordance with the Act, including, but not limited to, the following enforcement actions available in accordance with part D of the General Education Provisions Act—
(1) Withhold further payments under any applicable program;
(2) Issue a complaint to compel compliance through a cease and desist order; or
(3) Terminate eligibility to receive funding under any applicable program.
(b) If, after an investigation under § 99.66, the Secretary finds that an educational agency or institution, other recipient, or third party has complied voluntarily with the Act or this part, the Secretary provides the complainant and the agency or institution, other recipient, or third party with written notice of the decision and the basis for the decision.
(c) If the Office finds that a third party, outside the educational agency or institution, violates § 99.31(a)(6)(iii)(B), then the educational agency or institution from which the personally identifiable information originated may not allow the third party found to be responsible for the violation of § 99.31(a)(6)(iii)(B) access to personally identifiable information from education records for at least five years.
(d) If the Office finds that a State or local educational authority, a Federal agency headed by an official listed in § 99.31(a)(3), or an authorized representative of a State or local educational authority or a Federal agency headed by an official listed in § 99.31(a)(3), improperly rediscloses personally identifiable information from education records, then the educational agency or institution from which the personally identifiable information originated may not allow the third party found to be responsible for the improper redisclosure access to personally identifiable information from education records for at least five years.
(e) If the Office finds that a third party, outside the educational agency or institution, improperly rediscloses personally identifiable information from education records in violation of § 99.33 or fails to provide the notification required under § 99.33(b)(2), then the educational agency or institution from which the personally identifiable information originated may not allow the third party found to be responsible for the violation access to personally identifiable information from education records for at least five years.
Any willful or malicious burning or attempt to burn, with or without intent to defraud, a dwelling house, public building, motor vehicle or aircraft, personal property of another, etc.
An unlawful attack by one person upon another.
By definition there can be no “attempted” assaults, only “completed” assaults.
(a) Aggravated Assault. An unlawful attack by one person upon another for the purpose of inflicting severe or aggravated bodily injury. This type of assault usually is accompanied by the use of a weapon or by means likely to produce death or great bodily harm. (It is not necessary that injury result from an aggravated assault when a gun, knife, or other weapon is used which could and probably would result in serious injury if the crime were successfully completed.)
(b) Simple Assault. An unlawful physical attack by one person upon another where neither the offender displays a weapon, nor the victim suffers obvious severe or aggravated bodily injury involving apparent broken bones, loss of teeth, possible internal injury, severe laceration, or loss of consciousness.
(c) Intimidation. To unlawfully place another person in reasonable fear of bodily harm through the use of threatening words or other conduct, or both, but without displaying a weapon or subjecting the victim to actual physical attack.
This offense includes stalking.
The unlawful entry into a building or other structure with the intent to commit a felony or a theft.
The killing of another person through gross negligence.
The willful (nonnegligent) killing of one human being by another.
To willfully or maliciously destroy, damage, deface, or otherwise injure real or personal property without the consent of the owner or the person having custody or control of it.
The unlawful seizure, transportation, or detention of a person, or any combination of these actions, against his or her will, or of a minor without the consent of his or her custodial parent(s) or legal guardian.
Kidnapping/Abduction includes hostage taking.
The taking of, or attempting to take, anything of value under confrontational circumstances from the control, custody, or care of a person or persons by force or threat of force or violence or by putting the victim in fear.
Carjackings are robbery offenses where a motor vehicle is taken through force or threat of force.
Any sexual act directed against another person, forcibly or against that person's will, or both; or not forcibly or against the person's will where the victim is incapable of giving consent.
(a) Forcible Rape (Except “Statutory Rape”). The carnal knowledge of a person, forcibly or against that person's will, or both; or not forcibly or against the person's will where the victim is incapable of giving consent because of his or her temporary or permanent mental or physical incapacity (or because of his or her youth).
(b) Forcible Sodomy. Oral or anal sexual intercourse with another person, forcibly or against that person's will, or both; or not forcibly or against the person's will where the victim is incapable of giving consent because of his or her youth or because of his or her temporary or permanent mental or physical incapacity.
(c) Sexual Assault With An Object. To use an object or instrument to unlawfully penetrate, however slightly, the genital or anal opening of the body of another person, forcibly or against that person's will, or both; or not forcibly or against the person's will where the victim is incapable of giving consent because of his or her youth or because of his or her temporary or permanent mental or physical incapacity.
An “object” or “instrument” is anything used by the offender other than the offender's genitalia. Examples are a finger, bottle, handgun, stick, etc.
(d) Forcible Fondling. The touching of the private body parts of another person for the purpose of sexual gratification, forcibly or against that person's will, or both; or not forcibly or against the person's will where the victim is incapable of giving consent because of his or her youth or because of his or her temporary or permanent mental or physical incapacity.
Forcible Fondling includes “Indecent Liberties” and “Child Molesting.”
Unlawful, nonforcible sexual intercourse.
(a) Incest. Nonforcible sexual intercourse between persons who are related to each other within the degrees wherein marriage is prohibited by law.
(b) Statutory Rape. Nonforcible sexual intercourse with a person who is under the statutory age of consent.
The purpose of this part is to effectuate the provisions of title VI of the Civil Rights Act of 1964 (hereafter referred to as the “Act”) to the end that no person in the United States shall; on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity receiving Federal financial assistance from the Department of Education.
This regulation applies to any program to which Federal financial assistance is authorized to be extended to a recipient under a law administered by the Department, including the Federal financial assistance listed in appendix A of this regulation. It applies to money paid, property transferred, or other Federal financial assistance extended after the effective date of the regulation pursuant to an application approved prior to such effective date. This regulation does not apply to (a) any Federal financial assistance by way of insurance or guaranty contracts, (b) money paid, property transferred, or other assistance extended before the effective date of this regulation, (c) the use of any assistance by any individual who is the ultimate beneficiary, or (d) any employment practice, or any employer, employment agency, or labor organization, except to the extent described in § 100.3. The fact that a type of Federal assistance is not listed in appendix A shall not mean, if title VI of the Act is otherwise applicable, that a program is not covered. Federal financial assistance under statutes now in force or hereinafter enacted may be added to this list by notice published in the
(a) General. No person in the United States shall, on the ground of race, color, or national origin be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program to which this part applies.
(b) Specific discriminatory actions prohibited. (1) A recipient under any program to which this part applies may not, directly or through contractual or other arrangements, on ground of race, color, or national origin:
(i) Deny an individual any service, financial aid, or other benefit provided under the program;
(ii) Provide any service, financial aid, or other benefit to an individual which is different, or is provided in a different manner, from that provided to others under the program;
(iii) Subject an individual to segregation or separate treatment in any matter related to his receipt of any service, financial aid, or other benefit under the program;
(iv) Restrict an individual in any way in the enjoyment of any advantage or privilege enjoyed by others receiving any service, financial aid, or other benefit under the program;
(v) Treat an individual differently from others in determining whether he satisfies any admission, enrollment, quota, eligibility, membership or other requirement or condition which individuals must meet in order to be provided any service, financial aid, or other benefit provided under the program;
(vi) Deny an individual an opportunity to participate in the program through the provision of services or otherwise or afford him an opportunity to do so which is different from that afforded others under the program (including the opportunity to participate in the program as an employee but only to the extent set forth in paragraph (c) of this section).
(vii) Deny a person the opportunity to participate as a member of a planning or advisory body which is an integral part of the program.
(2) A recipient, in determining the types of services, financial aid, or other benefits, or facilities which will be provided under any such program, or the class of individuals to whom, or the situations in which, such services, financial aid, other benefits, or facilities will be provided under any such program, or the class of individuals to be afforded an opportunity to participate in any such program, may not, directly or through contractual or other arrangements, utilize criteria or methods of administration which have the effect of subjecting individuals to discrimination because of their race, color, or national origin, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program as respect individuals of a particular race, color, or national origin.
(3) In determining the site or location of a facilities, an applicant or recipient may not make selections with the effect of excluding individuals from, denying them the benefits of, or subjecting them to discrimination under any programs to which this regulation applies, on the ground of race, color, or national origin; or with the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the Act or this regulation.
(4) As used in this section, the services, financial aid, or other benefits provided under a program receiving Federal financial assistance shall be deemed to include any service, financial aid, or other benefits provided in or through a facility provided with the aid of Federal financial assistance.
(5) The enumeration of specific forms of prohibited discrimination in this paragraph and paragraph (c) of this section does not limit the generality of the prohibition in paragraph (a) of this section.
(6)(i) In administering a program regarding which the recipient has previously discriminated against persons on the ground of race, color, or national origin, the recipient must take affirmative action to overcome the effects of prior discrimination.
(ii) Even in the absence of such prior discrimination, a recipient in administering a program may take affirmative action to overcome the effects of conditions which resulted in limiting participation by persons of a particular race, color, or national origin.
(c) Employment practices. (1) Where a primary objective of the Federal financial assistance to a program to which this regulation applies is to provide employment, a recipient may not (directly or through contractual or other arrangements) subject an individual to discrimination on the ground of race, color, or national origin in its employment practices under such program (including recruitment or recruitment advertising, employment, layoff or termination, upgrading, demotion, or transfer, rates of pay or other forms of compensation, and use of facilities), including programs where a primary objective of the Federal financial assistance is (i) to reduce the employment of such individuals or to help them through employment to meet subsistence needs, (ii) to assist such individuals through employment to meet expenses incident to the commencement or continuation of their education or training, (iii) to provide work experience which contributes to the education or training of such individuals, or (iv) to provide remunerative activity to such individuals who because of handicaps cannot be readily absorbed in the competitive labor market. The following, under existing laws, have one of the above objectives as a primary objective:
(A) Projects under the Public Works Acceleration Act, Pub. L. 87-658, 42 U.S.C. 2641-2643.
(B) Work-study under the Vocational Education Act of 1963, as amended, 20 U.S.C. 1371-1374.
(C) Programs assisted under laws listed in appendix A as respects employment opportunities provided thereunder, or in facilities provided thereunder, which are limited, or for which preference is given, to students, fellows, or other persons in training for the same or related employments.
(D) Assistance to rehabilitation facilities under the Vocational Rehabilitation Act, 29 U.S.C. 32-34, 41a and 41b.
(2) The requirements applicable to construction employment under any such program shall be those specified in or pursuant to Part III of Executive Order 11246 or any Executive order which supersedes it.
(3) Where a primary objective of the Federal financial assistance is not to provide employment, but discrimination on the ground of race, color, or national origin in the employment practices of the recipient or other persons subject to the regulation tends, on the ground of race, color, or national origin, to exclude individuals from participation in, to deny them the benefits of, or to subject them to discrimination under any program to which this regulation applies, the foregoing provisions of this paragraph (c) shall apply to the employment practices of the recipient or other persons subject to the regulation, to the extent necessary to assure equality of opportunity to, and nondiscriminatory treatment of, beneficiaries.
(d) Indian health and Cuban refugee services. An individual shall not be deemed subjected to discrimination by reason of his exclusion from benefits limited by Federal law to individuals of a particular race, color, or national origin different from his.
(e) Medical emergencies. Notwithstanding the foregoing provisions of this section, a recipient of Federal financial assistance shall not be deemed to have failed to comply with paragraph (a) of this section if immediate provision of a service or other benefit to an individual is necessary to prevent his death or serious impairment of his health, and such service or other benefit cannot be provided except by or through a medical institution which refuses or fails to comply with paragraph (a) of this section.
(a) General. (1) Every application for Federal financial assistance to which this part applies, except an application to which paragraph (b) of this section applies, and every application for Federal financial assistance to provide a facility shall, as a condition to its approval and the extension of any Federal financial assistance pursuant to the application, contain or be accompanied by an assurance that the program will be conducted or the facility operated in compliance with all requirements imposed by or pursuant to this part. In the case of an application for Federal financial assistance to provide real property or structures thereon, the assurance shall obligate the recipient, or, in the case of a subsequent transfer, the transferee, for the period during which the real property or structures are used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. In the case of personal property the assurance shall obligate the recipient for the period during which he retains ownership or possession of the property. In all other cases the assurance shall obligate the recipient for the period during which Federal financial assistance is extended pursuant to the application. The responsible Department official shall specify the form of the foregoing assurances, and the extent to which like assurances will be required of subgrantees, contractors and subcontractors, transferees, successors in interest, and other participants. Any such assurance shall include provisions which give the United States a right to seek its judicial enforcement.
(2) Where Federal financial assistance is provided in the form of a transfer of real property or interest therein from the Federal Government the instrument effecting or recording the transfer shall contain a covenant running with the land to assure nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. Where no transfer of property is involved but property is improved with Federal financial assistance, the recipient shall agree to include such a covenant to any subsequent transfer of the property. Where the property is obtained from the Federal Government, such covenant may also include a condition coupled with a right to be reserved by the Department to revert title to the property in the event of a breach of the covenant where, in the discretion of the responsible Department official, such a condition and right of reverter is appropriate to the statute under which the real property is obtained and to the nature of the grant and the grantee. In the event a transferee of real property proposes to mortgage or otherwise encumber the real property as security for financing construction of new, or improvement of existing, facilities on such property for the purposes for which the property was transferred, the responsible Department official may agree, upon request of the transferee and if necessary to accomplish such financing, and upon such conditions as he deems appropriate, to forbear the exercise of such right to revert title for so long as the lien of such mortgage or other encumbrance remains effective.
(b) Continuing Federal financial assistance. Every application by a State or a State agency for continuing Federal financial assistance to which this regulation applies (including the Federal financial assistance listed in part 2 of appendix A) shall as a condition to its approval and the extension of any Federal financial assistance pursuant to the application (1) contain or be accompanied by a statement that the program is (or, in the case of a new program, will be) conducted in compliance with all requirements imposed by or pursuant to this regulation, and (2) provide or be accompanied by provision for such methods of administration for the program as are found by the responsible Department official to give reasonable assurance that the applicant and all recipients of Federal financial assistance under such program will comply with all requirements imposed by or pursuant to this regulation.
(c) Elementary and secondary schools. The requirements of paragraph (a) or (b) of this section with respect to any elementary or secondary school or school system shall be deemed to be satisfied if such school or school system (1) is subject to a final order of a court of the United States for the desegregation of such school or school system, and provides an assurance that it will comply with such order, including any future modification of such order, or (2) submits a plan for the desegregation of such school or school system which the responsible Department official determines is adequate to accomplish the purposes of the Act and this part, at the earliest practicable time, and provides reasonable assurance that it will carry out such plan; in any case of continuing Federal financial assistance the responsible Department official may reserve the right to redetermine, after such period as may be specified by him, the adequacy of the plan to accomplish the purposes of the Act and the regulations in this part. In any case in which a final order of a court of the United States for the desegregation of such school or school system is entered after submission of such a plan, such plan shall be revised to conform to such final order, including any future modification of such order.
(d) Assurance from institutions. (1) In the case of any application for Federal financial assistance to an institution of higher education (including assistance for construction, for research, for special training project, for student loans or for any other purpose), the assurance required by this section shall extend to admission practices and to all other practices relating to the treatment of students.
(2) The assurance required with respect to an institution of higher education, hospital, or any other institution, insofar as the assurance relates to the institution's practices with respect to admission or other treatment of individuals as students, patients, or clients of the institution or to the opportunity to participate in the provision of services or other benefits to such individuals, shall be applicable to the entire institution.
The following examples will illustrate the programs aided by Federal financial assistance of the Department. (In all cases the discrimination prohibited is discrimination on the ground of race, color, or national origin prohibited by title VI of the Act and this regulation, as a condition of the receipt of Federal financial assistance).
(a) In federally-affected area assistance (Pub. L. 815 and Pub. L. 874) for construction aid and for general support of the operation of elementary or secondary schools, or in more limited support to such schools such as for the acquisition of equipment, the provision of vocational education, or the provision of guidance and counseling services, discrimination by the recipient school district in any of its elementary or secondary schools in the admission of students, or in the treatment of its students in any aspect of the educational process, is prohibited. In this and the following illustrations the prohibition of discrimination in the treatment of students or other trainees includes the prohibition of discrimination among the students or trainees in the availability or use of any academic, dormitory, eating, recreational, or other facilities of the grantee or other recipient.
(b) In a research, training, demonstration, or other grant to a university for activities to be conducted in a graduate school, discrimination in the admission and treatment of students in the graduate school is prohibited, and the prohibition extends to the entire university.
(c) In a training grant to a hospital or other nonacademic institution, discrimination is prohibited in the selection of individuals to be trained and in their treatment by the grantee during their training. In a research or demonstration grant to such an institution discrimination is prohibited with respect to any educational activity and any provision of medical or other services and any financial aid to individuals incident to the program.
(d) In grants to assist in the construction of facilities for the provision of health, educational or welfare services, assurances will be required that services will be provided without discrimination, to the same extent that discrimination would be prohibited as a condition of Federal operating grants for the support of such services. Thus, as a condition of grants for the construction of academic, research, or other facilities at institutions of higher education, assurances will be required that there will be no discrimination in the admission or treatment of students.
(e) Upon transfers of real or personal surplus property for educational uses, discrimination is prohibited to the same extent as in the case of grants for the construction of facilities or the provision of equipment for like purposes.
(f) Each applicant for a grant for the construction of educational television facilities is required to provide an assurance that it will, in its broadcast services, give due consideration to the interests of all significant racial or ethnic groups within the population to be served by the applicant.
(g) A recipient may not take action that is calculated to bring about indirectly what this regulation forbids it to accomplish directly. Thus, a State, in selecting or approving projects or sites for the construction of public libraries which will receive Federal financial assistance, may not base its selections or approvals on criteria which have the effect of defeating or of substantially impairing accomplishments of the objectives of the Federal assistance as respects individuals of a particular race, color or national origin.
(h) In some situations, even though past discriminatory practices attributable to a recipient or applicant have been abandoned, the consequences of such practices continue to impede the full availability of a benefit. If the efforts required of the applicant or recipient under § 100.6(d), to provide information as to the availability of the program or activity and the rights of beneficiaries under this regulation, have failed to overcome these consequences, it will become necessary under the requirement stated in paragraph (i) of § 100.3(b)(6) for such applicant or recipient to take additional steps to make the benefits fully available to racial and nationality groups previously subject to discrimination. This action might take the form, for example, of special arrangements for obtaining referrals or making selections which will insure that groups previously subjected to discrimination are adequately served.
(i) Even though an applicant or recipient has never used discriminatory policies, the services and benefits of the program or activity it administers may not in fact be equally available to some racial or nationality groups. In such circumstances, an applicant or recipient may properly give special consideration to race, color, or national origin to make the benefits of its program more widely available to such groups, not then being adequately served. For example, where a university is not adequately serving members of a particular racial or nationality group, it may establish special recruitment policies to make its program better known and more readily available to such group, and take other steps to provide that group with more adequate service.
(a) Cooperation and assistance. The responsible Department official shall to the fullest extent practicable seek the cooperation of recipients in obtaining compliance with this part and shall provide assistance and guidance to recipients to help them comply voluntarily with this part.
(b) Compliance reports. Each recipient shall keep such records and submit to the responsible Department official or his designee timely, complete and accurate compliance reports at such times, and in such form and containing such information, as the responsible Department official or his designee may determine to be necessary to enable him to ascertain whether the recipient has complied or is complying with this part. For example, recipients should have available for the Department racial and ethnic data showing the extent to which members of minority groups are beneficiaries of and participants in federally-assisted programs. In the case in which a primary recipient extends Federal financial assistance to any other recipient, such other recipient shall also submit such compliance reports to the primary recipient as may be necessary to enable the primary recipient to carry out its obligations under this part.
(c) Access to sources of information. Each recipient shall permit access by the responsible Department official or his designee during normal business hours to such of its books, records, accounts, and other sources of information, and its facilities as may be pertinent to ascertain compliance with this part. Where any information required of a recipient is in the exclusive possession of any other agency, institution or person and this agency, institution or person shall fail or refuse to furnish this information the recipient shall so certify in its report and shall set forth what efforts it has made to obtain the information. Asserted considerations of privacy or confidentiality may not operate to bar the Department from evaluating or seeking to enforce compliance with this part. Information of a confidential nature obtained in connection with compliance evaluation or enforcement shall not be disclosed except where necessary in formal enforcement proceedings or where otherwise required by law.
(d) Information to beneficiaries and participants. Each recipient shall make available to participants, beneficiaries, and other interested persons such information regarding the provisions of this regulation and its applicability to the program for which the recipient receives Federal financial assistance, and make such information available to them in such manner, as the responsible Department official finds necessary to apprise such persons of the protections against discrimination assured them by the Act and this regulation.
(a) Periodic compliance reviews. The responsible Department official or his designee shall from time to time review the practices of recipients to determine whether they are complying with this part.
(b) Complaints. Any person who believes himself or any specific class of individuals to be subjected to discrimination prohibited by this part may by himself or by a representative file with the responsible Department official or his designee a written complaint. A complaint must be filed not later than 180 days from the date of the alleged discrimination, unless the time for filing is extended by the responsible Department official or his designee.
(c) Investigations. The responsible Department official or his designee will make a prompt investigation whenever a compliance review, report, complaint, or any other information indicates a possible failure to comply with this part. The investigation should include, where appropriate, a review of the pertinent practices and policies of the recipient, the circumstances under which the possible noncompliance with this part occurred, and other factors relevant to a determination as to whether the recipient has failed to comply with this part.
(d) Resolution of matters. (1) If an investigation pursuant to paragraph (c) of this section indicates a failure to comply with this part, the responsible Department official or his designee will so inform the recipient and the matter will be resolved by informal means whenever possible. If it has been determined that the matter cannot be resolved by informal means, action will be taken as provided for in § 100.8.
(2) If an investigation does not warrant action pursuant to paragraph (1) of this paragraph (d) the responsible Department official or his designee will so inform the recipient and the complainant, if any, in writing.
(e) Intimidatory or retaliatory acts prohibited. No recipient or other person shall intimidate, threaten, coerce, or discriminate against any individual for the purpose of interfering with any right or privilege secured by section 601 of the Act or this part, or because he has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding or hearing under this part. The identity of complainants shall be kept confidential except to the extent necessary to carry out the purposes of this part, including the conduct of any investigation, hearing, or judicial proceeding arising thereunder.
(a) General. If there appears to be a failure or threatened failure to comply with this regulation, and if the noncompliance or threatened noncompliance cannot be corrected by informal means, compliance with this part may be effected by the suspension or termination of or refusal to grant or to continue Federal financial assistance or by any other means authorized by law. Such other means may include, but are not limited to, (1) a reference to the Department of Justice with a recommendation that appropriate proceedings be brought to enforce any rights of the United States under any law of the United States (including other titles of the Act), or any assurance or other contractual undertaking, and (2) any applicable proceeding under State or local law.
(b) Noncompliance with § 100.4. If an applicant fails or refuses to furnish an assurance required under § 100.4 or otherwise fails or refuses to comply with a requirement imposed by or pursuant to that section Federal financial assistance may be refused in accordance with the procedures of paragraph (c) of this section. The Department shall not be required to provide assistance in such a case during the pendency of the administrative proceedings under such paragraph except that the Department shall continue assistance during the pendency of such proceedings where such assistance is due and payable pursuant to an application therefor approved prior to the effective date of this part.
(c) Termination of or refusal to grant or to continue Federal financial assistance. No order suspending, terminating or refusing to grant or continue Federal financial assistance shall become effective until (1) the responsible Department official has advised the applicant or recipient of his failure to comply and has determined that compliance cannot be secured by voluntary means, (2) there has been an express finding on the record, after opportunity for hearing, of a failure by the applicant or recipient to comply with a requirement imposed by or pursuant to this part, (3) the expiration of 30 days after the Secretary has filed with the committee of the House and the committee of the Senate having legislative jurisdiction over the program involved, a full written report of the circumstances and the grounds for such action. Any action to suspend or terminate or to refuse to grant or to continue Federal financial assistance shall be limited to the particular political entity, or part thereof, or other applicant or recipient as to whom such a finding has been made and shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found.
(d) Other means authorized by law. No action to effect compliance by any other means authorized by law shall be taken until (1) the responsible Department official has determined that compliance cannot be secured by voluntary means, (2) the recipient or other person has been notified of its failure to comply and of the action to be taken to effect compliance, and (3) the expiration of at least 10 days from the mailing of such notice to the recipient or other person. During this period of at least 10 days additional efforts shall be made to persuade the recipient or other person to comply with the regulation and to take such corrective action as may be appropriate.
(a) Opportunity for hearing. Whenever an opportunity for a hearing is required by § 100.8(c), reasonable notice shall be given by registered or certified mail, return receipt requested, to the affected applicant or recipient. This notice shall advise the applicant or recipient of the action proposed to be taken, the specific provision under which the proposed action against it is to be taken, and the matters of fact or law asserted as the basis for this action, and either (1) fix a date not less than 20 days after the date of such notice within which the applicant or recipient may request of the responsible Department official that the matter be scheduled for hearing or (2) advise the applicant or recipient that the matter in question has been set down for hearing at a stated place and time. The time and place so fixed shall be reasonable and shall be subject to change for cause. The complainant, if any, shall be advised of the time and place of the hearing. An applicant or recipient may waive a hearing and submit written information and argument for the record. The failure of an applicant or recipient to request a hearing for which a date has been set shall be deemed to be a waiver of the right to a hearing under section 602 of the Act and § 100.8(c) of this regulation and consent to the making of a decision on the basis of such information as may be filed as the record.
(b) Time and place of hearing. Hearings shall be held at the offices of the Department in Washington, DC, at a time fixed by the responsible Department official unless he determines that the convenience of the applicant or recipient or of the Department requires that another place be selected. Hearings shall be held before a hearing examiner designated in accordance with 5 U.S.C. 3105 and 3344 (section 11 of the Administrative Procedure Act).
(c) Right to counsel. In all proceedings under this section, the applicant or recipient and the Department shall have the right to be represented by counsel.
(d) Procedures, evidence, and record. (1) The hearing, decision, and any administrative review thereof shall be conducted in conformity with sections 5-8 of the Administrative Procedure Act, and in accordance with such rules of procedure as are proper (and not inconsistent with this section) relating to the conduct of the hearing, giving of notices subsequent to those provided for in paragraph (a) of this section, taking of testimony, exhibits, arguments and briefs, requests for findings, and other related matters. Both the Department and the applicant or recipient shall be entitled to introduce all relevant evidence on the issues as stated in the notice for hearing or as determined by the officer conducting the hearing at the outset of or during the hearing. Any person (other than a Government employee considered to be on official business) who, having been invited or requested to appear and testify as a witness on the Government's behalf, attends at a time and place scheduled for a hearing provided for by this part, may be reimbursed for his travel and actual expenses of attendance in an amount not to exceed the amount payable under the standardized travel regulations to a Government employee traveling on official business.
(2) Technical rules of evidence shall not apply to hearings conducted pursuant to this part, but rules or principles designed to assure production of the most credible evidence available and to subject testimony to test by cross-examination shall be applied where reasonably necessary by the officer conducting the hearing. The hearing officer may exclude irrelevant, immaterial, or unduly repetitious evidence. All documents and other evidence offered or taken for the record shall be open to examination by the parties and opportunity shall be given to refute facts and arguments advanced on either side of the issues. A transcript shall be made of the oral evidence except to the extent the substance thereof is stipulated for the record. All decisions shall be based upon the hearing record and written findings shall be made.
(e) Consolidated or joint hearings. In cases in which the same or related facts are asserted to constitute noncompliance with this regulation with respect to two or more Federal assistance statutes to which this part applies, or noncompliance with this part and the regulations of one or more other Federal departments or agencies issued under title VI of the Act, the responsible Department official may, by agreement with such other departments or agencies where applicable, provide for the conduct of consolidated or joint hearings, and for the application to such hearings of rules of procedures not inconsistent with this part. Final decisions in such cases, insofar as this regulation is concerned, shall be made in accordance with § 100.10.
(a) Decisions by hearing examiners. After a hearing is held by a hearing examiner such hearing examiner shall either make an initial decision, if so authorized, or certify the entire record including his recommended findings and proposed decision to the reviewing authority for a final decision, and a copy of such initial decision or certification shall be mailed to the applicant or recipient and to the complainant, if any. Where the initial decision referred to in this paragraph or in paragraph (c) of this section is made by the hearing examiner, the applicant or recipient or the counsel for the Department may, within the period provided for in the rules of procedure issued by the responsible Department official, file with the reviewing authority exceptions to the initial decision, with his reasons therefor. Upon the filing of such exceptions the reviewing authority shall review the initial decision and issue its own decision thereof including the reasons therefor. In the absence of exceptions the initial decision shall constitute the final decision, subject to the provisions of paragraph (e) of this section.
(b) Decisions on record or review by the reviewing authority. Whenever a record is certified to the reviewing authority for decision or it reviews the decision of a hearing examiner pursuant to paragraph (a) or (c) of this section, the applicant or recipient shall be given reasonable opportunity to file with it briefs or other written statements of its contentions, and a copy of the final decision of the reviewing authority shall be given in writing to the applicant or recipient and to the complainant, if any.
(c) Decisions on record where a hearing is waived. Whenever a hearing is waived pursuant to § 100.9(a) the reviewing authority shall make its final decision on the record or refer the matter to a hearing examiner for an initial decision to be made on the record. A copy of such decision shall be given in writing to the applicant or recipient, and to the complainant, if any.
(d) Rulings required. Each decision of a hearing examiner or reviewing authority shall set forth a ruling on each finding, conclusion, or exception presented, and shall identify the requirement or requirements imposed by or pursuant to this part with which it is found that the applicant or recipient has failed to comply.
(e) Review in certain cases by the Secretary. If the Secretary has not personally made the final decision referred to in paragraphs (a), (b), or (c) of this section, a recipient or applicant or the counsel for the Department may request the Secretary to review a decision of the Reviewing Authority in accordance with rules of procedure issued by the responsible Department official. Such review is not a matter of right and shall be granted only where the Secretary determines there are special and important reasons therefor. The Secretary may grant or deny such request, in whole or in part. He may also review such a decision upon his own motion in accordance with rules of procedure issued by the responsible Department official. In the absence of a review under this paragraph, a final decision referred to in paragraphs (a), (b), (c) of this section shall become the final decision of the Department when the Secretary transmits it as such to Congressional committees with the report required under section 602 of the Act. Failure of an applicant or recipient to file an exception with the Reviewing Authority or to request review under this paragraph shall not be deemed a failure to exhaust administrative remedies for the purpose of obtaining judicial review.
(f) Content of orders. The final decision may provide for suspension or termination of, or refusal to grant or continue Federal financial assistance, in whole or in part, to which this regulation applies, and may contain such terms, conditions, and other provisions as are consistent with and will effectuate the purposes of the Act and this regulation, including provisions designed to assure that no Federal financial assistance to which this regulation applies will thereafter be extended under such law or laws to the applicant or recipient determined by such decision to be in default in its performance of an assurance given by it pursuant to this regulation, or to have otherwise failed to comply with this regulation unless and until it corrects its noncompliance and satisfies the responsible Department official that it will fully comply with this regulation.
(g) Post-termination proceedings. (1) An applicant or recipient adversely affected by an order issued under paragraph (f) of this section shall be restored to full eligibility to receive Federal financial assistance if it satisfies the terms and conditions of that order for such eligibility or if it brings itself into compliance with this part and provides reasonable assurance that it will fully comply with this part. An elementary or secondary school or school system which is unable to file an assurance of compliance with § 100.3 shall be restored to full eligibility to receive Federal financial assistance, if it files a court order or a plan for desegregation which meets the requirements of § 100.4(c), and provides reasonable assurance that it will comply with the court order or plan.
(2) Any applicant or recipient adversely affected by an order entered pursuant to paragraph (f) of this section may at any time request the responsible Department official to restore fully its eligibility to receive Federal financial assistance. Any such request shall be supported by information showing that the applicant or recipient has met the requirements of paragraph (g)(1) of this section. If the responsible Department official determines that those requirements have been satisfied, he shall restore such eligibility.
(3) If the responsible Department official denies any such request, the applicant or recipient may submit a request for a hearing in writing, specifying why it believes such official to have been in error. It shall thereupon be given an expeditious hearing, with a decision on the record, in accordance with rules of procedure issued by the responsible Department official. The applicant or recipient will be restored to such eligibility if it proves at such hearing that it satisfied the requirements of paragraph (g)(1) of this section. While proceedings under this paragraph are pending, the sanctions imposed by the order issued under paragraph (f) of this section shall remain in effect.
Action taken pursuant to section 602 of the Act is subject to judicial review as provided in section 603 of the Act.
(a) Effect on other regulations. All regulations, orders, or like directions heretofore issued by any officer of the Department which impose requirements designed to prohibit any discrimination against individuals on the ground of race, color, or national origin under any program to which this regulation applies, and which authorize the suspension or termination of or refusal to grant or to continue Federal financial assistance to any applicant for or recipient of assistance for failure to comply with such requirements, are hereby superseded to the extent that such discrimination is prohibited by this regulation, except that nothing in this regulation shall be deemed to relieve any person of any obligation assumed or imposed under any such superseded regulation, order, instruction, or like direction prior to the effective date of this regulation. Nothing in this regulation, however, shall be deemed to supersede any of the following (including future amendments thereof):
(1) Executive Order 11063 and regulations issued thereunder, or any other regulations or instructions, insofar as such Order, regulations, or instructions prohibit discrimination on the ground of race, color, or national origin in any program or situation to which this regulation is inapplicable, or prohibit discrimination on any other ground; or
(2) Requirements for Emergency School Assistance as published in 35 FR 13442 and codified as 34 CFR part 280.
(b) Forms and instructions. The responsible Department official shall issue and promptly make available to interested persons forms and detailed instructions and procedures for effectuating this part.
(c) Supervision and coordination. The responsible Department official may from time to time assign to officials of the Department, or to officials of other departments or agencies of the Government with the consent of such departments or agencies, responsibilities in connection with the effectuation of the purposes of title VI of the Act and this regulation (other than responsibility for review as provided in § 100.10(e)), including the achievements of effective coordination and maximum uniformity within the Department and within the Executive Branch of the Government in the application of title VI and this regulation to similar programs and in similar situations. Any action taken, determination made, or requirement imposed by an official of another Department or Agency acting pursuant to an assignment of responsibility under this section shall have the same effect as though such action had been taken by the responsible official of this Department.
As used in this part:
(a) The term Department means the Department of Education.
(b) The term Secretary means the Secretary of Education.
(c) The term responsible Department official means the Secretary or, to the extent of any delegation by the Secretary of authority to act in his stead under any one or more provisions of this part, any person or persons to whom the Secretary has heretofore delegated, or to whom the Secretary may hereafter delegate such authority.
(d) The term reviewing authority means the Secretary, or any person or persons (including a board or other body specially created for that purpose and also including the responsible Department official) acting pursuant to authority delegated by the Secretary to carry out responsibilities under § 100.10(a)-(d).
(e) The term United States means the States of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, the Canal Zone, and the territories and possessions of the United States, and the term “State” means any one of the foregoing.
(f) The term Federal financial assistance includes (1) grants and loans of Federal funds, (2) the grant or donation of Federal property and interests in property, (3) the detail of Federal personnel, (4) the sale and lease of, and the permission to use (on other than a casual or transient basis), Federal property or any interest in such property without consideration or at a nominal consideration, or at a consideration which is reduced for the purpose of assisting the recipient, or in recognition of the public interest to be served by such sale or lease to the recipient, and (5) any Federal agreement, arrangement, or other contract which has as one of its purposes the provision of assistance.
(g) The term program or activity and the term program mean all of the operations of—
(1)(i) A department, agency, special purpose district, or other instrumentality of a State or of a local government; or
(ii) The entity of such State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government;
(2)(i) A college, university, or other postsecondary institution, or a public system of higher education; or
(ii) A local educational agency (as defined in 20 U.S.C. 8801), system of vocational education, or other school system;
(3)(i) An entire corporation, partnership, or other private organization, or an entire sole proprietorship—
(A) If assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or
(B) Which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or
(ii) The entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or
(4) Any other entity that is established by two or more of the entities described in paragraph (g)(1), (2), or (3) of this section; any part of which is extended Federal financial assistance.
(h) The term facility includes all or any portion of structures, equipment, or other real or personal property or interests therein, and the provision of facilities includes the construction, expansion, renovation, remodeling, alteration or acquisition of facilities.
(i) The term recipient means any State, political subdivision of any State, or instrumentality of any State or political subdivision, any public or private agency, institution, or organization, or other entity, or any individual, in any State, to whom Federal financial assistance is extended, directly or through another recipient, including any successor, assign, or transferee thereof, but such term does not include any ultimate beneficiary.
(j) The term primary recipient means any recipient which is authorized or required to extend Federal financial assistance to another recipient.
(k) The term applicant means one who submits an application, request, or plan required to be approved by a Department official, or by a primary recipient, as a condition to eligibility for Federal financial assistance, and the term application means such an application, request, or plan.
1. Loans for acquisition of equipment for academic subjects, and for minor remodeling (20 U.S.C. 445).
2. Construction of facilities for institutions of higher education (20 U.S.C. 701-758).
3. School Construction in federally-affected and in major disaster areas (20 U.S.C. 631-647).
4. Construction of educational broadcast facilities (47 U.S.C. 390-399).
5. Loan service of captioned films and educational media; research on, and production and distribution of, educational media for the handicapped, and training of persons in the use of such media for the handicapped (20 U.S.C. 1452).
6. Demonstration residential vocational education schools (20 U.S.C. 1321).
7. Research and related activities in education of handicapped children (20 U.S.C. 1441).
8. Educational research, dissemination and demonstration projects; research training; and construction under the Cooperation Research Act (20 U.S.C. 331-332(b)).
9. Research in teaching modern foreign languages (20 U.S.C. 512).
10. Training projects for manpower development and training (42 U.S.C. 2601, 2602, 2610a-2610c).
11. Research and training projects in Vocational Education (20 U.S.C. 1281(a), 1282-1284).
12. Allowances to institutions training NDEA graduate fellows (20 U.S.C. 461-465).
13. Grants for training in librarianship (20 U.S.C. 1031-1033).
14. Grants for training personnel for the education of handicapped children (20 U.S.C. 1431).
15. Allowances for institutions training teachers and related educational personnel in elementary and secondary education, or post-secondary vocational education (20 U.S.C. 1111-1118).
16. Recruitment, enrollment, training and assignment of Teacher Corps personnel (20 U.S.C. 1101-1107a).
17. Operation and maintenance of schools in Federally-affected and in major disaster areas (20 U.S.C. 236-241; 241-1; 242-244).
18. Grants or contracts for the operation of training institutes for elementary or secondary school personnel to deal with special educational problems occasioned by desegregation (42 U.S.C. 2000c-3).
19. Grants for in-service training of teachers and other schools personnel and employment of specialists in desegregation problems (42 U.S.C. 2000c-4).
20. Higher education students loan program (Title II, National Defense Education Act, 20 U.S.C. 421-429).
21. Educational Opportunity grants and assistance for State and private programs of low-interest insured loans and State loans to students in institutions of higher education (Title IV, Higher Education Act of 1965, 20 U.S.C. 1061-1087).
22. Grants and contracts for the conduct of Talent Search, Upward Bound, and Special Services Programs (20 U.S.C. 1068).
23. Land-grant college aid (7 U.S.C. 301-308; 321-326; 328-331).
24. Language and area centers (Title VI, National Defense Education Act, 20 U.S.C. 511).
25. American Printing House for the Blind (20 U.S.C. 101-105).
26. Future Farmers of America (36 U.S.C. 271-391) and similar programs.
27. Science clubs (Pub. L. 85-875, 20 U.S.C. 2, note).
28. Howard University (20 U.S.C. 121-129).
29. Gallaudet College (31 D.C. Code, Chapter 10).
30. Establishment and operation of a model secondary school for the deaf by Gallaudet College (31 D.C. Code 1051-1053; 80 Stat. 1027-1028).
31. Faculty development programs, workshops and institutes (20 U.S.C. 1131-1132).
32. National Technical Institute for the Deaf (20 U.S.C. 681-685).
33. Institutes and other programs for training educational personnel (parts D, E, and F, Title V, Higher Education Act of 1965) (20 U.S.C. 1119-1119c-4).
34. Grants and contracts for research and demonstration projects in librarianship (20 U.S.C. 1034).
35. Acquisition of college library resources (20 U.S.C. 1021-1028).
36. Grants for strengthening developing institutions of higher education (20 U.S.C. 1051-1054); National Fellowships for teaching at developing institutions (20 U.S.C. 1055), and grants to retired professors to teach at developing institutions (20 U.S.C. 1056).
37. College Work-Study Program (42 U.S.C. 2751-2757).
38. Financial assistance for acquisition of higher education equipment, and minor remodeling (20 U.S.C. 1121-1129).
39. Grants for special experimental demonstration projects and teacher training in adult education (20 U.S.C. 1208).
40. Grant programs for advanced and undergraduate international studies (20 U.S.C. 1171-1176; 22 U.S.C. 2452(b)).
41. Experimental projects for developing State leadership or establishment of special services (20 U.S.C. 865).
42. Grants to and arrangements with State educational and other agencies to meet special educational needs of migratory children of migratory agricultural workers (20 U.S.C. 241e(c)).
43. Grants by the Secretary to local educational agencies for supplementary educational centers and services; guidance, counseling, and testing (20 U.S.C. 841-844; 844b).
44. Resource centers for improvement of education of handicapped children (20 U.S.C. 1421) and centers and services for deaf-blind children (20 U.S.C. 1422).
45. Recruitment of personnel and dissemination of information on education of handicapped (20 U.S.C. 1433).
46. Grants for research and demonstrations relating to physical education or recreation for handicapped children (20 U.S.C. 1442) and training of physical educators and recreation personnel (20 U.S.C. 1434).
47. Dropout prevention projects (20 U.S.C. 887).
48. Bilingual education programs (20 U.S.C. 880b-880b-6).
49. Grants to agencies and organizations for Cuban refugees (22 U.S.C. 2601(b)(4)).
50. Grants and contracts for special programs for children with specific learning disabilities including research and related activities, training and operating model centers (20 U.S.C. 1461).
51. Curriculum development in vocational and technical education (20 U.S.C. 1391).
52. Establishment, including construction, and operation of a National Center on Educational Media and Materials for the Handicapped (20 U.S.C. 1453).
53. Grants and contracts for the development and operation of experimental preschool and early education programs for handicapped (20 U.S.C. 1423).
54. Grants to public or private non-profit agencies to carry on the Follow Through Program in kindergarten and elementary schools (42 U.S.C. 2809 (a)(2)).
55. Grants for programs of cooperative education and grants and contracts for training and research in cooperative education (20 U.S.C. 1087a-1087c).
56. Grants and contracts to encourage the sharing of college facilities and resources (network for knowledge) (20 U.S.C. 1133-1133b).
57. Grants, contracts, and fellowships to improve programs preparing persons for public service and to attract students to public service (20 U.S.C. 1134-1134b).
58. Grants for the improvement of graduate programs (20 U.S.C. 1135-1135c).
59. Contracts for expanding and improving law school clinical experience programs (20 U.S.C. 1136-1136b).
60. Exemplary programs and projects in vocational education (20 U.S.C. 1301-1305).
61. Grants to reduce borrowing cost for construction of residential schools and dormitories (20 U.S.C. 1323).
62. Surplus real and related personal property disposal for educational purposes (40 U.S.C. 484(k)).
1. Grants to States for public library service and construction, interlibrary cooperation and specialized State library services for certain State institutions and the physically handicapped (20 U.S.C. 351-355).
2. Grants to States for strengthening instruction in academic subjects (20 U.S.C. 441-444).
3. Grants to States for vocational education (20 U.S.C. 1241-1264).
4. Arrangements with State education agencies for training under the Manpower Development and Training Act (42 U.S.C. 2601-2602, 2610a).
5. Grants to States to assist in the elementary and secondary education of children of low-income families (20 U.S.C. 241a-242m).
6. Grants to States to provide for school library resources, textbooks and other instructional materials for pupils and teachers in elementary and secondary schools (20 U.S.C. 821-827).
7. Grants to States to strengthen State departments of education (20 U.S.C. 861-870).
8. Grants to States for community service programs (20 U.S.C. 1001-1011).
9. Grants to States for adult basic education and related research, teacher training and special projects (20 U.S.C. 1201-1211).
10. Grants to States educational agencies for supplementary educational centers and services, and guidance, counseling and testing (20 U.S.C. 841-847).
11. Grants to States for research and training in vocational education (20 U.S.C. 1281(b)).
12. Grants to States for exemplary programs and projects in vocational education (20 U.S.C. 1301-1305).
13. Grants to States for residential vocational education schools (20 U.S.C. 1321).
14. Grants to States for consumer and homemaking education (20 U.S.C. 1341).
15. Grants to States for cooperative vocational educational program (20 U.S.C. 1351-1355).
16. Grants to States for vocational work-study programs (20 U.S.C. 1371-1374).
17. Grants to States to attract and qualify teachers to meet critical teaching shortages (20 U.S.C. 1108-1110c).
18. Grants to States for education of handicapped children (20 U.S.C. 1411-1414).
19. Grants for administration of State plans and for comprehensive planning to determine construction needs of institutions of higher education (20 U.S.C. 715(b)).
These Guidelines apply to recipients of any Federal financial assistance from the Department of Education that offer or administer programs of vocational education or training. This includes State agency recipients.
The definition of recipient of Federal financial assistance is established by Department regulations implementing Title VI, Title IX, and Section 504 (34 CFR 100.13(i), 106.2(h), 104.3(f).
For the purposes of Title VI:
The term recipient means any State, political subdivision of any State, or instrumentality of any State or political subdivision, any public or private agency, institution, or organization, or other entity, or any individual, in any State, to whom Federal financial assistance is extended, directly or through another recipient, for any program, including any successor, assignee, or transferee thereof, but such terms does not include any ultimate beneficiary [e.g., students] under any such program. (34 CFR 100.13(i)).
For the purposes of Title IX:
Recipient means any State or political subdivision thereof, or any instrumentality of a State or political subdivision thereof, any public or private agency, institution, or organization, or other entity, or any person to whom Federal financial assistance is extended, directly or through another recipient and which operates an education program or activity which receives or benefits from such assistance, including any subunit, successor, assignee, or transferee thereof. (34 CFR 106.2(h)).
For the purposes of Section 504:
Recipient means any State or its political subdivision any instrumentality of a State or its political subdivision, any public or private agency, institution, or organization, or other entity, or any person to which Federal financial assistance is extended, directly or through another recipient, including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance. (34 CFR 104.3(f)).
The following education agencies, when they provide vocational education, are examples of recipients covered by these Guidelines:
1. The board of education of a public school district and its administrative agency.
2. The administrative board of a specialized vocational high school serving students from more than one school district.
3. The administrative board of a technical or vocational school that is used exclusively or principally for the provision of vocational education to persons who have completed or left high school (including persons seeking a certificate or an associate degree through a vocational program offered by the school) and who are available for study in preparation for entering the labor market.
4. The administrative board of a postsecondary institution, such as a technical institute, skill center, junior college, community college, or four year college that has a department or division that provides vocational education to students seeking immediate employment, a certificate or an associate degree.
5. The administrative board of a proprietary (private) vocational education school.
6. A State agency recipient itself operating a vocational education facility.
The following are examples of the types of schools to which these Guidelines apply.
1. A junior high school, middle school, or those grades of a comprehensive high school that offers instruction to inform, orient, or prepare students for vocational education at the secondary level.
2. A vocational education facility operated by a State agency.
3. A comprehensive high school that has a department exclusively or principally used for providing vocational education; or that offers at least one vocational program to secondary level students who are available for study in preparation for entering the labor market; or that offers adult vocational education to persons who have completed or left high school and who are available for study in preparation for entering the labor market.
4. A comprehensive high school, offering the activities described above, that receives students on a contract basis from other school districts for the purpose of providing vocational education.
5. A specialized high school used exclusively or principally for the provision of vocational education, that enrolls students form one or more school districts for the purpose of providing vocational education.
6. A technical or vocational school that primarily provides vocational education to persons who have completed or left high school and who are available for study in preparation for entering the labor market, including students seeking an associate degree or certificate through a course of vocational instruction offered by the school.
7. A junior college, a community college, or four-year college that has a department or division that provides vocational education to students seeking immediate employment, an associate degree or a certificate through a course of vocational instruction offered by the school.
8. A proprietary school, licensed by the State that offers vocational education.
Subsequent sections of these Guidelines may use the term secondary vocational education center in referring to the institutions described in paragraphs 3, 4 and 5 above or the term postsecondary vocational education center in referring to institutions described in paragraphs 6 and 7 above or the term vocational education center in referring to any or all institutions described above.
State agency recipients, in addition to complying with all other provisions of the Guidelines relevant to them, may not require, approve of, or engage in any discrimination or denial of services on the basis of race, color, national origin, sex, or handicap in performing any of the following activities:
1. Establishment of criteria or formulas for distribution of Federal or State funds to vocational education programs in the State;
2. Establishment of requirements for admission to or requirements for the administration of vocational education programs;
3. Approval of action by local entities providing vocational education. (For example, a State agency must ensure compliance with Section IV of these Guidelines if and when it reviews a vocational education agency decision to create or change a geographic service area.);
4. Conducting its own programs. (For example, in employing its staff it may not discriminate on the basis of sex or handicap.)
The State agency responsible for the administration of vocational education programs must adopt a compliance program to prevent, identify and remedy discrimination on the basis of race, color, national origin, sex or handicap by its subrecipients. (A “subrecipient,” in this context, is a local agency or vocational education center that receives financial assistance through a State agency.) This compliance program must include:
1. Collecting and analyzing civil rights related data and information that subrecipients compile for their own purposes or that are submitted to State and Federal officials under existing authorities;
2. Conducting periodic compliance reviews of selected subrecipients (i.e., an investigation of a subrecipient to determine whether it engages in unlawful discrimination in any aspect of its program); upon finding unlawful discrimination, notifying the subrecipient of steps it must take to attain compliance and attempting to obtain voluntary compliance;
3. Providing technical assistance upon request to subrecipients. This will include assisting subrecipients to identify unlawful discrimination and instructing them in remedies for and prevention of such discrimination;
4. Periodically reporting its activities and findings under the foregoing paragraphs, including findings of unlawful discrimination under paragraph 2, immediately above, to the Office for Civil Rights.
State agencies are not required to terminate or defer assistance to any subrecipient. Nor are they required to conduct hearings. The responsibilities of the Office for Civil Rights to collect and analyze data, to conduct compliance reviews, to investigate complaints and to provide technical assistance are not diminished or attenuated by the requirements of Section II of the Guidelines.
Within one year from the publication of these Guidelines in final form, each State agency recipient performing oversight responsibilities must submit to the Office for Civil Rights the methods of administration and related procedures it will follow to comply with the requirements described in paragraphs A and B immediately above. The Department will review each submission and will promptly either approve it, or return it to State officials for revision.
Recipients that administer grants for vocational education must distribute Federal, State, or local vocational education funds so that no student or group of students is unlawfully denied an equal opportunity to benefit from vocational education on the basis of race, color, national origin, sex, or handicap.
Recipients may not adopt a formula or other method for the allocation of Federal, State, or local vocational education funds that has the effect of discriminating on the basis of race, color, national origin, sex, or handicap. However, a recipient may adopt a formula or other method of allocation that uses as a factor race, color, national origin, sex, or handicap [or an index or proxy for race, color, national origin, sex, or handicap e.g., number of persons receiving Aid to Families with Dependent Children or with limited English speaking ability] if the factor is included to compensate for past discrimination or to comply with those provisions of the Vocational Education Amendments of 1976 designed to assist specified protected groups.
In each State it is likely that some local recipients will enroll greater proportions of minority students in vocational education than the State-wide proportion of minority students in vocational education. A funding formula or other method of allocation that results in such local recipients receiving per-pupil allocations of Federal or State vocational education funds lower than the State-wide average per-pupil allocation will be presumed unlawfully discriminatory.
Each State agency that establishes criteria for awarding competitive vocational education grants or contracts must establish and apply the criteria without regard to the race, color, national origin, sex, or handicap of any or all of a recipient's students, except to compensate for past discrimination.
State agencies must disseminate information needed to satisfy the requirements of any application process for competitive or discretionary grants so that all recipients, including those having a high percentage of minority or handicapped students, are informed of and able to seek funds. State agencies that provide technical assistance for the completion of the application process must provide such assistance without discrimination against any one recipient or class of recipients.
If the Office for Civil Rights finds that a recipient's system for distributing vocational education funds unlawfully discriminates on the basis of race, color, national origin, sex, or handicap, it will require the recipient to adopt an alternative nondiscriminatory method of distribution. The Office for Civil Rights may also require the recipient to compensate for the effects of its past unlawful discrimination in the distribution of funds.
Criteria controlling student eligibility for admission to vocational education schools, facilities and programs may not unlawfully discriminate on the basis of race, color, national origin, sex, or handicap. A recipient may not develop, impose, maintain, approve, or implement such discriminatory admissions criteria.
State and local recipients may not select or approve a site for a vocational education facility for the purpose or with the effect of excluding, segregating, or otherwise discriminating against students on the basis of race, color, or national origin. Recipients must locate vocational education facilities at sites that are readily accessible to both nonminority and minority communities, and that do not tend to identify the facility or program as intended for nonminority or minority students.
Recipients may not establish, approve or maintain geographic boundaries for a vocational education center service area or attendance zone, (hereinafter “service area”), that unlawfully exclude students on the basis of race, color, or national origin. The Office for Civil Rights will presume, subject to rebuttal, that any one or combination of the following circumstances indicates that the boundaries of a given service area are unlawfully constituted:
1. A school system or service area contiguous to the given service area, contains minority or nonminority students in substantially greater proportion than the given service area;
2. A substantial number of minority students who reside outside the given vocational education center service area, and who are not eligible for the center reside, nonetheless, as close to the center as a substantial number of non-minority students who are eligible for the center;
3. The over-all vocational education program of the given service area in comparison to the over-all vocational education program of a contiguous school system or service area enrolling a substantially greater proportion of minority students:
(a) Provides its students with a broader range of curricular offerings, facilities and equipment; or (b) provides its graduates greater opportunity for employment in jobs:
(i) For which there is a demonstrated need in the community or region; (ii) that pay higher entry level salaries or wages; or (iii) that are generally acknowledged to offer greater prestige or status.
A recipient may not add to, modify, or renovate the physical plant of a vocational education facility in a manner that creates, maintains, or increases student segregation on the basis of race, color, national origin, sex, or handicap.
If the conditions specified in paragraphs IV, A, B, C, or D, immediately above, are found and not rebutted by proof of nondiscrimination, the Office for Civil Rights will require the recipient(s) to submit a plan to remedy the discrimination. The following are examples of steps that may be included in the plan, where necessary to overcome the discrimination:
(1) Redrawing of the boundaries of the vocational education center's service area to include areas unlawfully excluded and/or to exclude areas unlawfully included; (2) provision of transportation to students residing in areas unlawfully excluded; (3) provision of additional programs and services to students who would have been eligible for attendance at the vocational education center but for the discriminatory service area or site selection; (4) reassignment of students; and (5) construction of new facilities or expansion of existing facilities.
A recipient may not adopt or maintain a system for admission to a secondary vocational education center or program that limits admission to a fixed number of students from each sending school included in the center's service area if such a system disproportionately excludes students from the center on the basis of race, sex, national origin or handicap. (Example: Assume 25 percent of a school district's high school students are black and that most of those black students are enrolled in one high school; the white students, 75 percent of the district's total enrollment, are generally enrolled in the five remaining high schools. This paragraph prohibits a system of admission to the secondary vocational education center that limits eligibility to a fixed and equal number of students from each of the district's six high schools.)
If the Office for Civil Rights finds a violation of paragraph F, above, the recipient must implement an alternative system of admissions that does not disproportionately exclude students on the basis of race, color, national origin, sex, or handicap.
A vocational education center, branch or annex, open to all students in a service area and predominantly enrolling minority students or students of one race, national origin or sex, will be presumed unlawfully segregated if:
(1) It was established by a recipient for members of one race, national origin or sex; or (2) it has since its construction been attended primarily by members of one race, national origin or sex; or (3) most of its program offerings have traditionally been selected predominantly by members of one race, national origin or sex.
If the conditions specified in paragraph IV-H are found and not rebutted by proof of nondiscrimination, the Office for Civil Rights will require the recipient(s) to submit a plan to remedy the segregation. The following are examples of steps that may be included in the plan, where necessary to overcome the discrimination:
(1) Elimination of program duplication in the segregated facility and other proximate vocational facilities; (2) relocation or “clustering” of programs or courses; (3) adding programs and courses that traditionally have been identified as intended for members of a particular race, national origin or sex to schools that have traditionally served members of the other sex or traditionally served persons of a different race or national origin; (4) merger of programs into one facility through school closings or new construction; (5) intensive outreach recruitment and counseling; (6) providing free transportation to students whose enrollment would promote desegregation.
Recipients may not judge candidates for admission to vocational education programs on the basis of criteria that have the effect of disproportionately excluding persons of a particular race, color, national origin, sex, or handicap. However, if a recipient can demonstrate that such criteria have been validated as essential to participation in a given program and that alternative equally valid criteria that do not have such a disproportionate adverse effect are unavailable, the criteria will be judged nondiscriminatory. Examples of admissions criteria that must meet this test are past academic performance, record of disciplinary infractions, counselors' approval, teachers' recommendations, interest inventories, high school diplomas and standardized tests, such as the Test of Adult Basic Education (TABE).
An introductory, preliminary, or exploratory course may not be established as a prerequisite for admission to a program unless the course has been and is available without regard to race, color, national origin, sex, and handicap. However, a course that was formerly only available on a discriminatory basis may be made a prerequisite for admission to a program if the recipient can demonstrate that:
(a) The course is essential to participation in the program; and (b) the course is presently available to those seeking enrollment for the first time and to those formerly excluded.
Recipients may not restrict an applicant's admission to vocational education programs because the applicant, as a member of a national origin minority with limited English language skills, cannot participate in and benefit from vocational instruction to the same extent as a student whose primary language is English. It is the responsibility of the recipient to identify such applicants and assess their ability to participate in vocational instruction.
Acceptable methods of identification include: (1) Identification by administrative staff, teachers, or parents of secondary level students; (2) identification by the student in postsecondary or adult programs; and (3) appropriate diagnostic procedures, if necessary.
Recipients must take steps to open all vocational programs to these national origin minority students. A recipient must demonstrate that a concentration of students with limited English language skills in one or a few programs is not the result of discriminatory limitations upon the opportunities available to such students.
If the Office for Civil Rights finds that a recipient has denied national origin minority persons admission to a vocational school or program because of their limited English language skills or has assigned students to vocational programs solely on the basis of their limited English language skills, the recipient will be required to submit a remedial plan that insures national origin minority students equal access to vocational education programs.
Recipients may not deny handicapped students access to vocational education programs or courses because of architectural or equipment barriers, or because of the need for related aids and services or auxiliary aids. If necessary, recipients must:
(1) Modify instructional equipment; (2) modify or adapt the manner in which the courses are offered; (3) house the program in facilities that are readily accessible to mobility impaired students or alter facilities to make them readily accessible to mobility impaired students; and (4) provide auxiliary aids that effectively make lectures and necessary materials available to postsecondary handicapped students; (5) provide related aids or services that assure secondary students an appropriate education.
Academic requirements that the recipient can demonstrate are essential to a program of instruction or to any directly related licensing requirement will not be regarded as discriminatory. However, where possible, a recipient must adjust those requirements to the needs of individual handicapped students.
Access to vocational programs or courses may not be denied handicapped students on the ground that employment opportunities in any occupation or profession may be more limited for handicapped persons than for non-handicapped persons.
Prior to the beginning of each school year, recipients must advise students, parents, employees and the general public that all vocational opportunities will be offered without regard to race, color, national origin, sex, or handicap. Announcement of this policy of non-discrimination may be made, for example, in local newspapers, recipient publications and/or other media that reach the general public, program beneficiaries, minorities (including national origin minorities with limited English language skills), women, and handicapped persons. A brief summary of program offerings and admission criteria should be included in the announcement; also the name, address and telephone number of the person designated to coordinate Title IX and Section 504 compliance activity.
If a recipient's service area contains a community of national origin minority persons with limited English language skills, public notification materials must be disseminated to that community in its language and must state that recipients will take steps to assure that the lack of English language skills will not be a barrier to admission and participation in vocational education programs.
Recipients must insure that their counseling materials and activities (including student program selection and career/employment selection), promotional, and recruitment efforts do not discriminate on the basis of race, color, national origin, sex, or handicap.
Recipients that operate vocational education programs must insure that counselors do not direct or urge any student to enroll in a particular career or program, or measure or predict a student's prospects for success in any career or program based upon the student's race, color, national origin, sex, or handicap. Recipients may not counsel handicapped students toward more restrictive career objectives than nonhandicapped students with similar abilities and interests. If a vocational program disproportionately enrolls male or female students, minority or nonminority students, or handicapped students, recipients must take steps to insure that the disproportion does not result from unlawful discrimination in counseling activities.
Recipients must conduct their student recruitment activities so as not to exclude or limit opportunities on the basis of race, color, national origin, sex, or handicap. Where recruitment activities involve the presentation or portrayal of vocational and career opportunities, the curricula and programs described should cover a broad range of occupational opportunities and not be limited on the basis of the race, color, national origin, sex, or handicap of the students or potential students to whom the presentation is made. Also, to the extent possible, recruiting teams should include persons of different races, national origins, sexes, and handicaps.
Recipients must insure that counselors can effectively communicate with national origin minority students with limited English language skills and with students who have hearing impairments. This requirement may be satisfied by having interpreters available.
Recipients may not undertake promotional efforts (including activities of school officials, counselors, and vocational staff) in a manner that creates or perpetuates stereotypes or limitations based on race, color, national origin, sex or handicap. Examples of promotional efforts are career days, parents' night, shop demonstrations, visitations by groups of prospective students and by representatives from business and industry. Materials that are part of promotional efforts may not create or perpetuate stereotypes through text or illustration. To the extent possible they should portray males or females, minorities or handicapped persons in programs and occupations in which these groups traditionally have not been represented. If a recipient's service area contains a community of national origin minority persons with limited English language skills, promotional literature must be distributed to that community in its language.
Recipients must place secondary level handicapped students in the regular educational environment of any vocational education program to the maximum extent appropriate to the needs of the student unless it can be demonstrated that the education of the handicapped person in the regular environment with the use of supplementary aids and services cannot be achieved satisfactorily. Handicapped students may be placed in a program only after the recipient satisfies the provisions of the Department's Regulation, 34 CFR, part 104, relating to evaluation, placement, and procedural safeguards. If a separate class or facility is identifiable as being for handicapped persons, the facility, the programs, and the services must be comparable to the facilities, programs, and services offered to nonhandicapped students.
Recipients may not award financial assistance in the form of loans, grants, scholarships, special funds, subsidies, compensation for work, or prizes to vocational education students on the basis of race, color, national origin, sex, or handicap, except to overcome the effects of past discrimination. Recipients may administer sex restricted financial assistance where the assistance and restriction are established by will, trust, bequest, or any similar legal instrument, if the overall effect of all financial assistance awarded does not discriminate on the basis of sex. Materials and information used to notify students of opportunities for financial assistance may not contain language or examples that would lead applicants to believe the assistance is provided on a discriminatory basis. If a recipient's service area contains a community of national origin minority persons with limited English language skills, such information must be disseminated to that community in its language.
Recipients must extend housing opportunities without discrimination based on race, color, national origin, sex, or handicap. This obligation extends to recipients that provide on-campus housing and/or that have agreements with providers of off-campus housing. In particular, a recipient postsecondary vocational education program that provides on-campus or off-campus housing to its nonhandicapped students must provide, at the same cost and under the same conditions, comparable convenient and accessible housing to handicapped students.
Recipients must provide changing rooms, showers, and other facilities for students of one sex that are comparable to those provided to students of the other sex. This may be accomplished by alternating use of the same facilities or by providing separate, comparable facilities.
Such facilities must be adapted or modified to the extent necessary to make the vocational education program readily accessible to handicapped persons.
A recipient must insure that: (a) It does not discriminate against its students on the basis of race, color, national origin, sex, or handicap in making available opportunities in cooperative education, work study and job placement programs; and (b) students participating in cooperative education, work study and job placement programs are not discriminated against by employers or prospective employers on the basis of race, color, national origin, sex, or handicap in recruitment, hiring, placement, assignment to work tasks, hours of employment, levels of responsibility, and in pay.
If a recipient enters into a written agreement for the referral or assignment of students to an employer, the agreement must contain an assurance from the employer that students will be accepted and assigned to jobs and otherwise treated without regard to race, color, national origin, sex, or handicap.
Recipients may not honor any employer's request for students who are free of handicaps or for students of a particular race, color, national origin, or sex. In the event an employer or prospective employer is or has been subject to court action involving discrimination in employment, school officials should rely on the court's findings if the decision resolves the issue of whether the employer has engaged in unlawful discrimination.
A recipient may not enter into any agreement for the provision or support of apprentice training for students or union members with any labor union or other sponsor that discriminates against its members or applicants for membership on the basis of race, color, national origin, sex, or handicap. If a recipient enters into a written agreement with a labor union or other sponsor providing for apprentice training, the agreement must contain an assurance from the union or other sponsor:
(1) That it does not engage in such discrimination against its membership or applicants for membership; and (2) that apprentice training will be offered and conducted for its membership free of such discrimination.
Recipients may not engage in any employment practice that discriminates against any employee or applicant for employment on the basis of sex or handicap. Recipients may not engage in any employment practice that discriminates on the basis of race, color, or national origin if such discrimination tends to result in segregation, exclusion or other discrimination against students.
Recipients may not limit their recruitment for employees to schools, communities, or companies disproportionately composed of persons of a particular race, color, national origin, sex, or handicap except for the purpose of overcoming the effects of past discrimination. Every source of faculty must be notified that the recipient does not discriminate in employment on the basis of race, color, national origin, sex, or handicap.
Whenever the Office for Civil Rights finds that in light of the representation of protected groups in the relevant labor market there is a significant underrepresentation or overrepresentation of protected group persons on the staff of a vocational education school or program, it will presume that the disproportion results from unlawful discrimination. This presumption can be overcome by proof that qualified persons of the particular race, color, national origin, or sex, or that qualified handicapped persons are not in fact available in the relevant labor market.
Recipients must establish and maintain faculty salary scales and policy based upon the conditions and responsibilities of employment, without regard to race, color, national origin, sex or handicap.
Recipients must provide equal employment opportunities for teaching and administrative positions to handicapped applicants who can perform the essential functions of the position in question. Recipients must make reasonable accommodation for the physical or mental limitations of handicapped applicants who are otherwise qualified unless recipients can demonstrate that the accommodation would impose an undue hardship.
Recipients must take steps to overcome the effects of past discrimination in the recruitment, hiring, and assignment of faculty. Such steps may include the recruitment or reassignment of qualified persons of a particular race, national origin, or sex, or who are handicapped.
State Advisory Councils of Vocational Education are recipients of Federal financial assistance and therefore must comply with Section VIII of the Guidelines.
Where recruitment and hiring of staff for State operated vocational education centers is conducted by a State civil service employment authority, the State education agency operating the program must insure that recruitment and hiring of staff for the vocational education center is conducted in accordance with the requirements of these Guidelines.
Proprietary vocational education schools that are recipients of Federal financial assistance through Federal student assistance programs or otherwise are subject to all of the requirements of the Department's regulations and these Guidelines.
Enforcement of the provisions of Title IX of the Education Amendments of 1972 and Section 504 of the Rehabilitation Act of 1973 is the responsibility of the Department of Education. However, authority to enforce Title VI of the Civil rights Act of 1964 for proprietary vocational education schools has been delegated to the Veterans Administration.
When the Office for Civil Rights receives a Title VI complaint alleging discrimination by a proprietary vocational education school it will forward the complaint to the Veterans Administration and cite the applicable requirements of the Department's regulations and these Guidelines. The complainant will be notified of such action.
The rules of procedure in this part supplement §§ 100.9 and 100.10 of this subtitle and govern the practice for hearings, decisions, and administrative review conducted by the Department of Education, pursuant to Title VI of the Civil Rights Act of 1964 (section 602, 78 Stat. 252) and part 100 of this subtitle.
All pleadings, correspondence, exhibits, transcripts, of testimony, exceptions, briefs, decisions, and other documents filed in the docket in any proceeding may be inspected and copied in the office of the Civil Rights hearing clerk. Inquiries may be made at the Department of Education, 400 Maryland Avenue SW., Washington, DC 20202.
As used in this part, words importing the singular number may extend and be applied to several persons or things, and vice versa. Words importing the masculine gender may be applied to females or organizations.
Upon notice to all parties, the reviewing authority or the presiding officer, with respect to matters pending before them, may modify or waive any rule in this part upon determination that no party will be unduly prejudiced and the ends of justice will thereby be served.
A party may appear in person or by counsel and participate fully in any proceeding. A State agency or a corporation may appear by any of its officers or by any employee it authorizes to appear on its behalf. Counsel must be members in good standing of the bar of a State, Territory, or possession of the United States or of the District of Columbia or the Commonwealth of Puerto Rico.
Any individual acting in a representative capacity in any proceeding may be required to show his authority to act in such capacity.
Disrespectful, disorderly, or contumacious language or contemptuous conduct, refusal to comply with directions, or continued use of dilatory tactics by any person at any hearing before a presiding officer shall constitute grounds for immediate exclusion of such person from the hearing by the presiding officer.
(a) The term party shall include an applicant or recipient or other person to whom a notice of hearing or opportunity for hearing has been mailed naming him a respondent.
(b) The Assistant Secretary for Civil Rights of the Department of Education, shall be deemed a party to all proceedings.
(a) Any interested person or organization may file a petition to participate in a proceeding as an amicus curiae. Such petition shall be filed prior to the prehearing conference, or if none is held, before the commencement of the hearing, unless the petitioner shows good cause for filing the petition later. The presiding officer may grant the petition if he finds that the petitioner has a legitimate interest in the proceedings, that such participation will not unduly delay the outcome, and may contribute materially to the proper disposition thereof. An amicus curiae is not a party and may not introduce evidence at a hearing.
(b) An amicus curiae may submit a statement of position to the presiding officer prior to the beginning of a hearing, and shall serve a copy on each party. The amicus curiae may submit a brief on each occasion a decision is to be made or a prior decision is subject to review. His brief shall be filed and served on each party within the time limits applicable to the party whose position he deems himself to support; or if he does not deem himself to support the position of any party, within the longest time limit applicable to any party at that particular stage of the proceedings.
(c) When all parties have completed their initial examination of a witness, any amicus curiae may request the presiding officer to propound specific questions to the witness. The presiding officer, in his discretion, may grant any such request if he believes the proposed additional testimony may assist materially in elucidating factual matters at issue between the parties and will not expand the issues.
A person submitting a complaint pursuant to § 100.7(b) of this title is not a party to the proceedings governed by this part, but may petition, after proceedings are initiated, to become an amicus curiae.
Documents to be filed under the rules in this part shall be dated, the original signed in ink, shall show the docket description and title of the proceeding, and shall show the title, if any, and address of the signatory. Copies need not be signed but the name of the person signing the original shall be reproduced. Documents shall be legible and shall not be more than 8
The signature of a party, authorized officer, employee or attorney constitutes a certificate that he has read the document, that to the best of his knowledge, information, and belief there is good ground to support it, and that it is not interposed for delay. If a document is not signed or is signed with intent to defeat the purpose of this section, it may be stricken as sham and false and the proceeding may proceed as though the document had not been filed. Similar action may be taken if scandalous or indecent matter is inserted.
All notices by a Department official, and all written motions, requests, petitions, memoranda, pleadings, exceptions, briefs, decisions, and correspondence to a Department official from a party, or vice versa, relating to a proceeding after its commencement shall be filed and served on all parties. Parties shall supply the original and two copies of documents submitted for filing. Filings shall be made with the Civil Rights hearing clerk at the address stated in the notice of hearing or notice of opportunity for hearing, during regular business hours. Regular business hours are every Monday through Friday (legal holidays in the District of Columbia excepted) from 9 a.m. to 5:30 p.m., eastern standard or daylight saving time, whichever is effective in the District of Columbia at the time. Originals only on exhibits and transcripts of testimony need be filed. For requirements of service on amici curiae, see § 101.107.
Service shall be made by personal delivery of one copy to each person to be served or by mailing by first-class mail, properly addressed with postage prepaid. When a party or amicus has appeared by attorney or other representative, service upon such attorney or representative will be deemed service upon the party or amicus. Documents served by mail preferably should be mailed in sufficient time to reach the addressee by the date on which the original is due to be filed, and should be air mailed if the addressee is more than 300 miles distant.
The date of service shall be the day when the matter is deposited in the U.S. mail or is delivered in person, except that the date of service of the initial notice of hearing or opportunity for hearing shall be the date of its delivery, or of its attempted delivery if refused.
The original of every document filed and required to be served upon parties to a proceeding shall be endorsed with a certificate of service signed by the party making service or by his attorney or representative, stating that such service has been made, the date of service, and the manner of service, whether by mail or personal delivery.
In computing any period of time under the rules in this part or in an order issued hereunder, the time begins with the day following the act, event, or default, and includes the last day of the period, unless it is a Saturday, Sunday, or legal holiday observed in the District of Columbia, in which event it includes the next following business day. When the period of time prescribed or allowed is less than 7 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded from the computation.
Requests for extension of time should be served on all parties and should set forth the reasons for the application. Applications may be granted upon a showing of good cause by the applicant. From the designation of a presiding officer until the issuance of his decision such requests should be addressed to him. Answers to such requests are permitted, if made promptly.
For good cause, the reviewing authority or the presiding officer, with respect to matters pending before them, may reduce any time limit prescribed by the rules in this part, except as provided by law or in part 100 of this chapter.
Proceedings are commenced by mailing a notice of hearing or opportunity for hearing to an affected applicant or recipient, pursuant to § 100.9 of this title.
The respondent, applicant or recipient may file an answer to the notice within 20 days after service thereof. Answers shall admit or deny specifically and in detail each allegation of the notice, unless the respondent party is without knowledge, in which case his answer should so state, and the statement will be deemed a denial. Allegations of fact in the notice not denied or controverted by answer shall be deemed admitted. Matters alleged as affirmative defenses shall be separately stated and numbered. Failure of the respondent to file an answer within the 20-day period following service of the notice may be deemed an admission of all matters of fact recited in the notice.
The Assistant Secretary for Civil Rights may amend the notice of hearing or opportunity for hearing once as a matter of course before an answer thereto is served, and each respondent may amend his answer once as a matter of course not later than 10 days before the date fixed for hearing but in no event later than 20 days from the date of service of his original answer. Otherwise a notice or answer may be amended only by leave of the presiding officer. A respondent shall file his answer to an amended notice within the time remaining for filing the answer to the original notice or within 10 days after service of the amended notice, whichever period may be the longer, unless the presiding officer otherwise orders.
Within 20 days after service of a notice of opportunity for hearing which does not fix a date for hearing the respondent, either in his answer or in a separate document, may request a hearing. Failure of the respondent to request a hearing shall be deemed a waiver of the right to a hearing and to constitute his consent to the making of a decision on the basis of such information as is available.
The responsible Department official may provide for proceedings in the Department to be joined or consolidated for hearing with proceedings in other Federal departments or agencies, by agreement with such other departments or agencies. All parties to any proceeding consolidated subsequently to service of the notice of hearing or opportunity for hearing shall be promptly served with notice of such consolidation.
Motions and petitions shall state the relief sought, the authority relied upon, and the facts alleged. If made before or after the hearing, these matters shall be in writing. If made at the hearing, they may be stated orally; but the presiding officer may require that they be reduced to writing and filed and served on all parties in the same manner as a formal motion. Motions, answers, and replies shall be addressed to the presiding officer, if the case is pending before him. A repetitious motion will not be entertained.
Within 8 days after a written motion or petition is served, or such other period as the reviewing authority or the presiding officer may fix, any party may file a response thereto. An immediate oral response may be made to an oral motion.
The reviewing authority or the presiding officer may not sustain or grant a written motion or petition prior to expiration of the time for filing responses thereto, but may overrule or deny such motion or petition without awaiting response: Provided, however, That prehearing conferences, hearings and decisions need not be delayed pending disposition of motions or petitions. Oral motions and petitions may be ruled on immediately. Motions and petitions submitted to the reviewing authority or the presiding officer, respectively, and not disposed of in separate rulings or in their respective decisions will be deemed denied. Oral arguments shall not be held or written motions or petitions unless the presiding officer in his discretion expressly so orders.
A hearing examiner assigned under 5 U.S.C. 3105 or 3344 (formerly section 11 of the Administrative Procedure Act) shall preside over the taking of evidence in any hearing to which these rules of procedure apply.
The designation of the hearing examiner as presiding officer shall be in writing, and shall specify whether the examiner is to make an initial decision or to certify the entire record including his recommended findings and proposed decision to the reviewing authority, and may also fix the time and place of hearing. A copy of such order shall be served on all parties. After service of an order designating a hearing examiner to preside, and until such examiner makes his decision, motions and petitions shall be submitted to him. In the case of the death, illness, disqualification or unavailability of the designated hearing examiner, another hearing examiner may be designated to take his place.
The presiding officer shall have the duty to conduct a fair hearing, to take all necessary action to avoid delay, and to maintain order. He shall have all powers necessary to these ends, including (but not limited to) the power to:
(a) Arrange and issue notice of the date, time, and place of hearings, or, upon due notice to the parties, to change the date, time, and place of hearings previously set.
(b) Hold conferences to settle, simplify, or fix the issues in a proceeding, or to consider other matters that may aid in the expeditious disposition of the proceeding.
(c) Require parties and amici curiae to state their position with respect to the various issues in the proceeding.
(d) Administer oaths and affirmations.
(e) Rule on motions, and other procedural items on matters pending before him.
(f) Regulate the course of the hearing and conduct of counsel therein.
(g) Examine witnesses and direct witnesses to testify.
(h) Receive, rule on, exclude or limit evidence.
(i) Fix the time for filing motions, petitions, briefs, or other items in matters pending before him.
(j) Issue initial or recommended decisions.
(k) Take any action authorized by the rules in this part or in conformance with the provisions of 5 U.S.C. 551-559 (the Administrative Procedure Act).
The presiding officer may require parties and amici curiae to file written statements of position prior to the beginning of a hearing. The presiding officer may also require the parties to submit trial briefs.
(a) The hearing is directed to receiving factual evidence and expert opinion testimony related to the issues in the proceeding. Argument will not be received in evidence; rather it should be presented in statements, memoranda, or briefs, as determined by the presiding officer. Brief opening statements, which shall be limited to statement of the party's position and what he intends to prove, may be made at hearings.
(b) Hearings for the reception of evidence will be held only in cases where issues of fact must be resolved in order to determine whether the respondent has failed to comply with one or more applicable requirements of part 100 of this title. In any case where it appears from the respondent's answer to the notice of hearing or opportunity for hearing, from his failure timely to answer, or from his admissions or stipulations in the record, that there are no matters of material fact in dispute, the reviewing authority or presiding officer may enter an order so finding, vacating the hearing date if one has been set, and fixing the time for filing briefs under § 101.101. Thereafter the proceedings shall go to conclusion in accordance with subpart J of this part. The presiding officer may allow an appeal from such order in accordance with § 101.86.
Testimony shall be given orally under oath or affirmation by witnesses at the hearing; but the presiding officer, in his discretion, may require or permit that the direct testimony of any witness be prepared in writing and served on all parties in advance of the hearing. Such testimony may be adopted by the witness at the hearing, and filed as part of the record thereof. Unless authorized by the presiding officer, witnesses will not be permitted to read prepared testimony into the record. Except as provided in §§ 101.75 and 101.76, witnesses shall be available at the hearing for cross-examination.
Proposed exhibits shall be exchanged at the prehearing conference, or otherwise prior to the hearing if the presiding officer so requires. Proposed exhibits not so exchanged may be denied admission as evidence. The authenticity of all proposed exhibits exchanged prior to hearing will be deemed admitted unless written objection thereto is filed prior to the hearing or unless good cause is shown at the hearing for failure to file such written objection.
An affidavit is; not inadmissible as such. Unless the presiding officer fixes other time periods affidavits shall be filed and served on the parties not later than 15 days prior to the hearing; and not less than 7 days prior to hearing a party may file and serve written objection to any affidavit on the ground that he believes it necessary to test the truth of assertions therein at hearing. In such event the assertions objected to will not be received in evidence unless the affiant is made available for cross-examination, or the presiding officer determines that cross-examination is not necessary for the full and true disclosure of facts referred to in such assertions. Notwithstanding any objection, however, affidavits may be considered in the case of any respondent who waives a hearing.
Upon such terms as may be just, for the convenience of the parties or of the Department, the presiding officer may authorize or direct the testimony of any witness to be taken by deposition.
Not later than 15 days prior to the scheduled date of the hearing except for good cause shown, or prior to such earlier date as the presiding officer may order, any party may serve upon an opposing party a written request for the admission of the genuineness and authenticity of any relevant documents described in and exhibited with the request, or for the admission of the truth of any relevant matters of fact stated in the request. Each of the matters of which an admission is requested shall be deemed admitted, unless within a period designated in the request (not less than 10 days after service thereof, or within such further time as the presiding officer or the reviewing authority if no presiding officer has yet been designated may allow upon motion and notice) the party to whom the request is directed serves upon the requesting party a sworn statement either denying specifically the matters of which an admission is requested or setting forth in detail the reasons why he cannot truthfully either admit or deny such matters. Copies of requests for admission and answers thereto shall be served on all parties. Any admission made by a party to such request is only for the purposes of the pending proceeding, or any proceeding or action instituted for the enforcement of any order entered therein, and shall not constitute and admission by him for any other purpose or be used against him in any other proceeding or action.
Irrelevant, immaterial, unreliable, and unduly repetitious evidence will be excluded.
A witness may be cross-examined on any matter material to the proceeding without regard to the scope of his direct examination.
Letters expressing views or urging action and other unsponsored written material regarding matters in issue in a hearing will be placed in the correspondence section of the docket of the proceeding. These data are not deemed part of the evidence or record in the hearing.
Objections to evidence shall be timely and briefly state the ground relied upon.
Exceptions to rulings of the presiding officer are unnecessary. It is sufficient that a party, at the time the ruling of the presiding officer is sought, makes known the action which he desires the presiding officer to take, or his objection to an action taken, and his grounds therefor.
Where official notice is taken or is to be taken of a material fact not appearing in the evidence of record, any party, on timely request, shall be afforded an opportunity to show the contrary.
Whenever there is offered (in whole or in part) a public document, such as an official report, decision, opinion, or published scientific or economic statistical data issued by any of the executive departments (or their subdivisions), legislative agencies or committees, or administrative agencies of the Federal Government (including Government-owned corporations), or a similar document issued by a State or its agencies, and such document (or part thereof) has been shown by the offeror to be reasonably available to the public, such document need not be produced or marked for identification, but may be offered for official notice, as a public document item by specifying the document or relevant part thereof.
An offer of proof made in connection with an objection taken to any ruling of the presiding officer rejecting or excluding proffered oral testimony shall consist of a statement of the substance of the evidence which counsel contends would be adduced by such testimony; and, if the excluded evidence consists of evidence in documentary or written form or of reference to documents or records, a copy of such evidence shall be marked for identification and shall accompany the record as the offer of proof.
Rulings of the presiding officer may not be appealed to the reviewing authority prior to his consideration of the entire proceeding except with the consent of the presiding officer and where he certifies on the record or in writing that the allowance of an interlocutory appeal is clearly necessary to prevent exceptional delay, expense, or prejudice to any party, or substantial detriment to the public interest. If an appeal is allowed, any party may file a brief with the reviewing authority within such period as the presiding officer directs. No oral argument will be heard unless the reviewing authority directs otherwise. At any time prior to submission of the proceeding to it for decisions, the reviewing authority may direct the presiding officer to certify any question or the entire record to it for decision. Where the entire record is so certified, the presiding officer shall recommend a decision.
The Department will designate the official reporter for all hearings. The official transcripts of testimony taken, together with any exhibits, briefs, or memoranda of law filed therewith shall be filed with the Department. Transcripts of testimony in hearings may be obtained from the official reporter by the parties and the public at rates not to exceed the maximum rates fixed by the contract between the Department and the reporter. Upon notice to all parties, the presiding officer may authorize corrections to the transcript which involve matters of substance.
The transcript of testimony, exhibits, and all papers and requests filed in the proceedings, except the correspondence section of the docket, including rulings and any recommended or initial decision shall constitute the exclusive record for decision.
(a) The presiding officer shall fix the time for filing posthearing briefs, which may contain proposed findings of fact and conclusions of law, and, if permitted, reply briefs.
(b) Briefs should include a summary of the evidence relied upon together with references to exhibit numbers and pages of the transcript, with citations of the authorities relied upon.
When the time for submission of posthearing briefs has expired, the presiding officer shall certify the entire record, including his recommended findings and proposed decision, to the responsible Department official; or if so authorized he shall make an initial decision. A copy of the recommended findings and proposed decision, or of the initial decision, shall be served upon all parties, and amici, if any.
Within 20 days after the mailing of an initial or recommended decision, any party may file exceptions to the decision, stating reasons therefor, with the reviewing authority. Any other party may file a response thereto within 30 days after the mailing of the decision. Upon the filing of such exceptions, the reviewing authority shall review the decision and issue its own decision thereon.
(a) Where the hearing is conducted by a hearing examiner who makes an initial decision, if no exceptions thereto are filed within the 20-day period specified in § 101.103, such decision shall become the final decision of the Department, and shall constitute “final agency action” within the meaning of 5 U.S.C. 704 (formerly section 10(c) of the Administrative Procedure Act), subject to the provisions of § 101.106.
(b) Where the hearing is conducted by a hearing examiner who makes a recommended decision, or upon the filing of exceptions to a hearing examiner's initial decision, the reviewing authority shall review the recommended or initial decision and shall issue its own decision thereon, which shall become the final decision of the Department, and shall constitute “final agency action” within the meaning of 5 U.S.C. 704 (formerly section 10(c) of the Administrative Procedure Act), subject to the provisions of § 101.106.
(c) All final decisions shall be promptly served on all parties, and amici, if any.
(a) If any party desires to argue a case orally on exceptions or replies to exceptions to an initial or recommended decision, he shall make such request in writing. The reviewing authority may grant or deny such requests in its discretion. If granted, it will serve notice of oral argument on all parties. The notice will set forth the order of presentation, the amount of time allotted, and the time and place for argument. The names of persons who will argue should be filed with the Department hearing clerk not later than 7 days before the date set for oral argument.
(b) The purpose of oral argument is to emphasize and clarify the written argument in the briefs. Reading at length from the brief or other texts is not favored. Participants should confine their arguments to points of controlling importance and to points upon which exceptions have been filed. Consolidations of appearances at oral argument by parties taking the same side will permit the parties' interests to be presented more effectively in the time allotted.
(c) Pamphlets, charts, and other written material may be presented at oral argument only if such material is limited to facts already in the record and is served on all parties and filed with the Department hearing clerk at least 7 days before the argument.
Within 20 days after an initial decision becomes a final decision pursuant to § 101.104(a) or within 20 days of the mailing of a final decision referred to in § 101.104(b), as the case may be, a party may request the Secretary to review the final decision. The Secretary may grant or deny such request, in whole or in part, or serve notice of his intent to review the decision in whole or in part upon his own motion. If the Secretary grants the requested review, or if he serves notice of intent to review upon his own motion, each party to the decision shall have 20 days following notice of the Secretary's proposed action within which to file exceptions to the decision and supporting briefs and memoranda, or briefs and memoranda in support of the decision. Failure of a party to request review under this paragraph shall not be deemed a failure to exhaust administrative remedies for the purpose of obtaining judicial review.
All briefs, exceptions, memoranda, requests, and decisions referred to in this subpart J shall be served upon amici curiae at the same times and in the same manner required for service on parties. Any written statements of position and trial briefs required of parties under § 101.71 shall be served on amici.
Parties and their representatives are expected to conduct themselves with honor and dignity and observe judicial standards of practice and ethics in all proceedings. They should not indulge in offensive personalities, unseemly wrangling, or intemperate accusations or characterizations. A representative of any party whether or not a lawyer shall observe the traditional responsibilities of lawyers as officers of the court and use his best efforts to restrain his client from improprieties in connection with a proceeding.
With respect to any proceeding it is improper for any interested person to attempt to sway the judgement of the reviewing authority by undertaking to bring pressure or influence to bear upon any officer having a responsibility for a decision in the proceeding, or his decisional staff. It is improper that such interested persons or any members of the Department's staff or the presiding officer give statements to communications media, by paid advertisement or otherwise, designed to influence the judgement of any officer having a responsibility for a decision in the proceeding, or his decisional staff. It is improper for any person to solicit communications to any such officer, or his decisional staff, other than proper communications by parties or amici curiae.
Only persons employed by or assigned to work with the reviewing authority who perform no investigative or prosecuting function in connection with a proceeding shall communicate ex parte with the reviewing authority, or the presiding officer, or any employee or person involved in the decisional process in such proceedings with respect to the merits of that or a factually related proceeding. The reviewing authority, the presiding officer, or any employee or person involved in the decisional process of a proceeding shall communicate ex parte with respect to the merits of that or a factually related proceeding only with persons employed by or assigned to work with them and who perform no investigative or prosecuting function in connection with the proceeding.
Requests for expeditious treatment of matters pending before the responsible Department official or the presiding officer are deemed communications on the merits, and are improper except when forwarded from parties to a proceeding and served upon all other parties thereto. Such communications should be in the form of a motion.
A request for information which merely inquires about the status of a proceeding without discussing issues or expressing points of view is not deemed an ex parte communication. Such requests should be directed to the Civil Rights hearing clerk. Communications with respect to minor procedural matters or inquiries or emergency requests for extensions of time are not deemed ex parte communications prohibited by § 101.113. Where feasible, however, such communications should be by letter with copies to all parties. Ex parte communications between a respondent and the responsible Department official or the Secretary with respect to securing such respondent's voluntary compliance with any requirement of part 100 of this title are not prohibited.
A prohibited communication in writing received by the Secretary, the reviewing authority, or by the presiding officer, shall be made public by placing it in the correspondence file of the docket in the case and will not be considered as part of the record for decision. If the prohibited communication is received orally a memorandum setting forth its substance shall be made and filed in the correspondence section of the docket in the case. A person referred to in such memorandum may file a comment for inclusion in the docket if he considers the memorandum to be incorrect.
(a) An applicant or recipient adversely affected by the order terminating, discontinuing, or refusing Federal financial assistance in consequence of proceedings pursuant to this title may request the responsible Department official for an order authorizing payment, or permitting resumption, of Federal financial assistance. Such request shall be in writing and shall affirmatively show that since entry of the order, it has brought its program or activity into compliance with the requirements of the Act, and with the Regulation thereunder, and shall set forth specifically, and in detail, the steps which it has taken to achieve such compliance. If the responsible Department official denies such request the applicant or recipient shall be given an expeditious hearing if it so requests in writing and specifies why it believes the responsible Department official to have been in error. The request for such a hearing shall be addressed to the responsible Department official and shall be made within 30 days after the applicant or recipient is informed that the responsible Department official has refused to authorize payment or permit resumption of Federal financial assistance.
(b) In the event that a hearing shall be requested pursuant to paragraph (a) of this section, the hearing procedures established by this part shall be applicable to the proceedings, except as otherwise provided in this section.
The definitions contained in § 100.13 of this subtitle apply to this part, unless the context otherwise requires, and the term “reviewing authority” as used herein includes the Secretary of Education, with respect to action by that official under § 101.106.
(b) These rules shall apply to any proceeding or part thereof to which part 100 of this title applies. In the case of any proceeding or part thereof governed by the provisions of 34 CFR, part 100 (Title VI regulations of the Department of Education) as that part existed prior to the amendments published in the
The purpose of this part is to effectuate section 504 of the Rehabilitation Act of 1973, which is designed to eliminate discrimination on the basis of handicap in any program or activity receiving Federal financial assistance.
This part applies to each recipient of Federal financial assistance from the Department of Education and to the program or activity that receives such assistance.
As used in this part, the term:
(a) The Act means the Rehabilitation Act of 1973, Pub. L. 93-112, as amended by the Rehabilitation Act Amendments of 1974, Pub. L. 93-516, 29 U.S.C. 794.
(b) Section 504 means section 504 of the Act.
(c) Education of the Handicapped Act means that statute as amended by the Education for all Handicapped Children Act of 1975, Pub. L. 94-142, 20 U.S.C. 1401 et seq.
(d) Department means the Department of Education.
(e) Assistant Secretary means the Assistant Secretary for Civil Rights of the Department of Education.
(f) Recipient means any state or its political subdivision, any instrumentality of a state or its political subdivision, any public or private agency, institution, organization, or other entity, or any person to which Federal financial assistance is extended directly or through another recipient, including any successor, assignee, or transferee of a recipient, but excluding the ultimate beneficiary of the assistance.
(g) Applicant for assistance means one who submits an application, request, or plan required to be approved by a Department official or by a recipient as a condition to becoming a recipient.
(h) Federal financial assistance means any grant, loan, contract (other than a procurement contract or a contract of insurance or guaranty), or any other arrangement by which the Department provides or otherwise makes available assistance in the form of:
(1) Funds;
(2) Services of Federal personnel; or
(3) Real and personal property or any interest in or use of such property, including:
(i) Transfers or leases of such property for less than fair market value or for reduced consideration; and
(ii) Proceeds from a subsequent transfer or lease of such property if the Federal share of its fair market value is not returned to the Federal Government.
(i) Facility means all or any portion of buildings, structures, equipment, roads, walks, parking lots, or other real or personal property or interest in such property.
(j) Handicapped person—(1) Handicapped persons means any person who (i) has a physical or mental impairment which substantially limits one or more major life activities, (ii) has a record of such an impairment, or (iii) is regarded as having such an impairment.
(2) As used in paragraph (j)(1) of this section, the phrase:
(i) Physical or mental impairment means (A) any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive, digestive, genito-urinary; hemic and lymphatic; skin; and endocrine; or (B) any mental or psychological disorder, such as intellectual disability, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
(ii) Major life activities means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.
(iii) Has a record of such an impairment means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.
(iv) Is regarded as having an impairment means (A) has a physical or mental impairment that does not substantially limit major life activities but that is treated by a recipient as constituting such a limitation; (B) has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or (C) has none of the impairments defined in paragraph (j)(2)(i) of this section but is treated by a recipient as having such an impairment.
(k) Program or activity means all of the operations of—
(1)(i) A department, agency, special purpose district, or other instrumentality of a State or of a local government; or
(ii) The entity of such State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government;
(2)(i) A college, university, or other postsecondary institution, or a public system of higher education; or
(ii) A local educational agency (as defined in 20 U.S.C. 8801), system of vocational education, or other school system;
(3)(i) An entire corporation, partnership, or other private organization, or an entire sole proprietorship—
(A) If assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or
(B) Which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or
(ii) The entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or
(4) Any other entity which is established by two or more of the entities described in paragraph (k)(1), (2), or (3) of this section; any part of which is extended Federal financial assistance.
(l) Qualified handicapped person means:
(1) With respect to employment, a handicapped person who, with reasonable accommodation, can perform the essential functions of the job in question;
(2) With respect to public preschool elementary, secondary, or adult educational services, a handicapped person (i) of an age during which nonhandicapped persons are provided such services, (ii) of any age during which it is mandatory under state law to provide such services to handicapped persons, or (iii) to whom a state is required to provide a free appropriate public education under section 612 of the Education of the Handicapped Act; and
(3) With respect to postsecondary and vocational education services, a handicapped person who meets the academic and technical standards requisite to admission or participation in the recipient's education program or activity;
(4) With respect to other services, a handicapped person who meets the essential eligibility requirements for the receipt of such services.
(m) Handicap means any condition or characteristic that renders a person a handicapped person as defined in paragraph (j) of this section.
(a) General. No qualified handicapped person shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity which receives Federal financial assistance.
(b) Discriminatory actions prohibited. (1) A recipient, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of handicap:
(i) Deny a qualified handicapped person the opportunity to participate in or benefit from the aid, benefit, or service;
(ii) Afford a qualified handicapped person an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others;
(iii) Provide a qualified handicapped person with an aid, benefit, or service that is not as effective as that provided to others;
(iv) Provide different or separate aid, benefits, or services to handicapped persons or to any class of handicapped persons unless such action is necessary to provide qualified handicapped persons with aid, benefits, or services that are as effective as those provided to others;
(v) Aid or perpetuate discrimination against a qualified handicapped person by providing significant assistance to an agency, organization, or person that discriminates on the basis of handicap in providing any aid, benefit, or service to beneficiaries of the recipients program or activity;
(vi) Deny a qualified handicapped person the opportunity to participate as a member of planning or advisory boards; or
(vii) Otherwise limit a qualified handicapped person in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving an aid, benefit, or service.
(2) For purposes of this part, aids, benefits, and services, to be equally effective, are not required to produce the identical result or level of achievement for handicapped and nonhandicapped persons, but must afford handicapped persons equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement, in the most integrated setting appropriate to the person's needs.
(3) Despite the existence of separate or different aid, benefits, or services provided in accordance with this part, a recipient may not deny a qualified handicapped person the opportunity to participate in such aid, benefits, or services that are not separate or different.
(4) A recipient may not, directly or through contractual or other arrangements, utilize criteria or methods of administration (i) that have the effect of subjecting qualified handicapped persons to discrimination on the basis of handicap, (ii) that have the purpose or effect of defeating or substantially impairing accomplishment of the objectives of the recipient's program or activity with respect to handicapped persons, or (iii) that perpetuate the discrimination of another recipient if both recipients are subject to common administrative control or are agencies of the same State.
(5) In determining the site or location of a facility, an applicant for assistance or a recipient may not make selections (i) that have the effect of excluding handicapped persons from, denying them the benefits of, or otherwise subjecting them to discrimination under any program or activity that receives Federal financial assistance or (ii) that have the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the program or activity with respect to handicapped persons.
(6) As used in this section, the aid, benefit, or service provided under a program or activity receiving Federal financial assistance includes any aid, benefit, or service provided in or through a facility that has been constructed, expanded, altered, leased or rented, or otherwise acquired, in whole or in part, with Federal financial assistance.
(c) Aid, benefits, or services limited by Federal law. The exclusion of nonhandicapped persons from aid, benefits, or services limited by Federal statute or executive order to handicapped persons or the exclusion of a specific class of handicapped persons from aid, benefits, or services limited by Federal statute or executive order to a different class of handicapped persons is not prohibited by this part.
(a) Assurances. An applicant for Federal financial assistance to which this part applies shall submit an assurance, on a form specified by the Assistant Secretary, that the program or activity will be operated in compliance with this part. An applicant may incorporate these assurances by reference in subsequent applications to the Department.
(b) Duration of obligation. (1) In the case of Federal financial assistance extended in the form of real property or to provide real property or structures on the property, the assurance will obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the real property or structures are used for the purpose for which Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits.
(2) In the case of Federal financial assistance extended to provide personal property, the assurance will obligate the recipient for the period during which it retains ownership or possession of the property.
(3) In all other cases the assurance will obligate the recipient for the period during which Federal financial assistance is extended.
(c) Covenants. (1) Where Federal financial assistance is provided in the form of real property or interest in the property from the Department, the instrument effecting or recording this transfer shall contain a covenant running with the land to assure nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits.
(2) Where no transfer of property is involved but property is purchased or improved with Federal financial assistance, the recipient shall agree to include the covenant described in paragraph (b)(2) of this section in the instrument effecting or recording any subsequent transfer of the property.
(3) Where Federal financial assistance is provided in the form of real property or interest in the property from the Department, the covenant shall also include a condition coupled with a right to be reserved by the Department to revert title to the property in the event of a breach of the covenant. If a transferee of real property proposes to mortgage or otherwise encumber the real property as security for financing construction of new, or improvement of existing, facilities on the property for the purposes for which the property was transferred, the Assistant Secretary may, upon request of the transferee and if necessary to accomplish such financing and upon such conditions as he or she deems appropriate, agree to forbear the exercise of such right to revert title for so long as the lien of such mortgage or other encumbrance remains effective.
(a) Remedial action. (1) If the Assistant Secretary finds that a recipient has discriminated against persons on the basis of handicap in violation of section 504 or this part, the recipient shall take such remedial action as the Assistant Secretary deems necessary to overcome the effects of the discrimination.
(2) Where a recipient is found to have discriminated against persons on the basis of handicap in violation of section 504 or this part and where another recipient exercises control over the recipient that has discriminated, the Assistant Secretary, where appropriate, may require either or both recipients to take remedial action.
(3) The Assistant Secretary may, where necessary to overcome the effects of discrimination in violation of section 504 or this part, require a recipient to take remedial action (i) with respect to handicapped persons who are no longer participants in the recipient's program or activity but who were participants in the program or activity when such discrimination occurred or (ii) with respect to handicapped persons who would have been participants in the program or activity had the discrimination not occurred.
(b) Voluntary action. A recipient may take steps, in addition to any action that is required by this part, to overcome the effects of conditions that resulted in limited participation in the recipient's program or activity by qualified handicapped persons.
(c) Self-evaluation. (1) A recipient shall, within one year of the effective date of this part:
(i) Evaluate, with the assistance of interested persons, including handicapped persons or organizations representing handicapped persons, its current policies and practices and the effects thereof that do not or may not meet the requirements of this part;
(ii) Modify, after consultation with interested persons, including handicapped persons or organizations representing handicapped persons, any policies and practices that do not meet the requirements of this part; and
(iii) Take, after consultation with interested persons, including handicapped persons or organizations representing handicapped persons, appropriate remedial steps to eliminate the effects of any discrimination that resulted from adherence to these policies and practices.
(2) A recipient that employs fifteen or more persons shall, for at least three years following completion of the evaluation required under paragraph (c)(1) of this section, maintain on file, make available for public inspection, and provide to the Assistant Secretary upon request:
(i) A list of the interested persons consulted,
(ii) A description of areas examined and any problems identified, and
(iii) A description of any modifications made and of any remedial steps taken.
(a) Designation of responsible employee. A recipient that employs fifteen or more persons shall designate at least one person to coordinate its efforts to comply with this part.
(b) Adoption of grievance procedures. A recipient that employs fifteen or more persons shall adopt grievance procedures that incorporate appropriate due process standards and that provide for the prompt and equitable resolution of complaints alleging any action prohibited by this part. Such procedures need not be established with respect to complaints from applicants for employment or from applicants for admission to postsecondary educational institutions.
(a) A recipient that employs fifteen or more persons shall take appropriate initial and continuing steps to notify participants, beneficiaries, applicants, and employees, including those with impaired vision or hearing, and unions or professional organizations holding collective bargaining or professional agreements with the recipient that it does not discriminate on the basis of handicap in violation of section 504 and this part. The notification shall state, where appropriate, that the recipient does not discriminate in admission or access to, or treatment or employment in, its program or activity. The notification shall also include an identification of the responsible employee designated pursuant to § 104.7(a). A recipient shall make the initial notification required by this paragraph within 90 days of the effective date of this part. Methods of initial and continuing notification may include the posting of notices, publication in newspapers and magazines, placement of notices in recipients' publication, and distribution of memoranda or other written communications.
(b) If a recipient publishes or uses recruitment materials or publications containing general information that it makes available to participants, beneficiaries, applicants, or employees, it shall include in those materials or publications a statement of the policy described in paragraph (a) of this section. A recipient may meet the requirement of this paragraph either by including appropriate inserts in existing materials and publications or by revising and reprinting the materials and publications.
The Assistant Secretary may require any recipient with fewer than fifteen employees, or any class of such recipients, to comply with §§ 104.7 and 104.8, in whole or in part, when the Assistant Secretary finds a violation of this part or finds that such compliance will not significantly impair the ability of the recipient or class of recipients to provide benefits or services.
(a) The obligation to comply with this part is not obviated or alleviated by the existence of any state or local law or other requirement that, on the basis of handicap, imposes prohibitions or limits upon the eligibility of qualified handicapped persons to receive services or to practice any occupation or profession.
(b) The obligation to comply with this part is not obviated or alleviated because employment opportunities in any occupation or profession are or may be more limited for handicapped persons than for nonhandicapped persons.
(a) General. (1) No qualified handicapped person shall, on the basis of handicap, be subjected to discrimination in employment under any program or activity to which this part applies.
(2) A recipient that receives assistance under the Education of the Handicapped Act shall take positive steps to employ and advance in employment qualified handicapped persons in programs or activities assisted under that Act.
(3) A recipient shall make all decisions concerning employment under any program or activity to which this part applies in a manner which ensures that discrimination on the basis of handicap does not occur and may not limit, segregate, or classify applicants or employees in any way that adversely affects their opportunities or status because of handicap.
(4) A recipient may not participate in a contractual or other relationship that has the effect of subjecting qualified handicapped applicants or employees to discrimination prohibited by this subpart. The relationships referred to in this paragraph include relationships with employment and referral agencies, with labor unions, with organizations providing or administering fringe benefits to employees of the recipient, and with organizations providing training and apprenticeships.
(b) Specific activities. The provisions of this subpart apply to:
(1) Recruitment, advertising, and the processing of applications for employment;
(2) Hiring, upgrading, promotion, award of tenure, demotion, transfer, layoff, termination, right of return from layoff and rehiring;
(3) Rates of pay or any other form of compensation and changes in compensation;
(4) Job assignments, job classifications, organizational structures, position descriptions, lines of progression, and seniority lists;
(5) Leaves of absense, sick leave, or any other leave;
(6) Fringe benefits available by virtue of employment, whether or not administered by the recipient;
(7) Selection and financial support for training, including apprenticeship, professional meetings, conferences, and other related activities, and selection for leaves of absence to pursue training;
(8) Employer sponsored activities, including those that are social or recreational; and
(9) Any other term, condition, or privilege of employment.
(c) A recipient's obligation to comply with this subpart is not affected by any inconsistent term of any collective bargaining agreement to which it is a party.
(a) A recipient shall make reasonable accommodation to the known physical or mental limitations of an otherwise qualified handicapped applicant or employee unless the recipient can demonstrate that the accommodation would impose an undue hardship on the operation of its program or activity.
(b) Reasonable accommodation may include:
(1) Making facilities used by employees readily accessible to and usable by handicapped persons, and
(2) Job restructuring, part-time or modified work schedules, acquisition or modification of equipment or devices, the provision of readers or interpreters, and other similar actions.
(c) In determining pursuant to paragraph (a) of this section whether an accommodation would impose an undue hardship on the operation of a recipient's program or activity, factors to be considered include:
(1) The overall size of the recipient's program or activity with respect to number of employees, number and type of facilities, and size of budget;
(2) The type of the recipient's operation, including the composition and structure of the recipient's workforce; and
(3) The nature and cost of the accommodation needed.
(d) A recipient may not deny any employment opportunity to a qualified handicapped employee or applicant if the basis for the denial is the need to make reasonable accommodation to the physical or mental limitations of the employee or applicant.
(a) A recipient may not make use of any employment test or other selection criterion that screens out or tends to screen out handicapped persons or any class of handicapped persons unless:
(1) The test score or other selection criterion, as used by the recipient, is shown to be job-related for the position in question, and
(2) Alternative job-related tests or criteria that do not screen out or tend to screen out as many handicapped persons are not shown by the Director to be available.
(b) A recipient shall select and administer tests concerning employment so as best to ensure that, when administered to an applicant or employee who has a handicap that impairs sensory, manual, or speaking skills, the test results accurately reflect the applicant's or employee's job skills, aptitude, or whatever other factor the test purports to measure, rather than reflecting the applicant's or employee's impaired sensory, manual, or speaking skills (except where those skills are the factors that the test purports to measure).
(a) Except as provided in paragraphs (b) and (c) of this section, a recipient may not conduct a preemployment medical examination or may not make preemployment inquiry of an applicant as to whether the applicant is a handicapped person or as to the nature or severity of a handicap. A recipient may, however, make preemployment inquiry into an applicant's ability to perform job-related functions.
(b) When a recipient is taking remedial action to correct the effects of past discrimination pursuant to § 104.6 (a), when a recipient is taking voluntary action to overcome the effects of conditions that resulted in limited participation in its federally assisted program or activity pursuant to § 104.6(b), or when a recipient is taking affirmative action pursuant to section 503 of the Act, the recipient may invite applicants for employment to indicate whether and to what extent they are handicapped, Provided, That:
(1) The recipient states clearly on any written questionnaire used for this purpose or makes clear orally if no written questionnaire is used that the information requested is intended for use solely in connection with its remedial action obligations or its voluntary or affirmative action efforts; and
(2) The recipient states clearly that the information is being requested on a voluntary basis, that it will be kept confidential as provided in paragraph (d) of this section, that refusal to provide it will not subject the applicant or employee to any adverse treatment, and that it will be used only in accordance with this part.
(c) Nothing in this section shall prohibit a recipient from conditioning an offer of employment on the results of a medical examination conducted prior to the employee's entrance on duty, Provided, That:
(1) All entering employees are subjected to such an examination regardless of handicap, and
(2) The results of such an examination are used only in accordance with the requirements of this part.
(d) Information obtained in accordance with this section as to the medical condition or history of the applicant shall be collected and maintained on separate forms that shall be accorded confidentiality as medical records, except that:
(1) Supervisors and managers may be informed regarding restrictions on the work or duties of handicapped persons and regarding necessary accommodations;
(2) First aid and safety personnel may be informed, where appropriate, if the condition might require emergency treatment; and
(3) Government officials investigating compliance with the Act shall be provided relevant information upon request.
No qualified handicapped person shall, because a recipient's facilities are inaccessible to or unusable by handicapped persons, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity to which this part applies.
(a) Accessibility. A recipient shall operate its program or activity so that when each part is viewed in its entirety, it is readily accessible to handicapped persons. This paragraph does not require a recipient to make each of its existing facilities or every part of a facility accessible to and usable by handicapped persons.
(b) Methods. A recipient may comply with the requirements of paragraph (a) of this section through such means as redesign of equipment, reassignment of classes or other services to accessible buildings, assignment of aides to beneficiaries, home visits, delivery of health, welfare, or other social services at alternate accessible sites, alteration of existing facilities and construction of new facilities in conformance with the requirements of § 104.23, or any other methods that result in making its program or activity accessible to handicapped persons. A recipient is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with paragraph (a) of this section. In choosing among available methods for meeting the requirement of paragraph (a) of this section, a recipient shall give priority to those methods that serve handicapped persons in the most integrated setting appropriate.
(c) Small health, welfare, or other social service providers. If a recipient with fewer than fifteen employees that provides health, welfare, or other social services finds, after consultation with a handicapped person seeking its services, that there is no method of complying with paragraph (a) of this section other than making a significant alteration in its existing facilities, the recipient may, as an alternative, refer the handicapped person to other providers of those services that are accessible.
(d) Time period. A recipient shall comply with the requirement of paragraph (a) of this section within sixty days of the effective date of this part except that where structural changes in facilities are necessary, such changes shall be made within three years of the effective date of this part, but in any event as expeditiously as possible.
(e) Transition plan. In the event that structural changes to facilities are necessary to meet the requirement of paragraph (a) of this section, a recipient shall develop, within six months of the effective date of this part, a transition plan setting forth the steps necessary to complete such changes. The plan shall be developed with the assistance of interested persons, including handicapped persons or organizations representing handicapped persons. A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum:
(1) Identify physical obstacles in the recipient's facilities that limit the accessibility of its program or activity to handicapped persons;
(2) Describe in detail the methods that will be used to make the facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve full accessibility in order to comply with paagraph (a) of this section and, if the time period of the transition plan is longer than one year, identify the steps of that will be taken during each year of the transition period; and
(4) Indicate the person responsible for implementation of the plan.
(f) Notice. The recipient shall adopt and implement procedures to ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of services, activities, and facilities that are accessible to and usuable by handicapped persons.
(a) Design and construction. Each facility or part of a facility constructed by, on behalf of, or for the use of a recipient shall be designed and constructed in such manner that the facility or part of the facility is readily accessible to and usable by handicapped persons, if the construction was commenced after the effective date of this part.
(b) Alteration. Each facility or part of a facility which is altered by, on behalf of, or for the use of a recipient after the effective date of this part in a manner that affects or could affect the usability of the facility or part of the facility shall, to the maximum extent feasible, be altered in such manner that the altered portion of the facility is readily accessible to and usable by handicapped persons.
(c) Conformance with Uniform Federal Accessibility Standards. (1) Effective as of January 18, 1991, design, construction, or alteration of buildings in conformance with sections 3-8 of the Uniform Federal Accessibility Standards (UFAS) (Appendix A to 41 CFR subpart 101-19.6) shall be deemed to comply with the requirements of this section with respect to those buildings. Departures from particular technical and scoping requirements of UFAS by the use of other methods are permitted where substantially equivalent or greater access to and usability of the building is provided.
(2) For purposes of this section, section 4.1.6(1)(g) of UFAS shall be interpreted to exempt from the requirements of UFAS only mechanical rooms and other spaces that, because of their intended use, will not require accessibility to the public or beneficiaries or result in the employment or residence therein of persons with phusical handicaps.
(3) This section does not require recipients to make building alterations that have little likelihood of being accomplished without removing or altering a load-bearing structural member.
Subpart D applies to preschool, elementary, secondary, and adult education programs or activities that receive Federal financial assistance and to recipients that operate, or that receive Federal financial assistance for the operation of, such programs or activities.
A recipient that operates a public elementary or secondary education program or activity shall annually:
(a) Undertake to identify and locate every qualified handicapped person residing in the recipient's jurisdiction who is not receiving a public education; and
(b) Take appropriate steps to notify handicapped persons and their parents or guardians of the recipient's duty under this subpart.
(a) General. A recipient that operates a public elementary or secondary education program or activity shall provide a free appropriate public education to each qualified handicapped person who is in the recipient's jurisdiction, regardless of the nature or severity of the person's handicap.
(b) Appropriate education. (1) For the purpose of this subpart, the provision of an appropriate education is the provision of regular or special education and related aids and services that (i) are designed to meet individual educational needs of handicapped persons as adequately as the needs of nonhandicapped persons are met and (ii) are based upon adherence to procedures that satisfy the requirements of §§ 104.34, 104.35, and 104.36.
(2) Implementation of an Individualized Education Program developed in accordance with the Education of the Handicapped Act is one means of meeting the standard established in paragraph (b)(1)(i) of this section.
(3) A recipient may place a handicapped person or refer such a person for aid, benefits, or services other than those that it operates or provides as its means of carrying out the requirements of this subpart. If so, the recipient remains responsible for ensuring that the requirements of this subpart are met with respect to any handicapped person so placed or referred.
(c) Free education—(1) General. For the purpose of this section, the provision of a free education is the provision of educational and related services without cost to the handicapped person or to his or her parents or guardian, except for those fees that are imposed on non-handicapped persons or their parents or guardian. It may consist either of the provision of free services or, if a recipient places a handicapped person or refers such person for aid, benefits, or services not operated or provided by the recipient as its means of carrying out the requirements of this subpart, of payment for the costs of the aid, benefits, or services. Funds available from any public or private agency may be used to meet the requirements of this subpart. Nothing in this section shall be construed to relieve an insurer or similar third party from an otherwise valid obligation to provide or pay for services provided to a handicapped person.
(2) Transportation. If a recipient places a handicapped person or refers such person for aid, benefits, or services not operated or provided by the recipient as its means of carrying out the requirements of this subpart, the recipient shall ensure that adequate transportation to and from the aid, benefits, or services is provided at no greater cost than would be incurred by the person or his or her parents or guardian if the person were placed in the aid, benefits, or services operated by the recipient.
(3) Residential placement. If a public or private residential placement is necessary to provide a free appropriate public education to a handicapped person because of his or her handicap, the placement, including non-medical care and room and board, shall be provided at no cost to the person or his or her parents or guardian.
(4) Placement of handicapped persons by parents. If a recipient has made available, in conformance with the requirements of this section and § 104.34, a free appropriate public education to a handicapped person and the person's parents or guardian choose to place the person in a private school, the recipient is not required to pay for the person's education in the private school. Disagreements between a parent or guardian and a recipient regarding whether the recipient has made a free appropriate public education available or otherwise regarding the question of financial responsibility are subject to the due process procedures of § 104.36.
(d) Compliance. A recipient may not exclude any qualified handicapped person from a public elementary or secondary education after the effective date of this part. A recipient that is not, on the effective date of this regulation, in full compliance with the other requirements of the preceding paragraphs of this section shall meet such requirements at the earliest practicable time and in no event later than September 1, 1978.
(a) Academic setting. A recipient to which this subpart applies shall educate, or shall provide for the education of, each qualified handicapped person in its jurisdiction with persons who are not handicapped to the maximum extent appropriate to the needs of the handicapped person. A recipient shall place a handicapped person in the regular educational environment operated by the recipient unless it is demonstrated by the recipient that the education of the person in the regular environment with the use of supplementary aids and services cannot be achieved satisfactorily. Whenever a recipient places a person in a setting other than the regular educational environment pursuant to this paragraph, it shall take into account the proximity of the alternate setting to the person's home.
(b) Nonacademic settings. In providing or arranging for the provision of nonacademic and extracurricular services and activities, including meals, recess periods, and the services and activities set forth in § 104.37(a)(2), a recipient shall ensure that handicapped persons participate with nonhandicapped persons in such activities and services to the maximum extent appropriate to the needs of the handicapped person in question.
(c) Comparable facilities. If a recipient, in compliance with paragraph (a) of this section, operates a facility that is identifiable as being for handicapped persons, the recipient shall ensure that the facility and the services and activities provided therein are comparable to the other facilities, services, and activities of the recipient.
(a) Preplacement evaluation. A recipient that operates a public elementary or secondary education program or activity shall conduct an evaluation in accordance with the requirements of paragraph (b) of this section of any person who, because of handicap, needs or is belived to need special education or related services before taking any action with respect to the initial placement of the person in regular or special education and any subsequent significant change in placement.
(b) Evaluation procedures. A recipient to which this subpart applies shall establish standards and procedures for the evaluation and placement of persons who, because of handicap, need or are believed to need special education or related services which ensure that:
(1) Tests and other evaluation materials have been validated for the specific purpose for which they are used and are administered by trained personnel in conformance with the instructions provided by their producer;
(2) Tests and other evaluation materials include those tailored to assess specific areas of educational need and not merely those which are designed to provide a single general intelligence quotient; and
(3) Tests are selected and administered so as best to ensure that, when a test is administered to a student with impaired sensory, manual, or speaking skills, the test results accurately reflect the student's aptitude or achievement level or whatever other factor the test purports to measure, rather than reflecting the student's impaired sensory, manual, or speaking skills (except where those skills are the factors that the test purports to measure).
(c) Placement procedures. In interpreting evaluation data and in making placement decisions, a recipient shall (1) draw upon information from a variety of sources, including aptitude and achievement tests, teacher recommendations, physical condition, social or cultural background, and adaptive behavior, (2) establish procedures to ensure that information obtained from all such sources is documented and carefully considered, (3) ensure that the placement decision is made by a group of persons, including persons knowledgeable about the child, the meaning of the evaluation data, and the placement options, and (4) ensure that the placement decision is made in conformity with § 104.34.
(d) Reevaluation. A recipient to which this section applies shall establish procedures, in accordance with paragraph (b) of this section, for periodic reevaluation of students who have been provided special education and related services. A reevaluation procedure consistent with the Education for the Handicapped Act is one means of meeting this requirement.
A recipient that operates a public elementary or secondary education program or activity shall establish and implement, with respect to actions regarding the identification, evaluation, or educational placement of persons who, because of handicap, need or are believed to need special instruction or related services, a system of procedural safeguards that includes notice, an opportunity for the parents or guardian of the person to examine relevant records, an impartial hearing with opportunity for participation by the person's parents or guardian and representation by counsel, and a review procedure. Compliance with the procedural safeguards of section 615 of the Education of the Handicapped Act is one means of meeting this requirement.
(a) General. (1) A recipient to which this subpart applies shall provide non-academic and extracurricular services and activities in such manner as is necessary to afford handicapped students an equal opportunity for participation in such services and activities.
(2) Nonacademic and extracurricular services and activities may include counseling services, physical recreational athletics, transportation, health services, recreational activities, special interest groups or clubs sponsored by the recipients, referrals to agencies which provide assistance to handicapped persons, and employment of students, including both employment by the recipient and assistance in making available outside employment.
(b) Counseling services. A recipient to which this subpart applies that provides personal, academic, or vocational counseling, guidance, or placement services to its students shall provide these services without discrimination on the basis of handicap. The recipient shall ensure that qualified handicapped students are not counseled toward more restrictive career objectives than are nonhandicapped students with similar interests and abilities.
(c) Physical education and athletics. (1) In providing physical education courses and athletics and similar aid, benefits, or services to any of its students, a recipient to which this subpart applies may not discriminate on the basis of handicap. A recipient that offers physical education courses or that operates or sponsors interscholastic, club, or intramural athletics shall provide to qualified handicapped students an equal opportunity for participation.
(2) A recipient may offer to handicapped students physical education and athletic activities that are separate or different from those offered to nonhandicapped students only if separation or differentiation is consistent with the requirements of § 104.34 and only if no qualified handicapped student is denied the opportunity to compete for teams or to participate in courses that are not separate or different.
A recipient to which this subpart applies that provides preschool education or day care or adult education may not, on the basis of handicap, exclude qualified handicapped persons and shall take into account the needs of such persons in determining the aid, benefits or services to be provided.
(a) A recipient that provides private elementary or secondary education may not, on the basis of handicap, exclude a qualified handicapped person if the person can, with minor adjustments, be provided an appropriate education, as defined in § 104.33(b)(1), within that recipient's program or activity.
(b) A recipient to which this section applies may not charge more for the provision of an appropriate education to handicapped persons than to nonhandicapped persons except to the extent that any additional charge is justified by a substantial increase in cost to the recipient.
(c) A recipient to which this section applies that provides special education shall do so in accordance with the provisions of §§ 104.35 and 104.36. Each recipient to which this section applies is subject to the provisions of §§ 104.34, 104.37, and 104.38.
Subpart E applies to postsecondary education programs or activities, including postsecondary vocational education programs or activities, that receive Federal financial assistance and to recipients that operate, or that receive Federal financial assistance for the operation of, such programs or activities.
(a) General. Qualified handicapped persons may not, on the basis of handicap, be denied admission or be subjected to discrimination in admission or recruitment by a recipient to which this subpart applies.
(b) Admissions. In administering its admission policies, a recipient to which this subpart applies:
(1) May not apply limitations upon the number or proportion of handicapped persons who may be admitted;
(2) May not make use of any test or criterion for admission that has a disproportionate, adverse effect on handicapped persons or any class of handicapped persons unless (i) the test or criterion, as used by the recipient, has been validated as a predictor of success in the education program or activity in question and (ii) alternate tests or criteria that have a less disproportionate, adverse effect are not shown by the Assistant Secretary to be available.
(3) Shall assure itself that (i) admissions tests are selected and administered so as best to ensure that, when a test is administered to an applicant who has a handicap that impairs sensory, manual, or speaking skills, the test results accurately reflect the applicant's aptitude or achievement level or whatever other factor the test purports to measure, rather than reflecting the applicant's impaired sensory, manual, or speaking skills (except where those skills are the factors that the test purports to measure); (ii) admissions tests that are designed for persons with impaired sensory, manual, or speaking skills are offered as often and in as timely a manner as are other admissions tests; and (iii) admissions tests are administered in facilities that, on the whole, are accessible to handicapped persons; and
(4) Except as provided in paragraph (c) of this section, may not make preadmission inquiry as to whether an applicant for admission is a handicapped person but, after admission, may make inquiries on a confidential basis as to handicaps that may require accommodation.
(c) Preadmission inquiry exception. When a recipient is taking remedial action to correct the effects of past discrimination pursuant to § 104.6(a) or when a recipient is taking voluntary action to overcome the effects of conditions that resulted in limited participation in its federally assisted program or activity pursuant to § 104.6(b), the recipient may invite applicants for admission to indicate whether and to what extent they are handicapped, Provided, That:
(1) The recipient states clearly on any written questionnaire used for this purpose or makes clear orally if no written questionnaire is used that the information requested is intended for use solely in connection with its remedial action obligations or its voluntary action efforts; and
(2) The recipient states clearly that the information is being requested on a voluntary basis, that it will be kept confidential, that refusal to provide it will not subject the applicant to any adverse treatment, and that it will be used only in accordance with this part.
(d) Validity studies. For the purpose of paragraph (b)(2) of this section, a recipient may base prediction equations on first year grades, but shall conduct periodic validity studies against the criterion of overall success in the education program or activity in question in order to monitor the general validity of the test scores.
(a) No qualified handicapped student shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any academic, research, occupational training, housing, health insurance, counseling, financial aid, physical education, athletics, recreation, transportation, other extracurricular, or other postsecondary education aid, benefits, or services to which this subpart applies.
(b) A recipient to which this subpart applies that considers participation by students in education programs or activities not operated wholly by the recipient as part of, or equivalent to, and education program or activity operated by the recipient shall assure itself that the other education program or activity, as a whole, provides an equal opportunity for the participation of qualified handicapped persons.
(c) A recipient to which this subpart applies may not, on the basis of handicap, exclude any qualified handicapped student from any course, course of study, or other part of its education program or activity.
(d) A recipient to which this subpart applies shall operate its program or activity in the most integrated setting appropriate.
(a) Academic requirements. A recipient to which this subpart applies shall make such modifications to its academic requirements as are necessary to ensure that such requirements do not discriminate or have the effect of discriminating, on the basis of handicap, against a qualified handicapped applicant or student. Academic requirements that the recipient can demonstrate are essential to the instruction being pursued by such student or to any directly related licensing requirement will not be regarded as discriminatory within the meaning of this section. Modifications may include changes in the length of time permitted for the completion of degree requirements, substitution of specific courses required for the completion of degree requirements, and adaptation of the manner in which specific courses are conducted.
(b) Other rules. A recipient to which this subpart applies may not impose upon handicapped students other rules, such as the prohibition of tape recorders in classrooms or of dog guides in campus buildings, that have the effect of limiting the participation of handicapped students in the recipient's education program or activity.
(c) Course examinations. In its course examinations or other procedures for evaluating students' academic achievement, a recipient to which this subpart applies shall provide such methods for evaluating the achievement of students who have a handicap that impairs sensory, manual, or speaking skills as will best ensure that the results of the evaluation represents the student's achievement in the course, rather than reflecting the student's impaired sensory, manual, or speaking skills (except where such skills are the factors that the test purports to measure).
(d) Auxiliary aids. (1) A recipient to which this subpart applies shall take such steps as are necessary to ensure that no handicapped student is denied the benefits of, excluded from participation in, or otherwise subjected to discrimination because of the absence of educational auxiliary aids for students with impaired sensory, manual, or speaking skills.
(2) Auxiliary aids may include taped texts, interpreters or other effective methods of making orally delivered materials available to students with hearing impairments, readers in libraries for students with visual impairments, classroom equipment adapted for use by students with manual impairments, and other similar services and actions. Recipients need not provide attendants, individually prescribed devices, readers for personal use or study, or other devices or services of a personal nature.
(a) Housing provided by the recipient. A recipient that provides housing to its nonhandicapped students shall provide comparable, convenient, and accessible housing to handicapped students at the same cost as to others. At the end of the transition period provided for in subpart C, such housing shall be available in sufficient quantity and variety so that the scope of handicapped students' choice of living accommodations is, as a whole, comparable to that of nonhandicapped students.
(b) Other housing. A recipient that assists any agency, organization, or person in making housing available to any of its students shall take such action as may be necessary to assure itself that such housing is, as a whole, made available in a manner that does not result in discrimination on the basis of handicap.
(a) Provision of financial assistance. (1) In providing financial assistance to qualified handicapped persons, a recipient to which this subpart applies may not,
(i) On the basis of handicap, provide less assistance than is provided to nonhandicapped persons, limit eligibility for assistance, or otherwise discriminate or
(ii) Assist any entity or person that provides assistance to any of the recipient's students in a manner that discriminates against qualified handicapped persons on the basis of handicap.
(2) A recipient may administer or assist in the administration of scholarships, fellowships, or other forms of financial assistance established under wills, trusts, bequests, or similar legal instruments that require awards to be made on the basis of factors that discriminate or have the effect of discriminating on the basis of handicap only if the overall effect of the award of scholarships, fellowships, and other forms of financial assistance is not discriminatory on the basis of handicap.
(b) Assistance in making available outside employment. A recipient that assists any agency, organization, or person in providing employment opportunities to any of its students shall assure itself that such employment opportunities, as a whole, are made available in a manner that would not violate subpart B if they were provided by the recipient.
(c) Employment of students by recipients. A recipient that employs any of its students may not do so in a manner that violates subpart B.
(a) Physical education and athletics. (1) In providing physical education courses and athletics and similar aid, benefits, or services to any of its students, a recipient to which this subpart applies may not discriminate on the basis of handicap. A recipient that offers physical education courses or that operates or sponsors intercollegiate, club, or intramural athletics shall provide to qualified handicapped students an equal opportunity for participation in these activities.
(2) A recipient may offer to handicapped students physical education and athletic activities that are separate or different only if separation or differentiation is consistent with the requirements of § 104.43(d) and only if no qualified handicapped student is denied the opportunity to compete for teams or to participate in courses that are not separate or different.
(b) Counseling and placement services. A recipient to which this subpart applies that provides personal, academic, or vocational counseling, guidance, or placement services to its students shall provide these services without discrimination on the basis of handicap. The recipient shall ensure that qualified handicapped students are not counseled toward more restrictive career objectives than are nonhandicapped students with similar interests and abilities. This requirement does not preclude a recipient from providing factual information about licensing and certification requirements that may present obstacles to handicapped persons in their pursuit of particular careers.
(c) Social organizations. A recipient that provides significant assistance to fraternities, sororities, or similar organizations shall assure itself that the membership practices of such organizations do not permit discrimination otherwise prohibited by this subpart.
Subpart F applies to health, welfare, and other social service programs or activities that receive Federal financial assistance and to recipients that operate, or that receive Federal financial assistance for the operation of, such programs or activities.
(a) General. In providing health, welfare, or other social services or benefits, a recipient may not, on the basis of handicap:
(1) Deny a qualified handicapped person these benefits or services;
(2) Afford a qualified handicapped person an opportunity to receive benefits or services that is not equal to that offered nonhandicapped persons;
(3) Provide a qualified handicapped person with benefits or services that are not as effective (as defined in § 104.4(b)) as the benefits or services provided to others;
(4) Provide benefits or services in a manner that limits or has the effect of limiting the participation of qualified handicapped persons; or
(5) Provide different or separate benefits or services to handicapped persons except where necessary to provide qualified handicapped persons with benefits and services that are as effective as those provided to others.
(b) Notice. A recipient that provides notice concerning benefits or services or written material concerning waivers of rights or consent to treatment shall take such steps as are necessary to ensure that qualified handicapped persons, including those with impaired sensory or speaking skills, are not denied effective notice because of their handicap.
(c) Emergency treatment for the hearing impaired. A recipient hospital that provides health services or benefits shall establish a procedure for effective communication with persons with impaired hearing for the purpose of providing emergency health care.
(d) Auxiliary aids. (1) A recipient to which this subpart applies that employs fifteen or more persons shall provide appropriate auxiliary aids to persons with impaired sensory, manual, or speaking skills, where necessary to afford such persons an equal opportunity to benefit from the service in question.
(2) The Assistant Secretary may require recipients with fewer than fifteen employees to provide auxiliary aids where the provision of aids would not significantly impair the ability of the recipient to provide its benefits or services.
(3) For the purpose of this paragraph, auxiliary aids may include brailled and taped material, interpreters, and other aids for persons with impaired hearing or vision.
A recipient to which this subpart applies that operates a general hospital or outpatient facility may not discriminate in admission or treatment against a drug or alcohol abuser or alcoholic who is suffering from a medical condition, because of the person's drug or alcohol abuse or alcoholism.
A recipient to which this subpart applies and that operates or supervises a program or activity that provides aid, benefits or services for persons who are institutionalized because of handicap shall ensure that each qualified handicapped person, as defined in § 104.3(k)(2), in its program or activity is provided an appropriate education, as defined in § 104.33(b). Nothing in this section shall be interpreted as altering in any way the obligations of recipients under subpart D.
The procedural provisions applicable to title VI of the Civil Rights Act of 1964 apply to this part. These procedures are found in §§ 100.6-100.10 and part 101 of this title.
Definitions—1. Recipient. Section 104.23 contains definitions used throughout the regulation.
One comment requested that the regulation specify that nonpublic elementary and secondary schools that are not otherwise recipients do not become recipients by virtue of the fact their students participate in certain federally funded programs. The Secretary believes it unnecessary to amend the regulation in this regard, because almost identical language in the Department's regulations implementing title VI and title IX of the Education Amendments of 1972 has consistently been interpreted so as not to render such schools recipients. These schools, however, are indirectly subject to the substantive requirements of this regulation through the application of § 104.4(b)(iv), which prohibits recipients from assisting agencies that discriminate on the basis of handicap in providing services to beneficiaries of the recipients' programs.
2. Federal financial assistance. In § 104.3(h), defining federal financial assistance, a clarifying change has been made: procurement contracts are specifically excluded. They are covered, however, by the Department of Labor's regulation under section 503. The Department has never considered such contracts to be contracts of assistance; the explicit exemption has been added only to avoid possible confusion.
The proposed regulation's exemption of contracts of insurance or guaranty has been retained. A number of comments argued for its deletion on the ground that section 504, unlike title VI and title IX, contains no statutory exemption for such contracts. There is no indication, however, in the legislative history of the Rehabilitation Act of 1973 or of the amendments to that Act in 1974, that Congress intended section 504 to have a broader application, in terms of federal financial assistance, than other civil rights statutes. Indeed, Congress directed that section 504 be implemented in the same manner as titles VI and IX. In view of the long established exemption of contracts of insurance or guaranty under title VI, we think it unlikely that Congress intended section 504 to apply to such contracts.
3. Handicapped person. Section 104.3(j), which defines the class of persons protected under the regulation, has not been substantially changed. The definition of handicapped person in paragraph (j)(1) conforms to the statutory definition of handicapped person that is applicable to section 504, as set forth in section 111(a) of the Rehabilitation Act Amendments of 1974, Pub. L. 93-516.
The first of the three parts of the statutory and regulatory definition includes any person who has a physical or mental impairment that substantially limits one or more major life activities. Paragraph (j)(2)(i) further defines physical or mental impairments. The definition does not set forth a list of specific diseases and conditions that constitute physical or mental impairments because of the difficulty of ensuring the comprehensiveness of any such list. The term includes, however, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, intellectual disability, emotional illness, and, as discussed below, drug addiction and alcoholism.
It should be emphasized that a physical or mental impairment does not constitute a handicap for purposes of section 504 unless its severity is such that it results in a substantial limitation of one or more major life activities. Several comments observed the lack of any definition in the proposed regulation of the phrase “substantially limits.” The Department does not believe that a definition of this term is possible at this time.
A related issue raised by several comments is whether the definition of handicapped person is unreasonably broad. Comments suggested narrowing the definition in various ways. The most common recommendation was that only “traditional” handicaps be covered. The Department continues to believe, however, that it has no flexibility within the statutory definition to limit the term to persons who have those severe, permanent, or progressive conditions that are most commonly regarded as handicaps. The Department intends, however, to give particular attention in its enforcement of section 504 to eliminating discrimination against persons with the severe handicaps that were the focus of concern in the Rehabilitation Act of 1973.
The definition of handicapped person also includes specific limitations on what persons are classified as handicapped under the regulation. The first of the three parts of the definition specifies that only physical and mental handicaps are included. Thus, environmental, cultural, and economic disadvantage are not in themselves covered; nor are prison records, age, or homosexuality. Of course, if a person who has any of these characteristics also has a physical or mental handicap, the person is included within the definition of handicapped person.
In paragraph (j)(2)(i), physical or mental impairment is defined to include, among other impairments, specific learning disabilities. The Department will interpret the term as it is used in section 602 of the Education of the Handicapped Act, as amended. Paragraph (15) of section 602 uses the term “specific learning disabilities” to describe such conditions as perceptual handicaps, brain injury, minimal brain dysfunction, dyslexia, and developmental aphasia.
Paragraph (j)(2)(i) has been shortened, but not substantively changed, by the deletion of clause (C), which made explicit the inclusion of any condition which is mental or physical but whose precise nature is not at present known. Clauses (A) and (B) clearly comprehend such conditions.
The second part of the statutory and regulatory definition of handicapped person includes any person who has a record of a physical or mental impairment that substantially limits a major life activity. Under the definition of “record” in paragraph (j)(2)(iii), persons who have a history of a handicapping condition but no longer have the condition, as well as persons who have been incorrectly classified as having such a condition, are protected from discrimination under section 504. Frequently occurring examples of the first group are persons with histories of mental or emotional illness, heart disease, or cancer; of the second group, persons who have been misclassified as having an intellectual disability.
The third part of the statutory and regulatory definition of handicapped person includes any person who is regarded as having a physical or mental impairment that substantially limits one or more major life activities. It includes many persons who are ordinarily considered to be handicapped but who do not technically fall within the first two parts of the statutory definition, such as persons with a limp. This part of the definition also includes some persons who might not ordinarily be considered handicapped, such as persons with disfiguring scars, as well as persons who have no physical or mental impairment but are treated by a recipient as if they were handicapped.
4. Drug addicts and alcoholics. As was the case during the first comment period, the issue of whether to include drug addicts and alcoholics within the definition of handicapped person was of major concern to many commenters. The arguments presented on each side of the issue were similar during the two comment periods, as was the preference of commenters for exclusion of this group of persons. While some comments reflected misconceptions about the implications of including alcoholics and drug addicts within the scope of the regulation, the Secretary understands the concerns that underlie the comments on this question and recognizes that application of section 504 to active alcoholics and drug addicts presents sensitive and difficult questions that must be taken into account in interpretation and enforcement.
The Secretary has carefully examined the issue and has obtained a legal opinion from the Attorney General. That opinion concludes that drug addiction and alcoholism are “physical or mental impairments” within the meaning of section 7(6) of the Rehabilitation Act of 1973, as amended, and that drug addicts and alcoholics are therefore handicapped for purposes of section 504 if their impairment substantially limits one of their major life activities. The Secretary therefore believes that he is without authority to exclude these conditions from the definition. There is a medical and legal consensus that alcoholism and drug addiction are diseases, although there is disagreement as to whether they are primarily mental or physical. In addition, while Congress did not focus specifically on the problems of drug addiction and alcoholism in enacting section 504, the committees that considered the Rehabilitation Act of 1973 were made aware of the Department's long-standing practice of treating addicts and alcoholics as handicapped individuals eligible for rehabilitation services under the Vocational Rehabilitation Act.
The Secretary wishes to reassure recipients that inclusion of addicts and alcoholics within the scope of the regulation will not lead to the consequences feared by many commenters. It cannot be emphasized too strongly that the statute and the regulation apply only to discrimination against qualified handicapped persons solely by reason of their handicap. The fact that drug addiction and alcoholism may be handicaps does not mean that these conditions must be ignored in determining whether an individual is qualified for services or employment opportunities. On the contrary, a recipient may hold a drug addict or alcoholic to the same standard of performance and behavior to which it holds others, even if any unsatisfactory performance or behavior is related to the person's drug addiction or alcoholism. In other words, while an alcoholic or drug addict may not be denied services or disqualified from employment solely because of his or her condition, the behavioral manifestations of the condition may be taken into account in determining whether he or she is qualified.
With respect to the employment of a drug addict or alcoholic, if it can be shown that the addiction or alcoholism prevents successful performance of the job, the person need not be provided the employment opportunity in question. For example, in making employment decisions, a recipient may judge addicts and alcoholics on the same basis it judges all other applicants and employees. Thus, a recipient may consider—for all applicants including drug addicts and alcoholics—past personnel records, absenteeism, disruptive, abusive, or dangerous behavior, violations of rules and unsatisfactory work performance. Moreover, employers may enforce rules prohibiting the possession or use of alcohol or drugs in the work-place, provided that such rules are enforced against all employees.
With respect to other services, the implications of coverage, of alcoholics and drug addicts are two-fold: first, no person may be excluded from services solely by reason of the presence or history of these conditions; second, to the extent that the manifestations of the condition prevent the person from meeting the basic eligibility requirements of the program or cause substantial interference with the operation of the program, the condition may be taken into consideration. Thus, a college may not exclude an addict or alcoholic as a student, on the basis of addiction or alcoholism, if the person can successfully participate in the education program and complies with the rules of the college and if his or her behavior does not impede the performance of other students.
Of great concern to many commenters was the question of what effect the inclusion of drug addicts and alcoholics as handicapped persons would have on school disciplinary rules prohibiting the use or possession of drugs or alcohol by students. Neither such rules nor their application to drug addicts or alcoholics is prohibited by this regulation, provided that the rules are enforced evenly with respect to all students.
5. Qualified handicapped person. Paragraph (k) of § 104.3 defines the term “qualified handicapped person.” Throughout the regulation, this term is used instead of the statutory term “otherwise qualified handicapped person.” The Department believes that the omission of the word “otherwise” is necessary in order to comport with the intent of the statute because, read literally, “otherwise” qualified handicapped persons include persons who are qualified except for their handicap, rather than in spite of their handicap. Under such a literal reading, a blind person possessing all the qualifications for driving a bus except sight could be said to be “otherwise qualified” for the job of driving. Clearly, such a result was not intended by Congress. In all other respects, the terms “qualified” and “otherwise qualified” are intended to be interchangeable.
Section 104.3(k)(1) defines a qualified handicapped person with respect to employment as a handicapped person who can, with reasonable accommodation, perform the essential functions of the job in question. The term “essential functions” does not appear in the corresponding provision of the Department of Labor's section 503 regulation, and a few commenters objected to its inclusion on the ground that a handicapped person should be able to perform all job tasks. However, the Department believes that inclusion of the phrase is useful in emphasizing that handicapped persons should not be disqualified simply because they may have difficulty in performing tasks that bear only a marginal relationship to a particular job. Further, we are convinced that inclusion of the phrase is not inconsistent with the Department of Labor's application of its definition.
Certain commenters urged that the definition of qualified handicapped person be amended so as explicitly to place upon the employer the burden of showing that a particular mental or physical characteristic is essential. Because the same result is achieved by the requirement contained in paragraph (a) of § 104.13, which requires an employer to establish that any selection criterion that tends to screen out handicapped persons is job-related, that recommendation has not been followed.
Section 104.3(k)(2) defines qualified handicapped person, with respect to preschool, elementary, and secondary programs, in terms of age. Several commenters recommended that eligibility for the services be based upon the standard of substantial benefit, rather than age, because of the need of many handicapped children for early or extended services if they are to have an equal opportunity to benefit from education programs. No change has been made in this provision, again because of the extreme difficulties in administration that would result from the choice of the former standard. Under the remedial action provisions of § 104.6(a)(3), however, persons beyond the age limits prescribed in § 104.3(k)(2) may in appropriate cases be required to be provided services that they were formerly denied because of a recipient's violation of section 504.
Section 104.3(k)(2) states that a handicapped person is qualified for preschool, elementary, or secondary services if the person is of an age at which nonhandicapped persons are eligible for such services or at which State law mandates the provision of educational services to handicapped persons. In addition, the extended age ranges for which recipients must provide full educational opportunity to all handicapped persons in order to be eligible for assistance under the Education of the Handicapped Act—generally, 3-18 as of September 1978, and 3-21 as of September 1980 are incorporated by reference in this paragraph.
Section 104.3(k)(3) defines qualified handicapped person with respect to postsecondary educational programs. As revised, the paragraph means that both academic and technical standards must be met by applicants to these programs. The term technical standards refers to all nonacademic admissions criteria that are essential to participation in the program in question.
6. General prohibitions against discrimination. Section 104.4 contains general prohibitions against discrimination applicable to all recipients of assistance from this Department.
Paragraph (b)(1(i) prohibits the exclusion of qualified handicapped persons from aids, benefits, or services, and paragraph (ii) requires that equal opportunity to participate or benefit be provided. Paragraph (iii) requires that services provided to handicapped persons be as effective as those provided to the nonhandicapped. In paragraph (iv), different or separate services are prohibited except when necessary to provide equally effective benefits.
In this context, the term equally effective, defined in paragraph (b)(2), is intended to encompass the concept of equivalent, as opposed to identical, services and to acknowledge the fact that in order to meet the individual needs of handicapped persons to the same extent that the corresponding needs of nonhandicapped persons are met, adjustments to regular programs or the provision of different programs may sometimes be necessary. This standard parallels the one established under title VI of Civil Rights Act of 1964 with respect to the provision of educational services to students whose primary language is not English. See Lau v. Nichols, 414 U.S. 563 (1974). To be equally effective, however, an aid, benefit, or service need not produce equal results; it merely must afford an equal opportunity to achieve equal results.
It must be emphasized that, although separate services must be required in some instances, the provision of unnecessarily separate or different services is discriminatory. The addition to paragraph (b)(2) of the phrase “in the most integrated setting appropriated to the person's needs” is intended to reinforce this general concept. A new paragraph (b)(3) has also been added to § 104.4, requiring recipients to give qualified handicapped persons the option of participating in regular programs despite the existence of permissibly separate or different programs. The requirement has been reiterated in §§ 104.38 and 104.47 in connection with physical education and athletics programs.
Section 104.4(b)(1)(v) prohibits a recipient from supporting another entity or person that subjects participants or employees in the recipient's program to discrimination on the basis of handicap. This section would, for example, prohibit financial support by a recipient to a community recreational group or to a professional or social organization that discriminates against handicapped persons. Among the criteria to be considered in each case are the substantiality of the relationship between the recipient and the other entity, including financial support by the recipient, and whether the other entity's activities relate so closely to the recipient's program or activity that they fairly should be considered activities of the recipient itself. Paragraph (b)(1)(vi) was added in response to comment in order to make explicit the prohibition against denying qualified handicapped persons the opportunity to serve on planning and advisory boards responsible for guiding federally assisted programs or activities.
Several comments appeared to interpret § 104.4(b)(5), which proscribes discriminatory site selection, to prohibit a recipient that is located on hilly terrain from erecting any new buildings at its present site. That, of course, is not the case. This paragraph is not intended to apply to construction of additional buildings at an existing site. Of course, any such facilities must be made accessible in accordance with the requirements of § 104.23.
7. Assurances of compliance. Section 104.5(a) requires a recipient to submit to the Assistant Secretary an assurance that each of its programs and activities receiving or benefiting from Federal financial assistance from this Department will be conducted in compliance with this regulation. Many commenters also sought relief from the paperwork requirements imposed by the Department's enforcement of its various civil rights responsibilities by requesting the Department to issue one form incorporating title VI, title IX, and section 504 assurances. The Secretary is sympathetic to this request. While it is not feasible to adopt a single civil rights assurance form at this time, the Office for Civil Rights will work toward that goal.
8. Private rights of action. Several comments urged that the regulation incorporate provision granting beneficiaries a private right of action against recipients under section 504. To confer such a right is beyond the authority of the executive branch of Government. There is, however, case law holding that such a right exists. Lloyd v. Regional Transportation Authority, 548 F. 2d 1277 (7th Cir. 1977); see Hairston v. Drosick, Civil No. 75-0691 (S.D. W. Va., Jan. 14, 1976); Gurmankin v. Castanzo, 411 F. Supp. 982 (E.D. Pa. 1976); cf. Lau v. Nichols, supra.
9. Remedial action. Where there has been a finding of discrimination, § 104.6 requires a recipient to take remedial action to overcome the effects of the discrimination. Actions that might be required under paragraph (a)(1) include provision of services to persons previously discriminated against, reinstatement of employees and development of a remedial action plan. Should a recipient fail to take required remedial action, the ultimate sanctions of court action or termination of Federal financial assistance may be imposed.
Paragraph (a)(2) extends the responsibility for taking remedial action to a recipient that exercises control over a noncomplying recipient. Paragraph (a)(3) also makes clear that handicapped persons who are not in the program at the time that remedial action is required to be taken may also be the subject of such remedial action. This paragraph has been revised in response to comments in order to include persons who would have been in the program if discriminatory practices had not existed. Paragraphs (a) (1), (2), and (3) have also been amended in response to comments to make plain that, in appropriate cases, remedial action might be required to redress clear violations of the statute itself that occurred before the effective date of this regulation.
10. Voluntary action. In § 104.6(b), the term “voluntary action” has been substituted for the term “affirmative action” because the use of the latter term led to some confusion. We believe the term “voluntary action” more accurately reflects the purpose of the paragraph. This provision allows action, beyond that required by the regulation, to overcome conditions that led to limited participation by handicapped persons, whether or not the limited participation was caused by any discriminatory actions on the part of the recipient. Several commenters urged that paragraphs (a) and (b) be revised to require remedial action to overcome effects of prior discriminatory practices regardless of whether there has been an express finding of discrimination. The self-evaluation requirement in paragraph (c) accomplishes much the same purpose.
11. Self-evaluation. Paragraph (c) requires recipients to conduct a self-evaluation in order to determine whether their policies or practices may discriminate against handicapped persons and to take steps to modify any discriminatory policies and practices and their effects. The Department received many comments approving of the addition to paragraph (c) of a requirement that recipients seek the assistance of handicapped persons in the self-evaluation process. This paragraph has been further amended to require consultation with handicapped persons or organizations representing them before recipients undertake the policy modifications and remedial steps prescribed in paragraphs (c) (ii) and (iii).
Paragraph (c)(2), which sets forth the recordkeeping requirements concerning self-evaluation, now applies only to recipients with fifteen or more employees. This change was made as part of an effort to reduce unnecessary or counterproductive administrative obligations on small recipients. For those recipients required to keep records, the requirements have been made more specific; records must include a list of persons consulted and a description of areas examined, problems identified, and corrective steps taken. Moreover, the records must be made available for public inspection.
12. Grievance procedure. Section 104.7 requires recipients with fifteen or more employees to designate an individual responsible for coordinating its compliance efforts and to adopt a grievance procedure. Two changes were made in the section in response to comment. A general requirement that appropriate due process procedures be followed has been added. It was decided that the details of such procedures could not at this time be specified because of the varied nature of the persons and entities who must establish the procedures and of the programs to which they apply. A sentence was also added to make clear that grievance procedures are not required to be made available to unsuccessful applicants for employment or to applicants for admission to colleges and universities.
The regulation does not require that grievance procedures be exhausted before recourse is sought from the Department. However, the Secretary believes that it is desirable and efficient in many cases for complainants to seek resolution of their complaints and disputes at the local level and therefore encourages them to use available grievance procedures.
A number of comments asked whether compliance with this section or the notice requirements of § 104.8 could be coordinated with comparable action required by the title IX regulation. The Department encourages such efforts.
13. Notice. Section 104.8 (formerly § 84.9) sets forth requirements for dissemination of statements of nondicrimination policy by recipients.
It is important that both handicapped persons and the public at large be aware of the obligations of recipients under section 504. Both the Department and recipients have responsibilities in this regard. Indeed the Department intends to undertake a major public information effort to inform persons of their rights under section 504 and this regulation. In § 104.8 the Department has sought to impose a clear obligation on major recipients to notify beneficiaries and employees of the requirements of section 504, without dictating the precise way in which this notice must be given. At the same time, we have avoided imposing requirements on small recipients (those with fewer than fifteen employees) that would create unnecessary and counterproductive paper work burdens on them and unduly stretch the enforcement resources of the Department.
Section 104.8(a), as simplified, requires recipients with fifteen or more employees to take appropriate steps to notify beneficiaries and employees of the recipient's obligations under section 504. The last sentence of § 104.8(a) has been revised to list possible, rather than required, means of notification. Section 104.8(b) requires recipients to include a notification of their policy of nondiscrimination in recruitment and other general information materials.
In response to a number of comments, § 104.8 has been revised to delete the requirements of publication in local newspapers, which has proved to be both troublesome and ineffective. Several commenters suggested that notification on separate forms be allowed until present stocks of publications and forms are depleted. The final regulation explicitly allows this method of compliance. The separate form should, however, be included with each significant publication or form that is distributed.
Section 104 which prohibited the use of materials that might give the impression that a recipient excludes qualified handicapped persons from its program, has been deleted. The Department is convinced by the comments that this provision is unnecessary and difficult to apply. The Department encourages recipients, however, to include in their recruitment and other general information materials photographs of handicapped persons and ramps and other features of accessible buildings.
Under new § 104.9 the Assistant Secretary may, under certain circumstances, require recipients with fewer than fifteen employees to comply with one or more of these requirements. Thus, if experience shows a need for imposing notice or other requirements on particular recipients or classes of small recipients, the Department is prepared to expand the coverage of these sections.
14. Inconsistent State laws. Section 104.10(a) states that compliance with the regulation is not excused by State or local laws limiting the eligibility of qualified handicapped persons to receive services or to practice an occupation. The provision thus applies only with respect to state or local laws that unjustifiably differentiate on the basis of handicap.
Paragraph (b) further points out that the presence of limited employment opportunities in a particular profession, does not excuse a recipient from complying with the regulation. Thus, a law school could not deny admission to a blind applicant because blind laywers may find it more difficult to find jobs than do nonhandicapped lawyers.
Subpart B prescribes requirements for nondiscrimination in the employment practices of recipients of Federal financial assistance administered by the Department. This subpart is consistent with the employment provisions of the Department's regulation implementing title IX of the Education Amendments of 1972 (34 CFR, part 106) and the regulation of the Department of Labor under section 503 of the Rehabilitation Act, which requries certain Federal contractors to take affirmative action in the employment and advancement of qualified handicapped persons. All recipients subject to title IX are also subject to this regulation. In addition, many recipients subject to this regulation receive Federal procurement contracts in excess of $2,500 and are therefore also subject to section 503.
15. Discriminatory practices. Section 104.11 sets forth general provisions with respect to discrimination in employment. A new paragraph (a)(2) has been added to clarify the employment obligations of recipients that receive Federal funds under Part B of the Education of the Handicapped Act, as amended (EHA). Section 606 of the EHA obligates elementary or secondary school systems that receive EHA funds to take positive steps to employ and advance in employment qualified handicapped persons. This obligation is similar to the nondiscrimination requirement of section 504 but requires recipients to take additional steps to hire and promote handicapped persons. In enacting section 606 Congress chose the words “positive steps” instead of “affirmative action” advisedly and did not intend section 606 to incorporate the types of activities required under Executive Order 11246 (affirmative action on the basis of race, color, sex, or national origin) or under sections 501 and 503 of the Rehabilitation Act of 1973.
Paragraph (b) of § 104.11 sets forth the specific aspects of employment covered by the regulation. Paragraph (c) provides that inconsistent provisions of collective bargaining agreements do not excuse noncompliance.
16. Reasonable accommodation. The reasonable accommodation requirement of § 104.12 generated a substantial number of comments. The Department remains convinced that its approach is both fair and effective. Moreover, the Department of Labor reports that it has experienced little difficulty in administering the requirements of reasonable accommodation. The provision therefore remains basically unchanged from the proposed regulation.
Section 104.12 requires a recipient to make reasonable accommodation to the known physical or mental limitations of a handicapped applicant or employee unless the recipient can demonstrate that the accommodation would impose an undue hardship on the operation of its program. Where a handicapped person is not qualified to perform a particular job, where reasonable accommodation does not overcome the effects of a person's handicap, or where reasonable accommodation causes undue hardship to the employer, failure to hire or promote the handicapped person will not be considered discrimination.
Section 104.12(b) lists some of the actions that constitute reasonable accommodation. The list is neither all-inclusive nor meant to suggest that employers must follow all of the actions listed.
Reasonable accommodation includes modification of work schedules, including part-time employment, and job restructuring. Job restructuring may entail shifting nonessential duties to other employees. In other cases, reasonable accommodation may include physical modifications or relocation of particular offices or jobs so that they are in facilities or parts of facilities that are accessible to and usable by handicapped persons. If such accommodations would cause undue hardship to the employer, they need not be made.
Paragraph (c) of this section sets forth the factors that the Office for Civil Rights will consider in determining whether an accommodation necessary to enable an applicant or employee to perform the duties of a job would impose an undue hardship. The weight given to each of these factors in making the determination as to whether an accommodation constitutes undue hardship will vary depending on the facts of a particular situation. Thus, a small day-care center might not be required to expend more than a nominal sum, such as that necessary to equip a telephone for use by a secretary with impaired hearing, but a large school district might be required to make available a teacher's aide to a blind applicant for a teaching job. The reasonable accommodation standard in § 104.12 is similar to the obligation imposed upon Federal contractors in the regulation implementing section 503 of the Rehabilitation Act of 1973, administered by the Department of Labor. Although the wording of the reasonable accommodation provisions of the two regulations is not identical, the obligation that the two regulations impose is the same, and the Federal Government's policy in implementing the two sections will be uniform. The Department adopted the factors listed in paragraph (c) instead of the “business necessity” standard of the Labor regulation because that term seemed inappropriate to the nature of the programs operated by the majority of institutions subject to this regulation, e.g., public school systems, colleges and universities. The factors listed in paragraph (c) are intended to make the rationale underlying the business necessity standard applicable to an understandable by recipients of ED funds.
17. Tests and selection criteria. Revised § 104.13(a) prohibits employers from using test or other selection criteria that screen out or tend to screen out handicapped persons unless the test or criterion is shown to be job-related and alternative tests or criteria that do not screen out or tend to screen out as many handicapped persons are not shown by the Assistant Secretary to be available. This paragraph is an application of the principle established under title VII of the Civil Rights Act of 1964 in Griggs v. Duke Power Company, 401 U.S. 424 (1971).
Under the proposed section, a statistical showing of adverse impact on handicapped persons was required to trigger an employer's obligation to show that employment criteria and qualifications relating to handicap were necessary. This requirement was changed because the small number of handicapped persons taking tests would make statistical showings of “disproportionate, adverse effect” difficult and burdensome. Under the altered, more workable provision, once it is shown that an employment test substantially limits the opportunities of handicapped persons, the employer must show the test to be job-related. A recipient is no longer limited to using predictive validity studies as the method for demonstrating that a test or other selection criterion is in fact job-related. Nor, in all cases, are predictive validity studies sufficient to demonstrate that a test or criterion is job-related. In addition, § 104.13(a) has been revised to place the burden on the Assistant Secretary, rather than the recipient, to identify alternate tests.
Section 104.13(b) requires that a recipient take into account that some tests and criteria depend upon sensory, manual, or speaking skills that may not themselves be necessary to the job in question but that may make the handicapped person unable to pass the test. The recipient must select and administer tests so as best to ensure that the test will measure the handicapped person's ability to perform on the job rather than the person's ability to see, hear, speak, or perform manual tasks, except, of course, where such skills are the factors that the test purports to measure. For example, a person with a speech impediment may be perfectly qualified for jobs that do not or need not, with reasonable accommodation, require ability to speak clearly. Yet, if given an oral test, the person will be unable to perform in a satisfactory manner. The test results will not, therefore, predict job performance but instead will reflect impaired speech.
18. Preemployment inquiries. Section 104.14, concerning preemployment inquiries, generated a large number of comments. Commenters representing handicapped persons strongly favored a ban on preemployment inquiries on the ground that such inquiries are often used to discriminate against handicapped persons and are not necessary to serve any legitimate interests of employers. Some recipients, on the other hand, argued that preemployment inquiries are necessary to determine qualifications of the applicant, safety hazards caused by a particular handicapping condition, and accommodations that might be required.
The Secretary has concluded that a general prohibition of preemployment inquiries is appropriate. However, a sentence has been added to paragraph (a) to make clear that an employer may inquire into an applicant's ability to perform job-related tasks but may not ask if the person has a handicap. For example, an employer may not ask on an employment form if an applicant is visually impaired but may ask if the person has a current driver's license (if that is a necessary qualification for the position in question). Similarly, employers may make inquiries about an applicant's ability to perform a job safely. Thus, an employer may not ask if an applicant is an epileptic but may ask whether the person can perform a particular job without endangering other employees.
Section 104.14(b) allows preemployment inquiries only if they are made in conjunction with required remedial action to correct past discrimination, with voluntary action to overcome past conditions that have limited the participation of handicapped persons, or with obligations under section 503 of the Rehabilitation Act of 1973. In these instances, paragraph (b) specifies certain safeguards that must be followed by the employer.
Finally, the revised provision allows an employer to condition offers of employment to handicapped persons on the results of medical examinations, so long as the examinations are administered to all employees in a nondiscriminatory manner and the results are treated on a confidential basis.
19. Specific acts of Discrimination. Sections 104.15 (recruitment), 104.16 (compensation), 104.17 (job classification and structure) and 104.18 (fringe benefits) have been deleted from the regulation as unnecessarily duplicative of § 104.11 (discrimination prohibited). The deletion of these sections in no way changes the substantive obligations of employers subject to this regulation from those set forth in the July 16 proposed regulation. These deletions bring the regulation closer in form to the Department of Labor's section 503 regulation.
A proposed section, concerning fringe benefits, had allowed for differences in benefits or contributions between handicapped and nonhandicapped persons in situations only where such differences could be justified on an actuarial basis. Section 104.11 simply bars discrimination in providing fringe benefits and does not address the issue of actuarial differences. The Department believes that currently available data and experience do not demonstrate a basis for promulgating a regulation specifically allowing for differences in benefits or contributions.
In general, Subpart C prohibits the exclusion of qualified handicapped persons from federally assisted programs or activities because a recipient's facilities are inaccessible or unusable.
20. Existing facilities. Section 104.22 maintains the same standard for nondiscrimination in regard to existing facilities as was included in the proposed regulation. The section states that a recipients program or activity, when viewed in its entirety, must be readily accessible to and usable by handicapped persons. Paragraphs (a) and (b) make clear that a recipient is not required to make each of its existing facilities accessible to handicapped persons if its program as a whole is accessible. Accessibility to the recipient's program or activity may be achieved by a number of means, including redesign of equipment, reassignment of classes or other services to accessible buildings, and making aides available to beneficiaries. In choosing among methods of compliance, recipients are required to give priority consideration to methods that will be consistent with provision of services in the most appropriate integrated setting. Structural changes in existing facilities are required only where there is no other feasible way to make the recipient's program accessible.
Under § 104.22, a university does not have to make all of its existing classroom buildings accessible to handicapped students if some of its buildings are already accessible and if it is possible to reschedule or relocate enough classes so as to offer all required courses and a reasonable selection of elective courses in accessible facilities. If sufficient relocation of classes is not possible using existing facilities, enough alterations to ensure program accessibility are required. A university may not exclude a handicapped student from a specifically requested course offering because it is not offered in an accessible location, but it need not make every section of that course accessible.
Commenters representing several institutions of higher education have suggested that it would be appropriate for one postsecondary institution in a geographical area to be made accessible to handicapped persons and for other colleges and universities in that area to participate in that school's program, thereby developing an educational consortium for the postsecondary education of handicapped students. The Department believes that such a consortium, when developed and applied only to handicapped persons, would not constitute compliance with § 104.22, but would discriminate against qualified handicapped persons by restricting their choice in selecting institutions of higher education and would, therefore, be inconsistent with the basic objectives of the statute.
Nothing in this regulation, however, should be read as prohibiting institutions from forming consortia for the benefit of all students. Thus, if three colleges decide that it would be cost-efficient for one college to offer biology, the second physics, and the third chemistry to all students at the three colleges, the arrangement would not violate section 504. On the other hand, it would violate the regulation if the same institutions set up a consortium under which one college undertook to make its biology lab accessible, another its physics lab, and a third its chemistry lab, and under which mobility-impaired handicapped students (but not other students) were required to attend the particular college that is accessible for the desired courses.
Similarly, while a public school district need not make each of its buildings completely accessible, it may not make only one facility or part of a facility accessible if the result is to segregate handicapped students in a single setting.
All recipients that provide health, welfare, or other social services may also comply with § 104.22 by delivering services at alternate accessible sites or making home visits. Thus, for example, a pharmacist might arrange to make home deliveries of drugs. Under revised § 104.22(c), small providers of health, welfare, and social services (those with fewer than fifteen employees) may refer a beneficiary to an accessible provider of the desired service, but only if no means of meeting the program accessibility requirement other than a significant alteration in existing facilities is available. The referring recipient has the responsibility of determining that the other provider is in fact accessible and willing to provide the service.
A recent change in the tax law may assist some recipients in meeting their obligations under this section. Under section 2122 of the Tax Reform Act of 1976, recipients that pay federal income tax are eligible to claim a tax deduction of up to $25,000 for architectural and transportation modifications made to improve accessibility for handicapped persons. See 42 FR 17870 (April 4, 1977), adopting 26 CFR 7.190.
Several commenters expressed concern about the feasibility of compliance with the program accessibility standard. The Secretary believes that the standard is flexible enough to permit recipients to devise ways to make their programs accessible short of extremely expensive or impractical physical changes in facilities. Accordingly, the section does not allow for waivers. The Department is ready at all times to provide technical assistance to recipients in meeting their program accessibility responsibilities. For this purpose, the Department is establishing a special technical assistance unit. Recipients are encouraged to call upon the unit staff for advice and guidance both on structural modifications and on other ways of meeting the program accessibility requirement.
Paragraph (d) has been amended to require recipients to make all nonstructural adjustments necessary for meeting the program accessibility standard within sixty days. Only where structural changes in facilities are necessary will a recipient be permitted up to three years to accomplish program accessibility. It should be emphasized that the three-year time period is not a waiting period and that all changes must be accomplished as expeditiously as possible. Further, it is the Department's belief, after consultation with experts in the field, that outside ramps to buildings can be constructed quickly and at relatively low cost. Therefore, it will be expected that such structural additions will be made promptly to comply with § 104.22(d).
The regulation continues to provide, as did the proposed version, that a recipient planning to achieve program accessibility by making structural changes must develop a transition plan for such changes within six months of the effective date of the regulation. A number of commenters suggested extending that period to one year. The secretary believes that such an extension is unnecessary and unwise. Planning for any necessary structural changes should be undertaken promptly to ensure that they can be completed within the three-year period. The elements of the transition plan as required by the regulation remain virtually unchanged from the proposal but § 104.22(d) now includes a requirement that the recipient make the plan available for public inspection.
Several commenters expressed concern that the program accessibility standard would result in the segregation of handicapped persons in educational institutions. The regulation will not be applied to permit such a result. See § 104.4(c)(2)(iv), prohibiting unnecessarily separate treatment; § 104.35, requiring that students in elementary and secondary schools be educated in the most integrated setting appropriate to their needs; and new § 104.43(d), applying the same standard to postsecondary education.
We have received some comments from organizations of handicapped persons on the subject of requiring, over an extended period of time, a barrier-free environment—that is, requiring the removal of all architectural barriers in existing facilities. The Department has considered these comments but has decided to take no further action at this time concerning these suggestions, believing that such action should only be considered in light of experience in implementing the program accessibility standard.
21. New construction. Section 104.23 requires that all new facilities, as well as alterations that could affect access to and use of existing facilities, be designed and constructed in a manner so as to make the facility accessible to and usable by handicapped persons. Section 104.23(a) has been amended so that it applies to each newly constructed facility if the construction was commenced after the effective date of the regulation. The words “if construction has commenced” will be considered to mean “if groundbreaking has taken place.” Thus, a recipient will not be required to alter the design of a facility that has progressed beyond groundbreaking prior to the effective date of the regulation.
Paragraph (b) requires certain alterations to conform to the requirement of physical accessibility in paragraph (a). If an alteration is undertaken to a portion of a building the accessibility of which could be improved by the manner in which the alteration is carried out, the alteration must be made in that manner. Thus, if a doorway or wall is being altered, the door or other wall opening must be made wide enough to accommodate wheelchairs. On the other hand, if the alteration consists of altering ceilings, the provisions of this section are not applicable because this alteration cannot be done in a way that affects the accessibility of that portion of the building. The phrase “to the maximum extent feasible” has been added to allow for the occasional case in which the nature of an existing facility is such as to make it impractical or prohibitively expensive to renovate the building in a manner that results in its being entirely barrier-free. In all such cases, however, the alteration should provide the maximum amount of physical accessibility feasible.
Section 104.23(d) of the proposed regulation, providing for a limited deferral of action concerning facilities that are subject to section 502 as well as section 504 of the Act, has been deleted. The Secretary believes that the provision is unnecessary and inappropriate to this regulation. The Department will, however, seek to coordinate enforcement activities under this regulation with those of the Architectural and Transportation Barriers Compliance Board.
Subpart D sets forth requirements for nondiscrimination in preschool, elementary, secondary, and adult education programs and activities, including secondary vocational education programs. In this context, the term “adult education” refers only to those educational programs and activities for adults that are operated by elementary and secondary schools.
The provisions of Subpart D apply to state and local educational agencies. Although the subpart applies, in general, to both public and private education programs and activities that are federally assisted, §§ 104.32 and 104.33 apply only to public programs and § 104.39 applies only to private programs; §§ 104.35 and 104.36 apply both to public programs and to those private programs that include special services for handicapped students.
Subpart B generally conforms to the standards established for the education of handicapped persons in Mills v. Board of Education of the District of Columbia, 348 F. Supp. 866 (D.D.C. 1972), Pennsylvania Association for Retarded Children v. Commonwealth of Pennsylvania, 344 F. Supp. 1257 (E.D. 1971), 343 F. Supp. 279 (E.D. Pa. 1972), and Lebanks v. Spears, 60, F.R.D. 135 (E.D. La. 1973), as well as in the Education of the Handicapped Act, as amended by Pub. L. 94-142 (the EHA).
The basic requirements common to those cases, to the EHA, and to this regulation are (1) that handicapped persons, regardless of the nature or severity of their handicap, be provided a free appropriate public education, (2) that handicapped students be educated with nonhandicapped students to the maximum extent appropriate to their needs, (3) that educational agencies undertake to identify and locate all unserved handicapped children, (4) that evaluation procedures be improved in order to avoid the inappropriate education that results from the misclassification of students, and (5) that procedural safeguard be established to enable parents and guardians to influence decisions regarding the evaluation and placement of their children. These requirements are designed to ensure that no handicapped child is excluded from school on the basis of handicap and, if a recipient demonstrates that placement in a regular educational setting cannot be achieved satisfactorily, that the student is provided with adequate alternative services suited to the student's needs without additional cost to the student's parents or guardian. Thus, a recipient that operates a public school system must either educate handicapped children in its regular program or provide such children with an appropriate alternative education at public expense.
It is not the intention of the Department, except in extraordinary circumstances, to review the result of individual placement and other educational decisions, so long as the school district complies with the “process” requirements of this subpart (concerning identification and location, evaluation, and due process procedures). However, the Department will place a high priority on investigating cases which may involve exclusion of a child from the education system or a pattern or practice of discriminatory placements or education.
22. Location and notification. Section 104.32 requires public schools to take steps annually to identify and locate handicapped children who are not receiving an education and to publicize to handicapped children and their parents the rights and duties established by section 504 and this regulation. This section has been shortened without substantive change.
23. Free appropriate public education. Under § 104.33(a), a recipient is responsible for providing a free appropriate public education to each qualified handicapped person who is in the recipient's jurisdiction. The word “in” encompasses the concepts of both domicile and actual residence. If a recipient places a child in a program other than its own, it remains financially responsible for the child, whether or not the other program is operated by another recipient or educational agency. Moreover, a recipient may not place a child in a program that is inappropriate or that otherwise violates the requirements of Subpart D. And in no case may a recipient refuse to provide services to a handicapped child in its jurisdiction because of another person's or entity's failure to assume financial responsibility.
Section 104.33(b) concerns the provision of appropriate educational services to handicapped children. To be appropriate, such services must be designed to meet handicapped children's individual educational needs to the same extent that those of nonhandicapped children are met. An appropriate education could consist of education in regular classes, education in regular classes with the use of supplementary services, or special education and related services. Special education may include specially designed instruction in classrooms, at home, or in private or public institutions and may be accompanied by such related services as developmental, corrective, and other supportive services (including psychological, counseling, and medical diagnostic services). The placement of the child must however, be consistent with the requirements of § 104.34 and be suited to his or her educational needs.
The quality of the educational services provided to handicapped students must equal that of the services provided to nonhandicapped students; thus, handicapped student's teachers must be trained in the instruction of persons with the handicap in question and appropriate materials and equipment must be available. The Department is aware that the supply of adequately trained teachers may, at least at the outset of the imposition of this requirement, be insufficient to meet the demand of all recipients. This factor will be considered in determining the appropriateness of the remedy for noncompliance with this section. A new § 104.33(b)(2) has been added, which allows this requirement to be met through the full implementation of an individualized education program developed in accordance with the standards of the EHA.
Paragraph (c) of § 104.33 sets forth the specific financial obligations of a recipient. If a recipient does not itself provide handicapped persons with the requisite services, it must assume the cost of any alternate placement. If, however, a recipient offers adequate services and if alternate placement is chosen by a student's parent or guardian, the recipient need not assume the cost of the outside services. (If the parent or guardian believes that his or her child cannot be suitably educated in the recipient's program, he or she may make use of the procedures established in § 104.36.) Under this paragraph, a recipient's obligation extends beyond the provision of tuition payments in the case of placement outside the regular program. Adequate transportation must also be provided. Recipients must also pay for psychological services and those medical services necessary for diagnostic and evaluative purposes.
If the recipient places a student, because of his or her handicap, in a program that necessitates his or her being away from home, the payments must also cover room and board and nonmedical care (including custodial and supervisory care). When residential care is necessitated not by the student's handicap but by factors such as the student's home conditions, the recipient is not required to pay the cost of room and board.
Two new sentences have been added to paragraph (c)(1) to make clear that a recipient's financial obligations need not be met solely through its own funds. Recipients may rely on funds from any public or private source including insurers and similar third parties.
The EHA requires a free appropriate education to be provided to handicapped children “no later than September 1, 1978,” but section 504 contains no authority for delaying enforcement. To resolve this problem, a new paragraph (d) has been added to § 104.33. Section 104.33(d) requires recipients to achieve full compliance with the free appropriate public education requirements of § 104.33 as expeditiously as possible, but in no event later than September 1, 1978. The provision also makes clear that, as of the effective date of this regulation, no recipient may exclude a qualified handicapped child from its educational program. This provision against exclusion is consistent with the order of providing services set forth in section 612(3) of the EHA, which places the highest priority on providing services to handicapped children who are not receiving an education.
24. Educational setting. Section 104.34 prescribes standards for educating handicapped persons with nonhandicapped persons to the maximum extent appropriate to the needs of the handicapped person in question. A handicapped student may be removed from the regular educational setting only where the recipient can show that the needs of the student would, on balance, be served by placement in another setting.
Although under § 104.34, the needs of the handicapped person are determinative as to proper placement, it should be stressed that, where a handicapped student is so disruptive in a regular classroom that the education of other students is significantly impaired, the needs of the handicapped child cannot be met in that environment. Therefore, regular placement would not be appropriate to his or her needs and would not be required by § 104.34.
Among the factors to be considered in placing a child is the need to place the child as close to home as possible. A new sentence has been added to paragraph (a) requiring recipients to take this factor into account. As pointed out in several comments, the parents' right under § 104.36 to challenge the placement of their child extends not only to placement in special classes or separate schools but also to placement in a distant school and, in particular, to residential placement. An equally appropriate educational program may exist closer to home; this issue may be raised by the parent or guardian under §§ 104.34 and 104.36.
New paragraph (b) specified that handicapped children must also be provided nonacademic services in as integrated a setting as possible. This requirement is especially important for children whose educational needs necessitate their being solely with other handicapped children during most of each day. To the maximum extent appropriate, children in residential settings are also to be provided opportunities for participation with other children.
Section 104.34(c) requires that any facilities that are identifiable as being for handicapped students be comparable in quality to other facilities of the recipient. A number of comments objected to this section on the basis that it encourages the creation and maintenance of such facilities. This is not the intent of the provision. A separate facility violates section 504 unless it is indeed necessary to the provision of an appropriate education to certain handicapped students. In those instances in which such facilities are necessary (as might be the case, for example, for persons with severe intellectual disabilities), this provision requires that the educational services provided be comparable to those provided in the facilities of the recipient that are not identifiable as being for handicapped persons.
25. Evaluation and placement. Because the failure to provide handicapped persons with an appropriate education is so frequently the result of misclassification or misplacement, § 104.33(b)(1) makes compliance with its provisions contingent upon adherence to certain procedures designed to ensure appropriate classification and placement. These procedures, delineated in §§ 104.35 and 104.36, are concerned with testing and other evaluation methods and with procedural due process rights.
Section 104.35(a) requires that an individual evaluation be conducted before any action is taken with respect either to the initial placement of a handicapped child in a regular or special education program or to any subsequent significant change in that placement. Thus, a full reevaluation is not required every time an adjustment in placement is made. “Any action” includes denials of placement.
Paragraphs (b) and (c) of § 104.35 establishes procedures designed to ensure that children are not misclassified, unnecessarily labeled as being handicapped, or incorrectly placed because of inappropriate selection, administration, or interpretation of evaluation materials. This problem has been extensively documented in “Issues in the Classification of Children,” a report by the Project on Classification of Exceptional Children, in which the HEW Interagency Task Force participated. The provisions of these paragraphs are aimed primarily at abuses in the placement process that result from misuse of, or undue or misplaced reliance on, standardized scholastic aptitude tests.
Paragraph (b) has been shortened but not substantively changed. The requirement in former subparagraph (1) that recipients provide and administer evaluation materials in the native language of the student has been deleted as unnecessary, since the same requirement already exists under title VI and is more appropriately covered under that statute. Paragraphs (1) and (2) are, in general, intended to prevent misinterpretation and similar misuse of test scores and, in particular, to avoid undue reliance on general intelligence tests. Subparagraph (3) requires a recipient to administer tests to a student with impaired sensory, manual, or speaking skills in whatever manner is necessary to avoid distortion of the test results by the impairment. Former subparagraph (4) has been deleted as unnecessarily repetitive of the other provisions of this paragraph.
Paragraph (c) requires a recipient to draw upon a variety of sources in the evaluation process so that the possibility of error in classification is minimized. In particular, it requires that all significant factors relating to the learning process, including adaptive behavior, be considered. (Adaptive behavior is the effectiveness with which the individual meets the standards of personal independence and social responsibility expected of his or her age and cultural group.) Information from all sources must be documented and considered by a group of persons, and the procedure must ensure that the child is placed in the most integrated setting appropriate.
The proposed regulation would have required a complete individual reevaluation of the student each year. The Department has concluded that it is inappropriate in the section 504 regulation to require full reevaluations on such a rigid schedule. Accordingly, § 104.35(c) requires periodic reevaluations and specifies that reevaluations in accordance with the EHA will constitute compliance. The proposed regulation implementing the EHA allows reevaluation at three-year intervals except under certain specified circumstances.
Under § 104.36, a recipient must establish a system of due process procedures to be afforded to parents or guardians before the recipient takes any action regarding the identification, evaluation, or educational placement of a person who, because of handicap, needs or is believed to need special education or related services. This section has been revised. Because the due process procedures of the EHA, incorporated by reference in the proposed section 504 regulation, are inappropriate for some recipients not subject to that Act, the section now specifies minimum necessary procedures: notice, a right to inspect records, an impartial hearing with a right to representation by counsel, and a review procedure. The EHA procedures remain one means of meeting the regulation's due process requirements, however, and are recommended to recipients as a model.
26. Nonacademic services. Section 104.37 requires a recipient to provide nonacademic and extracurricular services and activities in such manner as is necessary to afford handicapped students an equal opportunity for participation. Because these services and activities are part of a recipient's education program, they must, in accordance with the provisions of § 104.34, be provided in the most integrated setting appropriate.
Revised paragraph (c)(2) does permit separation or differentiation with respect to the provision of physical education and athletics activities, but only if qualified handicapped students are also allowed the opportunity to compete for regular teams or participate in regular activities. Most handicapped students are able to participate in one or more regular physical education and athletics activities. For example, a student in a wheelchair can participate in regular archery course, as can a deaf student in a wrestling course.
Finally, the one-year transition period provided in a proposed section was deleted in response to the almost unanimous objection of commenters to that provision.
27. Preschool and adult education. Section 104.38 prohibits discrimination on the basis of handicap in preschool and adult education programs. Former paragraph (b), which emphasized that compensatory programs for disadvantaged children are subject to section 504, has been deleted as unnecessary, since it is comprehended by paragraph (a).
28. Private education. Section 104.39 sets forth the requirements applicable to recipients that operate private education programs and activities. The obligations of these recipients have been changed in two significant respects: first, private schools are subject to the evaluation and due process provisions of the subpart only if they operate special education programs; second, under § 104.39(b), they may charge more for providing services to handicapped students than to nonhandicapped students to the extent that additional charges can be justified by increased costs.
Paragraph (a) of § 104.39 is intended to make clear that recipients that operate private education programs and activities are not required to provide an appropriate education to handicapped students with special educational needs if the recipient does not offer programs designed to meet those needs. Thus, a private school that has no program for persons with intellectual disabilities is neither required to admit such a person into its program nor to arrange or pay for the provision of the person's education in another program. A private recipient without a special program for blind students, however, would not be permitted to exclude, on the basis of blindness, a blind applicant who is able to participate in the regular program with minor adjustments in the manner in which the program is normally offered.
Subpart E prescribes requirements for nondiscrimination in recruitment, admission, and treatment of students in postsecondary education programs and activities, including vocational education.
29. Admission and recruitment. In addition to a general prohibition of discrimination on the basis of handicap in § 104.42(a), the regulation delineates, in § 104.42(b), specific prohibitions concerning the establishment of limitations on admission of handicapped students, the use of tests or selection criteria, and preadmission inquiry. Several changes have been made in this provision.
Section 104.42(b) provides that postsecondary educational institutions may not use any test or criterion for admission that has a disproportionate, adverse effect on handicapped persons unless it has been validated as a predictor of academic success and alternate tests or criteria with a less disproportionate, adverse effect are shown by the Department to be available. There are two significant changes in this approach from the July 16 proposed regulation.
First, many commenters expressed concern that § 104.42(b)(2)(ii) could be interpreted to require a “global search” for alternate tests that do not have a disproportionate, adverse impact on handicapped persons. This was not the intent of the provision and, therefore, it has been amended to place the burden on the Assistant Secretary for Civil Rights, rather than on the recipient, to identify alternate tests.
Second, a new paragraph (d), concerning validity studies, has been added. Under the proposed regulation, overall success in an education program, not just first-year grades, was the criterion against which admissions tests were to be validated. This approach has been changed to reflect the comment of professional testing services that use of first year grades would be less disruptive of present practice and that periodic validity studies against overall success in the education program would be sufficient check on the reliability of first-year grades.
Section 104.42(b)(3) also requires a recipient to assure itself that admissions tests are selected and administered to applicants with impaired sensory, manual, or speaking skills in such manner as is necessary to avoid unfair distortion of test results. Methods have been developed for testing the aptitude and achievement of persons who are not able to take written tests or even to make the marks required for mechanically scored objective tests; in addition, methods for testing persons with visual or hearing impairments are available. A recipient, under this paragraph, must assure itself that such methods are used with respect to the selection and administration of any admissions tests that it uses.
Section 104.42(b)(3)(iii) has been amended to require that admissions tests be administered in facilities that, on the whole, are accessible. In this context, “on the whole” means that not all of the facilities need be accessible so long as a sufficient number of facilities are available to handicapped persons.
Revised § 104.42(b)(4) generally prohibits preadmission inquiries as to whether an applicant has a handicap. The considerations that led to this revision are similar to those underlying the comparable revision of § 104.14 on preemployment inquiries. The regulation does, however, allow inquiries to be made, after admission but before enrollment, as to handicaps that may require accommodation.
New paragraph (c) parallels the section on preemployment inquiries and allows postsecondary institutions to inquire about applicants' handicaps before admission, subject to certain safeguards, if the purpose of the inquiry is to take remedial action to correct past discrimination or to take voluntary action to overcome the limited participation of handicapped persons in postsecondary educational institutions.
Proposed § 104.42(c), which would have allowed different admissions criteria in certain cases for handicapped persons, was widely misinterpreted in comments from both handicapped persons and recipients. We have concluded that the section is unnecessary, and it has been deleted.
30. Treatment of students. Section 104.43 contains general provisions prohibiting the discriminatory treatment of qualified handicapped applicants. Paragraph (b) requires recipients to ensure that equal opportunities are provided to its handicapped students in education programs and activities that are not operated by the recipient. The recipient must be satisfied that the outside education program or activity as a whole is nondiscriminatory. For example, a college must ensure that discrimination on the basis of handicap does not occur in connection with teaching assignments of student teachers in elementary or secondary schools not operated by the college. Under the “as a whole” wording, the college could continue to use elementary or secondary school systems that discriminate if, and only if, the college's student teaching program, when viewed in its entirety, offered handicapped student teachers the same range and quality of choice in student teaching assignments afforded nonhandicapped students.
Paragraph (c) of this section prohibits a recipient from excluding qualified handicapped students from any course, course of study, or other part of its education program or activity. This paragraph is designed to eliminate the practice of excluding handicapped persons from specific courses and from areas of concentration because of factors such as ambulatory difficulties of the student or assumptions by the recipient that no job would be available in the area in question for a person with that handicap.
New paragraph (d) requires postsecondary institutions to operate their programs and activities so that handicapped students are provided services in the most integrated setting appropriate. Thus, if a college had several elementary physics classes and had moved one such class to the first floor of the science building to accommodate students in wheelchairs, it would be a violation of this paragraph for the college to concentrate handicapped students with no mobility impairments in the same class.
31. Academic adjustments. Paragraph (a) of § 104.44 requires that a recipient make certain adjustments to academic requirements and practices that discriminate or have the effect of discriminating on the basis of handicap. This requirement, like its predecessor in the proposed regulation, does not obligate an institution to waive course or other academic requirements. But such institutions must accommodate those requirements to the needs of individual handicapped students. For example, an institution might permit an otherwise qualified handicapped student who is deaf to substitute an art appreciation or music history course for a required course in music appreciation or could modify the manner in which the music appreciation course is conducted for the deaf student. It shoud be stressed that academic requirements that can be demonstrated by the recipient to be essential to its program of instruction or to particular degrees need not be changed.
Paragraph (b) provides that postsecondary institutions may not impose rules that have the effect of limiting the participation of handicapped students in the education program. Such rules include prohibition of tape recorders or braillers in classrooms and dog guides in campus buildings. Several recipients expressed concern about allowing students to tape record lectures because the professor may later want to copyright the lectures. This problem may be solved by requiring students to sign agreements that they will not release the tape recording or transcription or otherwise hinder the professor's ability to obtain a copyright.
Paragraph (c) of this section, concerning the administration of course examinations to students with impaired sensory, manual, or speaking skills, parallels the regulation's provisions on admissions testing (§ 104.42(b)) and will be similarly interpreted.
Under § 104.44(d), a recipient must ensure that no handicapped student is subject to discrimination in the recipient's program because of the absence of necessary auxiliary educational aids. Colleges and universities expressed concern about the costs of compliance with this provision.
The Department emphasizes that recipients can usually meet this obligation by assisting students in using existing resources for auxiliary aids such as state vocational rehabilitation agencies and private charitable organizations. Indeed, the Department anticipates that the bulk of auxiliary aids will be paid for by state and private agencies, not by colleges or universities. In those circumstances where the recipient institution must provide the educational auxiliary aid, the institution has flexibility in choosing the methods by which the aids will be supplied. For example, some universities have used students to work with the institution's handicapped students. Other institutions have used existing private agencies that tape texts for handicapped students free of charge in order to reduce the number of readers needed for visually impaired students.
As long as no handicapped person is excluded from a program because of the lack of an appropriate aid, the recipient need not have all such aids on hand at all times. Thus, readers need not be available in the recipient's library at all times so long as the schedule of times when a reader is available is established, is adhered to, and is sufficient. Of course, recipients are not required to maintain a complete braille library.
32. Housing. Section 104.45(a) requires postsecondary institutions to provide housing to handicapped students at the same cost as they provide it to other students and in a convenient, accessible, and comparable manner. Commenters, particularly blind persons pointed out that some handicapped persons can live in any college housing and need not wait to the end of the transition period in subpart C to be offered the same variety and scope of housing accommodations given to nonhandicapped persons. The Department concurs with this position and will interpret this section accordingly.
A number of colleges and universities reacted negatively to paragraph (b) of this section. It provides that, if a recipient assists in making off-campus housing available to its students, it should develop and implement procedures to assure itself that off-campus housing, as a whole, is available to handicapped students. Since postsecondary institutions are presently required to assure themselves that off-campus housing is provided in a manner that does not discriminate on the basis of sex (§ 106.32 of the title IX regulation), they may use the procedures developed under title IX in order to comply with § 104.45(b). It should be emphasized that not every off-campus living accommodation need be made accessible to handicapped persons.
33. Health and insurance. A proposed section, providing that recipients may not discriminate on the basis of handicap in the provision of health related services, has been deleted as duplicative of the general provisions of § 104.43. This deletion represents no change in the obligation of recipients to provide nondiscriminatory health and insurance plans. The Department will continue to require that nondiscriminatory health services be provided to handicapped students. Recipients are not required, however, to provide specialized services and aids to handicapped persons in health programs. If, for example, a college infirmary treats only simple disorders such as cuts, bruises, and colds, its obligation to handicapped persons is to treat such disorders for them.
34. Financial assistance. Section 104.46(a), prohibiting discrimination in providing financial assistance, remains substantively the same. It provides that recipients may not provide less assistance to or limit the eligibility of qualified handicapped persons for such assistance, whether the assistance is provided directly by the recipient or by another entity through the recipient's sponsorship. Awards that are made under wills, trusts, or similar legal instruments in a discriminatory manner are permissible, but only if the overall effect of the recipient's provision of financial assistance is not discriminatory on the basis of handicap.
It will not be considered discriminatory to deny, on the basis of handicap, an athletic scholarship to a handicapped person if the handicap renders the person unable to qualify for the award. For example, a student who has a neurological disorder might be denied a varsity football scholarship on the basis of his inability to play football, but a deaf person could not, on the basis of handicap, be denied a scholarship for the school's diving team. The deaf person could, however, be denied a scholarship on the basis of comparative diving ability.
Commenters on § 104.46(b), which applies to assistance in obtaining outside employment for students, expressed similar concerns to those raised under § 104.43(b), concerning cooperative programs. This paragraph has been changed in the same manner as § 104.43(b) to include the “as a whole” concept and will be interpreted in the same manner as § 104.43(b).
35. Nonacademic services. Section 104.47 establishes nondiscrimination standards for physical education and athletics counseling and placement services, and social organizations. This section sets the same standards as does § 104.38 of subpart D, discussed above, and will be interpreted in a similar fashion.
Subpart F applies to recipients that operate health, welfare, and social service programs. The Department received fewer comments on this subpart than on others.
Although many commented that subpart F lacked specificity, these commenters provided neither concrete suggestions nor additions. Nevertheless, some changes have been made, pursuant to comment, to clarify the obligations of recipients in specific areas. In addition, in an effort to reduce duplication in the regulation, the section governing recipients providing health services has been consolidated with the section regulating providers of welfare and social services. Since the separate provisions that appeared in the proposed regulation were almost identical, no substantive change should be inferred from their consolidation.
Several commenters asked whether subpart F applies to vocational rehabilitation agencies whose purpose is to assist in the rehabilitation of handicapped persons. To the extent that such agencies receive financial assistance from the Department, they are covered by subpart F and all other relevant subparts of the regulation. Nothing in this regulation, however, precludes such agencies from servicing only handicapped persons. Indeed, § 104.4(c) permits recipients to offer services or benefits that are limited by federal law to handicapped persons or classes of handicapped persons.
Many comments suggested requiring state social service agencies to take an active role in the enforcement of section 504 with regard to local social service providers. The Department believes that the possibility for federal-state cooperation in the administration and enforcement of section 504 warrants further consideration.
A number of comments also discussed whether section 504 should be read to require payment of compensation to institutionalized handicapped patients who perform services for the institution in which they reside. The Department of Labor has recently issued a proposed regulation under the Fair Labor Standards Act (FLSA) that covers the question of compensation for institutionalized persons. 42 FR 15224 (March 18, 1977). This Department will seek information and comment from the Department of Labor concerning that agency's experience administering the FLSA regulation.
36. Health, welfare, and other social service providers. Section 104.52(a) has been expanded in several respects. The addition of new paragraph (a)(2) is intended to make clear the basic requirement of equal opportunity to receive benefits or services in the health, welfare, and social service areas. The paragraph parallels §§ 104.4(b)(ii) and 104.43(b). New paragraph (a)(3) requires the provision of effective benefits or services, as defined in § 104.4(b)(2) (i.e., benefits or services which “afford handicapped persons equal opportunity to obtain the same result (or) to gain the same benefit * * *”).
Section 104.52(a) also includes provisions concerning the limitation of benefits or services to handicapped persons and the subjection of handicapped persons to different eligibility standards. One common misconception about the regulation is that it would require specialized hospitals and other health care providers to treat all handicapped persons. The regulation makes no such requirement. Thus, a burn treatment center need not provide other types of medical treatment to handicapped persons unless it provides such medical services to nonhandicapped persons. It could not, however, refuse to treat the burns of a deaf person because of his or her deafness.
Commenters had raised the question of whether the prohibition against different standards of eligibility might preclude recipients from providing special services to handicapped persons or classes of handicapped persons. The regulation will not be so interpreted, and the specific section in question has been eliminated. Section 104.4(c) makes clear that special programs for handicapped persons are permitted.
A new paragraph (a)(5) concerning the provision of different or separate services or benefits has been added. This provision prohibits such treatment unless necessary to provide qualified handicapped persons with benefits and services that are as effective as those provided to others.
Section 104.52(b) has been amended to cover written material concerning waivers of rights or consent to treatment as well as general notices concerning health benefits or services. The section requires the recipient to ensure that qualified handicapped persons are not denied effective notice because of their handicap. For example, recipients could use several different types of notice in order to reach persons with impaired vision or hearing, such as brailled messages, radio spots, and tacticle devices on cards or envelopes to inform blind persons of the need to call the recipient for further information.
Section 104.52(c) is a new section requiring recipient hospitals to establish a procedure for effective communication with persons with impaired hearing for the purpose of providing emergency health care. Although it would be appropriate for a hospital to fulfill its responsibilities under this section by having a full-time interpreter for the deaf on staff, there may be other means of accomplishing the desired result of assuring that some means of communication is immediately available for deaf persons needing emergency treatment.
Section 104.52(c), also a new provision, requires recipients with fifteen or more employees to provide appropriate auxiliary aids for persons with impaired sensory, manual, or speaking skills. Further, the Assistant Secretary may require a small provider to furnish auxiliary aids where the provision of aids would not adversely affect the ability of the recipient to provide its health benefits or service.
37. Treatment of Drug Addicts and Alcoholics. Section 104.53 is a new section that prohibits discrimination in the treatment and admission of drug and alcohol addicts to hospitals and outpatient facilities. Section 104.53 prohibits discrimination against drug abusers by operators of outpatient facilities, despite the fact that section 407 pertains only to hospitals, because of the broader application of section 504. This provision does not mean that all hospitals and outpatient facilities must treat drug addiction and alcoholism. It simply means, for example, that a cancer clinic may not refuse to treat cancer patients simply because they are also alcoholics.
38. Education of institutionalized persons. The regulation retains § 104.54 of the proposed regulation that requires that an appropriate education be provided to qualified handicapped persons who are confined to residential institutions or day care centers.
In § 104.61, the Secretary has adopted the title VI complaint and enforcement procedures for use in implementing section 504 until such time as they are superseded by the issuance of a consolidated procedureal regulation applicable to all of the civil rights statutes and executive orders administered by the Department.
The purpose of this part is to effectuate section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of handicap in programs or activities conducted by Executive agencies or the United States Postal Service.
This part applies to all programs or activities conducted by the Department, except for programs or activities conducted outside the United States that do not involve individuals with handicaps in the United States.
For purposes of this part, the following definitions apply:
Auxiliary aids means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the Department. For example, auxiliary aids useful for persons with impaired vision include readers, materials in braille, audio recordings, and other similar services and devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TDDs), interpreters, notetakers, written materials, and other similar services and devices.
Complete complaint means a written statement that contains the complainant's name and address and describes the Department's alleged discriminatory action in sufficient detail to inform the Department of the nature and date of the alleged violation of section 504. It must be signed by the complainant or by someone authorized to do so on his or her behalf. Complaints filed on behalf of classes or third parties must describe or identify (by name, if possible) the alleged victims of discrimination.
Facility means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other conveyances, or other real or personal property.
Historic preservation programs means programs conducted by the Department that have preservation of historic properties as a primary purpose.
Historic properties means those properties that are listed or eligible for listing in the National Register of Historic Places or properties designated as historic under a statute of the appropriate State or local government body.
Individual with handicaps means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. As used in this definition, the phrase—
(1) Physical or mental impairment includes—
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as intellectual disability, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
(2) Major life activities includes functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working;
(3) Has a record of such an impairment means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities; and
(4) Is regarded as having an impairment means—
(i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the Department as constituting such a limitation;
(ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward the impairment; or
(iii) Has none of the impairments defined in paragraph (1) of this definition but is treated by the Department as having such an impairment.
Qualified individual with handicaps means—
(1) With respect to preschool, elementary, or secondary education services provided by the Department, an individual with handicaps who is a member of a class of persons otherwise entitled by statute, regulation, or Department policy to receive education services from the Department;
(2) With respect to any other Department program or activity under which a person is required to perform services or to achieve a level of accomplishment, an individual with handicaps who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the Department can demonstrate would result in a fundamental alteration in its nature;
(3) With respect to any other Department program or activity, an individual with handicaps who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity; and
(4) Qualified handicapped person as that term is defined for purposes of employment in 29 CFR 1613.702(f), which is made applicable to this part by § 105.30
Secretary means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
Section 504 means section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended by the Rehabilitation Act Amendments of 1974 (Pub. L. 93-516, 88 Stat. 1617); the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978 (Pub. L. 95-602, 92 Stat. 2955); the Rehabilitation Act Amendments of 1986 (Pub. L. 99-506, 100 Stat. 1810); and the Civil Rights Restoration Act of 1987 (Pub. L. 100-259, 102 Stat. 28). As used in this part, section 504 applies only to programs or activities conducted by the Department and not to federally assisted programs.
Substantial impairment means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration.
(a) The Department shall, within one year of the effective date of this part, evaluate its current policies and practices, and the effects thereof, that do not or may not meet the requirements of this part, and, to the extent modification of any of those policies and practices is required, the Department shall proceed to make the necessary modifications.
(b) The Department shall provide an opportunity to interested persons, including individuals with handicaps or organizations representing individuals with handicaps to participate in the self-evaluation process by submitting comments (both oral and written).
(c) The Department shall, for at least 3 years following completion of the self-evaluation, maintain on file, and make available for public inspection—
(1) A description of areas examined and any problems identified; and
(2) A description of any modifications made.
The Department shall make available, to employees, applicants, participants, beneficiaries, and other interested persons, information regarding the provisions of this part and its applicability to the programs or activities conducted by the Department, and make that information available to them in such manner as the Secretary finds necessary to apprise those persons of the protections against discrimination assured them by section 504 and the regulations in this part.
(a) No qualified individual with handicaps shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under, any program or activity conducted by the Department.
(b)(1) The Department, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of handicap—
(i) Deny a qualified individual with handicaps the opportunity to participate in or benefit from the aid, benefit, or service;
(ii) Afford a qualified individual with handicaps an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others;
(iii) Provide a qualified individual with handicaps with an aid, benefit, or service that is not as effective in affording equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to individuals with handicaps or to any class of individuals with handicaps than is provided to others unless that action is necessary to provide qualified individuals with handicaps with aid, benefits, or services that are as effective as those provided to others;
(v) Deny a qualified individual with handicaps the opportunity to participate as a member of planning or advisory boards; or
(vi) Otherwise limit a qualified individual with handicaps in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the aid, benefit, or service.
(2) The Department may not deny a qualified individual with handicaps the opportunity to participate in programs or activities that are not separate or different, despite the existence of permissibly separate or different programs or activities.
(3) The Department may not, directly or through contractual or other arrangements, use criteria or methods of administration the purpose or effect of which would—
(i) Subject qualified individuals with handicaps to discrimination on the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(4) The Department may not, in determining the site or location of a facility, make selections the purpose or effect of which would—
(i) Exclude individuals with handicaps from, deny them the benefits of, or otherwise subject them to discrimination under, any program or activity conducted by the Department; or
(ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(5) The Department, in the selection of procurement contractors, may not use criteria that subject qualified individuals with handicaps to discrimination on the basis of handicap.
(6) The Department may not administer a licensing or certification program in a manner that subjects qualified individuals with handicaps to discrimination on the basis of handicap, nor may the Department establish requirements for the program or activities of licensees or certified entities that subject qualified individuals with handicaps to discrimination on the basis of handicap. However, the programs or activities of entities that are licensed or certified by the Department are not, themselves, covered by this part.
(c) The exclusion of nonhandicapped persons from the benefits of a program limited by Federal statute or Executive Order to individuals with handicaps or the exclusion of a specific class of individuals with handicaps from a program limited by Federal statute or Executive Order to a different class of individuals with handicaps is not prohibited by this part.
(d) The Department shall administer programs and activities in the most integrated setting appropriate to the needs of qualified individuals with handicaps.
No qualified individual with handicaps shall, on the basis of handicap, be subjected to discrimination in employment under any program or activity conducted by the Department. As provided in § 105.41(b), the definitions, requirements, and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1613, shall apply to employment in federally conducted programs or activities.
Except as otherwise provided in § 105.32, no qualified individual with handicaps shall, because the Department's facilities are inaccessible to or unusable by individuals with handicaps, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the Department.
(a) General. The Department shall operate each program or activity so that the program or activity, viewed in its entirety, is readily accessible to and usable by individuals with handicaps. This paragraph does not—
(1) Necessarily require the Department to make each of its existing facilities accessible to and usable by individuals with handicaps;
(2) In the case of historic preservation programs, require the Department to take any action that would result in a substantial impairment of significant historic features of an historic property; or
(3)(i) Require the Department to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens.
(ii) The Department has the burden of proving that compliance with § 105.32(a) would result in that alteration or those burdens.
(iii) The decision that compliance would result in that alteration or those burdens must be made by the Secretary after considering all of the Department's resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion.
(iv) If an action would result in that alteration or those burdens, the Department shall take any other action that would not result in the alteration or burdens but would nevertheless ensure that individuals with handicaps receive the benefits and services of the program or activity.
(b) Methods—(1) General. (i) The Department may comply with the requirements of this section through such means as redesign of equipment, reassignment of services to accessible buildings, assignments of aides to beneficiaries, home visits, delivery of services at alternate accessible sites, alteration of existing facilities and construction of new facilities, use of accessible rolling stock, or any other methods that result in making its programs or activities readily accessible to and usable by individuals with handicaps.
(ii) The Department is not required to make structural changes in existing facilities if other methods are effective in achieving compliance with this section.
(iii) The Department, in making alterations to existing buildings, shall meet accessibility requirements to the extent compelled by the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any regulations implementing that Act.
(iv) In choosing among available methods for meeting the requirements of this section, the Department shall give priority to those methods that offer programs and activities to qualified individuals with handicaps in the most integrated setting appropriate.
(2) Historic preservation programs. In meeting the requirements of § 105.32(a) in historic preservation programs, the Department shall give priority to methods that provide physical access to individuals with handicaps. In cases were a physical alteration to an historic property is not required because of § 105.32 (a)(2) or (a)(3), alternative methods of achieving program accessibility include—
(i) Using audiovisual materials and devices to depict those portions of an historic property that cannot otherwise be made accessible;
(ii) Assigning persons to guide individuals with handicaps into or through portions of historic properties that cannot otherwise be made accessible; or
(iii) Adopting other innovative methods.
(c) Time period for compliance. The Department shall comply with the obligations established under this section within 60 days of the effective date of this part except that if structural changes in facilities are undertaken, the changes shall be made within 3 years of the effective date of this part, but in any event as expeditiously as possible.
(d) Transition plan. (1) In the event that structural changes to facilities will be undertaken to achieve program accessibility, the Department shall develop, within six months of the effective date of this part, a transition plan setting forth the steps necessary to complete those changes.
(2) The Department shall provide an opportunity to interested persons, including individuals with handicaps or organizations representing individuals with handicaps, to participate in the development of the transition plan by submitting comments (both oral and written). A copy of the transition plan must be made available for public inspection.
(3) The plan must, at a minimum—
(i) Identify physical obstacles in the Department's facilities that limit the accessibility of its programs or activities to individuals with handicaps;
(ii) Describe in detail the methods that will be used to make the facilities accessible;
(iii) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; and
(iv) Indicate the official responsible for implementation of the plan.
Each building or part of a building that is constructed or altered by, on behalf of, or for the use of, the Department must be designed, constructed, or altered so as to be readily accessible to and usable by individuals with handicaps. The definitions, requirements, and standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this section.
(a) The Department shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public, as follows:
(1)(i) The Department shall furnish appropriate auxiliary aids if necessary to afford an individual with handicaps an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the Department.
(ii) In determining what type of auxiliary aid is necessary, the Department shall give primary consideration to the request of the individual with handicaps.
(iii) The Department need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature.
(2) If the Department communicates with applicants and beneficiaries by telephone, telecommunication devices for deaf persons (TDDs) or equally effective telecommunication systems must be used.
(b) The Department shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities.
(c) The Department shall provide signs at a primary entrance to each of its inaccessible facilities, directing users to a location at which they can obtain information about accessible facilities. The international symbol for accessibility must be used at each primary entrance of an accessible facility.
(d)(1) This section does not require the Department to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens.
(2) The Department has the burden of proving that compliance with § 105.40 would result in that alteration or those burdens.
(3) The decision that compliance would result in that alteration or those burdens must be made by the Secretary after considering all Department resources available for use in the funding and operation of the conducted program or activity and must be accompanied by a written statement of the reasons for reaching that conclusion.
(4) If an action required to comply with this section would result in that alteration or those burdens, the Department shall take any other action that would not result in the alteration or burdens but would nevertheless ensure that, to the maximum extent possible, individuals with handicaps receive the benefits and services of the program or activity.
(a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of handicap in programs and activities conducted by the Department.
(b) As provided in § 105.30, the Department shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791).
(c) The Deputy Under Secretary for Management is responsible for coordinating implementation of this section. Complaints may be sent to the U.S. Department of Education, Office of Management, Federal Building No. 6, 400 Maryland Avenue SW., Washington, DC 20202.
(d) The Department shall accept and investigate all complete complaints for which it has jurisdiction. All complete complaints must be filed within 180 days of the alleged act of discrimination. The Department may extend this time period for good cause.
(e) If the Department receives a complaint over which it does not have jurisdiction, it shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate government entity.
(f) The Department shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157) is not readily accessible to and usable by individuals with handicaps.
(g) Within 180 days of the receipt of a complete complaint for which it has jurisdiction, the Department shall notify the complainant of the results of the investigation in a letter containing—
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal.
(h) Appeals of the findings of fact and conclusions of law or remedies must be filed by the complainant within 90 days of receipt from the Department of the letter required by § 105.41(g). The Department may extend this time for good cause.
(i) Timely appeals shall be accepted and processed by the Secretary.
(j) If the Secretary determines that additional information is needed for the complainant, he or she shall notify the complainant of the additional information needed to make his or her determination on the appeal.
(k) The Secretary shall notify the complainant of the results of the appeal.
(l) The time limit in paragraph (g) of this section may be extended by the Secretary.
(m) The Secretary may delegate the authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated.
The effective date of this part is October 9, 1990.
The purpose of this part is to effectuate Title IX, which is designed to eliminate (with certain exceptions) discrimination on the basis of sex in any education program or activity receiving Federal financial assistance, whether or not such program or activity is offered or sponsored by an educational institution as defined in this part. This part is also intended to effectuate section 844 of the Education Amendments of 1974, Public Law 93-380, 88 Stat. 484.
As used in this part, the term:
Administrative law judge means a person appointed by the reviewing authority to preside over a hearing held under § 106.81.
Administratively separate unit means a school, department, or college of an educational institution (other than a local educational agency), admission to which is independent of admission to any other component of such institution.
Admission means selection for part-time, full-time, special, associate, transfer, exchange, or any other enrollment, membership, or matriculation in or at an education program or activity operated by a recipient.
Applicant, as used in the definition of educational institution in this section and as used in § 106.4, means one who submits an application, request, or plan required to be approved by a Department official, or by a recipient, as a condition to becoming a recipient.
Assistant Secretary means the Assistant Secretary for Civil Rights of the Department.
Complainant means:
(1) A student or employee who is alleged to have been subjected to conduct that could constitute sex discrimination under Title IX or this part; or
(2) A person other than a student or employee who is alleged to have been subjected to conduct that could constitute sex discrimination under Title IX or this part and who was participating or attempting to participate in the recipient's education program or activity at the time of the alleged sex discrimination.
Complaint means an oral or written request to the recipient that objectively can be understood as a request for the recipient to investigate and make a determination about alleged discrimination under Title IX or this part.
Confidential employee means:
(1) An employee of a recipient whose communications are privileged or confidential under Federal or State law. The employee's confidential status, for purposes of this part, is only with respect to information received while the employee is functioning within the scope of their duties to which privilege or confidentiality applies;
(2) An employee of a recipient whom the recipient has designated as confidential under this part for the purpose of providing services to persons related to sex discrimination. If the employee also has a duty not associated with providing those services, the employee's confidential status is only with respect to information received about sex discrimination in connection with providing those services; or
(3) An employee of a postsecondary institution who is conducting an Institutional Review Board-approved human-subjects research study designed to gather information about sex discrimination—but the employee's confidential status is only with respect to information received while conducting the study.
Department means the Department of Education.
Disciplinary sanctions means consequences imposed on a respondent following a determination under Title IX that the respondent violated the recipient's prohibition on sex discrimination.
Educational institution means a local educational agency (LEA) as defined by section 8101 of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act (20 U.S.C. 7801(30)), a preschool, a private elementary or secondary school, or an applicant or recipient that is an institution of graduate higher education, an institution of undergraduate higher education, an institution of professional education, or an institution of vocational education.
Elementary school means elementary school as defined by section 8101 of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act (20 U.S.C. 7801(19)), and a public or private preschool.
Federal financial assistance means any of the following, when authorized or extended under a law administered by the Department:
(1) A grant or loan of Federal financial assistance, including funds made available for:
(i) The acquisition, construction, renovation, restoration, or repair of a building or facility or any portion thereof; and
(ii) Scholarships, loans, grants, wages, or other funds extended to any entity for payment to or on behalf of students admitted to that entity, or extended directly to such students for payment to that entity.
(2) A grant of Federal real or personal property or any interest therein, including surplus property, and the proceeds of the sale or transfer of such property, if the Federal share of the fair market value of the property is not, upon such sale or transfer, properly accounted for to the Federal Government.
(3) Provision of the services of Federal personnel.
(4) Sale or lease of Federal property or any interest therein at nominal consideration, or at consideration reduced for the purpose of assisting the recipient or in recognition of public interest to be served thereby, or permission to use Federal property or any interest therein without consideration.
(5) Any other contract, agreement, or arrangement which has as one of its purposes the provision of assistance to any education program or activity, except a contract of insurance or guaranty.
Institution of graduate higher education means an institution which:
(1) Offers academic study beyond the bachelor of arts or bachelor of science degree, whether or not leading to a certificate of any higher degree in the liberal arts and sciences; or
(2) Awards any degree in a professional field beyond the first professional degree (regardless of whether the first professional degree in such field is awarded by an institution of undergraduate higher education or professional education); or
(3) Awards no degree and offers no further academic study, but operates ordinarily for the purpose of facilitating research by persons who have received the highest graduate degree in any field of study.
Institution of professional education means an institution (except any institution of undergraduate higher education) which offers a program of academic study that leads to a first professional degree in a field for which there is a national specialized accrediting agency recognized by the Secretary.
Institution of undergraduate higher education means:
(1) An institution offering at least two but less than four years of college level study beyond the high school level, leading to a diploma or an associate degree, or wholly or principally creditable toward a baccalaureate degree; or
(2) An institution offering academic study leading to a baccalaureate degree; or
(3) An agency or body which certifies credentials or offers degrees, but which may or may not offer academic study.
Institution of vocational education means a school or institution (except an institution of professional or graduate or undergraduate higher education) which has as its primary purpose preparation of students to pursue a technical, skilled, or semiskilled occupation or trade, or to pursue study in a technical field, whether or not the school or institution offers certificates, diplomas, or degrees and whether or not it offers fulltime study.
Parental status, as used in §§ 106.21(c)(2)(i), 106.37(a)(3), 106.40(a), and 106.57(a)(1), means the status of a person who, with respect to another person who is under the age of 18 or who is 18 or older but is incapable of self-care because of a physical or mental disability, is:
(1) A biological parent;
(2) An adoptive parent;
(3) A foster parent;
(4) A stepparent;
(5) A legal custodian or guardian;
(6) In loco parentis with respect to such a person; or
(7) Actively seeking legal custody, guardianship, visitation, or adoption of such a person.
Party means a complainant or respondent.
Peer retaliation means retaliation by a student against another student.
Postsecondary institution means an institution of graduate higher education, an institution of undergraduate higher education, an institution of professional education, or an institution of vocational education that serves postsecondary school students.
Pregnancy or related conditions means:
(1) Pregnancy, childbirth, termination of pregnancy, or lactation;
(2) Medical conditions related to pregnancy, childbirth, termination of pregnancy, or lactation; or
(3) Recovery from pregnancy, childbirth, termination of pregnancy, lactation, or related medical conditions.
Program or activity and program means all of the operations of—
(1)(i) A department, agency, special purpose district, or other instrumentality of a State or local government; or
(ii) The entity of a State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government;
(2)(i) A college, university, or other postsecondary institution, or a public system of higher education; or
(ii) A local educational agency (as defined in 20 U.S.C. 8801), system of vocational education, or other school system;
(3)(i) An entire corporation, partnership, other private organization, or an entire sole proprietorship—
(A) If assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or
(B) Which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or
(ii) The entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or
(4) Any other entity that is established by two or more of the entities described in paragraph (1), (2), or (3) of this definition, any part of which is extended Federal financial assistance.
Recipient means any State or political subdivision thereof, or any instrumentality of a State or political subdivision thereof, any public or private agency, institution, or organization, or other entity, or any person, to whom Federal financial assistance is extended directly or through another recipient and which operates an education program or activity which receives such assistance, including any subunit, successor, assignee, or transferee thereof.
Relevant means related to the allegations of sex discrimination under investigation as part of the grievance procedures under § 106.45, and if applicable § 106.46. Questions are relevant when they seek evidence that may aid in showing whether the alleged sex discrimination occurred, and evidence is relevant when it may aid a decisionmaker in determining whether the alleged sex discrimination occurred.
Remedies means measures provided, as appropriate, to a complainant or any other person the recipient identifies as having had their equal access to the recipient's education program or activity limited or denied by sex discrimination. These measures are provided to restore or preserve that person's access to the recipient's education program or activity after a recipient determines that sex discrimination occurred.
Respondent means a person who is alleged to have violated the recipient's prohibition on sex discrimination.
Retaliation means intimidation, threats, coercion, or discrimination against any person by the recipient, a student, or an employee or other person authorized by the recipient to provide aid, benefit, or service under the recipient's education program or activity, for the purpose of interfering with any right or privilege secured by Title IX or this part, or because the person has reported information, made a complaint, testified, assisted, or participated or refused to participate in any manner in an investigation, proceeding, or hearing under this part, including in an informal resolution process under § 106.44(k), in grievance procedures under § 106.45, and if applicable § 106.46, and in any other actions taken by a recipient under § 106.44(f)(1). Nothing in this definition or this part precludes a recipient from requiring an employee or other person authorized by a recipient to provide aid, benefit, or service under the recipient's education program or activity to participate as a witness in, or otherwise assist with, an investigation, proceeding, or hearing under this part.
Reviewing authority means that component of the Department delegated authority by the Secretary to appoint, and to review the decisions of, administrative law judges in cases arising under this part.
Secondary school means secondary school as defined by section 8101 of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act (20 U.S.C. 7801(45)), and an institution of vocational education that serves secondary school students.
Secretary means the Secretary of Education.
Sex-based harassment prohibited by this part is a form of sex discrimination and means sexual harassment and other harassment on the basis of sex, including on the bases described in § 106.10, that is:
(1) Quid pro quo harassment. An employee, agent, or other person authorized by the recipient to provide an aid, benefit, or service under the recipient's education program or activity explicitly or impliedly conditioning the provision of such an aid, benefit, or service on a person's participation in unwelcome sexual conduct;
(2) Hostile environment harassment. Unwelcome sex-based conduct that, based on the totality of the circumstances, is subjectively and objectively offensive and is so severe or pervasive that it limits or denies a person's ability to participate in or benefit from the recipient's education program or activity (i.e., creates a hostile environment). Whether a hostile environment has been created is a fact-specific inquiry that includes consideration of the following:
(i) The degree to which the conduct affected the complainant's ability to access the recipient's education program or activity;
(ii) The type, frequency, and duration of the conduct;
(iii) The parties' ages, roles within the recipient's education program or activity, previous interactions, and other factors about each party that may be relevant to evaluating the effects of the conduct;
(iv) The location of the conduct and the context in which the conduct occurred; and
(v) Other sex-based harassment in the recipient's education program or activity; or
(3) Specific offenses. (i) Sexual assault meaning an offense classified as a forcible or nonforcible sex offense under the uniform crime reporting system of the Federal Bureau of Investigation;
(ii) Dating violence meaning violence committed by a person:
(A) Who is or has been in a social relationship of a romantic or intimate nature with the victim; and
(B) Where the existence of such a relationship shall be determined based on a consideration of the following factors:
(1) The length of the relationship;
(2) The type of relationship; and
(3) The frequency of interaction between the persons involved in the relationship;
(iii) Domestic violence meaning felony or misdemeanor crimes committed by a person who:
(A) Is a current or former spouse or intimate partner of the victim under the family or domestic violence laws of the jurisdiction of the recipient, or a person similarly situated to a spouse of the victim;
(B) Is cohabitating, or has cohabitated, with the victim as a spouse or intimate partner;
(C) Shares a child in common with the victim; or
(D) Commits acts against a youth or adult victim who is protected from those acts under the family or domestic violence laws of the jurisdiction; or
(iv) Stalking meaning engaging in a course of conduct directed at a specific person that would cause a reasonable person to:
(A) Fear for the person's safety or the safety of others; or
(B) Suffer substantial emotional distress.
Note 1 to the definition of sex-based harassment: The Assistant Secretary will not require a recipient to adopt a particular definition of consent, where that term is applicable with respect to sex-based harassment.
Student means a person who has gained admission.
Student with a disability means a student who is an individual with a disability as defined in the Rehabilitation Act of 1973, as amended, 29 U.S.C. 705(9)(B), (20)(B), or a child with a disability as defined in the Individuals with Disabilities Education Act, 20 U.S.C. 1401(3).
Supportive measures means individualized measures offered as appropriate, as reasonably available, without unreasonably burdening a complainant or respondent, not for punitive or disciplinary reasons, and without fee or charge to the complainant or respondent to:
(1) Restore or preserve that party's access to the recipient's education program or activity, including measures that are designed to protect the safety of the parties or the recipient's educational environment; or
(2) Provide support during the recipient's grievance procedures under § 106.45, and if applicable § 106.46, or during the informal resolution process under § 106.44(k).
Title IX means Title IX of the Education Amendments of 1972 (Pub. L. 92-318; 20 U.S.C. 1681, 1682, 1683, 1685, 1686, 1687, 1688, 1689), as amended.
(a) Remedial action. If the Assistant Secretary finds that a recipient has discriminated against persons on the basis of sex in an education program or activity under this part, or otherwise violated this part, such recipient must take such remedial action as the Assistant Secretary deems necessary to remedy the violation, consistent with 20 U.S.C. 1682.
(b) Affirmative action. In the absence of a finding of discrimination on the basis of sex in an education program or activity, a recipient may take affirmative action to overcome the effects of conditions which resulted in limited participation therein by persons of a particular sex. Nothing herein shall be interpreted to alter any affirmative action obligations which a recipient may have under Executive Order 11246.
(a) General. Every application for Federal financial assistance shall as condition of its approval contain or be accompanied by an assurance from the applicant or recipient, satisfactory to the Assistant Secretary, that the education program or activity operated by the applicant or recipient and to which this part applies will be operated in compliance with this part. An assurance of compliance with this part shall not be satisfactory to the Assistant Secretary if the applicant or recipient to whom such assurance applies fails to commit itself to take whatever remedial action is necessary in accordance with § 106.3(a) to eliminate existing discrimination on the basis of sex or to eliminate the effects of past discrimination whether occurring prior or subsequent to the submission to the Assistant Secretary of such assurance.
(b) Duration of obligation. (1) In the case of Federal financial assistance extended to provide real property or structures thereon, such assurance shall obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the real property or structures are used to provide an education program or activity.
(2) In the case of Federal financial assistance extended to provide personal property, such assurance shall obligate the recipient for the period during which it retains ownership or possession of the property.
(3) In all other cases such assurance shall obligate the recipient for the period during which Federal financial assistance is extended.
(c) Form. The Director will specify the form of the assurances required by paragraph (a) of this section and the extent to which such assurances will be required of the applicant's or recipient's subgrantees, contractors, subcontractors, transferees, or successors in interest.
If a recipient sells or otherwise transfers property financed in whole or in part with Federal financial assistance to a transferee which operates any education program or activity, and the Federal share of the fair market value of the property is not upon such sale or transfer properly accounted for to the Federal Government both the transferor and the transferee shall be deemed to be recipients, subject to the provisions of subpart B of this part.
(a) Effect of other Federal provisions. The obligations imposed by this part are independent of, and do not alter, obligations not to discriminate on the basis of sex imposed by Executive Order 11246, as amended; sections 704 and 855 of the Public Health Service Act (42 U.S.C. 292d and 298b-2); Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.); the Equal Pay Act (29 U.S.C. 206 and 206(d)); and any other Act of Congress or Federal regulation.
(b) Effect of State or local law or other requirements. The obligation to comply with Title IX and this part is not obviated or alleviated by any State or local law or other requirement that conflicts with Title IX or this part.
(c) Effect of rules or regulations of private organizations. The obligation to comply with this part is not obviated or alleviated by any rule or regulation of any organization, club, athletic or other league, or association which would render any applicant or student ineligible to participate or limit the eligibility or participation of any applicant or student, on the basis of sex, in any education program or activity operated by a recipient and which receives Federal financial assistance.
(d) Constitutional protections. Nothing in this part requires a recipient to:
(1) Restrict any rights that would otherwise be protected from government action by the First Amendment of the U.S. Constitution;
(2) Deprive a person of any rights that would otherwise be protected from government action under the Due Process Clauses of the Fifth and Fourteenth Amendments of the U.S. Constitution; or
(3) Restrict any other rights guaranteed against government action by the U.S. Constitution.
(e) Effect of Section 444 of General Education Provisions Act (GEPA)/Family Educational Rights and Privacy Act (FERPA). The obligation to comply with Title IX and this part is not obviated or alleviated by FERPA, 20 U.S.C. 1232g, or its implementing regulations, 34 CFR part 99.
(f) Title VII of the Civil Rights Act of 1964. Nothing in this part may be read in derogation of any individual's rights under title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq. or any regulations promulgated thereunder.
(g) Exercise of rights by parents, guardians, or other authorized legal representatives. Nothing in Title IX or this part may be read in derogation of any legal right of a parent, guardian, or other authorized legal representative to act on behalf of a complainant, respondent, or other person, subject to paragraph (e) of this section, including but not limited to making a complaint through the recipient's grievance procedures for complaints of sex discrimination.
The obligation to comply with this part is not obviated or alleviated because employment opportunities in any occupation or profession are or may be more limited for members of one sex than for members of the other sex.
(a) Designation of a Title IX Coordinator. (1) Title IX Coordinator. Each recipient mustdesignate and authorize at least one employee, referred to herein as a Title IX Coordinator, to coordinate its efforts to comply with its responsibilities under Title IX and this part. If a recipient has more than one Title IX Coordinator, it must designate one of its Title IX Coordinators to retain ultimate oversight over those responsibilities and ensure the recipient's consistent compliance with its responsibilities under Title IX and this part.
(2) Delegation to designees. As appropriate, a recipient may delegate, or permit a Title IX Coordinator to delegate, specific duties to one or more designees.
(b) Adoption, publication, and implementation of nondiscrimination policy and grievance procedures. (1) Nondiscrimination policy. Each recipient must adopt, publish, and implement a policy stating that the recipient does not discriminate on the basis of sex and prohibits sex discrimination in any education program or activity that it operates, as required by Title IX and this part, including in admission (unless subpart C of this part does not apply) and employment.
(2) Grievance procedures. A recipient must adopt, publish, and implement grievance procedures consistent with the requirements of § 106.45, and if applicable § 106.46, that provide for the prompt and equitable resolution of complaints made by students, employees, or other individuals who are participating or attempting to participate in the recipient's education program or activity, or by the Title IX Coordinator, alleging any action that would be prohibited by Title IX or this part.
(c) Notice of nondiscrimination. A recipient must provide a notice of nondiscrimination to students; parents, guardians, or other authorized legal representatives of elementary school and secondary school students; employees; applicants for admission and employment; and all unions and professional organizations holding collective bargaining or professional agreements with the recipient.
(1) Contents of notice of nondiscrimination. (i) The notice of nondiscrimination must include the following elements:
(A) A statement that the recipient does not discriminate on the basis of sex and prohibits sex discrimination in any education program or activity that it operates, as required by Title IX and this part, including in admission (unless subpart C of this part does not apply) and employment;
(B) A statement that inquiries about the application of Title IX and this part to the recipient may be referred to the recipient's Title IX Coordinator, the Office for Civil Rights, or both;
(C) The name or title, office address, email address, and telephone number of the recipient's Title IX Coordinator;
(D) How to locate the recipient's nondiscrimination policy under paragraph (b)(1) of this section; and the recipient's grievance procedures under paragraph (b)(2) of this section; and
(E) How to report information about conduct that may constitute sex discrimination under Title IX; and how to make a complaint of sex discrimination under this part.
(ii) Nothing in this part prevents a recipient from including in its notice of nondiscrimination information about any exceptions or exemptions applicable to the recipient under Title IX.
(2) Publication of notice of nondiscrimination. (i) Each recipient must prominently include all elements of its notice of nondiscrimination set out in paragraphs (c)(1)(i)(A) through (E) of this section on its website and in each handbook, catalog, announcement, bulletin, and application form that it makes available to persons entitled to notice under paragraph (c) of this section, or which are otherwise used in connection with the recruitment of students or employees.
(ii) If necessary, due to the format or size of any publication under paragraph (c)(2)(i) of this section, the recipient may instead include in those publications a statement that the recipient prohibits sex discrimination in any education program or activity that it operates and that individuals may report concerns or questions to the Title IX Coordinator, and provide the location of the notice on the recipient's website.
(iii) A recipient must not use or distribute a publication stating that the recipient treats applicants, students, or employees differently on the basis of sex, except as such treatment is permitted by Title IX or this part.
(d) Training. The recipient must ensure that the persons described in paragraphs (d)(1) through (4) of this section receive training related to their duties under Title IX promptly upon hiring or change of position that alters their duties under Title IX or this part, and annually thereafter. This training must not rely on sex stereotypes.
(1) All employees. All employees must be trained on:
(i) The recipient's obligation to address sex discrimination in its education program or activity;
(ii) The scope of conduct that constitutes sex discrimination under Title IX and this part, including the definition of sex-based harassment; and
(iii) All applicable notification and information requirements under §§ 106.40(b)(2) and 106.44.
(2) Investigators, decisionmakers, and other persons who are responsible for implementing the recipient's grievance procedures or have the authority to modify or terminate supportive measures. In addition to the training requirements in paragraph (d)(1) of this section, all investigators, decisionmakers, and other persons who are responsible for implementing the recipient's grievance procedures or have the authority to modify or terminate supportive measures under § 106.44(g)(4) must be trained on the following topics to the extent related to their responsibilities:
(i) The recipient's obligations under § 106.44;
(ii) The recipient's grievance procedures under § 106.45, and if applicable § 106.46;
(iii) How to serve impartially, including by avoiding prejudgment of the facts at issue, conflicts of interest, and bias; and
(iv) The meaning and application of the term “relevant” in relation to questions and evidence, and the types of evidence that are impermissible regardless of relevance under § 106.45, and if applicable § 106.46.
(3) Facilitators of informal resolution process. In addition to the training requirements in paragraph (d)(1) of this section, all facilitators of an informal resolution process under § 106.44(k) must be trained on the rules and practices associated with the recipient's informal resolution process and on how to serve impartially, including by avoiding conflicts of interest and bias.
(4) Title IX Coordinator and designees. In addition to the training requirements in paragraphs (d)(1) through (3) of this section, the Title IX Coordinator and any designees under paragraph (a) of this section must be trained on their specific responsibilities under paragraph (a) of this section, §§ 106.40(b)(3), 106.44(f) and (g), the recipient's recordkeeping system and the requirements of paragraph (f) of this section, and any other training necessary to coordinate the recipient's compliance with Title IX.
(e) Students with disabilities. If a complainant or respondent is an elementary or secondary student with a disability, the recipient must require the Title IX Coordinator to consult with one or more members, as appropriate, of the student's Individualized Education Program (IEP) team, 34 CFR 300.321, if any, or one or more members, as appropriate, of the group of persons responsible for the student's placement decision under 34 CFR 104.35(c), if any, to determine how to comply with the requirements of the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq., and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, throughout the recipient's implementation of grievance procedures under § 106.45. If a complainant or respondent is a postsecondary student with a disability, the Title IX Coordinator may consult, as appropriate, with the individual or office that the recipient has designated to provide support to students with disabilities to determine how to comply with Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794.
(f) Recordkeeping. A recipient must maintain for a period of at least seven years:
(1) For each complaint of sex discrimination, records documenting the informal resolution process under § 106.44(k) or the grievance procedures under § 106.45, and if applicable § 106.46, and the resulting outcome.
(2) For each notification the Title IX Coordinator receives of information about conduct that reasonably may constitute sex discrimination under Title IX or this part, including notifications under § 106.44(c)(1) or (2), records documenting the actions the recipient took to meet its obligations under § 106.44.
(3) All materials used to provide training under paragraph (d) of this section. A recipient must make these training materials available upon request for inspection by members of the public.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
Discrimination on the basis of sex includes discrimination on the basis of sex stereotypes, sex characteristics, pregnancy or related conditions, sexual orientation, and gender identity.
Except as provided in this subpart, this part applies to every recipient and to all sex discrimination occurring under a recipient's education program or activity in the United States. For purposes of this section, conduct that occurs under a recipient's education program or activity includes but is not limited to conduct that occurs in a building owned or controlled by a student organization that is officially recognized by a postsecondary institution, and conduct that is subject to the recipient's disciplinary authority. A recipient has an obligation to address a sex-based hostile environment under its education program or activity, even when some conduct alleged to be contributing to the hostile environment occurred outside the recipient's education program or activity or outside the United States.
(a) Application. This part does not apply to an educational institution which is controlled by a religious organization to the extent application of this part would not be consistent with the religious tenets of such organization.
(b) Assurance of exemption. An educational institution that seeks assurance of the exemption set forth in paragraph (a) of this section may do so by submitting in writing to the Assistant Secretary a statement by the highest ranking official of the institution, identifying the provisions of this part that conflict with a specific tenet of the religious organization. An institution is not required to seek assurance from the Assistant Secretary in order to assert such an exemption. In the event the Department notifies an institution that it is under investigation for noncompliance with this part and the institution wishes to assert an exemption set forth in paragraph (a) of this section, the institution may at that time raise its exemption by submitting in writing to the Assistant Secretary a statement by the highest ranking official of the institution, identifying the provisions of this part which conflict with a specific tenet of the religious organization, whether or not the institution had previously sought assurance of an exemption from the Assistant Secretary.
(c) Eligibility. Any of the following in paragraphs (c)(1) through (6) of this section shall be sufficient to establish that an educational institution is controlled by a religious organization, as contemplated under paragraph (a) of this section, and is therefore eligible to assert a religious exemption to the extent application of this part would not be consistent with its religious tenets:
(1) That the educational institution is a school or department of divinity.
(2) That the educational institution requires its faculty, students, or employees to be members of, or otherwise engage in religious practices of, or espouse a personal belief in, the religion of the organization by which it claims to be controlled.
(3) That the educational institution, in its charter or catalog, or other official publication, contains an explicit statement that it is controlled by a religious organization or an organ thereof, or is committed to the doctrines or practices of a particular religion, and the members of its governing body are appointed by the controlling religious organization or an organ thereof, and it receives a significant amount of financial support from the controlling religious organization or an organ thereof.
(4) That the educational institution has a doctrinal statement or a statement of religious practices, along with a statement that members of the institution community must engage in the religious practices of, or espouse a personal belief in, the religion, its practices, or the doctrinal statement or statement of religious practices.
(5) That the educational institution has a published institutional mission that is approved by the governing body of an educational institution and that includes, refers to, or is predicated upon religious tenets, beliefs, or teachings.
(6) Other evidence sufficient to establish that an educational institution is controlled by a religious organization, pursuant to 20 U.S.C. 1681(a)(3).
(d) Severability. If any provision of this section or its application to any person, act, or practice is held invalid, the remainder of this section or the application of its provisions to any person, act, or practice shall not be affected thereby.
This part does not apply to an educational institution whose primary purpose is the training of individuals for a military service of the United States or for the merchant marine.
(a) Social fraternities and sororities. This part does not apply to the membership practices of social fraternities and sororities which are exempt from taxation under section 501(a) of the Internal Revenue Code of 1954, the active membership of which consists primarily of students in attendance at institutions of higher education.
(b) YMCA, YWCA, Girl Scouts, Boy Scouts and Camp Fire Girls. This part does not apply to the membership practices of the Young Men's Christian Association, the Young Women's Christian Association, the Girl Scouts, the Boy Scouts and Camp Fire Girls.
(c) Voluntary youth service organizations. This part does not apply to the membership practices of voluntary youth service organizations which are exempt from taxation under section 501(a) of the Internal Revenue Code of 1954 and the membership of which has been traditionally limited to members of one sex and principally to persons of less than nineteen years of age.
(a) Admissions to educational institutions prior to June 24, 1973, are not covered by this part.
(b) Administratively separate units. For purposes only of this section and subpart C, each administratively separate unit shall be deemed to be an educational institution.
(c) Application of subpart C. Except as provided in paragraphs (d) and (e) of this section, subpart C applies to each recipient. A recipient to which subpart C applies shall not discriminate on the basis of sex in admission or recruitment in violation of that subpart.
(d) Educational institutions. Except as provided in paragraph (e) of this section as to recipients which are educational institutions, subpart C applies only to institutions of vocational education, professional education, graduate higher education, and public institutions of undergraduate higher education.
(e) Public institutions of undergraduate higher education. Subpart C does not apply to any public institution of undergraduate higher education which traditionally and continually from its establishment has had a policy of admitting only students of one sex.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) Status generally. No person shall, on the basis of sex, be denied admission, or be subjected to discrimination in admission, by any recipient to which this subpart applies.
(b) Specific prohibitions. (1) In determining whether a person satisfies any policy or criterion for admission, or in making any offer of admission, a recipient to which this subpart applies shall not:
(i) Give preference to one person over another on the basis of sex, by ranking applicants separately on such basis, or otherwise;
(ii) Apply numerical limitations upon the number or proportion of persons of either sex who may be admitted; or
(iii) Otherwise treat one individual differently from another on the basis of sex.
(2) A recipient shall not administer or operate any test or other criterion for admission which has a disproportionately adverse effect on persons on the basis of sex unless the use of such test or criterion is shown to predict validly success in the education program or activity in question and alternative tests or criteria which do not have such a disproportionately adverse effect are shown to be unavailable.
(c) Parental, family, or marital status; pregnancy or related conditions. In determining whether a person satisfies any policy or criterion for admission, or in making any offer of admission, a recipient to which this subpart applies:
(1) Must treat pregnancy or related conditions in the same manner and under the same policies as any other temporary medical conditions; and
(2) Must not:
(i) Adopt or implement any policy, practice, or procedure concerning the current, potential, or past parental, family, or marital status of a student or applicant that treats persons differently on the basis of sex;
(ii) Discriminate against any person on the basis of current, potential, or past pregnancy or related conditions, or adopt or implement any policy, practice, or procedure that so discriminates; and
(iii) Make a pre-admission inquiry as to the marital status of an applicant for admission, including whether such applicant is “Miss or Mrs.” A recipient may ask an applicant to self-identify their sex, but only if this question is asked of all applicants and if the response is not used as a basis for discrimination prohibited by this part.
A recipient to which this subpart applies shall not give preference to applicants for admission, on the basis of attendance at any educational institution or other school or entity which admits as students only or predominantly members of one sex, if the giving of such preference has the effect of discriminating on the basis of sex in violation of this subpart.
(a) Nondiscriminatory recruitment. A recipient to which this subpart applies shall not discriminate on the basis of sex in the recruitment and admission of students. A recipient may be required to undertake additional recruitment efforts for one sex as remedial action pursuant to § 106.3(a), and may choose to undertake such efforts as affirmative action pursuant to § 106.3(b).
(b) Recruitment at certain institutions. A recipient to which this subpart applies shall not recruit primarily or exclusively at educational institutions, schools or entities which admit as students only or predominantly members of one sex, if such actions have the effect of discriminating on the basis of sex in violation of this subpart.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) General. (1) Except as provided elsewhere in this part, no person shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any academic, extracurricular, research, occupational training, or other education program or activity operated by a recipient that receives Federal financial assistance.
(2) In the limited circumstances in which Title IX or this part permits different treatment or separation on the basis of sex, a recipient must not carry out such different treatment or separation in a manner that discriminates on the basis of sex by subjecting a person to more than de minimis harm, except as permitted by 20 U.S.C. 1681(a)(1) through (9) and the corresponding regulations §§ 106.12 through 106.15, 20 U.S.C. 1686 and its corresponding regulation § 106.32(b)(1), or § 106.41(b). Adopting a policy or engaging in a practice that prevents a person from participating in an education program or activity consistent with the person's gender identity subjects a person to more than de minimis harm on the basis of sex.
(3) This subpart does not apply to actions of a recipient in connection with admission of its students to an education program or activity of:
(i) A recipient to which subpart C does not apply; or
(ii) An entity, not a recipient, to which subpart C would not apply if the entity were a recipient.
(b) Specific prohibitions. Except as provided in this subpart, in providing any aid, benefit, or service to a student, a recipient shall not, on the basis of sex:
(1) Treat one person differently from another in determining whether such person satisfies any requirement or condition for the provision of such aid, benefit, or service;
(2) Provide different aid, benefits, or services or provide aid, benefits, or services in a different manner;
(3) Deny any person any such aid, benefit, or service;
(4) Subject any person to separate or different rules of behavior, sanctions, or other treatment;
(5) Apply any rule concerning the domicile or residence of a student or applicant, including eligibility for in-state fees and tuition;
(6) Aid or perpetuate discrimination against any person by providing significant assistance to any agency, organization, or person which discriminates on the basis of sex in providing any aid, benefit or service to students or employees;
(7) Otherwise limit any person in the enjoyment of any right, privilege, advantage, or opportunity.
(c) Assistance administered by a recipient educational institution to study at a foreign institution. A recipient educational institution may administer or assist in the administration of scholarships, fellowships, or other awards established by foreign or domestic wills, trusts, or similar legal instruments, or by acts of foreign governments and restricted to members of one sex, which are designed to provide opportunities to study abroad, and which are awarded to students who are already matriculating at or who are graduates of the recipient institution; Provided, a recipient educational institution which administers or assists in the administration of such scholarships, fellowships, or other awards which are restricted to members of one sex provides, or otherwise makes available reasonable opportunities for similar studies for members of the other sex. Such opportunities may be derived from either domestic or foreign sources.
(d) Aid, benefits or services not provided by recipient. (1) This paragraph applies to any recipient which requires participation by any applicant, student, or employee in any education program or activity not operated wholly by such recipient, or which facilitates, permits, or considers such participation as part of or equivalent to an education program or activity operated by such recipient, including participation in educational consortia and cooperative employment and student-teaching assignments.
(2) Such recipient:
(i) Shall develop and implement a procedure designed to assure itself that the operator or sponsor of such other education program or activity takes no action affecting any applicant, student, or employee of such recipient which this part would prohibit such recipient from taking; and
(ii) Shall not facilitate, require, permit, or consider such participation if such action occurs.
(a) Generally. A recipient shall not, on the basis of sex, apply different rules or regulations, impose different fees or requirements, or offer different services or benefits related to housing, except as provided in this section (including housing provided only to married students).
(b) Housing provided by recipient. (1) A recipient may provide separate housing on the basis of sex.
(2) Housing provided by a recipient to students of one sex, when compared to that provided to students of the other sex, shall be as a whole:
(i) Proportionate in quantity to the number of students of that sex applying for such housing; and
(ii) Comparable in quality and cost to the student.
(c) Other housing. (1) A recipient shall not, on the basis of sex, administer different policies or practices concerning occupancy by its students of housing other than provided by such recipient.
(2) A recipient which, through solicitation, listing, approval of housing, or otherwise, assists any agency, organization, or person in making housing available to any of its students, shall take such reasonable action as may be necessary to assure itself that such housing as is provided to students of one sex, when compared to that provided to students of the other sex, is as a whole:
(i) Proportionate in quantity and
(ii) Comparable in quality and cost to the student.
A recipient may provide separate toilet, locker room, and shower facilities on the basis of sex, but such facilities provided for students of one sex shall be comparable to such facilities provided for students of the other sex.
(a) General standard. Except as provided for in this section or otherwise in this part, a recipient shall not provide or otherwise carry out any of its education programs or activities separately on the basis of sex, or require or refuse participation therein by any of its students on the basis of sex.
(1) Contact sports in physical education classes. This section does not prohibit separation of students by sex within physical education classes or activities during participation in wrestling, boxing, rugby, ice hockey, football, basketball, and other sports the purpose or major activity of which involves bodily contact.
(2) Ability grouping in physical education classes. This section does not prohibit grouping of students in physical education classes and activities by ability as assessed by objective standards of individual performance developed and applied without regard to sex.
(3) Human sexuality classes. Classes or portions of classes in elementary and secondary schools that deal primarily with human sexuality may be conducted in separate sessions for boys and girls.
(4) Choruses. Recipients may make requirements based on vocal range or quality that may result in a chorus or choruses of one or predominantly one sex.
(b) Classes and extracurricular activities—(1) General standard. Subject to the requirements in this paragraph, a recipient that operates a nonvocational coeducational elementary or secondary school may provide nonvocational single-sex classes or extracurricular activities, if—
(i) Each single-sex class or extracurricular activity is based on the recipient's important objective—
(A) To improve educational achievement of its students, through a recipient's overall established policy to provide diverse educational opportunities, provided that the single-sex nature of the class or extracurricular activity is substantially related to achieving that objective; or
(B) To meet the particular, identified educational needs of its students, provided that the single-sex nature of the class or extracurricular activity is substantially related to achieving that objective;
(ii) The recipient implements its objective in an evenhanded manner;
(iii) Student enrollment in a single-sex class or extracurricular activity is completely voluntary; and
(iv) The recipient provides to all other students, including students of the excluded sex, a substantially equal coeducational class or extracurricular activity in the same subject or activity.
(2) Single-sex class or extracurricular activity for the excluded sex. A recipient that provides a single-sex class or extracurricular activity, in order to comply with paragraph (b)(1)(ii) of this section, may be required to provide a substantially equal single-sex class or extracurricular activity for students of the excluded sex.
(3) Substantially equal factors. Factors the Department will consider, either individually or in the aggregate as appropriate, in determining whether classes or extracurricular activities are substantially equal include, but are not limited to, the following: the policies and criteria of admission, the educational benefits provided, including the quality, range, and content of curriculum and other services and the quality and availability of books, instructional materials, and technology, the qualifications of faculty and staff, geographic accessibility, the quality, accessibility, and availability of facilities and resources provided to the class, and intangible features, such as reputation of faculty.
(4) Periodic evaluations. (i) The recipient must conduct periodic evaluations to ensure that single-sex classes or extracurricular activities are based upon genuine justifications and do not rely on overly broad generalizations about the different talents, capacities, or preferences of either sex and that any single-sex classes or extracurricular activities are substantially related to the achievement of the important objective for the classes or extracurricular activities.
(ii) Evaluations for the purposes of paragraph (b)(4)(i) of this section must be conducted at least every two years.
(5) Scope of coverage. The provisions of paragraph (b)(1) through (4) of this section apply to classes and extracurricular activities provided by a recipient directly or through another entity, but the provisions of paragraph (b)(1) through (4) of this section do not apply to interscholastic, club, or intramural athletics, which are subject to the provisions of §§ 106.41 and 106.37(c) of this part.
(c) Schools—(1) General Standard. Except as provided in paragraph (c)(2) of this section, a recipient that operates a public nonvocational elementary or secondary school that excludes from admission any students, on the basis of sex, must provide students of the excluded sex a substantially equal single-sex school or coeducational school.
(2) Exception. A nonvocational public charter school that is a single-school local educational agency under State law may be operated as a single-sex charter school without regard to the requirements in paragraph (c)(1) of this section.
(3) Substantially equal factors. Factors the Department will consider, either individually or in the aggregate as appropriate, in determining whether schools are substantially equal include, but are not limited to, the following: The policies and criteria of admission, the educational benefits provided, including the quality, range, and content of curriculum and other services and the quality and availability of books, instructional materials, and technology, the quality and range of extracurricular offerings, the qualifications of faculty and staff, geographic accessibility, the quality, accessibility, and availability of facilities and resources, and intangible features, such as reputation of faculty.
(4) Definition. For the purposes of paragraph (c)(1) through (3) of this section, the term “school” includes a “school within a school,” which means an administratively separate school located within another school.
A recipient shall not, on the basis of sex, exclude any person from admission to any institution of vocational education operated by that recipient.
(a) Counseling. A recipient shall not discriminate against any person on the basis of sex in the counseling or guidance of students or applicants for admission.
(b) Use of appraisal and counseling materials. A recipient which uses testing or other materials for appraising or counseling students shall not use different materials for students on the basis of their sex or use materials which permit or require different treatment of students on such basis unless such different materials cover the same occupations and interest areas and the use of such different materials is shown to be essential to eliminate sex bias. Recipients shall develop and use internal procedures for ensuring that such materials do not discriminate on the basis of sex. Where the use of a counseling test or other instrument results in a substantially disproportionate number of members of one sex in any particular course of study or classification, the recipient shall take such action as is necessary to assure itself that such disproportion is not the result of discrimination in the instrument or its application.
(c) Disproportion in classes. Where a recipient finds that a particular class contains a substantially disproportionate number of individuals of one sex, the recipient shall take such action as is necessary to assure itself that such disproportion is not the result of discrimination on the basis of sex in counseling or appraisal materials or by counselors.
(a) General. Except as provided in paragraphs (b) and (c) of this section, in providing financial assistance to any of its students, a recipient shall not:
(1) On the basis of sex, provide different amount or types of such assistance, limit eligibility for such assistance which is of any particular type or source, apply different criteria, or otherwise discriminate;
(2) Through solicitation, listing, approval, provision of facilities or other services, assist any foundation, trust, agency, organization, or person which provides assistance to any of such recipient's students in a manner which discriminates on the basis of sex; or
(3) Apply any rule or assist in application of any rule concerning eligibility for such assistance which treats persons of one sex differently from persons of the other sex with regard to marital or parental status.
(b) Financial aid established by certain legal instruments. (1) A recipient may administer or assist in the administration of scholarships, fellowships, or other forms of financial assistance established pursuant to domestic or foreign wills, trusts, bequests, or similar legal instruments or by acts of a foreign government which requires that awards be made to members of a particular sex specified therein; Provided, That the overall effect of the award of such sex-restricted scholarships, fellowships, and other forms of financial assistance does not discriminate on the basis of sex.
(2) To ensure nondiscriminatory awards of assistance as required in paragraph (b)(1) of this section, recipients shall develop and use procedures under which:
(i) Students are selected for award of financial assistance on the basis of nondiscriminatory criteria and not on the basis of availability of funds restricted to members of a particular sex;
(ii) An appropriate sex-restricted scholarship, fellowship, or other form of financial assistance is allocated to each student selected under paragraph (b)(2)(i) of this section; and
(iii) No student is denied the award for which he or she was selected under paragraph (b)(2)(i) of this section because of the absence of a scholarship, fellowship, or other form of financial assistance designated for a member of that student's sex.
(c) Athletic scholarships. (1) To the extent that a recipient awards athletic scholarships or grants-in-aid, it must provide reasonable opportunities for such awards for members of each sex in proportion to the number of students of each sex participating in interscholastic or intercollegiate athletics.
(2) Separate athletic scholarships or grants-in-aid for members of each sex may be provided as part of separate athletic teams for members of each sex to the extent consistent with this paragraph and § 106.41.
(a) Assistance by recipient in making available outside employment. A recipient which assists any agency, organization or person in making employment available to any of its students:
(1) Shall assure itself that such employment is made available without discrimination on the basis of sex; and
(2) Shall not render such services to any agency, organization, or person which discriminates on the basis of sex in its employment practices.
(b) Employment of students by recipients. A recipient which employs any of its students shall not do so in a manner which violates subpart E of this part.
In providing a medical, hospital, accident, or life insurance benefit, service, policy, or plan to any of its students, a recipient shall not discriminate on the basis of sex, or provide such benefit, service, policy, or plan in a manner which would violate Subpart E of this part if it were provided to employees of the recipient. This section shall not prohibit a recipient from providing any benefit or service which may be used by a different proportion of students of one sex than of the other, including family planning services. However, any recipient which provides full coverage health service shall provide gynecological care.
(a) Status generally. A recipient must not adopt or implement any policy, practice, or procedure concerning a student's current, potential, or past parental, family, or marital status that treats students differently on the basis of sex.
(b) Pregnancy or related conditions. (1) Nondiscrimination. A recipient must not discriminate in its education program or activity against any student based on the student's current, potential, or past pregnancy or related conditions. A recipient does not engage in prohibited discrimination when it allows a student, based on pregnancy or related conditions, to voluntarily participate in a separate portion of its education program or activity provided the recipient ensures that the separate portion is comparable to that offered to students who are not pregnant and do not have related conditions.
(2) Responsibility to provide Title IX Coordinator contact and other information. A recipient must ensure that when a student, or a person who has a legal right to act on behalf of the student, informs any employee of the student's pregnancy or related conditions, unless the employee reasonably believes that the Title IX Coordinator has been notified, the employee promptly provides that person with the Title IX Coordinator's contact information and informs that person that the Title IX Coordinator can coordinate specific actions to prevent sex discrimination and ensure the student's equal access to the recipient's education program or activity.
(3) Specific actions to prevent discrimination and ensure equal access. A recipient must take specific actions under paragraphs (b)(3)(i) through (vi) of this section to promptly and effectively prevent sex discrimination and ensure equal access to the recipient's education program or activity once the student, or a person who has a legal right to act on behalf of the student, notifies the Title IX Coordinator of the student's pregnancy or related conditions. The Title IX Coordinator must coordinate these actions.
(i) Responsibility to provide information about recipient obligations. The recipient must inform the student, and if applicable, the person who notified the Title IX Coordinator of the student's pregnancy or related conditions and has a legal right to act on behalf of the student, of the recipient's obligations under paragraphs (b)(1) through (5) of this section and § 106.44(j) and provide the recipient's notice of nondiscrimination under § 106.8(c)(1).
(ii) Reasonable modifications. (A) The recipient must make reasonable modifications to the recipient's policies, practices, or procedures as necessary to prevent sex discrimination and ensure equal access to the recipient's education program or activity. Each reasonable modification must be based on the student's individualized needs. In determining what modifications are required under this paragraph, the recipient must consult with the student. A modification that a recipient can demonstrate would fundamentally alter the nature of its education program or activity is not a reasonable modification.
(B) The student has discretion to accept or decline each reasonable modification offered by the recipient. If a student accepts a recipient's offered reasonable modification, the recipient must implement it.
(C) Reasonable modifications may include, but are not limited to, breaks during class to express breast milk, breastfeed, or attend to health needs associated with pregnancy or related conditions, including eating, drinking, or using the restroom; intermittent absences to attend medical appointments; access to online or homebound education; changes in schedule or course sequence; extensions of time for coursework and rescheduling of tests and examinations; allowing a student to sit or stand, or carry or keep water nearby; counseling; changes in physical space or supplies (for example, access to a larger desk or a footrest); elevator access; or other changes to policies, practices, or procedures.
(iii) Voluntary access to separate and comparable portion of program or activity. The recipient must allow the student to voluntarily access any separate and comparable portion of the recipient's education program or activity under paragraph (b)(1) of this section.
(iv) Voluntary leaves of absence. The recipient must allow the student to voluntarily take a leave of absence from the recipient's education program or activity to cover, at minimum, the period of time deemed medically necessary by the student's licensed healthcare provider. To the extent that a student qualifies for leave under a leave policy maintained by a recipient that allows a greater period of time than the medically necessary period, the recipient must permit the student to take voluntary leave under that policy instead if the student so chooses. When the student returns to the recipient's education program or activity, the student must be reinstated to the academic status and, as practicable, to the extracurricular status that the student held when the voluntary leave began.
(v) Lactation space. The recipient must ensure that the student can access a lactation space, which must be a space other than a bathroom, that is clean, shielded from view, free from intrusion from others, and may be used by a student for expressing breast milk or breastfeeding as needed.
(vi) Limitation on supporting documentation. A recipient must not require supporting documentation under paragraphs (b)(3)(ii) through (v) unless the documentation is necessary and reasonable for the recipient to determine the reasonable modifications to make or whether to take additional specific actions under paragraphs (b)(3)(ii) through (v). Examples of situations when requiring supporting documentation is not necessary and reasonable include, but are not limited to, when the student's need for a specific action under paragraphs (b)(3)(ii) through (v) is obvious, such as when a student who is pregnant needs a bigger uniform; when the student has previously provided the recipient with sufficient supporting documentation; when the reasonable modification because of pregnancy or related conditions at issue is allowing a student to carry or keep water nearby and drink, use a bigger desk, sit or stand, or take breaks to eat, drink, or use the restroom; when the student has lactation needs; or when the specific action under paragraphs (b)(3)(ii) through (v) is available to students for reasons other than pregnancy or related conditions without submitting supporting documentation.
(4) Comparable treatment to other temporary medical conditions. To the extent consistent with paragraph (b)(3) of this section, a recipient must treat pregnancy or related conditions in the same manner and under the same policies as any other temporary medical conditions with respect to any medical or hospital benefit, service, plan, or policy the recipient administers, operates, offers, or participates in with respect to students admitted to the recipient's education program or activity.
(5) Certification to participate. A recipient must not require a student who is pregnant or has related conditions to provide certification from a healthcare provider or any other person that the student is physically able to participate in the recipient's class, program, or extracurricular activity unless:
(i) The certified level of physical ability or health is necessary for participation in the class, program, or extracurricular activity;
(ii) The recipient requires such certification of all students participating in the class, program, or extracurricular activity; and
(iii) The information obtained is not used as a basis for discrimination prohibited by this part.
(a) General. No person shall, on the basis of sex, be excluded from participation in, be denied the benefits of, be treated differently from another person or otherwise be discriminated against in any interscholastic, intercollegiate, club or intramural athletics offered by a recipient, and no recipient shall provide any such athletics separately on such basis.
(b) Separate teams. Notwithstanding the requirements of paragraph (a) of this section, a recipient may operate or sponsor separate teams for members of each sex where selection for such teams is based upon competitive skill or the activity involved is a contact sport. However, where a recipient operates or sponsors a team in a particular sport for members of one sex but operates or sponsors no such team for members of the other sex, and athletic opportunities for members of that sex have previously been limited, members of the excluded sex must be allowed to try-out for the team offered unless the sport involved is a contact sport. For the purposes of this part, contact sports include boxing, wrestling, rugby, ice hockey, football, basketball and other sports the purpose or major activity of which involves bodily contact.
(c) Equal opportunity. A recipient which operates or sponsors interscholastic, intercollegiate, club or intramural athletics shall provide equal athletic opportunity for members of both sexes. In determining whether equal opportunities are available the Director will consider, among other factors:
(1) Whether the selection of sports and levels of competition effectively accommodate the interests and abilities of members of both sexes;
(2) The provision of equipment and supplies;
(3) Scheduling of games and practice time;
(4) Travel and per diem allowance;
(5) Opportunity to receive coaching and academic tutoring;
(6) Assignment and compensation of coaches and tutors;
(7) Provision of locker rooms, practice and competitive facilities;
(8) Provision of medical and training facilities and services;
(9) Provision of housing and dining facilities and services;
(10) Publicity.
Nothing in this regulation shall be interpreted as requiring or prohibiting or abridging in any way the use of particular textbooks or curricular materials.
If use of a single standard of measuring skill or progress in physical education classes has an adverse effect on members of one sex, the recipient shall use appropriate standards that do not have that effect.
(a) General. (1) A recipient with knowledge of conduct that reasonably may constitute sex discrimination in its education program or activity must respond promptly and effectively; and
(2) A recipient must also comply with this section to address sex discrimination in its education program or activity.
(b) Barriers to reporting. A recipient must require its Title IX Coordinator to:
(1) Monitor the recipient's education program or activity for barriers to reporting information about conduct that reasonably may constitute sex discrimination under Title IX or this part; and
(2) Take steps reasonably calculated to address such barriers.
(c) Notification requirements. (1) An elementary school or secondary school recipient must require all of its employees who are not confidential employees to notify the Title IX Coordinator when the employee has information about conduct that reasonably may constitute sex discrimination under Title IX or this part.
(2) All other recipients must, at a minimum, require:
(i) Any employee who is not a confidential employee and who either has authority to institute corrective measures on behalf of the recipient or has responsibility for administrative leadership, teaching, or advising in the recipient's education program or activity to notify the Title IX Coordinator when the employee has information about conduct that reasonably may constitute sex discrimination under Title IX or this part; and
(ii) All other employees who are not confidential employees and not covered by paragraph (c)(2)(i) of this section to either:
(A) Notify the Title IX Coordinator when the employee has information about conduct that reasonably may constitute sex discrimination under Title IX or this part; or
(B) Provide the contact information of the Title IX Coordinator and information about how to make a complaint of sex discrimination to any person who provides the employee with information about conduct that reasonably may constitute sex discrimination under Title IX or this part.
(3) A postsecondary institution must reasonably determine and specify whether and under what circumstances a person who is both a student and an employee is subject to the requirements of paragraph (c)(2) of this section.
(4) The requirements of paragraphs (c)(1) and (2) of this section do not apply to an employee who has personally been subject to conduct that reasonably may constitute sex discrimination under Title IX or this part.
(d) Confidential employee requirements. (1) A recipient must notify all participants in the recipient's education program or activity of how to contact its confidential employees, if any, excluding any employee whose confidential status is only with respect to their conducting an Institutional Review Board-approved human-subjects research study designed to gather information about sex discrimination as set out in the definition of confidential employee in § 106.2.
(2) A recipient must require a confidential employee to explain to any person who informs the confidential employee of conduct that reasonably may constitute sex discrimination under Title IX or this part:
(i) The employee's status as confidential for purposes of this part, including the circumstances in which the employee is not required to notify the Title IX Coordinator about conduct that reasonably may constitute sex discrimination;
(ii) How to contact the recipient's Title IX Coordinator and how to make a complaint of sex discrimination; and
(iii) That the Title IX Coordinator may be able to offer and coordinate supportive measures, as well as initiate an informal resolution process or an investigation under the grievance procedures.
(e) Public awareness events. When a postsecondary institution's Title IX Coordinator is notified of information about conduct that reasonably may constitute sex-based harassment under Title IX or this part that was provided by a person during a public event to raise awareness about sex-based harassment that was held on the postsecondary institution's campus or through an online platform sponsored by a postsecondary institution, the postsecondary institution is not obligated to act in response to the information, unless it indicates an imminent and serious threat to the health or safety of a complainant, any students, employees, or other persons. However, in all cases the postsecondary institution must use this information to inform its efforts to prevent sex-based harassment, including by providing tailored training to address alleged sex-based harassment in a particular part of its education program or activity or at a specific location when information indicates there may be multiple incidents of sex-based harassment. Nothing in Title IX or this part obligates a postsecondary institution to require its Title IX Coordinator or any other employee to attend such public awareness events.
(f) Title IX Coordinator requirements. The Title IX Coordinator is responsible for coordinating the recipient's compliance with its obligations under Title IX and this part.
(1) A recipient must require its Title IX Coordinator, when notified of conduct that reasonably may constitute sex discrimination under Title IX or this part, to take the following actions to promptly and effectively end any sex discrimination in its education program or activity, prevent its recurrence, and remedy its effects:
(i) Treat the complainant and respondent equitably;
(ii) Offer and coordinate supportive measures under paragraph (g) of this section, as appropriate, for the complainant. In addition, if the recipient has initiated grievance procedures under § 106.45, and if applicable § 106.46, or offered an informal resolution process under paragraph (k) of this section to the respondent, offer and coordinate supportive measures under paragraph (g) of this section, as appropriate, for the respondent;
(iii)(A) Notify the complainant or, if the complainant is unknown, the individual who reported the conduct, of the grievance procedures under § 106.45, and if applicable § 106.46, and the informal resolution process under paragraph (k) of this section, if available and appropriate; and
(B) If a complaint is made, notify the respondent of the grievance procedures under § 106.45, and if applicable § 106.46, and the informal resolution process under paragraph (k) of this section, if available and appropriate;
(iv) In response to a complaint, initiate the grievance procedures under § 106.45, and if applicable § 106.46, or the informal resolution process under paragraph (k) of this section, if available and appropriate and requested by all parties;
(v) In the absence of a complaint or the withdrawal of any or all of the allegations in a complaint, and in the absence or termination of an informal resolution process, determine whether to initiate a complaint of sex discrimination that complies with the grievance procedures under § 106.45, and if applicable § 106.46.
(A) To make this fact-specific determination, the Title IX Coordinator must consider, at a minimum, the following factors:
(1) The complainant's request not to proceed with initiation of a complaint;
(2) The complainant's reasonable safety concerns regarding initiation of a complaint;
(3) The risk that additional acts of sex discrimination would occur if a complaint is not initiated;
(4) The severity of the alleged sex discrimination, including whether the discrimination, if established, would require the removal of a respondent from campus or imposition of another disciplinary sanction to end the discrimination and prevent its recurrence;
(5) The age and relationship of the parties, including whether the respondent is an employee of the recipient;
(6) The scope of the alleged sex discrimination, including information suggesting a pattern, ongoing sex discrimination, or sex discrimination alleged to have impacted multiple individuals;
(7) The availability of evidence to assist a decisionmaker in determining whether sex discrimination occurred; and
(8) Whether the recipient could end the alleged sex discrimination and prevent its recurrence without initiating its grievance procedures under § 106.45, and if applicable § 106.46.
(B) If, after considering these and other relevant factors, the Title IX Coordinator determines that the conduct as alleged presents an imminent and serious threat to the health or safety of the complainant or other person, or that the conduct as alleged prevents the recipient from ensuring equal access on the basis of sex to its education program or activity, the Title IX Coordinator may initiate a complaint.
(vi) If initiating a complaint under paragraph (f)(1)(v) of this section, notify the complainant prior to doing so and appropriately address reasonable concerns about the complainant's safety or the safety of others, including by providing supportive measures consistent with paragraph (g) of this section; and
(vii) Regardless of whether a complaint is initiated, take other appropriate prompt and effective steps, in addition to steps necessary to effectuate the remedies provided to an individual complainant, if any, to ensure that sex discrimination does not continue or recur within the recipient's education program or activity.
(2) A Title IX Coordinator is not required to comply with paragraphs (f)(1)(i) through (vii) of this section upon being notified of conduct that may constitute sex discrimination if the Title IX Coordinator reasonably determines that the conduct as alleged could not constitute sex discrimination under Title IX or this part.
(g) Supportive measures. Under paragraph (f) of this section, a recipient must offer and coordinate supportive measures, as appropriate, as described in paragraphs (g)(1) through (6) of this section. For allegations of sex discrimination other than sex-based harassment or retaliation, a recipient's provision of supportive measures does not require the recipient, its employee, or any other person authorized to provide aid, benefit, or service on the recipient's behalf to alter the alleged discriminatory conduct for the purpose of providing a supportive measure.
(1) Supportive measures may vary depending on what the recipient deems to be reasonably available. These measures may include but are not limited to: counseling; extensions of deadlines and other course-related adjustments; campus escort services; increased security and monitoring of certain areas of the campus; restrictions on contact applied to one or more parties; leaves of absence; changes in class, work, housing, or extracurricular or any other activity, regardless of whether there is or is not a comparable alternative; and training and education programs related to sex-based harassment.
(2) Supportive measures must not unreasonably burden either party and must be designed to protect the safety of the parties or the recipient's educational environment, or to provide support during the recipient's grievance procedures under § 106.45, and if applicable § 106.46, or during the informal resolution process under § 106.44(k). A recipient must not impose such measures for punitive or disciplinary reasons.
(3) A recipient may, as appropriate, modify or terminate supportive measures at the conclusion of the grievance procedures under § 106.45, and if applicable § 106.46, or at the conclusion of the informal resolution process under paragraph (k) of this section, or the recipient may continue them beyond that point.
(4) A recipient must provide a complainant or respondent with a timely opportunity to seek, from an appropriate and impartial employee, modification or reversal of the recipient's decision to provide, deny, modify, or terminate supportive measures applicable to them. The impartial employee must be someone other than the employee who made the challenged decision and must have authority to modify or reverse the decision, if the impartial employee determines that the decision to provide, deny, modify, or terminate the supportive measure was inconsistent with the definition of supportive measures in § 106.2. A recipient must also provide a party with the opportunity to seek additional modification or termination of a supportive measure applicable to them if circumstances change materially.
(5) A recipient must not disclose information about any supportive measures to persons other than the person to whom they apply, including informing one party of supportive measures provided to another party, unless necessary to provide the supportive measure or restore or preserve a party's access to the education program or activity, or when an exception in § 106.44(j)(1) through (5) applies.
(6)(i) If the complainant or respondent is an elementary or secondary student with a disability, the recipient must require the Title IX Coordinator to consult with one or more members, as appropriate, of the student's Individualized Education Program (IEP) team, 34 CFR 300.321, if any, or one or more members, as appropriate, of the group of persons responsible for the student's placement decision under 34 CFR 104.35(c), if any, to determine how to comply with the requirements of the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq., and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, in the implementation of supportive measures.
(ii) If the complainant or respondent is a postsecondary student with a disability, the Title IX Coordinator may consult, as appropriate, with the individual or office that the recipient has designated to provide support to students with disabilities to determine how to comply with Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, in the implementation of supportive measures.
(h) Emergency removal. Nothing in this part precludes a recipient from removing a respondent from the recipient's education program or activity on an emergency basis, provided that the recipient undertakes an individualized safety and risk analysis, determines that an imminent and serious threat to the health or safety of a complainant or any students, employees, or other persons arising from the allegations of sex discrimination justifies removal, and provides the respondent with notice and an opportunity to challenge the decision immediately following the removal. This provision must not be construed to modify any rights under the Individuals with Disabilities Education Act, 20 U.S.C. 1400 et seq., Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, or the Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq.
(i) Administrative leave. Nothing in this part precludes a recipient from placing an employee respondent on administrative leave from employment responsibilities during the pendency of the recipient's grievance procedures. This provision must not be construed to modify any rights under Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, or the Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq.
(j) Prohibited disclosures of personally identifiable information. A recipient must not disclose personally identifiable information obtained in the course of complying with this part, except in the following circumstances:
(1) When the recipient has obtained prior written consent from a person with the legal right to consent to the disclosure;
(2) When the information is disclosed to a parent, guardian, or other authorized legal representative with the legal right to receive disclosures on behalf of the person whose personally identifiable information is at issue;
(3) To carry out the purposes of this part, including action taken to address conduct that reasonably may constitute sex discrimination under Title IX in the recipient's education program or activity;
(4) As required by Federal law, Federal regulations, or the terms and conditions of a Federal award, including a grant award or other funding agreement; or
(5) To the extent such disclosures are not otherwise in conflict with Title IX or this part, when required by State or local law or when permitted under FERPA, 20 U.S.C. 1232g, or its implementing regulations, 34 CFR part 99.
(k) Discretion to offer informal resolution in some circumstances. (1) At any time prior to determining whether sex discrimination occurred under § 106.45, and if applicable § 106.46, a recipient may offer to a complainant and respondent an informal resolution process, unless the complaint includes allegations that an employee engaged in sex-based harassment of an elementary school or secondary school student or such a process would conflict with Federal, State or local law. A recipient that provides the parties an informal resolution process must, to the extent necessary, also require its Title IX Coordinator to take other appropriate prompt and effective steps to ensure that sex discrimination does not continue or recur within the recipient's education program or activity.
(i) Subject to the limitations in paragraph (k)(1) of this section, a recipient has discretion to determine whether it is appropriate to offer an informal resolution process when it receives information about conduct that reasonably may constitute sex discrimination under Title IX or this part or when a complaint of sex discrimination is made, and may decline to offer informal resolution despite one or more of the parties' wishes.
(ii) In addition to the limitations in paragraph (k)(1) of this section, circumstances when a recipient may decline to allow informal resolution include but are not limited to when the recipient determines that the alleged conduct would present a future risk of harm to others.
(2) A recipient must not require or pressure the parties to participate in an informal resolution process. The recipient must obtain the parties' voluntary consent to the informal resolution process and must not require waiver of the right to an investigation and determination of a complaint as a condition of enrollment or continuing enrollment, or employment or continuing employment, or exercise of any other right.
(3) Before initiation of an informal resolution process, the recipient must provide to the parties notice that explains:
(i) The allegations;
(ii) The requirements of the informal resolution process;
(iii) That, prior to agreeing to a resolution, any party has the right to withdraw from the informal resolution process and to initiate or resume the recipient's grievance procedures;
(iv) That the parties' agreement to a resolution at the conclusion of the informal resolution process would preclude the parties from initiating or resuming grievance procedures arising from the same allegations;
(v) The potential terms that may be requested or offered in an informal resolution agreement, including notice that an informal resolution agreement is binding only on the parties; and
(vi) What information the recipient will maintain and whether and how the recipient could disclose such information for use in grievance procedures under § 106.45, and if applicable § 106.46, if grievance procedures are initiated or resumed.
(4) The facilitator for the informal resolution process must not be the same person as the investigator or the decisionmaker in the recipient's grievance procedures. Any person designated by a recipient to facilitate an informal resolution process must not have a conflict of interest or bias for or against complainants or respondents generally or an individual complainant or respondent. Any person facilitating informal resolution must receive training under § 106.8(d)(3).
(5) Potential terms that may be included in an informal resolution agreement include but are not limited to:
(i) Restrictions on contact; and
(ii) Restrictions on the respondent's participation in one or more of the recipient's programs or activities or attendance at specific events, including restrictions the recipient could have imposed as remedies or disciplinary sanctions had the recipient determined at the conclusion of the recipient's grievance procedures that sex discrimination occurred.
(a)(1) General. A recipient's grievance procedures for the prompt and equitable resolution of complaints of sex discrimination must be in writing and include provisions that incorporate the requirements of this section. The requirements related to a respondent apply only to sex discrimination complaints alleging that a person violated the recipient's prohibition on sex discrimination. When a sex discrimination complaint alleges that a recipient's policy or practice discriminates on the basis of sex, the recipient is not considered a respondent.
(2) Complaint. The following persons have a right to make a complaint of sex discrimination, including complaints of sex-based harassment, requesting that the recipient investigate and make a determination about alleged discrimination under Title IX or this part:
(i) A complainant;
(ii) A parent, guardian, or other authorized legal representative with the legal right to act on behalf of a complainant;
(iii) The Title IX Coordinator, after making the determination specified in § 106.44(f)(1)(v);
(iv) With respect to complaints of sex discrimination other than sex-based harassment, in addition to the persons listed in paragraphs (a)(2)(i) through (iii) of this section,
(A) Any student or employee; or
(B) Any person other than a student or employee who was participating or attempting to participate in the recipient's education program or activity at the time of the alleged sex discrimination.
(b) Basic requirements for grievance procedures. A recipient's grievance procedures must:
(1) Treat complainants and respondents equitably;
(2) Require that any person designated as a Title IX Coordinator, investigator, or decisionmaker not have a conflict of interest or bias for or against complainants or respondents generally or an individual complainant or respondent. The decisionmaker may be the same person as the Title IX Coordinator or investigator;
(3) Include a presumption that the respondent is not responsible for the alleged sex discrimination until a determination is made at the conclusion of the recipient's grievance procedures for complaints of sex discrimination;
(4) Establish reasonably prompt timeframes for the major stages of the grievance procedures, including a process that allows for the reasonable extension of timeframes on a case-by-case basis for good cause with notice to the parties that includes the reason for the delay. Major stages include, for example, evaluation (i.e., the recipient's decision whether to dismiss or investigate a complaint of sex discrimination); investigation; determination; and appeal, if any;
(5) Require the recipient to take reasonable steps to protect the privacy of the parties and witnesses during the pendency of a recipient's grievance procedures, provided that the steps do not restrict the ability of the parties to: obtain and present evidence, including by speaking to witnesses, subject to § 106.71; consult with their family members, confidential resources, or advisors; or otherwise prepare for or participate in the grievance procedures;
(6) Require an objective evaluation of all evidence that is relevant, as defined in § 106.2, and not otherwise impermissible under paragraph (b)(7) of this section—including both inculpatory and exculpatory evidence—and provide that credibility determinations must not be based on a person's status as a complainant, respondent, or witness;
(7) Exclude the following types of evidence, and questions seeking that evidence, as impermissible (i.e., must not be accessed or considered, except by the recipient to determine whether an exception in paragraphs (i) through (iii) applies; must not be disclosed; and must not otherwise be used), regardless of whether they are relevant:
(i) Evidence that is protected under a privilege as recognized by Federal or State law or evidence provided to a confidential employee, unless the person to whom the privilege or confidentiality is owed has voluntarily waived the privilege or confidentiality;
(ii) A party's or witness's records that are made or maintained by a physician, psychologist, or other recognized professional or paraprofessional in connection with the provision of treatment to the party or witness, unless the recipient obtains that party's or witness's voluntary, written consent for use in the recipient's grievance procedures; and
(iii) Evidence that relates to the complainant's sexual interests or prior sexual conduct, unless evidence about the complainant's prior sexual conduct is offered to prove that someone other than the respondent committed the alleged conduct or is evidence about specific incidents of the complainant's prior sexual conduct with the respondent that is offered to prove consent to the alleged sex-based harassment. The fact of prior consensual sexual conduct between the complainant and respondent does not by itself demonstrate or imply the complainant's consent to the alleged sex-based harassment or preclude determination that sex-based harassment occurred; and
(8) If a recipient adopts grievance procedures that apply to the resolution of some, but not all, complaints articulate consistent principles for how the recipient will determine which procedures apply.
(c) Notice of allegations. Upon initiation of the recipient's grievance procedures, a recipient must provide notice of the allegations to the parties whose identities are known.
(1) The notice must include:
(i) The recipient's grievance procedures under this section, and if applicable § 106.46, and any informal resolution process under § 106.44(k);
(ii) Sufficient information available at the time to allow the parties to respond to the allegations. Sufficient information includes the identities of the parties involved in the incident(s), the conduct alleged to constitute sex discrimination under Title IX or this part, and the date(s) and location(s) of the alleged incident(s), to the extent that information is available to the recipient;
(iii) A statement that retaliation is prohibited; and
(iv) A statement that the parties are entitled to an equal opportunity to access the relevant and not otherwise impermissible evidence or an accurate description of this evidence as set out in paragraph (f)(4) of this section; and if the recipient provides a description of the evidence, the parties are entitled to an equal opportunity to access to the relevant and not otherwise impermissible evidence upon the request of any party.
(2) If, in the course of an investigation, the recipient decides to investigate additional allegations of sex discrimination by the respondent toward the complainant that are not included in the notice provided under paragraph (c) of this section or that are included in a complaint that is consolidated under paragraph (e) of this section, the recipient must provide notice of the additional allegations to the parties whose identities are known.
(d) Dismissal of a complaint. (1) A recipient may dismiss a complaint of sex discrimination made through its grievance procedures under this section, and if applicable § 106.46, for any of the following reasons:
(i) The recipient is unable to identify the respondent after taking reasonable steps to do so;
(ii) The respondent is not participating in the recipient's education program or activity and is not employed by the recipient;
(iii) The complainant voluntarily withdraws any or all of the allegations in the complaint, the Title IX Coordinator declines to initiate a complaint under § 106.44(f)(1)(v), and the recipient determines that, without the complainant's withdrawn allegations, the conduct that remains alleged in the complaint, if any, would not constitute sex discrimination under Title IX or this part even if proven; or
(iv) The recipient determines the conduct alleged in the complaint, even if proven, would not constitute sex discrimination under Title IX or this part. Prior to dismissing the complaint under this paragraph, the recipient must make reasonable efforts to clarify the allegations with the complainant.
(2) Upon dismissal, a recipient must promptly notify the complainant of the basis for the dismissal. If the dismissal occurs after the respondent has been notified of the allegations, then the recipient must also notify the respondent of the dismissal and the basis for the dismissal promptly following notification to the complainant, or simultaneously if notification is in writing.
(3) A recipient must notify the complainant that a dismissal may be appealed and provide the complainant with an opportunity to appeal the dismissal of a complaint on the bases set out in § 106.46(i)(1). If the dismissal occurs after the respondent has been notified of the allegations, then the recipient must also notify the respondent that the dismissal may be appealed on the bases set out in § 106.46(i)(1). If the dismissal is appealed, the recipient must:
(i) Notify the parties of any appeal, including notice of the allegations consistent with paragraph (c) of this section if notice was not previously provided to the respondent;
(ii) Implement appeal procedures equally for the parties;
(iii) Ensure that the decisionmaker for the appeal did not take part in an investigation of the allegations or dismissal of the complaint;
(iv) Ensure that the decisionmaker for the appeal has been trained as set out in § 106.8(d)(2);
(v) Provide the parties a reasonable and equal opportunity to make a statement in support of, or challenging, the outcome; and
(vi) Notify the parties of the result of the appeal and the rationale for the result.
(4) A recipient that dismisses a complaint must, at a minimum:
(i) Offer supportive measures to the complainant as appropriate under § 106.44(g);
(ii) For dismissals under paragraph (d)(1)(iii) or (iv) of this section in which the respondent has been notified of the allegations, offer supportive measures to the respondent as appropriate under § 106.44(g); and
(iii) Require its Title IX Coordinator to take other appropriate prompt and effective steps to ensure that sex discrimination does not continue or recur within the recipient's education program or activity under § 106.44(f)(1)(vii).
(e) Consolidation of complaints. A recipient may consolidate complaints of sex discrimination against more than one respondent, or by more than one complainant against one or more respondents, or by one party against another party, when the allegations of sex discrimination arise out of the same facts or circumstances. If one of the complaints to be consolidated is a complaint of sex-based harassment involving a student complainant or student respondent at a postsecondary institution, the grievance procedures for investigating and resolving the consolidated complaint must comply with the requirements of § 106.46 in addition to the requirements of this section. When more than one complainant or more than one respondent is involved, references in this section and in § 106.46 to a party, complainant, or respondent include the plural, as applicable.
(f) Complaint investigation. A recipient must provide for adequate, reliable, and impartial investigation of complaints. To do so, the recipient must:
(1) Ensure that the burden is on the recipient—not on the parties—to conduct an investigation that gathers sufficient evidence to determine whether sex discrimination occurred;
(2) Provide an equal opportunity for the parties to present fact witnesses and other inculpatory and exculpatory evidence that are relevant and not otherwise impermissible;
(3) Review all evidence gathered through the investigation and determine what evidence is relevant and what evidence is impermissible regardless of relevance, consistent with § 106.2 and with paragraph (b)(7) of this section; and
(4) Provide each party with an equal opportunity to access the evidence that is relevant to the allegations of sex discrimination and not otherwise impermissible, consistent with § 106.2 and with paragraph (b)(7) of this section, in the following manner:
(i) A recipient must provide an equal opportunity to access either the relevant and not otherwise impermissible evidence, or an accurate description of this evidence. If the recipient provides a description of the evidence, it must further provide the parties with an equal opportunity to access the relevant and not otherwise impermissible evidence upon the request of any party;
(ii) A recipient must provide a reasonable opportunity to respond to the evidence or to the accurate description of the evidence described in paragraph (f)(4)(i) of this section; and
(iii) A recipient must take reasonable steps to prevent and address the parties' unauthorized disclosure of information and evidence obtained solely through the grievance procedures. For purposes of this paragraph, disclosures of such information and evidence for purposes of administrative proceedings or litigation related to the complaint of sex discrimination are authorized.
(g) Questioning parties and witnesses to aid in evaluating allegations and assessing credibility. A recipient must provide a process that enables the decisionmaker to question parties and witnesses to adequately assess a party's or witness's credibility to the extent credibility is both in dispute and relevant to evaluating one or more allegations of sex discrimination.
(h) Determination whether sex discrimination occurred. Following an investigation and evaluation of all relevant and not otherwise impermissible evidence under paragraphs (f) and (g) of this section, the recipient must:
(1) Use the preponderance of the evidence standard of proof to determine whether sex discrimination occurred, unless the recipient uses the clear and convincing evidence standard of proof in all other comparable proceedings, including proceedings relating to other discrimination complaints, in which case the recipient may elect to use that standard of proof in determining whether sex discrimination occurred. Both standards of proof require the decisionmaker to evaluate relevant and not otherwise impermissible evidence for its persuasiveness; if the decisionmaker is not persuaded under the applicable standard by the evidence that sex discrimination occurred, whatever the quantity of the evidence is, the decisionmaker must not determine that sex discrimination occurred.
(2) Notify the parties in writing of the determination whether sex discrimination occurred under Title IX or this part including the rationale for such determination, and the procedures and permissible bases for the complainant and respondent to appeal, if applicable;
(3) If there is a determination that sex discrimination occurred, as appropriate, require the Title IX Coordinator to coordinate the provision and implementation of remedies to a complainant and other persons the recipient identifies as having had equal access to the recipient's education program or activity limited or denied by sex discrimination, coordinate the imposition of any disciplinary sanctions on a respondent, including notification to the complainant of any such disciplinary sanctions, and require the Title IX Coordinator to take other appropriate prompt and effective steps to ensure that sex discrimination does not continue or recur within the recipient's education program or activity under § 106.44(f)(1)(vii). A recipient may not impose discipline on a respondent for sex discrimination prohibited by Title IX unless there is a determination at the conclusion of the recipient's grievance procedures that the respondent engaged in prohibited sex discrimination;
(4) Comply with § 106.45, and if applicable § 106.46, before the imposition of any disciplinary sanctions against a respondent; and
(5) Not discipline a party, witness, or others participating in a recipient's grievance procedures for making a false statement or for engaging in consensual sexual conduct based solely on the recipient's determination whether sex discrimination occurred.
(i) Appeals. In addition to an appeal of a dismissal consistent with paragraph (d)(3) of this section, a recipient must offer the parties an appeal process that, at a minimum, is the same as it offers in all other comparable proceedings, if any, including proceedings relating to other discrimination complaints. For a complaint of sex-based harassment involving a student complainant or student respondent, a postsecondary institution must also offer an appeal on the bases set out in § 106.46(i)(1).
(j) Additional provisions. If a recipient adopts additional provisions as part of its grievance procedures for handling complaints of sex discrimination, including sex-based harassment, such additional provisions must apply equally to the parties.
(k) Informal resolution. In lieu of resolving a complaint through the recipient's grievance procedures, the parties may instead elect to participate in an informal resolution process under § 106.44(k) if provided by the recipient consistent with that paragraph.
(l) Provisions limited to sex-based harassment complaints. For complaints alleging sex-based harassment, the grievance procedures must:
(1) Describe the range of supportive measures available to complainants and respondents under § 106.44(g); and
(2) List, or describe the range of, the possible disciplinary sanctions that the recipient may impose and remedies that the recipient may provide following a determination that sex-based harassment occurred.
(a) General. A postsecondary institution's written grievance procedures for prompt and equitable resolution of complaints of sex-based harassment involving a student complainant or student respondent must include provisions that incorporate the requirements of § 106.45 and this section.
(b) Student employees. When a complainant or respondent is both a student and an employee of a postsecondary institution, the postsecondary institution must make a fact-specific inquiry to determine whether the requirements of this section apply. In making this determination, a postsecondary institution must, at a minimum, consider whether the party's primary relationship with the postsecondary institution is to receive an education and whether the alleged sex-based harassment occurred while the party was performing employment-related work.
(c) Written notice of allegations. Upon the initiation of the postsecondary institution's sex-based harassment grievance procedures under this section, a postsecondary institution must provide written notice to the parties whose identities are known with sufficient time for the parties to prepare a response before any initial interview.
(1) The written notice must include all information required under § 106.45(c)(1)(i) through (iii) and also inform the parties that:
(i) The respondent is presumed not responsible for the alleged sex-based harassment until a determination is made at the conclusion of the grievance procedures under this section and that prior to the determination, the parties will have an opportunity to present relevant and not otherwise impermissible evidence to a trained, impartial decisionmaker;
(ii) They may have an advisor of their choice to serve in the role set out in paragraph (e)(2) of this section, and that the advisor may be, but is not required to be, an attorney;
(iii) They are entitled to an equal opportunity to access the relevant and not otherwise impermissible evidence or an investigative report that accurately summarizes this evidence as set out in paragraph (e)(6) of this section; and if the postsecondary institution provides access to an investigative report, the parties are entitled to an equal opportunity to access to the relevant and not otherwise impermissible evidence upon the request of any party; and
(iv) If applicable, the postsecondary institution's code of conduct prohibits knowingly making false statements or knowingly submitting false information during the grievance procedure.
(2) If, in the course of an investigation, the recipient decides to investigate additional allegations of sex-based harassment by the respondent toward the complainant that are not included in the written notice provided under paragraph (c) of this section or that are included in a complaint that is consolidated under § 106.45(e), the recipient must provide written notice of the additional allegations to the parties whose identities are known.
(3) To the extent the postsecondary institution has reasonable concerns for the safety of any person as a result of providing this notice, the postsecondary institution may reasonably delay providing written notice of the allegations in order to address the safety concern appropriately. Reasonable concerns must be based on individualized safety and risk analysis and not on mere speculation or stereotypes.
(d) Dismissal of a complaint. When dismissing a complaint alleging sex-based harassment involving a student complainant or a student respondent, a postsecondary institution must:
(1) Provide the parties, simultaneously, with written notice of the dismissal and the basis for the dismissal, if dismissing a complaint under any of the bases in § 106.45(d)(1), except if the dismissal occurs before the respondent has been notified of the allegations, in which case the recipient must provide such written notice only to the complainant; and
(2) Obtain the complainant's withdrawal in writing if dismissing a complaint based on the complainant's voluntary withdrawal of the complaint or allegations under § 106.45(d)(1)(iii).
(e) Complaint investigation. When investigating a complaint alleging sex-based harassment and throughout the postsecondary institution's grievance procedures for complaints of sex-based harassment involving a student complainant or a student respondent, a postsecondary institution:
(1) Must provide, to a party whose participation is invited or expected, written notice of the date, time, location, participants, and purpose of all meetings or proceedings with sufficient time for the party to prepare to participate;
(2) Must provide the parties with the same opportunities to be accompanied to any meeting or proceeding by the advisor of their choice, who may be, but is not required to be, an attorney, and not limit the choice or presence of the advisor for the complainant or respondent in any meeting or proceeding; however, the postsecondary institution may establish restrictions regarding the extent to which the advisor may participate in the grievance procedures, as long as the restrictions apply equally to the parties;
(3) Must provide the parties with the same opportunities, if any, to have persons other than the advisor of the parties' choice present during any meeting or proceeding;
(4) Has discretion to determine whether the parties may present expert witnesses as long as the determination applies equally to the parties;
(5) Must allow for the reasonable extension of timeframes on a case-by-case basis for good cause with written notice to the parties that includes the reason for the delay; and
(6) Must provide each party and the party's advisor, if any, with an equal opportunity to access the evidence that is relevant to the allegations of sex-based harassment and not otherwise impermissible, consistent with §§ 106.2 and 106.45(b)(7), in the following manner:
(i) A postsecondary institution must provide an equal opportunity to access either the relevant and not otherwise impermissible evidence, or the same written investigative report that accurately summarizes this evidence. If the postsecondary institution provides access to an investigative report, it must further provide the parties with an equal opportunity to access the relevant and not otherwise impermissible evidence upon the request of any party;
(ii) A postsecondary institution must provide the parties with a reasonable opportunity to review and respond to the evidence or the investigative report described in paragraph (e)(6)(i) of this section prior to the determination whether sex-based harassment occurred. If a postsecondary institution conducts a live hearing as part of its grievance procedures, it must provide this opportunity to review the evidence in advance of the live hearing; it is at the postsecondary institution's discretion whether to provide this opportunity to respond prior to the live hearing, during the live hearing, or both prior to and during the live hearing;
(iii) A postsecondary institution must take reasonable steps to prevent and address the parties' and their advisors' unauthorized disclosure of information and evidence obtained solely through the sex-based harassment grievance procedures. For purposes of this paragraph, disclosures of such information and evidence for purposes of administrative proceedings or litigation related to the complaint of sex-based harassment are authorized; and
(iv) Compliance with paragraph (e)(6) of this section satisfies the requirements of § 106.45(f)(4).
(f) Questioning parties and witnesses to aid in evaluating allegations and assessing credibility. (1) Process for questioning parties and witnesses. A postsecondary institution must provide a process as specified in this subpart that enables the decisionmaker to question parties and witnesses to adequately assess a party's or witness's credibility to the extent credibility is both in dispute and relevant to evaluating one or more allegations of sex-based harassment. Questioning of the parties and witnesses must take place consistent with the following provisions before determining whether sex-based harassment occurred:
(i) When a postsecondary institution chooses not to conduct a live hearing under paragraph (g) of this section, the process for proposing and asking relevant and not otherwise impermissible questions and follow-up questions of parties and witnesses under §§ 106.2 and 106.45(b)(7), including questions challenging credibility, must:
(A) Allow the investigator or decisionmaker to ask such questions during individual meetings with a party or witness;
(B) Allow each party to propose such questions that the party wants asked of any party or witness and have those questions asked by the investigator or decisionmaker during one or more individual meetings, including follow-up meetings, with a party or witness, subject to the requirements in paragraph (f)(3) of this section; and
(C) Provide each party with an audio or audiovisual recording or transcript with enough time for the party to have a reasonable opportunity to propose follow-up questions.
(ii) When a postsecondary institution chooses to conduct a live hearing under paragraph (g) of this section, the process for proposing and asking relevant and not otherwise impermissible questions and follow-up questions of parties and witnesses under §§ 106.2 and 106.45(b)(7), including questions challenging credibility, must allow the decisionmaker to ask such questions, and either:
(A) Allow each party to propose such questions that the party wants asked of any party or witness and have those questions asked by the decisionmaker, subject to the requirements under paragraph (f)(3) of this section; or
(B) Allow each party's advisor to ask any party or witness such questions, subject to the requirements under paragraph (f)(3) of this section. Such questioning must never be conducted by a party personally. If a postsecondary institution permits advisor-conducted questioning and a party does not have an advisor to ask questions on their behalf, the postsecondary institution must provide the party with an advisor of the postsecondary institution's choice, without charge to the party, for the purpose of advisor-conducted questioning. In those instances, the postsecondary institution must not appoint a confidential employee and may appoint, but is not required to appoint, an attorney to serve as an advisor.
(2) Compliance with § 106.45(g). Compliance with paragraph (f)(1)(i) or (ii) of this section satisfies the requirements of § 106.45(g).
(3) Procedures for the decisionmaker to evaluate the questions and limitations on questions. The decisionmaker must determine whether a proposed question is relevant under § 106.2 and not otherwise impermissible under § 106.45(b)(7), prior to the question being posed, and must explain any decision to exclude a question as not relevant or otherwise impermissible. If a decisionmaker determines that a party's question is relevant and not otherwise impermissible, then the question must be asked except that a postsecondary institution must not permit questions that are unclear or harassing of the party or witness being questioned. The decisionmaker must give a party an opportunity to clarify or revise a question that the decisionmaker has determined is unclear or harassing and, if the party sufficiently clarifies or revises a question to satisfy the terms of this paragraph, the question must be asked. A postsecondary institution may also adopt and apply other reasonable rules regarding decorum, provided they apply equally to the parties.
(4) Refusal to respond to questions and inferences based on refusal to respond to questions. A decisionmaker may choose to place less or no weight upon statements by a party or witness who refuses to respond to questions deemed relevant and not impermissible. The decisionmaker must not draw an inference about whether sex-based harassment occurred based solely on a party's or witness's refusal to respond to such questions.
(g) Live hearing procedures. A postsecondary institution's sex-based harassment grievance procedures may, but need not, provide for a live hearing. If a postsecondary institution chooses to conduct a live hearing, it may conduct the live hearing with the parties physically present in the same geographic location. At the postsecondary institution's discretion the institution may, or upon the request of either party it must, conduct the live hearing with the parties physically present in separate locations, with technology enabling the decisionmaker and parties to simultaneously see and hear the party or the witness while that person is speaking. A postsecondary institution must create an audio or audiovisual recording or transcript, of any live hearing and make it available to the parties for inspection and review.
(h) Written determination whether sex-based harassment occurred. The postsecondary institution must provide the determination whether sex-based harassment occurred in writing to the parties simultaneously.
(1) The written determination must include:
(i) A description of the alleged sex-based harassment;
(ii) Information about the policies and procedures that the postsecondary institution used to evaluate the allegations;
(iii) The decisionmaker's evaluation of the relevant and not otherwise impermissible evidence and determination whether sex-based harassment occurred;
(iv) When the decisionmaker finds that sex-based harassment occurred, any disciplinary sanctions the postsecondary institution will impose on the respondent, whether remedies other than the imposition of disciplinary sanctions will be provided by the postsecondary institution to the complainant, and, to the extent appropriate, other students identified by the postsecondary institution to be experiencing the effects of the sex-based harassment; and
(v) The postsecondary institution's procedures for the complainant and respondent to appeal.
(2) The determination regarding responsibility becomes final either on the date that the postsecondary institution provides the parties with the written determination of the result of any appeal, or, if no party appeals, the date on which an appeal would no longer be considered timely.
(i) Appeals. (1) A postsecondary institution must offer the parties an appeal from a determination whether sex-based harassment occurred, and from a postsecondary institution's dismissal of a complaint or any allegations therein, on the following bases:
(i) Procedural irregularity that would change the outcome;
(ii) New evidence that would change the outcome and that was not reasonably available when the determination whether sex-based harassment occurred or dismissal was made; and
(iii) The Title IX Coordinator, investigator, or decisionmaker had a conflict of interest or bias for or against complainants or respondents generally or the individual complainant or respondent that would change the outcome.
(2) A postsecondary institution may offer an appeal to the parties on additional bases, so long as the procedures and additional bases for appeal are equally available to all parties.
(3) As to all appeals, the postsecondary institution must comply with the requirements in § 106.45(d)(3)(i), (v), and (vi) in writing.
(j) Informal resolution. If a postsecondary institution offers or provides the parties to the grievance procedures under § 106.45 and under this section with an informal resolution process under § 106.44(k), the postsecondary institution must inform the parties in writing of the offer and their rights and responsibilities in the informal resolution process and otherwise comply with the provisions of § 106.44(k)(3) in writing.
The Assistant Secretary will not deem a recipient to have violated this part solely because the Assistant Secretary would have reached a different determination in a particular complaint alleging sex-based harassment than a recipient reached under § 106.45, and if applicable § 106.46, based on the Assistant Secretary's independent weighing of the evidence.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) General. (1) No person shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination in employment, or recruitment, consideration, or selection therefor, whether full-time or part-time, under any education program or activity operated by a recipient which receives Federal financial assistance.
(2) A recipient shall make all employment decisions in any education program or activity operated by such recipient in a nondiscriminatory manner and shall not limit, segregate, or classify applicants or employees in any way which could adversely affect any applicant's or employee's employment opportunities or status because of sex.
(3) A recipient shall not enter into any contractual or other relationship which directly or indirectly has the effect of subjecting employees or students to discrimination prohibited by this subpart, including relationships with employment and referral agencies, with labor unions, and with organizations providing or administering fringe benefits to employees of the recipient.
(4) A recipient shall not grant preferences to applicants for employment on the basis of attendance at any educational institution or entity which admits as students only or predominantly members of one sex, if the giving of such preferences has the effect of discriminating on the basis of sex in violation of this part.
(b) Application. The provisions of this subpart apply to:
(1) Recruitment, advertising, and the process of application for employment;
(2) Hiring, upgrading, promotion, consideration for and award of tenure, demotion, transfer, layoff, termination, application of nepotism policies, right of return from layoff, and rehiring;
(3) Rates of pay or any other form of compensation, and changes in compensation;
(4) Job assignments, classifications and structure, including position descriptions, lines of progression, and seniority lists;
(5) The terms of any collective bargaining agreement;
(6) Granting and return from leaves of absence, leave for pregnancy or related conditions, leave for persons of either sex to care for children or dependents, or any other leave;
(7) Fringe benefits available by virtue of employment, whether or not administered by the recipient;
(8) Selection and financial support for training, including apprenticeship, professional meetings, conferences, and other related activities, selection for tuition assistance, selection for sabbaticals and leaves of absence to pursue training;
(9) Employer-sponsored activities, including those that are social or recreational; and
(10) Any other term, condition, or privilege of employment.
A recipient shall not administer or operate any test or other criterion for any employment opportunity which has a disproportionately adverse effect on persons on the basis of sex unless:
(a) Use of such test or other criterion is shown to predict validly successful performance in the position in question; and
(b) Alternative tests or criteria for such purpose, which do not have such disproportionately adverse effect, are shown to be unavailable.
(a) Nondiscriminatory recruitment and hiring. A recipient shall not discriminate on the basis of sex in the recruitment and hiring of employees. Where a recipient has been found to be presently discriminating on the basis of sex in the recruitment or hiring of employees, or has been found to have in the past so discriminated, the recipient shall recruit members of the sex so discriminated against so as to overcome the effects of such past or present discrimination.
(b) Recruitment patterns. A recipient shall not recruit primarily or exclusively at entities which furnish as applicants only or predominantly members of one sex if such actions have the effect of discriminating on the basis of sex in violation of this subpart.
A recipient shall not make or enforce any policy or practice which, on the basis of sex:
(a) Makes distinctions in rates of pay or other compensation;
(b) Results in the payment of wages to employees of one sex at a rate less than that paid to employees of the opposite sex for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions.
A recipient shall not:
(a) Classify a job as being for males or for females;
(b) Maintain or establish separate lines of progression, seniority lists, career ladders, or tenure systems based on sex; or
(c) Maintain or establish separate lines of progression, seniority systems, career ladders, or tenure systems for similar jobs, position descriptions, or job requirements which classify persons on the basis of sex, unless sex is a bona-fide occupational qualification for the positions in question as set forth in § 106.61.
(a) Fringe benefits defined. For purposes of this part, fringe benefits means: Any medical, hospital, accident, life insurance or retirement benefit, service, policy or plan, any profit-sharing or bonus plan, leave, and any other benefit or service of employment not subject to the provision of § 106.54.
(b) Prohibitions. A recipient shall not:
(1) Discriminate on the basis of sex with regard to making fringe benefits available to employees or make fringe benefits available to spouses, families, or dependents of employees differently upon the basis of the employee's sex;
(2) Administer, operate, offer, or participate in a fringe benefit plan which does not provide either for equal periodic benefits for members of each sex, or for equal contributions to the plan by such recipient for members of each sex; or
(3) Administer, operate, offer, or participate in a pension or retirement plan which establishes different optional or compulsory retirement ages based on sex or which otherwise discriminates in benefits on the basis of sex.
(a) Status generally. A recipient must not adopt or implement any policy, practice, or procedure, or take any employment action, on the basis of sex:
(1) Concerning the current, potential, or past parental, family, or marital status of an employee or applicant for employment, which treats persons differently; or
(2) That is based upon whether an employee or applicant for employment is the head of household or principal wage earner in such employee's or applicant's family unit.
(b) Pregnancy or related conditions. A recipient must not discriminate against any employee or applicant for employment on the basis of current, potential, or past pregnancy or related conditions.
(c) Comparable treatment to other temporary medical conditions. A recipient must treat pregnancy or related conditions as any other temporary medical conditions for all job-related purposes, including commencement, duration and extensions of leave; payment of disability income; accrual of seniority and any other benefit or service; and reinstatement; and under any fringe benefit offered to employees by virtue of employment.
(d) Voluntary leaves of absence. In the case of a recipient that does not maintain a leave policy for its employees, or in the case of an employee with insufficient leave or accrued employment time to qualify for leave under such a policy, a recipient must treat pregnancy or related conditions as a justification for a voluntary leave of absence without pay for a reasonable period of time, at the conclusion of which the employee shall be reinstated to the status held when the leave began or to a comparable position, without decrease in rate of compensation or loss of promotional opportunities, or any other right or privilege of employment.
(e) Lactation time and space. (1) A recipient must provide reasonable break time for an employee to express breast milk or breastfeed as needed.
(2) A recipient must ensure that an employee can access a lactation space, which must be a space other than a bathroom that is clean, shielded from view, free from intrusion from others, and may be used by an employee for expressing breast milk or breastfeeding as needed.
(a) Prohibitory requirements. The obligation to comply with this subpart is not obviated or alleviated by the existence of any State or local law or other requirement which imposes prohibitions or limits upon employment of members of one sex which are not imposed upon members of the other sex.
(b) Benefits. A recipient which provides any compensation, service, or benefit to members of one sex pursuant to a State or local law or other requirement shall provide the same compensation, service, or benefit to members of the other sex.
A recipient shall not in any advertising related to employment indicate preference, limitation, specification, or discrimination based on sex unless sex is a bona-fide occupational qualification for the particular job in question.
(a) Marital status. A recipient must not make a pre-employment inquiry as to the marital status of an applicant for employment, including whether such applicant is “Miss or Mrs.”
(b) Sex. A recipient may ask an applicant for employment to self-identify their sex, but only if this question is asked of all applicants and if the response is not used as a basis for discrimination prohibited by Title IX or this part.
A recipient may take action otherwise prohibited by this subpart provided it is shown that sex is a bona-fide occupational qualification for that action, such that consideration of sex with regard to such action is essential to successful operation of the employment function concerned. A recipient shall not take action pursuant to this section which is based upon alleged comparative employment characteristics or stereotyped characterizations of one or the other sex, or upon preference based on sex of the recipient, employees, students, or other persons, but nothing contained in this section shall prevent a recipient from considering an employee's sex in relation to employment in a locker room or toilet facility used only by members of one sex.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
A recipient must prohibit retaliation, including peer retaliation, in its education program or activity. When a recipient has information about conduct that reasonably may constitute retaliation under Title IX or this part, the recipient is obligated to comply with § 106.44. Upon receiving a complaint alleging retaliation, a recipient must initiate its grievance procedures under § 106.45, or, as appropriate, an informal resolution process under § 106.44(k). As set out in § 106.45(e), if the complaint is consolidated with a complaint of sex-based harassment involving a student complainant or student respondent at a postsecondary institution, the grievance procedures initiated by the consolidated complaint must comply with the requirements of both §§ 106.45 and 106.46.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
The procedural provisions applicable to Title VI of the Civil Rights Act of 1964 are hereby adopted and incorporated herein. These procedures may be found at 34 CFR 100.6 through 100.11 and 34 CFR part 101.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
The purpose of this part is to implement the Boy Scouts of America Equal Access Act, 20 U.S.C. 7905.
This part applies to any public elementary school, public secondary school, local educational agency, or State educational agency that has a designated open forum or limited public forum and that receives funds made available through the Department.
The following definitions apply to this part:
(a) Act means the Boy Scouts of America Equal Access Act, section 9525 of the Elementary and Secondary Education Act of 1965, as amended by section 901 of the No Child Left Behind Act of 2001, Pub. L. 107-110, 115 Stat. 1425, 1981-82 (20 U.S.C. 7905).
(b) Boy Scouts means the organization named “Boy Scouts of America,” which has a Federal charter and which is listed as an organization in title 36 of the United States Code (Patriotic and National Observances, Ceremonies, and Organizations) in Subtitle II (Patriotic and National Organizations), Part B (Organizations), Chapter 309 (Boy Scouts of America).
(c) Covered entity means any public elementary school, public secondary school, local educational agency, or State educational agency that has a designated open forum or limited public forum and that receives funds made available through the Department.
(d) Department means the Department of Education.
(e) Designated open forum means that an elementary school or secondary school designates a time and place for one or more outside youth or community groups to meet on school premises or in school facilities, including during the hours in which attendance at the school is compulsory, for reasons other than to provide the school's educational program.
(f) Elementary school means an elementary school as defined by section 9101(18) of the Elementary and Secondary Education Act of 1965, as amended by section 901 of the No Child Left Behind Act of 2001, Pub. L. 107-110, 115 Stat. 1425, 1958 (20 U.S.C. 7801).
(g) Group officially affiliated with any other Title 36 youth group means a youth group resulting from the chartering process or other process used by that Title 36 youth group to establish official affiliation with youth groups.
(h) Group officially affiliated with the Boy Scouts means a youth group formed as a result of a community organization charter issued by the Boy Scouts.
(i) Limited public forum means that an elementary school or secondary school grants an offering to, or opportunity for, one or more outside youth or community groups to meet on school premises or in school facilities before or after the hours during which attendance at the school is compulsory.
(j) Local educational agency means a local educational agency as defined by section 9101(26) of the Elementary and Secondary Education Act of 1965, as amended by section 901 of the No Child Left Behind Act of 2001, Pub. L. 107-110, 115 Stat. 1425, 1961 (20 U.S.C. 7801).
(k) Outside youth or community group means a youth or community group that is not affiliated with the school.
(l) Premises or facilities means all or any portion of buildings, structures, equipment, roads, walks, parking lots, or other real or personal property or interest in that property.
(m) Secondary school means a secondary school as defined by section 9101(38) of the Elementary and Secondary Education Act of 1965, as amended by section 901 of the No Child Left Behind Act of 2001, Pub. L. 107-110, 115 Stat. 1425, 1965 (20 U.S.C. 7801).
(n) State educational agency means a State educational agency as defined by section 9101(41) of the Elementary and Secondary Education Act of 1965, as amended by section 901 of the No Child Left Behind Act of 2001, Pub. L. 107-110, 115 Stat. 1425, 1965 (20 U.S.C. 7801).
(o) Title 36 of the United States Code (as a patriotic society) means title 36 (Patriotic and National Observances, Ceremonies, and Organizations), Subtitle II (Patriotic and National Organizations) of the United States Code.
(p) Title 36 youth group means a group or organization listed in title 36 of the United States Code (as a patriotic society) that is intended to serve young people under the age of 21.
(q) To sponsor any group officially affiliated with the Boy Scouts or with any other Title 36 youth group means to obtain a community organization charter issued by the Boy Scouts or to take actions required by any other Title 36 youth group to become a sponsor of that group.
(r) Youth group means any group or organization intended to serve young people under the age of 21.
The obligation of a covered entity to comply with the Act and this part is not obviated or alleviated by any State or local law or other requirement.
(a) The obligation of covered entities to comply with the Act and this part is not limited by the nature or extent of their authority to make decisions about the use of school premises or facilities.
(b) Consistent with the requirements of § 108.6, a covered entity must provide equal access to any group that is officially affiliated with the Boy Scouts or is officially affiliated with any other Title 36 youth group. A covered entity may require that any group seeking equal access inform the covered entity whether the group is officially affiliated with the Boy Scouts or is officially affiliated with any other Title 36 youth group. A covered entity's failure to request this information is not a defense to a covered entity's noncompliance with the Act or this part.
(a) General. Consistent with the requirements of paragraph (b) of this section, no covered entity shall deny equal access or a fair opportunity to meet to, or discriminate against, any group officially affiliated with the Boy Scouts or officially affiliated with any other Title 36 youth group that requests to conduct a meeting within that covered entity's designated open forum or limited public forum. No covered entity shall deny that access or opportunity or discriminate for reasons including the membership or leadership criteria or oath of allegiance to God and country of the Boy Scouts or of the Title 36 youth group.
(b) Specific requirements—(1) Meetings. Any group officially affiliated with the Boy Scouts or officially affiliated with any other Title 36 youth group that requests to conduct a meeting in the covered entity's designated open forum or limited public forum must be given equal access to school premises or facilities to conduct meetings.
(2) Benefits and services. Any group officially affiliated with the Boy Scouts or officially affiliated with any other Title 36 youth group that requests to conduct a meeting as described in paragraph (b)(1) of this section must be given equal access to any other benefits and services provided to one or more outside youth or community groups that are allowed to meet in that same forum. These benefits and services may include, but are not necessarily limited to, school-related means of communication, such as bulletin board notices and literature distribution, and recruitment.
(3) Fees. Fees may be charged in connection with the access provided under the Act and this part.
(4) Terms. Any access provided under the Act and this part to any group officially affiliated with the Boy Scouts or officially affiliated with any other Title 36 youth group, as well as any fees charged for this access, must be on terms that are no less favorable than the most favorable terms provided to one or more outside youth or community groups.
(5) Nondiscrimination. Any decisions relevant to the provision of equal access must be made on a nondiscriminatory basis. Any determinations of which youth or community groups are outside groups must be made using objective, nondiscriminatory criteria, and these criteria must be used in a consistent, equal, and nondiscriminatory manner.
Nothing in the Act or this part shall be construed to require any school, agency, or school served by an agency to sponsor any group officially affiliated with the Boy Scouts or with any other Title 36 youth group.
An applicant for funds made available through the Department to which this part applies must submit an assurance that the applicant will comply with the Act and this part. The assurance shall be in effect for the period during which funds made available through the Department are extended. The Department specifies the form of the assurance, including the extent to which assurances will be required concerning the compliance obligations of subgrantees, contractors and subcontractors, and other participants, and provisions that give the United States a right to seek its judicial enforcement. An applicant may incorporate this assurance by reference in subsequent applications to the Department.
The procedural provisions applicable to title VI of the Civil Rights Act of 1964, which are found in 34 CFR 100.6 through 100.11 and 34 CFR part 101, apply to this part, except that, notwithstanding these provisions and any other provision of law, no funds made available through the Department shall be provided to any school, agency, or school served by an agency that fails to comply with the Act or this part.
The purpose of these regulations is to set out ED's rules for implementing the Age Discrimination Act of 1975. The Act prohibits discrimination on the basis of age in programs or activities receiving Federal financial assistance. The Act permits federally assisted programs or activities, and recipients of Federal funds, to continue to use age distinctions and factors other than age that meet the requirements of the Act.
(a) These regulations apply to any program or activity receiving Federal financial assistance from ED.
(b) These regulations do not apply to—
(1) An age distinction contained in that part of a Federal, State, or local statute or ordinance adopted by an elected, general purpose legislative body that—
(i) Provides any benefits or assistance to persons based on age;
(ii) Establishes criteria for participation in age-related terms; or
(iii) Describes intended beneficiaries or target groups in age-related terms; or
(2) Any employment practice of any employer, employment agency, labor organization, or any labor-management joint apprenticeship training program, except any program or activity receiving Federal financial assistance for employment under the Job Training Partnership Act (29 U.S.C. 1501 et seq.).
The following definitions apply to these regulations: Act means the Age Discrimination Act of 1975, as amended (Title III of Pub. L. 94-135).
Action means any act, activity, policy, rule, standard, or method of administration, or the use of any policy, rule, standard, or method of administration.
Age means how old a person is, or the number of years from the date of a person's birth.
Age distinction means any action using age or an age-related term.
Age-related term means a word or words that necessarily imply a particular age or range of ages (e.g., “children,” “adult,” “older persons,” but not “student” or “grade”).
Agency means a Federal department or agency that is empowered to extend financial assistance.
Applicant for Federal financial assistance means one who submits an application, request, or plan required to be approved by a Department official or by a recipient as a condition to becoming a recipient or subrecipient.
Department means the United States Department of Education.
ED means the United States Department of Education.
Federal financial assistance means any grant, entitlement, loan, cooperative agreement, contract (other than a procurement contract or a contract of insurance or guaranty), or any other arrangement by which ED provides or otherwise makes available assistance in the form of—
(a) Funds;
(b) Services of Federal personnel; or
(c) Real and personal property or any interest in or use of property, including—
(1) Transfers or leases of property for less than fair market value or for reduced consideration; and
(2) Proceeds from a subsequent transfer or lease of property if the Federal share of its fair market value is not returned to the Federal Government.
Program or activity means all of the operations of—
(a)(1) A department, agency, special purpose district, or other instrumentality of a State or local government; or
(2) The entity of a State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government;
(b)(1) A college, university, or other postsecondary institution, or a public system of higher education; or
(2) A local educational agency (as defined in 20 U.S.C. 8801), system of vocational education, or other school system;
(c)(1) An entire corporation, partnership, other private organization, or an entire sole proprietorship—
(i) If assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or
(ii) Which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or
(2) The entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or
(d) Any other entity that is established by two or more of the entities described in paragraph (a), (b), or (c) of this section; any part of which is extended Federal financial assistance.
Recipient means any State or its political subdivision, any instrumentality of a State or its political subdivision, any public or private agency, institution, organization, or other entity, or any person to which Federal financial assistance from ED is extended, directly or through another recipient. “Recipient” includes any successor, assignee, or transferee of a recipient, but excludes the ultimate beneficiary of the assistance.
Secretary means the Secretary of Education, or his or her designee.
Subrecipient means any of the entities in the definition of “recipient” to which a recipient extends or passes on Federal financial assistance. A subrecipient is generally regarded as a recipient of Federal financial assistance and has all the duties of a recipient in these regulations.
United States means the fifty States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, the Virgin Islands, American Samoa, Wake Island, the Trust Territory of the Pacific Islands, the Commonwealth of the Northern Mariana Islands, and the territories and possessions of the United States.
The rules stated in this section are subject to the exceptions contained in §§ 110.12 and 110.13 of these regulations.
(a) General rule. No person in the United States shall, on the basis of age, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.
(b) Specific rules. A recipient may not, in any program or activity receiving Federal financial assistance, directly or through contractual, licensing, or other arrangements, use age distinctions or take any other actions that have the effect, on the basis of age, of—
(1) Excluding individuals from, denying them the benefits of, or subjecting them to discrimination under a program or activity receiving Federal financial assistance; or
(2) Denying or limiting individuals in their opportunity to participate in any program or activity receiving Federal financial assistance.
(c) Other forms of discrimination. The specific forms of age discrimination listed in paragraph (b) of this section do not necessarily constitute a complete list.
For purposes of these regulations, the terms normal operation and statutory objective have the following meanings:
(a) Normal operation means the operation of a program or activity without significant changes that would impair its ability to meet its objectives.
(b) Statutory objective means any purpose of a program or activity expressly stated in any Federal statute, State statute, or local statute or ordinance adopted by an elected, general purpose legislative body.
A recipient is permitted to take an action otherwise prohibited by § 110.10 if the action reasonably takes into account age as a factor necessary to the normal operation or the achievement of any statutory objective of a program or activity. An action reasonably takes into account age as a factor necessary to the normal operation or the achievement of any statutory objective of a program or activity, if—
(a) Age is used as a measure or approximation of one or more other characteristics;
(b) The other characteristic or characteristics must be measured or approximated in order for the normal operation of the program or activity to continue, or to achieve any statutory objective of the program or activity;
(c) The other characteristic or characteristics can be reasonably measured or approximated by the use of age; and
(d) The other characteristic or characteristics are impractical to measure directly on an individual basis.
A recipient is permitted to take an action otherwise prohibited by § 110.10 that is based on a factor other than age, even though that action may have a disproportionate effect on persons of different ages. An action may be based on a factor other than age only if the factor bears a direct and substantial relationship to the normal operation of the program or activity or to the achievement of a statutory objective.
The burden of proving that an age distinction or other action falls within the exceptions outlined in §§ 110.12 and 110.13 is on the recipient of Federal financial assistance.
Even in the absence of a finding of discrimination, a recipient may take affirmative action to overcome the effects of conditions that resulted in limited participation in the recipient's program or activity on the basis of age.
If a recipient operating a program or activity provides special benefits to the elderly or to children, the use of age distinctions is presumed to be necessary to the normal operation of the program or activity, notwithstanding the provisions of § 110.12.
Any age distinction contained in regulations issued by ED is presumed to be necessary to the achievement of a statutory objective of the program or activity to which the regulations apply, notwithstanding the provisions of § 110.12.
Each ED recipient has primary responsibility for ensuring that its program or activity is in compliance with the Act and these regulations and shall take steps to eliminate violations of the Act. A recipient also has responsibility to maintain records, provide information, and to afford ED access to its records to the extent required for ED to determine whether the recipient is in compliance with the Act and these regulations.
If the recipient initially receiving funds makes the funds available to a subrecipient, the recipient shall notify the subrecipient of its obligations under the Act and these regulations.
Each recipient shall—
(a) Provide ED with information that ED determines is necessary to ascertain whether the recipient is in compliance with the Act and these regulations; and
(b) Permit reasonable access by ED to the books, records, accounts, reports, and other recipient facilities and sources of information to the extent ED determines is necessary to ascertain whether a recipient is in compliance with the Act and these regulations.
(a) Assurances. An applicant for Federal financial assistance to which these regulations apply shall sign a written assurance, on a form specified by ED, that the program or activity will be operated in compliance with these regulations. An applicant may incorporate this assurance by reference in subsequent applications to ED.
(b) Duration of obligation. (1) In the case of Federal financial assistance extended in the form of real property or to provide real property or structures on the property, the assurance will obligate the recipient or, in the case of a subsequent transfer, the transferee, for the period during which the real property or structures are used for the purpose for which Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits.
(2) In the case of Federal financial assistance extended to provide personal property, the assurance will obligate the recipient for the period during which it retains ownership or possession of the property.
(3) In all other cases the assurance will obligate the recipient for the period during which Federal financial assistance is extended.
(c) Covenants. (1) If Federal financial assistance is provided in the form of real property or interest in the property from ED, the instrument effecting or recording this transfer must contain a covenant running with the land to assure nondiscrimination for the period during which the real property is used for a purpose for which the Federal financial assistance is extended or for another purpose involving the provision of similar services or benefits.
(2) If no transfer of property is involved but property is purchased or improved with Federal financial assistance, the recipient shall agree to include the covenant described in paragraph (b)(2) of this section in the instrument effecting or recording any subsequent transfer of the property.
(3) If Federal financial assistance is provided in the form of real property or interest in the property from ED, the covenant must also include a condition coupled with a right to be reserved by ED to revert title to the property in the event of a breach of the covenant. If a transferee of real property proposes to mortgage or otherwise encumber the real property as security for financing construction of new, or improvement of existing, facilities on the property for the purposes for which the property was transferred, ED may, upon request of the transferee and if necessary to accomplish that financing and upon conditions that ED deems appropriate, agree to forbear the exercise of the right to revert title for as long as the lien of the mortgage or other encumbrance remains effective.
(a) As part of a compliance review under § 110.30 or a complaint investigation under § 110.31, ED may require a recipient employing the equivalent of 15 or more full-time employees to complete a written self-evaluation, in a manner specified by ED, of any age distinction imposed in its program or activity receiving Federal financial assistance from ED to assess the recipient's compliance with the Act.
(b) Whenever an assessment indicates a violation of the Act or these regulations, the recipient shall take corrective action.
(a) Designation of responsible employee. Each recipient shall designate at least one employee to coordinate its efforts to comply with and carry out its responsibilities under the Act and these regulations, including investigation of any complaints that the recipient receives alleging any actions that are prohibited by the Act and these regulations.
(b) Notice. A recipient shall notify its beneficiaries, in a continuing manner, of information regarding the provisions of the Act and these regulations. The notification must also identify the responsible employee by name or title, address, and telephone number.
(c) Grievance procedures. A recipient shall adopt and publish grievance procedures providing for prompt and equitable resolution of complaints alleging any action that would be prohibited by the Act or these regulations.
(a) ED may conduct compliance reviews, pre-award reviews, and other similar procedures that permit ED to investigate and correct violations of the Act and of these regulations. ED may conduct these reviews in the absence of a complaint against a recipient. The review may be as comprehensive as necessary to determine whether a violation of these regulations occurred.
(b) If a compliance review or pre-award review indicates a violation of the Act or these regulations, ED attempts to achieve voluntary compliance with the Act. If voluntary compliance cannot be achieved, ED arranges for enforcement as described in § 110.35.
(a) Any person, individually or as a member of a class or on behalf of others, may file a complaint with ED alleging discrimination prohibited by the Act or by these regulations based on an action occurring on or after July 1, 1979. A complainant shall file a complaint within 180 days from the date the complainant first had knowledge of the alleged discrimination. However, for good cause shown, ED may extend this time limit.
(b) ED attempts to facilitate the filing of complaints, if possible, by—
(1) Accepting as a complete complaint any written statement that identifies the parties involved and the date the complainant first had knowledge of the alleged violation, describes generally the action or practice complained of, and is signed by the complainant;
(2) Freely permitting a complainant to add information to the complaint to meet the requirements of a complete complaint;
(3) Widely disseminating information regarding the obligations of recipients under the Act and these regulations;
(4) Notifying the complainant and the recipient of their rights and obligations under the complaint procedure, including the right to have a representative at all stages of the complaint procedure; and
(5) Notifying the complainant and the recipient (or their representatives) of their right to contact ED for information and assistance regarding the complaint resolution process.
(c) A complaint is considered to be complete on the date that ED receives all the information necessary to process it, as described in paragraph (b)(1) of this section.
(d) ED returns to the complainant any complaint outside the jurisdiction of these regulations and states the reason or reasons why it is outside the jurisdiction of the regulations.
(a) ED promptly refers to the Federal Mediation and Conciliation Service or to the mediation agency designated by the Secretary of Health and Human Services, all complaints that—
(1) Fall within the jurisdiction of the Act and these regulations, unless the age distinction complained of is clearly within an exemption under § 110.2(b); and
(2) Contain all information necessary for further processing.
(b) Both the complainant and the recipient shall participate in the mediation process to the extent necessary to reach an agreement or to make an informed judgment that an agreement is not possible. The recipient and the complainant need not meet with the mediator at the same time, and the meeting may be conducted by telephone or other means of effective dialogue if a personal meeting between the party and the mediator is impractical.
(c) If the complainant and the recipient reach an agreement, the mediator shall prepare a written statement of the agreement and have the complainant and recipient sign it. The mediator shall send a copy of the agreement to ED. ED takes no further action on the complaint unless informed that the complainant or the recipient fails to comply with the agreement, at which time ED reinstates the complaint.
(d) The mediator shall protect the confidentiality of all information obtained in the course of the mediation process. No mediator shall testify in any adjudicative proceeding, produce any document, or otherwise disclose any information obtained in the course of the mediation process without prior approval of the head of the mediation agency.
(e) The mediation will proceed for a maximum of 60 days after a complaint is filed with ED. Mediation ends if—
(1) 60 days elapse from the time the complaint is received;
(2) Prior to the end of the 60-day period, an agreement is reached; or
(3) Prior to the end of the 60-day period, the mediator determines that agreement cannot be reached.
(f) The mediator shall return unresolved complaints to ED.
(a) Initial investigation. ED investigates complaints that are unresolved after mediation or reopened because of a violation of the mediation agreement. ED uses methods during the investigation to encourage voluntary resolution of the complaint, including discussions with the complainant and recipient to establish the facts and, if possible, resolve the complaint to the mutual satisfaction of the parties. ED may seek the assistance of any involved State, local, or other Federal agency.
(b) Formal investigation, conciliation, and hearing. If ED cannot resolve the complaint during the early stages of the investigation, ED completes the investigation of the complaint and makes formal findings. If the investigation indicates a violation of the Act or these regulations, ED attempts to achieve voluntary compliance. If ED cannot obtain voluntary compliance, ED begins enforcement as described in § 110.35.
A recipient may not engage in acts of intimidation or retaliation against any person who—
(a) Attempts to assert a right protected by the Act or these regulations; or
(b) Cooperates in any mediation, investigation, hearing, or other part of ED's investigation, conciliation, and enforcement process.
(a) ED may enforce the Act and these regulations under § 110.35(a) (1) or (2) through—
(1) Termination of, or refusal to grant or continue, a recipient's Federal financial assistance from ED for a program or activity in which the recipient has violated the Act or these regulations. The determination of the recipient's violation may be made only after a recipient has had an opportunity for a hearing on the record before an administrative law judge.
(2) Any other means authorized by law, including, but not limited to—
(i) Referral to the Department of Justice for proceedings to enforce any rights of the United States or obligations of the recipient created by the Act or these regulations; or
(ii) Use of any requirement of or referral to any Federal, State, or local government agency that will have the effect of correcting a violation of the Act or of these regulations.
(b) ED limits any termination or refusal under § 110.35(a)(1) to the particular recipient and to the particular program or activity ED finds in violation of the Act or these regulations. ED will not base any part of a termination on a finding with respect to any program or activity that does not receive Federal financial assistance from ED.
(c) ED takes no action under paragraph (a) of this section until—
(1) ED has advised the recipient of its failure to comply with the Act or with these regulations and has determined that voluntary compliance cannot be obtained; and
(2) Thirty days have elapsed after the Secretary has sent a written report of the circumstances and grounds of the action to the committees of the Congress having legislative jurisdiction over the program or activity involved. The Secretary files a report if any action is taken under § 110.35(a)(1).
(d) The Secretary also may defer granting new Federal financial assistance from ED to a recipient if termination proceedings in § 110.35(a)(1) are initiated.
(1) New Federal financial assistance from ED includes all assistance for which ED requires an application or approval, including renewal or continuation of existing activities, or authorization of new activities, during the deferral period. New Federal financial assistance from ED does not include increases in funding as a result of changed computation of formula awards or assistance approved prior to the initiation of termination proceedings.
(2) ED does not begin a deferral until the recipient has received a notice of an opportunity for a hearing under § 110.35(a)(1). A deferral may not continue for more than 60 days unless a hearing has begun within that time or the time for beginning the hearing has been extended by mutual consent of the recipient and ED. A deferral may not continue for more than 30 days after the close of the hearing, unless the hearing results in a finding against the recipient.
(a) The following ED procedural provisions applicable to Title VI of the Civil Rights Act of 1964 also apply to ED's enforcement of these regulations: 34 CFR 100.9 and 100.10 and 34 CFR part 101.
(b) Action taken under section 305 of the Act is subject to judicial review as provided by section 306 of the Act.
(a) If the Secretary withholds funds from a recipient under these regulations, the Secretary may disburse the funds withheld directly to an alternate recipient: any public or nonprofit private organization or agency, or State or political subdivision of the State.
(b) The Secretary requires any alternate recipient to demonstrate—
(1) The ability to comply with the Act and these regulations; and
(2) The ability to achieve the goals of the Federal statute authorizing the Federal financial assistance.
If ED finds that a recipient has discriminated on the basis of age, the recipient shall take any remedial action that ED may require to overcome the effects of the discrimination. If another recipient exercises control over the recipient that has discriminated or if the entity that has discriminated is a subrecipient, both recipients or recipient and subrecipient may be required to take remedial action.
(a) A complainant may file a civil action following the exhaustion of administrative remedies under the Act. Administrative remedies are exhausted if—
(1) One hundred eighty days have elapsed since the complainant filed the complaint with ED, and ED has made no finding with regard to the complaint; or
(2) ED issues any finding in favor of the recipient.
(b) If ED fails to make a finding within 180 days or issues a finding in favor of the recipient, ED promptly—
(1) Advises the complainant of this fact;
(2) Advises the complainant of his or her right to bring a civil action for injunctive relief; and
(3) Informs the complainant—
(i) That a civil action can be brought only in a United States district court for the district in which the recipient is found or transacts business;
(ii) That a complainant prevailing in a civil action has the right to be awarded the costs of the action, including reasonable attorney's fees, but that these costs must be demanded in the complaint filed with the court;
(iii) That before commencing the action, the complainant shall give 30 days notice by registered mail to the Secretary, the Secretary of Health and Human Services, the Attorney General of the United States, and the recipient;
(iv) That the notice shall state the alleged violation of the Act, the relief requested, the court in which the action will be brought, and whether or not attorney's fees are demanded in the event the complainant prevails; and
(v) That the complainant may not bring an action if the same alleged violation of the Act by the same recipient is the subject of a pending action in any court of the United States.
Section 200.1 also issued under 20 U.S.C. 6311(b)(1).
Section 200.11 also issued under 20 U.S.C. 6311(c)(2), (g)(2)(D), (h)(1)(C)(xii), (h)(2)(C), 6312(c)(3), 9622(d)(1).
Section 200.25 also issued under 20 U.S.C. 6314.
Section 200.26 also issued under 20 U.S.C. 6314.
Section 200.29 also issued under 20 U.S.C. 1413(a)(2)(D), 6311(g)(2)(E), 6314, 6396(b)(4), 7425(c), 7703(d).
Section 200.61 also issued under 20 U.S.C. 6312(e).
Section 200.62 also issued under 20 U.S.C. 6320(a).
Section 200.63 also issued under 20 U.S.C. 6320(b).
Section 200.64 also issued under 20 U.S.C. 6320.
Section 200.65 also issued under 20 U.S.C. 6320(a)(1)(B).
Section 200.68 also issued under 20 U.S.C. 6320(a)(3)(B).
Section 200.73 also issued under 20 U.S.C. 6332(c), 6336(f)(3), 7221e(c).
Section 200.77 also issued under 20 U.S.C. 6313(c)(3)-(5), 6318(a)(3), 6320; 42 U.S.C. 11432(g)(1)(J)(ii)-(iii), 11433(b)(1).
Section 200.78 also issued under 20 U.S.C. 6313(a)(5)(B), (c), 6333(c)(2).
Section 200.79 also issued under 20 U.S.C. 6313(b)(1)(D), (c)(2)(B), 6321(d).
Section 200.81 also issued under 20 U.S.C. 6391-6399.
Section 200.83 also issued under 20 U.S.C. 6396.
Section 200.85 also issued under 20 U.S.C. 6398.
Section 200.87 also issued under 20 U.S.C. 7881(b)(1)(A).
Section 200.88 also issued under 20 U.S.C. 6321(d).
Section 200.89 also issued under 20 U.S.C. 6391-6399, 6571, 18 U.S.C. 1001.
Section 200.90 also issued under 20 U.S.C. 6432, 6454, 6472.
Section 200.100 also issued under 20 U.S.C. 6303, 6303b, 6304.
Section 200.103 also issued under 20 U.S.C. 6315(c)(1)(A)(ii), 6571(a), 8101(4).
(a) Academic standards in general. A State must adopt challenging academic content standards and aligned academic achievement standards that will be used by the State, its local educational agencies (LEAs), and its schools to carry out this subpart. These academic standards must—
(1) Be the same academic content standards and aligned academic achievement standards that the State applies to all public schools and public school students in the State, including the public schools and public school students served under this subpart, except as provided in paragraph (d) of this section, which applies only to the State's academic achievement standards;
(2) With respect to the academic achievement standards, include the same knowledge, skills, and levels of achievement expected of all public school students in the State, except as provided in paragraph (d) of this section; and
(3) Include at least mathematics, reading/language arts, and science, and may include other subjects determined by the State.
(b) Academic content standards. (1) The challenging academic content standards required under paragraph (a) of this section must—
(i) Specify what all students are expected to know and be able to do;
(ii) Contain coherent and rigorous content; and
(iii) Encourage the teaching of advanced skills.
(2) A State's academic content standards may—
(i) Be grade specific; or,
(ii) Cover more than one grade if grade-level content expectations are provided for each of grades 3 through 8.
(3) At the high school level, the academic content standards must define the knowledge and skills that all high school students are expected to know and be able to do in at least reading/language arts, mathematics, and science, irrespective of course titles or years completed.
(c) Academic achievement standards. (1) The challenging academic achievement standards required under paragraph (a) of this section must—
(i) Be aligned with the State's challenging academic content standards and with entrance requirements for credit-bearing coursework in the system of public higher education in the State and relevant State career and technical education standards; and
(ii) Include the following components for each content area:
(A) Not less than three achievement levels that describe at least—
(1) Two levels of high achievement—proficient and advanced—that determine how well students are mastering the material in the State's academic content standards; and
(2) A third level of achievement—basic—to provide complete information about the progress of lower-achieving students toward mastering the proficient and advanced levels of achievement.
(B) Descriptions of the competencies associated with each achievement level.
(C) Assessment scores (“cut scores”) that differentiate among the achievement levels as specified in paragraph (c)(1)(ii)(A) of this section, and a description of the rationale and procedures used to determine each achievement level.
(2) A State must develop academic achievement standards for every grade and subject assessed, even if the State's academic content standards cover more than one grade.
(d) Alternate academic achievement standards. For students under section 602(3) of the Individuals with Disabilities Education Act (IDEA) with the most significant cognitive disabilities who take an alternate assessment, a State may, through a documented and validated standards-setting process, define alternate academic achievement standards, provided those standards—
(1) Are aligned with the State's challenging academic content standards;
(2) Promote access to the general curriculum, consistent with the IDEA;
(3) Reflect professional judgment as to the highest possible standards achievable by such students;
(4) Are designated in the individualized education program developed under section 614(d)(3) of the IDEA for each such student as the academic achievement standards that will be used for the student; and
(5) Are aligned to ensure that a student who meets the alternate academic achievement standards is on track to pursue postsecondary education or employment, consistent with the purposes of the Rehabilitation Act of 1973, as amended by the Workforce Innovation and Opportunity Act, as in effect on July 22, 2014, and § 200.2(b)(3)(ii)(B)(2).
(e) Modified academic achievement standards. A State may not define or implement for use under this subpart any alternate or modified academic achievement standards for children with disabilities under section 602(3) of the IDEA that are not alternate academic achievement standards that meet the requirements of paragraph (d) of this section.
(f) English language proficiency standards. A State must adopt English language proficiency standards that—
(1) Are derived from the four recognized domains of speaking, listening, reading, and writing;
(2) Address the different proficiency levels of English learners; and
(3) Are aligned with the State's challenging academic content standards and aligned academic achievement standards.
(g) Subjects without standards. If an LEA serves students under subpart A of this part in subjects for which a State has not developed academic standards, the State must describe in its State plan a strategy for ensuring that those students are taught the same knowledge and skills and held to the same expectations in those subjects as are all other students.
(h) Other subjects with standards. If a State has developed standards in other subjects for all students, the State must apply those standards to students participating under subpart A of this part.
(a)(1) Each State, in consultation with its LEAs, must implement a system of high-quality, yearly student academic assessments that include, at a minimum, academic assessments in mathematics, reading/language arts, and science.
(2)(i) The State may also measure the achievement of students in other academic subjects in which the State has adopted challenging State academic standards.
(ii) If a State has developed assessments in other subjects for all students, the State must include students participating under this subpart in those assessments.
(b) The assessments required under this section must:
(1)(i) Except as provided in §§ 200.3, 200.5(b), and 200.6(c) and section 1204 of the Elementary and Secondary Education Act, as amended by the Every Student Succeeds Act (hereinafter “the Act”), be the same assessments used to measure the achievement of all students; and
(ii) Be administered to all students consistent with § 200.5(a), including the following highly-mobile student populations as defined in paragraph (b)(11) of this section:
(A) Students with status as a migratory child.
(B) Students with status as a homeless child or youth.
(C) Students with status as a child in foster care.
(D) Students with status as a student with a parent who is a member of the armed forces on active duty or serves on full-time National Guard duty;
(2)(i) Be designed to be valid and accessible for use by all students, including students with disabilities and English learners; and
(ii) Be developed, to the extent practicable, using the principles of universal design for learning. For the purposes of this section, “universal design for learning” means a scientifically valid framework for guiding educational practice that—
(A) Provides flexibility in the ways information is presented, in the ways students respond or demonstrate knowledge and skills, and in the ways students are engaged; and
(B) Reduces barriers in instruction, provides appropriate accommodations, supports, and challenges, and maintains high achievement expectations for all students, including students with disabilities and English learners;
(3)(i)(A) Be aligned with challenging academic content standards and aligned academic achievement standards (hereinafter “challenging State academic standards”) as defined in section 1111(b)(1)(A) of the Act; and
(B) Provide coherent and timely information about student attainment of those standards and whether a student is performing at the grade in which the student is enrolled; and
(ii)(A)(1) Be aligned with the challenging State academic content standards; and
(2) Address the depth and breadth of those standards; and
(B)(1) Measure student performance based on challenging State academic achievement standards that are aligned with entrance requirements for credit-bearing coursework in the system of public higher education in the State and relevant State career and technical education standards consistent with section 1111(b)(1)(D) of the Act; or
(2) With respect to alternate assessments for students with the most significant cognitive disabilities, measure student performance based on alternate academic achievement standards defined by the State consistent with section 1111(b)(1)(E) of the Act that reflect professional judgment as to the highest possible standards achievable by such students to ensure that a student who meets the alternate academic achievement standards is on track to pursue postsecondary education or competitive integrated employment, consistent with the purposes of the Rehabilitation Act of 1973, as amended by the Workforce Innovation and Opportunity Act, as in effect on July 22, 2014;
(4)(i) Be valid, reliable, and fair for the purposes for which the assessments are used; and
(ii) Be consistent with relevant, nationally recognized professional and technical testing standards;
(5) Be supported by evidence that—
(i) The assessments are of adequate technical quality—
(A) For each purpose required under the Act; and
(B) Consistent with the requirements of this section; and
(ii) For each assessment administered to meet the requirements of this subpart, is made available to the public, including on the State's Web site;
(6) Be administered in accordance with the frequency described in § 200.5(a);
(7) Involve multiple up-to-date measures of student academic achievement, including measures that assess higher-order thinking skills—such as critical thinking, reasoning, analysis, complex problem solving, effective communication, and understanding of challenging content—as defined by the State. These measures may—
(i) Include valid and reliable measures of student academic growth at all achievement levels to help ensure that the assessment results could be used to improve student instruction; and
(ii) Be partially delivered in the form of portfolios, projects, or extended performance tasks;
(8) Objectively measure academic achievement, knowledge, and skills without evaluating or assessing personal or family beliefs and attitudes, except that this provision does not preclude the use of—
(i) Constructed-response, short answer, or essay questions; or
(ii) Items that require a student to analyze a passage of text or to express opinions;
(9) Provide for participation in the assessments of all students in the grades assessed consistent with §§ 200.5(a) and 200.6;
(10) At the State's discretion, be administered through—
(i) A single summative assessment; or
(ii) Multiple statewide interim assessments during the course of the academic year that result in a single summative score that provides valid, reliable, and transparent information on student achievement and, at the State's discretion, student growth, consistent with paragraph (b)(4) of this section;
(11)(i) Consistent with sections 1111(b)(2)(B)(xi) and 1111(h)(1)(C)(ii) of the Act, enable results to be disaggregated within each State, LEA, and school by—
(A) Gender;
(B) Each major racial and ethnic group;
(C) Status as an English learner as defined in section 8101(20) of the Act;
(D) Status as a migratory child as defined in section 1309(3) of the Act;
(E) Children with disabilities as defined in section 602(3) of the Individuals with Disabilities Education Act (IDEA) as compared to all other students;
(F) Economically disadvantaged students as compared to students who are not economically disadvantaged;
(G) Status as a homeless child or youth as defined in section 725(2) of title VII, subtitle B of the McKinney-Vento Homeless Assistance Act, as amended;
(H) Status as a child in foster care. “Foster care” means 24-hour substitute care for children placed away from their parents and for whom the agency under title IV-E of the Social Security Act has placement and care responsibility. This includes, but is not limited to, placements in foster family homes, foster homes of relatives, group homes, emergency shelters, residential facilities, child care institutions, and preadoptive homes. A child is in foster care in accordance with this definition regardless of whether the foster care facility is licensed and payments are made by the State, tribal, or local agency for the care of the child, whether adoption subsidy payments are being made prior to the finalization of an adoption, or whether there is Federal matching of any payments that are made; and
(I) Status as a student with a parent who is a member of the armed forces on active duty or serves on full-time National Guard duty, where “armed forces,” “active duty,” and “full-time National Guard duty” have the same meanings given them in 10 U.S.C. 101(a)(4), 101(d)(1), and 101(d)(5).
(ii) Disaggregation is not required in the case of a State, LEA, or school in which the number of students in a subgroup is insufficient to yield statistically reliable information or the results would reveal personally identifiable information about an individual student.
(12) Produce individual student reports consistent with § 200.8(a); and
(13) Enable itemized score analyses to be produced and reported to LEAs and schools consistent with § 200.8(b).
(c)(1) At its discretion, a State may administer the assessments required under this section in the form of computer-adaptive assessments if such assessments meet the requirements of section 1111(b)(2)(J) of the Act and this section. A computer-adaptive assessment—
(i) Must, except as provided in § 200.6(c)(7)(iii), measure a student's academic proficiency based on the challenging State academic standards for the grade in which the student is enrolled and growth toward those standards; and
(ii) May measure a student's academic proficiency and growth using items above or below the student's grade level.
(2) If a State administers a computer-adaptive assessment, the determination under paragraph (b)(3)(i)(B) of this section of a student's academic proficiency for the grade in which the student is enrolled must be reported on all reports required by § 200.8 and section 1111(h) of the Act.
(d) A State must submit evidence for peer review under section 1111(a)(4) of the Act that its assessments under this section and §§ 200.3, 200.4, 200.5(b), 200.6(c), 200.6(f), 200.6(h), and 200.6(j) meet all applicable requirements.
(e) Information provided to parents under section 1111(b)(2) of the Act must—
(1) Be in an understandable and uniform format;
(2) Be, to the extent practicable, written in a language that parents can understand or, if it is not practicable to provide written translations to a parent with limited English proficiency, be orally translated for such parent; and
(3) Be, upon request by a parent who is an individual with a disability as defined by the Americans with Disabilities Act (ADA), as amended, provided in an alternative format accessible to that parent.
(a) In general. (1) A State, at the State's discretion, may permit an LEA to administer a nationally recognized high school academic assessment in each of reading/language arts, mathematics, or science, approved in accordance with paragraph (b) of this section, in lieu of the respective statewide assessment under § 200.5(a)(1)(i)(B) and (a)(1)(ii)(C) if such assessment meets all requirements of this section.
(2) An LEA must administer the same locally selected, nationally recognized academic assessment to all high school students in the LEA consistent with the requirements in § 200.5(a)(1)(i)(B) and (a)(1)(ii)(C), except for students with the most significant cognitive disabilities who are assessed on an alternate assessment aligned with alternate academic achievement standards, consistent with § 200.6(c).
(b) State approval. If a State chooses to allow an LEA to administer a nationally recognized high school academic assessment under paragraph (a) of this section, the State must:
(1) Establish and use technical criteria to determine if the assessment—
(i) Is aligned with the challenging State academic standards;
(ii) Addresses the depth and breadth of those standards;
(iii) Is equivalent to or more rigorous than the statewide assessments under § 200.5(a)(1)(i)(B) and (a)(1)(ii)(C), as applicable, with respect to—
(A) The coverage of academic content;
(B) The difficulty of the assessment;
(C) The overall quality of the assessment; and
(D) Any other aspects of the assessment that the State may establish in its technical criteria;
(iv) Meets all requirements under § 200.2(b), except for § 200.2(b)(1), and ensures that all high school students in the LEA are assessed consistent with §§ 200.5(a) and 200.6; and
(v) Produces valid and reliable data on student academic achievement with respect to all high school students and each subgroup of high school students in the LEA that—
(A) Are comparable to student academic achievement data for all high school students and each subgroup of high school students produced by the statewide assessment at each academic achievement level;
(B) Are expressed in terms consistent with the State's academic achievement standards under section 1111(b)(1)(A) of the Act; and
(C) Provide unbiased, rational, and consistent differentiation among schools within the State for the purpose of the State-determined accountability system under section 1111(c) of the Act, including calculating the Academic Achievement indicator under section 1111(c)(4)(B)(i) of the Act and annually meaningfully differentiating between schools under section 1111(c)(4)(C) of the Act;
(2) Before approving any nationally recognized high school academic assessment for use by an LEA in the State—
(i) Ensure that the use of appropriate accommodations under § 200.6(b) and (f) does not deny a student with a disability or an English learner—
(A) The opportunity to participate in the assessment; and
(B) Any of the benefits from participation in the assessment that are afforded to students without disabilities or students who are not English learners; and
(ii) Submit evidence to the Secretary in accordance with the requirements for peer review under section 1111(a)(4) of the Act demonstrating that any such assessment meets the requirements of this section; and
(3)(i) Approve an LEA's request to use a locally selected, nationally recognized high school academic assessment that meets the requirements of this section;
(ii) Disapprove an LEA's request if it does not meet the requirements of this section; or
(iii) Revoke approval for good cause.
(c) LEA applications. (1) Before an LEA requests approval from the State to use a locally selected, nationally recognized high school academic assessment, the LEA must—
(i) Notify all parents of high school students it serves—
(A) That the LEA intends to request approval from the State to use a locally selected, nationally recognized high school academic assessment in place of the statewide academic assessment under § 200.5(a)(1)(i)(B) and (a)(1)(ii)(C), as applicable;
(B) Of how parents and, as appropriate, students, may provide meaningful input regarding the LEA's request; and
(C) Of any effect of such request on the instructional program in the LEA; and
(ii) Provide an opportunity for meaningful consultation to all public charter schools whose students would be included in such assessments.
(2) As part of requesting approval to use a locally selected, nationally recognized high school academic assessment, an LEA must—
(i) Update its LEA plan under section 1112 or section 8305 of the Act, including to describe how the request was developed consistent with all requirements for consultation under sections 1112 and 8538 of the Act; and
(ii) If the LEA is a charter school under State law, provide an assurance that the use of the assessment is consistent with State charter school law and it has consulted with the authorized public chartering agency.
(3) Upon approval, the LEA must notify all parents of high school students it serves that the LEA received approval and will use such locally selected, nationally recognized high school academic assessment instead of the statewide academic assessment under § 200.5(a)(1)(i)(B) and (a)(1)(ii)(C), as applicable.
(4) In each subsequent year following approval in which the LEA elects to administer a locally selected, nationally recognized high school academic assessment, the LEA must notify—
(i) The State of its intention to continue administering such assessment; and
(ii) Parents of which assessment the LEA will administer to students to meet the requirements of § 200.5(a)(1)(i)(B) and (a)(1)(ii)(C), as applicable, at the beginning of the school year.
(5) The notices to parents under this paragraph (c) of this section must be consistent with § 200.2(e).
(d) Definition. “Nationally recognized high school academic assessment” means an assessment of high school students' knowledge and skills that is administered in multiple States and is recognized by institutions of higher education in those or other States for the purposes of entrance or placement into courses in postsecondary education or training programs.
(a) If a State provides satisfactory evidence to the Secretary that neither the State educational agency (SEA) nor any other State government official, agency, or entity has sufficient authority under State law to adopt academic content standards, student academic achievement standards, and academic assessments applicable to all students enrolled in the State's public schools, the State may meet the requirements under §§ 200.1 and 200.2 by—
(1) Adopting academic standards and academic assessments that meet the requirements of §§ 200.1 and 200.2 on a Statewide basis and limiting their applicability to students served under subpart A of this part; or
(2) Adopting and implementing policies that ensure that each LEA in the State that receives funds under subpart A of this part will adopt academic standards and academic assessments aligned with those standards that—
(i) Meet the requirements in §§ 200.1 and 200.2; and
(ii) Are applicable to all students served by the LEA.
(b) A State that qualifies under paragraph (a) of this section must—
(1) Establish technical criteria for evaluating whether each LEA's—
(i) Academic content and student academic achievement standards meet the requirements in § 200.1; and
(ii) Academic assessments meet the requirements in § 200.2, particularly regarding validity and reliability, technical quality, alignment with the LEA's academic standards, and inclusion of all students in the grades assessed;
(2) Review and approve each LEA's academic standards and academic assessments to ensure that they—
(i) Meet or exceed the State's technical criteria; and
(ii) For purposes of this section—
(A) Are equivalent to one another in their content coverage, difficulty, and quality;
(B) Have comparable validity and reliability with respect to groups of students described in section 1111(c)(2) of the Act; and
(C) Provide unbiased, rational, and consistent determinations of the annual progress of schools within the State; and
(3) Be able to aggregate, with confidence, data from local assessments to make accountability determinations under section 1111(c) of the Act.
(a) Frequency. (1) A State must administer the assessments required under § 200.2 annually as follows:
(i) With respect to both the reading/language arts and mathematics assessments—
(A) In each of grades 3 through 8; and
(B) At least once in grades 9 through 12.
(ii) With respect to science assessments, not less than one time during each of—
(A) Grades 3 through 5;
(B) Grades 6 through 9; and
(C) Grades 10 through 12.
(2) A State must administer the English language proficiency assessment required under § 200.6(h) annually to all English learners in schools served by the State in all grades in which there are English learners, kindergarten through grade 12.
(3) With respect to any other subject chosen by a State, the State may administer the assessments at its discretion.
(b) Middle school mathematics exception. A State that administers an end-of-course mathematics assessment to meet the requirements under paragraph (a)(1)(i)(B) of this section may exempt an eighth-grade student from the mathematics assessment typically administered in eighth grade under paragraph (a)(1)(i)(A) of this section if—
(1) The student instead takes the end-of-course mathematics assessment the State administers to high school students under paragraph (a)(1)(i)(B) of this section;
(2) The student's performance on the high school assessment is used in the year in which the student takes the assessment for purposes of measuring academic achievement under section 1111(c)(4)(B)(i) of the Act and participation in assessments under section 1111(c)(4)(E) of the Act;
(3) In high school—
(i) The student takes a State-administered end-of-course assessment or nationally recognized high school academic assessment as defined in § 200.3(d) in mathematics that—
(A) Is more advanced than the assessment the State administers under paragraph (a)(1)(i)(B) of this section; and
(B) Provides for appropriate accommodations consistent with § 200.6(b) and (f); and
(ii) The student's performance on the more advanced mathematics assessment is used for purposes of measuring academic achievement under section 1111(c)(4)(B)(i) of the Act and participation in assessments under section 1111(c)(4)(E) of the Act; and
(4) The State describes in its State plan, with regard to this exception, its strategies to provide all students in the State the opportunity to be prepared for and to take advanced mathematics coursework in middle school.
(a) Students with disabilities in general. (1) A State must include students with disabilities in all assessments under section 1111(b)(2) of the Act, with appropriate accommodations consistent with paragraphs (b), (f)(1), and (h)(4) of this section. For purposes of this section, students with disabilities, collectively, are—
(i) All children with disabilities as defined under section 602(3) of the IDEA;
(ii) Students with the most significant cognitive disabilities who are identified from among the students in paragraph (a)(1)(i) of this section; and
(iii) Students with disabilities covered under other acts, including—
(A) Section 504 of the Rehabilitation Act of 1973, as amended; and
(B) Title II of the ADA, as amended.
(2)(i) Except as provided in paragraph (a)(2)(ii)(B) of this section, a student with a disability under paragraph (a)(1) of this section must be assessed with an assessment aligned with the challenging State academic standards for the grade in which the student is enrolled.
(ii) A student with the most significant cognitive disabilities under paragraph (a)(1)(ii) of this section may be assessed with—
(A) The general assessment under paragraph (a)(2)(i) of this section; or
(B) If a State has adopted alternate academic achievement standards permitted under section 1111(b)(1)(E) of the Act for students with the most significant cognitive disabilities, an alternate assessment under paragraph (c) of this section aligned with the challenging State academic content standards for the grade in which the student is enrolled and the State's alternate academic achievement standards.
(b) Appropriate accommodations for students with disabilities. (1) A State's academic assessment system must provide, for each student with a disability under paragraph (a) of this section, the appropriate accommodations, such as interoperability with, and ability to use, assistive technology devices consistent with nationally recognized accessibility standards, that are necessary to measure the academic achievement of the student consistent with paragraph (a)(2) of this section, as determined by—
(i) For each student under paragraph (a)(1)(i) and (ii) of this section, the student's IEP team;
(ii) For each student under paragraph (a)(1)(iii)(A) of this section, the student's placement team; or
(iii) For each student under paragraph (a)(1)(iii)(B) of this section, the individual or team designated by the LEA to make these decisions.
(2) A State must—
(i)(A) Develop appropriate accommodations for students with disabilities;
(B) Disseminate information and resources to, at a minimum, LEAs, schools, and parents; and
(C) Promote the use of such accommodations to ensure that all students with disabilities are able to participate in academic instruction and assessments consistent with paragraph (a)(2) of this section and with § 200.2(e); and
(ii) Ensure that general and special education teachers, paraprofessionals, teachers of English learners, specialized instructional support personnel, and other appropriate staff receive necessary training to administer assessments and know how to administer assessments, including, as necessary, alternate assessments under paragraphs (c) and (h)(5) of this section, and know how to make use of appropriate accommodations during assessment for all students with disabilities, consistent with section 1111(b)(2)(B)(vii)(III) of the Act.
(3) A State must ensure that the use of appropriate accommodations under this paragraph (b) of this section does not deny a student with a disability—
(i) The opportunity to participate in the assessment; and
(ii) Any of the benefits from participation in the assessment that are afforded to students without disabilities.
(c) Alternate assessments aligned with alternate academic achievement standards for students with the most significant cognitive disabilities. (1) If a State has adopted alternate academic achievement standards permitted under section 1111(b)(1)(E) of the Act for students with the most significant cognitive disabilities, the State must measure the achievement of those students with an alternate assessment that—
(i) Is aligned with the challenging State academic content standards under section 1111(b)(1) of the Act for the grade in which the student is enrolled;
(ii) Yields results relative to the alternate academic achievement standards; and
(iii) At the State's discretion, provides valid and reliable measures of student growth at all alternate academic achievement levels to help ensure that the assessment results can be used to improve student instruction.
(2) For each subject for which assessments are administered under § 200.2(a)(1), the total number of students assessed in that subject using an alternate assessment aligned with alternate academic achievement standards under paragraph (c)(1) of this section may not exceed 1.0 percent of the total number of students in the State who are assessed in that subject.
(3) A State must—
(i) Not prohibit an LEA from assessing more than 1.0 percent of its assessed students in any subject for which assessments are administered under § 200.2(a)(1) with an alternate assessment aligned with alternate academic achievement standards;
(ii) Require that an LEA submit information justifying the need of the LEA to assess more than 1.0 percent of its assessed students in any such subject with such an alternate assessment;
(iii) Provide appropriate oversight, as determined by the State, of an LEA that is required to submit information to the State; and
(iv) Make the information submitted by an LEA under paragraph (c)(3)(ii) of this section publicly available, provided that such information does not reveal personally identifiable information about an individual student.
(4) If a State anticipates that it will exceed the cap under paragraph (c)(2) of this section with respect to any subject for which assessments are administered under § 200.2(a)(1) in any school year, the State may request that the Secretary waive the cap for the relevant subject, pursuant to section 8401 of the Act, for one year. Such request must—
(i) Be submitted at least 90 days prior to the start of the State's testing window for the relevant subject;
(ii) Provide State-level data, from the current or previous school year, to show—
(A) The number and percentage of students in each subgroup of students defined in section 1111(c)(2)(A), (B), and (D) of the Act who took the alternate assessment aligned with alternate academic achievement standards; and
(B) The State has measured the achievement of at least 95 percent of all students and 95 percent of students in the children with disabilities subgroup under section 1111(c)(2)(C) of the Act who are enrolled in grades for which the assessment is required under § 200.5(a);
(iii) Include assurances from the State that it has verified that each LEA that the State anticipates will assess more than 1.0 percent of its assessed students in any subject for which assessments are administered under § 200.2(a)(1) in that school year using an alternate assessment aligned with alternate academic achievement standards—
(A) Followed each of the State's guidelines under paragraph (d) of this section, except paragraph (d)(6); and
(B) Will address any disproportionality in the percentage of students in any subgroup under section 1111(c)(2)(A), (B), or (D) of the Act taking an alternate assessment aligned with alternate academic achievement standards;
(iv) Include a plan and timeline by which—
(A) The State will improve the implementation of its guidelines under paragraph (d) of this section, including by reviewing and, if necessary, revising its definition under paragraph (d)(1), so that the State meets the cap in paragraph (c)(2) of this section in each subject for which assessments are administered under § 200.2(a)(1) in future school years;
(B) The State will take additional steps to support and provide appropriate oversight to each LEA that the State anticipates will assess more than 1.0 percent of its assessed students in a given subject in a school year using an alternate assessment aligned with alternate academic achievement standards to ensure that only students with the most significant cognitive disabilities take an alternate assessment aligned with alternate academic achievement standards. The State must describe how it will monitor and regularly evaluate each such LEA to ensure that the LEA provides sufficient training such that school staff who participate as members of an IEP team or other placement team understand and implement the guidelines established by the State under paragraph (d) of this section so that all students are appropriately assessed; and
(C) The State will address any disproportionality in the percentage of students taking an alternate assessment aligned with alternate academic achievement standards as identified through the data provided in accordance with paragraph (c)(4)(ii)(A) of this section; and
(v) If the State is requesting to extend a waiver for an additional year, meet the requirements in paragraph (c)(4)(i) through (iv) of this section and demonstrate substantial progress towards achieving each component of the prior year's plan and timeline required under paragraph (c)(4)(iv) of this section.
(5) A State must report separately to the Secretary, under section 1111(h)(5) of the Act, the number and percentage of children with disabilities under paragraph (a)(1)(i) and (ii) of this section taking—
(i) General assessments described in § 200.2;
(ii) General assessments with accommodations; and
(iii) Alternate assessments aligned with alternate academic achievement standards under paragraph (c) of this section.
(6) A State may not develop, or implement for use under this part, any alternate or modified academic achievement standards that are not alternate academic achievement standards for students with the most significant cognitive disabilities that meet the requirements of section 1111(b)(1)(E) of the Act.
(7) For students with the most significant cognitive disabilities, a computer-adaptive alternate assessment aligned with alternate academic achievement standards must—
(i) Assess a student's academic achievement based on the challenging State academic content standards for the grade in which the student is enrolled;
(ii) Meet the requirements for alternate assessments aligned with alternate academic achievement standards under paragraph (c) of this section; and
(iii) Meet the requirements in § 200.2, except that the alternate assessment need not measure a student's academic proficiency based on the challenging State academic achievement standards for the grade in which the student is enrolled and growth toward those standards.
(d) State guidelines for students with the most significant cognitive disabilities. If a State adopts alternate academic achievement standards for students with the most significant cognitive disabilities and administers an alternate assessment aligned with those standards, the State must—
(1) Establish, consistent with section 612(a)(16)(C) of the IDEA, and monitor implementation of clear and appropriate guidelines for IEP teams to apply in determining, on a case-by-case basis, which students with the most significant cognitive disabilities will be assessed based on alternate academic achievement standards. Such guidelines must include a State definition of “students with the most significant cognitive disabilities” that addresses factors related to cognitive functioning and adaptive behavior, such that—
(i) The identification of a student as having a particular disability as defined in the IDEA or as an English learner does not determine whether a student is a student with the most significant cognitive disabilities;
(ii) A student with the most significant cognitive disabilities is not identified solely on the basis of the student's previous low academic achievement, or the student's previous need for accommodations to participate in general State or districtwide assessments; and
(iii) A student is identified as having the most significant cognitive disabilities because the student requires extensive, direct individualized instruction and substantial supports to achieve measurable gains on the challenging State academic content standards for the grade in which the student is enrolled;
(2) Provide to IEP teams a clear explanation of the differences between assessments based on grade-level academic achievement standards and those based on alternate academic achievement standards, including any effects of State and local policies on a student's education resulting from taking an alternate assessment aligned with alternate academic achievement standards, such as how participation in such assessments may delay or otherwise affect the student from completing the requirements for a regular high school diploma;
(3) Ensure that parents of students selected to be assessed using an alternate assessment aligned with alternate academic achievement standards under the State's guidelines in paragraph (d) of this section are informed, consistent with § 200.2(e), that their child's achievement will be measured based on alternate academic achievement standards, and how participation in such assessments may delay or otherwise affect the student from completing the requirements for a regular high school diploma;
(4) Not preclude a student with the most significant cognitive disabilities who takes an alternate assessment aligned with alternate academic achievement standards from attempting to complete the requirements for a regular high school diploma;
(5) Promote, consistent with requirements under the IDEA, the involvement and progress of students with the most significant cognitive disabilities in the general education curriculum that is based on the State's academic content standards for the grade in which the student is enrolled;
(6) Incorporate the principles of universal design for learning, to the extent feasible, in any alternate assessments aligned with alternate academic achievement standards that the State administers consistent with § 200.2(b)(2)(ii); and
(7) Develop, disseminate information on, and promote the use of appropriate accommodations consistent with paragraph (b) of this section to ensure that a student with significant cognitive disabilities who does not meet the criteria in paragraph (a)(1)(ii) of this section—
(i) Participates in academic instruction and assessments for the grade in which the student is enrolled; and
(ii) Is assessed based on challenging State academic standards for the grade in which the student is enrolled.
(e) Definitions with respect to students with disabilities. Consistent with 34 CFR 300.5, “assistive technology device” means any item, piece of equipment, or product system, whether acquired commercially off the shelf, modified, or customized, that is used to increase, maintain, or improve the functional capabilities of a child with a disability. The term does not include a medical device that is surgically implanted, or the replacement of such device.
(f) English learners in general. (1) Consistent with § 200.2 and paragraphs (g) and (i) of this section, a State must assess English learners in its academic assessments required under § 200.2 in a valid and reliable manner that includes—
(i) Appropriate accommodations with respect to a student's status as an English learner and, if applicable, the student's status under paragraph (a) of this section. A State must—
(A) Develop appropriate accommodations for English learners;
(B) Disseminate information and resources to, at a minimum, LEAs, schools, and parents; and
(C) Promote the use of such accommodations to ensure that all English learners are able to participate in academic instruction and assessments; and
(ii) To the extent practicable, assessments in the language and form most likely to yield accurate and reliable information on what those students know and can do to determine the students' mastery of skills in academic content areas until the students have achieved English language proficiency consistent with the standardized, statewide exit procedures in section 3113(b)(2) of the Act.
(2) To meet the requirements under paragraph (f)(1) of this section, the State must—
(i) Ensure that the use of appropriate accommodations under paragraph (f)(1)(i) of this section and, if applicable, under paragraph (b) of this section does not deny an English learner—
(A) The opportunity to participate in the assessment; and
(B) Any of the benefits from participation in the assessment that are afforded to students who are not English learners; and
(ii) In its State plan, consistent with section 1111(a) of the Act—
(A) Provide its definition for “languages other than English that are present to a significant extent in the participating student population,” consistent with paragraph (f)(4) of this section, and identify the specific languages that meet that definition;
(B) Identify any existing assessments in languages other than English, and specify for which grades and content areas those assessments are available;
(C) Indicate the languages identified under paragraph (f)(2)(ii)(A) of this section for which yearly student academic assessments are not available and are needed; and
(D) Describe how it will make every effort to develop assessments, at a minimum, in languages other than English that are present to a significant extent in the participating student population including by providing—
(1) The State's plan and timeline for developing such assessments, including a description of how it met the requirements of paragraph (f)(4) of this section;
(2) A description of the process the State used to gather meaningful input on the need for assessments in languages other than English, collect and respond to public comment, and consult with educators; parents and families of English learners; students, as appropriate; and other stakeholders; and
(3) As applicable, an explanation of the reasons the State has not been able to complete the development of such assessments despite making every effort.
(3) A State may request assistance from the Secretary in identifying linguistically accessible academic assessments that are needed.
(4) In determining which languages other than English are present to a significant extent in a State's participating student population, a State must, at a minimum—
(i) Ensure that its definition of “languages other than English that are present to a significant extent in the participating student population” encompasses at least the most populous language other than English spoken by the State's participating student population;
(ii) Consider languages other than English that are spoken by distinct populations of English learners, including English learners who are migratory, English learners who were not born in the United States, and English learners who are Native Americans; and
(iii) Consider languages other than English that are spoken by a significant portion of the participating student population in one or more of a State's LEAs as well as languages spoken by a significant portion of the participating student population across grade levels.
(g) Assessing reading/language arts in English for English learners. (1) A State must assess, using assessments written in English, the achievement of an English learner in meeting the State's reading/language arts academic standards if the student has attended schools in the United States, excluding Puerto Rico and, if applicable, students in Native American language schools or programs consistent with paragraph (j) of this section, for three or more consecutive years.
(2) An LEA may continue, for no more than two additional consecutive years, to assess an English learner under paragraph (g)(1) of this section if the LEA determines, on a case-by-case individual basis, that the student has not reached a level of English language proficiency sufficient to yield valid and reliable information on what the student knows and can do on reading/language arts assessments written in English.
(3) The requirements in paragraph (g)(1)-(2) of this section do not permit a State or LEA to exempt English learners from participating in the State assessment system.
(h) Assessing English language proficiency of English learners. (1) Each State must—
(i) Develop a uniform, valid, and reliable statewide assessment of English language proficiency, including reading, writing, speaking, and listening skills; and
(ii) Require each LEA to use such assessment to assess annually the English language proficiency, including reading, writing, speaking, and listening skills, of all English learners in kindergarten through grade 12 in schools served by the LEA.
(2) The assessment under paragraph (h)(1) of this section must—
(i) Be aligned with the State's English language proficiency standards under section 1111(b)(1)(F) of the Act;
(ii) Be developed and used consistent with the requirements of § 200.2(b)(2), (4), and (5); and
(iii) Provide coherent and timely information about each student's attainment of the State's English language proficiency standards to parents consistent with § 200.2(e) and section 1112(e)(3) of the Act.
(3) If a State develops a computer-adaptive assessment to measure English language proficiency, the State must ensure that the computer-adaptive assessment—
(i) Assesses a student's language proficiency, which may include growth toward proficiency, in order to measure the student's acquisition of English; and
(ii) Meets the requirements for English language proficiency assessments in paragraph (h) of this section.
(4)(i) A State must provide appropriate accommodations that are necessary to measure a student's English language proficiency relative to the State's English language proficiency standards under section 1111(b)(1)(F) of the Act for each English learner covered under paragraph (a)(1)(i) or (iii) of this section.
(ii) If an English learner has a disability that precludes assessment of the student in one or more domains of the English language proficiency assessment required under section 1111(b)(2)(G) of the Act such that there are no appropriate accommodations for the affected domain(s) (e.g., a non-verbal English learner who because of an identified disability cannot take the speaking portion of the assessment), as determined, on an individualized basis, by the student's IEP team, 504 team, or by the individual or team designated by the LEA to make these decisions under title II of the ADA, as specified in paragraph (b)(1) of this section, a State must assess the student's English language proficiency based on the remaining domains in which it is possible to assess the student.
(5) A State must provide for an alternate English language proficiency assessment for each English learner covered under paragraph (a)(1)(ii) of this section who cannot participate in the assessment under paragraph (h)(1) of this section even with appropriate accommodations.
(i) Recently arrived English learners. (1)(i) A State may exempt a recently arrived English learner, as defined in paragraph (k)(2) of this section, from one administration of the State's reading/language arts assessment under § 200.2 consistent with section 1111(b)(3)(A)(i)(I) of the Act.
(ii) If a State does not assess a recently arrived English learner on the State's reading/language arts assessment consistent with section 1111(b)(3)(A)(i)(I) of the Act, the State must count the year in which the assessment would have been administered as the first of the three years in which the student may take the State's reading/language arts assessment in a native language consistent with paragraph (g)(1) of this section.
(iii) A State and its LEAs must report on State and local report cards required under section 1111(h) of the Act the number of recently arrived English learners who are not assessed on the State's reading/language arts assessment.
(iv) Nothing in this section relieves an LEA from its responsibility under applicable law to provide recently arrived English learners with appropriate instruction to enable them to attain English language proficiency as well as grade-level content knowledge in reading/language arts, mathematics, and science.
(2) A State must assess the English language proficiency of a recently arrived English learner pursuant to paragraph (h) of this section.
(3) A State must assess the mathematics and science achievement of a recently arrived English learner pursuant to § 200.2 with the frequency described in § 200.5(a).
(j) Students in Native American language schools or programs. (1) Except as provided in paragraph (j)(2) of this section, a State is not required to assess, using an assessment written in English, student achievement in meeting the challenging State academic standards in reading/language arts, mathematics, or science for a student who is enrolled in a school or program that provides instruction primarily in a Native American language if—
(i) The State provides such an assessment in the Native American language to all students in the school or program, consistent with the requirements of § 200.2;
(ii) The State submits evidence regarding any such assessment in the Native American language for peer review as part of its State assessment system, consistent with § 200.2(d), and receives approval that the assessment meets all applicable requirements; and
(iii) For an English learner, as defined in section 8101(20)(C)(ii) of the Act, the State continues to assess the English language proficiency of such English learner, using the annual English language proficiency assessment required under paragraph (h) of this section, and provides appropriate services to enable him or her to attain proficiency in English.
(2) Notwithstanding paragraph (g) of this section, the State must assess under § 200.5(a)(1)(i)(B), using assessments written in English, the achievement of each student enrolled in such a school or program in meeting the challenging State academic standards in reading/language arts, at a minimum, at least once in grades 9 through 12.
(k) Definitions with respect to English learners and students in Native American language schools or programs. For the purpose of this section—
(1) “Native American” means “Indian” as defined in section 6151 of the Act, which includes Alaska Native and members of Federally recognized or State-recognized tribes; Native Hawaiian; and Native American Pacific Islander.
(2) A “recently arrived English learner” is an English learner who has been enrolled in schools in the United States for less than twelve months.
(3) The phrase “schools in the United States” includes only schools in the 50 States and the District of Columbia.
(a) Student reports. A State's academic assessment system must produce individual student interpretive, descriptive, and diagnostic reports that—
(1)(i) Include information regarding achievement on the academic assessments under § 200.2 measured against the State's student academic achievement standards; and
(ii) Help parents, teachers, and principals to understand and address the specific academic needs of students; and
(2) Are provided to parents, teachers, and principals—
(i) As soon as is practicable after the assessment is given; and
(ii) In an understandable and uniform format, consistent with § 200.2(e).
(b) Itemized score analyses for LEAs and schools. (1) A State's academic assessment system must produce and report to LEAs and schools itemized score analyses, consistent with § 200.2(b)(13), so that parents, teachers, principals, and administrators can interpret and address the specific academic needs of students.
(2) The requirement to report itemized score analyses in paragraph (b)(1) of this section does not require the release of test items.
(a) A State may defer the start or suspend the administration of the assessments required under § 200.2 for one year for each year for which the amount appropriated for State assessment grants under section 1002(b) of the Act is less than $369,100,000.
(b) A State may not cease the development of the assessments referred to in paragraph (a) of this section even if sufficient funds are not appropriated under section 1002(b) of the Act.
(a) Nothing in § 200.1 or § 200.2 requires a private school, including a private school whose students receive services under subpart A of this part, to participate in a State's academic assessment system.
(b)(1) If an LEA provides services to eligible private school students under subpart A of this part, the LEA must, through timely consultation with appropriate private school officials, determine how services to eligible private school students will be academically assessed and how the results of that assessment will be used to improve those services.
(2) The assessments referred to in paragraph (b)(1) of this section may be the State's academic assessments under § 200.2 or other appropriate academic assessments.
(a) State participation. Each State that receives funds under this subpart must participate in biennial State academic assessments of fourth and eighth grade reading and mathematics under the State National Assessment of Educational Progress (NAEP), if the Department pays the costs of administering those assessments.
(b) Local participation. In accordance with section 1112(c)(3) of the ESEA, and notwithstanding section 303(d)(1) of the National Assessment of Educational Progress Authorization Act, an LEA that receives funds under this subpart must participate, if selected, in the State-NAEP assessments referred to in paragraph (a) of this section.
(c) Report cards. Each State and LEA must report on its annual State and LEA report card, respectively, the most recent available academic achievement results in grades four and eight on the State's NAEP reading and mathematics assessments under paragraph (a) of this section, compared to the national average of such results. The report cards must include—
(1) The percentage of students at each achievement level reported on the NAEP in the aggregate and, for State report cards, disaggregated for each subgroup described in section 1111(c)(2) of the ESEA; and
(2) The participation rates for children with disabilities and for English learners.
(a) Purpose. (1) The purpose of a schoolwide program is to improve academic achievement throughout a school so that all students, particularly the lowest-achieving students, demonstrate proficiency related to the challenging State academic standards under § 200.1.
(2) The improved achievement is to result from improving the entire educational program of the school.
(b) Eligibility. (1) A school may operate a schoolwide program if—
(i) The school's LEA determines that the school serves an eligible attendance area or is a participating school under section 1113 of the ESEA; and
(ii) Except as provided under paragraph (b)(1)(iii) of this section, for the initial year of the schoolwide program—
(A) The school serves a school attendance area in which not less than 40 percent of the children are from low-income families; or
(B) Not less than 40 percent of the children enrolled in the school are from low-income families.
(iii) A school that does not meet the poverty percentage in paragraph (b)(1)(ii) of this section may operate a schoolwide program if the school receives a waiver from the State to do so, after taking into account how a schoolwide program will best serve the needs of the students in the school in improving academic achievement and other factors.
(2) In determining the percentage of children from low-income families under paragraph (b)(1) of this section, the LEA may use a measure of poverty that is different from the measure or measures of poverty used by the LEA to identify and rank school attendance areas for eligibility and participation under this subpart.
(c) Participating students and services. A school operating a schoolwide program is not required to identify—
(1) Particular children as eligible to participate; or
(2) Individual services as supplementary.
(d) Supplemental funds. In accordance with the method of determination described in section 1118(b)(2) of the ESEA, a school participating in a schoolwide program must use funds available under this subpart and under any other Federal program included under paragraph (e) of this section and § 200.29 only to supplement the total amount of funds that would, in the absence of the funds under this subpart, be made available from non-Federal sources for that school, including funds needed to provide services that are required by law for children with disabilities and English learners.
(e) Consolidation of funds. An eligible school may, consistent with § 200.29, consolidate and use funds or services under subpart A of this part, together with other Federal, State, and local funds that the school receives, to operate a schoolwide program in accordance with §§ 200.25 through 200.29.
(f) Prekindergarten program. A school operating a schoolwide program may use funds made available under this subpart to establish or enhance prekindergarten programs for children below the age of 6.
(a) Comprehensive needs assessment. (1) A school operating a schoolwide program must conduct a comprehensive needs assessment of the entire school that—
(i) Takes into account information on the academic achievement of all students in the school, including all subgroups of students under section 1111(c)(2) of the ESEA and migratory children as defined in section 1309(3) of the ESEA, relative to the challenging State academic standards under § 200.1 and any other factors as determined by the LEA to—
(A) Help the school understand the subjects and skills for which teaching and learning need to be improved; and
(B) Identify the specific academic needs of students and subgroups of students who are failing, or are at risk of failing, to meet the challenging State academic standards; and
(ii) Assesses the needs of the school relative to each of the components of the schoolwide program under section 1114(b)(7) of the ESEA.
(2) The comprehensive needs assessment must be developed with the participation of individuals who will carry out the schoolwide program plan.
(3) The school must document how it conducted the needs assessment, the results it obtained, and the conclusions it drew from those results.
(b) Comprehensive plan. Using data from the comprehensive needs assessment under paragraph (a) of this section, a school that wishes to operate a schoolwide program must develop a comprehensive plan, in accordance with section 1114(b) of the ESEA, that describes how the school will improve academic achievement for all students in the school, but particularly the needs of those students who are failing, or are at risk of failing, to meet the challenging State academic standards and any other factors as determined by the LEA.
(c) Evaluation. A school operating a schoolwide program must—
(1) Regularly monitor the implementation of, and results achieved by, the schoolwide program, using data from the State's annual assessments and other indicators of academic achievement;
(2) Determine whether the schoolwide program has been effective in increasing the achievement of students in meeting the challenging State academic standards, particularly for those students who had been furthest from achieving the standards; and
(3) Revise the plan, as necessary, based on the results of the regular monitoring, to ensure continuous improvement of students in the schoolwide program.
(1) Regularly monitor the implementation of, and results achieved by, the schoolwide program, using data from the State's annual assessments and other indicators of academic achievement;
(2) Determine whether the schoolwide program has been effective in increasing the achievement of students in meeting the challenging State academic standards, particularly for those students who had been furthest from achieving the standards; and
(3) Revise the plan, as necessary, based on the results of the regular monitoring, to ensure continuous improvement of students in the schoolwide program.
(a)(1) In addition to funds under subpart A of this part, a school may consolidate and use in its schoolwide program Federal funds from any program administered by the Secretary that is included in the most recent notice published for this purpose in the
(2) For purposes of §§ 200.25 through 200.29, the authority to consolidate funds from other Federal programs also applies to services provided to the school with those funds.
(b)(1) Except as provided in paragraphs (b)(2) and (c) of this section, a school that consolidates and uses in a schoolwide program funds from any other Federal program administered by the Secretary—
(i) Is not required to meet the statutory or regulatory requirements of that program applicable at the school level; but
(ii) Must meet the intent and purposes of that program to ensure that the needs of the intended beneficiaries of that program are addressed.
(2) A school that chooses to consolidate funds from other Federal programs must meet the requirements of those programs relating to—
(i) Health;
(ii) Safety;
(iii) Civil rights;
(iv) Student and parental participation and involvement;
(v) Services to private school children;
(vi) Maintenance of effort;
(vii) Comparability of services;
(viii) Use of Federal funds to supplement, not supplant non-Federal funds in accordance with § 200.25(d); and
(ix) Distribution of funds to SEAs or LEAs.
(c) A school must meet the following requirements if the school consolidates and uses funds from these programs in its schoolwide program:
(1) Migrant education. Before the school chooses to consolidate in its schoolwide program funds received under part C of Title I of the ESEA, the school must—
(i) Use these funds, in consultation with parents of migratory children or organizations representing those parents, or both, first to meet the unique educational needs of migratory students that result from the effects of their migratory lifestyle, and those other needs that are necessary to permit these students to participate effectively in school, as identified through the comprehensive Statewide needs assessment under § 200.83; and
(ii) Document that these needs have been met.
(2) Indian education. The school may consolidate funds received under subpart 1 of part A of title VI of the ESEA if—
(i) The parent committee established by the LEA under section 6114(c)(4) of the ESEA approves the inclusion of these funds;
(ii) The schoolwide program is consistent with the purpose described in section 6111 of the ESEA; and
(iii) The LEA identifies in its application how the use of such funds in a schoolwide program will produce benefits to Indian students that would not be achieved if the funds are not used in a schoolwide program.
(3) Special education. (i) The school may consolidate funds received under part B of the IDEA.
(ii) However, the amount of funds consolidated may not exceed the amount received by the LEA under part B of IDEA for that fiscal year, divided by the number of children with disabilities in the jurisdiction of the LEA, and multiplied by the number of children with disabilities participating in the schoolwide program.
(iii) The school may also consolidate funds received under section 7003(d) of the ESEA (Impact Aid) for children with disabilities in a schoolwide program.
(iv) A school that consolidates funds under part B of IDEA or section 7003(d) of the ESEA may use those funds for any activities under its schoolwide program plan but must comply with all other requirements of part B of IDEA, to the same extent it would if it did not consolidate funds under part B of IDEA or section 7003(d) of the ESEA in the schoolwide program.
(d) A school that consolidates and uses in a schoolwide program funds under subpart A of this part or from any other Federal program administered by the Secretary—
(1) Is not required to maintain separate fiscal accounting records, by program, that identify the specific activities supported by those particular funds; but
(2) Must maintain records that demonstrate that the schoolwide program, as a whole, addresses the intent and purposes of each of the Federal programs whose funds were consolidated to support the schoolwide program.
(e) Each State must modify or eliminate State fiscal and accounting barriers so that schools can easily consolidate funds from other Federal, State, and local sources in their schoolwide programs to improve educational opportunities and reduce unnecessary fiscal and accounting requirements.
(a) Applicability. (1) An LEA must ensure that each paraprofessional who is hired by the LEA and who works in a program supported with funds under subpart A of this part meets the requirements in paragraph (b) of this section and, except as provided in paragraph (e) of this section, the requirements in either paragraph (c) or (d) of this section.
(2) For the purpose of this section, the term “paraprofessional”—
(i) Means an individual who provides instructional support consistent with § 200.59; and
(ii) Does not include individuals who have only non-instructional duties (such as providing technical support for computers, providing personal care services, or performing clerical duties).
(3) For the purpose of paragraph (a) of this section, a paraprofessional working in “a program supported with funds under subpart A of this part” is—
(i) A paraprofessional in a targeted assisted school who is paid with funds under subpart A of this part;
(ii) A paraprofessional in a schoolwide program school; or
(iii) A paraprofessional employed by an LEA with funds under subpart A of this part to provide instructional support to a public school teacher covered under § 200.55 who provides equitable services to eligible private school students under § 200.62.
(b) All paraprofessionals. A paraprofessional covered under paragraph (a) of this section, regardless of the paraprofessional's hiring date, must have earned a secondary school diploma or its recognized equivalent.
(c) New paraprofessionals. A paraprofessional covered under paragraph (a) of this section who is hired after January 8, 2002 must have—
(1) Completed at least two years of study at an institution of higher education;
(2) Obtained an associate's or higher degree; or
(3)(i) Met a rigorous standard of quality, and can demonstrate—through a formal State or local academic assessment—knowledge of, and the ability to assist in instructing, as appropriate—
(A) Reading/language arts, writing, and mathematics; or
(B) Reading readiness, writing readiness, and mathematics readiness.
(ii) A secondary school diploma or its recognized equivalent is necessary, but not sufficient, to meet the requirement in paragraph (c)(3)(i) of this section.
(d) Existing paraprofessionals. Each paraprofessional who was hired on or before January 8, 2002 must meet the requirements in paragraph (c) of this section no later than January 8, 2006.
(e) Exceptions. A paraprofessional does not need to meet the requirements in paragraph (c) or (d) of this section if the paraprofessional—
(1)(i) Is proficient in English and a language other than English; and
(ii) Acts as a translator to enhance the participation of limited English proficient children under subpart A of this part; or
(2) Has instructional-support duties that consist solely of conducting parental involvement activities.
(a) Information for parents. (1) At the beginning of each school year, an LEA that receives funds under this subpart must notify the parents of each student attending a title I school that the parents may request, and the LEA will provide the parents on request and in a timely manner, information regarding the professional qualifications of the student's classroom teachers, including, at a minimum, the following:
(i) Whether the teacher has met State qualification and licensing criteria for the grade levels and subject areas in which the teacher provides instruction.
(ii) Whether the teacher is teaching under emergency or other provisional status through which State qualification or licensing criteria have been waived.
(iii) Whether the teacher is teaching in the field of discipline of the certification of the teacher.
(iv) Whether the parent's child is provided services by paraprofessionals and, if so, their qualifications.
(2) A school that participates under this subpart must provide to each parent—
(i) Information on the level of achievement and academic growth, if applicable and available, of the parent's child on each of the State academic assessments required under section 1111(b)(2) of the ESEA; and
(ii) Timely notice that the parent's child has been assigned, or has been taught for four or more consecutive weeks by, a teacher who does not meet applicable State certification or licensure requirements at the grade level and subject area in which the teacher has been assigned.
(b) Testing transparency. (1) At the beginning of each school year, an LEA that receives funds under this subpart must notify the parents of each student attending a title I school that the parents may request, and the LEA will provide the parents on request in a timely manner, information regarding any State or LEA policy regarding student participation in any assessments mandated by section 1111(b)(2) of the ESEA and by the State or LEA, which must include a policy, procedure, or parental right to opt the child out of such assessment, where applicable.
(2) Each LEA that receives funds under this subpart must make widely available through public means (including by posting in a clear and easily accessible manner on the LEA's website and, where practicable, on the website of each school served by the LEA) for each grade served by the LEA, information on each assessment required by the State to comply with section 1111 of the ESEA, other assessments required by the State, and, where such information is available and feasible to report, assessments required districtwide by the LEA, consistent with section 1112(e)(2)(B)-(C) of the ESEA.
(c) Language Instruction for English learners—(1) Notice. (i) An LEA using funds under this subpart or title III of the ESEA to provide a language instruction educational program as determined under title III must, not later than 30 days after the beginning of the school year unless paragraph (c)(1)(ii) of this section applies, inform parents of an English learner identified for participation or participating in such a program of the information in section 1112(e)(3)(A) of the ESEA.
(ii) For a child who has not been identified as an English learner prior to the beginning of the school year but is identified as an English learner during such school year, an LEA must notify the child's parents during the first two weeks of the child being placed in a language instruction educational program consistent with paragraph (c)(1)(i) of this section.
(2) Parental participation. An LEA receiving funds under this subpart must implement an effective means of outreach, consistent with paragraph (c)(3) of this section, to parents of English learners to inform parents how the parents can—
(i) Be involved in the education of their children; and
(ii) Be active participants in assisting their children to—
(A) Attain English proficiency;
(B) Achieve at high levels within a well-rounded education; and
(C) Meet the challenging State academic standards expected of all students.
(3) Parent meetings. Implementing an effective means of outreach under paragraph (c)(2) of this section must include holding, and sending notice of opportunities for, regular meetings for the purpose of formulating and responding to recommendations from parents of English learners assisted under this subpart or title III.
(4) Basis for admission or exclusion. A student may not be admitted to, or excluded from, any federally assisted education program on the basis of a surname or language-minority status.
(d) Notice and format. The notice and information provided to parents under this section must meet the requirements in § 200.2(e).
(a) After timely and meaningful consultation with appropriate officials of private schools, an LEA must—
(1) In accordance with §§ 200.62 through 200.67 and section 1117 of the ESEA, provide, individually or in combination, as requested by private school officials to best meet the needs of eligible children, special educational services, instructional services (including evaluations to determine the progress being made in meeting such students' academic needs), counseling, mentoring, one-on-one tutoring, or other benefits under this subpart (such as dual or concurrent enrollment, educational radio and television, computer equipment and materials, other technology, and mobile educational services and equipment) that address their needs, on an equitable basis and in a timely manner, to eligible children who are enrolled in private elementary and secondary schools; and
(2) Ensure that teachers and families of participating private school children participate, on an equitable basis, in accordance with § 200.65 in services and activities developed pursuant to section 1116 of the ESEA.
(b)(1) Eligible private school children are children who—
(i) Reside in participating public school attendance areas of the LEA, regardless of whether the private school they attend is located in the LEA; and
(ii) Meet the criteria in section 1115(c) of the ESEA.
(2) Among the eligible private school children, the LEA must select children to participate, consistent with § 200.64.
(c) The services and other benefits an LEA provides under this section must be secular, neutral and nonideological.
(a) In order to have timely and meaningful consultation, an LEA must consult with appropriate officials of private schools during the design and development of the LEA's program for eligible private school children, as well as their teachers and families under § 200.65. The goal of consultation is reaching agreement on how to provide equitable and effective programs for eligible private school children, and the results of that agreement must be transmitted to the ombudsman designated under § 200.68.
(b) At a minimum, the LEA must consult on the following:
(1) How the LEA will identify the needs of eligible private school children.
(2) What services the LEA will offer to eligible private school children.
(3) How and when the LEA will make decisions about the delivery of services.
(4) How, where, and by whom the LEA will provide services to eligible private school children.
(5) How the LEA will assess academically the services to eligible private school children in accordance with § 200.10, and how the LEA will use the results of that assessment to improve Title I services.
(6) The size and scope of the equitable services that the LEA will provide to eligible private school children, and, consistent with § 200.64(a), the proportion of funds that the LEA will allocate for these services, and how the LEA determines that proportion of funds.
(7) The method or sources of data that the LEA will use under § 200.64(a) to determine the number of private school children from low-income families residing in participating public school attendance areas, including whether the LEA will extrapolate data if a survey is used.
(8) Whether the LEA will provide services directly or through a separate government agency, consortium, entity, or third-party contractor.
(9) Whether to provide equitable services to eligible private school children—
(i) By creating a pool or pools of funds with all of the funds allocated under § 200.64(a)(2) based on all the children from low-income families in a participating school attendance area who attend private schools; or
(ii) In a participating school attendance area who attend private schools with the proportion of funds allocated under § 200.64(a)(2) based on the number of children from low-income families who attend private schools.
(10) When, including the approximate time of day, the LEA will provide services.
(11) Whether the LEA will consolidate and use funds under subpart A of this part with eligible funds available for services to private school children under applicable programs, as defined in section 8501(b)(1) of the ESEA, to provide services to eligible private school children.
(12) The equitable services the LEA will provide to teachers and families of participating private school children.
(c)(1) Consultation by the LEA must—
(i) Include meetings of the LEA and appropriate officials of the private schools; and
(ii) Occur before the LEA makes any decision that affects the opportunity of eligible private school children to participate in Title I programs.
(2) The LEA must meet with officials of the private schools throughout the implementation and assessment of the Title I services.
(d)(1) Consultation must include—
(i) A discussion of service delivery mechanisms the LEA can use to provide equitable services to eligible private school children; and
(ii) A thorough consideration and analysis of the views of the officials of the private schools on the provision of services through a contract with a third-party provider.
(2) If the LEA disagrees with the views of the officials of the private schools on the provision of services through a contract, the LEA must provide in writing to the officials of the private schools the reasons why the LEA chooses not to use a contractor.
(e)(1)(i) The LEA must maintain in its records and provide to the SEA a written affirmation, signed by officials of each private school with participating children or appropriate private school representatives, that the required consultation has occurred.
(ii) The LEA's written affirmation must provide the option for private school officials to indicate their belief that timely and meaningful consultation has not occurred or that the program design is not equitable with respect to eligible private school children.
(2) If the officials of the private schools do not provide the affirmations within a reasonable period of time, the LEA must submit to the SEA documentation that the required consultation occurred.
(f)(1) An official of a private school has the right to complain to the SEA that the LEA did not—
(i) Engage in timely and meaningful consultation;
(ii) Consider the views of the official of the private school; or
(iii) Make a decision that treats the private school students equitably.
(2) If a private school official wishes to file a complaint, the official must provide the basis of the noncompliance by the LEA to the SEA and the LEA must forward the appropriate documentation to the SEA.
(3) An SEA must provide equitable services directly or through contracts with public or private agencies, organizations, or institutions if the appropriate private school officials have—
(i) Requested that the SEA provide such services directly; and
(ii) Demonstrated that the LEA has not met the requirements of §§ 200.62 through 200.67 in accordance with the SEA's procedures for making such a request.
(a) Equal expenditures. (1) Funds expended by an LEA under this subpart for services for eligible private school children in the aggregate must be equal to the proportion of funds generated by private school children from low-income families who reside in participating public school attendance areas under paragraph (a)(2) of this section.
(2) An LEA must determine the proportional share of funds available for services for eligible private school children based on the total amount of funds received by the LEA under subpart 2 of part A of title I of the ESEA prior to any allowable expenditures or transfers by the LEA.
(3)(i) To obtain a count of private school children from low-income families who reside in participating public school attendance areas, the LEA may—
(A) Use the same poverty data the LEA uses to count public school children;
(B)(1) Use comparable poverty data from a survey of families of private school students that, to the extent possible, protects the families' identity; and
(2) Extrapolate data from the survey based on a representative sample if complete actual data are unavailable;
(C) Use comparable poverty data from a different source, such as scholarship applications;
(D) Apply the low-income percentage of each participating public school attendance area to the number of private school children who reside in that school attendance area; or
(E) Use an equated measure of low income correlated with the measure of low income used to count public school children.
(ii) An LEA may count private school children from low-income families every year or every two years.
(iii) After timely and meaningful consultation in accordance with § 200.63, the LEA shall have the final authority in determining the method used to calculate the number of private school children from low-income families.
(4) An SEA must provide notice in a timely manner to appropriate private school officials in the State of the allocation of funds for educational services and other benefits that LEAs have determined are available for eligible private school children.
(5) An LEA must obligate funds generated to provide equitable services for eligible private school children in the fiscal year for which the funds are received by the LEA.
(b) Services on an equitable basis. (1) The services that an LEA provides to eligible private school children must be equitable in comparison to the services and other benefits that the LEA provides to public school children participating under subpart A of this part.
(2) Services are equitable if the LEA—
(i) Addresses and assesses the specific needs and educational progress of eligible private school children on a comparable basis as public school children;
(ii) Meets the equal expenditure requirements under paragraph (a) of this section; and
(iii) Provides private school children with an opportunity to participate that—
(A) Is equitable to the opportunity provided to public school children; and
(B) Provides reasonable promise of the private school children achieving the high levels called for by the State's student academic achievement standards or equivalent standards applicable to the private school children.
(3)(i) The LEA may provide services to eligible private school children either directly or through arrangements with another LEA or a third-party provider.
(ii) If the LEA contracts with a third-party provider—
(A) The provider must be independent of the private school; and
(B) The contract must be under the control and supervision of the LEA.
(4) After timely and meaningful consultation under § 200.63, the LEA must make the final decisions with respect to the services it will provide to eligible private school children.
(a) From the proportional share reserved for equitable services under § 200.77(d), an LEA shall ensure that teachers and families of participating private school children participate on an equitable basis in services and activities under this subpart.
(b) After consultation with appropriate private school officials, the LEA must provide services and activities under paragraph (a) of this section either—
(1) In conjunction with the LEA's services and activities for teachers and families; or
(2) Independently.
(a) An LEA must use funds under subpart A of this part to provide services that supplement, and in no case supplant, the services that would, in the absence of Title I services, be available to participating private school children.
(b)(1) The LEA must use funds under subpart A of this part to meet the special educational needs of participating private school children.
(2) The LEA may not use funds under subpart A of this part for—
(i) The needs of the private school; or
(ii) The general needs of children in the private school.
(a) The LEA must keep title to and exercise continuing administrative control of all property, equipment, and supplies that the LEA acquires with funds under subpart A of this part for the benefit of eligible private school children.
(b) The LEA may place equipment and supplies in a private school for the period of time needed for the program.
(c) The LEA must ensure that the equipment and supplies placed in a private school—
(1) Are used only for Title I purposes; and
(2) Can be removed from the private school without remodeling the private school facility.
(d) The LEA must remove equipment and supplies from a private school if—
(1) The LEA no longer needs the equipment and supplies to provide Title I services; or
(2) Removal is necessary to avoid unauthorized use of the equipment or supplies for other than Title I purposes.
(e) The LEA may not use funds under subpart A of this part for repairs, minor remodeling, or construction of private school facilities.
To help ensure equity for eligible private school children, teachers, and other educational personnel, an SEA must designate an ombudsman to monitor and enforce the requirements in §§ 200.62 through 200.67.
(a) The Secretary allocates basic grants, concentration grants, targeted grants, and education finance incentive grants, through SEAs, to each eligible LEA for which the Bureau of the Census has provided data on the number of children from low-income families residing in the school attendance areas of the LEA (hereinafter referred to as the “Census list”).
(b) In establishing eligibility and allocating funds under paragraph (a) of this section, the Secretary counts children ages 5 to 17, inclusive (hereinafter referred to as “formula children”)—
(1) From families below the poverty level based on the most recent satisfactory data available from the Bureau of the Census;
(2) From families above the poverty level receiving assistance under the Temporary Assistance for Needy Families program under Title IV of the Social Security Act;
(3) Being supported in foster homes with public funds; and
(4) Residing in local institutions for neglected children.
(c) Except as provided in §§ 200.72, 200.75, and 200.100, an SEA may not change the Secretary's allocation to any LEA that serves an area with a total census population of at least 20,000 persons.
(d) In accordance with § 200.74, an SEA may use an alternative method, approved by the Secretary, to distribute the State's share of basic grants, concentration grants, targeted grants, and education finance incentive grants to LEAs that serve an area with a total census population of less than 20,000 persons.
(a) Basic grants. An LEA is eligible for a basic grant if the number of formula children is—
(1) At least 10; and
(2) Greater than two percent of the LEA's total population ages 5 to 17 years, inclusive.
(b) Concentration grants. An LEA is eligible for a concentration grant if—
(1) The LEA is eligible for a basic grant under paragraph (a) of this section; and
(2) The number of formula children exceeds—
(i) 6,500; or
(ii) 15 percent of the LEA's total population ages 5 to 17 years, inclusive.
(c) Targeted grants. An LEA is eligible for a targeted grant if the number of formula children is—
(1) At least 10; and
(2) At least five percent of the LEA's total population ages 5 to 17 years, inclusive.
(d) Education finance incentive grants. An LEA is eligible for an education finance incentive grant if the number of formula children is—
(1) At least 10; and
(2) At least five percent of the LEA's total population ages 5 to 17 years, inclusive.
(a) General. For each LEA not on the Census list (hereinafter referred to as a “new” LEA), an SEA must determine the number of formula children and the number of children ages 5 to 17, inclusive, in that LEA.
(b) Determining LEA eligibility. An SEA must determine basic grant, concentration grant, targeted grant, and education finance incentive grant eligibility for each new LEA and re-determine eligibility for the LEAs on the Census list, as appropriate, based on the number of formula children and children ages 5 to 17, inclusive, determined in paragraph (a) of this section.
(c) Adjusting LEA allocations. An SEA must adjust the LEA allocations calculated by the Secretary to determine allocations for eligible new LEAs based on the number of formula children determined in paragraph (a) of this section.
(a) General. (1) Except as authorized under paragraph (c) of this section and § 200.100(d)(2), an SEA may not reduce the allocation of an eligible LEA below the hold-harmless amounts established under paragraph (a)(4) of this section.
(2) The hold-harmless protection limits the maximum reduction of an LEA's allocation compared to the LEA's allocation for the preceding year.
(3) Except as provided in § 200.100(d), an SEA must apply the hold-harmless requirement separately for basic grants, concentration grants, targeted grants, and education finance incentive grants as described in paragraph (a)(4) of this section.
(4) Under sections 1122(c) and 1125A(f)(3) of the ESEA, the hold-harmless percentage varies based on the LEA's proportion of formula children, as shown in the following table:
| LEA's number of formula children ages 5 to 17, inclusive, as a percentage of its total population of children ages 5 to 17,
inclusive | Hold-harmless
percentage | Applicable grant formulas |
|---|---|---|
| (i) 30% or more
(ii) 15% or more but less than 30% (iii) Less than 15% | 95
90 85 | Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants. |
(b) Targeted grants and education finance incentive grants. The number of formula children used to determine the hold-harmless percentage is the number before applying the weights described in section 1125 and section 1125A of the ESEA.
(c) Adjustment for insufficient funds. If the amounts made available to the State are insufficient to pay the full amount that each LEA is eligible to receive under paragraph (a)(4) of this section, the SEA must ratably reduce the allocations for all LEAs in the State to the amount available.
(d) Eligibility for hold-harmless protection. (1) An LEA must meet the eligibility requirements for a basic grant, targeted grant, or education finance incentive grant under § 200.71 in order for the applicable hold-harmless provision to apply.
(2) An LEA not meeting the eligibility requirements for a concentration grant under § 200.71 must be paid its hold-harmless amount for four consecutive years.
(e) Hold-harmless protection for a newly opened or significantly expanded charter school LEA. An SEA must calculate a hold-harmless base for the prior year for a newly opened or significantly expanded charter school LEA that, as applicable, reflects the new or significantly expanded enrollment of the charter school LEA.
(a) For eligible LEAs serving an area with a total census population of less than 20,000 persons (hereinafter referred to as “small LEAs”), an SEA may apply to the Secretary to use an alternative method to distribute basic grant, concentration grant, targeted grant, and education finance incentive grant funds.
(b) In its application, the SEA must—
(1) Identify the alternative data it proposes to use; and
(2) Assure that it has established a procedure through which a small LEA that is dissatisfied with the determination of its grant may appeal directly to the Secretary.
(c) The SEA must base its alternative method on population data that best reflect the current distribution of children from low-income families among the State's small LEAs and use the same poverty measure consistently for small LEAs across the State for all Title I, part A programs.
(d) Based on the alternative poverty data selected, the SEA must—
(1) Re-determine eligibility of its small LEAs for basic grants, concentration grants, targeted grants, and education finance incentive grants in accordance with § 200.71;
(2) Calculate allocations for small LEAs in accordance with the provisions of sections 1124, 1124A, 1125, and 1125A of the ESEA, as applicable; and
(3) Ensure that each LEA receives the hold-harmless amount to which it is entitled under § 200.73.
(e) The amount of funds available for redistribution under each formula is the separate amount determined by the Secretary under sections 1124, 1124A, 1125, and 1125A of the ESEA for eligible small LEAs after the SEA has made the adjustments required under § 200.72(c).
(f) If the amount available for redistribution to small LEAs under an alternative method is not sufficient to satisfy applicable hold-harmless requirements, the SEA must ratably reduce all eligible small LEAs to the amount available.
(a) In a State in which the number of formula children is less than 0.25 percent of the national total on January 8, 2002 (hereinafter referred to as a “small State”), an SEA may either—
(1) Allocate concentration grants among eligible LEAs in the State in accordance with §§ 200.72 through 200.74, as applicable; or
(2) Without regard to the allocations determined by the Secretary—
(i) Identify those LEAs in which the number or percentage of formula children exceeds the statewide average number or percentage of those children; and
(ii) Allocate concentration grant funds, consistent with § 200.73, among the LEAs identified in paragraph (a)(2)(i) of this section based on the number of formula children in each of those LEAs.
(b) If the SEA in a small State uses an alternative method under § 200.74, the SEA must use the poverty data approved under the alternative method to identify those LEAs with numbers or percentages of formula children that exceed the statewide average number or percentage of those children for the State as a whole.
Before allocating funds in accordance with § 200.78, an LEA must reserve funds as are reasonable and necessary to—
(a) Provide services comparable to those provided to children in participating school attendance areas and schools to serve—
(1)(i) Homeless children and youths, including providing educationally related support services to children in shelters and other locations where homeless children may live.
(ii) Funds reserved under paragraph (a)(1)(i) of this section may be—
(A) Determined based on a needs assessment of homeless children and youths in the LEA, taking into consideration the number and needs of those children, which may be the same needs assessment as conducted under section 723(b)(1) of the McKinney-Vento Homeless Assistance Act; and
(B) Used to provide homeless children and youths with services not ordinarily provided to other students under this subpart, including providing—
(1) Funding for the liaison designated under section 722(g)(1)(J)(ii) of the McKinney-Vento Homeless Assistance Act; and
(2) Transportation pursuant to section 722(g)(1)(J)(iii) of that Act;
(2) Children in local institutions for neglected children; and
(3) If appropriate—
(i) Children in local institutions for delinquent children; and
(ii) Neglected and delinquent children in community-day school programs;
(4) An LEA must determine the amount of funds reserved under paragraphs (a)(1)(i) and (a)(2) and (3) of this section based on the total allocation received by the LEA under subpart 2 of part A of title I of the ESEA prior to any allowable expenditures or transfers by the LEA;
(b) Provide, where appropriate under section 1113(c)(4) of the ESEA, financial incentives and rewards to teachers who serve students in title I schools identified for comprehensive support and improvement activities or targeted support and improvement activities under section 1111(d) of the ESEA for the purpose of attracting and retaining qualified and effective teachers;
(c) Meet the requirements for parental involvement in section 1116(a)(3) of the ESEA;
(d) Provide and administer equitable services in accordance with § 200.64(a);
(e) Administer programs for public school children under this subpart; and
(f) Conduct other authorized activities, such as early childhood education, school improvement and coordinated services.
(a)(1) After reserving funds, as applicable, under § 200.77, including funds for equitable services for private school students, their teachers, and their families, an LEA must allocate funds under this subpart to school attendance areas and schools, identified as eligible and selected to participate under section 1113(a) or (b) of the ESEA, in rank order on the basis of the total number of public school children from low-income families in each area or school.
(2) To determine the number of children from low-income families in a secondary school, an LEA must use—
(i) The same measure of poverty it uses for elementary schools; or
(ii) An accurate estimate of the number of students from low-income families by applying the average percentage of students from low-income families in the elementary school attendance areas that feed into the secondary school to the number of students enrolled in the secondary school if—
(A) The LEA conducts outreach to secondary schools within the LEA to inform the schools of the option to use this measure; and
(B) A majority of the secondary schools approve the use of this measure.
(3) If an LEA ranks its school attendance areas and schools by grade span groupings, the LEA may determine the percentage of children from low-income families in the LEA as a whole or for each grade span grouping.
(b)(1) Except as provided in paragraphs (b)(2) and (d) of this section, an LEA must allocate to each participating school attendance area or school an amount for each low-income child that is at least 125 percent of the per-pupil amount of funds the LEA received for that year under part A, subpart 2 of Title I. The LEA must calculate this per-pupil amount before it reserves funds under § 200.77, using the poverty measure selected by the LEA under section 1113(a)(5) of the ESEA.
(2) If an LEA is serving only school attendance areas or schools in which the percentage of children from low-income families is 35 percent or more, the LEA is not required to allocate a per-pupil amount of at least 125 percent.
(c) An LEA is not required to allocate the same per-pupil amount to each participating school attendance area or school provided the LEA allocates higher per-pupil amounts to areas or schools with higher concentrations of poverty than to areas or schools with lower concentrations of poverty.
(d) An LEA may reduce the amount of funds allocated under this section to a school attendance area or school if the area or school is spending supplemental State or local funds for programs that meet the requirements in § 200.79(b).
(e) If an LEA contains two or more counties in their entirety, the LEA must distribute to schools within each county a share of the LEA's total grant that is no less than the county's share of the child count used to calculate the LEA's grant.
(a) For the purpose of determining compliance with the supplement not supplant requirement in section 1118(b) and the comparability requirement in section 1118(c) of the ESEA, a grantee or subgrantee under this subpart may exclude supplemental State and local funds spent in any school attendance area or school for programs that meet the intent and purposes of title I of the ESEA.
(b) A program meets the intent and purposes of Title I if the program either—
(1)(i) Is implemented in a school in which the percentage of children from low-income families is at least 40 percent;
(ii) Is designed to promote schoolwide reform and upgrade the entire educational operation of the school to support students in their achievement toward meeting the challenging State academic standards that all students are expected to meet;
(iii) Is designed to meet the educational needs of all students in the school, particularly the needs of students who are failing, or are most at risk of failing, to meet the challenging State academic standards; and
(iv) Uses the State's assessment system under § 200.2 to review the effectiveness of the program; or
(2)(i) Serves only students who are failing, or are most at risk of failing, to meet the challenging State academic standards;
(ii) Provides supplementary services designed to meet the special educational needs of the students who are participating in the program to support their achievement toward meeting the State's student academic achievement standards; and
(iii) Uses the State's assessment system under § 200.2 to review the effectiveness of the program.
(c) The conditions in paragraph (b) of this section also apply to supplemental State and local funds expended under section 1113(b)(1)(D) and 1113(c)(2)(B) of the ESEA.
The following definitions apply to programs and projects operated under this subpart:
(a) Agricultural work or employment means the production or initial processing of raw agricultural products such as crops, trees, dairy products, poultry, or livestock. It consists of work performed for wages or personal subsistence.
(b) Consolidated Student Record means the MDEs for a migratory child that have been submitted by one or more SEAs and consolidated into a single, uniquely identified record available through MSIX.
(c) Fishing work or employment means the catching or initial processing of fish or shellfish or the raising or harvesting of fish or shellfish at fish farms. It consists of work performed for wages or personal subsistence.
(d) [Reserved]
(e) Migrant Student Information Exchange (MSIX) means the nationwide system administered by the Department for linking and exchanging specified educational and health information for all migratory children.
(f) Migratory agricultural worker means an individual who made a qualifying move in the preceding 36 months and, after doing so, engaged in new temporary or seasonal employment or personal subsistence in agriculture, which may be dairy work or the initial processing of raw agricultural products. If an individual did not engage in such new employment soon after a qualifying move, such individual may be considered a migratory agricultural worker if the individual actively sought such new employment and has a recent history of moves for temporary or seasonal agricultural employment.
(g) Migratory child means a child or youth who made a qualifying move in the preceding 36 months as a migratory agricultural worker or a migratory fisher; or with, or to join, a parent or spouse who is a migratory agricultural worker or a migratory fisher.
(h) Migratory fisher means an individual who made a qualifying move in the preceding 36 months and, after doing so, engaged in new temporary or seasonal employment or personal subsistence in fishing. If the individual did not engage in such new employment soon after a qualifying move, the individual may be considered a migratory fisher if the individual actively sought such new employment and has a recent history of moves for temporary or seasonal fishing employment.
(i) Minimum Data Elements (MDEs) means the educational and health information for migratory children that the Secretary requires each SEA that receives a grant of MEP funds to collect, maintain, and submit to MSIX, and use under this part. MDEs may include—
(1) Immunization records and other health information;
(2) Academic history (including partial credit), credit accrual, and results from State assessments required under the ESEA;
(3) Other academic information essential to ensuring that migratory children achieve to high academic standards; and
(4) Information regarding eligibility for services under the Individuals with Disabilities Education Act.
(j) Move or Moved means a change from one residence to another residence that occurs due to economic necessity.
(k) MSIX Memorandum of Understanding (MOU) means the agreement between the Department and an SEA that governs the interconnection of the State migrant student records system(s) and MSIX, including the terms under which the agency will abide by the agreement based upon its review of all relevant technical, security, and administrative issues.
(l) MSIX Interconnection Security Agreement means the agreement between the Department and an SEA that specifies the technical and security requirements for establishing, maintaining, and operating the interconnection between the State migrant student records system and MSIX. The MSIX Interconnection Security Agreement supports the MSIX MOU and documents the requirements for connecting the two information technology systems, describes the security controls to be used to protect the systems and data, and contains a topological drawing of the interconnection.
(m) Personal subsistence means that the worker and the worker's family, as a matter of economic necessity, consume, as a substantial portion of their food intake, the crops, dairy products, or livestock they produce or the fish they catch.
(n) Qualifying work means temporary employment or seasonal employment in agricultural work or fishing work.
(o) Seasonal employment means employment that occurs only during a certain period of the year because of the cycles of nature and that, by its nature, may not be continuous or carried on throughout the year.
(p) Temporary employment means employment that lasts for a limited period of time, usually a few months, but no longer than 12 months. It typically includes employment where the employer states that the worker was hired for a limited time frame; the worker states that the worker does not intend to remain in that employment indefinitely; or the SEA has determined on some other reasonable basis that the employment is temporary. The definition includes employment that is constant and available year-round only if, within 18 months after the effective date of this regulation and at least once every three years thereafter, the SEA documents that, given the nature of the work, of those workers whose children were previously determined to be eligible based on the State's prior determination of the temporary nature of such employment (or the children themselves if they are the workers), virtually no workers remained employed by the same employer more than 12 months.
An SEA may use the funds available from its State Migrant Education Program (MEP) to carry out other administrative activities, beyond those allowable under § 200.100(b)(4), that are unique to the MEP, including those that are the same or similar to administrative activities performed by LEAs in the State under subpart A of this part. These activities include but are not limited to—
(a) Statewide identification and recruitment of eligible migratory children;
(b) Interstate and intrastate coordination of the State MEP and its local projects with other relevant programs and local projects in the State and in other States;
(c) Procedures for providing for educational continuity for migratory children through the timely transfer of educational and health records, beyond that required generally by State and local agencies;
(d) Collecting and using information for accurate distribution of subgrant funds;
(e) Development of a statewide needs assessment and a comprehensive State plan for MEP service delivery;
(f) Supervision of instructional and support staff;
(g) Establishment and implementation of a State parent advisory council; and
(h) Conducting an evaluation of the effectiveness of the State MEP.
(a) An SEA that receives a grant of MEP funds must develop and update a written comprehensive State plan for service delivery based on a current statewide needs assessment that, at a minimum, has the following components:
(1) Performance targets. The plan must specify—
(i) Performance targets that the State has adopted for all children in reading and mathematics achievement, high school graduation, and the number of school dropouts, as well as the State's performance targets, if any, for school readiness; and
(ii) Any other performance targets that the State has identified for migratory children.
(2) Needs assessment. The plan must include an identification and assessment of—
(i) The unique educational needs of migratory children that result from the children's migratory lifestyle; and
(ii) Other needs of migratory students that must be met in order for migratory children to participate effectively in school.
(3) Measurable program outcomes. The plan must include the measurable program outcomes (i.e., objectives) that a State's migrant education program will produce to meet the identified unique needs of migratory children and help migratory children achieve the State's performance targets identified in paragraph (a)(1) of this section.
(4) Service delivery. The plan must describe the strategies that the SEA will pursue on a statewide basis to achieve the measurable program outcomes in paragraph (a)(3) of this section by addressing—
(i) The unique educational needs of migratory children consistent with paragraph (a)(2)(i) of this section; and
(ii) Other needs of migratory children consistent with paragraph (a)(2)(ii) of this section.
(5) Evaluation. The plan must describe how the State will evaluate the effectiveness of its program.
(b) The SEA must develop its comprehensive State plan for service delivery in consultation with the State parent advisory council or, for SEAs not operating programs for one school year in duration, in consultation with the parents of migratory children. This consultation must be in a format and language that the parents understand.
(c) Each SEA receiving MEP funds must ensure that its local operating agencies comply with the comprehensive State plan for service delivery.
(a) Each SEA must determine the effectiveness of its MEP through a written evaluation that measures the implementation and results achieved by the program against the State's performance targets in § 200.83(a)(1), particularly for those students who have priority for service as defined in section 1304(d) of the ESEA.
(b) SEAs and local operating agencies receiving MEP funds must use the results of the evaluation carried out by an SEA under paragraph (a) of this section to improve the services provided to migratory children.
(a) MSIX State record system and data exchange requirements. In order to receive a grant of MEP funds, an SEA must collect, maintain, and submit to MSIX MDEs and otherwise exchange and use information on migratory children in accordance with the requirements of this section. Failure of an SEA to do so constitutes a failure under section 454 of the General Education Provisions Act, 20 U.S.C. 1234c, to comply substantially with a requirement of law applicable to the funds made available under the MEP.
(b) MSIX data submission requirements—(1) General. (i) In order to satisfy the requirements of paragraphs (b)(2) and (3) of this section, an SEA that receives a grant of MEP funds must submit electronically to MSIX the MDEs applicable to the child's age and grade level. An SEA must collect and submit the MDEs applicable to the child's age and grade level, regardless of the type of school in which the child is enrolled (e.g., public, private, or home school), or whether a child is enrolled in any school.
(ii) For migratory children who are or were enrolled in private schools, the SEA meets its responsibility under paragraph (b)(1)(i) of this section for collecting MDEs applicable to the child's age and grade level by advising the parent of the migratory child, or the migratory child if the child is emancipated, of the necessity of requesting the child's records from the private school, and by facilitating the parent or emancipated child's request to the private school that it provide all necessary information from the child's school records—
(A) Directly to the parent or emancipated child, in which case the SEA must follow up directly with the parent or child; or
(B) To the SEA, or a specific local operating agency, for forwarding to MSIX, in which case the SEA must follow up with the parent, emancipated child, or the private school to make sure that the records requested by the parent or emancipated child have been forwarded.
(iii) For migratory children who are or were enrolled in home schools, the SEA meets its responsibility under paragraph (b)(1)(i) of this section for collecting MDEs applicable to the child's age and grade level by requesting these records, either directly or through a local operating agency, directly from the parent or emancipated child.
(2) Start-up data submissions. No later than 90 calendar days after the effective date of these regulations, an SEA must collect and submit to MSIX each of the MDEs described in paragraph (b)(1)(i) of this section applicable to the child's age and grade level for every migratory child who is eligible to receive MEP services in the State on the effective date of these regulations, other than through continuation of services provided under section 1304(e) of the ESEA.
(3) Subsequent data submissions. An SEA must comply with the following timelines for subsequent data submissions throughout the entire calendar year whether or not local operating agencies or LEAs in the State are closed for summer or intersession periods.
(i) Migratory children for whom an SEA has approved a new Certificate of Eligibility. For every migratory child for whom an SEA approves a new Certificate of Eligibility under § 200.89(c) after the effective date of these regulations—
(A) An SEA must collect and submit to MSIX the MDEs described in paragraph (b)(1)(i) of this section within 10 working days of approving a new Certificate of Eligibility for the migratory child. The SEA is not required to collect and submit MDEs in existence before its approval of a new Certificate of Eligibility for the child except as provided in paragraph (b)(3)(i)(B) of this section; and
(B) An SEA that approves a new Certificate of Eligibility for a secondary school-aged migratory child must also—
(1) Collect and submit to MSIX within 10 working days of approving a new Certificate of Eligibility for the child MDEs from the most recent secondary school in that State attended previously by the migratory child; and
(2) Notify MSIX within 30 calendar days if one of its local operating agencies obtains records from a secondary school attended previously in another State by the migratory child.
(ii) End of term submissions. (A) Within 30 calendar days of the end of an LEA's or local operating agency's fall, spring, summer, or intersession terms, an SEA must collect and submit to MSIX all MDE updates and newly available MDEs for migratory children who were eligible for the MEP during the term and for whom the SEA submitted data previously under paragraph (b)(2) or (b)(3)(i) of this section.
(B) When a migratory child's MEP eligibility expires before the end of a school year, an SEA must submit all MDE updates and newly available MDEs for the child through the end of the school year.
(iii) Change of residence submissions. (A) Within four working days of receiving notification from MSIX that a migratory child in its State has changed residence to a new local operating agency within the State or another SEA has approved a new Certificate of Eligibility for a migratory child, an SEA must collect and submit to MSIX all new MDEs and MDE updates that have become available to the SEA or one of its local operating agencies since the SEA's last submission of MDEs to MSIX for the child.
(B) An SEA or local operating agency that does not yet have a new MDE or MDE update for a migratory child when it receives a change of residence notification from MSIX must submit the MDE to MSIX within four working days of the date that the SEA or one of its local operating agencies obtains the MDE.
(c) Use of Consolidated Student Records. In order to facilitate school enrollment, grade and course placement, accrual of high school credits, and participation in the MEP, each SEA that receives a grant of MEP funds must—
(1) Use, and require each of its local operating agencies to use, the Consolidated Student Record for all migratory children who have changed residence to a new school district within the State or in another State;
(2) Encourage LEAs that are not local operating agencies receiving MEP funds to use the Consolidated Student Record for all migratory children described in paragraph (c)(1) of this section; and
(3) Establish procedures, develop and disseminate guidance, and provide training in the use of Consolidated Student Records to SEA, local operating agency, and LEA personnel who have been designated by the SEA as authorized MSIX users under paragraph (f)(2) of this section.
(d) MSIX data quality. Each SEA that receives a grant of MEP funds must—
(1) Use, and require each of its local operating agencies to use, reasonable and appropriate methods to ensure that all data submitted to MSIX are accurate and complete; and
(2) Respond promptly, and ensure that each of its local operating agencies responds promptly, to any request by the Department for information needed to meet the Department's responsibility for the accuracy and completeness of data in MSIX in accordance with the Privacy Act of 1974, as amended, 5 U.S.C. 552a(e)(6) and (g)(1)(C) or (D).
(e) Procedures for MSIX data correction by parents, guardians, and migratory children. Each SEA that receives a grant of MEP funds must establish and implement written procedures that allow a parent or guardian of a migratory child, or a migratory child, to ask the SEA to correct or determine the correctness of MSIX data. An SEA's written procedures must meet the following minimum requirements:
(1) Response to parents, guardians, and migratory children. (i) Within 30 calendar days of receipt of a data correction request from a parent, guardian, or migratory child, an SEA must—
(A) Send a written or electronic acknowledgement to the requester;
(B) Investigate the request;
(C) Decide whether to revise the data as requested; and
(D) Send the requester a written or electronic notice of the SEA's decision.
(ii) If an SEA determines that data it submitted previously to MSIX should be corrected, the SEA must submit the revised data to MSIX within four working days of its decision to correct the data. An SEA is not required to notify MSIX if it decides not to revise the data as requested.
(iii)(A) If a parent, guardian, or migratory child requests that an SEA correct or determine the correctness of data that was submitted to MSIX by another SEA, within four working days of receipt of the request, the SEA must send the data correction request to the SEA that submitted the data to MSIX.
(B) An SEA that receives an MSIX data correction request from another SEA under this paragraph must respond as if it received the data correction request directly from the parent, guardian, or migratory child.
(2) Response to SEAs. An SEA or local operating agency that receives a request for information from an SEA that is responding to a parent's, guardian's, or migratory child's data correction request under paragraph (e)(1) of this section must respond in writing within ten working days of receipt of the request.
(3) Response to the Department. An SEA must respond in writing within ten working days to a request from the Department for information needed by the Department to respond to an individual's request to correct or amend a Consolidated Student Record under the Privacy Act of 1974, as amended, 5 U.S.C. 552a(d)(2) and 34 CFR 5b.7.
(f) MSIX data protection. Each SEA that receives a grant of MEP funds must—
(1) Enter into and carry out its responsibilities in accordance with an MSIX MOU, an MSIX Interconnection Security Agreement, and other information technology agreements required by the Secretary in accordance with applicable Federal requirements;
(2) Establish and implement written procedures to protect the integrity, security, and confidentiality of Consolidated Student Records, whether in electronic or print format, through appropriate administrative, technical, and physical safeguards established in accordance with the MSIX MOU and MSIX Interconnection Security Agreement. An SEA's written procedures must include, at a minimum, reasonable methods to ensure that—
(3) Require all authorized users to complete the User Application Form approved by the Secretary before providing them access to MSIX. An SEA may also develop its own documentation for approving user access to MSIX provided that it contains the same information as the User Application Form approved by the Secretary; and
(4) Retain the documentation required for approving user access to MSIX for three years after the date the SEA terminates the user's access.
Funds available under part C of Title I of the ESEA may be used in a schoolwide program subject to the requirements of § 200.29(c)(1).
An SEA and its operating agencies must conduct programs and projects under this subpart in a manner consistent with the basic requirements of section 8501 of the ESEA.
(a) For purposes of determining compliance with the comparability requirement in section 1118(c) and the supplement, not supplant requirement in section 1118(b) of the ESEA, a grantee or subgrantee under part C of title I of the ESEA may exclude supplemental State and local funds expended in any school attendance area or school for carrying out special programs that meet the intent and purposes of part C of title I.
(b) Before funds for a State and local program may be excluded for purposes of these requirements, the SEA must make an advance written determination that the program meets the intent and purposes of part C of Title I.
(c) A program meets the intent and purposes of part C of Title I if it meets the following requirements:
(1) The program is specifically designed to meet the unique educational needs of migratory children, as defined in section 1309(3) of the ESEA.
(2) The program is based on performance targets related to educational achievement that are similar to those used in programs funded under part C of Title I of the ESEA, and is evaluated in a manner consistent with those program targets.
(3) The grantee or subgrantee keeps, and provides access to, records that ensure the correctness and verification of these requirements.
(4) The grantee monitors program performance to ensure that these requirements are met.
(a) [Reserved]
(b) Responsibilities of SEAs for re-interviewing to ensure the eligibility of children under the MEP—(1) Retrospective re-interviewing. (i) As a condition for the continued receipt of MEP funds in FY 2006 and subsequent years, an SEA under a corrective action issued by the Secretary under paragraph (b)(2)(vii) or (d)(7) of this section must, as required by the Secretary—
(A) Conduct a statewide re-interviewing process consistent with paragraph (b)(1)(ii) of this section; and
(B) Consistent with paragraph (b)(1)(iii) of this section, report to the Secretary on the procedures it has employed, its findings, its defect rate, and corrective actions it has taken or will take to avoid a recurrence of any problems found.
(ii) At a minimum, the re-interviewing process must include—
(A) Selection of a sample of identified migratory children (from the child counts of a particular year as directed by the Secretary) randomly selected on a statewide basis to allow the State to estimate the statewide proportion of eligible migratory children at a 95 percent confidence level with a confidence interval of plus or minus 5 percent.
(B) Use of independent re-interviewers (i.e., interviewers who are neither SEA or local operating agency staff members working to administer or operate the State MEP nor any other persons who worked on the initial eligibility determinations being tested) trained to conduct personal interviews and to understand and apply program eligibility requirements; and
(C) Calculation of a defect rate based on the number of sampled children determined ineligible as a percentage of those sampled children whose parent/guardian was actually re-interviewed.
(iii) At a minimum, the report must include—
(A) An explanation of the sample and procedures used in the SEA's re-interviewing process;
(B) The findings of the re-interviewing process, including the determined defect rate;
(C) An acknowledgement that the Secretary may adjust the child counts for 2000-2001 and subsequent years downward based on the defect rate that the Secretary accepts;
(D) A summary of the types of defective eligibility determinations that the SEA identified through the re-interviewing process;
(E) A summary of the reasons why each type of defective eligibility determination occurred; and
(F) A summary of the corrective actions the SEA will take to address the identified problems.
(2) Prospective re-interviewing. As part of the system of quality controls identified in paragraph (d) of this section, an SEA that receives MEP funds must annually validate child eligibility determinations from the current performance reporting period (September 1 to August 31) through re-interviews for a randomly selected sample of children identified as migratory during the same performance reporting period. In conducting these re-interviews, an SEA must—
(i) Except as specified in paragraphs (b)(2)(i)(A) and (B) of this section, use one or more re-interviewers who may be SEA or local operating agency staff members working to administer or operate the State MEP, or any other person trained to conduct personal interviews and to understand and apply program eligibility requirements, but who did not work on the initial eligibility determinations being tested;
(A) At least once every three years until September 1, 2020, SEAs must use one or more independent re-interviewers (i.e., interviewers who are neither SEA nor local operating agency staff members working to administer or operate the State MEP nor any other persons who worked on the initial eligibility determinations being tested and who are trained to conduct personal interviews and to understand and apply program eligibility requirements).
(B) Beginning September 1, 2020, an SEA must use one or more independent re-interviewers to validate child eligibility determinations made during one of the first three full performance reporting periods (September 1 through August 31) following the effective date of a major statutory or regulatory change that directly impacts child eligibility (as determined by the Secretary). Therefore, the entire sample of eligibility determinations to be tested by independent re-interviewers must be drawn from children determined to be eligible in a single performance period, based on eligibility requirements that include the major statutory or regulatory change.
(ii) Select a random sample of identified migratory children so that a sufficient number of eligibility determinations in the current performance reporting period are tested on a statewide basis or within categories associated with identified risk factors (e.g., experience of recruiters, size or growth in local migratory child population, effectiveness of local quality control procedures) in order to help identify possible problems with the State's child eligibility determinations;
(iii) Conduct re-interviews with the parents or guardians of the children in the sample. States must use a face-to-face approach to conduct these re-interviews unless circumstances make face-to-face re-interviews impractical and necessitate the use of an alternative method such as telephone re-interviewing;
(iv) Determine and document in writing whether the child eligibility determination and the information on which the determination was based were true and correct;
(v) Stop serving any children found not to be eligible and remove them from the data base used to compile counts of eligible children;
(vi) Certify and report to the Department the results of re-interviewing in the SEA's annual report of the number of migratory children in the State required by the Secretary; and
(vii) Implement corrective actions or improvements to address the problems identified by the State (including the identification and removal of other ineligible children in the total population), and any corrective actions, including retrospective re-interviewing, required by the Secretary.
(c) Responsibilities of SEAs to document the eligibility of migratory children. (1) An SEA and its operating agencies must use the Certificate of Eligibility (COE) form established by the Secretary to document the State's determination of the eligibility of migratory children.
(2) In addition to the form required under paragraph (c)(1) of this section, the SEA and its operating agencies must maintain any additional documentation the SEA requires to confirm that each child found eligible for this program meets all of the eligibility definitions in section 1309 of the ESEA and § 200.81.
(3) An SEA is responsible for the accuracy of all the determinations of the eligibility of migratory children identified in the State.
(d) Responsibilities of an SEA to establish and implement a system of quality controls for the proper identification and recruitment of eligible migratory children. An SEA must establish and implement a system of quality controls for the proper identification and recruitment of eligible migratory children on a statewide basis. At a minimum, this system of quality controls must include the following components:
(1) Training to ensure that recruiters and all other staff involved in determining eligibility and in conducting quality control procedures know the requirements for accurately determining and documenting child eligibility under the MEP.
(2) Supervision and annual review and evaluation of the identification and recruitment practices of individual recruiters.
(3) A formal process for resolving eligibility questions raised by recruiters and their supervisors and for ensuring that this information is communicated to all local operating agencies.
(4) An examination by qualified individuals at the SEA or local operating agency level of each COE to verify that the written documentation is sufficient and that, based on the recorded data, the child is eligible for MEP services.
(5) A process for the SEA to validate that eligibility determinations were properly made, including conducting prospective re-interviewing as described in paragraph (b)(2).
(6) Documentation that supports the SEA's implementation of this quality-control system and of a record of actions taken to improve the system where periodic reviews and evaluations indicate a need to do so.
(7) A process for implementing corrective action if the SEA finds COEs that do not sufficiently document a child's eligibility for the MEP, or in response to internal State audit findings and recommendations, or monitoring or audit findings of the Secretary.
(a) The following definition applies to the programs authorized in part D, subparts 1 and 2 of Title I of the ESEA:
Children and youth means the same as “children” as that term is defined in § 200.103(a).
(b) The following definitions apply to the programs authorized in part D, subpart 1 of Title I of the ESEA:
Institution for delinquent children and youth means, as determined by the SEA, a public or private residential facility that is operated primarily for the care of children and youth who—
(i) Have been adjudicated to be delinquent or in need of supervision; and
(ii) Have had an average length of stay in the institution of at least 30 days.
Institution for neglected children and youth means, as determined by the SEA, a public or private residential facility, other than a foster home, that is operated primarily for the care of children and youth who—
(i) Have been committed to the institution or voluntarily placed in the institution under applicable State law due to abandonment, neglect, or death of their parents or guardians; and
(ii) Have had an average length of stay in the institution of at least 30 days.
Regular program of instruction means an educational program (not beyond grade 12) in an institution or a community day program for neglected or delinquent children that consists of classroom instruction in basic school subjects such as reading, mathematics, and career and technical education, and that is supported by non-Federal funds. Neither the manufacture of goods within the institution nor activities related to institutional maintenance are considered classroom instruction.
(c) The following definition applies to the local agency program authorized in part D, subpart 2 of title I of the ESEA:
Locally operated correctional facility means a facility in which persons are confined as a result of a conviction for a criminal offense, including persons under 21 years of age. The term also includes a local public or private institution and community day program or school not operated by the State that serves delinquent children and youth.
To receive an allocation under part D, subpart 1 of Title I of the ESEA, an SEA must provide the Secretary with a count of children and youth under the age of 21 enrolled in a regular program of instruction operated or supported by State agencies in institutions or community day programs for neglected or delinquent children and youth and adult correctional institutions as specified in paragraphs (a) and (b) of this section.
(a) Enrollment. (1) To be counted, a child or youth must be enrolled in a regular program of instruction for at least—
(i) 20 hours per week if in an institution or community day program for neglected or delinquent children; or
(ii) 15 hours per week if in an adult correctional institution.
(2) The State agency must specify the date on which the enrollment of neglected or delinquent children is determined under paragraph (a)(1) of this section, except that the date specified must be—
(i) Consistent for all institutions or community day programs operated by the State agency; and
(ii) Represent a school day in the calendar year preceding the year in which funds become available.
(b) Adjustment of enrollment. The SEA must adjust the enrollment for each institution or community day program served by a State agency by—
(1) Multiplying the number determined in paragraph (a) of this section by the number of days per year the regular program of instruction operates; and
(2) Dividing the result of paragraph (b)(1) of this section by 180.
(c) Date of submission. The SEA must annually submit the data in paragraph (b) of this section no later than January 31.
A State must reserve funds for school improvement, and may reserve funds for State administration and direct student services as follows:
(a) School improvement. (1) To carry out school improvement activities and the State's statewide system of technical assistance and support for LEAs authorized under sections 1003 and 1111(d) of the ESEA, an SEA must reserve the greater of—
(i) Seven percent from the sum of the amounts allocated to the State under section 1002(a) of the ESEA; or
(ii) The sum of the total amount that the State—
(A) Reserved for fiscal year 2016 under section 1003(a) of the ESEA as in effect on December 9, 2015; and
(B) Received for fiscal year 2016 under section 1003(g) of the ESEA as in effect on December 9, 2015.
(2) For fiscal year 2018 and subsequent years, in reserving funds under paragraph (a)(1) of this section, a State may not reduce the sum of the allocations an LEA receives under subpart 2 of part A of title I of the ESEA below the sum of the allocations the LEA received under subpart 2 for the preceding fiscal year.
(3) If funds under section 1002(a) are insufficient in a given fiscal year to implement both paragraphs (a)(1) and (2) of this section, a State is not required to reserve the full amount required under paragraph (a)(1) of this section.
(b) State administration.(1) An SEA may reserve for State administrative activities authorized in sections 1004 and 1603 of the ESEA no more than the greater of—
(i) One percent from each of the amounts allocated to the State or Outlying Area under section 1002(a), (c), and (d) of the ESEA; or
(ii) $400,000 ($50,000 for the Outlying Areas).
(2)(i) An SEA reserving $400,000 under paragraph (b)(1)(ii) of this section must reserve proportionate amounts from each of the amounts allocated to the State or Outlying Area under section 1002(a), but is not required to reserve proportionate amounts from section 1002(a), (c), and (d) of the ESEA.
(ii) If an SEA reserves funds from the amounts allocated to the State or Outlying Area under section 1002(c) or (d) of the ESEA, the SEA may not reserve from those allocations more than the amount the SEA would have reserved if it had reserved proportionate amounts from section 1002(a), (c), and (d) of the ESEA.
(3) If the sum of the amounts allocated to all the States under section 1002(a), (c), and (d) of the ESEA is greater than $14,000,000,000, an SEA may not reserve more than one percent of the amount the State would receive if $14,000,000,000 had been allocated among the States under section 1002(a), (c), and (d) of the ESEA.
(4) An SEA may use the funds it has reserved under paragraph (b) of this section to perform general administrative activities necessary to carry out, at the State level, any of the programs authorized under Title I, parts A, C, and D of the ESEA.
(c) Direct student services. To carry out direct student services authorized under section 1003A of the ESEA, an SEA may, after meaningful consultation with geographically diverse LEAs, reserve not more than three percent of the amounts allocated to the State under subpart 2 of part A of title I of the ESEA for each fiscal year.
(d) Reservations and hold-harmless. In reserving funds under paragraphs (b) and (c) of this section, an SEA may—
(1) Proportionately reduce each LEA's total allocation received under section 1002(a) of the ESEA while ensuring that no LEA receives in total less than the hold-harmless percentage under § 200.73(a)(4), except that, when the amount remaining is insufficient to pay all LEAs the hold-harmless amount provided in § 200.73, the SEA shall ratably reduce each LEA's hold-harmless allocation to the amount available; or
(2) Proportionately reduce each LEA's total allocation received under subpart 2 of part A of title I of the ESEA even if an LEA's total allocation falls below its hold-harmless percentage under § 200.73(a)(4).
The following definitions apply to programs operated under this part:
(a) Child with a disability means child with a disability, as defined in section 602(3) of the IDEA.
(b) Children means—
(1) Persons up through age 21 who are entitled to a free public education through grade 12; and
(2) Preschool children below the age and grade level at which the agency provides free public education.
(c) Fiscal year means the Federal fiscal year—a period beginning on October 1 and ending on the following September 30—or another 12-month period normally used by the SEA for record-keeping.
(a) In general. (1) The Secretary may provide a State educational agency (SEA), or consortium of SEAs, with authority to establish and operate an innovative assessment system in its public schools (hereinafter referred to as “innovative assessment demonstration authority”).
(2) An SEA or consortium of SEAs may implement the innovative assessment demonstration authority during its demonstration authority period and, if applicable, extension or waiver period described in § 200.108(a) and (c), after which the Secretary will either approve the system for statewide use consistent with § 200.107 or withdraw the authority consistent with § 200.108(b).
(b) Definitions. For purposes of §§ 200.104 through 200.108—
(1) Affiliate member of a consortium means an SEA that is formally associated with a consortium of SEAs that is implementing the innovative assessment demonstration authority, but is not yet a full member of the consortium because it is not proposing to use the consortium's innovative assessment system under the demonstration authority, instead of, or in addition to, its statewide assessment under section 1111(b)(2) of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act (hereinafter “the Act”) for purposes of accountability and reporting under sections 1111(c) and 1111(h) of the Act.
(2) Demonstration authority period refers to the period of time over which an SEA, or consortium of SEAs, is authorized to implement the innovative assessment demonstration authority, which may not exceed five years and does not include the extension or waiver period under § 200.108. An SEA must use its innovative assessment system in all participating schools instead of, or in addition to, the statewide assessment under section 1111(b)(2) of the Act for purposes of accountability and reporting under section 1111(c) and 1111(h) of the Act in each year of the demonstration authority period.
(3) Innovative assessment system means a system of assessments, which may include any combination of general assessments or alternate assessments aligned with alternate academic achievement standards, in reading/language arts, mathematics, or science administered in at least one required grade under § 200.5(a)(1) and section 1111(b)(2)(B)(v) of the Act that—
(i) Produces—
(A) An annual summative determination of each student's mastery of grade-level content standards aligned to the challenging State academic standards under section 1111(b)(1) of the Act; or
(B) In the case of a student with the most significant cognitive disabilities assessed with an alternate assessment aligned with alternate academic achievement standards under section 1111(b)(1)(E) of the Act and aligned with the State's academic content standards for the grade in which the student is enrolled, an annual summative determination relative to such alternate academic achievement standards for each such student; and
(ii) May, in any required grade or subject, include one or more of the following types of assessments:
(A) Cumulative year-end assessments.
(B) Competency-based assessments.
(C) Instructionally embedded assessments.
(D) Interim assessments.
(E) Performance-based assessments.
(F) Another innovative assessment design that meets the requirements under § 200.105(b).
(4) Participating LEA means a local educational agency (LEA) in the State with at least one school participating in the innovative assessment demonstration authority.
(5) Participating school means a public school in the State in which the innovative assessment system is administered under the innovative assessment demonstration authority instead of, or in addition to, the statewide assessment under section 1111(b)(2) of the Act and where the results of the school's students on the innovative assessment system are used by its State and LEA for purposes of accountability and reporting under section 1111(c) and 1111(h) of the Act.
(c) Peer review of applications. (1) An SEA or consortium of SEAs seeking innovative assessment demonstration authority under paragraph (a) of this section must submit an application to the Secretary that demonstrates how the applicant meets all application requirements under § 200.105 and that addresses all selection criteria under § 200.106.
(2) The Secretary uses a peer review process, including a review of the SEA's application to determine that it meets or will meet each of the requirements under § 200.105 and sufficiently addresses each of the selection criteria under § 200.106, to inform the Secretary's decision of whether to award the innovative assessment demonstration authority to an SEA or consortium of SEAs. Peer review teams consist of experts and State and local practitioners who are knowledgeable about innovative assessment systems, including—
(i) Individuals with past experience developing innovative assessment and accountability systems that support all students and subgroups of students described in section 1111(c)(2) of the Act (e.g., psychometricians, measurement experts, researchers); and
(ii) Individuals with experience implementing such innovative assessment and accountability systems (e.g., State and local assessment directors, educators).
(3)(i) If points or weights are assigned to the selection criteria under § 200.106, the Secretary will inform applicants in the application package or a notice published in the
(A) The total possible score for all of the selection criteria under § 200.106; and
(B) The assigned weight or the maximum possible score for each criterion or factor under that criterion.
(ii) If no points or weights are assigned to the selection criteria and selected factors under § 200.106, the Secretary will evaluate each criterion equally and, within each criterion, each factor equally.
(d) Initial demonstration period. (1) The initial demonstration period is the first three years in which the Secretary awards at least one SEA, or consortium of SEAs, innovative assessment demonstration authority, concluding with publication of the progress report described in section 1204(c) of the Act. During the initial demonstration period, the Secretary may provide innovative assessment demonstration authority to—
(i) No more than seven SEAs in total, including those SEAs participating in consortia; and
(ii) Consortia that include no more than four SEAs.
(2) An SEA that is an affiliate member of a consortium is not included in the application under paragraph (c) of this section or counted toward the limitation in consortia size under paragraph (d)(1)(ii) of this section.
An SEA or consortium of SEAs seeking the innovative assessment demonstration authority must submit to the Secretary, at such time and in such manner as the Secretary may reasonably require, an application that includes the following:
(a) Consultation. Evidence that the SEA or consortium has developed an innovative assessment system in collaboration with—
(1) Experts in the planning, development, implementation, and evaluation of innovative assessment systems, which may include external partners; and
(2) Affected stakeholders in the State, or in each State in the consortium, including—
(i) Those representing the interests of children with disabilities, English learners, and other subgroups of students described in section 1111(c)(2) of the Act;
(ii) Teachers, principals, and other school leaders;
(iii) LEAs;
(iv) Representatives of Indian tribes located in the State;
(v) Students and parents, including parents of children described in paragraph (a)(2)(i) of this section; and
(vi) Civil rights organizations.
(b) Innovative assessment system. A demonstration that the innovative assessment system does or will—
(1) Meet the requirements of section 1111(b)(2)(B) of the Act, except that an innovative assessment—
(i) Need not be the same assessment administered to all public elementary and secondary school students in the State during the demonstration authority period described in § 200.104(b)(2) or extension period described in § 200.108 and prior to statewide use consistent with § 200.107, if the innovative assessment system will be administered initially to all students in participating schools within a participating LEA, provided that the statewide academic assessments under § 200.2(a)(1) and section 1111(b)(2) of the Act are administered to all students in any non-participating LEA or any non-participating school within a participating LEA; and
(ii) Need not be administered annually in each of grades 3-8 and at least once in grades 9-12 in the case of reading/language arts and mathematics assessments, and at least once in grades 3-5, 6-9, and 10-12 in the case of science assessments, so long as the statewide academic assessments under § 200.2(a)(1) and section 1111(b)(2) of the Act are administered in any required grade and subject under § 200.5(a)(1) in which the SEA does not choose to implement an innovative assessment;
(2)(i) Align with the challenging State academic content standards under section 1111(b)(1) of the Act, including the depth and breadth of such standards, for the grade in which a student is enrolled; and
(ii) May measure a student's academic proficiency and growth using items above or below the student's grade level so long as, for purposes of meeting the requirements for reporting and school accountability under sections 1111(c) and 1111(h) of the Act and paragraphs (b)(3) and (b)(7)-(9) of this section, the State measures each student's academic proficiency based on the challenging State academic standards for the grade in which the student is enrolled;
(3) Express student results or competencies consistent with the challenging State academic achievement standards under section 1111(b)(1) of the Act and identify which students are not making sufficient progress toward, and attaining, grade-level proficiency on such standards;
(4)(i) Generate results, including annual summative determinations as defined in paragraph (b)(7) of this section, that are valid, reliable, and comparable for all students and for each subgroup of students described in § 200.2(b)(11)(i)(A)-(I) and sections 1111(b)(2)(B)(xi) and 1111(h)(1)(C)(ii) of the Act, to the results generated by the State academic assessments described in § 200.2(a)(1) and section 1111(b)(2) of the Act for such students. Consistent with the SEA's or consortium's evaluation plan under § 200.106(e), the SEA must plan to annually determine comparability during each year of its demonstration authority period in one of the following ways:
(A) Administering full assessments from both the innovative and statewide assessment systems to all students enrolled in participating schools, such that at least once in any grade span (i.e., 3-5, 6-8, or 9-12) and subject for which there is an innovative assessment, a statewide assessment in the same subject would also be administered to all such students. As part of this determination, the innovative assessment and statewide assessment need not be administered to an individual student in the same school year.
(B) Administering full assessments from both the innovative and statewide assessment systems to a demographically representative sample of all students and subgroups of students described in section 1111(c)(2) of the Act, from among those students enrolled in participating schools, such that at least once in any grade span (i.e., 3-5, 6-8, or 9-12) and subject for which there is an innovative assessment, a statewide assessment in the same subject would also be administered in the same school year to all students included in the sample.
(C) Including, as a significant portion of the innovative assessment system in each required grade and subject in which both an innovative and statewide assessment are administered, items or performance tasks from the statewide assessment system that, at a minimum, have been previously pilot tested or field tested for use in the statewide assessment system.
(D) Including, as a significant portion of the statewide assessment system in each required grade and subject in which both an innovative and statewide assessment are administered, items or performance tasks from the innovative assessment system that, at a minimum, have been previously pilot tested or field tested for use in the innovative assessment system.
(E) An alternative method for demonstrating comparability that an SEA can demonstrate will provide for an equally rigorous and statistically valid comparison between student performance on the innovative assessment and the statewide assessment, including for each subgroup of students described in § 200.2(b)(11)(i)(A)-(I) and sections 1111(b)(2)(B)(xi) and 1111(h)(1)(C)(ii) of the Act; and
(ii) Generate results, including annual summative determinations as defined in paragraph (b)(7) of this section, that are valid, reliable, and comparable, for all students and for each subgroup of students described in § 200.2(b)(11)(i)(A)-(I) and sections 1111(b)(2)(B)(xi) and 1111(h)(1)(C)(ii) of the Act, among participating schools and LEAs in the innovative assessment demonstration authority. Consistent with the SEA's or consortium's evaluation plan under § 200.106(e), the SEA must plan to annually determine comparability during each year of its demonstration authority period;
(5)(i) Provide for the participation of all students, including children with disabilities and English learners;
(ii) Be accessible to all students by incorporating the principles of universal design for learning, to the extent practicable, consistent with § 200.2(b)(2)(ii); and
(iii) Provide appropriate accommodations consistent with § 200.6(b) and (f)(1)(i) and section 1111(b)(2)(B)(vii) of the Act;
(6) For purposes of the State accountability system consistent with section 1111(c)(4)(E) of the Act, annually measure in each participating school progress on the Academic Achievement indicator under section 1111(c)(4)(B) of the Act of at least 95 percent of all students, and 95 percent of students in each subgroup of students described in section 1111(c)(2) of the Act, who are required to take such assessments consistent with paragraph (b)(1)(ii) of this section;
(7) Generate an annual summative determination of achievement, using the annual data from the innovative assessment, for each student in a participating school in the demonstration authority that describes—
(i) The student's mastery of the challenging State academic standards under section 1111(b)(1) of the Act for the grade in which the student is enrolled; or
(ii) In the case of a student with the most significant cognitive disabilities assessed with an alternate assessment aligned with alternate academic achievement standards under section 1111(b)(1)(E) of the Act, the student's mastery of those standards;
(8) Provide disaggregated results by each subgroup of students described in § 200.2(b)(11)(i)(A)-(I) and sections 1111(b)(2)(B)(xi) and 1111(h)(1)(C)(ii) of the Act, including timely data for teachers, principals and other school leaders, students, and parents consistent with § 200.8 and section 1111(b)(2)(B)(x) and (xii) and section 1111(h) of the Act, and provide results to parents in a manner consistent with paragraph (b)(4)(i) of this section and § 200.2(e); and
(9) Provide an unbiased, rational, and consistent determination of progress toward the State's long-term goals for academic achievement under section 1111(c)(4)(A) of the Act for all students and each subgroup of students described in section 1111(c)(2) of the Act and a comparable measure of student performance on the Academic Achievement indicator under section 1111(c)(4)(B) of the Act for participating schools relative to non-participating schools so that the SEA may validly and reliably aggregate data from the system for purposes of meeting requirements for—
(i) Accountability under sections 1003 and 1111(c) and (d) of the Act, including how the SEA will identify participating and non-participating schools in a consistent manner for comprehensive and targeted support and improvement under section 1111(c)(4)(D) of the Act; and
(ii) Reporting on State and LEA report cards under section 1111(h) of the Act.
(c) Selection criteria. Information that addresses each of the selection criteria under § 200.106.
(d) Assurances. Assurances that the SEA, or each SEA in a consortium, will—
(1) Continue use of the statewide academic assessments in reading/language arts, mathematics, and science required under § 200.2(a)(1) and section 1111(b)(2) of the Act—
(i) In all non-participating schools; and
(ii) In all participating schools for which such assessments will be used in addition to innovative assessments for accountability purposes under section 1111(c) of the Act consistent with paragraph (b)(1)(ii) of this section or for evaluation purposes consistent with § 200.106(e) during the demonstration authority period;
(2) Ensure that all students and each subgroup of students described in section 1111(c)(2) of the Act in participating schools are held to the same challenging State academic standards under section 1111(b)(1) of the Act as all other students, except that students with the most significant cognitive disabilities may be assessed with alternate assessments aligned with alternate academic achievement standards consistent with § 200.6 and section 1111(b)(1)(E) and (b)(2)(D) of the Act, and receive the instructional support needed to meet such standards;
(3) Report the following annually to the Secretary, at such time and in such manner as the Secretary may reasonably require:
(i) An update on implementation of the innovative assessment demonstration authority, including—
(A) The SEA's progress against its timeline under § 200.106(c) and any outcomes or results from its evaluation and continuous improvement process under § 200.106(e); and
(B) If the innovative assessment system is not yet implemented statewide consistent with § 200.104(a)(2), a description of the SEA's progress in scaling up the system to additional LEAs or schools consistent with its strategies under § 200.106(a)(3)(i), including updated assurances from participating LEAs consistent with paragraph (e)(2) of this section.
(ii) The performance of students in participating schools at the State, LEA, and school level, for all students and disaggregated for each subgroup of students described in section 1111(c)(2) of the Act, on the innovative assessment, including academic achievement and participation data required to be reported consistent with section 1111(h) of the Act, except that such data may not reveal any personally identifiable information.
(iii) If the innovative assessment system is not yet implemented statewide, school demographic information, including enrollment and student achievement information, for the subgroups of students described in section 1111(c)(2) of the Act, among participating schools and LEAs and for any schools or LEAs that will participate for the first time in the following year, and a description of how the participation of any additional schools or LEAs in that year contributed to progress toward achieving high-quality and consistent implementation across demographically diverse LEAs in the State consistent with the SEA's benchmarks described in § 200.106(a)(3)(iii).
(iv) Feedback from teachers, principals and other school leaders, and other stakeholders consulted under paragraph (a)(2) of this section, including parents and students, from participating schools and LEAs about their satisfaction with the innovative assessment system;
(4) Ensure that each participating LEA informs parents of all students in participating schools about the innovative assessment, including the grades and subjects in which the innovative assessment will be administered, and, consistent with section 1112(e)(2)(B) of the Act, at the beginning of each school year during which an innovative assessment will be implemented. Such information must be—
(i) In an understandable and uniform format;
(ii) To the extent practicable, written in a language that parents can understand or, if it is not practicable to provide written translations to a parent with limited English proficiency, be orally translated for such parent; and
(iii) Upon request by a parent who is an individual with a disability as defined by the Americans with Disabilities Act, provided in an alternative format accessible to that parent; and
(5) Coordinate with and provide information to, as applicable, the Institute of Education Sciences for purposes of the progress report described in section 1204(c) of the Act and ongoing dissemination of information under section 1204(m) of the Act.
(e) Initial implementation in a subset of LEAs or schools. If the innovative assessment system will initially be administered in a subset of LEAs or schools in a State—
(1) A description of each LEA, and each of its participating schools, that will initially participate, including demographic information and its most recent LEA report card under section 1111(h)(2) of the Act; and
(2) An assurance from each participating LEA, for each year that the LEA is participating, that the LEA will comply with all requirements of this section.
(f) Application from a consortium of SEAs. If an application for the innovative assessment demonstration authority is submitted by a consortium of SEAs—
(1) A description of the governance structure of the consortium, including—
(i) The roles and responsibilities of each member SEA, which may include a description of affiliate members, if applicable, and must include a description of financial responsibilities of member SEAs;
(ii) How the member SEAs will manage and, at their discretion, share intellectual property developed by the consortium as a group; and
(iii) How the member SEAs will consider requests from SEAs to join or leave the consortium and ensure that changes in membership do not affect the consortium's ability to implement the innovative assessment demonstration authority consistent with the requirements and selection criteria in this section and § 200.106.
(2) While the terms of the association with affiliate members are defined by each consortium, consistent with § 200.104(b)(1) and paragraph (f)(1)(i) of this section, for an affiliate member to become a full member of the consortium and to use the consortium's innovative assessment system under the demonstration authority, the consortium must submit a revised application to the Secretary for approval, consistent with the requirements of this section and § 200.106 and subject to the limitation under § 200.104(d).
The Secretary reviews an application by an SEA or consortium of SEAs seeking innovative assessment demonstration authority consistent with § 200.104(c) based on the following selection criteria:
(a) Project narrative. The quality of the SEA's or consortium's plan for implementing the innovative assessment demonstration authority. In determining the quality of the plan, the Secretary considers—
(1) The rationale for developing or selecting the particular innovative assessment system to be implemented under the demonstration authority, including—
(i) The distinct purpose of each assessment that is part of the innovative assessment system and how the system will advance the design and delivery of large-scale, statewide academic assessments in innovative ways; and
(ii) The extent to which the innovative assessment system as a whole will promote high-quality instruction, mastery of challenging State academic standards, and improved student outcomes, including for each subgroup of students described in section 1111(c)(2) of the Act;
(2) The plan the SEA or consortium, in consultation with any external partners, if applicable, has to—
(i) Develop and use standardized and calibrated tools, rubrics, methods, or other strategies for scoring innovative assessments throughout the demonstration authority period, consistent with relevant nationally recognized professional and technical standards, to ensure inter-rater reliability and comparability of innovative assessment results consistent with § 200.105(b)(4)(ii), which may include evidence of inter-rater reliability; and
(ii) Train evaluators to use such strategies, if applicable; and
(3) If the system will initially be administered in a subset of schools or LEAs in a State—
(i) The strategies the SEA, including each SEA in a consortium, will use to scale the innovative assessment to all schools statewide, with a rationale for selecting those strategies;
(ii) The strength of the SEA's or consortium's criteria that will be used to determine LEAs and schools that will initially participate and when to approve additional LEAs and schools, if applicable, to participate during the requested demonstration authority period; and
(iii) The SEA's plan, including each SEA in a consortium, for how it will ensure that, during the demonstration authority period, the inclusion of additional LEAs and schools continues to reflect high-quality and consistent implementation across demographically diverse LEAs and schools, or contributes to progress toward achieving such implementation across demographically diverse LEAs and schools, including diversity based on enrollment of subgroups of students described in section 1111(c)(2) of the Act and student achievement. The plan must also include annual benchmarks toward achieving high-quality and consistent implementation across participating schools that are, as a group, demographically similar to the State as a whole during the demonstration authority period, using the demographics of initially participating schools as a baseline.
(b) Prior experience, capacity, and stakeholder support. (1) The extent and depth of prior experience that the SEA, including each SEA in a consortium, and its LEAs have in developing and implementing the components of the innovative assessment system. An SEA may also describe the prior experience of any external partners that will be participating in or supporting its demonstration authority in implementing those components. In evaluating the extent and depth of prior experience, the Secretary considers—
(i) The success and track record of efforts to implement innovative assessments or innovative assessment items aligned to the challenging State academic standards under section 1111(b)(1) of the Act in LEAs planning to participate; and
(ii) The SEA's or LEA's development or use of—
(A) Effective supports and appropriate accommodations consistent with § 200.6(b) and (f)(1)(i) and section 1111(b)(2)(B)(vii) of the Act for administering innovative assessments to all students, including English learners and children with disabilities, which must include professional development for school staff on providing such accommodations;
(B) Effective and high-quality supports for school staff to implement innovative assessments and innovative assessment items, including professional development; and
(C) Standardized and calibrated tools, rubrics, methods, or other strategies for scoring innovative assessments, with documented evidence of the validity, reliability, and comparability of annual summative determinations of achievement, consistent with § 200.105(b)(4) and (7).
(2) The extent and depth of SEA, including each SEA in a consortium, and LEA capacity to implement the innovative assessment system considering the availability of technological infrastructure; State and local laws; dedicated and sufficient staff, expertise, and resources; and other relevant factors. An SEA or consortium may also describe how it plans to enhance its capacity by collaborating with external partners that will be participating in or supporting its demonstration authority. In evaluating the extent and depth of capacity, the Secretary considers—
(i) The SEA's analysis of how capacity influenced the success of prior efforts to develop and implement innovative assessments or innovative assessment items; and
(ii) The strategies the SEA is using, or will use, to mitigate risks, including those identified in its analysis, and support successful implementation of the innovative assessment.
(3) The extent and depth of State and local support for the application for demonstration authority in each SEA, including each SEA in a consortium, as demonstrated by signatures from the following:
(i) Superintendents (or equivalent) of LEAs, including participating LEAs in the first year of the demonstration authority period.
(ii) Presidents of local school boards (or equivalent, where applicable), including within participating LEAs in the first year of the demonstration authority.
(iii) Local teacher organizations (including labor organizations, where applicable), including within participating LEAs in the first year of the demonstration authority.
(iv) Other affected stakeholders, such as parent organizations, civil rights organizations, and business organizations.
(c) Timeline and budget. The quality of the SEA's or consortium's timeline and budget for implementing the innovative assessment demonstration authority. In determining the quality of the timeline and budget, the Secretary considers—
(1) The extent to which the timeline reasonably demonstrates that each SEA will implement the system statewide by the end of the requested demonstration authority period, including a description of—
(i) The activities to occur in each year of the requested demonstration authority period;
(ii) The parties responsible for each activity; and
(iii) If applicable, how a consortium's member SEAs will implement activities at different paces and how the consortium will implement interdependent activities, so long as each non-affiliate member SEA begins using the innovative assessment in the same school year consistent with § 200.104(b)(2); and
(2) The adequacy of the project budget for the duration of the requested demonstration authority period, including Federal, State, local, and non-public sources of funds to support and sustain, as applicable, the activities in the timeline under paragraph (c)(1) of this section, including—
(i) How the budget will be sufficient to meet the expected costs at each phase of the SEA's planned expansion of its innovative assessment system; and
(ii) The degree to which funding in the project budget is contingent upon future appropriations at the State or local level or additional commitments from non-public sources of funds.
(d) Supports for educators, students, and parents. The quality of the SEA or consortium's plan to provide supports that can be delivered consistently at scale to educators, students, and parents to enable successful implementation of the innovative assessment system and improve instruction and student outcomes. In determining the quality of supports, the Secretary considers—
(1) The extent to which the SEA or consortium has developed, provided, and will continue to provide training to LEA and school staff, including teachers, principals, and other school leaders, that will familiarize them with the innovative assessment system and develop teacher capacity to implement instruction that is informed by the innovative assessment system and its results;
(2) The strategies the SEA or consortium has developed and will use to familiarize students and parents with the innovative assessment system;
(3) The strategies the SEA will use to ensure that all students and each subgroup of students under section 1111(c)(2) of the Act in participating schools receive the support, including appropriate accommodations consistent with § 200.6(b) and (f)(1)(i) and section 1111(b)(2)(B)(vii) of the Act, needed to meet the challenging State academic standards under section 1111(b)(1) of the Act; and
(4) If the system includes assessment items that are locally developed or locally scored, the strategies and safeguards (e.g., test blueprints, item and task specifications, rubrics, scoring tools, documentation of quality control procedures, inter-rater reliability checks, audit plans) the SEA or consortium has developed, or plans to develop, to validly and reliably score such items, including how the strategies engage and support teachers and other staff in designing, developing, implementing, and validly and reliably scoring high-quality assessments; how the safeguards are sufficient to ensure unbiased, objective scoring of assessment items; and how the SEA will use effective professional development to aid in these efforts.
(e) Evaluation and continuous improvement. The quality of the SEA's or consortium's plan to annually evaluate its implementation of innovative assessment demonstration authority. In determining the quality of the evaluation, the Secretary considers—
(1) The strength of the proposed evaluation of the innovative assessment system included in the application, including whether the evaluation will be conducted by an independent, experienced third party, and the likelihood that the evaluation will sufficiently determine the system's validity, reliability, and comparability to the statewide assessment system consistent with the requirements of § 200.105(b)(4) and (9); and
(2) The SEA's or consortium's plan for continuous improvement of the innovative assessment system, including its process for—
(i) Using data, feedback, evaluation results, and other information from participating LEAs and schools to make changes to improve the quality of the innovative assessment; and
(ii) Evaluating and monitoring implementation of the innovative assessment system in participating LEAs and schools annually.
(a)(1) After an SEA has scaled its innovative assessment system to operate statewide in all schools and LEAs in the State, the SEA must submit evidence for peer review under section 1111(a)(4) of the Act and § 200.2(d) to determine whether the system may be used for purposes of both academic assessments and the State accountability system under sections 1111(b)(2), (c), and (d) and 1003 of the Act.
(2) An SEA may only use the innovative assessment system for the purposes described in paragraph (a)(1) of this section if the Secretary determines that the system is of high quality consistent with paragraph (b) of this section.
(b) Through the peer review process of State assessments and accountability systems under section 1111(a)(4) of the Act and § 200.2(d), the Secretary determines that the innovative assessment system is of high quality if—
(1) An innovative assessment developed in any grade or subject under § 200.5(a)(1) and section 1111(b)(2)(B)(v) of the Act—
(i) Meets all of the requirements under section 1111(b)(2) of the Act and § 200.105(b) and (c);
(ii) Provides coherent and timely information about student achievement based on the challenging State academic standards under section 1111(b)(1) of the Act;
(iii) Includes objective measurements of academic achievement, knowledge, and skills; and
(iv) Is valid, reliable, and consistent with relevant, nationally recognized professional and technical standards;
(2) The SEA provides satisfactory evidence that it has examined the statistical relationship between student performance on the innovative assessment in each subject area and student performance on other measures of success, including the measures used for each relevant grade-span within the remaining indicators (i.e., indicators besides Academic Achievement) in the statewide accountability system under section 1111(c)(4)(B)(ii)-(v) of the Act, and how the inclusion of the innovative assessment in its Academic Achievement indicator under section 1111(c)(4)(B)(i) of the Act affects the annual meaningful differentiation of schools under section 1111(c)(4)(C) of the Act;
(3) The SEA has solicited information, consistent with the requirements under § 200.105(d)(3)(iv), and taken into account feedback from teachers, principals, other school leaders, parents, and other stakeholders under § 200.105(a)(2) about their satisfaction with the innovative assessment system; and
(4) The SEA has demonstrated that the same innovative assessment system was used to measure—
(i) The achievement of all students and each subgroup of students described in section 1111(c)(2) of the Act, and that appropriate accommodations were provided consistent with § 200.6(b) and (f)(1)(i) under section 1111(b)(2)(B)(vii) of the Act; and
(ii) For purposes of the State accountability system consistent with section 1111(c)(4)(E) of the Act, progress on the Academic Achievement indicator under section 1111(c)(4)(B)(i) of the Act of at least 95 percent of all students, and 95 percent of students in each subgroup of students described in section 1111(c)(2) of the Act.
(c) With respect to the evidence submitted to the Secretary to make the determination described in paragraph (b)(2) of this section, the baseline year for any evaluation is the first year that a participating LEA in the State administered the innovative assessment system under the demonstration authority.
(d) In the case of a consortium of SEAs, evidence may be submitted for the consortium as a whole so long as the evidence demonstrates how each member SEA meets each requirement of paragraph (b) of this section applicable to an SEA.
(a) Extension. (1) The Secretary may extend an SEA's demonstration authority period for no more than two years if the SEA submits to the Secretary—
(i) Evidence that its innovative assessment system continues to meet the requirements under § 200.105 and the SEA continues to implement the plan described in its application in response to the selection criteria in § 200.106 in all participating schools and LEAs;
(ii) A high-quality plan, including input from stakeholders under § 200.105(a)(2), for transitioning to statewide use of the innovative assessment system by the end of the extension period; and
(iii) A demonstration that the SEA and all LEAs that are not yet fully implementing the innovative assessment system have sufficient capacity to support use of the system statewide by the end of the extension period.
(2) In the case of a consortium of SEAs, the Secretary may extend the demonstration authority period for the consortium as a whole or for an individual member SEA.
(b) Withdrawal of demonstration authority. (1) The Secretary may withdraw the innovative assessment demonstration authority provided to an SEA, including an individual SEA member of a consortium, if at any time during the approved demonstration authority period or extension period, the Secretary requests, and the SEA does not present in a timely manner—
(i) A high-quality plan, including input from stakeholders under § 200.105(a)(2), to transition to full statewide use of the innovative assessment system by the end of its approved demonstration authority period or extension period, as applicable; or
(ii) Evidence that—
(A) The innovative assessment system meets all requirements under § 200.105, including a demonstration that the innovative assessment system has met the requirements under § 200.105(b);
(B) The SEA continues to implement the plan described in its application in response to the selection criteria in § 200.106;
(C) The innovative assessment system includes and is used to assess all students attending participating schools in the demonstration authority, consistent with the requirements under section 1111(b)(2) of the Act to provide for participation in State assessments, including among each subgroup of students described in section 1111(c)(2) of the Act, and for appropriate accommodations consistent with § 200.6(b) and (f)(1)(i) and section 1111(b)(2)(B)(vii) of the Act;
(D) The innovative assessment system provides an unbiased, rational, and consistent determination of progress toward the State's long-term goals and measurements of interim progress for academic achievement under section 1111(c)(4)(A) of the Act for all students and subgroups of students described in section 1111(c)(2) of the Act and a comparable measure of student performance on the Academic Achievement indicator under section 1111(c)(4)(B)(i) of the Act for participating schools relative to non-participating schools; or
(E) The innovative assessment system demonstrates comparability to the statewide assessments under section 1111(b)(2) of the Act in content coverage, difficulty, and quality.
(2)(i) In the case of a consortium of SEAs, the Secretary may withdraw innovative assessment demonstration authority for the consortium as a whole at any time during its demonstration authority period or extension period if the Secretary requests, and no member of the consortium provides, the information under paragraph (b)(1)(i) or (ii) of this section.
(ii) If innovative assessment demonstration authority for one or more SEAs in a consortium is withdrawn, the consortium may continue to implement the authority if it can demonstrate, in an amended application to the Secretary that, as a group, the remaining SEAs continue to meet all requirements and selection criteria in §§ 200.105 and 200.106.
(c) Waiver authority. (1) At the end of the extension period, an SEA that is not yet approved consistent with § 200.107 to implement its innovative assessment system statewide may request a waiver from the Secretary consistent with section 8401 of the Act to delay the withdrawal of authority under paragraph (b) of this section for the purpose of providing the SEA with the time necessary to receive approval to transition to use of the innovative assessment system statewide under § 200.107(b).
(2) The Secretary may grant an SEA a one-year waiver to continue the innovative assessment demonstration authority, if the SEA submits, in its request under paragraph (c)(1) of this section, evidence satisfactory to the Secretary that it—
(i) Has met all of the requirements under paragraph (b)(1) of this section and of §§ 200.105 and 200.106; and
(ii) Has a high-quality plan, including input from stakeholders under § 200.105(a)(2), for transition to statewide use of the innovative assessment system, including peer review consistent with § 200.107, in a reasonable period of time.
(3) In the case of a consortium of SEAs, the Secretary may grant a one-year waiver consistent with paragraph (c)(1) of this section for the consortium as a whole or for individual member SEAs, as necessary.
(d) Return to the statewide assessment system. If the Secretary withdraws innovative assessment demonstration authority consistent with paragraph (b) of this section, or if an SEA voluntarily terminates use of its innovative assessment system prior to the end of its demonstration authority, extension, or waiver period under paragraph (c) of this section, as applicable, the SEA must—
(1) Return to using, in all LEAs and schools in the State, a statewide assessment that meets the requirements of section 1111(b)(2) of the Act; and
(2) Provide timely notice to all participating LEAs and schools of the withdrawal of authority and the SEA's plan for transition back to use of a statewide assessment.
(a) High School Equivalency Program. The High School Equivalency Program (HEP) is designed to assist persons who are eligible under § 206.3—to obtain the equivalent of a secondary school diploma and subsequently to gain employment or be placed in an institution of higher education (IHE) or other postsecondary education or training.
(b) College Assistance Migrant Program. The College Assistance Migrant Program (CAMP) is designed to assist persons who are eligible under § 206.3—who are enrolled or are admitted for enrollment on a full-time basis in the first academic year at an IHE.
(a) Eligibility. An IHE or a private nonprofit organization may apply for a grant to operate a HEP or CAMP project.
(b) Cooperative planning. If a private nonprofit organization other than an IHE applies for a HEP or a CAMP grant, that agency must plan the project in cooperation with an IHE and must propose to operate the project, or in the case of a HEP grant, some aspects of the project, with the facilities of that IHE.
(a) General. To be eligible to participate in a HEP or a CAMP project—
(1) A person, or his or her immediate family member, must have spent a minimum of 75 days during the past 24 months as a migrant or seasonal farmworker; or
(2) The person must have participated (with respect to HEP within the last 24 months), or be eligible to participate, in programs under 34 CFR part 200, subpart C (Title I—Migrant Education Program) or 20 CFR part 633 (Employment and Training Administration, Department of Labor—Migrant and Seasonal Farmworker Programs).
(b) Special HEP qualifications. To be eligible to participate in a HEP project, a person also must—
(1) Not have earned a secondary school diploma or its equivalent;
(2) Not be currently enrolled in an elementary or secondary school;
(3) Be 16 years of age or over, or beyond the age of compulsory school attendance in the State in which he or she resides; and
(4) Be determined by the grantee to need the academic and supporting services and financial assistance provided by the project in order to attain the equivalent of a secondary school diploma and to gain employment or be placed in an IHE or other postsecondary education or training.
(c) Special CAMP qualifications. To be eligible to participate in a CAMP project, a person also must—
(1) Be enrolled or be admitted for enrollment as a full-time student at the participating IHE;
(2) Not be beyond the first academic year of a program of study at the IHE, as determined under the standards of the IHE; and
(3) Be determined by the grantee to need the academic and supporting services and financial assistance provided by the project in order to complete an academic program of study at the IHE.
The following regulations apply to HEP and CAMP:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions That Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(7) [Reserved]
(8) 34 CFR part 86 (Drug-Free Schools and Campuses).
(9) 34 CFR part 97 (Protection of Human Subjects).
(10) 34 CFR part 98 (Student Rights in Research, Experimental Programs, and Testing).
(11) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 206.
(c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted in 2 CFR part 3474, and the OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted in 2 CFR part 3485.
(a) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR 77.1(c) (EDGAR, Definitions):
(b) Definitions in the grants administration regulations. The following terms used in this part are defined in 2 CFR part 200, as adopted in 2 CFR part 3474:
(c) Program definitions. The following additional definitions apply specifically to HEP and CAMP:
(1) Act means the Higher Education Act of 1965, as amended.
(2) Agricultural activity means:
(i) Any activity directly related to the production of crops, dairy products, poultry, or livestock;
(ii) Any activity directly related to the cultivation or harvesting of trees; or
(iii) Any activity directly related to fish farms.
(3) Farmwork means any agricultural activity, performed for either wages or personal subsistence, on a farm, ranch, or similar establishment.
(4) Full-time, with respect to an individual, means a student who is carrying a full-time academic workload, as defined in 34 CFR part 690 (regulations for the Pell Grant Program).
(5) Immediate family member means one or more of the following:
(i) A spouse.
(ii) A parent, step-parent, adoptive parent, foster parent, or anyone with guardianship.
(iii) Any person who—
(A) Claims the individual as a dependent on a Federal income tax return for either of the previous two years, or
(B) Resides in the same household as the individual, supports that individual financially, and is a relative of that individual.
(6) Institution of higher education means an educational institution that:
(i) Is in a State;
(ii) Is authorized by that State to provide a program of education beyond secondary school;
(iii) Is a public or nonprofit institution;
(iv) Admits as a regular student only a person who:
(A) Has a secondary school diploma;
(B) Has the recognized equivalent of a secondary school diploma; or
(C) Is beyond the age of compulsory school attendance in that State and has the ability to benefit from the training offered by the institution;
(v) Provides:
(A) An educational program for which it awards a bachelor's degree; or
(B) At least a two-year program that is acceptable for full credit toward a bachelor's degree;
(vi)(A) Is accredited by a nationally recognized accrediting agency or association;
(B) Has satisfactorily assured the Secretary that it will meet the accreditation standards of a nationally recognized accrediting agency or association within a reasonable time considering the resources available to the institution, the period of time, if any, it has operated, and its effort to meet accreditation standards; or
(C) Has its credits accepted on transfer by at least three accredited institutions on the same basis as those institutions accept transfer credits from fully accredited institutions.
(7) Migrant farmworker means a seasonal farmworker—as defined in paragraph (c)(8) of this section—whose employment required travel that precluded the farmworker from returning to his or her domicile (permanent place of residence) within the same day.
(8) Seasonal farmworker means a person whose primary employment was in farmwork on a temporary or seasonal basis (that is, not a constant year-round activity) for a period of at least 75 days within the past 24 months.
(d) Other definitions. For purposes of determining program eligibility under § 206.3(a)(2), the definitions in 34 CFR 200.81 (Title I—Migrant Education Program) and 20 CFR 633.104 (Employment and Training Administration, Department of Labor—Migrant and Seasonal Farmworker Programs) apply.
(a) General. A grantee may use funds under HEP or CAMP to support approved projects designed to provide academic and supporting services and financial assistance to eligible participants as described in § 206.3.
(b) Types of services—(1) HEP projects. A HEP project may provide the following types of services to assist participants in obtaining the equivalent of a secondary school diploma, and as needed, to assure the success of the participants in meeting the project's objectives and in succeeding at the secondary school level and beyond:
(i) Recruitment services to reach persons who are eligible under § 206.3 (a) and (b).
(ii) Educational services that provide instruction designed to help students pass an examination and obtain a certificate that meets the guidelines for high school equivalency established by the State in which the project is located.
(iii) Supportive services that include the following:
(A) Personal, vocational, and academic counseling;
(B) Placement services designed to place students in a university, college, or junior college program (including preparation for college entrance examinations), or in military services or career positions; and
(C) Health services.
(iv) Information concerning and assistance in obtaining available student financial aid.
(v) Stipends for high school equivalency program participants.
(vi) Housing for those enrolled in residential programs.
(vii) Exposure to cultural events, academic programs, and other educational and cultural activities usually not available to migrant youth.
(viii) Other essential supportive services, (such as transportation and child care) as needed, to ensure the success of eligible students.
(ix) Other activities to improve persistence and retention in postsecondary education.
(2) CAMP projects. A CAMP project may provide the following types of services to assist the participants in meeting the project's objectives and in succeeding in an academic program of study at the IHE:
(i) Outreach and recruitment services to reach persons who are eligible under § 206.3 (a) and (c).
(ii) Supportive and instructional services to improve placement, persistence, and retention in postsecondary education, including:
(A) Personal, academic, career economic education, or personal finance counseling as an ongoing part of the program;
(B) Tutoring and academic-skillbuilding instruction and assistance;
(C) Assistance with special admissions;
(D) Health services; and
(E) Other services as necessary to assist students in completing program requirements.
(iii) Assistance in obtaining student financial aid that includes, but is not limited to, the following:
(A) Stipends.
(B) Scholarships.
(C) Student travel.
(D) Career-oriented work-study.
(E) Books and supplies.
(F) Tuition and fees.
(G) Room and board.
(H) Other assistance necessary to assist students in completing their first year of college or university.
(iv) Housing support for students living in institutional facilities and commuting students.
(v) Exposure to cultural events, academic programs, and other activities not usually available to migrant youth.
(vi) Internships.
(vii) Other essential supportive services (such as transportation and child care) as necessary to ensure the success of eligible students.
(c) The health services, and other financial support services provided to participating students must:
(1) Be necessary to ensure their participation in the HEP or CAMP; and
(2) Not detract, because of the amount, from the basic educational services provided under those programs.
(a) In addition to the services provided in § 206.10(b)(2), CAMP projects must provide follow-up services for project participants after they have completed their first year of college.
(b) Follow-up services may include—
(1) Monitoring and reporting the academic progress of students who participated in the project during their first year of college and their subsequent years in college;
(2) Referring these students to on- or off-campus providers of counseling services, academic assistance, or financial aid, and coordinating those services, assistance, and aid with other non-program services, assistance, and aid, including services, assistance, and aid provided by community-based organizations, which may include mentoring and guidance; and
(3) For students attending two-year institutions of higher education, encouraging the students to transfer to four-year institutions of higher education, where appropriate, and monitoring the rate of transfer of those students.
(c) Grantees may not use more than 10 percent of funds awarded to them for follow-up services.
In applying for a grant, an applicant shall:
(a) Follow the procedures and meet the requirements stated in subpart C of 34 CFR part 75 (EDGAR-Direct Grant Programs);
(b) Submit a grant application that:
(1) Covers a period of five years unless extraordinary circumstances warrant a shorter period; and
(2) Includes an annual budget of not less than $180,000;
(c) Include a management plan that contains:
(1) Assurances that the staff has a demonstrated knowledge of and will be sensitive to the unique characteristics and needs of the migrant and seasonal farmworker population; and
(2) Provisions for:
(i) Staff inservice training;
(ii) Training and technical assistance;
(iii) Staff travel;
(iv) Student travel;
(v) Interagency coordination; and
(vi) Project evaluation; and
(d) Provide the following assurances:
(1) The grantee will develop and implement a plan for identifying, informing, and recruiting eligible participants who are most in need of the academic and supporting services and financial assistance provided by the project.
(2) The grantee will develop and implement a plan for identifying and using the resources of the participating IHE and the community to supplement and enhance the services provided by the project.
The Secretary evaluates an application under the procedures in 34 CFR part 75.
(a) In the case of an applicant for a HEP award, the Secretary considers the applicant's experience in implementing an expiring HEP project with respect to—
(1) Whether the applicant served the number of participants described in its approved application;
(2) The extent to which the applicant met or exceeded its funded objectives with regard to project participants, including the targeted number and percentage of—
(i) Participants who received a general educational development (GED) credential; and
(ii) GED credential recipients who were reported as entering postsecondary education programs, career positions, or the military; and
(3) The extent to which the applicant met the administrative requirements, including recordkeeping, reporting, and financial accountability under the terms of the previously funded award.
(b) In the case of an applicant for a CAMP award, the Secretary considers the applicant's experience in implementing an expiring CAMP project with respect to—
(1) Whether the applicant served the number of participants described in its approved application;
(2) The extent to which the applicant met or exceeded its funded objectives with regard to project participants, including the targeted number and percentage of participants who—
(i) Successfully completed the first year of college; and
(ii) Continued to be enrolled in postsecondary education after completing their first year of college; and
(3) The extent to which the applicant met the administrative requirements, including recordkeeping, reporting, and financial accountability under the terms of the previously funded award.
Funds provided under HEP or CAMP may not be used for construction activities, other than minor construction-related activities such as the repair or minor remodeling or alteration of facilities.
The regulations in this part govern the provision of financial assistance under title VIII of the Elementary and Secondary Education Act of 1965 (ESEA) to local educational agencies (LEAs) in areas affected by Federal activities.
(a)(1) The following terms defined in section 8013 of the Act apply to this part:
(2) The following term defined in § 222.30 applies to this part:
(b) The following terms defined in section 9101 of the ESEA (General Provisions) also apply to this part:
(c) In addition, the following definitions apply to this part:
Act means title VIII of the Elementary and Secondary Education Act of 1965 (ESEA), as amended.
Applicant means any LEA that files an application for financial assistance under section 8002 or section 8003 of the Act and the regulations in this part implementing those provisions. Except as provided in section 8005(d)(4) of the Act, an SEA may be an applicant for assistance under section 8003 only if the SEA directly operates and maintains facilities for providing free public education for the children it claims in its application.
Application means a complete and signed application in the form approved by the Secretary, filed by an applicant.
Federally connected children means children described in section 8003 or section 8010(c)(2) of the Act.
Federal property. (1) The term means—
(i) Federal property described in section 8013; and
(ii) Ships that are owned by the United States and whose home ports are located upon Federal property described in this definition.
(2) Notwithstanding paragraph (1) of this definition, for the purpose of section 8002 the term does not include—
(i) Any real property that the United States does not own in fee simple, except for Indian lands described in section 8013(7), and transferred property described in section 8002(d); and
(ii) Real property described in section 8002(c) (real property with respect to which payments are being made under section 13 of the Tennessee Valley Authority Act of 1933).
Fiscally dependent LEA means an LEA that does not have the final authority to determine the amount of revenue to be raised from local sources for current expenditure purposes.
Fiscally independent LEA means an LEA that has the final authority to determine the amount of revenue to be raised from local sources for current expenditure purposes within the limits established by State law.
Local educational agency (LEA) is defined in section 8013(9). Except for an SEA qualifying under section 8005(d)(4), the term includes an SEA only so long as—
(1) The SEA directly operates and maintains the facilities for providing free public education for the children it claims in its application;
(2) The children claimed by the SEA actually are attending those State-operated facilities; and
(3) The SEA does not, through a tuition arrangement, contract, or by any other means, pay another entity to operate and maintain facilities for those children.
Local real property tax rate for current expenditure purposes. (1) For a fiscally independent LEA, the term means the entire tax levied on real property within the LEA, if all but a de minimis amount of the total proceeds from the tax levy are available to that LEA for current expenditures (as defined in section 8013).
(2) For a fiscally dependent LEA, the term means the following:
(i) The entire tax levied by the general government on real property if all but a de minimis amount of the total proceeds from that tax levy are available to the LEA for current expenditures (as defined in section 8013);
(ii) That portion of a local real property tax rate designated by the general government for current expenditure purposes (as defined in section 8013); or
(iii) If no real property tax levied by the general government meets the criteria in paragraphs (2)(i) or (ii) of this definition, an imputed tax rate that the Secretary determines by—
(A) Dividing the total local real property tax revenue available for current expenditures of the general government by the total revenue from all local sources available for current expenditures of the general government;
(B) Multiplying the figure obtained in paragraph (2)(iii)(A) of this definition by the revenue received by the LEA for current expenditures (as defined in section 8013) from the general government; and
(C) Dividing the figure obtained in paragraph (2)(iii)(B) of this definition by the total current actual assessed value of all real property in the district.
(3) The term does not include any portion of a tax or revenue that is restricted to or dedicated for any specific purpose other than current expenditures (as defined in section 8013).
Membership means the following:
(1)(i) The definition given to the term by State law; or
(ii) If State law does not define the term, the number of children listed on an LEA's current enrollment records on its survey date(s).
(2) The term includes children for whom the applicant is responsible for providing a free public education, but who are attending schools other than those operated by the applicant under a tuition arrangement described in paragraph (4) of the definition of “free public education” in § 222.30.
(3) The term does not include children who—
(i) Have never attended classes in schools of the LEA or of another educational entity with which the LEA has a tuition arrangement;
(ii) Have permanently left the LEA;
(iii) Otherwise have become ineligible to attend classes there; or
(iv) Attend the schools of the applicant LEA under a tuition arrangement with another LEA that is responsible for providing them a free public education; or
(v) Reside in a State other than the State in which the LEA is located, unless the student is covered by the provisions of—
(A) Section 7010(c) of the Act; or
(B) A formal State tuition or enrollment agreement.
Parent employed on Federal property. (1) The term means:
(i) An employee of the Federal government who reports to work on, or whose place of work is located on, Federal property, including a Federal employee who reports to an alternative duty station on the survey date, but whose regular duty station is on Federal property.
(ii) A person not employed by the Federal government but who spends more than 50 percent of his or her working time on Federal property (whether as an employee or self-employed) when engaged in farming, grazing, lumbering, mining, or other operations that are authorized by the Federal government, through a lease or other arrangement, to be carried out entirely or partly on Federal property.
(2) Except as provided in paragraph (1)(ii) of this definition, the term does not include a person who is not employed by the Federal government and reports to work at a location not on Federal property, even though the individual provides services to operations or activities authorized to be carried out on Federal property.
Real property. (1) The term means—
(i) Land; and
(ii) Improvements (such as buildings and appurtenances to those buildings, railroad lines, utility lines, pipelines, and other permanent fixtures), except as provided in paragraph (2).
(2) The term does not include—
(i) Improvements that are classified as personal property under State law; or
(ii) Equipment and movable machinery, such as motor vehicles, movable house trailers, farm machinery, rolling railroad stock, and floating dry docks, unless that equipment or movable machinery is classified as real property or subject to local real property taxation under State law.
Revenues derived from local sources. (1) The term means—
(i) Tax funds derived from real estate; and
(ii) Other taxes or receipts that are received from the county, and any other local tax or miscellaneous receipts.
(2)(i) For the purpose of paragraph (1)(i) of this definition, the term tax funds derived from real estate means—
(A) Locally received funds that are derived from local taxation of real property;
(B) Tax funds that are received on account of Wherry-Spence housing projects (12 U.S.C. 1702 et seq.) located on private property; and
(C) All local real property tax funds that are received from either the county or the State, serving as a collecting agency, and that are returned to the LEA for expenditure by that agency.
(ii) The term does not include—
(A) Any payments under this Act or the Johnson-O'Malley Act (25 U.S.C. 452);
(B) Tax payments that are received on account of Wherry-Spence housing projects located on federally owned property; or
(C) Local real property tax funds that are received by the State and distributed to LEAs on a per-pupil or formula basis.
State aid means any contribution, no repayment of which is expected, made by a State to or on behalf of an LEA within the State for the support of free public education.
Uniformed services means the United States Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic and Atmospheric Administration, and Public Health Service.
An LEA must meet the following application requirements to be considered for a payment under section 8002 or 8003:
(a) Except as provided in paragraphs (b) and (d) of this section, on or before January 31 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 8002 or section 8003, the LEA must—
(1) File with the Secretary a complete and signed application for payment under section 8002 or section 8003; and
(2) Certify to the Secretary that it will file, and file, a copy of the application referred to in paragraph (a) of this section with its SEA.
(b)(1) If any of the following events that give rise to eligibility for payment occur after the filing deadline in paragraph (a)(1) of this section, an LEA must file a complete and signed application within the time limits required by paragraph (b)(2) of this section:
(i) The United States Government initiates or reactivates a Federal activity, or acquires real property.
(ii) The United States Congress enacts new legislation.
(iii) A reorganization of school districts takes place.
(iv) Property, previously determined by the Secretary not to be Federal property, is determined in writing by the Secretary to be Federal property.
(2) Except as provided in paragraph (d) of this section, within 60 days after the applicable event occurs but not later than June 30 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 8002 or section 8003, the LEA must—
(i) File an application with the Secretary as permitted by paragraph (b)(1) of this section; and
(ii) File a copy of that application with its SEA.
(c)(1) If the SEA wishes to notify the Secretary of any inconsistencies or other concerns with an LEA's application, the SEA must do so—
(i) For an application subject to the filing deadlines in paragraph (a)(1) of this section, on or before February 15 of the fiscal year preceding the fiscal year for which the LEA seeks assistance under section 8002 or section 8003; and
(ii) On or before fifteen days following the date by which an application subject to the filing deadlines in paragraph (b) of this section must be filed.
(2) The Secretary does not process for payment a timely filed application until any concerns timely raised by the SEA are resolved. If the Secretary does not receive comments or notification from the SEA by the applicable deadline set forth in paragraph (c)(1) of this section, the Secretary assumes that the data and statements in the application are, to the best of the SEA's knowledge, true, complete, and correct.
(d) If a filing date in this section falls on a Saturday, Sunday, or Federal holiday, the deadline for filing is the next succeeding business day.
To be timely filed under § 222.3, an application must be received by the Secretary on or before the applicable filing date.
(a) An LEA may amend its application following any of the events described in § 222.3(b)(1) by submitting a written request to the Secretary and a copy to its SEA no later than the earlier of the following events:
(1) The 60th day following the applicable event.
(2) By June 30 of the Federal fiscal year preceding the fiscal year for which the LEA seeks assistance.
(b) The LEA also may amend its application based on actual data regarding eligible Federal properties or federally connected children if—
(1) Those data were not available at the time the LEA filed its application (e.g., due to a second membership count of students) and are acceptable to the Secretary; and
(2) The LEA submits a written request to the Secretary with a copy to its SEA no later than the end of the Federal fiscal year preceding the fiscal year for which the LEA seeks assistance.
(a) The Secretary accepts or approves for payment any otherwise approvable application under section 8002 or section 8003 that is timely filed with the Secretary in accordance with §§ 222.3, 222.4, and 222.5, as applicable.
(b) The Secretary does not accept or approve for payment any section 8002 or section 8003 application that is not timely filed with the Secretary as described in paragraph (a) of this section, except as follows:
(1) The Secretary accepts and approves for payment any otherwise approvable application filed within—
(i) 60 days from the application deadline established in § 222.3; or
(ii) 60 days from the date of the Secretary's written notice of an LEA's failure to comply with the applicable filing date.
(2) The Secretary reduces the payment for applications described in paragraph (b)(1) of this section by 10 percent of the amount that would have been paid if the LEA had timely filed the application.
(a) General. Except as indicated in paragraph (b) of this section, the Secretary does not consider information submitted by an applicant after the deadlines prescribed in this subpart for submission of applications and amendments to applications.
(b) Information solicited by the Secretary. The Secretary may solicit from an applicant at any time additional information to process an application.
(a) Any applicant that is a party to an annexation, consolidation, deconsolidation, merger, or other similar action affecting its boundaries, classification, control, governing authority, or identity must provide the following information to the Secretary as soon as practicable:
(1) A description of the character and extent of the change.
(2) The effective date of the change.
(3) Full identification of all predecessor and successor LEAs.
(4) Full information regarding the disposition of the assets and liabilities of all predecessor LEAs.
(5) Identification of the governing body of all successor LEAs.
(6) The name and address of each authorized representative officially designated by the governing body of each successor LEA for purposes of the Act.
(b) If a payment is made under section 8002 or 8003 to an LEA that has ceased to be a legally constituted entity during the regular school term due to an action described in paragraph (a) of this section, the LEA may retain that payment if—
(1) An adjustment is made in the payment of a successor LEA to account for the payment to the predecessor LEA; or
(2)(i) The payment amount does not exceed the amount the predecessor LEA would have been eligible to receive if the change in boundaries or organization had not taken place; and
(ii) A successor LEA is not an eligible applicant.
(c) A predecessor LEA receiving any portion of a payment under section 8002 or 8003 that exceeds the amount allowed by paragraph (b)(2)(i) of this section must return the excessive portion to the Secretary, unless the Secretary determines otherwise under section 8012 of the Act.
Except as otherwise provided in § 222.10—
(a) An LEA must maintain adequate written records to support the amount of payment it received under the Act for any fiscal year;
(b) On request, the LEA must make its records available to the Secretary for the purpose of examination or audit; and
(c) Each applicant must submit such reports and information as the Secretary may require to determine the amount that the applicant may be paid under the Act.
An LEA must retain the records described in § 222.9 until the later of—
(a) Three years after the last payment for a fiscal year; or
(b) If the records have been questioned on Federal audit or review, until the question is finally resolved and any necessary adjustments to payments have been made.
Except as otherwise provided in §§ 222.12-222.18, the Secretary adjusts for and recovers overpayments as follows:
(a) If the Secretary determines that an LEA has received a payment in excess of what it should have received under the Act and this part, the Secretary deducts the amount of the overpayment from subsequent payments for which the LEA is eligible under the Act.
(b)(1) If the LEA is not eligible for subsequent payments under the Act, the LEA must promptly refund the amount of the overpayment to the Secretary.
(2) If the LEA does not promptly repay the amount of the overpayment or promptly enter into a repayment agreement with the Secretary, the Secretary may use the procedures in 34 CFR part 30 to offset that amount against payments from other Department programs or, under the circumstances permitted in part 30, to request that another agency offset the debt.
(a) The Secretary considers as eligible for forgiveness under section 8012 of the Act (“eligible overpayment”) any amount that is more than an LEA was eligible to receive for a particular fiscal year under the Act, except for the types of overpayments listed in § 222.13.
(b) The Secretary applies §§ 222.14-222.18 in forgiving, in whole or part, an LEA's obligation to repay an eligible overpayment that resulted from error either by the LEA or the Secretary.
The Secretary does not consider as eligible for forgiveness under section 8012 of the Act any overpayment caused by an LEA's failure to expend or account for funds properly under the following laws and regulations:
(a) Section 8003(d) of the Act (implemented in subpart D of this part) for certain federally connected children with disabilities.
(b) Section 8007 of the Act for construction.
The Secretary forgives an eligible overpayment, in whole or part as described in § 222.18, if—
(a) An LEA submits to the Department's Impact Aid Program office a written request for forgiveness by the later of—
(1) Thirty days from the LEA's initial receipt of a written notice of the overpayment; or
(2) September 2, 1997;
(b) The LEA submits to the Department's Impact Aid Program office the information and documentation described in § 222.16 by the deadlines described in paragraph (a) of this section, or other time limit established in writing by the Secretary due to lack of availability of the information and documentation; and
(c) The Secretary determines under § 222.17 that—
(1) In the case either of an LEA's or the Department's error, repayment of the LEA's total eligible overpayments will result in an undue financial hardship on the LEA and seriously harm the LEA's educational program; or
(2) In the case of the Department's error, determined on a case-by-case basis, repayment would be manifestly unjust (“manifestly unjust repayment exception”).
Unless the Secretary (or the Secretary's delegatee) extends the applicable time limit in writing—
(a) A request for forgiveness of an overpayment under § 222.14 does not extend the time within which an applicant must file a request for an administrative hearing under § 222.151; and
(b) A request for an administrative hearing under § 222.151, or for reconsideration under § 222.152, does not extend the time within which an applicant must file a request for forgiveness under § 222.14.
(a) Every LEA requesting forgiveness must submit, within the time limits established under § 222.14(b), the following information and documentation for the fiscal year immediately preceding the date of the forgiveness request (“preceding fiscal year”):
(1) A copy of the LEA's annual financial report to the State.
(2) The LEA's local real property tax rate for current expenditure purposes, as described in § 222.17(b).
(3) The average local real property tax rate of all LEAs in the State.
(4) The average per pupil expenditure (APPE) of the LEA, calculated by dividing the LEA's aggregate current expenditures by the total number of children in average daily attendance for whom the LEA provided a free public education.
(5) The APPE of the State, as defined in section 8013 of the ESEA.
(b) An LEA requesting forgiveness under § 222.14(c)(2) (manifestly unjust repayment exception), or § 222.17(a)(3) (no present or prospective ability to repay), also must submit written information and documentation in specific support of its forgiveness request under those provisions within the time limits established under § 222.14(b).
(a) The Secretary determines that repayment of an eligible overpayment will result in undue financial hardship on an LEA and seriously harm its educational program if the LEA meets the requirements in paragraph (a)(1), (2), or (3) of this section.
(1) An LEA other than an LEA described in paragraphs (a)(2) and (3) of this section meets the requirements of paragraph (a) of this section if—
(i) The LEA's eligible overpayments on the date of its request total at least $10,000;
(ii) The LEA's local real property tax rate for current expenditure purposes, for the preceding fiscal year, is equal to or higher than the State average local real property tax rate for that preceding fiscal year; and
(iii) The LEA's average per pupil expenditure (APPE) (as described in § 222.16(a)(4)) for the preceding fiscal year is lower than the State APPE (as described in § 222.16(a)(5)) for that preceding fiscal year.
(2) The following LEAs qualify under paragraph (a) of this section if they meet the requirements in paragraph (a)(1)(i) of this section and their APPE (as described in § 222.16(a)(4)) for the preceding fiscal year does not exceed 125 percent of the State APPE (as described in § 222.16(a)(5)) for that preceding fiscal year:
(i) An LEA with boundaries that are the same as a Federal military installation.
(ii) Other LEAs with no local real property tax revenues, or with minimal local real property tax revenues per pupil due to substantial amounts of Federal property in the LEA as compared with the average amount of those revenues per pupil for all LEAs in the State.
(3) An LEA qualifies under paragraph (a) of this section if neither the successor nor the predecessor LEA has the present or prospective ability to repay the eligible overpayment.
(b) The Secretary uses the following methods to determine a tax rate for the purposes of paragraph (a)(1)(ii) of this section:
(1) If an LEA is fiscally independent, the Secretary uses actual tax rates if all the real property in the taxing jurisdiction of the LEA is assessed at the same percentage of true value. In the alternative, the Secretary computes a tax rate for fiscally independent LEAs by using the methods described in §§ 222.67-222.69.
(2) If an LEA is fiscally dependent, the Secretary imputes a tax rate using the method described in § 222.70(b).
For an LEA that meets the requirements of § 222.14(a) (timely filed forgiveness request) and § 222.14(b) (timely filed information and documentation), the Secretary forgives an eligible overpayment as follows:
(a) Forgiveness in whole. The Secretary forgives the eligible overpayment in whole if the Secretary determines that the LEA meets—
(1) The requirements of § 222.17 (undue financial hardship), and the LEA's current expenditure closing balance for the LEA's fiscal year immediately preceding the date of its forgiveness request (“preceding fiscal year”) is ten percent or less of its total current expenditures (TCE) for that year; or
(2) The manifestly unjust repayment exception in § 222.14(c)(2).
(b) Forgiveness in part. (1) The Secretary forgives the eligible overpayment in part if the Secretary determines that the LEA meets the requirements of § 222.17 (undue financial hardship), and the LEA's preceding fiscal year's current expenditure closing balance is more than ten percent of its TCE for that year.
(2) For an eligible overpayment that is forgiven in part, the Secretary—
(i) Requires the LEA to repay the amount by which the LEA's preceding fiscal year's current expenditure closing balance exceeded ten percent of its preceding fiscal year's TCE (“calculated repayment amount”); and
(ii) Forgives the difference between the calculated repayment amount and the LEA's total overpayments.
(3) For the purposes of this section, “current expenditure closing balance” means an LEA's closing balance before any revocable transfers to non-current expenditure accounts, such as capital outlay or debt service accounts.
The Secretary calculates the amount that the LEA must repay by determining the amount by which the preceding fiscal year's closing balance exceeds 10 percent of the preceding year's TCE. This calculation is made by subtracting 10 percent of the LEA's TCE ($150,000) from the closing balance ($250,000), resulting in a difference of $100,000 that the LEA must repay. The Secretary then totals the eligible overpayment amounts ($200,000 + $300,000), resulting in a total amount of $500,000. The Secretary subtracts the calculated repayment amount ($100,000) from the total of the two overpayment balances ($500,000), resulting in $400,000 that the Secretary forgives.
(a) The following Federal statutes and regulations on nondiscrimination apply to assistance under this part:
(1) The provisions of title VI of the Civil Rights Act of 1964 (Pub. L. 88-352) (prohibition of discrimination on the basis of race, color or national origin), and the implementing regulations (34 CFR part 100).
(2) The provisions of title IX of the Education Amendments of 1972 (Pub. L. 92-318) (prohibition of discrimination on the basis of sex), and the implementing regulations (34 CFR part 106).
(3) The provisions of section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112) (prohibition of discrimination on the basis of disability), and the implementing regulations (34 CFR part 104).
(4) The provisions of title II of the Americans with Disabilities Act of 1990 (Pub. L. 101-336) (prohibition of discrimination on basis of disability), and any implementing regulations.
(5) The provisions of the Age Discrimination Act of 1975 (Pub. L. 94-135) (prohibition of age discrimination), and any implementing regulations.
(b) The following Education Department General Administrative Regulations (EDGAR):
(1) Subparts A, E, F, and §§ 75.900 and 75.910 of 34 CFR part 75 (Direct Grant Programs) for payments under sections 8003(d) (payments for federally connected children with disabilities), 8007 (construction), and 8008 (school facilities), except for the following:
(i) Section 75.603 does not apply to payments under section 8007 (construction) or section 8008 (school facilities).
(ii) Section 75.605 does not apply to payments under section 8007 (construction).
(iii) Sections 75.600-602, 75.604, and 75.606-617 apply to payments under section 8007 (construction) only to the extent that funds received under that section are used for major renovations or to construct new school facilities.
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 82 (New Restrictions on Lobbying).
(4) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(c) 2 CFR part 180, as adopted and amended as regulations of the Department in 2 CFR part 3485 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)).
(d) 2 CFR part 200, as adopted in 2 CFR part 3474 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), for payments under sections 8003(d) (payments for federally connected children with disabilities), 8007 (construction), and 8008 (school facilities).
In addition to the terms referenced or defined in § 222.2, the following definitions apply to this subpart:
Acquisition or acquired by the United States. (1) The term means—
(i) The receipt or taking by the United States of ownership in fee simple of real property by condemnation, exchange, gift, purchase, transfer, or other arrangement;
(ii) The receipt by the United States of real property as trustee for the benefit of individual Indians or Indian tribes; or
(iii) The imposition by the United States of restrictions on sale, transfer, or exchange of real property held by individual Indians or Indian tribes.
(2) The definition of “acquisition” in 34 CFR 77.1(c) (Definitions that Apply to Department Regulations) of this title does not apply to this subpart.
Assessed value. For the purpose of determining eligibility under section 8002(a)(1) and § 222.21, the following definition applies:
(1) The term means the value that is assigned to real property, for the purpose of generating local real property tax revenues for current expenditures (as defined in section 8013 of the Act), by a State or local official who is legally authorized to determine that assessed value.
(2) The term does not include—
(i) A value assigned to tax-exempt real property;
(ii) A value assigned to real property for the purpose of generating other types of revenues, such as payments in lieu of taxes (PILOTs);
(iii) Fair market value, or a percentage of fair market value, of real property unless that value was actually used to generate local real property tax revenues for current expenditures (as defined in section 8013); or
(iv) A value assigned to real property in a condemnation or other court proceeding, or a percentage of that value, unless that value was actually used to generate local real property tax revenues for current expenditures (as defined in section 8013).
Eligible Federal property. (1) The term means “Federal property” as defined in § 222.2(c) for section 8002, which meets the following additional requirements:
(i) The United States has acquired the Federal property since 1938; and
(ii) The Federal property was not acquired by exchange for other Federal property that the United States owned within the school district before 1939.
(2) In addition, for local educational agencies (LEAs) that are eligible under § 222.21(a)(2), the term also means land acquired by the United States Forest Service between 1915 and 1990.
(a) For an LEA with an otherwise approvable application to be eligible to receive financial assistance under section 8002 of the Act, the LEA must meet the requirements in subpart A of this part and § 222.22. In addition, unless otherwise provided by statute as meeting the requirements in section 8002(a)(1)(C), the LEA must document—
(1) That the United States owns or has acquired “eligible Federal property” within the LEA, that has an aggregate assessed value of 10 percent or more of the assessed value of—
(i) All real property in that LEA, based upon the assessed values of the eligible Federal property and of all real property (including that Federal property) on the date or dates of acquisition of the eligible Federal property; or
(ii) All real property in the LEA as assessed in the first year preceding or succeeding acquisition, whichever is greater, only if—
(A) The assessment of all real property in the LEA is not made at the same time or times that the Federal property was so acquired and assessed; and
(B) State law requires an assessment be made of property so acquired; or
(2)(i) That, as demonstrated by written evidence from the United States Forest Service satisfactory to the Secretary, the LEA contains between 20,000 and 60,000 acres of land that has been acquired by the United States Forest Service between 1915 and 1990; and
(ii) That the LEA serves a county chartered by State law in 1875 or 1890.
(b) “Federal property” described in section 8002(d) (certain transferred property) is considered to be owned by the United States for the purpose of paragraph (a) of this section.
(c) If, during any fiscal year, the United States sells, transfers, is otherwise divested of ownership of, or relinquishes an interest in or restriction on, eligible Federal property, the Secretary redetermines the LEA's eligibility for the following fiscal year, based upon the remaining eligible Federal property, in accordance with paragraph (a) of this section. This paragraph does not apply to a transfer of real property by the United States described in section 8002(d).
(d) Except as provided under paragraph (a)(2) of this section, the Secretary's determinations and redeterminations of eligibility under this section are based on the following documents:
(1) For a new section 8002 applicant or newly acquired eligible Federal property, only upon—
(i) Original records as of the time(s) of Federal acquisition of real property, prepared by a legally authorized official, documenting the assessed value of that real property;
(ii) Facsimiles, such as microfilm, or other reproductions of those records; or
(iii) If the documents specified in paragraphs (d)(1)(i) and (ii) are unavailable, other records that the Secretary determines to be appropriate and reliable for establishing eligibility under section 8002(a)(1) of the Act, such as Federal agency records or local historical records.
(2) For a redetermination of an LEA's eligibility under section 8002(a)(1), only upon—
(i) Records described in paragraph (d)(1) of this section; or
(ii) Department records.
(e) The Secretary does not base the determination or redetermination of an LEA's eligibility under this section upon secondary documentation that is in the nature of an opinion, such as estimates, certifications, or appraisals.
(a) An LEA with an otherwise approvable application is eligible to receive assistance under section 8002 for a fiscal year only if the LEA meets the requirements in subpart A of these regulations and § 222.21, and is not substantially compensated, for the loss in revenue resulting from Federal ownership of real property by increases in revenue accruing to the LEA during the previous fiscal year from Federal activities with respect to the eligible Federal property in the LEA.
(b) The Secretary considers that an LEA is substantially compensated by increases in revenue from Federal activities with respect to the eligible Federal property if—
(1) The LEA received revenue during the preceding fiscal year that is generated from activities in or on the eligible Federal property; and
(2) The revenue described in paragraph (b)(1) of this section equals or exceeds the maximum payment amount under section 8002(b) for the fiscal year for which the LEA seeks assistance.
(c) If an LEA described in paragraph (a) of this section received revenue described in paragraph (b)(1) of this section during the preceding fiscal year that, when added to the LEA's projected total section 8002 payment for the fiscal year for which the LEA seeks assistance, exceeds the maximum payment amount under section 8002(b) for the fiscal year for which the LEA seeks assistance, the Secretary reduces the LEA's projected section 8002 payment by an amount equal to that excess amount.
(d) For purposes of this section, the amount of revenue that an LEA receives during the previous fiscal year from activities conducted on Federal property includes payments received by any Federal agency due to activities on Federal property, including forestry, mining, and grazing, but does not include revenue from:
(1) Payments received by the LEA from the Secretary of Defense to support—
(i) The operation of a domestic dependent elementary or secondary school; or
(ii) The provision of a free public education to dependents of members of the Armed Forces residing on or near a military installation;
(2) Payments from the Department; or
(3) Payments in Lieu of Taxes from the Department of Interior under 31 U.S.C. 6901 et seq.
(a) Eligibility. An LEA formed by the consolidation of one or more LEAs is eligible for section 7002 funds, notwithstanding section 222.21(a)(1), if—
(1) The consolidation occurred prior to fiscal year 1995 or after fiscal year 2005; and
(2) At least one of the former LEAs included in the consolidation:
(i) Was eligible for section 7002 funds in the fiscal year prior to the consolidation; and
(ii) Currently contains Federal property that meets the requirements of § 222.21(a) within the boundaries of the former LEA or LEAs.
(b) Documentation required. In the first year of application following the consolidation, an LEA that meets the requirements of paragraph (a) of this section must submit evidence that it meets the requirements of paragraphs (a)(1) and (a)(2)(ii) of this section.
(c) Basis for foundation payment. (1) The foundation payment for a consolidated district is based on the total section 7002 payment for the last fiscal year for which the former LEA received payment. When more than one former LEA qualifies under paragraph (a)(2) of this section, the payments for the last fiscal year for which the former LEAs received payment are added together to calculate the foundation basis.
(2) Consolidated LEAs receive only a foundation payment and do not receive a payment from any remaining funds.
An LEA that has multiple tax rates for real property classifications derives a single tax rate for the purposes of determining its Section 7002 maximum payment by dividing the total revenues for current expenditures it received from local real property taxes by the total taxable value of real property located within the boundaries of the LEA. These data are from the fiscal year prior to the fiscal year in which the applicant seeks assistance.
In addition to the terms defined in § 222.2, the following definition applies to this part:
Free public education. (1) The term means education that is provided—
(i) At public expense;
(ii)(A) As the complete elementary or secondary educational program as determined under State law through grade 12; and
(B) Preschool education, whether or not included as elementary education by State law;
(iii) In a school of the local educational agency (LEA) or under a tuition arrangement with another LEA or other educational entity; and
(iv) Under public supervision and direction, except with respect to children with disabilities.
(2) For the purpose of paragraph (1)(i) of this definition, education is provided at public expense if—
(i) There is no tuition charge to the child or the child's parents; and
(ii) Federal funds, other than Impact Aid funds and charter school startup funds, do not provide a substantial portion of the educational program, in relation to other LEAs in the State, as determined by the Secretary.
(3) For the purpose of paragraph (1)(ii) of this definition, the complete elementary or secondary educational program is the program recognized by the State as meeting all requirements for elementary or secondary education for the children claimed and, except for preschool education, does not include a program that provides only—
(i) Supplementary services or instruction; or
(ii) A portion of the required educational program.
(4) For the purpose of paragraph (1)(iii) of this definition, a tuition arrangement must—
(i) Satisfy all applicable legal requirements in the State; and
(ii) Genuinely reflect the applicant LEA's responsibility to provide a free public education to the children claimed under section 8003.
(5) For the purpose of paragraph (1)(iv) of this definition, education provided under public supervision and direction means education that is provided—
(i) In a school of the applicant LEA or another LEA; or
(ii) By another educational entity, over which the applicant LEA, or other public agency, exercises authority with respect to the significant aspects of the educational program for the children claimed. The Secretary considers significant aspects of the educational program to include administrative decisions relating to teachers, instruction, and curriculum.
The Secretary makes payments to an LEA with an otherwise approvable application for children claimed under section 8003(b) of the Act if—
(a) The LEA meets the requirements in subpart A of these regulations and this subpart; and
(b)(1) The LEA is responsible under applicable State or Federal law for providing a free public education to those children;
(2) The LEA is providing a free public education to those children; and
(3) The State provides funds for the education of those children on the same basis as all other public school children in the State, unless permitted otherwise under section 8009 of the Act.
(a) The Secretary determines an LEA's payment under section 8003(b) on the basis of information in the LEA's application, including information regarding the membership of federally connected children.
(b) The LEA must supply information in its timely and complete application regarding its federally connected membership on the basis of any count described in §§ 222.33 through 222.35.
(a)(1) An applicant must select a day in the current school year as the survey date for making the first membership count, which must be no earlier than the fourth day of the regular school year and before January 31.
(2) The applicant must use the same survey date for all schools in the LEA.
(b) As of the survey date, the applicant must—
(1) Count the membership of its federally connected children; and
(2) Count the total membership of its children—both federally connected and non-federally connected.
(c) The data on the application resulting from the count in paragraph (b) of this section must be accurate and verifiable by the application deadline.
(a)(1) The applicant may, but is not required to, make a second count of membership.
(2) If the applicant chooses to make a second count of membership, the applicant must select a day after January 31, but no later than May 14, as the survey date for making the second membership count, and make that count in accordance with § 222.33(b).
(3) The applicant must use the same survey date for the second membership count for all schools in the LEA.
(b) The applicant may use the information obtained from a second membership count to amend its application for assistance as described in § 222.5(b).
An applicant counts the membership of its federally connected children using one of the following methods:
(a) Parent-pupil survey. An applicant may conduct a parent-pupil survey to count the membership of its federally connected children, which must be counted as of the survey date.
(1) The applicant shall conduct a parent-pupil survey by providing a form to a parent of each pupil enrolled in the LEA to substantiate the pupil's place of residence and the parent's place of employment.
(2) A parent-pupil survey form must include the following:
(i) Pupil enrollment information (this information may also be obtained from school records), including—
(A) Name of pupil;
(B) Date of birth of the pupil; and
(C) Name of public school and grade of the pupil.
(ii) Pupil residence information, including:
(A) The complete address of the pupil's residence, or other acceptable location information for that residence, such as a complete legal description, a complete U.S. Geological Survey number, or complete property tract or parcel number, or acceptable certification by a Federal agency official with access to data or records to verify the location of the Federal property; and
(B) If the pupil's residence is on Federal property, the name of the Federal facility.
(3) If any of the following circumstances apply, the parent-pupil survey form must also include the following:
(i) If the parent is employed on Federal property, except for a parent who is a member of the uniformed services on active duty, parent employment information, including—
(A) Name (as it appears on the employer's payroll record) of the parent (mother, father, legal guardian or other person standing in loco parentis) who is employed on Federal property and with whom the pupil resides; and
(B) Name of employer, name and complete address of the Federal property on which the parent is employed (or other acceptable location information, such as a complete legal description or acceptable certification by a Federal agency).
(ii) If the parent is a member of the uniformed services on active duty, the name, rank, and branch of service of that parent.
(iii) If the parent is both an official of, and accredited by a foreign government, and a foreign military officer, the name, rank, and country of service.
(iv) If the parent is a civilian employed on a Federal vessel, the name of the vessel, hull number, homeport, and name of the controlling agency.
(4)(i) Every parent-pupil survey form must include the signature of the parent supplying the information, except as provided in paragraph (a)(4)(ii) of this section, and the date of such signature, which must be on or after the survey date.
(ii) An LEA may accept an unsigned parent-pupil survey form, or a parent-pupil survey form that is signed by a person other than a parent, only under unusual circumstances. In those instances, the parent-pupil survey form must show why the parent did not sign the survey form, and when, how, and from whom the residence and employment information was obtained. Unusual circumstances may include, but are not limited to:
(A) A pupil who, on the survey date, resided with a person without full legal guardianship of the child while the pupil's parent or parents were deployed for military duty. In this case, the person with whom the child is residing may sign the parent-pupil survey form.
(B) A pupil who, on the survey date, was a ward of the juvenile justice system. In this case, an administrator of the institution where the pupil was held on the survey date may sign the parent-pupil survey form.
(C) A pupil who, on the survey date, was an emancipated youth may sign his or her own parent-pupil survey form.
(D) A pupil who, on the survey date, was at least 18 years old but who was not past the 12th grade may sign his or her own parent-pupil survey form.
(iii) The Department does not accept a parent-pupil survey form signed by an employee of the school district who is not the student's mother, father, legal guardian or other person standing in loco parentis.
(b) Source check. A source check is a type of survey tool that groups children being claimed on the Impact Aid application by Federal property. This form is used in lieu of the parent-pupil survey form to substantiate a pupil's place of residence or parent's place of employment on the survey date.
(1) The source check must include sufficient information to determine the eligibility of the Federal property and the individual children claimed on the form.
(2) A source check may also include:
(i) Certification by a parent's employer regarding the parent's place of employment;
(ii) Certification by a military or other Federal housing official as to the residence of each pupil claimed;
(iii) Certification by a military personnel official regarding the military active duty status of the parent of each pupil claimed as active duty uniformed services; or
(iv) Certification by the Bureau of Indian Affairs (BIA) or authorized tribal official regarding the eligibility of Indian lands.
(c) Another method approved by the Secretary.
(a) An LEA is eligible to receive a payment under section 8003 for a fiscal year only if the total number of eligible federally connected children for whom it provided a free public education for the preceding fiscal year was—
(1) At least 400 who were in average daily attendance (ADA); or
(2) At least 3 percent of the total number of children in ADA.
(b) An LEA is eligible to receive a payment under section 8003 for a fiscal year on behalf of federally connected children described in section 8003(a)(1)(F) or (G) only if the total number of those children for whom it provided a free public education for the preceding fiscal year was—
(1) At least 1,000 in ADA; or
(2) At least 10 percent of the total number of children in ADA.
(c) Children described in paragraph (b) of this section are counted for the purposes of paragraph (a) of this section only if the applicant LEA is eligible to receive a payment on behalf of those children under section 8003.
(a) This section describes how the Secretary computes the ADA of federally connected children for each category in section 8003 to determine an applicant's payment.
(b)(1) For purposes of this section, actual ADA means raw ADA data that have not been weighted or adjusted to reflect higher costs for specific types of students for purposes of distributing State aid for education.
(2) If an LEA provides a program of free public summer school, attendance data for the summer session are included in the LEA's ADA figure in accordance with State law or practice.
(3) An LEA's ADA count includes attendance data for children who do not attend the LEA's schools, but for whom it makes tuition arrangements with other educational entities.
(4) Data are not counted for any child—
(i) Who is not physically present at school for the daily minimum time period required by the State, unless the child is—
(A) Participating via telecommunication or correspondence course programs that meet State standards; or
(B) Being served by a State-approved homebound instruction program for the daily minimum time period appropriate for the child; or
(ii) Attending the applicant's schools under a tuition arrangement with another LEA.
(c) An LEA may determine its average daily attendance calculation in one of the following ways:
(1) If an LEA is in a State that collects actual ADA data for purposes of distributing State aid for education, the Secretary calculates the ADA of that LEA's federally connected children for the current fiscal year payment as follows:
(i) By dividing the ADA of all the LEA's children for the second preceding fiscal year by the LEA's total membership on its survey date for the second preceding fiscal year (or, in the case of an LEA that conducted two membership counts in the second preceding fiscal year, by the average of the LEA's total membership on the two survey dates); and
(ii) By multiplying the figure determined in paragraph (c)(1)(i) of this section by the LEA's total membership of federally connected children in each subcategory described in section 7003 and claimed in the LEA's application for the current fiscal year payment.
(2) An LEA may submit its total preceding year ADA data. The Secretary uses these data to calculate the ADA of the LEA's federally connected children by—
(i) Dividing the LEA's preceding year's total ADA data by the preceding year's total membership data; and
(ii) Multiplying the figure determined in paragraph (c)(2)(i) of this section by the LEA's total membership of federally connected children as described in paragraph (c)(1)(i) of this section.
(3) An LEA may submit attendance data based on sampling conducted during the previous fiscal year.
(i) The sampling must include attendance data for all children for at least 30 school days.
(ii) The data must be collected during at least three periods evenly distributed throughout the school year.
(iii) Each collection period must consist of at least five consecutive school days.
(iv) The Secretary uses these data to calculate the ADA of the LEA's federally connected children by—
(A) Determining the ADA of all children in the sample;
(B) Dividing the figure obtained in paragraph (c)(3)(iv)(A) of this section by the LEA's total membership for the previous fiscal year; and
(C) Multiplying the figure determined in paragraph (c)(3)(iv)(B) of this section by the LEA's total membership of federally connected children for the current fiscal year, as described in paragraph (c)(1)(i) of this section.
(d) An SEA may submit data to calculate the average daily attendance calculation for the LEAs in that State in one of the following ways:
(1) If the SEA distributes State aid for education based on data similar to attendance data, the SEA may request that the Secretary use those data to calculate the ADA of each LEA's federally connected children. If the Secretary determines that those data are, in effect, equivalent to attendance data, the Secretary allows use of the requested data and determines the method by which the ADA for all of the LEA's federally connected children will be calculated.
(2) An SEA may submit data necessary for the Secretary to calculate a State average attendance ratio for all LEAs in the State by submitting the total ADA and total membership data for the State for each of the last three most recent fiscal years that ADA data were collected. The Secretary uses these data to calculate the ADA of the federally connected children for each LEA in the State by—
(i)(A) Dividing the total ADA data by the total membership data for each of the three fiscal years and averaging the results; and
(B) Multiplying the average determined in paragraph (d)(2)(i)(A) of this section by the LEA's total membership of federally connected children as described in paragraph (c)(1)(i) of this section.
(e) The Secretary may calculate a State average attendance ratio in States with LEAs that would benefit from such calculation by using the methodology in paragraph (d)(2)(i) of this section.
(a) The maximum basic support payment that an LEA may receive under section 8003(b)(1) for any fiscal year is the sum of its total weighted student units under section 8003(a)(2) for the federally connected children eligible to be counted as the basis for payment, multiplied by the greater of the following:
(1) One-half of the State average per pupil expenditure for the third fiscal year preceding the fiscal year for which the LEA seeks assistance.
(2) One-half of the national average per pupil expenditure for the third fiscal year preceding the fiscal year for which the LEA seeks assistance.
(3) The local contribution rate (LCR) based on generally comparable LEAs determined in accordance with §§ 222.39-222.41.
(4) The State average per pupil expenditure for the third preceding fiscal year multiplied by the local contribution percentage as defined in section 8013(8) of the Act for that same year.
(b) If satisfactory data from the third preceding fiscal year are not available for the expenditures described in paragraphs (a)(1) or (2), the Secretary uses data from the most recent fiscal year for which data that are satisfactory to the Secretary are available.
(a) To identify generally comparable LEAs within its State for LCR purposes, the State educational agency (SEA) for that State, after appropriate consultation with the applicant LEAs in the State, shall use data from the third fiscal year preceding the fiscal year for which the LCR is being computed to group all of its LEAs, including all applicant LEAs, as follows:
(1) Grouping by grade span/legal classification alone. Divide all LEAs into groups that serve the same grade span and then subdivide the grade span groups by legal classification, if the Secretary considers this classification relevant and sufficiently different from grade span within the State. As an alternative grade-span division, divide all LEAs into elementary, secondary, or unified grade-span groups, as appropriate, within the State.
(2) Grouping by grade span/legal classification and size. (i) Divide all LEAs into groups by grade span (or the alternative grade-span groups described in paragraph (a)(1) of this section) and legal classification, if relevant and sufficiently different from grade span and size.
(ii) List all LEAs within each group in descending order by size as measured by ADA, placing the LEA with the largest ADA at the top of the list. A State that does not tabulate actual annual ADA shall use the same formula for establishing ADA for the purpose of ranking LEAs by size as the Department has approved for the purpose of calculating payments under section 8003 for applicant LEAs in the State.
(iii) Divide each group into either two subgroups or three subgroups.
(iv) To determine the subgroups, divide each list at the point(s) that will result in as nearly equal numbers of LEAs in each subgroup as possible, so that no group is more than one LEA larger than any other group.
(3) Grouping by grade span/legal classification and location. Divide all LEAs into groups by grade span (or the alternative grade-span groups described in paragraph (a)(1) of this section) and, if relevant and sufficiently different from grade span and location, legal classification; then subdivide these groups by location, as determined by placement inside or outside a metropolitan statistical area (MSA) as defined by the U.S. Bureau of the Census. The Department will supply SEAs with lists of MSA classifications for their LEAs, and only the classifications on those lists will be recognized by the Department for the purposes of these regulations.
(4) Grouping by grade span/legal classification, size, and location. (i) Divide all LEAs into groups by grade span (or the alternative grade-span groups described in paragraph (a)(1) of this section) and, if relevant and sufficiently different from grade span, size, and location, legal classification; then subdivide these groups by size (into two or three subgroups for each grade span, as described in paragraph (a)(2) of this section); and further subdivide these groups by location (inside or outside an MSA).
(ii) In using both the size and location factors, the SEA shall subdivide according to the size factor before the location factor.
(b) After applying the following restrictions, the SEA shall compute an LCR according to the provisions of § 222.41 for each group of generally comparable LEAs identified under paragraph (a) of this section, as follows:
(1) The SEA shall not, when computing an LCR, include the following “significantly impacted” LEAs in any group of generally comparable LEAs:
(i) Any LEA having—in the third fiscal year preceding the fiscal year for which the LCR is being computed—20 percent or more of its ADA composed of children identified under section 8003(a)(1)(A)-(C).
(ii) Any LEA having—in the third fiscal year preceding the fiscal year for which the LCR is being computed—50 percent or more of its ADA composed of children identified under section 8003(a)(1)(A)-(G) who were eligible under § 222.36 to be counted as the basis for payment under section 8003.
(2) The SEA may not compute an LCR for any group that contains fewer than 10 LEAs.
(c) The LCR for a “significantly impacted” LEA described in paragraph (b)(1) of this section is the LCR of any group in which that LEA would be included based on grade span/legal classification, size, location, or a combination of these factors, if the LEA were not excluded as significantly impacted.
(d) This section does not apply to applicant LEAs located in—
(1) Puerto Rico;
(2) Wake Island;
(3) Guam;
(4) American Samoa;
(5) Any outlying area; and
(6) Any State in which there is only one LEA.
1. Characteristics of Applicant LEA. The grade span of an applicant LEA is kindergarten through grade 8 (K-8). In the applicant's State, legal classification of LEAs is based on grade span, and thus does not act to further subdivide groups of LEAs.
The ADA of the applicant LEA is above the median ADA of LEAs serving only K-8 in the State.
The applicant LEA is located outside an MSA.
2. Characteristics of Other LEAs Serving Same Grade Span. The SEA of the applicant's State groups all LEAs in its State according to the factors in § 222.39.
a. The SEA identifies the following groups:
(i) One hundred and one LEAs serve only K-8. The SEA has identified a group of 50 LEAs having an ADA above the median ADA for the group of 101, one LEA having an ADA at the median, and a group of 50 LEAs having an ADA below the median ADA; and according to § 222.39(a)(2), the SEA considers 51 LEAs to have an ADA below the median ADA.
(ii) Of the 101 LEAs in the group, the SEA has identified a group of 64 LEAs as being inside an MSA and a group of 37 LEAs as being outside an MSA.
(iii) Among the group of 50 LEAs having an ADA above the median, the SEA has identified a group of 35 LEAs as being inside an MSA and a group of 15 LEAs as being outside an MSA.
(iv) Among the group of 51 LEAs having an ADA at or below the median, the SEA has identified a group of 29 LEAs as being inside an MSA and 22 LEAs as being outside an MSA.
(v) One LEA has 20 percent of its ADA composed of children identified under section 8003(a)(1)(A)-(C) and, therefore, must be excluded from any group it falls within before the SEA computes an LCR for the group. The LEA has an ADA below the median ADA and is located outside an MSA.
b. On the basis of § 222.41, the SEA computes the LCR for each group of generally comparable LEAs that the SEA has identified.
(a) To use the procedures in this section, the applicant LEA, for the year of application, must either—
(1)(i) Be located entirely on Federal land; and
(ii) Be raising either no local revenues or an amount of local revenues the Secretary determines to be minimal; or
(2)(i) Be located in a State where State aid makes up no more than 40 percent of the State average per pupil expenditure in the third fiscal year preceding the fiscal year for which the LCR is being computed;
(ii) In its application, have federally connected children identified under section 8003(a)(1)(A)-(C) equal to at least 20 percent of its total ADA; and
(iii) In its application, have federally connected children identified under section 8003(a)(1)(A)-(G) who were eligible to be counted as the basis for payment under section 8003 equal to at least 50 percent of its total ADA.
(b) If requested by an applicant LEA described in paragraph (a) of this section, the SEA follows the procedures in this section, in consultation with the LEA, to determine generally comparable LEAs using additional factors for the purpose of calculating and certifying an LCR for that LEA.
(c) The SEA identifies—
(1) The subgroup of generally comparable LEAs from the group identified under § 222.39(a)(2) (grouping by grade span/legal classification and size) that includes the applicant LEA; or
(2) For an LEA described in paragraph (a) of this section that serves a different span of grades from all other LEAs in its State (and therefore cannot match any group of generally comparable LEAs under § 222.39(a)(2)), for purposes of this section only, a group using only legal classification and size as measured by ADA.
(d) From the subgroup described in paragraph (c) of this section, the SEA then identifies 10 or more generally comparable LEAs that share one or more additional common factors of general comparability with the applicant LEA described in paragraph (a) of this section, as follows:
(1)(i) The SEA must consider one or more generally accepted, objectively defined factors that affect the applicant's cost of educating its children. Examples of such cost-related factors include location inside or outside an MSA, an unusually large geographical area or an economically depressed area, sparsity or density of population, and the percentage of its students who are from low-income families or who are children with disabilities, neglected or delinquent children, low-achieving children, or children with limited English proficiency.
(ii) The SEA may not consider cost-related factors that can be varied at the discretion of the applicant LEA or its generally comparable LEAs or factors dependent on the wealth of the applicant LEA or its generally comparable LEAs. Examples of factors that may not be considered include special alternative curricular programs, pupil-teacher ratio, and per pupil expenditures.
(iii) If an SEA proposes to use one or more special additional factors to determine generally comparable LEAs, the SEA must submit, with its annual submission of generally comparable data to the Department, its rationale for selecting the additional factor or factors and describe how they affect the cost of education in the LEA.
(2) The SEA applies the factor or factors of general comparability identified under paragraph (d)(1)(i) of this section in one of the following ways in order to identify 10 or more generally comparable LEAs for the eligible applicant LEA, none of which may be significantly impacted LEAs:
(i) The SEA identifies all of the LEAs in the group to which the eligible applicant LEA belongs under § 222.39(a)(2) that share the factor or factors. If the subgroup containing the eligible applicant LEA includes at least 10 other LEAs (excluding significantly impacted LEAs), it will be the eligible applicant LEA's new group of generally comparable LEAs. The SEA computes the LCR for the eligible applicant LEA using the data for all of the LEAs in the subgroup except the eligible applicant LEA.
(ii) After the SEA identifies all of the LEAs in the group to which the eligible applicant LEA belongs under § 222.39(a)(2) that share the factor or factors, the SEA then systematically orders by ADA all of the LEAs in the group that includes the eligible applicant LEA. The SEA may further divide the ordered LEAs into subgroups by using logical division points (e.g., the median, quartiles, or standard deviations) or a continuous interval of the ordered LEAs (e.g., a percentage or a numerical range). If the subgroup containing the eligible applicant LEA includes at least 10 other LEAs (excluding significantly impacted LEAs), it will be the eligible applicant LEA's new group of generally comparable LEAs. The SEA computes the LCR for the eligible applicant LEA using the data for all of the LEAs in the subgroup except the eligible applicant LEA.
(iii) The SEA may apply more than one factor of general comparability in identifying a new group of 10 or more generally comparable LEAs for the eligible applicant LEA. If the subgroup containing the eligible applicant LEA includes at least 10 other LEAs (excluding significantly impacted LEAs), it will be the eligible applicant LEA's new group of generally comparable LEAs. The SEA computes the LCR for the eligible applicant LEA using the data from all of the LEAs in the subgroup except the eligible applicant LEA.
(e)(1) Using the new group of generally comparable LEAs selected under paragraph (d) of this section, the SEA computes the LCR for the eligible applicant LEA according to the provisions of § 222.41.
(2) The SEA certifies the resulting LCR by submitting that LCR to the Secretary and providing the Secretary a description of the additional factor or factors of general comparability and the data used to identify the new group of generally comparable LEAs.
(3) The Secretary reviews the data submitted by the SEA, and accepts the LCR for the purpose of use under section 8003(b)(1)(C)(iii) in determining the LEA's maximum payment under section 8003 if the Secretary determines that it meets the purposes and requirements of the Act and this part.
Except as otherwise specified in the Act, the SEA, subject to the Secretary's review and approval, computes and certifies an LCR for each group of generally comparable LEAs within its State that was identified using the factors in § 222.39, and § 222.40 if appropriate, as follows:
(a)(1) The SEA shall compile the aggregate local current expenditures of the comparable LEAs in each group for the third fiscal year preceding the fiscal year for which the LCR is being computed.
(2) For purposes of this section, the SEA shall consider only those aggregate current expenditures made by the generally comparable LEAs from revenues derived from local sources. No State or Federal funds may be included.
(b) The SEA shall compile the aggregate number of children in ADA to whom the generally comparable LEAs in each group provided a free public education during the third fiscal year preceding the fiscal year for which the LCR is being computed.
(c) The SEA shall divide—
(1) The aggregate current expenditures determined under paragraph (a) of this section by;
(2) The aggregate number of children determined under paragraph (b) of this section.
(d) The SEA certifies the resulting figure for each group as the LCR for that group of generally comparable LEAs to be used by the Secretary under section 8003(b)(1)(C)(iii) in determining the LEA's maximum payment amount under section 8003.
An LEA is eligible for financial assistance under section 8003(b)(1)(F) if the Secretary determines that the LEA meets all of the following requirements—
(a)(1) The LEA is eligible for a basic support payment under section 8003(b), including meeting the maintenance of effort requirements in section 8003(g) of the Act;
(2) The LEA timely applies for assistance under section 8003(b)(1)(F) and meets all other requirements of subparts A and C;
(3) The LEA is meeting the tax rate requirement in § 222.68(c) and the other applicable requirements of §§ 222.68 through 222.72; and
(4) The LEA is not in a State that takes the LEA's payment under section 8003(b)(1)(F) into account in an equalization program that qualifies under section 8009 of the Act.
(b)(1) As part of its section 8003 application, the LEA indicates in writing that it wishes to apply for an “unusual geographic” payment and it will provide the Secretary with documentation upon request that demonstrates that the LEA is unable to provide a level of education equivalent to that provided by its generally comparable LEAs because—
(i) The applicant's current expenditures are affected by unusual geographic factors; and
(ii) As a result, those current expenditures are not reasonably comparable to the current expenditures of its generally comparable LEAs.
(2) The LEA's documentation must include—
(i) A specific description of the unusual geographic factors on which the applicant is basing its request for compensation under this section and objective data demonstrating that the applicant is more severely affected by the factors than any other LEA in its State;
(ii) Objective data demonstrating the specific ways in which the unusual geographic factors affect the applicant's current expenditures so that they are not reasonably comparable to the current expenditures of its generally comparable LEAs;
(iii) Objective data demonstrating the specific ways in which the unusual geographic factors prevent the applicant from providing a level of education equivalent to that provided by its generally comparable LEAs; and
(iv) Any other information that the Secretary may require to make an eligibility determination under this section.
The Secretary determines a maximum payment under section 8003(b)(1)(F) for an eligible LEA, using data from the third preceding fiscal year, as follows:
(a) Subject to paragraph (b) of this section, the Secretary increases the eligible LEA's local contribution rate (LCR) for section 8003(b) payment purposes to the amount the Secretary determines will compensate the applicant for the increase in its current expenditures necessitated by the unusual geographic factors identified under § 222.43(b)(2).
(b) The Secretary does not increase the LCR under this section to an amount that is more than—
(1) Is necessary to allow the applicant to provide a level of education equivalent to that provided by its generally comparable LEAs; or
(2) The per pupil share for all children in ADA of the increased current expenditures necessitated by the unusual geographic factors identified under § 222.43, as determined by the Secretary.
In addition to the terms referenced or defined in § 222.2, the following definitions apply to this subpart:
Child with a disability as defined in 34 CFR 300.8.
Early intervention services as defined in 34 CFR 303.13.
Free appropriate public education or FAPE as defined in 34 CFR 300.17.
Individualized education program or IEP as defined in 34 CFR 300.22.
Individualized family service plan or IFSP as defined in 34 CFR 303.20.
Infant or toddler with a disability as defined in 34 CFR 303.21.
Infants, toddlers, and children with disabilities, for these regulations, means both a “child with a disability” as defined in 34 CFR 300.8 and an “infant or toddler with a disability” as defined in 34 CFR 303.21.
Related services as defined in 34 CFR 300.34.
Special education as defined in 34 CFR 300.39.
(a) An LEA may count children described in sections 8003(a)(1)(A)(ii), (a)(1)(B), (a)(1)(C), and (a)(1)(D) of the Act who are eligible for services under the provisions of Part B or Part C of the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.) (IDEA), for the purpose of computing a payment under section 8003(d) in accordance with the provisions of this section.
(b)(1) An LEA may count a child with a disability described in paragraph (a) of this section who attends a private school or residential program if the LEA has placed or referred the child in accordance with the provisions of section 613 of the IDEA and 34 CFR part 300, subparts C and D.
(2) An LEA may not count a child with a disability described in paragraph (a) of this section who is placed in a private school by his or her parents, but that child may participate in public school programs that use section 8003(d) funds.
(c) An LEA may count infants and toddlers with disabilities described in paragraph (a) of this section if—
(1) The LEA provides early intervention services or FAPE to each of those children—
(i) Either directly or through an arrangement with another entity; and
(ii) The State does not charge a fee or other out-of-pocket cost to the child's parents under the State's system of payments on file with the Secretary required under 34 CFR 303.203(b)(1), 303.520, and 303.521, and there is no other cost to the child's parents (the costs of premiums do not count as out-of-pocket costs); and
(2) Each of those children has an IFSP or IEP (as appropriate).
To receive a payment under section 8003(d), an eligible LEA shall—
(a) State in its application the number of federally connected children with disabilities it claims for a payment under section 8003(d);
(b) Have in effect written IEPs or IFSPs for all federally connected children with disabilities it claims under section 8003(d); and
(c) Meet the requirements of subparts A and C of the regulations in this part.
(a) An LEA shall use funds provided under section 8003(d) in accordance with the provisions of section 8003(d)(2) and 34 CFR parts 300 and 303.
(b) Obligations and expenditures of section 8003(d) funds may be incurred in either of the two following ways:
(1) An LEA may obligate or expend section 8003(d) funds for the fiscal year for which the funds were appropriated.
(2) An LEA may reimburse itself for obligations or expenditures of local and general State aid funds for the fiscal year for which the section 8003(d) funds were appropriated.
(c) An LEA shall use its section 8003(d) funds for the following types of expenditures:
(1) Expenditures that are reasonably related to the conduct of programs or projects for the free appropriate public education of, or early intervention services for, federally connected children with disabilities, which may include—
(i) Program planning and evaluation; and
(ii) Construction of or alteration to existing school facilities, but only when in accordance with section 605 of the IDEA and when the Secretary authorizes in writing those uses of funds.
(2) Acquisition cost (net invoice price) of equipment required for the free appropriate public education of, and early intervention services for, federally connected children with disabilities.
(i) If section 8003(d) funds are used for the acquisition of any equipment described in this paragraph (c)(2) of this section, the fair market value of any financial advantage realized through rebates, discounts, bonuses, free pieces of equipment used in a program or project for the free appropriate public education of, or early intervention services for, federally connected children with disabilities, or other circumstances, is not an allowable expenditure and may not be credited as an expenditure of those funds.
(ii) Funds awarded under the provisions of section 8003(d) may be used to acquire equipment for the free appropriate public education of, or early intervention services for, the federally connected children with disabilities only if title to the equipment would be in the applicant agency.
(d) An LEA shall account for the use of section 8003(d) funds as follows:
(1) By recording, for each fiscal year, the receipt (or credit) of section 8003(d) funds separately from other funds received under the Act, i.e., on a line item basis in the general fund account or in a separate account; and
(2) By demonstrating that, for each fiscal year, the amount of expenditures for special education and related services and for early intervention services provided to the federally connected children with disabilities is at least equal to the amount of section 8003(d) funds received or credited for that fiscal year. This is done as follows:
(i) For each fiscal year determine the amount of an LEA's expenditures for special education and related services and for early intervention services provided to all children with disabilities.
(ii) The amount determined in paragraph (d)(2)(i) of this section is divided by the average daily attendance (ADA) of the total number of children with disabilities the LEA served during that fiscal year.
(iii) The amount determined in paragraph (d)(2)(ii) of this section is then multiplied by the total ADA of the LEA's federally connected children with disabilities claimed by the LEA for that fiscal year.
(3) If the amount of section 8003(d) funds the LEA received (or was credited) for the fiscal year exceeds the amount obtained in paragraph (d)(2)(iii) of this section, an overpayment equal to the excess section 8003(d) funds is established. This overpayment may be reduced or eliminated to the extent that the LEA can demonstrate that the average per pupil expenditure for special education and related services and for early intervention services provided to federally connected children with disabilities exceeded its average per pupil expenditure for serving non-federally connected children with disabilities.
Funds provided under section 8003(d) may not supplant any State funds that were or would have been available to the LEA for the free appropriate public education of children counted under section 8003(d).
(a) No section 8003(d) funds may be paid to an LEA whose per pupil State aid for federally connected children with disabilities, either general State aid or special education State aid, has been or would be reduced as a result of eligibility for or receipt of section 8003(d) funds, whether or not a State has a program of State aid that meets the requirements of section 8009 of the Act and subpart K of the regulations in this part.
(1) A reduction in the per pupil amount of State aid for children with disabilities, including children counted under section 8003(d), from that received in a previous year raises a presumption that supplanting has occurred.
(2) The LEA may rebut this presumption by demonstrating that the reduction was unrelated to the receipt of section 8003(d) funds.
(b) In any State in which there is only one LEA, all funds for programs, and for early intervention services, for children with disabilities other than funds from Federal sources are considered by the Secretary to be local funds.
Local educational agencies receiving funds under section 8003(d) are subject to the requirements of the Individuals with Disabilities Education Act, and related regulations (20 U.S.C. 1401 et seq. and 34 CFR parts 300 and 303).
The regulations in this subpart implement section 8003(b)(2) of the Act, which provides financial assistance to certain heavily impacted local educational agencies (LEAs). The specific eligibility requirements are detailed in §§ 222.62 through 222.66.
(a) Computations and determinations made with regard to an LEA's eligibility under section 8003(b)(2) in §§ 222.61 through 222.66 of these regulations are based on the LEA's final student, revenue, expenditure, and tax data from the third fiscal year preceding the fiscal year for which it seeks assistance.
(b) Except for an LEA described in § 222.64(a)(3)(ii), the LEAs used for meeting the applicable tax rate requirement are the comparable LEAs that are identified in § 222.74 or all LEAs in the applicant's State.
(c) As used in this subpart, the phrase “tax rate for general fund purposes” means “local real property tax rates for current expenditures purposes” as defined in § 222.2. “Current expenditures” is defined in section 8013(4) of the ESEA.
(a) An applicant that wishes to be considered to receive a heavily impacted payment must submit the required information indicating tax rate eligibility under §§ 222.63 or 222.64 with the annual section 7003 Impact Aid application. Final LEA tax rate eligibility must be verified by the SEA under the process described in § 222.73.
(b) An LEA that is eligible to apply for a “continuing” heavily impacted payment under section 8003(b)(2)(B) is one that received a heavily impacted LEA payment for fiscal year 2000 and that meets eligibility requirements specified in § 222.63.
(c) An LEA that is eligible to apply for a “new” heavily impacted payment under section 8003(b)(2)(C) is one that did not receive see above and throughout the section for fiscal year 2000 and that meets eligibility requirements specified in § 222.64 for two consecutive application years.
A continuing heavily impacted LEA must have—
(a) The same boundaries as those of a Federal military installation;
(b)(1) An enrollment of federally connected children described in section 8003(a)(1) equal to at least 35 percent of the total number of children in average daily attendance (ADA) in the LEA;
(2) A per pupil expenditure (PPE) that is less than the average PPE of the State in which the LEA is located or of all the States, whichever PPE is greater (except that an LEA with a total student enrollment of less than 350 students shall be determined to have met the PPE requirement); and
(3) A tax rate for general fund purposes of at least 95 percent of the average tax rate of comparable LEAs identified under § 222.74 or all LEAs in the applicant's State;
(c)(1) An enrollment of federally connected children described in section 8003(a)(1) equal to at least 30 percent of the total number of children in ADA in the LEA; and
(2) A tax rate for general fund purposes of at least 125 percent of the average tax rate of comparable LEAs identified under §§ 222.39-40 or of all LEAs in the applicant's State; or
(d) A total enrollment of at least 25,000 students, of which at least 50 percent are children described in section 8003(a)(1) and at least 6,000 of such children are children described in section 8003(a)(1)(A) and (B).
A new heavily impacted LEA must have—
(a)(1)(i) Federally connected children equal to at least 50 percent of the total number of children in average daily attendance (ADA) in the LEA if children described in section 8003(a)(1)(F)-(G) are eligible to be counted for a section 8003(b)(1) payment; or
(ii) Federally connected children equal to at least 40 percent of the total number of children in ADA if children described in section 8003(a)(1)(F)-(G) are not eligible to be counted for a section 8003(b)(1) payment; and
(2)(i) If the LEA has a total ADA of more than 350 children,
(A) A per pupil expenditure (PPE) that is less than the average of the State in which the LEA is located; and
(B) A tax rate for general fund purposes equal to at least 95 percent of the average tax rate of comparable LEAs identified in § 222.74 or of all LEAs in the applicant's State; or
(ii) If the LEA has a total ADA of less than 350 children,
(A) A PPE that is less than the average PPE of one or three generally comparable LEAs identified in § 222.74(b); and
(B) A tax rate equal to at least 95 percent of the average tax rate of one or three generally comparable LEAs identified in § 222.74(b);
(b) The same boundaries as those of a Federal military installation; or
(c)(1) The same boundaries as island property held in trust by the Federal government;
(2) No taxing authority; and
(3) Received a payment under section 8003(b)(1) for fiscal year 2001.
Subject to § 222.66, an LEA described in § 222.63 or § 222.64 is eligible for financial assistance under section 8003(b)(2) if the Secretary determines that the LEA meets the following requirements:
(a) The LEA timely applies for assistance under section 8003(b)(2) and meets all of the other application and eligibility requirements of subparts A and C of these regulations.
(b) Except for an LEA described in § 222.63(a) or (d), or § 222.64(b) or (c), the LEA meets the applicable tax rate requirement in accordance with the procedures and requirements of §§ 222.68 through 222.74.
(a) A continuing heavily impacted LEA that fails to meet the eligibility requirements in § 222.63 in any fiscal year or a new heavily impacted LEA that received a section 8003(b)(2) payment but then fails to meet the eligibility requirements in § 222.64 will still receive a heavily impacted payment in the first year of ineligibility, based on the number of children in ADA that would be counted for that application if the LEA were eligible.
(b)(1) A continuing heavily impacted LEA may resume eligibility for a heavily impacted payment if it applies in the fiscal year preceding the year for which it seeks eligibility and it meets the eligibility requirements in § 222.63 for both fiscal years.
(2) In the first fiscal year that a continuing heavily impacted LEA qualifies to resume eligibility, it cannot receive a heavily impacted payment but instead will receive a basic support payment under section 8003(b)(1) for that year.
Continuing LEAs
| FFY 1 | FFY 2 | FFY 3 | FFY 4 | FFY 5 | |
|---|---|---|---|---|---|
| 8003(b)(2) Eligibility | |||||
| Payment Type | (b)(2) | (b)(2) | (b)(2) Hold Harmless | (b)(1) | (b)(2) |
(c) A new heavily impacted LEA may resume eligibility for a heavily impacted payment if it meets the eligibility requirements in § 222.64 for the fiscal year for which it seeks a payment.
New LEAs
| FFY 1 | FFY 2 | FFY 3 | FFY 4 | FFY 5 | |
|---|---|---|---|---|---|
| 8003(b)(2) Eligibility | |||||
| Payment Type | (b)(1) | (b)(2) | (b)(2) Hold Harmless | (b)(2) | (b)(2) |
The Secretary determines that an LEA is not eligible for financial assistance under section 8003(b)(2) if—
(a) The LEA is in a State that has an equalized program of State aid that meets the requirements of section 8009; and
(b) The State, in determining the LEA's eligibility for or amount of State aid, takes into consideration the portion of the LEA's payment under section 8003(b)(2) that exceeds what the LEA would receive under section 8003(b)(1).
(a) To determine whether a fiscally independent LEA, as defined in § 222.2(c), meets the applicable tax rate requirement in §§ 222.63(b)(3), 222.63(c)(2), and 222.64(a)(3), the Secretary compares the LEA's local real property tax rate for current expenditure purposes, as defined in § 222.2(c) (referred to in this part as “tax rate” or “tax rates”), with the tax rates of its generally comparable LEAs.
(b) For purposes of this section, the Secretary uses—
(1) The actual tax rate if all the real property in the LEA and its generally comparable LEAs is assessed at the same percentage of true value; or
(2) Tax rates computed under §§ 222.69-222.71.
(c) The Secretary determines that an LEA described in §§ 222.63(b), 222.63(c), or 222.64(a) meets the applicable tax rate requirement if—
(1) The LEA's tax rate is equal to at least 95 percent (or 125 percent under 222.63(c)) of the average tax rate of its generally comparable LEAs;
(2) Each of the LEA's tax rates for each classification of real property is equal to at least 95 percent (or 125 percent under 222.63(c)) of each of the average tax rates of its generally comparable LEAs for the same classification of property;
(3) The LEA taxes all of its real property at the maximum rates allowed by the State, if those maximum rates apply uniformly to all LEAs in the State and the State does not permit any rates higher than the maximum; or
(4) The LEA has no taxable real property.
If the real property of an LEA and its generally comparable LEAs consists of one classification of property but the property is assessed at different percentages of true value in the different LEAs, the Secretary determines whether the LEA meets the applicable tax rate requirement under § 222.68(c)(1) by using tax rates computed by—
(a) Multiplying the LEA's actual tax rate for real property by the percentage of true value assigned to that property for tax purposes; and
(b) Performing the computation in paragraph (a) of this section for each of its generally comparable LEAs and determining the average of those computed tax rates.
If the real property of an LEA and its generally comparable LEAs consists of two or more classifications of real property taxed at different rates, the Secretary determines whether the LEA meets the applicable tax rate requirement under § 222.68(c)(1) or (2) by using one of the following:
(a) Actual tax rates for each of the classifications of real property.
(b) Tax rates computed in accordance with § 222.69 for each of the classifications of real property.
(c) Tax rates computed by—
(1) Determining the total true value of all real property in the LEA by dividing the assessed value of each classification of real property in the LEA by the percentage of true value assigned to that property for tax purposes and aggregating the results;
(2) Determining the LEA's total revenues derived from local real property taxes for current expenditures (as defined in section 8013);
(3) Dividing the amount determined in paragraph (c)(2) of this section by the amount determined in paragraph (c)(1) of this section; and
(4) Performing the computations in paragraphs (c)(1), (2), and (3) of this section for each of the generally comparable LEAs and then determining the average of their computed tax rates.
(a) In a State in which a substantial portion of revenues for current expenditures for educational purposes is derived from local tax sources other than real property taxes, the State educational agency (SEA) may request that the Secretary take those revenues into account in determining whether an LEA in that State meets the applicable tax rate requirement under § 222.68.
(b) If, based upon the request of an SEA, the Secretary determines that it is appropriate to take the revenues described in paragraph (a) of this section into account in determining whether an LEA in that State meets the applicable tax rate requirement under § 222.68, the Secretary uses tax rates computed by—
(1) Dividing the assessed value of each classification of real property in the LEA by the percentage of true value assigned to that property for tax purposes and aggregating the results;
(2) Determining the LEA's total revenues derived from local tax sources for current expenditures (as defined in section 8013);
(3) Dividing the amount determined in paragraph (b)(2) of this section by the amount determined in paragraph (b)(1) of this section; and
(4) Performing the computations in paragraphs (b)(1), (2), and (3) of this section for each of the generally comparable LEAs and then determining the average of those computed tax rates.
(a) If an LEA is fiscally dependent, as defined in § 222.2(c), the Secretary compares the LEA's imputed local tax rate, calculated under paragraph (b) of this section, with the average tax rate of its generally comparable LEAs, calculated under paragraph (c) of this section, to determine whether the LEA meets the applicable tax rate requirement.
(b) The Secretary imputes a local tax rate for a fiscally dependent LEA by—
(1) Dividing the assessed value of each classification of real property within the boundaries of the general government by the percentage of true value assigned to that property for tax purposes and aggregating the results;
(2) Determining the amount of locally derived revenues made available by the general government for the LEA's current expenditures (as defined in section 8013); and
(3) Dividing the amount determined in paragraph (b)(2) of this section by the amount determined in paragraph (b)(1) of this section.
(c) The Secretary performs the computations in paragraph (b) of this section for each of the fiscally dependent generally comparable LEAs and the computations in §§ 222.68 through 222.71, whichever is applicable, for each of the fiscally independent generally comparable LEAs and determines the average of all those tax rates.
(d) The Secretary determines that a fiscally dependent LEA described in § 222.63(b) or § 222.64(a) meets the applicable tax rate requirement if its imputed local tax rate is equal to at least 95 percent of the average tax rate of its generally comparable LEAs.
(e) The Secretary determines that a fiscally dependent LEA described in § 222.63(c) meets the applicable tax rate requirement if its imputed local tax rate is equal to at least 125 percent of the average tax rate of its generally comparable LEAs.
The SEA of any State with an LEA applying for assistance under section 8003(b)(2) shall provide the Secretary with relevant information necessary to determine the PPE for all LEAs in the State and whether the LEA meets the applicable tax rate requirement under this subpart.
(a) Except as otherwise provided in paragraph (b) of this section, the Secretary identifies generally comparable LEAs for purposes of this subpart in accordance with the local contribution rate procedures described in §§ 222.39 through 222.40.
(b) For applicant LEAs described in § 222.64(a)(2)(ii) and (a)(3)(ii), to identify the one or three generally comparable LEAs, the Secretary uses the following procedures:
(1) The Secretary asks the SEA of the applicant LEA to identify generally comparable LEAs in the State by first following the directions in § 222.39(a)(4), using data from the preceding fiscal year. The SEA then removes from the resulting list any LEAs that are significantly impacted, as described in § 222.39(b)(1), except the applicant LEA.
(2) If the remaining LEAs are not in rank order by total ADA, the SEA lists them in that order.
(3) The LEA may then select as its generally comparable LEAs, for purposes of section 8003(b)(2) only, one or three LEAs from the list that are closest to it in size as determined by total ADA (i.e., the next one larger or the next one smaller, or the next three larger LEAs, the next three smaller, the next two larger and the next one smaller, or the next one larger and the next two smaller).
For applicant LEAs described in § 222.64(a)(2)(ii), the Secretary computes average per pupil expenditures (APPE) by dividing the sum of the total current expenditures for the third preceding fiscal year for the identified generally comparable LEAs by the sum of the total ADA of those LEAs for the same fiscal year.
In addition to the definitions in § 222.2, the following definitions apply to this subpart:
Indian children means children residing on Indian lands who are recognized by an Indian tribe as being affiliated with that tribe.
Indian tribe means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established under the Alaska Native Claims Settlement Act (85 Stat. 688), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
(a) To receive a payment under section 7003 of the Act for children residing on Indian lands, an LEA must—
(1) Meet the application and eligibility requirements in section 7003 and subparts A and C of these regulations;
(2) Except as provided in paragraph (b) of this section, develop and implement policies and procedures in accordance with § 222.94; and
(3) Include in its application for payments under section 7003—
(i) An assurance that the LEA established these policies and procedures in consultation with and based on information from tribal officials and parents of those children residing on Indian lands who are Indian children, except as provided in paragraph (b) of this section;
(ii) An assurance that the LEA has provided a written response to the comments, concerns and recommendations received through the Indian policies and procedures consultation process, except as provided in paragraph (b) of this section; and
(iii) Either a copy of the policies and procedures, or documentation that the LEA has received a waiver in accordance with the provisions of paragraph (b) of this section.
(b) An LEA is not required to comply with § 222.94 with respect to students from a tribe that has provided the LEA with a waiver that meets the requirements of this paragraph.
(1) A waiver must contain a voluntary written statement from an appropriate tribal official or tribal governing body that—
(i) The LEA need not comply with § 222.94 because the tribe is satisfied with the LEA's provision of educational services to the tribe's students; and
(ii) The tribe was provided a copy of the requirements in § 222.91 and § 222.94, and understands the requirements that are being waived.
(2) The LEA must submit the waiver at the time of application.
(3) The LEA must obtain a waiver from each tribe that has Indian children living on Indian lands claimed by the LEA on its application under section 7003 of the Act. If the LEA only obtains waivers from some, but not all, applicable tribes, the LEA must comply with the requirements of § 222.94 with respect to those tribes that did not agree to waive these requirements.
(a) The following statutes and regulations apply to LEAs that claim children residing on Indian lands for payments under section 8003:
(1) The General Education Provisions Act (GEPA) in 20 U.S.C. 1221 et seq., unless otherwise noted.
(2) Other relevant regulations in this part.
(b) The following statutes, rules, and regulations do not apply to any hearing proceedings under this subpart:
(1) Administrative Procedure Act.
(2) Federal Rules of Civil Procedure.
(3) Federal Rules of Evidence.
(4) GEPA, part E.
(5) 34 CFR part 81.
(a) An LEA that is subject to the requirements of § 222.91(a) must consult with and involve local tribal officials and parents of Indian children in the planning and development of:
(1) Its Indian policies and procedures (IPPs), and
(2) The LEA's general educational program and activities.
(b) An LEA's IPPs must include a description of the specific procedures for how the LEA will:
(1) Disseminate relevant applications, evaluations, program plans and information related to the LEA's education program and activities with sufficient advance notice to allow tribes and parents of Indian children the opportunity to review and make recommendations.
(2) Provide an opportunity for tribes and parents of Indian children to provide their views on the LEA's educational program and activities, including recommendations on the needs of their children and on how the LEA may help those children realize the benefits of the LEA's education programs and activities. As part of this requirement, the LEA will—
(i) Notify tribes and the parents of Indian children of the opportunity to submit comments and recommendations, considering the tribe's preference for method of communication, and
(ii) Modify the method of and time for soliciting Indian views, if necessary, to ensure the maximum participation of tribes and parents of Indian children.
(3) At least annually, assess the extent to which Indian children participate on an equal basis with non-Indian children in the LEA's education program and activities. As part of this requirement, the LEA will:
(i) Share relevant information related to Indian children's participation in the LEA's education program and activities with tribes and parents of Indian children; and
(ii) Allow tribes and parents of Indian children the opportunity and time to review and comment on whether Indian children participate on an equal basis with non-Indian children.
(4) Modify the IPPs if necessary, based upon the results of any assessment or input described in paragraph (b) of this section.
(5) Respond at least annually in writing to comments and recommendations made by tribes or parents of Indian children, and disseminate the responses to the tribe and parents of Indian children prior to the submission of the IPPs by the LEA.
(6) Provide a copy of the IPPs annually to the affected tribe or tribes.
(c)(1) An LEA that is subject to the requirements of § 222.91(a) must implement the IPPs described in paragraph (b) of this section.
(2) Each LEA that has developed IPPs shall review those IPPs annually to ensure that they comply with the provisions of this section, and are implemented by the LEA in accordance with this section.
(3) If an LEA determines, after input from the tribe and parents of Indian children, that its IPPs do not meet the requirements of this section, the LEA shall amend its IPPs to conform to those requirements within 90 days of its determination.
(4) An LEA that amends its IPPs shall, within 30 days, send a copy of the amended IPPs to—
(i) The Impact Aid Program Director for approval; and
(ii) The affected tribe or tribes.
(a) The Director of the Impact Aid Program (Director) periodically reviews applicant LEAs' IPPs to ensure that they comply with the provisions of section 8004(a) and § 222.94.
(b) If the Director determines either that the LEA's IPPs do not comply with the minimum standards of section 8004(a), or that the IPPs have not been implemented in accordance with § 222.94, the Director provides the LEA with written notification of the deficiencies related to its IPPs and requires that the LEA take appropriate action.
(c) An LEA shall make the necessary changes within 90 days of receipt of written notification from the Director.
(d) If the LEA fails to make the necessary adjustments or changes within the prescribed period of time, the Director may withhold all or part of the payments that the LEA is eligible to receive under section 8003.
(a) Only a tribal chairman or an authorized designee for a tribe that has students attending an LEA's schools may file a written complaint with the Assistant Secretary for Elementary and Secondary Education (Assistant Secretary) regarding any action of the LEA pursuant to, or relevant to, section 8004(a) and § 222.94.
(b) If a tribe files a complaint through a designee, the tribe shall acknowledge in writing in the complaint that the designee is authorized to act on its behalf.
For purposes of this subpart, a complaint is a signed statement that includes—
(a) An allegation that an LEA has failed to develop and implement IPPs in accordance with section 8004(a);
(b) Information that supports the allegation;
(c) A specific request for relief; and
(d) A statement describing what steps the tribe has taken to resolve with the LEA the matters on which the complaint is based.
(a) The Assistant Secretary considers a complaint to have been received only after the Assistant Secretary determines that the complaint—
(1) Satisfies the requirements in §§ 222.102 and 222.103; and
(2) Is in writing and signed by the tribal chairman or the tribe's authorized designee.
(b) If the Assistant Secretary determines that a complaint fails to meet the requirements in §§ 222.102-222.103, the Assistant Secretary notifies the tribe or its designee in writing that the complaint has been dismissed for purposes of invoking the hearing procedures in §§ 222.102-222.113.
(c) Any notification that a complaint has been dismissed includes the reasons why the Assistant Secretary determined that the complaint did not meet the requirements in §§ 222.102 and 222.103.
(d) Notification that a complaint has been dismissed does not preclude other efforts to investigate or resolve the issues raised in the complaint, including the filing of an amended complaint.
Within 10 working days of receipt of a complaint, the Secretary or his designee—
(a) Designates a hearing examiner to conduct a hearing;
(b) Designates a time for the hearing that is no more than 30 days after the designation of a hearing examiner;
(c) Designates a place for the hearing that, to the extent possible, is—
(1) Near the LEA; or
(2) At another location convenient to the tribe and the LEA, if it is determined that there is good cause to designate another location;
(d) Notifies the tribe and the LEA of the time, place, and nature of the hearing; and
(e) Transmits copies of the complaint to the LEA and the affected tribe or tribes.
An LEA's reply to the charges in the complaint must be filed with the hearing examiner within 15 days of the date the LEA receives a copy of the notice and complaint described in § 222.108 (d) and (e) from the hearing examiner.
Hearings on IPP complaints filed by an Indian tribe or tribes against an LEA are conducted as follows:
(a) The hearing must be open to the public.
(b) Parties may be represented by counsel.
(c)(1) Each party may submit oral and written testimony that is relevant to the issues in the proceeding and make recommendations concerning appropriate remedial actions.
(2) A party may object to evidence it considers to be irrelevant or unduly repetitious.
(d) No party shall communicate orally or in writing with the hearing examiner or the Assistant Secretary on matters under review, except minor procedural matters, unless all parties to the complaint are given—
(1) Timely and adequate notice of the communication; and
(2) Reasonable opportunity to respond.
(e) For each document that a party submits, the party shall—
(1) File one copy for inclusion in the record of the proceeding; and
(2) Provide a copy to each of the other parties to the proceeding.
(f) Each party shall bear only its own costs in the proceeding.
The hearing examiner is authorized to conduct a hearing under section 8004(e) and §§ 222.109-222.113 as follows:
(a) The hearing examiner may—
(1) Clarify, simplify, or define the issues or consider other matters that may aid in the disposition of the complaint;
(2) Direct the parties to exchange relevant documents or information; and
(3) Examine witnesses.
(b) The hearing examiner—
(1) Regulates the course of proceedings and conduct of the parties;
(2) Arranges for the preparation of a transcript of each hearing and provides one copy to each party;
(3) Schedules the submission of oral and documentary evidence;
(4) Receives, rules on, excludes, or limits evidence;
(5) Establishes and maintains a record of the proceeding, including any transcripts referenced above;
(6) Establishes reasonable rules governing public attendance at the proceeding; and
(7) Is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(a) Each party may submit to the hearing examiner additional evidence that is relevant to the issues raised at the hearing, within the time period and in the manner specified by the hearing examiner.
(b) Within 30 days after the hearing, the hearing examiner—
(1) Makes, on the basis of the record, written findings of fact and recommendations concerning any appropriate remedial action that should be taken;
(2) Submits those findings and recommendations, along with the hearing record, to the Assistant Secretary; and
(3) Sends a copy of those findings and recommendations to each party.
(c)(1) Each party may file with the Assistant Secretary comments on the hearing examiner's findings and recommendations.
(2) The comments must be received by the Assistant Secretary within 10 days after the party receives a copy of the hearing examiner's findings and recommendations.
(a) Within 30 days after receiving the entire hearing record and the hearing examiner's findings and recommendations, the Assistant Secretary makes, on the basis of the record, a written determination that includes—
(1) Any appropriate remedial action that the LEA must take;
(2) A schedule for completing any remedial action; and
(3) The reasons for the Assistant Secretary's decision.
(b) After completing the final determination required by paragraph (a) of this section, the Assistant Secretary sends the parties a copy of that determination.
(c) The Assistant Secretary's final determination under paragraph (a) of this section is the final action of the Department concerning the complaint and is subject to judicial review.
The Assistant Secretary implements section 8004 of the Act and this subpart through such actions as the Assistant Secretary determines to be appropriate, including the withholding of funds in accordance with §§ 222.115-222.122, after affording the affected LEA, parents, and Indian tribe or tribes an opportunity to present their views.
Except as provided in § 222.120, the Assistant Secretary withholds payments to an LEA if—
(a) The Assistant Secretary determines it is necessary to enforce the requirements of section 8004 of the Act or this subpart; or
(b) After a hearing has been conducted under section 8004(e) of the Act and §§ 222.102-222.113 (IPP hearing)—
(1) The LEA rejects the final determination of the Assistant Secretary; or
(2) The LEA fails to implement the required remedy within the time established and the Assistant Secretary determines that the required remedy will not be undertaken by the LEA even if the LEA is granted a reasonable extension of time.
(a) If the Assistant Secretary decides to withhold an LEA's funds, the Assistant Secretary issues a written notice of intent to withhold the LEA's payments.
(b) In the written notice, the Assistant Secretary—
(1) Describes how the LEA failed to comply with the requirements at issue; and
(2)(i) Advises an LEA that has participated in an IPP hearing that it may request, in accordance with § 222.117(c), that its payments not be withheld; or
(ii) Advises an LEA that has not participated in an IPP hearing that it may request a withholding hearing in accordance with § 222.117(d).
(c) The Assistant Secretary sends a copy of the written notice of intent to withhold payments to the LEA and the affected Indian tribe or tribes by certified mail with return receipt requested.
(a) The withholding of payments authorized by section 8004 of the Act is conducted in accordance with section 8004 (d)(2) or (e)(8)-(9) of the Act and the regulations in this subpart.
(b) An LEA that receives a notice of intent to withhold payments from the Assistant Secretary is not entitled to an Impact Aid hearing under the provisions of section 8011 of the Act and subpart J of this part.
(c) After an IPP hearing. (1) An LEA that rejects or fails to implement the final determination of the Assistant Secretary after an IPP hearing has 10 days from the date of the LEA's receipt of the written notice of intent to withhold funds to provide the Assistant Secretary with a written explanation and documentation in support of the reasons why its payments should not be withheld. The Assistant Secretary provides the affected Indian tribe or tribes with an opportunity to respond to the LEA's submission.
(2) If after reviewing an LEA's written explanation and supporting documentation, and any response from the Indian tribe or tribes, the Assistant Secretary determines to withhold an LEA's payments, the Assistant Secretary notifies the LEA and the affected Indian tribe or tribes of the withholding determination in writing by certified mail with return receipt requested prior to withholding the payments.
(3) In the withholding determination, the Assistant Secretary states the facts supporting the determination that the LEA failed to comply with the legal requirements at issue, and why the provisions of § 222.120 (provisions governing circumstances when an LEA is exempt from the withholding of payments) are inapplicable. This determination is the final decision of the Department.
(d) An LEA that has not participated in an IPP hearing. (1) An LEA that has not participated in an IPP hearing has 30 days from the date of its receipt of the Assistant Secretary's notice of intent to withhold funds to file a written request for a withholding hearing with the Assistant Secretary. The written request for a withholding hearing must—
(i) Identify the issues of law and facts in dispute; and
(ii) State the LEA's position, together with the pertinent facts and reasons supporting that position.
(2) If the LEA's request for a withholding hearing is accepted, the Assistant Secretary sends written notification of acceptance to the LEA and the affected Indian tribe or tribes and forwards to the hearing examiner a copy of the Assistant Secretary's written notice, the LEA's request for a withholding hearing, and any other relevant documents.
(3) If the LEA's request for a withholding hearing is rejected, the Assistant Secretary notifies the LEA in writing that its request for a hearing has been rejected and provides the LEA with the reasons for the rejection.
(4) The Assistant Secretary rejects requests for withholding hearings that are not filed in accordance with the time for filing requirements described in paragraph (d)(1) of this section. An LEA that files a timely request for a withholding hearing, but fails to meet the other filing requirements set forth in paragraph (d)(1) of this section, has 30 days from the date of receipt of the Assistant Secretary's notification of rejection to submit an acceptable amended request for a withholding hearing.
(e) If an LEA fails to file a written explanation in accordance with paragraph (c) of this section, or a request for a withholding hearing or an amended request for a withholding hearing in accordance with paragraph (d) of this section, the Secretary proceeds to take appropriate administrative action to withhold funds without further notification to the LEA.
(a) Appointment of hearing examiner. Upon receipt of a request for a withholding hearing that meets the requirements of § 222.117(d), the Assistant Secretary requests the appointment of a hearing examiner.
(b) Time and place of the hearing. Withholding hearings under this subpart are held at the offices of the Department in Washington, DC, at a time fixed by the hearing examiner, unless the hearing examiner selects another place based upon the convenience of the parties.
(c) Proceeding. (1) The parties to the withholding hearing are the Assistant Secretary and the affected LEA. An affected Indian tribe is not a party, but, at the discretion of the hearing examiner, may participate in the hearing and present its views on the issues relevant to the withholding determination.
(2) The parties may introduce all relevant evidence on the issues stated in the LEA's request for withholding hearing or other issues determined by the hearing examiner during the proceeding. The Assistant Secretary's notice of intent to withhold, the LEA's request for a withholding hearing, and all amendments and exhibits to those documents, must be made part of the hearing record.
(3) Technical rules of evidence, including the Federal Rules of Evidence, do not apply to hearings conducted under this subpart, but the hearing examiner may apply rules designed to assure production of the most credible evidence available, including allowing the cross-examination of witnesses.
(4) Each party may examine all documents and other evidence offered or accepted for the record, and may have the opportunity to refute facts and arguments advanced on either side of the issues.
(5) A transcript must be made of the oral evidence unless the parties agree otherwise.
(6) Each party may be represented by counsel.
(7) The hearing examiner is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(d) Filing requirements. (1) All written submissions must be filed with the hearing examiner by hand-delivery, mail, or facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(2) If agreed upon by the parties, a party may serve a document upon the other party by facsimile transmission.
(3) The filing date for a written submission under this subpart is the date the document is—
(i) Hand-delivered;
(ii) Mailed; or
(iii) Sent by facsimile transmission.
(4) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was timely received by the hearing examiner.
(5) Any party filing a document by facsimile transmission must file a follow-up hard copy by hand-delivery or mail within a reasonable period of time.
(e) Procedural rules. (1) If the hearing examiner determines that no dispute exists as to a material fact or that the resolution of any disputes as to material facts would not be materially assisted by oral testimony, the hearing examiner shall afford each party an opportunity to present its case—
(i) In whole or in part in writing; or
(ii) In an informal conference after affording each party sufficient notice of the issues to be considered.
(2) With respect to withholding hearings involving a dispute as to a material fact the resolution of which would be materially assisted by oral testimony, the hearing examiner shall afford to each party—
(i) Sufficient notice of the issues to be considered at the hearing;
(ii) An opportunity to present witnesses on the party's behalf; and
(iii) An opportunity to cross-examine other witnesses either orally or through written interrogatories.
(f) Decision of the hearing examiner. (1) The hearing examiner—
(i) Makes written findings and an initial withholding decision based upon the hearing record; and
(ii) Forwards to the Secretary, and mails to each party and to the affected Indian tribe or tribes, a copy of the written findings and initial withholding decision.
(2) A hearing examiner's initial withholding decision constitutes the Secretary's final withholding decision without any further proceedings unless—
(i) Either party to the withholding hearing, within 30 days of the date of its receipt of the initial withholding decision, requests the Secretary to review the decision and that request is granted; or
(ii) The Secretary otherwise determines, within the time limits stated in paragraph (g)(2)(ii) of this section, to review the initial withholding decision.
(3) When an initial withholding decision becomes the Secretary's final decision without any further proceedings, the Department notifies the parties and the affected Indian tribe or tribes of the finality of the decision.
(g) Administrative appeal of an initial decision. (1)(i) Any party may request the Secretary to review an initial withholding decision.
(ii) A party must file this request for review within 30 days of the party's receipt of the initial withholding decision.
(2) The Secretary may—
(i) Grant or deny a timely request for review of an initial withholding decision; or
(ii) Otherwise determine to review the decision, so long as that determination is made within 45 days of the date of receipt of the initial decision by the Secretary.
(3) The Secretary mails to each party and the affected Indian tribe or tribes, by certified mail with return receipt requested, written notice of—
(i) The Secretary's action granting or denying a request for review of an initial decision; or
(ii) The Secretary's determination to review an initial decision.
(h) Secretary's review of an initial withholding decision. (1) When the Secretary reviews an initial withholding decision, the Secretary notifies each party and the affected Indian tribe or tribes in writing, by certified mail with return receipt requested, that it may file a written statement or comments; and
(2) Mails to each party and to the affected Indian tribe or tribes, by certified mail with return receipt requested, written notice of the Secretary's final withholding decision.
(a) The withholding provisions in this subpart apply to all payments that an LEA is otherwise eligible to receive under section 8003 of the Act for any fiscal year.
(b) The Assistant Secretary withholds funds after completion of any administrative proceedings under §§ 222.116-222.118 until the LEA documents either compliance or exemption from compliance with the requirements in section 8004 of the Act and this subpart.
Except as provided in paragraph (d)(2) of this section, the Assistant Secretary does not withhold payments to an LEA under the following circumstances:
(a) The LEA documents that it has received a written statement from the affected Indian tribe or tribes that the LEA need not comply with section 8004 (a) and (b) of the Act, because the affected Indian tribe or tribes is satisfied with the provision of educational services by the LEA to the children claimed on the LEA's application for assistance under section 8003 of the Act.
(b) The Assistant Secretary receives from the affected Indian tribe or tribes a written request that meets the requirements of § 222.121 not to withhold payments from an LEA.
(c) The Assistant Secretary, on the basis of documentation provided by the LEA, determines that withholding payments during the course of the school year would substantially disrupt the educational programs of the LEA.
(d)(1) The affected Indian tribe or tribes elects to have educational services provided by the Bureau of Indian Affairs under section 1101(d) of the Education Amendments of 1978.
(2) For an LEA described in paragraph (d)(1) of this section, the Secretary recalculates the section 8003 payment that the LEA is otherwise eligible to receive to reflect the number of students who remain in attendance at the LEA.
(a) The affected Indian tribe or tribes may submit to the Assistant Secretary a formal request not to withhold payments from an LEA.
(b) The formal request must be in writing and signed by the tribal chairman or authorized designee.
If the Secretary determines that an LEA's payments will not be withheld under this subpart, the Assistant Secretary notifies the LEA and the affected Indian tribe or tribes, in writing, by certified mail with return receipt requested, of the reasons why the payments will not be withheld.
In addition to the terms referenced or defined in § 222.2, the following definitions apply to this subpart:
Minimum school facilities means those school facilities for which the Secretary may provide assistance under this part as follows:
(1) The Secretary, after consultation with the State educational agency and the local educational agency (LEA), considers these facilities necessary to support an educational program—
(i) For the membership of students residing on Federal property to be served at normal capacity; and
(ii) In accordance with applicable Federal and State laws and, if necessary or appropriate, common practice in the State.
(2) The term includes, but is not restricted to—
(i) Classrooms and related facilities; and
(ii) Machinery, utilities, and initial equipment, to the extent that these are necessary or appropriate for school purposes.
Providing assistance means constructing, leasing, renovating, remodeling, rehabilitating, or otherwise providing minimum school facilities.
The types of projects for which the Secretary may provide assistance under section 8008 of the Act during any given year include, but are not restricted to, one or more of the following:
(a)(1) Emergency repairs to existing facilities for which the Secretary is responsible under section 8008.
(2) As used in this section, the term emergency repairs means those repairs necessary—
(i) For the health and safety of persons using the facilities;
(ii) For the removal of architectural barriers to the disabled; or
(iii) For the prevention of further deterioration of the facilities.
(b) Renovation of facilities for which the Secretary is responsible under section 8008 to meet the standards of minimum school facilities in exchange for an LEA or another appropriate entity accepting transfer of the Secretary's interest in them under § 222.143.
(c) Provision of temporary facilities on Federal property pending emergency repairs.
(d) Construction of replacement minimum school facilities when more cost-effective than renovation and when the replacement facilities are to be transferred to local ownership under § 222.143.
When minimum school facilities are provided under section 8008, the Secretary may—
(a) Arrange for the operation of the facilities by an agency other than the Department;
(b) Establish terms and conditions for the operation of the facilities; and
(c) Require the operating agency to submit assurances and enter into other arrangements that the Secretary specifies.
When the Secretary transfers to an LEA or other appropriate entity (transferee) facilities that have been used to carry out the purposes of section 10 of Pub. L. 81-815 or section 8008, the Secretary establishes appropriate terms and conditions for the transfer including that it be—
(a) Without charge; and
(b) Consented to by the transferee.
(a) Except as provided in paragraph (b) of this section, the regulations in this subpart govern all Impact Aid administrative hearings under section 8011(a) of the Act and requests for reconsideration.
(b) Except as otherwise indicated in this part, the regulations in this subpart do not govern the following administrative hearings:
(1) Subpart G, §§ 222.90-222.122 (Indian policies and procedures tribal complaint and withholding hearings.
(2) Subpart K, § 222.165 (hearings concerning determinations under section 8009 of the Act).
(a) Any local educational agency (LEA) that is adversely affected by the Secretary's (or the Secretary's delegatee's) action or failure to act upon the LEA's application under the Act is entitled to an administrative hearing in accordance with this subpart.
(b) An applicant is entitled to an administrative hearing under this subpart only if—
(1) The applicant files a written request for an administrative hearing within 60 days of its receipt of written notice of the adverse action; and
(2) The issues of fact or law specified in the hearing request are material to the determination of the applicant's rights and are not committed wholly to the discretion of the Secretary.
(a)(1) An LEA may request reconsideration of any determination made by the Secretary (or the Secretary's delegatee) under the Act, either in addition to or instead of requesting an administrative hearing under § 222.151.
(2) A request for reconsideration, or actual reconsideration by the Secretary (or the Secretary's delegatee), does not extend the time within which an applicant must file a request for an administrative hearing under § 222.151, unless the Secretary (or the Secretary's delegatee) extends that time limit in writing.
(b) The Secretary's (or the Secretary's delegatee's) consideration of a request for reconsideration is not prejudiced by a pending request for an administrative hearing on the same matter, or the fact that a matter has been scheduled for a hearing. The Secretary (or the Secretary's delegatee) may, but is not required to, postpone the administrative hearing due to a request for reconsideration.
(c) The Secretary (or the Secretary's delegatee) may reconsider any determination under the Act concerning a particular party unless the determination has been the subject of an administrative hearing under this part with respect to that party.
An applicant requesting a hearing in accordance with this subpart must—
(a)(1) If it mails the hearing request, address it to the Secretary, c/o Director, Impact Aid Program, Room 3E105, U.S. Department of Education, 400 Maryland Avenue SW., Washington, DC 20202-6244;
(2) If it hand-delivers the hearing request, deliver it to the Director, Impact Aid Program, Room 3E105, U.S. Department of Education, 400 Maryland Avenue SW., Washington, DC 20202-6244; or
(3) If it emails the hearing request, send it to Impact.Aid@ed.gov.
Note to paragraph (a): The Secretary encourages applicants requesting an Impact Aid hearing to mail or email their requests. Because of enhanced security procedures, building access for non-official staff may be limited. Applicants should be prepared to mail their hearing requests if they or their courier are unable to obtain access to the building.
(b) Clearly specify in its written hearing request the issues of fact and law to be considered; and
(c) Furnish a copy of its hearing request to its State educational agency (SEA) (unless the applicant is an SEA).
(a) All written submissions under this subpart must be filed by hand-delivery, mail, or facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(b) If agreed upon by the parties, a party may serve a document upon the other party or parties by facsimile transmission.
(c) The filing date for a written submission under this subpart is the date the document is—
(1) Hand-delivered;
(2) Mailed; or
(3) Sent by facsimile transmission.
(d) A party other than the Department filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department, including by the administrative law judge (ALJ).
(e) Any party filing a document by facsimile transmission must file a follow-up hard copy by hand-delivery or mail within a reasonable period of time.
Administrative hearings under this subpart are held at the offices of the Department in Washington, DC, at a time fixed by the ALJ, unless the ALJ selects another place based upon the convenience of the parties.
Administrative hearings under this subpart are conducted as follows:
(a) The administrative hearing is conducted by an ALJ appointed under 5 U.S.C. 3105, who issues rules of procedure that are proper and not inconsistent with this subpart.
(b) The parties may introduce all relevant evidence on the issues stated in the applicant's request for hearing or on other issues determined by the ALJ during the proceeding. The application in question and all amendments and exhibits must be made part of the hearing record.
(c) Technical rules of evidence, including the Federal Rules of Evidence, do not apply to hearings conducted under this subpart, but the ALJ may apply rules designed to assure production of the most credible evidence available, including allowing the cross-examination of witnesses.
(d) Each party may examine all documents and other evidence offered or accepted for the record, and may have the opportunity to refute facts and arguments advanced on either side of the issues.
(e) A transcript must be made of the oral evidence unless the parties agree otherwise.
(f) Each party may be represented by counsel.
(g) The ALJ is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(a) Decision. (1) The ALJ—
(i) Makes written findings and an initial decision based upon the hearing record; and
(ii) Forwards to the Secretary, and mails to each party, a copy of the written findings and initial decision.
(2) An ALJ's initial decision constitutes the Secretary's final decision without any further proceedings unless—
(i) A party, within the time limits stated in paragraph (b)(1)(ii) of this section, requests the Secretary to review the decision and that request is granted; or
(ii) The Secretary otherwise determines, within the time limits stated in paragraph (b)(2)(ii) of this section, to review the initial decision.
(3) When an initial decision becomes the Secretary's final decision without any further proceedings, the Department's Office of Hearings and Appeals notifies the parties of the finality of the decision.
(b) Administrative appeal of an initial decision. (1)(i) Any party may request the Secretary to review an initial decision.
(ii) A party must file such a request for review within 30 days of the party's receipt of the initial decision.
(2) The Secretary may—
(i) Grant or deny a timely request for review of an initial decision; or
(ii) Otherwise determine to review the decision, so long as that determination is made within 45 days of the date of receipt of the initial decision.
(3) The Secretary mails to each party written notice of—
(i) The Secretary's action granting or denying a request for review of an initial decision; or
(ii) The Secretary's determination to review an initial decision.
When the Secretary reviews an initial decision, the Secretary—
(a) Notifies the applicant in writing that it may file a written statement or comments; and
(b) Mails to each party written notice of the Secretary's final decision.
If an LEA or a State that is aggrieved by the Secretary's final decision following an administrative hearing proceeding under this subpart wishes to seek judicial review, the LEA or State must, within 30 working days (as determined by the LEAs or State) after receiving notice of the Secretary's final decision, file with the United States Court of Appeals for the circuit in which that LEA or State is located a petition for review of the final agency action, in accordance with section 8011(b) of the Act.
(a) Scope. This subpart applies to determinations made by the Secretary under section 8009 of the Act.
(b) Purpose. The sole purpose of the regulations in this subpart is to implement the provisions of section 8009. The definitions and standards contained in this subpart apply only with respect to section 8009 and do not establish definitions and standards for any other purpose.
(a) General rules. (1) A State may take into consideration payments under sections 8002 and 8003(b) of the Act (including hold harmless payments calculated under section 8003(e)) in allocating State aid if that State has a State aid program that qualifies under § 222.162, except as follows:
(i) Those payments may be taken into consideration for each affected local educational agency (LEA) only in the proportion described in § 222.163.
(ii) A State may not take into consideration—
(A) That portion of an LEA's payment that is generated by the portion of a weight in excess of one under section 8003(a)(2)(B) of the Act (children residing on Indian lands);
(B) Payments under section 8003(d) of the Act (children with disabilities); or
(C) The amount that an LEA receives under section 8003(b)(2) that exceeds the amount the LEA would receive if eligible under section 8003(b)(1) and not section 8003(b)(2) (heavily impacted LEAs).
(2) No State aid program may qualify under this subpart if a court of that State has determined by final order, not under appeal, that the program fails to equalize expenditures for free public education among LEAs within the State or otherwise violates law, and if the court's order provides that the program is no longer in effect.
(3) No State, whether or not it has an equalization program that qualifies under § 222.162, may, in allocating State aid, take into consideration an LEA's eligibility for payments under the Act if that LEA does not apply for and receive those payments.
(4) Any State that takes into consideration payments under the Act in accordance with the provisions of section 8009 in allocating State aid to LEAs must reimburse any LEA for any amounts taken into consideration for any fiscal year to the extent that the LEA did not in fact receive payments in those amounts during that fiscal year.
(5) Except as provided in paragraph (a)(6), a State may not take into consideration payments under the Act in making estimated or final State aid payments before its State aid program has been certified by the Secretary.
(6)(i) If the Secretary has not made a determination under section 7009 of the Act for a fiscal year, the State may request permission from the Secretary to make estimated or preliminary State aid payments for that fiscal year, that consider a portion of Impact Aid payments as local resources in accordance with this section.
(ii) The State must include with its request an assurance that if the Secretary determines that the State does not meet the requirements of section 222.162 for that State fiscal year, the State must pay to each affected LEA, within 60 days of the Secretary's determination, the amount by which the State reduced State aid to the LEA.
(iii) In determining whether to grant permission, the Secretary may consider factors including whether—
(A) The Secretary certified the State under § 222.162 in the prior State fiscal year; and
(B) Substantially the same State aid program is in effect since the date of the last certification.
(b) Data for determinations. (1) Except as provided in paragraph (b)(2) of this section, determinations under this subpart requiring the submission of financial or school population data must be made on the basis of final data for the second fiscal year preceding the fiscal year for which the determination is made if substantially the same program was then in effect.
(2)(i) If the Secretary determines that the State has substantially revised its State aid program, the Secretary may certify that program for any fiscal year only if—
(A) The Secretary determines, on the basis of projected data, that the State's program will meet the disparity standard described in § 222.162 for the fiscal year for which the determination is made; and
(B) The State provides an assurance to the Secretary that, if final data do not demonstrate that the State's program met that standard for the fiscal year for which the determination is made, the State will pay to each affected LEA the amount by which the State reduced State aid to the LEA.
(ii) Data projections submitted by a State must set forth the assumptions upon which the data projections are founded, be accompanied by an assurance as to their accuracy, and be adjusted by actual data for the fiscal year of determination that must be submitted to the Secretary as soon as these data are available.
(3) For a State that has not previously been certified by the Secretary under § 222.162, or if the last certification was more than two years prior, the State submits projected data showing whether it meets the disparity standard in § 222.162. The projected data must show the resulting amounts of State aid as if the State were certified to consider Impact Aid in making State aid payments.
(c) Definitions. The following definitions apply to this subpart:
Current expenditures is defined in section 7013(4) of the Act. Additionally, for the purposes of this section it does not include expenditures of funds received by the agency under sections 7002 and 7003(b) (including hold harmless payments calculated under section 7003(e)) that are not taken into consideration under the State aid program and exceed the proportion of those funds that the State would be allowed to take into consideration under § 222.162.
Equalize expenditures means to meet the standard set forth in § 222.162.
Local tax revenues means compulsory charges levied by an LEA or by an intermediate school district or other local governmental entity on behalf of an LEA for current expenditures for educational services. “Local tax revenues” include the proceeds of ad valorem taxes, sales and use taxes, income taxes and other taxes. Where a State funding formula requires a local contribution equivalent to a specified mill tax levy on taxable real or personal property or both, “local tax revenues” include any revenues recognized by the State as satisfying that local contribution requirement.
Local tax revenues covered under a State equalization program means “local tax revenues” as defined in paragraph (c) of this section contributed to or taken into consideration in a State aid program subject to a determination under this subpart, but excluding all revenues from State and Federal sources.
Revenue means an addition to assets that does not increase any liability, does not represent the recovery of an expenditure, does not represent the cancellation of certain liabilities without a corresponding increase in other liabilities or a decrease in assets, and does not represent a contribution of fund capital in food service or pupil activity funds. Furthermore, the term “revenue” includes only revenue for current expenditures.
State aid means any contribution, no repayment for which is expected, made by a State to or on behalf of LEAs within the State for current expenditures for the provision of free public education.
Total local tax revenues means all “local tax revenues” as defined in paragraph (c) of this section, including tax revenues for education programs for children needing special services, vocational education, transportation, and the like during the period in question but excluding all revenues from State and Federal sources.
(a) Percentage disparity limitation. The Secretary considers that a State aid program equalizes expenditures if the disparity in the amount of current expenditures or revenues per pupil for free public education among LEAs in the State is no more than 25 percent. In determining the disparity percentage, the Secretary disregards LEAs with per pupil expenditures or revenues above the 95th or below the 5th percentile of those expenditures or revenues in the State. The method for calculating the percentage of disparity in a State is in the appendix to this subpart.
(b)(1) Weighted average disparity for different grade level groups. If a State requests it, the Secretary will make separate disparity computations for different groups of LEAs in the State that have similar grade levels of instruction.
(2) In those cases, the weighted average disparity for all groups, based on the proportionate number of pupils in each group, may not be more than the percentage provided in paragraph (a) of this section. The method for calculating the weighted average disparity percentage is set out in the appendix to this subpart.
(c) Per pupil figure computations. In calculating the current expenditures or revenue disparities under this section, computations of per pupil figures are made on one of the following bases:
(1) The per pupil amount of current expenditures or revenue for an LEA is computed on the basis of the total number of pupils receiving free public education in the schools of the agency. The total number of pupils is determined in accordance with whatever standard measurement of pupil count is used in the State.
(2) If a State aid program uses “weighted pupil,” “classroom,” “instructional unit,” or another designated measure of need in determining allocations of State aid to take account of special cost differentials, the computation of per pupil revenue or current expenditures may be made using one of the methods in paragraph (d) of this section. The two allowable categories of special cost differentials are—
(i) Those associated with pupils having special educational needs, such as children with disabilities, economically disadvantaged children, non-English speaking children, and gifted and talented children; and
(ii) Those associated with particular types of LEAs such as those affected by geographical isolation, sparsity or density of population, high cost of living, or special socioeconomic characteristics within the area served by an LEA.
(d) Accounting for special cost differentials. In computing per-pupil figures under paragraph (c) of this section, the State accounts for special cost differentials that meet the requirements of paragraph (c)(2) of this section in one of four ways:
(1) The inclusion method on a revenue basis. The State divides total revenues by a weighted pupil count that includes only those weights associated with the special cost differentials.
(2) The inclusion method on an expenditure basis. The State divides total current expenditures by a weighted pupil count that includes only those weights associated with the special cost differentials.
(3) The exclusion method on a revenue basis. The State subtracts revenues associated with the special cost differentials from total revenues, and divides this net amount by an unweighted pupil count.
(4) The exclusion method on an expenditure basis. The State subtracts current expenditures from revenues associated with the special cost differentials from total current expenditures, and divides this net amount by an unweighted pupil count.
(a) Provision of law. Section 8009(d)(1)(B) provides that, upon certification by the Secretary, in allocating State aid a State may consider as local resources funds received under sections 8002 and 8003(b) (including hold harmless payments calculated under section 8003(e)) only in proportion to the share that local tax revenues covered under a State equalization program are of total local tax revenues. Determinations of proportionality must be made on a case-by-case basis for each LEA affected and not on the basis of a general rule to be applied throughout a State.
(b) Computation of proportion. (1) In computing the share that local tax revenues covered under a State equalization program are of total local tax revenues for an LEA with respect to a program qualifying under § 222.162, the proportion is obtained by dividing the amount of local tax revenues covered under the equalization program by the total local tax revenues attributable to current expenditures for free public education within that LEA.
(2) In cases where there are no local tax revenues for current expenditures and the State provides all of those revenues on behalf of the LEA, the State may consider up to 100 percent of the funds received under the Act by that LEA in allocating State aid.
(c) Application of proportion to Impact Aid payments. Except as provided in § 222.161(a)(1)(ii) and (iii), the proportion established under this section (or a lesser proportion) for any LEA receiving payments under sections 8002 and 8003(b) (including hold harmless payments calculated under section 8003(e)) may be applied by a State to actual receipts of those payments.
(a) Initiation. (1) A proceeding under this subpart leading to a determination by the Secretary under section 8009 may be initiated—
(i) By the State educational agency (SEA) or other appropriate agency of the State;
(ii) By an LEA; or
(iii) By the Secretary, if the Secretary has reason to believe that the State's action is in violation of section 8009.
(2) Whenever a proceeding under this subpart is initiated, the party initiating the proceeding shall provide either the State or all LEAs with a complete copy of the submission required in paragraph (b) of this section. Following receipt of the submission, the Secretary shall notify the State and all LEAs in the State of their right to request from the Secretary, within 30 days of the initiation of a proceeding, the opportunity to present their views to the Secretary before the Secretary makes a determination.
(b) Submission. (1) A submission by a State or LEA under this section must be made in the manner requested by the Secretary and must contain the information and assurances as may be required by the Secretary in order to reach a determination under section 8009 and this subpart.
(2)(i) A State in a submission shall—
(A) Demonstrate how its State aid program comports with § 222.162; and
(B) Demonstrate for each LEA receiving funds under the Act that the proportion of those funds that will be taken into consideration comports with § 222.163.
(ii) The submission must be received by the Secretary no later than 120 calendar days before the beginning of the State's fiscal year for the year of the determination, and must include (except as provided in § 222.161(c)(2)) final second preceding fiscal year disparity data enabling the Secretary to determine whether the standard in § 222.162 has been met. The submission is considered timely if received by the Secretary on or before the filing deadline or if it bears a U.S. Postal Service postmark dated on or before the filing deadline.
(3) An LEA in a submission must demonstrate whether the State aid program comports with section 8009.
(4) Whenever a proceeding is initiated under this subpart, the Secretary may request from a State the data deemed necessary to make a determination. A failure on the part of a State to comply with that request within a reasonable period of time results in a summary determination by the Secretary that the State aid program of that State does not comport with the regulations in this subpart.
(5) Before making a determination under section 8009, the Secretary affords the State, and all LEAs in the State, an opportunity to present their views as follows:
(i) Upon receipt of a timely request for a predetermination hearing, the Secretary notifies all LEAs and the State of the time and place of the predetermination hearing.
(ii) Predetermination hearings are informal and any LEA and the State may participate whether or not they requested the predetermination hearing.
(iii) At the conclusion of the predetermination hearing, the Secretary holds the record open for 15 days for the submission of post-hearing comments. The Secretary may extend the period for post-hearing comments for good cause for up to an additional 15 days.
(iv) Instead of a predetermination hearing, if the party or parties requesting the predetermination hearing agree, they may present their views to the Secretary exclusively in writing. In such a case, the Secretary notifies all LEAs and the State that this alternative procedure is being followed and that they have up to 30 days from the date of the notice in which to submit their views in writing. Any LEA or the State may submit its views in writing within the specified time, regardless of whether it requested the opportunity to present its views.
(c) Determinations. The Secretary reviews the participants' submissions and any views presented at a predetermination hearing under paragraph (b)(5) of this section, including views submitted during the post-hearing comment period. Based upon this review, the Secretary issues a written determination setting forth the reasons for the determination in sufficient detail to enable the State or LEAs to respond. The Secretary affords reasonable notice of a determination under this subpart and the opportunity for a hearing to the State or any LEA adversely affected by the determination.
The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, an applicant should check with its local post office.
(a) Request for hearing. (1) A State or LEA that is adversely affected by a determination under section 8009 and this subpart and that desires a hearing regarding that determination must submit a written request for a hearing within 60 days of receipt of the determination. The time within which a request must be filed may not be extended unless the Secretary, or the Secretary's delegatee, extends the time in writing at the time notice of the determination is given.
(2) A request for a hearing in accordance with this section must specify the issues of fact and law to be considered.
(3) If an LEA requests a hearing, it must furnish a copy of the request to the State. If a State requests a hearing, it must furnish a copy of the request to all LEAs in the State.
(b) Right to intervene. Any LEA or State that is adversely affected by a determination shall have the right of intervention in the hearing.
(c) Time and place of hearing. The hearing is held at a time and place fixed by the Secretary or the Secretary's delegatee (with due regard to the mutual convenience of the parties).
(d) Counsel. In all proceedings under this section, all parties may be represented by counsel.
(e) Proceedings. (1) The Secretary refers the matter in controversy to an administrative law judge (ALJ) appointed under 5 U.S.C. 3105.
(2) The ALJ is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(f) Filing requirements. (1) Any written submission under this section must be filed by hand-delivery, mail, or facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(2) If agreed upon by the parties, service of a document may be made upon the other party by facsimile transmission.
(3) The filing date for a written submission under this section is the date the document is—
(i) Hand-delivered;
(ii) Mailed; or
(iii) Sent by facsimile transmission.
(4) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department.
(5) Any party filing a document by facsimile transmission must file a follow-up hard copy by hand-delivery or mail within a reasonable period of time.
(g) Procedural rules. (1) If, in the opinion of the ALJ, no dispute exists as to a material fact the resolution of which would be materially assisted by oral testimony, the ALJ shall afford each party to the proceeding an opportunity to present its case—
(i) In whole or in part in writing; or
(ii) In an informal conference after affording each party sufficient notice of the issues to be considered.
(2) With respect to hearings involving a dispute as to a material fact the resolution of which would be materially assisted by oral testimony, the ALJ shall afford the following procedures to each party:
(i) Sufficient notice of the issues to be considered at the hearing.
(ii) An opportunity to make a record of the proceedings.
(iii) An opportunity to present witnesses on the party's behalf.
(iv) An opportunity to cross-examine other witnesses either orally or through written interrogatories.
(h) Decisions. (1) The ALJ—
(i) Makes written findings and an initial decision based upon the hearing record; and
(ii) Forwards to the Secretary, and mails to each party, a copy of the written findings and initial decision.
(2) Appeals to the Secretary and the finality of initial decisions under section 8009 are governed by §§ 222.157(b), 222.158, and 222.159 of subpart J of this part.
(i) Corrective action. (1) Within 30 days after a determination by the Secretary that a State has been in violation of section 8009 unless the determination is timely appealed by the State, the State shall provide satisfactory written assurances that it will undertake appropriate corrective action if necessary.
(2) A State found by the Secretary to have been in violation of section 8009 following a hearing shall provide, within 30 days after disposal of the hearing request (such as by a final decision issued under this subpart or withdrawal of the hearing request), satisfactory assurances that it is taking corrective action, if necessary.
(3) At any time during a hearing under this subpart, a State may provide the Secretary appropriate assurances that it will undertake corrective action if necessary. The Secretary or the ALJ, as applicable, may stay the proceedings pending completion of corrective action.
The following paragraphs describe the methods for making certain calculations in conjunction with determinations made under the regulations in this subpart. Except as otherwise provided in the regulations, these methods are the only methods that may be used in making these calculations.
1. Determinations of disparity standard compliance under § 222.162(b)(1).
(a) The determinations of disparity in current expenditures or revenue per pupil are made by—
(i) Ranking all LEAs having similar grade levels within the State on the basis of current expenditures or revenue per pupil for the second preceding fiscal year before the year of determination;
(ii) Identifying those LEAs in each ranking that fall at the 95th and 5th percentiles of the total number of pupils in attendance in the schools of those LEAs; and
(iii) Subtracting the lower current expenditure or revenue per pupil figure from the higher for those agencies identified in paragraph (ii) and dividing the difference by the lower figure.
(b) In cases under § 222.162(b), where separate computations are made for different groups of LEAs, the disparity percentage for each group is obtained in the manner described in paragraph (a) above. Then the weighted average disparity percentage for the State as a whole is determined by—
(i) Multiplying the disparity percentage for each group by the total number of pupils receiving free public education in the schools in that group;
(ii) Summing the figures obtained in paragraph (b)(i); and
(iii) Dividing the sum obtained in paragraph (b)(ii) by the total number of pupils for all the groups.
Example
| Group 1 (grades 1-6), 80,000 pupils × 18.00%= | 14,400 |
| Group 2 (grades 7-12), 100,000 pupils × 22.00%= | 22,000 |
| Group 3 (grades 1-12), 20,000 pupils × 35.00%= | 7,000 |
| Total 200,000 pupils | 43,400 |
| 43,400/200,000 = 21.70% Disparity |
2. Determinations under § 222.163(b) as to maximum proportion of payments under the Act that may be taken into consideration by a State under an equalization program. The proportion that local tax revenues covered under a State equalization program are of total local tax revenues for a particular LEA shall be obtained by dividing: (a) The amount of local tax revenues covered under the equalization program by (b) the total local tax revenues attributable to current expenditures within the LEA. Local revenues that can be excluded from the proportion computation are those received from local non-tax sources such as interest, bake sales, gifts, donations, and in-kind contributions.
The Impact Aid Discretionary Construction grant program provides competitive grants for emergency repairs and modernization of school facilities to certain eligible local educational agencies (LEAs) that receive formula Impact Aid funds.
(a) Applications for these grants are considered in four funding priority categories. The specific requirements for each priority are detailed in §§ 222.177 through 222.182.
(b)(1) Generally, to be eligible for an emergency construction grant, an LEA must—
(i) Enroll a high proportion (at least 40 percent) of federally connected children in average daily attendance (ADA) who reside on Indian lands or who have a parent on active duty in the U.S. uniformed services;
(ii) Have a school that enrolls a high proportion of one of these types of students;
(iii) Be eligible for funding for heavily impacted LEAs under section 8003(b)(2) of the Act; or
(iv) Meet the specific numeric requirements regarding bonding capacity.
(2) The Secretary must also consider such factors as an LEA's total assessed value of real property that may be taxed for school purposes, its availability and use of bonding capacity, and the nature and severity of the emergency.
(c)(1) Generally, to be eligible for a modernization construction grant, an LEA must—
(i) Be eligible for Impact Aid funding under either section 8002 or 8003 of the Act;
(ii) Be eligible for funding for heavily impacted LEAs under section 8003(b)(2) of the Act;
(iii) Enroll a high proportion (at least 40 percent) of federally connected children in ADA who reside on Indian lands or who have a parent on active duty in the U.S. uniformed services;
(iv) Have a school that enrolls a high proportion of one of these types of students; or
(v) Meet the specific numeric requirements regarding bonding capacity.
(2) The Secretary must also consider such factors as an LEA's total assessed value of real property that may be taxed for school purposes, its availability and use of bonding capacity, and the nature and severity of its need for modernization funds.
(a) An LEA may use emergency grant funds received under this program only to repair, renovate, alter, and, in the limited circumstances described in paragraph (c) of this section, replace a public elementary or secondary school facility used for free public education to ensure the health and safety of students and personnel, including providing accessibility for the disabled as part of a larger project.
(b) An LEA may use modernization grant funds received under this program only to renovate, alter, retrofit, extend, and, in the limited circumstances described in paragraph (c) of this section, replace a public elementary or secondary school facility used for free public education to provide school facilities that support a contemporary educational program for the LEA's students at normal capacity, and in accordance with the laws, standards, or common practices in the LEA's State.
(c)(1) An emergency or modernization grant under this program may be used for the construction of a new school facility but only if the Secretary determines—
(i) That the LEA holds title to the existing facility for which funding is requested; and
(ii) In consultation with the grantee, that partial or complete replacement of the facility would be less expensive or more cost-effective than improving the existing facility.
(2) When construction of a new school facility is permitted, emergency and modernization funds may be used only for a new school facility that is used for free public education. These funds may be used for the—
(i) Construction of instructional, resource, food service, and general or administrative support areas, so long as they are a part of the instructional facility; and
(ii) Purchase of initial equipment or machinery, and initial utility connections.
The Secretary does not fund the following activities under a Discretionary Construction grant:
(a) Improvements to facilities for which the LEA does not have full title or other interest, such as a lease-hold interest.
(b) Improvements to or repairs of school grounds, such as environmental remediation, traffic remediation, and landscaping, that do not directly involve instructional facilities.
(c) Repair, renovation, alteration, or construction for stadiums or other facilities that are primarily used for athletic contests, exhibitions, and other events for which admission is charged to the general public.
(d) Improvements to or repairs of teacher housing.
(e) Except in the limited circumstances as provided in § 222.172(c), when new construction is permissible, acquisition of any interest in real property.
(f) Maintenance costs associated with any of an LEA's school facilities.
Grant funds under this program may not be used to supplant or replace other available non-Federal construction money. These grant funds may be used for emergency or modernization activities only to the extent that they supplement the amount of construction funds that would, in the absence of these grant funds, be available to a grantee from non-Federal funds for these purposes.
The following regulations apply to the Impact Aid Discretionary Construction program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 75 (Direct Grant Programs) except for 34 CFR §§ 75.600 through 75.617.
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(b) The OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted and amended as regulations of the Department in 2 CFR part 3485, and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted and amended in 2 CFR part 3474.
(c) The regulations in 34 CFR part 222.
(a) In addition to the terms referenced in 34 CFR 222.2, the following definitions apply to this program:
Bond limit means the cap or limit that a State may impose on an LEA's capacity for bonded indebtedness. For applicants in States that place no limit on an LEA's capacity for bonded indebtedness, the Secretary shall consider the LEA's bond limit to be 10 percent of its total assessed valuation.
Construction means
(1) Preparing drawings and specifications for school facilities;
(2) Repairing, renovating, or altering school facilities;
(3) Extending school facilities as described in § 222.172(b);
(4) Erecting or building school facilities, as described in § 222.172(c); and
(5) Inspections or supervision related to school facilities projects.
Emergency means a school facility condition that is so injurious or hazardous that it either poses an immediate threat to the health and safety of the facility's students and staff or can be reasonably expected to pose such a threat in the near future. These conditions can include deficiencies in the following building features: a roof; electrical wiring; a plumbing or sewage system; heating, ventilation, or air conditioning; the need to bring a school facility into compliance with fire and safety codes, or providing accessibility for the disabled as part of a larger project.
Level of bonded indebtedness means the amount of long-term debt issued by an LEA divided by the LEA's bonding capacity.
Minimal capacity to issue bonds means that the total assessed value of real property in an LEA that may be taxed for school purposes is at least $25,000,000 but not more than $50,000,000.
Modernization means the repair, renovation, alteration, or extension of a public elementary or secondary school facility in order to support a contemporary educational program for an LEA's students in normal capacity, and in accordance with the laws, standards, or common practices in the LEA's State.
No practical capacity to issue bonds means that the total assessed value of real property in an LEA that may be taxed for school purposes is less than $25,000,000.
School facility means a building used to provide free public education, including instructional, resource, food service, and general or administrative support areas, so long as they are a part of the facility.
Total assessed value per student means the assessed valuation of real property per pupil (AVPP), unless otherwise defined by an LEA's State.
(b) The following terms used in this subpart are defined or referenced in 34 CFR 77.1:
An LEA is eligible to apply for an emergency grant under the first priority of section 8007(b) of the Act if it—
(a) Is eligible to receive formula construction funds for the fiscal year under section 8007(a) of the Act;
(b)(1) Has no practical capacity to issue bonds;
(2) Has minimal capacity to issue bonds and has used at least 75 percent of its bond limit; or
(3) Is eligible to receive funds for the fiscal year for heavily impacted districts under section 8003(b)(2) of the Act; and
(c) Has a school facility emergency that the Secretary has determined poses a health or safety hazard to students and school personnel.
Except as provided in § 222.179, an LEA is eligible to apply for an emergency grant under the second priority of section 8007(b) of the Act if it—
(a) Is eligible to receive funds for the fiscal year under section 8003(b) of the Act;
(b)(1) Enrolls federally connected children living on Indian lands equal to at least 40 percent of the total number of children in average daily attendance (ADA) in its schools; or
(2) Enrolls federally connected children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA in its schools;
(c) Has used at least 75 percent of its bond limit;
(d) Has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average; and
(e) Has a school facility emergency that the Secretary has determined poses a health or safety hazard to students and school personnel.
An LEA that is eligible to receive section 8003(b) assistance for the fiscal year but that does not meet the other eligibility criteria described in § 222.178(a) or (b) may apply on behalf of a school located within its geographic boundaries for an emergency grant under the second priority of section 8007(b) of the Act if—
(a) The school—
(1) Enrolls children living on Indian lands equal to at least 40 percent of the total number of children in ADA; or
(2) Enrolls children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA;
(b) The school has a school facility emergency that the Secretary has determined poses a health or safety hazard to students and school personnel;
(c) The LEA has used at least 75 percent of its bond limit; and
(d) The LEA has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average.
An LEA is eligible to apply for a modernization grant under the third priority of section 8007(b) of the Act if it—
(a) Is eligible to receive funds for the fiscal year under section 8002 or 8003(b) of the Act;
(b)(1) Has no practical capacity to issue bonds;
(2) Has minimal capacity to issue bonds and has used at least 75 percent of its bond limit; or
(3) Is eligible to receive funds for the fiscal year for heavily impacted districts under section 8003(b)(2) of the Act; and
(c) Has facility needs resulting from the presence of the Federal Government, such as the enrollment of federally connected children, the presence of Federal property, or an increase in enrollment due to expanded Federal activities, housing privatization, or the acquisition of Federal property.
An LEA is eligible to apply for a modernization grant under the fourth priority of section 8007(b) of the Act if it—
(a)(1) Is eligible to receive funds for the fiscal year under section 8003(b) of the Act; and
(i) Enrolls children living on Indian lands equal to at least 40 percent of the total number of children in ADA in its schools; or
(ii) Enrolls children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA in its schools; or
(2) Is eligible to receive assistance for the fiscal year under section 8002 of the Act;
(b) Has used at least 75 percent of its bond limit;
(c) Has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average; and
(d) Has facility needs resulting from the presence of the Federal Government, such as the enrollment of federally connected children, the presence of Federal property, or an increase in enrollment due to expanded Federal activities, housing privatization, or the acquisition of Federal property.
An LEA that is eligible to receive a payment under Title VIII for the fiscal year but that does not meet the other eligibility criteria described in § 222.181 may apply on behalf of a school located within its geographic boundaries for a modernization grant under the fourth priority of section 8007(b) of the Act if—
(a) The school—
(1) Enrolls children living on Indian lands equal to at least 40 percent of the total number of children in ADA; or
(2) Enrolls children with a parent in the U.S. uniformed services equal to at least 40 percent of the total number of children in ADA;
(b) The LEA has used at least 75 percent of its bond limit;
(c) The LEA has an average per-student assessed value of real property available to be taxed for school purposes that is below its State average; and
(d) The school has facility needs resulting from the presence of the Federal Government, such as the enrollment of federally connected children, the presence of Federal property, or an increase in enrollment due to expanded Federal activities, housing privatization, or the acquisition of Federal property.
(a) To apply for funds under this program, an LEA may submit only one application for one educational facility for each competition.
(b) An application must—
(1) Contain the information required in §§ 222.184 through 222.186, as applicable, and in any application notice that the Secretary may publish in the
(2) Be timely filed in accordance with the provisions of the Secretary's application notice.
An application for an emergency or modernization grant must contain the following information:
(a) The name of the school facility the LEA is proposing to repair, construct, or modernize.
(b)(1) For an applicant under section 8003(b) of the Act, the number of federally connected children described in section 8003(a)(1) enrolled in the school facility, as well as the total enrollment in the facility, for which the LEA is seeking a grant; or
(2) For an applicant under section 8002 of the Act, the total enrollment, for the preceding year, in the LEA and in the school facility for which the LEA is seeking a grant, based on the fall State count date.
(c) The identification of the LEA's interest in, or authority over, the school facility involved, such as an ownership interest or a lease arrangement.
(d) The original construction date of the school facility that the LEA proposes to renovate or modernize.
(e) The dates of any major renovations of that school facility and the areas of the school covered by the renovations.
(f) The proportion of Federal acreage within the geographic boundaries of the LEA.
(g) Fiscal data including the LEA's—
(1) Maximum bonding capacity;
(2) Amount of bonded debt;
(3) Total assessed value of real property available to be taxed for school purposes;
(4) State average assessed value per pupil of real property available to be taxed for school purposes;
(5) Local real property tax levy, in mills or dollars, used to generate funds for capital expenditures; and
(6) Sources and amounts of funds available for the proposed project.
(h) A description of the need for funds and the proposed project for which a grant under this subpart L would be used, including a cost estimate for the project.
(i) Applicable assurances and certifications identified in the approved grant application package.
In addition to the information specified in § 222.184, an application for an emergency grant must contain the following:
(a) A description of the deficiency that poses a health or safety hazard to occupants of the facility.
(b) A description of how the deficiency adversely affects the occupants and how it will be repaired.
(c) A statement signed by an appropriate local official, as defined below, that the deficiency threatens the health and safety of occupants of the facility or prevents the use of the facility. An appropriate local official may include a local building inspector, a licensed architect, or a licensed structural engineer. An appropriate local official may not include a member of the applicant LEA's staff.
In addition to the information specified in § 222.184, an application for a modernization grant must contain a description of—
(a) The need for modernization; and
(b) How the applicant will use funds received under this program to address the need referenced in paragraph (a) of this section.
(a) Except as provided in paragraph (b) of this section, the Secretary will determine eligibility under this discretionary program based on student and fiscal data for each LEA from the fiscal year preceding the fiscal year for which the applicant is applying for funds.
(b) If satisfactory fiscal data are not available from the preceding fiscal year, the Secretary will use data from the most recent fiscal year for which data that are satisfactory to the Secretary are available.
In any given year, the Secretary may assign extra weight for certain facilities systems or emergency and modernization conditions by identifying the systems or conditions and their assigned weights in a notice published in the
(a) Except as provided in paragraph (b) of this section, the Secretary gives funding priority to applications in the following order:
(1) First priority is given to applications described under § 222.177 and, among those applicants for emergency grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the emergency.
(2) After all eligible first-priority applications are funded, second priority is given to applications described under §§ 222.178 and 222.179 and, among those applicants for emergency grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the emergency.
(3) Third priority is given to applications described under § 222.180 and, among those applicants for modernization grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the need for modernization.
(4) Fourth priority is given to applications described under §§ 222.181 and 222.182 and, among those applicants for modernization grants, priority is given to applications based on a rank order of the application quality factors referenced in § 222.190, including the severity of the need for modernization.
(b)(1) The Secretary makes awards in each priority described above until the Secretary is unable to make an approvable award in that priority.
(2) If the Secretary is unable to fund a full project or a viable portion of a project, the Secretary may continue to fund down the list of high-ranking applicants within a priority.
(3) The Secretary applies any remaining funds to awards in the next priority.
(4) If an applicant does not receive an emergency or modernization grant in a fiscal year, the Secretary will, subject to the availability of funds and to the priority and award criteria, consider that application in the following year along with the next fiscal year's pool of applications.
(a) To the extent that they are consistent with these regulations and section 8007(b) of the Act, the Secretary will follow grant selection procedures that are specified in 34 CFR 75.215 through 75.222. In general these procedures are based on the authorizing statute, the selection criteria, and any priorities or other applicable requirements that have been published in the
(b) In the event of ties in numeric ranking, the Secretary may consider as tie-breaking factors: the severity of the emergency or the need for modernization; for applicants under section 8003 of the Act, the numbers of federally connected children who will benefit from the project; or for applicants under section 8002 of the Act, the numbers of children who will benefit from the project; the AVPP compared to the LEA's State average; and available resources or non-Federal funds available for the grant project.
(a) Subject to any applicable contribution requirements as described in §§ 222.192 and 222.193, the procedures in 34 CFR 75.231 through 75.236, and the provisions in paragraph (b) of this section, the Secretary may fund up to 100 percent of the allowable costs in an approved grantee's proposed project.
(b) An award amount may not exceed the difference between—
(1) The cost of the proposed project; and
(2) The amount the grantee has available or will have available for this purpose from other sources, including local, State, and other Federal funds.
To determine the amount of local funds that an LEA has available under § 222.191(b)(2) for a project under this program, the Secretary will consider as available all LEA funds that may be used for capital expenditures except $100,000 or 10 percent of the average annual capital expenditures of the applicant for the three previous fiscal years, whichever is greater. The Secretary will not consider capital funds that an LEA can demonstrate have been committed through signed contracts or other written binding agreements but have not yet been expended.
(a) Except as provided in paragraph (b) of this section and § 222.191, the amount of funds provided under an emergency grant or a modernization grant awarded to an eligible LEA is subject to the following limitations:
(1) The award amount may not be more than 50 percent of the total cost of an approved project.
(2) The total amount of grant funds may not exceed four million dollars during any four-year period.
(b) Emergency or modernization grants to LEAs with no practical capacity to issue bonds as defined in § 222.176 are not subject to the award limitations described in paragraph (a) of this section.
(a) LEAs that are subject to the applicable matching requirement described in § 222.193(a) may use allowable third party in-kind contributions as defined below to meet the requirements.
(b) Third party in-kind contributions mean property or services that benefit this grant program and are contributed by non-Federal third parties without charge to the grantee or by a cost-type contractor under the grant agreement.
(c) Subject to the limitations of 34 CFR 75.564(c)(2) regarding indirect costs, the provisions of 2 CFR 200.306 govern the allowability and valuation of in-kind contributions, except that it is permissible for a third party to contribute real property to a grantee for a project under this program, so long as no Federal funds are spent for the acquisition of real property.
The Secretary makes funds available to a grantee during a project period using the following procedure:
(a) Upon final approval of the grant proposal, the Secretary authorizes a project period of up to 60 months based upon the nature of the grant proposal and the time needed to complete the project.
(b) The Secretary then initially makes available to the grantee 10 percent of the total award amount.
(c) After the grantee submits a copy of the emergency or modernization contract approved by the grantee's governing board, the Secretary makes available 80 percent of the total award amount to a grantee.
(d) The Secretary makes available up to the remaining 10 percent of the total award amount to the grantee after the grantee submits a statement that—
(1) Details any earnings, savings, or interest;
(2) Certifies that—
(i) The project is fully completed; and
(ii) All the awarded funds have been spent for grant purposes; and
(3) Is signed by the—
(i) Chairperson of the governing board;
(ii) Superintendent of schools; and
(iii) Architect of the project.
(a) Except as provided in paragraph (b) of this section, a grantee under this program must comply with—
(1) The general construction legal requirements identified in the grant application assurances;
(2) The prevailing wage standards in the grantee's locality that are established by the Secretary of Labor in accordance with the Davis-Bacon Act (40 U.S.C. 276a, et seq.); and
(3) All relevant Federal, State, and local environmental laws and regulations.
(b) A grantee that qualifies for a grant because it enrolls a high proportion of federally connected children who reside on Indian lands is considered to receive a grant award primarily for the benefit of Indians and must therefore comply with the Indian preference requirements of section 7(b) of the Indian Self-Determination Act.
(a) The Credit Enhancement for Charter School Facilities Program provides grants to eligible entities to assist charter schools in obtaining facilities.
(b) Grantees use these grants to do the following:
(1) Assist charter schools in obtaining loans, bonds, and other debt instruments for the purpose of obtaining, constructing, and renovating facilities.
(2) Assist charter schools in obtaining leases of facilities.
(3) Assist charter schools with the predevelopment costs required to assess sites for the purpose of acquiring (by purchase, lease, donation, or otherwise) an interest (including an interest held by a third party for the benefit of a charter school) in improved or unimproved real property or constructing new facilities, or renovating, repairing, or altering existing facilities, and that are necessary to commence or continue the operation of a charter school.
(c) Grantees may demonstrate innovative credit enhancement initiatives while meeting the program purposes under paragraph (b) of this section.
(d) For the purposes of these regulations, the Credit Enhancement for Charter School Facilities Program includes grants made under the Charter School Facilities Financing Demonstration Grant Program.
The following are eligible to receive a grant under this part:
(a) A public entity, such as a State or local governmental entity;
(b) A private nonprofit entity; or
(c) A consortium of entities described in paragraphs (a) and (b) of this section.
The following regulations apply to the Credit Enhancement for Charter School Facilities Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) [Reserved]
(6) 34 CFR part 81 (General Educational Provisions Act—Enforcement).
(7) 34 CFR part 82 (New Restrictions on Lobbying).
(8) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Grants)).
(9) [Reserved]
(10) 34 CFR part 97 (Protection of Human Subjects).
(11) 34 CFR part 98 (Student Rights in Research, Experimental Programs, and Testing).
(12) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 225.
(c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted in 2 CFR part 3474 and OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted in 2 CFR part 3485.
(a) Definitions in the Act. The following term used in this part is defined in section 4310(2) of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act:
(b) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR 77.1:
(a) The Secretary evaluates an application on the basis of the criteria in § 225.11.
(b) The Secretary awards up to 100 points for these criteria.
(c) The maximum possible score for each criterion is indicated in parentheses.
The Secretary uses the following criteria to evaluate an application for a Credit Enhancement for Charter School Facilities grant:
(a) Quality of project design and significance. (35 points) In determining the quality of project design and significance, the Secretary considers—
(1) The extent to which the grant proposal would provide financing to charter schools at better rates and terms than they can receive absent assistance through the program;
(2) The extent to which the project goals, objectives, and timeline are clearly specified, measurable, and appropriate for the purpose of the program;
(3) The extent to which the project implementation plan and activities, including the partnerships established, are likely to achieve measurable objectives that further the purposes of the program;
(4) The extent to which the project is likely to produce results that are replicable;
(5) The extent to which the project will use appropriate criteria for selecting charter schools for assistance and for determining the type and amount of assistance to be given;
(6) The extent to which the proposed activities will leverage private or public-sector funding and increase the number and variety of charter schools assisted in meeting their facilities needs more than would be accomplished absent the program;
(7) The extent to which the project will serve charter schools in States with strong charter laws, consistent with the criteria for such laws in section 4303(g)(2) of the Elementary and Secondary Education Act of 1965; and
(8) The extent to which the requested grant amount and the project costs are reasonable in relation to the objectives, design, and potential significance of the project.
(b) Quality of project services. (15 points) In determining the quality of the project services, the Secretary considers—
(1) The extent to which the services to be provided by the project reflect the identified needs of the charter schools to be served;
(2) The extent to which charter schools and chartering agencies were involved in the design of, and demonstrate support for, the project;
(3) The extent to which the technical assistance and other services to be provided by the proposed grant project involve the use of cost-effective strategies for increasing charter schools' access to facilities financing, including the reasonableness of fees and lending terms; and
(4) The extent to which the services to be provided by the proposed grant project are focused on assisting charter schools with a likelihood of success and the greatest demonstrated need for assistance under the program.
(c) Capacity. (35 points) In determining an applicant's business and organizational capacity to carry out the project, the Secretary considers—
(1) The amount and quality of experience of the applicant in carrying out the activities it proposes to undertake in its application, such as enhancing the credit on debt issuances, guaranteeing leases, and facilitating financing;
(2) The applicant's financial stability;
(3) The ability of the applicant to protect against unwarranted risk in its loan underwriting, portfolio monitoring, and financial management;
(4) The applicant's expertise in education to evaluate the likelihood of success of a charter school;
(5) The ability of the applicant to prevent conflicts of interest, including conflicts of interest by employees and members of the board of directors in a decision-making role;
(6) If the applicant has co-applicants (consortium members), partners, or other grant project participants, the specific resources to be contributed by each co-applicant (consortium member), partner, or other grant project participant to the implementation and success of the grant project;
(7) For State governmental entities, the extent to which steps have been or will be taken to ensure that charter schools within the State receive the funding needed to obtain adequate facilities; and
(8) For previous grantees under the charter school facilities programs, their performance in implementing these grants.
(d) Quality of project personnel. (15 points) In determining the quality of project personnel, the Secretary considers—
(1) The qualifications of project personnel, including relevant training and experience, of the project manager and other members of the project team, including consultants or subcontractors; and
(2) The staffing plan for the grant project.
(a) The Secretary may award up to 15 additional points under a competitive priority related to the capacity of charter schools to offer public school choice in those communities with the greatest need for this choice based on—
(1) The extent to which the applicant would target services to geographic areas in which a large proportion or number of public schools have been identified for comprehensive support and improvement or targeted support and improvement under the ESEA, as amended by the Every Student Succeeds Act;
(2) The extent to which the applicant would target services to geographic areas in which a large proportion of students perform below proficient on State academic assessments; and
(3) The extent to which the applicant would target services to communities with large proportions of students from low-income families.
(b) The Secretary may elect to—
(1) Use this competitive priority only in certain years; and
(2) Consider the points awarded under this priority only for proposals that exhibit sufficient quality to warrant funding under the selection criteria in § 225.11.
(a) A grantee may draw down funds after it has signed a performance agreement acceptable to the Department of Education and the grantee.
(b) A grantee may draw down and spend a limited amount of funds prior to reaching an acceptable performance agreement provided that the grantee requests to draw down and spend a specific amount of funds and the Department of Education approves the request in writing.
(a) Grantees must not use reserve account funds to—
(1) Directly pay for a charter school's construction, renovation, repair, or acquisition; or
(2) Provide a down payment on facilities in order to secure loans for charter schools. A grantee may, however, use funds to guarantee a loan for the portion of the loan that would otherwise have to be funded with a down payment.
(b) In the event of a default of payment to lenders or contractors by a charter school whose loan or lease is guaranteed by reserve account funds, a grantee may use these funds to cover defaulted payments that are referenced under paragraph (a)(1) of this section.
(a) The State Charter School Facilities Incentive program provides grants to States to help charter schools pay for facilities.
(b) Grantees must use these grants to—
(1) Establish new per-pupil facilities aid programs for charter schools;
(2) Enhance existing per-pupil facilities aid programs for charter schools; or
(3) Administer programs described under paragraphs (b)(1) and (2) of this section.
States are eligible to receive grants under this program.
The following regulations apply to the State Charter School Facilities Incentive program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1)[Reserved]
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) [Reserved]
(6) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(7) 34 CFR part 82 (New Restrictions on Lobbying).
(8) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(9) [Reserved]
(10) 34 CFR part 97 (Protection of Human Subjects).
(11) 34 CFR part 98 (Student Rights in Research, Experimental Programs, and Testing).
(12) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 226.
(c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted in 2 CFR part 3474 and the OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted in 2 CFR part 3485.
(a) Definitions in the statute. The following term used in this part is defined in section 4310 of the Elementary and Secondary Education Act of 1965, as amended (ESEA):
(b) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR 77.1:
(c) Other definition. The following definition also applies to this part:
Construction means—
(1) Preparing drawings and specifications for school facilities projects;
(2) Repairing, renovating, or altering school facilities;
(3) Extending school facilities;
(4) Erecting or building school facilities; and
(5) Inspections or supervision related to school facilities.
(a) The Secretary evaluates an application on the basis of the criteria in § 226.12 and the competitive preference priorities in § 226.14.
(b) The Secretary informs applicants of the maximum possible score for each criterion and competitive preference priority in the application package or in a notice published in the
The selection criteria for this program are as follows:
(a) Need for facility funding. (1) The need for per-pupil charter school facility funding in the State.
(2) The extent to which the proposal meets the need to fund charter school facilities on a per-pupil basis.
(b) Quality of plan. (1) The likelihood that the proposed grant project will result in the State either retaining a new per-pupil facilities aid program or continuing to enhance such a program without the total amount of assistance (State and Federal) declining over a five-year period.
(2) The flexibility charter schools have in their use of facility funds for the various authorized purposes.
(3) The quality of the plan for identifying charter schools and determining their eligibility to receive funds.
(4) The per-pupil facilities aid formula's ability to target resources to charter schools with the greatest need and the highest proportions of students in poverty.
(5) For projects that plan to reserve funds for evaluation, the quality of the applicant's plan to use grant funds for this purpose.
(6) For projects that plan to reserve funds for technical assistance, dissemination, or personnel, the quality of the applicant's plan to use grant funds for these purposes.
(c) The grant project team. (1) The qualifications, including relevant training and experience, of the project manager and other members of the grant project team, including employees not paid with grant funds, consultants, and subcontractors.
(2) The adequacy and appropriateness of the applicant's staffing plan for the grant project.
(d) The budget. (1) The extent to which the requested grant amount and the project costs are reasonable in relation to the objectives, design, and potential significance of the proposed grant project.
(2) The extent to which the costs are reasonable in relation to the number of students served and to the anticipated results and benefits.
(3) The extent to which the non-Federal share exceeds the minimum percentages (which are based on the percentages under section 4304(k)(2)(C) of the ESEA), particularly in the initial years of the program.
(e) State experience. The experience of the State in addressing the facility needs of charter schools through various means, including providing per-pupil aid and access to State loan or bonding pools.
(a) The Secretary may award points to an application under a competitive preference priority regarding the capacity of charter schools to offer public school choice in those communities with the greatest need for this choice based on—
(1) The extent to which the applicant would target services to geographic areas in which a large proportion or number of public schools have been identified for comprehensive support and improvement or targeted support and improvement under the ESEA;
(2) The extent to which the applicant would target services to geographic areas in which a large proportion of students perform poorly on State academic assessments; and
(3) The extent to which the applicant would target services to communities with large proportions of low-income students.
(b) The Secretary may award points to an application under a competitive preference priority for applicants that have not previously received a grant under the program.
(c) The Secretary may elect to consider the points awarded under these priorities only for proposals that exhibit sufficient quality to warrant funding under the selection criteria in § 226.12 of this part.
(a) Charter schools that receive grant funds through their State must use the funds for facilities. Except as provided in paragraph (b) of this section, allowable expenditures include:
(1) Rent.
(2) Purchase of building or land.
(3) Construction.
(4) Renovation of an existing school facility.
(5) Leasehold improvements.
(6) Debt service on a school facility.
(b) Charter schools may not use these grant funds for purchasing land when they have no immediate plans to construct a building on that land.
State grantees may use up to five percent of their grant award for administrative expenses that include: indirect costs, evaluation, technical assistance, dissemination, personnel costs, and any other costs involved in administering the State's per-pupil facilities aid program.
(a) Except as provided in paragraph (b) of this section, charter school subgrantees may use grant funds for administrative costs that are necessary and reasonable for the proper and efficient performance and administration of this Federal grant. This use of funds, as well as indirect costs and rates, must comply with EDGAR and the Office of Management and Budget Circular A-87 (Cost Principles for State, Local, and Indian Tribal Governments).
(b) Consistent with the requirements in 34 CFR 75.564(c)(2), any charter school subgrantees that use grant funds for construction activities may not be reimbursed for indirect costs for those activities.
(a) The Professional Development program provides grants to eligible entities to—
(1) Increase the number of qualified Indian individuals in professions that serve Indian students;
(2) Provide pre- and in-service training and support to qualified Indian individuals to become effective teachers, principals, other school leaders, administrators, teacher aides, paraprofessionals, counselors, social workers, and specialized instructional support personnel;
(3) Improve the skills of qualified Indian individuals who serve in the education field; and
(4) Develop and implement initiatives to promote retention of effective teachers, principals, and school leaders who have a record of success in helping low-achieving Indian students improve their academic achievement, outcomes, and preparation for postsecondary education or employment.
(b) The Professional Development program requires individuals who receive training to—
(1) Perform work related to the training received under the program and that benefits Indian students in an LEA that serves a high proportion of Indian students, or to repay all or a prorated part of the assistance received under the program; and
(2) Periodically report to the Secretary on the individual's compliance with the work requirement until work-related payback is complete or the individual has been referred for cash payback.
(a) In order to be eligible for either pre-service or in-service training programs, an applicant must be an eligible entity which means—
(1) An institution of higher education, or a TCU;
(2) A State educational agency in consortium with an institution of higher education or a TCU;
(3) A local educational agency (LEA) in consortium with an institution of higher education or a TCU;
(4) An Indian tribe or Indian organization in consortium with an institution of higher education or a TCU; or
(5) A BIE-funded school in consortium with at least one TCU, where feasible.
(b) BIE-funded schools are eligible applicants for—
(1) An in-service training program; and
(2) A pre-service training program when the BIE-funded school applies in consortium with an institution of higher education that meets the requirements in paragraph (c) of this section.
(c) Eligibility of an applicant that is an institution of higher education or a TCU, or an applicant requiring a consortium with any institution of higher education or TCU, requires that the institution of higher education or TCU be accredited to provide the coursework and level of degree or Native American language certificate required by the project.
The following definitions apply to the Professional Development program:
BIE-funded school means a Bureau of Indian Education school, a contract or grant school, or a school for which assistance is provided under the Tribally Controlled Schools Act of 1988.
Department means the U.S. Department of Education.
Dependent allowance means costs for the care of minor children under the age of 18 who reside with the training participant and for whom the participant has responsibility. The term does not include financial obligations for payment of child support required of the participant.
Educator means an individual who is one or more of—
(1) A teacher (including an early education teacher);
(2) A principal or other school leader;
(3) An administrator;
(4) Specialized instructional personnel (e.g., school psychologist, school counselor, school social worker, school nurse, librarian, early intervention service personnel);
(5) A paraprofessional; or
(6) Faculty.
Full course load means the number of credit hours that the institution requires of a full-time student.
Good standing means a cumulative grade point average of at least 2.0 on a 4.0 grade point scale in which failing grades are computed as part of the average, or another appropriate standard established by the institution.
Graduate degree means a post-baccalaureate degree awarded by an institution of higher education.
Indian means an individual who is—
(1) A member of an Indian tribe or band, as membership is defined by the Indian tribe or band, including any tribe or band terminated since 1940, and any tribe or band recognized by the State in which the tribe or band resides;
(2) A descendant of a parent or grandparent who meets the requirements of paragraph (1) of this definition;
(3) Considered by the Secretary of the Interior to be an Indian for any purpose;
(4) An Eskimo, Aleut, or other Alaska Native; or
(5) A member of an organized Indian group that received a grant under the Indian Education Act of 1988 as it was in effect on October 19, 1994.
Indian organization means an organization that—
(1) Is legally established—
(i) By tribal or inter-tribal charter or in accordance with State or tribal law; and
(ii) With appropriate constitution, by-laws, or articles of incorporation;
(2) Includes in its purposes the promotion of the education of Indians;
(3) Is controlled by a governing board, the majority of which is Indian;
(4) If located on an Indian reservation, operates with the sanction or by charter of the governing body of that reservation;
(5) Is neither an organization or subdivision of, nor under the direct control of, any institution of higher education or TCU; and
(6) Is not an agency of State or local government.
Induction services means services provided—
(1)(i) By educators, local traditional leaders, or cultural experts;
(ii) For the one, two, or three years of qualifying employment, as designated by the Department in the notice inviting applications; and
(iii) In LEAs that serve a high proportion of Indian students;
(2) To support and improve participants' professional performance and promote their retention in the field of education and teaching, and that include, at a minimum, these activities:
(i) High-quality mentoring, coaching, and consultation services for the participant to improve performance.
(ii) Access to research materials and information on teaching and learning.
(iii) Assisting new teachers with use of technology in the classroom and use of data, particularly student achievement data, for classroom instruction.
(iv) Clear, timely, and useful feedback on performance, provided in coordination with the participant's supervisor.
(v) Periodic meetings or seminars for participants to enhance collaboration, feedback, and peer networking and support.
In-service training means activities and opportunities designed to enhance the skills and abilities of individuals in their current areas of employment.
Institution of higher education (IHE) has the meaning given that term in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).
Local educational agency (LEA) that serves a high proportion of Indian students means—
(1) An LEA, including a BIE-funded school, that serves a high proportion of Indian students in the LEA as compared to other LEAs in the State; or
(2) An LEA, including a BIE-funded school, that serves a high proportion of Indian students in the school in which the participant works compared to other LEAs in the State, even if the LEA as a whole in which the participant works does not have a high proportion of Indian students compared to other LEAs in the State.
Native American means “Indian” as defined in section 6151(3) of the Elementary and Secondary Education Act, as amended, which includes Alaska Native and members of federally-recognized or State-recognized Tribes; Native Hawaiian; and Native American Pacific Islander.
Native American language means the historical, traditional languages spoken by Native Americans.
Participant means an Indian individual who is being trained under the Professional Development program.
Payback means work-related service or cash reimbursement to the Department of Education for the training received under the Professional Development program.
Pre-service training means training to Indian individuals to prepare them to meet the requirements for licensing or certification in a professional field requiring at least a baccalaureate degree, or licensing or certification in the field of Native American language instruction.
Professional development activities means pre-service or in-service training offered to enhance the skills and abilities of individual participants.
Qualifying employment means employment in an LEA that serves a high proportion of Indian students.
Secretary means the Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
Stipend means that portion of an award that is used for room, board, and personal living expenses for participants in pre-service training who are living at or near the institution providing the training.
Tribal college or university (TCU) has the meaning given that term in section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 1059c(b)).
Tribal educational agency (TEA) means the agency, department, or instrumentality of an Indian Tribe that is primarily responsible for supporting Tribal students' elementary and secondary education.
(a) A Professional Development program may include, as training costs, assistance to—
(1) Fully finance a student's educational expenses including tuition, books, and required fees; health insurance required by the institution of higher education; stipend; dependent allowance; technology costs; program required travel; and instructional supplies; or
(2) Supplement other financial aid, including Federal funding other than loans, for meeting a student's educational expenses.
(b) The Secretary announces the expected maximum amounts for stipends and dependent allowance in the annual notice inviting applications published in the
(c) Other costs that a Professional Development program may include, but that must not be included as training costs, include costs for—
(1) Collaborating with prospective employers within the grantees' local service area to create a pool of potentially available qualifying employment opportunities;
(2) In-service training activities such as providing mentorships linking experienced teachers at job placement sites with program participants;
(3) Assisting participants in identifying and securing qualifying employment opportunities in their field of study following completion of the program; and
(4) Teacher mentoring programs, professional guidance, and instructional support provided by educators, local traditional leaders, or cultural experts, as appropriate for teachers for up to their first three years of employment as teachers; and
(5) Programs designed to train traditional leaders and cultural experts to assist participants with relevant Native language and cultural mentoring, guidance, and support.
An applicant must—
(a) Describe how it will—
(1) Recruit qualified Indian individuals, such as students who may not be of traditional college age, to become teachers, principals, or school leaders, if applicable;
(2) Use funds made available under the grant to support the recruitment, preparation, retention, and professional development of Indian teachers or principals in LEAs that serve a high proportion of Indian students, as applicable; and
(3) Assist participants who receive pre-service training in meeting the payback requirements under § 263.9(b), if applicable;
(b) If required by the Secretary through a notice inviting applications published in the
(1) A statement that the LEA agrees to consider program graduates for employment;
(2) Evidence that the LEA meets the definition of “LEA that serves a high proportion of Indian students”; and
(3) The signature of an authorized representative of the LEA;
(c) If applying as an Indian organization, demonstrate that the entity meets the definition of “Indian organization”;
(d) If it is an affected LEA that is subject to the requirements of section 8358 of the Elementary and Secondary Education Act of 1965, as amended (ESEA), consult with appropriate officials from Tribe(s) or Tribal organizations approved by the Tribes located in the area served by the LEA prior to its submission of an application, as required under ESEA section 8538; and
(e) Comply with any other requirements in the application package.
(a) The Secretary gives competitive preference priority to—
(1) Tribal Applicants. An application submitted by an Indian tribe, Indian organization, or an TCU that is eligible to participate in the Professional Development program. A consortium application of eligible entities that meets the requirements of 34 CFR 75.127 through 75.129 and includes an Indian tribe, Indian organization, or TCU will be considered eligible to receive preference under this priority only if the lead applicant for the consortium is the Indian tribe, Indian organization, or TCU. In order to be considered a consortium application, the application must include the consortium agreement, signed by all parties; or
(2) Consortium Applicants, Non-Tribal Lead. A consortium application of eligible entities that—
(i) Meets the requirements of 34 CFR 75.127 through 75.129 and includes an Indian tribe, Indian organization, or TCU; and
(ii) Is not eligible to receive a preference under paragraph (a)(1) of this section.
(b) The Secretary may annually establish as a priority any of the priorities listed in this paragraph. When inviting applications for a competition under the Professional Development program, the Secretary designates the type of each priority as absolute, competitive preference, or invitational through a notice in the
(1) Pre-Service training for teachers. The Secretary establishes a priority for projects that—
(i) Provide support and training to Indian individuals to complete a pre-service education program before the end of the award period that enables the individuals to meet the requirements for full State certification or licensure as a teacher through—
(A) Training that leads to a degree in education;
(B) For States allowing a degree in a specific subject area, training that leads to a degree in the subject area;
(C) Training in a current or new specialized teaching assignment that requires a degree and in which a documented teacher shortage exists; or
(D) Training in the field of Native American language instruction;
(ii) Provide induction services, during the award period, to participants after graduation, certification, or licensure, for the period of time designated by the Department in the notice inviting applications, while participants are completing their work-related payback in schools in LEAs that serve a high proportion of Indian students; and
(iii) Include goals for the—
(A) Number of participants to be recruited each year;
(B) Number of participants to continue in the project each year;
(C) Number of participants to graduate each year; and
(D) Number of participants to find qualifying employment within twelve months of completion.
(2) Pre-service administrator training. The Secretary establishes a priority for projects that—
(i) Provide support and training to Indian individuals to complete a graduate degree in education administration that is provided before the end of the award period and that allows participants to meet the requirements for State certification or licensure as an education administrator;
(ii) Provide induction services, during the award period, to participants after graduation, certification, or licensure, for the period of time designated by the Department in the notice inviting applications, while participants are completing their work-related payback in schools in LEAs that serve a high proportion of Indian students; and
(iii) Include goals for the—
(A) Number of participants to be recruited each year;
(B) Number of participants to continue in the project each year;
(C) Number of participants to graduate each year; and
(D) Number of participants to find qualifying employment within twelve months of completion.
(3) Pre-service administrator training for work in Tribal educational agencies. The Secretary establishes a priority for projects that—
(i) Meet the requirements of the pre-service administrator training priority in paragraph (b)(2) of this section;
(ii) Include training on working for a TEA, and opportunities for participants to work with or for TEAs during the training period; and
(iii) Include efforts by the applicant to place participants in administrator jobs in TEAs following program completion.
(4) Pre-service administrator training for school start-ups. The Secretary establishes a priority for projects that—
(i) Meet the requirements of the pre-service administrator training priority in paragraph (b)(2) of this section;
(ii) Include training to support the capacity of school leaders to start new schools that serve Indian students, such as charter schools or schools transitioning from BIE-operated to Tribally controlled; and
(iii) Include efforts by the applicant to place participants in administrator jobs with entities planning to start or transition a school to serve Indian students.
(5) Indian educator retention. The Secretary establishes a priority for projects that—
(i) Propose an educator retention initiative to help address the shortage of fully certified Indian educators to help ensure that Indian students gain knowledge and understanding of Native communities, languages, histories, traditions, and cultures, and expand their impact on Indian students' education; or
(ii) Support compensated educator leadership models designed to increase the retention of effective, experienced Indian educators who take on additional leadership and peer support responsibilities such that Indian teachers have the opportunity to advance in their careers and earn additional compensation.
(6) State or local educational agencies or Bureau of Indian Education school lead applicants. The Secretary establishes a priority for applications that are submitted by one or more of the below types of applicants, in consortium with an institution of higher education, which could include a Tribal college or university:
(i) State educational agency.
(ii) Local educational agency.
(iii) Bureau of Indian Education school.
The Secretary uses the procedures for establishing selection criteria and factors in 34 CFR 75.200 through 75.210 to establish the criteria and factors used to evaluate applications submitted in a grant competition for the Professional Development program. The Secretary may also consider one or more of the criteria and factors listed in paragraphs (a) through (e) of this section to evaluate applications.
(a) Need for project. In determining the need for the proposed project, the Secretary considers one or more of the following:
(1) The extent to which the proposed project will prepare personnel in specific fields in which shortages have been demonstrated through a job market analysis.
(2) The extent to which LEAs with qualifying employment opportunities exist in the project's service area, as demonstrated through a job market analysis, and have provided a letter of support for the project.
(b) Significance. In determining the significance of the proposed project, the Secretary considers one or more of the following:
(1) The potential of the proposed project to develop effective strategies for teaching Indian students and improving Indian student achievement, as demonstrated by a plan to share findings gained from the proposed project with parties who could benefit from such findings, such as other institutions of higher education who are training teachers and administrators who will be serving Indian students.
(2) The likelihood that the proposed project will build local capacity to provide, improve, or expand services that address the specific needs of Indian students.
(c) Quality of the project design. The Secretary considers one or more of the following factors in determining the quality of the design of the proposed project:
(1) The extent to which the goals, objectives, and outcomes to be achieved by the proposed project are ambitious but also attainable and address—
(i) The number of participants expected to be recruited in the project each year;
(ii) The number of participants expected to continue in the project each year;
(iii) The number of participants expected to graduate; and
(iv) The number of participants expected to find qualifying employment within twelve months of completion.
(2) The extent to which the proposed project has a plan for recruiting and selecting participants, including students who may not be of traditional college age, that ensures that program participants are likely to complete the program.
(3) The extent to which the proposed project will incorporate the needs of potential employers, as identified by a job market analysis, by establishing partnerships and relationships with LEAs that serve a high proportion of Indian students and developing programs that meet their employment needs.
(d) Quality of project services. The Secretary considers one or more of the following factors in determining the quality of project services:
(1) The likelihood that the proposed project will provide participants with learning experiences that develop needed skills for successful teaching and/or administration in LEAs that serve a high proportion of Indian students.
(2) The extent to which the proposed project prepares participants to adapt teaching and/or administrative practices to meet the breadth of Indian student needs.
(3) The extent to which the applicant will provide job placement activities that reflect the findings of a job market analysis and needs of potential employers and that offer qualifying employment opportunities.
(4) The extent to which the applicant will offer induction services that reflect the latest research on effective delivery of such services.
(5) The extent to which the applicant will assist participants in meeting the service obligation requirements.
(e) Quality of project personnel. The Secretary considers one or more of the following factors when determining the quality of the personnel who will carry out the proposed project:
(1) The qualifications, including relevant training, experience, and cultural competence, of the project director and the amount of time this individual will spend directly involved in the project.
(2) The qualifications, including relevant training, experience, and cultural competence, of key project personnel and the amount of time to be spent on the project and direct interactions with participants.
(a) A participant must submit a written request for a leave of absence to the project director not less than 30 days prior to withdrawal or completion of a grading period, unless an emergency situation has occurred and the project director chooses to waive the prior notification requirement.
(b) The project director may approve a leave of absence, for a period not longer than 12 months, provided the participant has completed a minimum of 50 percent of the training in the project and is in good standing at the time of request.
(c) The project director permits a leave of absence only if the institution of higher education certifies that the training participant is eligible to resume his or her course of study at the end of the leave of absence.
(d) A participant who is granted a leave of absence and does not return to his or her course of study by the end of the grant project period will be considered not to have completed the course of study for the purpose of project performance reporting.
(a) General. All participants who receive pre-service training must—
(1) Either perform work-related payback or provide cash reimbursement to the Department for the training received. It is the preference of the Department for participants to complete a work-related payback;
(2) Sign an agreement, at the time of selection for training, that sets forth the payback requirements; and
(3) Report employment verification in a manner specified by the Department or its designee.
(b) Work-related payback. (1) Participants qualify for work-related payback if the work they are performing is in their field of study under the Professional Development program and benefits Indian students. Employment in a LEA that serves a high proportion of Indian students qualifies as work that benefits Indian students.
(2) The period of time required for a work-related payback is determined as follows:
(i) If a participant was a full-time student in a pre-service training program, the work-related payback period is equivalent to the total period of time for which pre-service training under the Professional Development program was actually received on a month-for-month basis.
(ii) If a participant was a part-time student in a pre-service training program, the work-related payback period is proportional to the accumulated academic years for which pre-service training under the Professional Development program was actually received on a month-for-month basis, taking into consideration the typical academic calendar of the institution where the training was received.
(iii) If a participant received pre-service training as a full-time student for a portion of the program and as a part-time student for another portion of the program, the period of work-related payback is prorated accordingly.
(3) Work-related payback is credited for the actual time the participant works, not for how the participant is paid (e.g., for work completed over 9 months but paid over 12 months, the payback credit is 9 months).
(4) For participants that initiate, but cannot complete, a work-related payback, the payback converts to a cash payback that is prorated based upon the amount of work-related payback completed.
(5) The work-related payback period for an individual supported under the Professional Development program may extend beyond the end of the performance period of the Professional Development grant.
(c) Cash payback. (1) Participants who do not submit employment verification within twelve months of program exit or completion, or have not submitted employment verification for a twelve-month period during a work-related payback, will automatically be referred for a cash payback unless the participant qualifies for a deferral as described in § 263.9.
(2) The cash payback required shall be equivalent to the total amount of funds received and expended for training received under this program and may be prorated based on any approved work-related service the participant performs.
(3) Participants who are referred to cash payback may incur non-refundable penalty and administrative fees in addition to their total training costs and will incur interest charges starting the day of referral.
(4) Notwithstanding paragraph (c)(1) of this section, participants who exited or completed a grant-funded pre-service training program in Federal fiscal year 2020 (October 1, 2019-September 30, 2020) who did not submit employment verification within 24 months of program exit or completion, and participants with qualifying employment during Federal fiscal year 2020 who did not submit employment verification for a 24-month period, will automatically be referred for a cash payback unless the participant qualifies for a deferral as described in § 263.10.
(5) Notwithstanding paragraph (c)(1) of this section, participants who exit or complete a grant-funded training program in Federal fiscal year 2020 (October 1, 2019-September 30, 2020) who do not submit employment verification within 24 months of program exit or completion, and participants with qualifying employment during Federal fiscal year 2020 who do not submit employment verification for a 24-month period, will automatically be referred for a cash payback unless the participant qualifies for a deferral as described in § 263.9.
For grants that provide pre-service administrator training, a participant who has received administrator training and subsequently works for a Tribal education agency that provides administrative control or direction of public schools (e.g., BIE-funded schools or charter schools) satisfies the requirements of paragraph (b)(1) of this section.
(a) Exceptions to payback. Based upon sufficient evidence to substantiate the grounds, the Secretary may grant, in whole or in part, an exception to the repayment requirement in § 263.9 as follows:
(1) Repayment is not required if the participant—
(i) Is unable to continue the course of study or perform the service obligation because of a permanent disability that—
(A) Had not been diagnosed at the time the participant executed the initial agreement; or
(B) Did not originally prevent the participant from performing the requirements of the course of study or the service obligation at the time the participant signed the agreement but subsequently worsened; or
(ii) Has died.
(2) To request an exception to payback under paragraph (a)(1) of this section for oneself or on behalf of another individual, a requestor must submit an explanation of the reason for the exception along with substantiating evidence to the Secretary through the program officer.
(b) Deferral of payback. Subject to meeting the requirements of this section, the Secretary may defer payback requirements during the time the participant is—
(1) Continuing education after completing or exiting the Professional Development program, in a full- or part-time course of study without interruption, in a program leading to a degree at an accredited institution of higher education;
(2) Serving on active duty as a member of the Armed Forces of the United States;
(3) Serving as a full-time volunteer for an Indian Tribe, for a period not to exceed 36 months;
(4) Experiencing a temporary disability that affects the participant's ability to continue the course of study or perform the work obligation, for a period not to exceed thirty-six months.
(c) Secretarial exceptions. Under limited circumstances as determined by the Secretary and based upon evidence submitted by the participant, the Secretary may grant an exception to, or deferral of, the payback requirement under circumstances not specified in this section. These circumstances may include, but are not limited to, the need to care for a disabled spouse, partner, or child, or to accompany a spouse or partner on active duty in the Armed Forces or Bureau of Indian Affairs law enforcement.
(d) Requesting payback deferral for continuing education. (1) To receive a payback deferral under paragraph (b)(1) of this section, a participant must submit a request to the Secretary through the program officer that includes—
(i) The name of the accredited institution the student will be attending;
(ii) A copy of the letter of admission from the institution;
(iii) The degree being sought; and
(iv) The projected date of completion.
(2) If the Secretary approves the deferral of the payback requirement under paragraph (b)(1) of this section, the participant must submit to the Secretary through the program officer a status report from an academic advisor or other authorized representative of the institution of higher education, showing verification of enrollment and status, after every grading period.
(e) Requesting payback deferral for active duty in the Armed Forces. If a participant exits the Professional Development program because the participant is called or ordered to active duty status in connection with a war, military operation, or national emergency for more than 30 days as a member of a reserve component of the Armed Forces named in 10 U.S.C. 10101, or as a member of the National Guard on full-time National Guard duty, as defined in 10 U.S.C. 101(d)(5), the Secretary may defer the payback requirement until the participant has completed the military service. Requests for deferral must be submitted to the Secretary through the program officer within 30 days of the earlier of receiving the call to military service or completing or exiting the Professional Development program, and must include—
(1) A written statement from the participant's commanding or personnel officer certifying—
(i) That the participant is on active duty in the Armed Forces of the United States;
(ii) The date on which the participant's service began; and
(iii) The date on which the participant's service is expected to end; or
(2)(i) A true certified copy of the participant's official military orders; and
(ii) A copy of the participant's military identification.
(f) Requesting payback deferral for volunteer work. (1) To receive a payback deferral related to qualifying volunteer work under paragraph (b)(3) of this section, the participant must submit a request to the Secretary through the program officer that includes—
(i) The name of the Indian Tribe at which the participant will be volunteering;
(ii) A copy of the letter appointing the participant as a full-time volunteer at the Indian Tribe;
(iii) A statement of volunteer work to be performed; and
(iv) The projected date of completion.
(2) If the Secretary approves payback deferral under this paragraph (f), the participant must submit to the Secretary through the program officer a status report from an authorized representative from the entity with which the participant is volunteering, showing verification of continued engagement every 12 months. The Secretary may defer the payback requirement until the participant has completed his or her qualifying volunteer work, for a period not to exceed 36 months.
(g) Requesting payback deferral for temporary disability. To receive a payback deferral under paragraph (b)(4) of this section, the participant must submit a request to the Secretary through the program officer that includes—
(1) An explanation of the reason for the deferral;
(2) An indication of the length of time for which they are requesting deferral; and
(3) Substantiating evidence.
(a) Notice of intent. Participants must submit to the Secretary, within 30 days of completion of, or exit from, as applicable, their training program, a notice of intent to complete a work-related or cash payback, or to continue in a degree program.
(b) Work-related payback. (1) Starting within six months after exit from or completion of the program, participants must submit to the Secretary employment information, which includes information explaining how the employment is related to the training received and benefits Indian students in an LEA that serves a high proportion of Indian students.
(2) Participants must submit an employment status report every six months beginning from the date the work-related service is to begin until the payback obligation has been fulfilled.
(c) Cash payback. If a cash payback is to be made, the Department contacts the participant to establish an appropriate schedule for payments.
(a) Requirement for payback meeting. Prior to providing funds or services to a participant, the grantee must conduct a payback meeting with the participant to explain the costs of training and payback responsibilities following training.
(b) Requirement for payback agreement. (1) Prior to providing funds or services to a participant, and for each subsequent year that training funds are disbursed, the grantee must enter into a written agreement with each participant in which the participant agrees to the terms and conditions required by this section.
(2) The payback agreement must explain the Secretary's authority to grant deferrals and exceptions to the service obligation pursuant to § 263.10 and include—
(i) The current Department address for purposes of the participant's compliance with § 263.11, or any other purpose under this part, and other Office of Indian Education contact information;
(ii) The estimated length of training;
(iii) The total training costs;
(iv) The total amount of assistance accrued year-to-date;
(v) The total number of months in the service obligation year-to-date;
(vi) A statement explaining that work must be in an “LEA that serves a high proportion of Indian students,” and the regulatory definition of that phrase; and
(vii) Information documenting that the grantee held a payback meeting with the participant that meets the requirements of this section.
(3) The grantee must submit a signed payback agreement to the Department within 30 days of the date on which the payback agreement is fully executed by the grantee and participant. The grantee must provide a copy of the payback agreement to the participant upon execution.
(c) Exit certification. At the time of exit from the program, the grantee must provide the below information to the participant. Upon receipt of this information from the grantee, the participant must provide written certification to the grantee that this information is correct:
(1) The name of the institution where the participant received pre-service training and the award number of the Federal grant that provided the scholarship.
(2) The number of months the participant needs to work in an LEA that serves a high proportion of Indian students to satisfy the payback requirements in § 263.9.
(3) The total amount of financial assistance received.
(4) The participant's field of study and the obligation of the participant to perform the service obligation with employment that meets the requirements in § 263.9(b).
(d) Career preparation. During the grant period, a grantee must conduct activities to assist participants in identifying qualified employment opportunities following completion of the program.
(e) Information and annual reporting. The grantee must report to the Secretary all participant training and payback information in a manner specified by the Secretary as well as any other information that is necessary to carry out the Secretary's functions under section 6122 of the ESEA and this part. Each grantee will make annual reports to the Secretary, unless more frequent reporting is required by the Secretary, that are necessary to carry out the Secretary's functions under this part.
(f) Standards for satisfactory progress. The grantee must establish, publish, notify participants of, and apply reasonable standards for measuring whether a participant is making satisfactory progress in the training program. The Secretary considers an institution's standards to be reasonable if the standards—
(1) Are the same as the institution's standards for a student enrolled in the same academic program who is not receiving assistance under this program; and
(2) Include the following elements:
(i) Grades, work projects completed, including performance tasks, or comparable factors that are measurable against a norm and are aligned with demonstrating effective practice.
(ii) A maximum timeframe in which the participant must complete the participant's educational objective, degree, or certificate.
(iii) Consistent application of standards to all participants within categories of students, (e.g., full-time, part-time, undergraduate students, and graduate students).
(iv) Specific policies defining the effect of course incompletes, withdrawals, repetitions, and noncredit remedial courses on satisfactory progress.
(v) Specific procedures for appeal of a determination that a participant is not making satisfactory progress and for reinstatement of aid.
(g) Requirement for Indian preference. (1) Under section 7(b) of the Indian Self-Determination and Education Assistance Act (Pub. L. 93-638), to the greatest extent feasible, a grantee must—
(i) Give to Indians preferences and opportunities for training and employment in connection with the administration of the grant; and
(ii) Give to Indian organizations and to Indian-owned economic enterprises, as defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452(e), preference in the award of contracts in connection with the administration of the grant.
(2) For the purposes of this paragraph (g), an Indian is a member of any federally recognized Indian Tribe.
(a) In making continuation awards, in addition to applying the criteria in 34 CFR 75.253, the Secretary considers the extent to which a grantee has achieved its project goals to recruit, retain, graduate, and place in qualifying employment program participants.
(b) The Secretary may reduce continuation awards, including the portion of awards that may be used for administrative costs, as well as student training costs, based on a grantee's failure to achieve its project goals specified in paragraph (a) of this section.
The following definitions apply to the Demonstration Grants for Indian Children program:
Federally supported elementary or secondary school for Indian students means an elementary or secondary school that is operated or funded, through a contract or grant, by the Bureau of Indian Education.
Indian means an individual who is—
(1) A member of an Indian tribe or band, as membership is defined by the Indian tribe or band, including any tribe or band terminated since 1940, and any tribe or band recognized by the State in which the tribe or band resides;
(2) A descendant of a parent or grandparent who meets the requirements described in paragraph (1) of this definition;
(3) Considered by the Secretary of the Interior to be an Indian for any purpose;
(4) An Eskimo, Aleut, or other Alaska Native; or
(5) A member of an organized Indian group that received a grant under the Indian Education Act of 1988 as it was in effect on October 19, 1994.
Indian organization means an organization that—
(1) Is legally established—
(i) By tribal or inter-tribal charter or in accordance with State or tribal law; and
(ii) With appropriate constitution, by-laws, or articles of incorporation;
(2) Includes in its purposes the promotion of the education of Indians;
(3) Is controlled by a governing board, the majority of which is Indian;
(4) If located on an Indian reservation, operates with the sanction of or by charter from the governing body of that reservation;
(5) Is neither an organization or subdivision of, nor under the direct control of, any institution of higher education or TCU; and
(6) Is not an agency of State or local government.
Native youth community project means a project that is—
(1) Focused on a defined local geographic area;
(2) Centered on the goal of ensuring that Indian students are prepared for college and careers;
(3) Informed by evidence, which could be either a needs assessment conducted within the last three years or other data analysis, on—
(i) The greatest barriers, both in and out of school, to the readiness of local Indian students for college and careers;
(ii) Opportunities in the local community to support Indian students; and
(iii) Existing local policies, programs, practices, service providers, and funding sources;
(4) Focused on one or more barriers or opportunities with a community-based strategy or strategies and measurable objectives;
(5) Designed and implemented through a partnership of various entities, which—
(i) Must include—
(A) One or more tribes or their tribal education agencies; and
(B) One or more BIE-funded schools, one or more local educational agencies, or both; and
(ii) May include other optional entities, including community-based organizations, national nonprofit organizations, and Alaska regional corporations; and
(6) Led by an entity that—
(i) Is eligible for a grant under the Demonstration Grants for Indian Children and Youth program; and
(ii) Demonstrates, or partners with an entity that demonstrates, the capacity to improve outcomes that are relevant to the project focus through experience with programs funded through other sources.
Parent includes a legal guardian or other person standing in loco parentis (such as a grandparent or stepparent with whom the child lives, or a person who is legally responsible for the child's welfare).
Professional development activities means in-service training offered to enhance the skills and abilities of individuals that may be part of, but not exclusively, the activities provided in a Demonstration Grants for Indian Children and Youth program.
Tribal College or University (TCU) means an accredited college or university within the United States cited in section 532 of the Equity in Educational Land-Grant Status Act of 1994, any other institution that qualifies for funding under the Tribally Controlled College or University Assistance Act of 1978, and the Navajo Community College, authorized in the Navajo Community College Assistance Act of 1978.
(a) The Secretary gives priority to an application that presents a plan for combining two or more of the activities described in section 6121(c) of the Elementary and Secondary Education Act of 1965, as amended (ESEA), over a period of more than one year.
(b) The Secretary gives a competitive preference priority to—
(1) Tribal lead applicants. An application submitted by an Indian Tribe, Indian organization, BIE-funded school, or TCU that is eligible to participate in the Demonstration Grants for Indian Children and Youth program. A group application submitted by a consortium that meets the requirements of 34 CFR 75.127 through 75.129 or submitted by a partnership is eligible to receive the preference only if the lead applicant is an Indian Tribe, Indian organization, BIE-funded school, or TCU; or
(2) Tribal partnership. A group application submitted by a consortium of eligible entities that meets the requirements of 34 CFR 75.127 through 75.129 or submitted by a partnership if the consortium or partnership—
(i) Includes an Indian Tribe, Indian organization, BIE-funded school, or TCU; and
(ii) Is not eligible to receive the preference in paragraph (b)(1) of this section.
(c) The Secretary may give priority to an application that meets any of the priorities listed in this paragraph. When inviting applications for a competition under the Demonstration Grants program, the Secretary designates the type of each priority as absolute, competitive preference, or invitational through a notice inviting applications published in the
(1) Native youth community projects. Native youth community projects, as defined in this subpart.
(2) Experienced applicants. Projects in which the applicant or one of its partners has received a grant in the last four years under a Federal program selected by the Secretary and announced in a notice inviting applications published in the
(3) Consolidated funding. Projects in which the applicant has Department approval to consolidate funding through a plan that complies with section 6116 of the ESEA or other authority designated by the Secretary.
(4) Statutorily authorized activities. Projects that focus on a specific activity authorized in section 6116(c) of the ESEA as designated by the Secretary in the notice inviting applications.
(5) Rural applicants. Projects that include either—
(i) An LEA that is eligible under the Small Rural School Achievement (SRSA) program or the Rural and Low-Income School (RLIS) program authorized under title VI, part B of the ESEA; or
(ii) A BIE-funded school that is located in an area designated with locale code of either 41, 42, or 43 as designated by the National Center for Education Statistics.
(6) Non-rural applicants. Non-rural projects that do not meet the priority in paragraph (c)(5) of this section. This priority can only be used in competitions where the priority in paragraph (c)(5) of this section is also used.
(7) Accessing choices in education. Projects to expand educational choice by enabling a Tribe, or the grantee and its Tribal partner, to select a project focus that meets the needs of their students and enabling parents of Indian students, or the students, to choose education services by selecting the specific service and provider desired.
(a) Each application must contain—
(1) A description of how Indian Tribes and parents and families of Indian children and youth have been, and will be, involved in developing and implementing the proposed activities;
(2) Assurances that the applicant will participate, at the request of the Secretary, in any national evaluation of this program;
(3) Information demonstrating that the proposed project is evidence-based, where applicable, or is based on an existing evidence-based program that has been modified to be culturally appropriate for Indian students;
(4) A description of how the applicant will continue the proposed activities once the grant period is over; and
(5) Other assurances and information as the Secretary may reasonably require.
(b) The Secretary may require an applicant to satisfy any of the requirements in this paragraph. When inviting applications for a competition under the Demonstration Grants program, the Secretary establishes the application requirements through a notice inviting applications published in the
(1) Evidence, which could be either a needs assessment conducted within the last three years or other data analysis, of—
(i) The greatest barriers, both in and out of school, to the readiness of local Indian students for college and careers;
(ii) Opportunities in the local community to support Indian students; and
(iii) Existing local policies, programs, practices, service providers, and funding sources.
(2) A copy of an agreement signed by the partners in the proposed project, identifying the responsibilities of each partner in the project. The agreement can be either—
(i) A consortium agreement that meets the requirements of 34 CFR 75.128, if each of the entities are eligible entities under this program; or
(ii) Another form of partnership agreement, such as a memorandum of understanding or a memorandum of agreement, if not all the partners are eligible entities under this program.
(3) A plan, which includes measurable objectives, to evaluate reaching the project goal or goals.
(4) A plan for how the applicant will oversee service providers and ensure that students receive high-quality services under the project.
(5)(i) For an applicant that is not a Tribe, if 50 percent or more of the total student population of the schools to be served by the project consists of members of one Tribe, documentation that that Tribe is a partner for the proposed project.
(ii) For an applicant that is an LEA or SEA and is not required by paragraph (i) of this section to partner with a specific Tribe, documentation that at least one Tribe or Indian organization is a partner for the proposed project.
(6) An assurance that—
(i) Services will be supplemental to the education program provided by local schools attended by the students to be served;
(ii) Funding will be supplemental to existing sources, such as Johnson O'Malley funding; and
(iii) The availability of funds for supplemental special education and related services (i.e., services that are not part of the special education and related services, supplementary aids and services, and program modifications or supports for school personnel that are required to make a free appropriate public education (FAPE) available under Part B of the Individuals with Disabilities Education Act (IDEA) to a child with a disability in conformity with the child's IEP or the regular or special education and related aids and services required to make FAPE available under a Section 504 plan, if any) does not affect the right of the child to receive FAPE under Part B of the IDEA or Section 504, and the respective implementing regulations.
(7) For an applicant that does not propose a planning period—
(i) A description of the service selection method required in § 263.25(d).
(ii) A description of the parent involvement and feedback process required in § 263.25(e).
(iii) A sample of the written agreement required in § 263.25(f).
(iv) A description of the process to choose students to be served, as required in § 263.25(g).
(a) Awards that are primarily for the benefit of Indians are subject to the provisions of section 7(b) of the Indian Self-Determination and Education Assistance Act (Pub. L. 93-638). That section requires that, to the greatest extent feasible, a grantee—
(1) Give to Indians preferences and opportunities for training and employment in connection with the administration of the grant; and
(2) Give to Indian organizations and to Indian-owned economic enterprises, as defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452(e)), preference in the award of contracts in connection with the administration of the grant.
(b) For purposes of this section, an Indian is a member of any federally recognized Indian tribe.
(a) In general. The Secretary uses the procedures in 34 CFR 75.200 through 75.210 to establish the selection criteria and factors used to evaluate applications submitted in a grant competition for the Demonstration Grants for Indian Children and Youth program. The Secretary may also consider one or more of the criteria and factors in this section to evaluate applications.
(b) Quality of project services. The Secretary may consider one or more of the following factors in determining the quality of project services:
(1) The extent to which the project would offer high-quality choices of services, including culturally relevant services, and providers, for parents and students to select.
(2) The extent to which the services to be offered would meet the needs of the local population, as demonstrated by an analysis of community-level data, including direct input from parents and families of Indian children and youth.
(3) The quality of the plan to ensure that the services to be offered are evidence-based, where applicable, or are based on existing evidence-based programs that have been modified to be culturally appropriate for Indian students.
(c) Quality of the project design. The Secretary may consider one or more of the following factors in determining the quality of the project design:
(1) The extent to which the project is designed to improve student and parent satisfaction with the student's overall education experience, as measured by pre- and post-project data.
(2) The extent to which the applicant proposes a fair and neutral process of selecting service providers that will result in high-quality options from which parents and students can select services.
(3) The quality of the proposed plan to inform parents and students about available service choices under the project, and about the timeline for termination of the project.
(4) The quality of the applicant's plan to oversee service providers and ensure that students receive high-quality services under the project.
(d) Reasonableness of budget. The Secretary may consider one or more of the following factors in determining the reasonableness of the project budget:
(1) The extent to which the budget reflects the number of students to be served and a per-pupil amount for services, based only on direct costs for student services, that is reasonable in relation to the project objectives.
(2) The extent to which the per-pupil costs of specific services and per-pupil funds available are transparent to parents and other stakeholders.
In any year in which the Secretary uses the priority in § 263.21(c)(7) for a competition, each project must—
(a) Include the following, which are chosen by the grantee, or for LEAs and SEAs, the grantee and its partnering Tribe or Indian organization:
(1) A project focus and specific services that are based on the needs of the local community; and
(2) Service providers;
(b) Include more than one education option from which parents and students may choose, which may include—
(1) Native language, history, or culture courses;
(2) Advanced, remedial, or elective courses, which may be online;
(3) Apprenticeships or training programs that lead to industry certifications;
(4) Concurrent and dual enrollment;
(5) Tuition for private school or home education expenses;
(6) Special education and related services that supplement, and are not part of, the special education and related services, supplementary aids and services, and program modifications or supports for school personnel required to make available a free appropriate public education (FAPE) under Part B of the IDEA to a child with a disability in conformity with the child's individualized education program (IEP) or the regular or special education and related aids and services required to ensure FAPE under Section 504 of the Rehabilitation Act of 1973 (Section 504);
(7) Books, materials, or education technology, including learning software or hardware, that are accessible to all children;
(8) Tutoring;
(9) Summer or afterschool education programs, and student transportation needed for those specific programs. Such programs could include instruction in the arts, music, or sports, to the extent that the applicant can demonstrate that such services are culturally related or are supported by evidence that suggests the services may have a positive effect on relevant education outcomes;
(10) Testing preparation and application fees, including for private school and graduating students;
(11) Supplemental counseling services, not to include psychiatric or medical services; or
(12) Other education-related services that are reasonable and necessary for the project;
(c) Provide a method to enable parents and students to select services. Such a method must—
(1) Ensure that funds will be transferred directly from the grantee to the selected service provider; and
(2) Include service providers other than the applicant, although the applicant may be one of the service providers;
(d) Include a parent involvement and feedback process that—
(1) Describes a way for parents to request services or providers that are not currently offered and provide input on services provided through the project, and describes how the grantee will provide parents with written responses within 30 days; and
(2) May include a parent liaison to support the grantee in outreach to parents, inform parents and students of the timeline for the termination of the project, and assist parents and the grantee with the process by which a parent can request services or providers not already specified by the grantee;
(e) Include a written agreement between the grantee and each service provider under the project. Each agreement must include—
(1) A nondiscrimination clause that—
(i) Requires the provider to abide by all applicable non-discrimination laws with regard to students to be served, e.g., on the basis of race, color, national origin, religion, sex, or disability; and
(ii) Prohibits the provider from discriminating among students who are eligible for services under this program, i.e., that meet the definition of “Indian” in section 6151 of the ESEA, on the basis of affiliation with a particular Tribe;
(2) A description of how the grantee will oversee the service provider and hold the provider accountable for—
(i) The terms of the written agreement; and
(ii) The use of funds, including compliance with generally accepted accounting procedures and Federal cost principles;
(3) A description of how students' progress will be measured; and
(4) A provision for the termination of the agreement if the provider is unable to meet the terms of the agreement;
(f) Include a fair and documented process to choose students to be served, such as a lottery or other transparent criteria (e.g., based on particular types of need), in the event that the number of requests from parents of eligible students or from students for services under the project exceeds the available capacity, with regard to the number or intensity of services offered;
(g) Ensure that—
(1) At least 80 percent of grant funds are used for direct services to eligible students, provided that, if a grantee requests and receives approval for a planning period, not to exceed 12 months, the 80 percent requirement does not apply to that planning period;
(2) Not more than 15 percent of grant funds are used on the service selection method described in paragraph (d) of this section or the parent involvement and feedback process described in paragraph (e) of this section, except in an authorized planning period; and
(3) No grant funds are used to establish or develop the capacity of entities or individuals that are or may become service providers under this project;
(h) For a grantee that receives approval for a planning period, not to exceed 12 months, submit to the Department prior to the end of that period the following documents:
(1) A description of the operational service selection process that meets the requirements of paragraph (c) of this section.
(2) A description of the operational parent involvement and feedback process that meets the requirements of paragraph (d) of this section.
(3) A sample of the written agreement that meets the requirements of paragraph (e) of this section, and a list of providers with whom the grantee has signed written agreements.
(4) A description of the process that will be used to choose students to be served in the event that the demand for services exceeds the available capacity, as described in paragraph (f) of this section.
This program provides financial assistance to operate regional Equity Assistance Centers (EACs), to enable them to provide technical assistance (including training) at the request of school boards and other responsible governmental agencies in the preparation, adoption, and implementation of plans for the desegregation of public schools, and in the development of effective methods of coping with special educational problems occasioned by desegregation.
A public agency (other than a State educational agency or a school board) or private, nonprofit organization is eligible to receive a grant under this program.
(a) The recipient of a grant under this part may provide assistance only if requested by school boards or other responsible governmental agencies located in its geographic region.
(b) The recipient may provide assistance only to the following persons:
(1) Public school personnel.
(2) Students enrolled in public schools, parents of those students, community organizations and other community members.
(a) The Secretary may award funds to EACs for projects offering technical assistance (including training) to school boards and other responsible governmental agencies, at their request, for assistance in the preparation, adoption, and implementation of plans for the desegregation of public schools.
(b) A project must provide technical assistance in all four of the desegregation assistance areas, as defined in 34 CFR 270.7.
(c) Desegregation assistance may include, among other activities:
(1) Dissemination of information regarding effective methods of coping with special educational problems occasioned by desegregation;
(2) Assistance and advice in coping with these problems; and
(3) Training designed to improve the ability of teachers, supervisors, counselors, parents, community members, community organizations, and other elementary or secondary school personnel to deal effectively with special educational problems occasioned by desegregation.
(a) The Secretary awards a grant to provide race, sex, national origin, and religion desegregation assistance under this program to regional EACs serving designated geographic regions.
(b) The Secretary announces in the
(c) The Secretary determines the number and boundaries of each geographic region for each competition on the basis of one or more of the following:
(1) Size and diversity of the student population;
(2) The number of LEAs;
(3) The composition of urban, city, and rural LEAs;
(4) The history and frequency of the EAC and other Department technical assistance activities;
(5) Geographic proximity of the States within each region; and
(6) The amount of funding available for the competition.
The following regulations apply to this program:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR part 75 (Direct Grant Programs), part 77 (Definitions That Apply to Department Regulations), part 79 (Intergovernmental Review of Department of Education Programs and Activities), and part 81 (General Education Provisions Act—Enforcement), except that 34 CFR 75.232 (relating to the cost analysis) does not apply to grants under this program.
(b) The regulations in this part.
(c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted in 2 CFR part 3474 and the OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted in 2 CFR part 3485.
In addition to the definitions in 34 CFR 77.1, the following definitions apply to the regulations in this part:
Desegregation assistance means the provision of technical assistance (including training) in the areas of race, sex, national origin, and religion desegregation of public elementary and secondary schools.
Desegregation assistance areas means the areas of race, sex, national origin, and religion desegregation.
English learner has the same meaning under this part as the same term defined in section 8101(20) of the Elementary and Secondary Education Act, as amended.
Equity Assistance Center means a regional desegregation technical assistance and training center funded under this part.
National origin desegregation means the assignment of students to public schools and within those schools without regard to their national origin, including providing students such as those who are English learners with a full opportunity for participation in all educational programs regardless of their national origin.
Public school means any elementary or secondary educational institution operated by a State, subdivision of a State, or governmental agency within a State, or operated wholly or predominantly from or through the use of governmental funds or property, or funds or property derived from governmental sources.
Public school personnel means school board members and persons who are employed by or who work in the schools of a responsible governmental agency, as that term is defined in this section.
Race desegregation means the assignment of students to public schools and within those schools without regard to their race, including providing students with a full opportunity for participation in all educational programs regardless of their race. “Race desegregation” does not mean the assignment of students to public schools to correct conditions of racial separation that are not the result of State or local law or official action.
Religion desegregation means the assignment of students to public schools and within those schools without regard to their religion, including providing students with a full opportunity for participation in all educational programs regardless of their religion.
Responsible governmental agency means any school board, State, municipality, LEA, or other governmental unit legally responsible for operating a public school or schools.
School board means any agency or agencies that administer a system of one or more public schools and any other agency that is responsible for the assignment of students to or within that system.
Sex desegregation means the assignment of students to public schools and within those schools without regard to their sex (including transgender status; gender identity; sex stereotypes, such as treating a person differently because he or she does not conform to sex-role expectations because he or she is attracted to or is in a relationship with a person of the same sex; and pregnancy and related conditions), including providing students with a full opportunity for participation in all educational programs regardless of their sex.
Special educational problems occasioned by desegregation means those issues that arise in classrooms, schools, and communities in the course of desegregation efforts based on race, national origin, sex, or religion. The phrase does not refer to the provision of special education and related services for students with disabilities as defined under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.)
(a) The Secretary evaluates the application on the basis of the criteria in 34 CFR 75.210.
(b) The Secretary selects the highest ranking application for each geographic region to receive a grant.
The Secretary determines the amount of a grant on the basis of:
(a) The amount of funds available for all grants under this part;
(b) A cost analysis of the project (that shows whether the applicant will achieve the objectives of the project with reasonable efficiency and economy under the budget in the application), by which the Secretary:
(1) Verifies the cost data in the detailed budget for the project;
(2) Evaluates specific elements of costs; and
(3) Examines costs to determine if they are necessary, reasonable, and allowable under applicable statutes and regulations;
(c) Evidence supporting the magnitude of the need of the responsible governmental agencies for desegregation assistance in the geographic region and the cost of providing that assistance to meet those needs, as compared with the evidence supporting the magnitude of the needs for desegregation assistance, and the cost of providing it, in all geographic regions for which applications are approved for funding;
(d) The size and the racial, ethnic, or religious diversity of the student population of the geographic region for which the EAC will provide services; and
(e) Any other information concerning desegregation problems and proposed activities that the Secretary finds relevant in the applicant's geographic region.
(a) A recipient of a grant under this part must:
(1) Operate an EAC in the geographic region to be served; and
(2) Have a full-time project director.
(b) A recipient of a grant under this part must coordinate assistance in its geographic region with appropriate SEAs, Comprehensive Centers, Regional Educational Laboratories, and other Federal technical assistance centers. As part of this coordination, the recipient shall seek to prevent duplication of assistance where an SEA, Comprehensive Center, Regional Educational Laboratory, or other Federal technical assistance center may have already provided assistance to the responsible governmental agency.
(c) A recipient of a grant under this part must communicate and coordinate with the most recent EAC grant recipient(s) in its region, as needed, to ensure a smooth transition for ongoing technical assistance under the EAC program.
(a) The recipient of an award under this program may pay:
(1) Stipends to public school personnel who participate in technical assistance or training activities funded under this part for the period of their attendance, if the person to whom the stipend is paid receives no other compensation for that period; or
(2) Reimbursement to a responsible governmental agency that pays substitutes for public school personnel who:
(i) Participate in technical assistance or training activities funded under this part; and
(ii) Are being compensated by that responsible governmental agency for the period of their attendance.
(b) A recipient may pay the stipends and reimbursements described in this section only if it demonstrates that the payment of these costs is necessary to the success of the technical assistance or training activity, and will not exceed 20 percent of the total award.
(c) If a recipient is authorized by the Secretary to pay stipends or reimbursements (or any combination of these payments), the recipient shall determine the conditions and rates for these payments in accordance with appropriate State policies, or in the absence of State policies, in accordance with local policies.
(d) A recipient of a grant under this part may pay a travel allowance only to a person who participates in a technical assistance or training activity under this part.
(e) If the participant does not complete the entire scheduled activity, the recipient may pay the participant's transportation to his or her residence or place of employment only if the participant left the training activity because of circumstances not reasonably within his or her control.
A recipient of a grant under this program may not use funds to assist in the development or implementation of activities or the development of curriculum materials for the direct instruction of students to improve their academic and vocational achievement levels.
The Magnet Schools Assistance Program provides grants to eligible local educational agencies (LEAs) or consortia of LEAs for use in magnet schools that are part of an approved desegregation plan and that are designed to bring students from different social, economic, ethnic and racial backgrounds together. The purposes of the program are to support, through financial assistance to eligible LEAs or consortia of LEAs—
(a) The elimination, reduction, or prevention of minority group isolation in elementary and secondary schools with substantial portions of minority students, which shall include assisting in the efforts of the United States to achieve voluntary desegregation in public schools;
(b) The development and implementation of magnet school projects that will assist LEAs in achieving systemic reforms and providing all students the opportunity to meet challenging State academic content standards and student academic achievement standards;
(c) The development and design of innovative educational methods and practices that promote diversity and increase choices in public elementary schools and public secondary schools and public educational programs;
(d) Courses of instruction within magnet schools that will substantially strengthen the knowledge of academic subjects and the attainment of tangible and marketable vocational, technological, and professional skills of students attending such schools;
(e) Improvement of the capacity of LEAs, including through professional development, to continue operating magnet schools at a high performance level after Federal funding for the magnet schools is terminated; and
(f) Ensuring that all students enrolled in the magnet school programs have equitable access to high quality education that will enable the students to succeed academically and continue with postsecondary education or productive employment.
(a) An LEA or consortia of LEAs is eligible to receive assistance under this part if the LEA or consortia of LEAs meets any of the following requirements:
(1) The LEA or consortia of LEAs is implementing a plan undertaken pursuant to a final order of a court of the United States, or a court of any State, or any other State agency or official of competent jurisdiction, and the order requires the desegregation of minority group segregated children or faculty in the elementary and secondary schools of that agency or those agencies.
(2) The LEA or consortia of LEAs adopted and is implementing on either a voluntary basis or as required under title VI of the Civil Rights Act of 1964—or will adopt and implement if assistance is made available under this part—a plan that has been approved by the Secretary as adequate under title VI.
(b) The Secretary approves a voluntary plan under paragraph (a)(2) of this section only if he determines that for each magnet school for which funding is sought, the magnet school will reduce, eliminate, or prevent minority group isolation within the period of the grant award, either in the magnet school or in a feeder school, as appropriate.
The following regulations apply to the Magnet Schools Assistance Program:
(a) The Education Department General Administrative Regulations (EDGAR), 34 CFR parts 75 (Direct Grant Programs), 77 (Definitions that Apply to Department Regulations), 79 (Intergovernmental Review of Department of Education Programs and Activities) and 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(b) The regulations in this part.
(c) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted in 2 CFR part 3474 and OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted in part 3485.
(a) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR part 77:
(b) Definitions that apply to this program. The following definitions also apply to this part:
Act means the Elementary and Secondary Education Act of 1965 as amended by title V, Part C of the No Child Left Behind Act of 2001, Pub. L. 107-110 (20 U.S.C. 7231-7231j).
Desegregation, in reference to a plan, means a plan for the reassignment of children or faculty to remedy the illegal separation of minority group children or faculty in the schools of an LEA or a plan for the reduction, elimination, or prevention of minority group isolation in one or more of the schools of an LEA.
Feeder school means a school from which students are drawn to attend a magnet school.
Magnet school means a public elementary school, public secondary school, public elementary education center, or public secondary education center that offers a special curriculum capable of attracting substantial numbers of students of different racial backgrounds.
Minority group means the following:
(1) American Indian or Alaskan Native. A person having origins in any of the original peoples of North America, and who maintains cultural identification through tribal affiliation or community recognition.
(2) Asian of Pacific Islander. A person having origins in any of the original peoples of the Far East, Southeast Asia, the Indian subcontinent, or the Pacific Islands. This area includes, for example, China, India, Japan, Korea, the Philippine Islands, and Samoa.
(3) Black (Not of Hispanic Origin). A person having origins in any of the black racial groups of Africa.
(4) Hispanic. A person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.
Special curriculum means a course of study embracing subject matter or a teaching methodology that is not generally offered to students of the same age or grade level in the same LEA or consortium of LEAs, as the students to whom the special curriculum is offered in the magnet schools. This term does not include:
(1) A course of study or a part of a course of study designed solely to provide basic educational services to handicapped students or to students of limited English-speaking ability;
(2) A course of study or a part of a course of study in which any student is unable to participate because of his or her limited English-speaking ability;
(3) A course of study or a part of a course of study in which any student is unable to participate because of his or her limited financial resources; or
(4) A course of study or a part of a course of study that fails to provide for a participating student's meeting the requirements for completion of elementary or secondary education in the same period as other students enrolled in the applicant's schools.
(a) The Secretary funds applications proposing projects in magnet schools that are part of an approved desegregation plan and that are designed to bring students from different social, economic, ethnic, and racial backgrounds together.
(b) For the purposes of this part, an approved desegregation plan is a desegregation plan described in § 280.2 (a) or (b).
(c) In the case of a desegregation plan described in § 280.2(a)(1), any modification to that plan must be approved by the court, agency, or official that approved the plan.
(a) Each eligible LEA or consortium of LEAs that desires to receive assistance under this part shall submit an annual application to the Secretary.
(b) In its application, the LEA or consortium of LEAs shall provide assurances that it—
(1) Will use funds made available under this part for the purposes specified in section 5301(b) of the Act;
(2) Will employ highly qualified teachers in the courses of instruction assisted under this part;
(3) Will not engage in discrimination based upon race, religion, color, national origin, sex, or disability in the hiring, promotion, or assignment of employees of the agency or other personnel for whom the agency has any administrative responsibility;
(4) Will not engage in discrimination based upon race, religion, color, national origin, sex, or disability in the assignment of students to schools or to courses of instruction within schools of the agency, except to carry out the approved desegregation plan;
(5) Will not engage in discrimination based upon race, religion, color, national origin, sex, or disability in designing or operating extracurricular activities for students;
(6) Will carry out a high-quality education program that will encourage greater parental decisionmaking and involvement; and
(7) Will give students residing in the local attendance area of the proposed magnet school program equitable consideration for placement in the program, consistent with desegregation guidelines and the capacity of the applicant to accommodate students.
(c) In addition to the assurances listed in paragraph (b) of this section, the LEA or consortium of LEAs shall provide such other assurances as the Secretary determines necessary to carry out the provisions of this part.
(d) Upon request, the LEA or consortium of LEAs shall submit any information that is necessary for the Assistant Secretary for Civil Rights to determine whether the assurances required in paragraphs (b) (3), (4), and (5) of this section will be met.
(e) An LEA or consortium of LEAs that has an approved desegregation plan shall submit each of the following with its application:
(1) A copy of the plan.
(2) An assurance that the plan is being implemented as approved.
(f) An LEA or consortium of LEAs that does not have an approved desegregation plan shall submit each of the following with its application:
(1) A copy of the plan the LEA or consortium of LEAs is submitting for approval.
(2) A copy of a school board resolution or other evidence of final official action adopting and implementing the plan, or agreeing to adopt and implement it upon the award of assistance under this part.
(3) Evidence that the plan is a desegregation plan as defined in § 280.4(b).
(4) For an LEA or consortium of LEAs that seeks assistance for existing magnet schools—
(i) Enrollment numbers and percentages, for minority and non-minority group students, for each magnet school for which funding is sought and each feeder school—
(A) For the school year prior to the creation of each magnet school;
(B) For the school year in which the application is submitted; and
(C) For each of the school years of the proposed grant cycle (i.e., projected enrollment figures); and
(ii) Districtwide enrollment numbers and percentages for minority group students in the LEA's or consortium of LEAs' schools, for grade levels involved in the applicant's magnet schools (e.g., K-6, 7-9, 10-12)—
(A) For the school year prior to the creation of each magnet school;
(B) For the school year in which the application is submitted; and
(C) For each of the school years of the proposed grant cycle (i.e., projected enrollment figures).
(5) For an LEA or consortium of LEAs that seeks assistance for new magnet schools—
(i) Enrollment numbers and percentages, for minority and non-minority group students, for each magnet school for which funding is sought and for each feeder school—
(A) For the school year in which the application is submitted; and
(B) For each of the school years of the proposed grant cycle (i.e., projected enrollment figures); and
(ii) Districtwide numbers and percentages of minority group students in the LEA's or consortium of LEAs' schools, for the grade levels involved in the applicant's magnet schools (e.g., K-6, 7-9, 10-12)—
(A) For the school year in which the application is submitted; and
(B) For each of the school years of the proposed grant cycle (i.e., projected enrollment figures).
(g) An applicant that does not have an approved desegregation plan, and demonstrates that it cannot provide some portion of the information requested under paragraphs (f)(4) and (5) of this section, may provide other information (in lieu of that portion of the information not provided in response to paragraphs (f)(4) and (5) of this section) to demonstrate that the creation or operation of its proposed magnet school would reduce, eliminate, or prevent minority group isolation in the applicant's schools.
(h) After reviewing the information provided in response to paragraph (f)(4) or (5) of this section, or as provided under paragraph (g) of this section, the Secretary may request other information, if necessary (e.g., demographic data concerning the attendance areas in which the magnet schools are or will be located), to determine whether to approve an LEA's or consortium of LEAs' plan.
(i) In addition to including the assurances required by this section, an LEA or consortium of LEAs shall describe in its application—
(1) How the applicant will use assistance made available under this part to promote desegregation, including how the proposed magnet school programs will increase interaction among students of different social, economic, ethnic, and racial backgrounds;
(2) How and to what extent the assistance will increase student academic achievement in instructional areas offered;
(3) How the LEA or consortium of LEAs will continue the magnet schools program after assistance under this part is no longer available, including, if applicable, why magnet schools previously established or supported with Magnet Schools Assistance Program grant funds cannot be continued without the use of funds under this part;
(4) How assistance will be used to—
(i) Improve student academic achievement for all students attending the magnet school programs; and
(ii) Implement services and activities that are consistent with other programs under the Act and other statutes, as appropriate; and
(5) What criteria will be used in selecting students to attend the proposed magnet schools program.
(a) The Secretary evaluates an application under the procedures in 34 CFR part 75 and this part.
(b) To evaluate an application for a new grant the Secretary may use—
(1) Selection criteria established under 34 CFR 75.209;
(2) Selection criteria in § 280.31;
(3) Selection criteria established under 34 CFR 75.210; or
(4) Any combination of criteria from paragraphs (b)(1), (b)(2), and (b)(3) of this section.
(c) The Secretary indicates in the application notice published in the
(d) The Secretary evaluates an application submitted under this part on the basis of criteria described in paragraph (c) of this section and the priority factors in § 280.32.
(e) The Secretary awards up to 100 points for the extent to which an application meets the criteria described in paragraph (c) of this section.
(f) The Secretary then awards up to 30 additional points based upon the priority factors in § 280.32.
The Secretary may use the following selection criteria in evaluating each application:
(a) Plan of operation. (1) The Secretary reviews each application to determine the quality of the plan of operation for the project.
(2) The Secretary determines the extent to which the applicant demonstrates—
(i) The effectiveness of its management plan to ensure proper and efficient administration of the project;
(ii) The effectiveness of its plan to attain specific outcomes that—
(A) Will accomplish the purposes of the program;
(B) Are attainable within the project period;
(C) Are measurable and quantifiable; and
(D) For multi-year projects, can be used to determine the project's progress in meeting its intended outcomes;
(iii) The effectiveness of its plan for utilizing its resources and personnel to achieve the objectives of the project, including how well it utilizes key personnel to complete tasks and achieve the objectives of the project;
(iv) How it will ensure equal access and treatment for eligible project participants who have been traditionally underrepresented in courses or activities offered as part of the magnet school, e.g., women and girls in mathematics, science or technology courses, and disabled students; and
(v) The effectiveness of its plan to recruit students from different social, economic, ethnic, and racial backgrounds into the magnet schools.
(b) Quality of personnel. (1) The Secretary reviews each application to determine the qualifications of the personnel the applicant plans to use on the project.
(2) The Secretary determines the extent to which—
(i) The project director (if one is used) is qualified to manage the project;
(ii) Other key personnel are qualified to manage the project;
(iii) Teachers who will provide instruction in participating magnet schools are qualified to implement the special curriculum of the magnet schools; and
(iv) The applicant, as part of its nondiscriminatory employment practices will ensure that its personnel are selected for employment without regard to race, religion, color, national origin, sex, age, or disability.
(3) To determine personnel qualifications the Secretary considers experience and training in fields related to the objectives of the project, including the key personnel's knowledge of and experience in curriculum development and desegregation strategies.
(c) Quality of project design. (1) The Secretary reviews each application to determine the quality of the project design.
(2) The Secretary determines the extent to which each magnet school for which funding is sought will—
(i) Foster interaction among students of different social, economic, ethnic, and racial backgrounds in classroom activities, extracurricular activities, or other activities in the magnet schools (or, if appropriate, in the schools in which the magnet school programs operate);
(ii) Address the educational needs of the students who will be enrolled in the magnet schools;
(iii) Carry out a high quality educational program that will substantially strengthen students' reading skills or knowledge of mathematics, science, history, geography, English, foreign languages, art, music, or vocational, technological, and professional skills;
(iv) Encourage greater parental decisionmaking and involvement; and
(v) Improve the racial balance of students in the applicant's schools by reducing, eliminating, or preventing minority group isolation in its schools.
(d) Budget and resources. The Secretary reviews each application to determine the adequacy of the resources and the cost-effectiveness of the budget for the project, including—
(1) The adequacy of the facilities that the applicant plans to use;
(2) The adequacy of the equipment and supplies that the applicant plans to use; and
(3) The adequacy and reasonableness of the budget for the project in relation to the objectives of the project.
(e) Evaluation plan. The Secretary determines the extent to which the evaluation plan for the project—
(1) Includes methods that are appropriate for the project;
(2) Will determine how successful the project is in meeting its intended outcomes, including its goals for desegregating its students and increasing student achievement; and
(3) Includes methods that are objective and that will produce data that are quantifiable.
(f) Commitment and capacity. (1) The Secretary reviews each application to determine whether the applicant is likely to continue the magnet school activities after assistance under this part is no longer available.
(2) The Secretary determines the extent to which the applicant—
(i) Is committed to the magnet schools project; and
(ii) Has identified other resources to continue support for the magnet school activities when assistance under this program is no longer available.
(a) How priority is given. In addition to the points awarded under § 280.31, the Secretary gives priority to the factors listed in paragraphs (b) through (d) of this section by awarding additional points for these factors. The Secretary indicates in the application notice published in the
(b) Need for assistance. The Secretary evaluates the applicant's need for assistance under this part, by considering—
(1) The costs of fully implementing the magnet schools project as proposed;
(2) The resources available to the applicant to carry out the project if funds under the program were not provided;
(3) The extent to which the costs of the project exceed the applicant's resources; and
(4) The difficulty of effectively carrying out the approved plan and the project for which assistance is sought, including consideration of how the design of the magnet school project—e.g., the type of program proposed, the location of the magnet school within the LEA—impacts on the applicant's ability to successfully carry out the approved plan.
(c) New or revised magnet schools projects. The Secretary determines the extent to which the applicant proposes to carry out new magnet schools projects or significantly revise existing magnet schools projects.
(d) Selection of students. The Secretary determines the extent to which the applicant proposes to select students to attend magnet schools by methods such as lottery, rather than through academic examination.
(a) In selecting among applicants for funds appropriated for this program in excess of $75 million, the Secretary first identifies those remaining applicants that did not receive funds under this program in the last fiscal year of the previous funding cycle.
(b) The Secretary then awards ten additional points to each applicant identified under paragraph (a) of this section.
An LEA or consortium of LEAs may use funds received under this part for the following activities:
(a) Planning and promotional activities directly related to the development, expansion, continuation, or enhancement of academic programs and services offered at magnet schools, though planning activities are subject to the restrictions in § 280.41(a) and do not include activities described under paragraph (f) of this section.
(b) The acquisition of books, materials, and equipment (including computers) and the maintenance and operation of materials, equipment and computers. Any books, materials or equipment purchased with grant funds must be:
(1) Necessary for the conduct of programs in magnet schools; and
(2) Directly related to improving student academic achievement based on the State's challenging academic content standards and student academic achievement standards or directly related to improving student reading skills or knowledge of mathematics, science, history, geography, English, foreign languages, art, or music, or to improving vocational, technological, or professional skills.
(c) The payment or subsidization of the compensation of elementary and secondary school teachers:
(1) Who are highly qualified;
(2) Who are necessary to conduct programs in magnet schools; and
(3) Whose employment is directly related to improving student academic achievement based on the State's challenging academic content standards and student academic achievement standards or directly related to improving student reading skills or knowledge of mathematics, science, history, geography, English, foreign languages, art, or music, or to improving vocational, technological, or professional skills.
(d) The payment or subsidization of the compensation of instructional staff, where applicable, who satisfy the requirements of paragraphs (c)(2) and (3) of this section.
(e) With respect to a magnet school program offered to less than the entire school population, for instructional activities that—
(1) Are designed to make available the special curriculum of the magnet school program to students enrolled in the school, but not in the magnet school program; and
(2) Further the purposes of the program.
(f) Activities, which may include professional development, that will build the recipient's capacity to operate magnet school programs once the grant period has ended.
(g) Activities to enable the LEA or consortium of LEAs to have more flexibility in the administration of a magnet school program in order to serve students attending a school who are not enrolled in a magnet school program.
(h) Activities to enable the LEA or consortium of LEAs to have flexibility in designing magnet schools for students in all grades.
An LEA or consortium of LEAs that receives assistance under this part may not—
(a) Expend for planning more than 50 percent of the funds received for the first fiscal year, and 15 percent of the funds received for the second or the third fiscal year;
(b) Use funds for transportation; or
(c) Use funds for any activity that does not augment academic improvement.
Section 299.4 also issued under 20 U.S.C. 7821 and 7823.
Section 299.5 also issued under 20 U.S.C. 7428(c), 7801(11), 7901.
Section 299.6 also issued under 20 U.S.C. 7881.
Section 299.7 also issued under 20 U.S.C. 7881.
Section 299.8 also issued under 20 U.S.C. 7881.
Section 299.9 also issued under 20 U.S.C. 7881.
Section 299.10 also issued under 20 U.S.C. 7881.
Section 299.11 also issued under 20 U.S.C. 7881.
Section 299.12 also issued under 20 U.S.C. 7881(a)(3)(B).
Section 299.13 also issued under 20 U.S.C. 7844(a)(3)(C), 7883.
Section 299.14 also issued under 20 U.S.C. 7844(a)(3)(C), 7883.
Section 299.15 also issued under 20 U.S.C. 7844(a)(3)(C), 7883.
Section 299.16 also issued under 20 U.S.C. 7883.
Section 299.17 also issued under 20 U.S.C. 7883.
Section 299.18 issued under 20 U.S.C. 6320(e), 7882, and 7883.
Section 299.19 issued under 20 U.S.C. 6320(e) and 7882(a).
Section 299.20 issued under 20 U.S.C. 6320(b)(6) and (e), 7881(c)(6), 7882, and 7883.
Section 299.21 issued under 20 U.S.C. 7884(a)(1).
Section 299.22 issued under 20 U.S.C. 7884(a)(1).
Section 299.23 issued under 20 U.S.C. 7884(a)(1).
Section 299.24 issued under 20 U.S.C. 7884(a)(1).
Section 299.25 issued under 20 U.S.C. 7884(a)(1).
Section 299.26 issued under 20 U.S.C. 7884(a)(1).
Section 299.27 issued under 20 U.S.C. 7884(a)(2).
Section 299.28 issued under 20 U.S.C. 7884(b).
(a) This part establishes uniform administrative rules for programs in titles I through VII of the Elementary and Secondary Education Act of 1965, as amended (ESEA). As indicated in particular sections of this part, certain provisions apply only to a specific group of programs.
(b) If an ESEA program does not have implementing regulations, the Secretary implements the program under the authorizing statute and, to the extent applicable, title VIII of the ESEA, the General Education Provisions Act, the regulations in this part, EDGAR (34 CFR parts 75 through 99), and 2 CFR parts 180, as adopted at 2 CFR part 3485, and 200, as adopted at 2 CFR part 3474, that are not inconsistent with specific statutory provisions of the ESEA.
Title 2 of the CFR, part 200, as adopted at 2 CFR part 3474, applies to all ESEA programs except for title VII programs (Impact Aid) (in addition to any other specific implementing regulations).
34 CFR 222.19 indicates which EDGAR provisions apply to title VII programs (Impact Aid).
An SEA may adopt and use its own reasonable standards in determining whether—
(a) The majority of its resources for administrative purposes comes from non-Federal sources to permit the consolidation of State administrative funds in accordance with section 8201 of the ESEA; and
(b) To approve an LEA's consolidation of its administrative funds in accordance with section 8203 of the ESEA.
(a) General. An LEA receiving funds under an applicable program listed in paragraph (b) of this section may receive its full allocation of funds only if the SEA finds that either the combined fiscal effort per student or the aggregate expenditures of State and local funds with respect to the provision of free public education in the LEA for the preceding fiscal year was not less than 90 percent of the combined fiscal effort per student or the aggregate expenditures for the second preceding fiscal year.
(b) Applicable programs. This subpart is applicable to the following programs:
(1) Part A of title I (Improving Basic Programs Operated by Local Educational Agencies).
(2) Part D of title I (Prevention and Intervention Programs for Children and Youth Who Are Neglected, Delinquent, or At Risk).
(3) Part A of title II (Supporting Effective Instruction).
(4) Part A, subpart 1 of title III (English Language Acquisition, Language Enhancement, and Academic Achievement), except for section 3112.
(5) Part A of title IV (Student Support and Academic Enrichment Grants).
(6) Part B of title IV (21st Century Community Learning Centers).
(7) Part B, subpart 2 of title V (Rural and Low-Income School Program).
(8) Part A, subpart 1 of title VI (Indian Education Formula Grants to Local Educational Agencies).
(c) Meaning of “preceding fiscal year”. For purposes of determining if the requirement of paragraph (a) of this section is met, the “preceding fiscal year” means the Federal fiscal year, or the 12-month fiscal period most commonly used in a State for official reporting purposes, prior to the beginning of the Federal fiscal year in which funds are available for obligation by the Department.
(1) Example. For fiscal year 2018 funds that are first made available on July 1, 2018, if a State is using the Federal fiscal year, the “preceding fiscal year” is Federal fiscal year 2017 (which began on October 1, 2016 and ended September 30, 2017) and the “second preceding fiscal year” is Federal fiscal year 2016 (which began on October 1, 2015). If a State is using a fiscal year that begins on July 1, 2018, the “preceding fiscal year” is the 12-month period ending on June 30, 2017, and the “second preceding fiscal year” is the period ending on June 30, 2016.
(2) [Reserved]
(d) Expenditures. (1) In determining an LEA's compliance with paragraph (a) of this section, the SEA shall consider only the LEA's expenditures from State and local funds for free public education. These include expenditures for administration, instruction, attendance and health services, pupil transportation services, operation and maintenance of plant, fixed charges, and net expenditures to cover deficits for food services and student body activities.
(2) The SEA may not consider the following expenditures in determining an LEA's compliance with the requirements in paragraph (a) of this section:
(i) Any expenditures for community services, capital outlay, debt service or supplemental expenses made as a result of a Presidentially declared disaster.
(ii) Any expenditures made from funds provided by the Federal Government.
(a) General. An agency, consortium, or entity receiving funds under an applicable program listed in paragraph (b) of this section, after timely and meaningful consultation with appropriate private school officials (in accordance with the statute), shall provide special educational services or other benefits under this subpart on an equitable basis to eligible children who are enrolled in private elementary and secondary schools, and to their teachers and other educational personnel.
(b) Applicable programs. This subpart is applicable to the following programs:
(1) Part C of title I (Migrant Education).
(2) Part A of title II (Supporting Effective Instruction).
(3) Part A of title III (English Acquisition, Language Enhancement, and Academic Achievement).
(4) Part A of title IV (Student Support and Academic Enrichment Grants).
(5) Part B of title IV (21st Century Community Learning Centers).
(6) Section 4631 (Project SERV).
(c) Provisions not applicable. Sections 75.650 and 76.650 through 76.662 of title 34 of the Code of Federal Regulations (participation of students enrolled in private schools) do not apply to programs listed in paragraph (b) of this section.
(a)(1) In order to have timely and meaningful consultation, an agency, consortium, or entity must—
(i) Consult with appropriate private school officials during the design and development of the agency, consortium, or entity's program for eligible private school children and their teachers and other educational personnel; and
(ii) Consult before the agency, consortium, or entity makes any decision that affects the opportunities of eligible private school children and their teachers and other educational personnel to participate in the applicable program.
(2) Such consultation must continue throughout the implementation and assessment of equitable services.
(b) Both the agency, consortium, or entity and private school officials must have the goal of reaching agreement on how to provide equitable and effective programs for private school children and their teachers and other educational personnel, including, at a minimum, on issues such as—
(1) How the agency, consortium, or entity will identify the needs of eligible private school children and their teachers and other educational personnel;
(2) What services the agency, consortium, or entity will offer to eligible private school children and their teachers and other educational personnel;
(3) How and when the agency, consortium, or entity will make decisions about the delivery of services;
(4) How, where, and by whom the agency, consortium, or entity will provide services to eligible private school children and their teachers and other educational personnel;
(5) How the agency, consortium, or entity will assess the services and use the results of the assessment to improve those services;
(6) Whether the agency, consortium, or entity will provide services directly or through a separate government agency, consortium, entity, or third-party contractor;
(7) The size and scope of the equitable services that the agency, consortium, or entity will provide to eligible private school children and their teachers and other educational personnel, the amount of funds available for those services, and how that amount is determined; and
(8) Whether to provide equitable services to eligible private school children and their teachers and other educational personnel—
(i) On a school-by-school basis;
(ii) By creating a pool or pools of funds with all the funds allocated under the applicable program based on the amount of funding allocated for equitable services to two or more participating private schools served by the same agency, consortium, or entity, provided that all the affected private schools agree to receive services in this way; or
(iii) By creating a pool or pools of funds with all the funds allocated under the applicable program based on the amount of funding allocated for equitable services to two or more participating private schools served across multiple agencies, consortia, or entities, provided that all the affected private schools agree to receive services in this way.
(c)(1) Consultation must include—
(i) A discussion of service delivery mechanisms the agency, consortium, or entity can use to provide equitable services to eligible private school children and their teachers and other educational personnel; and
(ii) A thorough consideration and analysis of the views of private school officials on the provision of services through a contract with a third-party provider.
(2) If the agency, consortium, or entity disagrees with the views of private school officials on the provision of services through a contract, the agency, consortium, or entity must provide in writing to the private school officials the reasons why the agency, consortium, or entity chooses not to use a contractor.
(d)(1) The agency, consortium, or entity must maintain in its records and provide to the SEA a written affirmation, signed by officials of each private school with participating children or appropriate private school representatives, that the required consultation has occurred. The written affirmation must provide the option for private school officials to indicate such officials' belief that timely and meaningful consultation has not occurred or that the program design is not equitable with respect to eligible private school children.
(2) If private school officials do not provide the affirmations within a reasonable period of time, the agency, consortium, or entity must submit to the SEA documentation that the required consultation occurred.
(e) A private school official has the right to complain to the SEA that the agency, consortium, or entity did not—
(1) Engage in timely and meaningful consultation;
(2) Give due consideration to the views of the private school official; or
(3) Make a decision that treats the private school or its students equitably as required by this section.
A grantee or subgrantee may use program funds to pay for the services of an employee of a private school if:
(a) The employee performs the services outside of his or her regular hours of duty; and
(b) The employee performs the services under public supervision and control.
(a) Equal expenditures. (1) Expenditures of funds made by an agency, consortium, or entity under a program listed in § 299.6 (b) for services for eligible private school children and their teachers and other educational personnel must be equal on a per-pupil basis to the amount of funds expended for participating public school children and their teachers and other educational personnel, taking into account the number and educational needs of those children and their teachers and other educational personnel.
(2) Before determining equal expenditures under paragraph (a)(1) of this section, an agency, consortium, or entity shall pay for the reasonable and necessary administrative costs of providing services to public and private school children and their teachers and other educational personnel from the agency's, consortium's, or entity's total allocation of funds under the applicable ESEA program.
(3) An agency, consortium, or entity must obligate funds allocated for educational services and other benefits for eligible private school children in the fiscal year for which the funds are received by the agency, consortium, or entity.
(4) An SEA must provide notice in a timely manner to appropriate private school officials in the State of the allocation of funds for educational services and other benefits that an agency, consortium, or entity has determined are available for eligible private school children and their teachers and other educational personnel.
(b) Services on an equitable basis. (1) The services that an agency, consortium, or entity provides to eligible private school children and their teachers and other educational personnel must also be equitable in comparison to the services and other benefits provided to public school children and their teachers or other educational personnel participating in a program under this subpart.
(2) Services are equitable if the agency's, consortium's, or entity's—
(i) Addresses and assesses the specific needs and educational progress of eligible private school children and their teachers and other educational personnel on a comparable basis to public school children and their teachers and other educational personnel;
(ii) Determines the number of students and their teachers and other educational personnel to be served on an equitable basis;
(iii) Meets the equal expenditure requirements under paragraph (a) of this section; and
(iv) Provides private school children and their teachers and other educational personnel with an opportunity to participate that is equitable to the opportunity and benefits provided to public school children and their teachers and other educational personnel.
(3) The agency, consortium, or entity shall make the final decisions with respect to the services to be provided to eligible private school children and their teachers and the other educational personnel.
(c) If the needs of private school children, their teachers and other educational personnel are different from the needs of children, teachers and other educational personnel in the public schools, the agency, consortium, or entity shall provide program benefits for the private school children, teachers, and other educational personnel that are different from the benefits it provides for the public school children and their teachers and other educational personnel.
(a) An agency, consortium, or entity shall use funds under a program listed in § 299.6(b) to provide services that supplement, and in no case supplant, the level of services that would, in the absence of services provided under that program, be available to participating children and their teachers and other educational personnel in private schools.
(b) An agency, consortium, or entity shall use funds under a program listed in § 299.6(b) to meet the special educational needs of participating children who attend a private school and their teachers and other educational personnel, but may not use those funds for—
(1) The needs of the private school; or
(2) The general needs of children and their teachers and other educational personnel in the private school.
(a) A agency, consortium, or entity must keep title to, and exercise continuing administrative control of, all property, equipment, and supplies that the agency, consortium, or entity acquires with funds under a program listed in § 299.6(b) for the benefit of eligible private school children and their teachers and other educational personnel.
(b) The agency, consortium, or entity may place equipment and supplies in a private school for the period of time needed for the program.
(c) The agency, consortium, or entity shall ensure that the equipment and supplies placed in a private school—
(1) Are used only for proper purposes of the program; and
(2) Can be removed from the private school without remodeling the private school facility.
(d) The agency, consortium, or entity must remove equipment and supplies from a private school if—
(1) The equipment and supplies are no longer needed for the purposes of the program; or
(2) Removal is necessary to avoid unauthorized use of the equipment or supplies for other than the purposes of the program.
(e) No funds may be used for repairs, minor remodeling, or construction of private school facilities.
To help ensure equity for eligible private school children, teachers, and other educational personnel, an SEA must direct the ombudsman designated under section 1117 of the ESEA and § 200.68 to monitor and enforce the requirements in §§ 299.6 through 299.11.
(a) General. An SEA shall adopt written procedures, consistent with State law, for—
(1) Receiving and resolving any complaint from an organization or individual that the SEA or an agency or consortium of agencies is violating a Federal statute or regulation that applies to an applicable program listed in paragraph (b) of this section;
(2) Reviewing an appeal from a decision of an agency or consortium of agencies with respect to a complaint; and
(3) Conducting an independent on-site investigation of a complaint if the SEA determines that an on-site investigation is necessary.
(b) Applicable programs. This subpart is applicable to the following programs:
(1) Part A of title I (Improving Basic Programs Operated by Local Educational Agencies).
(2) Part C of title I (Education of Migratory Children).
(3) Part D of title I (Prevention and Intervention Programs for Children and Youth Who Are Neglected, Delinquent, or At Risk).
(4) Part A of title II (Supporting Effective Instruction).
(5) Part A, subpart 1 of title III (English Language Acquisition, Language Enhancement, and Academic Achievement), except for section 3112.
(6) Part A of title IV (Student Support and Academic Enrichment Grants).
(7) Part B of title IV (21st Century Community Learning Centers).
(8) Part B, subpart 2 of title V (Rural and Low-Income School Program).
(9) Subtitle B of title VII of the McKinney-Vento Homeless Assistance Act, Education for Homeless Children and Youth Program.
An SEA shall include the following in its complaint procedures:
(a)(1) Except as provided in paragraph (a)(2) of this section, a reasonable time limit after the SEA receives a complaint for resolving the complaint in writing, including a provision for carrying out an independent on-site investigation, if necessary.
(2) In matters involving violations of section 1117 or 8501 of the ESEA (participation of private school children), an SEA must resolve, in writing, a complaint within 45 days after receiving the complaint.
(b) An extension of the time limit under paragraph (a)(1) of this section only if exceptional circumstances exist with respect to a particular complaint.
(c)(1) The right for the complainant to request the Secretary to review the final decision of the SEA, at the Secretary's discretion.
(2) In matters involving violations of section 1117 or 8501 of the ESEA (participation of private school children), the Secretary will follow the procedures in section 8503(b) of the ESEA.
(d) A requirement for LEAs to disseminate, free of charge, adequate information about the complaint procedures to parents of students, and appropriate private school officials or representatives.
An organization or individual may file a written signed complaint with an SEA. The complaint must be in writing and signed by the complainant, and include—
(a) A statement that the SEA or an agency or consortium of agencies has violated a requirement of a Federal statute or regulation that applies to an applicable program; and
(b) The facts on which the statement is based and the specific requirement allegedly violated.
An SEA must include the following in its written resolution of a complaint under an applicable program:
(a) A description of applicable statutory and regulatory requirements.
(b) A description of the procedural history of the complaint.
(c) Findings of fact supported by citation, including page numbers, to supporting documents under paragraph (h) of this section.
(d) Analysis and conclusions regarding the requirements.
(e) Corrective actions, if applicable.
(f) A statement of applicable appeal rights.
(g) A statement regarding the State's determination about whether it will provide services.
(h) All documents the SEA relied on in reaching its decision, paginated consecutively.
(a) A party appealing an SEA's written resolution of a complaint, or failure to resolve a complaint, must include the following in its request within 30 days of either the SEA's resolution or the 45-day time limit:
(1) A clear and concise statement of the parts of the SEA's decision being appealed, if applicable.
(2) The legal and factual basis for the appeal.
(3) A copy of the complaint filed with the SEA.
(4) A copy of the SEA's written resolution of the complaint being appealed, if one is available, including all supporting documentation required under § 299.16(h).
(5) Any supporting documentation not included as part of the SEA's written resolution of the complaint being appealed.
(b) Unless substantiating documentation identified in paragraph (a) of this section is provided to the Department, the appeal is not considered complete. Statutory or regulatory time limits are stayed until the appeal is complete as determined by the Department.
(c) In resolving the appeal, if the Department determines that additional information is necessary, all applicable statutory or regulatory time limits are stayed pending receipt of that information.
The regulations in this subpart apply to part A of Title I and applicable programs under section 8501(b)(1) of the ESEA under which the Secretary is authorized to waive the requirements for providing services to private school children, teachers or other educational personnel, and families, as applicable, and to implement a bypass.
(a) The Secretary arranges for a bypass if—
(1) An agency, consortium, or entity is prohibited by law from providing for the participation in programs of children enrolled in, or teachers or other educational personnel from, private elementary and secondary schools, on an equitable basis; or
(2) The Secretary determines that the agency, consortium, or entity has substantially failed, or is unwilling, to provide for that participation as required by section 1117 or 8501 of the ESEA, as applicable.
(b) If the Secretary determines that a bypass is appropriate after following the requirements in §§ 299.21 through 299.26, the Secretary—
(1) Waives the requirements under section 1117 or 8501 of the ESEA, as applicable, for the agency, consortium, or entity; and
(2) Arranges for the provision of equitable services to those children, teachers or other educational personnel, and families, as applicable, through arrangements subject to the requirements of section 1117 or 8501 of the ESEA, as applicable, and sections 8503 and 8504 of the ESEA.
(a) A private school official may request a bypass of an agency, consortium, or entity under the following circumstances:
(1) The private school official has—
(i) Filed a complaint with the State educational agency (SEA) under section 1117(b)(6)(A)-(B) or section 8501(c)(6)(A)-(B) of the ESEA and §§ 299.13 through 299.17 that an agency, consortium, or entity other than the SEA has substantially failed or is unwilling to provide equitable services;
(ii) Requested that the SEA provide equitable services on behalf of the agency, consortium, or entity under section 1117(b)(6)(C) or section 8501(c)(6)(C) of the ESEA; and
(iii) Submitted an appeal of the SEA's resolution of the complaint filed under this paragraph (a)(1) to the Secretary under section 8503(b) of the ESEA and § 299.17.
(2) If an SEA has substantially failed, or is unwilling, to provide equitable services, the private school official has—
(i) Filed a complaint with the SEA under section 8503(a) of the ESEA and §§ 299.13 through 299.16; and
(ii) Submitted an appeal to the Secretary under section 8503(b) of the ESEA and § 299.17 of the SEA's resolution of the complaint filed under paragraph (a)(1) of this section in which the private school official requests a bypass.
(b) An agency, consortium, or entity may request that the Secretary implement a bypass if the agency, consortium, or entity is prohibited by law from providing equitable services under section 1117 or section 8501 of the ESEA.
(a) Before taking any final action to implement a bypass, the Secretary provides the affected agency, consortium, or entity with written notice.
(b) In the written notice, the Secretary—
(1) States the reasons for the proposed bypass in sufficient detail to allow the agency, consortium, or entity to respond;
(2) Cites the requirement that is the basis for the alleged failure to comply; and
(3) Advises the agency, consortium, or entity that it—
(i) Has a deadline (which must not be fewer than 45 days after receiving the written notice) to submit written objections to the proposed bypass; and
(ii) May request in writing the opportunity for a hearing to show cause why the Secretary should not implement the bypass.
(a) Any written submission under § 299.21 must be filed by hand delivery, mail, or email.
(b) The filing date for a written submission is the date on which the document is—
(1) Hand delivered;
(2) Mailed; or
(3) Emailed.
Sections 299.24 through 299.26 describe the procedures that the Secretary uses in conducting a show-cause hearing. The hearing officer may modify the procedures for a particular case if all parties agree that the modification is appropriate.
(a) If an agency, consortium, or entity requests a hearing to show cause why the Secretary should not implement a bypass, the Secretary appoints a hearing officer and notifies appropriate representatives of the affected private school children, teachers or other educational personnel, or families that they may participate in the hearing.
(b) The hearing officer has no authority to require or conduct discovery or to rule on the validity of any statute or regulation.
(c) The hearing officer notifies the agency, consortium, or entity and representatives of the private school children, teachers or other educational personnel, or families of the time and place of the hearing.
(a) The following procedures apply to a show-cause hearing regarding implementation of a bypass:
(1) The hearing officer arranges for a transcript to be created.
(2) The agency, consortium, or entity and representatives of the private school children, teachers or other educational personnel, or families each may—
(i) Be represented by legal counsel; and
(ii) Submit oral or written evidence and arguments at the hearing.
(b) Within 10 days after the hearing, the hearing officer—
(1) Indicates that a decision will be issued based on the existing record; or
(2) Requests further information from the agency, consortium, or entity, representatives of the private school children, teachers or other educational personnel, or families, or Department officials.
(a)(1) Within 120 days after the record of a show-cause hearing is closed, the hearing officer issues a written decision on whether the Secretary should implement a bypass.
(2) The hearing officer sends copies of the decision to the agency, consortium, or entity; representatives of the private school children, teachers or other educational personnel, or families; and the Secretary.
(b) Within 30 days after receiving the hearing officer's decision, the agency, consortium, or entity, and representatives of the private school children, teachers or other educational personnel, or families may each submit to the Secretary written comments on the decision.
(c) The Secretary may adopt, reverse, modify, or remand the hearing officer's decision.
If an agency, consortium, or entity is dissatisfied with the Secretary's final action after a proceeding under §§ 299.13 through 299.26, it may, within 60 days after receiving notice of that action, file a petition for review with the United States Court of Appeals for the circuit in which it is located.
The Secretary continues a bypass until the Secretary determines, in consultation with the relevant agency, consortium, or entity and representatives of the affected private school children, teachers or other educational personnel, or families, that there will no longer be any failure or inability on the part of the agency, consortium, or entity to meet the requirements for providing services.
The purposes of this part are—
(a) To ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepare them for further education, employment, and independent living;
(b) To ensure that the rights of children with disabilities and their parents are protected;
(c) To assist States, localities, educational service agencies, and Federal agencies to provide for the education of all children with disabilities; and
(d) To assess and ensure the effectiveness of efforts to educate children with disabilities.
(a) States. This part applies to each State that receives payments under Part B of the Act, as defined in § 300.4.
(b) Public agencies within the State. The provisions of this part—
(1) Apply to all political subdivisions of the State that are involved in the education of children with disabilities, including:
(i) The State educational agency (SEA).
(ii) Local educational agencies (LEAs), educational service agencies (ESAs), and public charter schools that are not otherwise included as LEAs or ESAs and are not a school of an LEA or ESA.
(iii) Other State agencies and schools (such as Departments of Mental Health and Welfare and State schools for children with deafness or children with blindness).
(iv) State and local juvenile and adult correctional facilities; and
(2) Are binding on each public agency in the State that provides special education and related services to children with disabilities, regardless of whether that agency is receiving funds under Part B of the Act.
(c) Private schools and facilities. Each public agency in the State is responsible for ensuring that the rights and protections under Part B of the Act are given to children with disabilities—
(1) Referred to or placed in private schools and facilities by that public agency; or
(2) Placed in private schools by their parents under the provisions of § 300.148.
Act means the Individuals with Disabilities Education Act, as amended.
Assistive technology device means any item, piece of equipment, or product system, whether acquired commercially off the shelf, modified, or customized, that is used to increase, maintain, or improve the functional capabilities of a child with a disability. The term does not include a medical device that is surgically implanted, or the replacement of such device.
Assistive technology service means any service that directly assists a child with a disability in the selection, acquisition, or use of an assistive technology device. The term includes—
(a) The evaluation of the needs of a child with a disability, including a functional evaluation of the child in the child's customary environment;
(b) Purchasing, leasing, or otherwise providing for the acquisition of assistive technology devices by children with disabilities;
(c) Selecting, designing, fitting, customizing, adapting, applying, maintaining, repairing, or replacing assistive technology devices;
(d) Coordinating and using other therapies, interventions, or services with assistive technology devices, such as those associated with existing education and rehabilitation plans and programs;
(e) Training or technical assistance for a child with a disability or, if appropriate, that child's family; and
(f) Training or technical assistance for professionals (including individuals providing education or rehabilitation services), employers, or other individuals who provide services to, employ, or are otherwise substantially involved in the major life functions of that child.
Charter school has the meaning given the term in section 4310(2) of the Elementary and Secondary Education Act of 1965, as amended, 20 U.S.C. 6301 et seq. (ESEA).
(a) General—(1) Child with a disability means a child evaluated in accordance with §§ 300.304 through 300.311 as having an intellectual disability, a hearing impairment (including deafness), a speech or language impairment, a visual impairment (including blindness), a serious emotional disturbance (referred to in this part as “emotional disturbance”), an orthopedic impairment, autism, traumatic brain injury, an other health impairment, a specific learning disability, deaf-blindness, or multiple disabilities, and who, by reason thereof, needs special education and related services.
(2)(i) Subject to paragraph (a)(2)(ii) of this section, if it is determined, through an appropriate evaluation under §§ 300.304 through 300.311, that a child has one of the disabilities identified in paragraph (a)(1) of this section, but only needs a related service and not special education, the child is not a child with a disability under this part.
(ii) If, consistent with § 300.39(a)(2), the related service required by the child is considered special education rather than a related service under State standards, the child would be determined to be a child with a disability under paragraph (a)(1) of this section.
(b) Children aged three through nine experiencing developmental delays. Child with a disability for children aged three through nine (or any subset of that age range, including ages three through five), may, subject to the conditions described in § 300.111(b), include a child—
(1) Who is experiencing developmental delays, as defined by the State and as measured by appropriate diagnostic instruments and procedures, in one or more of the following areas: Physical development, cognitive development, communication development, social or emotional development, or adaptive development; and
(2) Who, by reason thereof, needs special education and related services.
(c) Definitions of disability terms. The terms used in this definition of a child with a disability are defined as follows:
(1)(i) Autism means a developmental disability significantly affecting verbal and nonverbal communication and social interaction, generally evident before age three, that adversely affects a child's educational performance. Other characteristics often associated with autism are engagement in repetitive activities and stereotyped movements, resistance to environmental change or change in daily routines, and unusual responses to sensory experiences.
(ii) Autism does not apply if a child's educational performance is adversely affected primarily because the child has an emotional disturbance, as defined in paragraph (c)(4) of this section.
(iii) A child who manifests the characteristics of autism after age three could be identified as having autism if the criteria in paragraph (c)(1)(i) of this section are satisfied.
(2) Deaf-blindness means concomitant hearing and visual impairments, the combination of which causes such severe communication and other developmental and educational needs that they cannot be accommodated in special education programs solely for children with deafness or children with blindness.
(3) Deafness means a hearing impairment that is so severe that the child is impaired in processing linguistic information through hearing, with or without amplification, that adversely affects a child's educational performance.
(4)(i) Emotional disturbance means a condition exhibiting one or more of the following characteristics over a long period of time and to a marked degree that adversely affects a child's educational performance:
(A) An inability to learn that cannot be explained by intellectual, sensory, or health factors.
(B) An inability to build or maintain satisfactory interpersonal relationships with peers and teachers.
(C) Inappropriate types of behavior or feelings under normal circumstances.
(D) A general pervasive mood of unhappiness or depression.
(E) A tendency to develop physical symptoms or fears associated with personal or school problems.
(ii) Emotional disturbance includes schizophrenia. The term does not apply to children who are socially maladjusted, unless it is determined that they have an emotional disturbance under paragraph (c)(4)(i) of this section.
(5) Hearing impairment means an impairment in hearing, whether permanent or fluctuating, that adversely affects a child's educational performance but that is not included under the definition of deafness in this section.
(6) Intellectual disability means significantly subaverage general intellectual functioning, existing concurrently with deficits in adaptive behavior and manifested during the developmental period, that adversely affects a child's educational performance. The term “intellectual disability” was formerly termed “mental retardation.”
(7) Multiple disabilities means concomitant impairments (such as intellectual disability-blindness or intellectual disability-orthopedic impairment), the combination of which causes such severe educational needs that they cannot be accommodated in special education programs solely for one of the impairments. Multiple disabilities does not include deaf-blindness.
(8) Orthopedic impairment means a severe orthopedic impairment that adversely affects a child's educational performance. The term includes impairments caused by a congenital anomaly, impairments caused by disease (e.g., poliomyelitis, bone tuberculosis), and impairments from other causes (e.g., cerebral palsy, amputations, and fractures or burns that cause contractures).
(9) Other health impairment means having limited strength, vitality, or alertness, including a heightened alertness to environmental stimuli, that results in limited alertness with respect to the educational environment, that—
(i) Is due to chronic or acute health problems such as asthma, attention deficit disorder or attention deficit hyperactivity disorder, diabetes, epilepsy, a heart condition, hemophilia, lead poisoning, leukemia, nephritis, rheumatic fever, sickle cell anemia, and Tourette syndrome; and
(ii) Adversely affects a child's educational performance.
(10) Specific learning disability—(i) General. Specific learning disability means a disorder in one or more of the basic psychological processes involved in understanding or in using language, spoken or written, that may manifest itself in the imperfect ability to listen, think, speak, read, write, spell, or to do mathematical calculations, including conditions such as perceptual disabilities, brain injury, minimal brain dysfunction, dyslexia, and developmental aphasia.
(ii) Disorders not included. Specific learning disability does not include learning problems that are primarily the result of visual, hearing, or motor disabilities, of intellectual disability, of emotional disturbance, or of environmental, cultural, or economic disadvantage.
(11) Speech or language impairment means a communication disorder, such as stuttering, impaired articulation, a language impairment, or a voice impairment, that adversely affects a child's educational performance.
(12) Traumatic brain injury means an acquired injury to the brain caused by an external physical force, resulting in total or partial functional disability or psychosocial impairment, or both, that adversely affects a child's educational performance. Traumatic brain injury applies to open or closed head injuries resulting in impairments in one or more areas, such as cognition; language; memory; attention; reasoning; abstract thinking; judgment; problem-solving; sensory, perceptual, and motor abilities; psychosocial behavior; physical functions; information processing; and speech. Traumatic brain injury does not apply to brain injuries that are congenital or degenerative, or to brain injuries induced by birth trauma.
(13) Visual impairment including blindness means an impairment in vision that, even with correction, adversely affects a child's educational performance. The term includes both partial sight and blindness.
Consent means that—
(a) The parent has been fully informed of all information relevant to the activity for which consent is sought, in his or her native language, or through another mode of communication;
(b) The parent understands and agrees in writing to the carrying out of the activity for which his or her consent is sought, and the consent describes that activity and lists the records (if any) that will be released and to whom; and
(c)(1) The parent understands that the granting of consent is voluntary on the part of the parent and may be revoked at any time.
(2) If a parent revokes consent, that revocation is not retroactive (i.e., it does not negate an action that has occurred after the consent was given and before the consent was revoked).
(3) If the parent revokes consent in writing for their child's receipt of special education services after the child is initially provided special education and related services, the public agency is not required to amend the child's education records to remove any references to the child's receipt of special education and related services because of the revocation of consent.
(a) Day means calendar day unless otherwise indicated as business day or school day.
(b) Business day means Monday through Friday, except for Federal and State holidays (unless holidays are specifically included in the designation of business day, as in § 300.148(d)(1)(ii)).
(c)(1) School day means any day, including a partial day that children are in attendance at school for instructional purposes.
(2) School day has the same meaning for all children in school, including children with and without disabilities.
Educational service agency means—
(a) A regional public multiservice agency—
(1) Authorized by State law to develop, manage, and provide services or programs to LEAs;
(2) Recognized as an administrative agency for purposes of the provision of special education and related services provided within public elementary schools and secondary schools of the State;
(b) Includes any other public institution or agency having administrative control and direction over a public elementary school or secondary school; and
(c) Includes entities that meet the definition of intermediate educational unit in section 602(23) of the Act as in effect prior to June 4, 1997.
Elementary school means a nonprofit institutional day or residential school, including a public elementary charter school, that provides elementary education, as determined under State law.
Equipment means—
(a) Machinery, utilities, and built-in equipment, and any necessary enclosures or structures to house the machinery, utilities, or equipment; and
(b) All other items necessary for the functioning of a particular facility as a facility for the provision of educational services, including items such as instructional equipment and necessary furniture; printed, published and audio-visual instructional materials; telecommunications, sensory, and other technological aids and devices; and books, periodicals, documents, and other related materials.
Evaluation means procedures used in accordance with §§ 300.304 through 300.311 to determine whether a child has a disability and the nature and extent of the special education and related services that the child needs.
Excess costs means those costs that are in excess of the average annual per-student expenditure in an LEA during the preceding school year for an elementary school or secondary school student, as may be appropriate, and that must be computed after deducting—
(a) Amounts received—
(1) Under Part B of the Act;
(2) Under Part A of title I of the ESEA; and
(3) Under Part A of title III of the ESEA and;
(b) Any State or local funds expended for programs that would qualify for assistance under any of the parts described in paragraph (a) of this section, but excluding any amounts for capital outlay or debt service. (See appendix A to part 300 for an example of how excess costs must be calculated.)
Free appropriate public education or FAPE means special education and related services that—
(a) Are provided at public expense, under public supervision and direction, and without charge;
(b) Meet the standards of the SEA, including the requirements of this part;
(c) Include an appropriate preschool, elementary school, or secondary school education in the State involved; and
(d) Are provided in conformity with an individualized education program (IEP) that meets the requirements of §§ 300.320 through 300.324.
Homeless children has the meaning given the term homeless children and youths in section 725 (42 U.S.C. 11434a) of the McKinney-Vento Homeless Assistance Act, as amended, 42 U.S.C. 11431 et seq.
Include means that the items named are not all of the possible items that are covered, whether like or unlike the ones named.
(a) Indian means an individual who is a member of an Indian tribe.
(b) Indian tribe means any Federal or State Indian tribe, band, rancheria, pueblo, colony, or community, including any Alaska Native village or regional village corporation (as defined in or established under the Alaska Native Claims Settlement Act, 43 U.S.C. 1601 et seq.).
(c) Nothing in this definition is intended to indicate that the Secretary of the Interior is required to provide services or funding to a State Indian tribe that is not listed in the
Individualized education program or IEP means a written statement for a child with a disability that is developed, reviewed, and revised in accordance with §§ 300.320 through 300.324.
Individualized education program team or IEP Team means a group of individuals described in § 300.321 that is responsible for developing, reviewing, or revising an IEP for a child with a disability.
Individualized family service plan or IFSP has the meaning given the term in section 636 of the Act.
Infant or toddler with a disability—
(a) Means an individual under three years of age who needs early intervention services because the individual—
(1) Is experiencing developmental delays, as measured by appropriate diagnostic instruments and procedures in one or more of the areas of cognitive development, physical development, communication development, social or emotional development, and adaptive development; or
(2) Has a diagnosed physical or mental condition that has a high probability of resulting in developmental delay; and
(b) May also include, at a State's discretion—
(1) At-risk infants and toddlers; and
(2) Children with disabilities who are eligible for services under section 619 and who previously received services under Part C of the Act until such children enter, or are eligible under State law to enter, kindergarten or elementary school, as appropriate, provided that any programs under Part C of the Act serving such children shall include—
(i) An educational component that promotes school readiness and incorporates pre-literacy, language, and numeracy skills; and
(ii) A written notification to parents of their rights and responsibilities in determining whether their child will continue to receive services under Part C of the Act or participate in preschool programs under section 619.
Institution of higher education—
(a) Has the meaning given the term in section 101 of the Higher Education Act of 1965, as amended, 20 U.S.C. 1021 et seq. (HEA); and
(b) Also includes any community college receiving funds from the Secretary of the Interior under the Tribally Controlled Community College or University Assistance Act of 1978, 25 U.S.C. 1801, et seq.
Limited English proficient has the meaning given the term 'English learner' in section 8101 of the ESEA.
(a) General. Local educational agency or LEA means a public board of education or other public authority legally constituted within a State for either administrative control or direction of, or to perform a service function for, public elementary or secondary schools in a city, county, township, school district, or other political subdivision of a State, or for a combination of school districts or counties as are recognized in a State as an administrative agency for its public elementary schools or secondary schools.
(b) Educational service agencies and other public institutions or agencies. The term includes—
(1) An educational service agency, as defined in § 300.12; and
(2) Any other public institution or agency having administrative control and direction of a public elementary school or secondary school, including a public nonprofit charter school that is established as an LEA under State law.
(c) BIA funded schools. The term includes an elementary school or secondary school funded by the Bureau of Indian Affairs, and not subject to the jurisdiction of any SEA other than the Bureau of Indian Affairs, but only to the extent that the inclusion makes the school eligible for programs for which specific eligibility is not provided to the school in another provision of law and the school does not have a student population that is smaller than the student population of the LEA receiving assistance under the Act with the smallest student population.
(a) Native language, when used with respect to an individual who is limited English proficient, means the following:
(1) The language normally used by that individual, or, in the case of a child, the language normally used by the parents of the child, except as provided in paragraph (a)(2) of this section.
(2) In all direct contact with a child (including evaluation of the child), the language normally used by the child in the home or learning environment.
(b) For an individual with deafness or blindness, or for an individual with no written language, the mode of communication is that normally used by the individual (such as sign language, Braille, or oral communication).
(a) Parent means—
(1) A biological or adoptive parent of a child;
(2) A foster parent, unless State law, regulations, or contractual obligations with a State or local entity prohibit a foster parent from acting as a parent;
(3) A guardian generally authorized to act as the child's parent, or authorized to make educational decisions for the child (but not the State if the child is a ward of the State);
(4) An individual acting in the place of a biological or adoptive parent (including a grandparent, stepparent, or other relative) with whom the child lives, or an individual who is legally responsible for the child's welfare; or
(5) A surrogate parent who has been appointed in accordance with § 300.519 or section 639(a)(5) of the Act.
(b) (1) Except as provided in paragraph (b)(2) of this section, the biological or adoptive parent, when attempting to act as the parent under this part and when more than one party is qualified under paragraph (a) of this section to act as a parent, must be presumed to be the parent for purposes of this section unless the biological or adoptive parent does not have legal authority to make educational decisions for the child.
(2) If a judicial decree or order identifies a specific person or persons under paragraphs (a)(1) through (4) of this section to act as the “parent” of a child or to make educational decisions on behalf of a child, then such person or persons shall be determined to be the “parent” for purposes of this section.
Parent training and information center means a center assisted under sections 671 or 672 of the Act.
Personally identifiable means information that contains—
(a) The name of the child, the child's parent, or other family member;
(b) The address of the child;
(c) A personal identifier, such as the child's social security number or student number; or
(d) A list of personal characteristics or other information that would make it possible to identify the child with reasonable certainty.
Public agency includes the SEA, LEAs, ESAs, nonprofit public charter schools that are not otherwise included as LEAs or ESAs and are not a school of an LEA or ESA, and any other political subdivisions of the State that are responsible for providing education to children with disabilities.
(a) General. Related services means transportation and such developmental, corrective, and other supportive services as are required to assist a child with a disability to benefit from special education, and includes speech-language pathology and audiology services, interpreting services, psychological services, physical and occupational therapy, recreation, including therapeutic recreation, early identification and assessment of disabilities in children, counseling services, including rehabilitation counseling, orientation and mobility services, and medical services for diagnostic or evaluation purposes. Related services also include school health services and school nurse services, social work services in schools, and parent counseling and training.
(b) Exception; services that apply to children with surgically implanted devices, including cochlear implants. (1) Related services do not include a medical device that is surgically implanted, the optimization of that device's functioning (e.g., mapping), maintenance of that device, or the replacement of that device.
(2) Nothing in paragraph (b)(1) of this section—
(i) Limits the right of a child with a surgically implanted device (e.g., cochlear implant) to receive related services (as listed in paragraph (a) of this section) that are determined by the IEP Team to be necessary for the child to receive FAPE.
(ii) Limits the responsibility of a public agency to appropriately monitor and maintain medical devices that are needed to maintain the health and safety of the child, including breathing, nutrition, or operation of other bodily functions, while the child is transported to and from school or is at school; or
(iii) Prevents the routine checking of an external component of a surgically implanted device to make sure it is functioning properly, as required in § 300.113(b).
(c) Individual related services terms defined. The terms used in this definition are defined as follows:
(1) Audiology includes—
(i) Identification of children with hearing loss;
(ii) Determination of the range, nature, and degree of hearing loss, including referral for medical or other professional attention for the habilitation of hearing;
(iii) Provision of habilitative activities, such as language habilitation, auditory training, speech reading (lip-reading), hearing evaluation, and speech conservation;
(iv) Creation and administration of programs for prevention of hearing loss;
(v) Counseling and guidance of children, parents, and teachers regarding hearing loss; and
(vi) Determination of children's needs for group and individual amplification, selecting and fitting an appropriate aid, and evaluating the effectiveness of amplification.
(2) Counseling services means services provided by qualified social workers, psychologists, guidance counselors, or other qualified personnel.
(3) Early identification and assessment of disabilities in children means the implementation of a formal plan for identifying a disability as early as possible in a child's life.
(4) Interpreting services includes—
(i) The following, when used with respect to children who are deaf or hard of hearing: Oral transliteration services, cued language transliteration services, sign language transliteration and interpreting services, and transcription services, such as communication access real-time translation (CART), C-Print, and TypeWell; and
(ii) Special interpreting services for children who are deaf-blind.
(5) Medical services means services provided by a licensed physician to determine a child's medically related disability that results in the child's need for special education and related services.
(6) Occupational therapy—
(i) Means services provided by a qualified occupational therapist; and
(ii) Includes—
(A) Improving, developing, or restoring functions impaired or lost through illness, injury, or deprivation;
(B) Improving ability to perform tasks for independent functioning if functions are impaired or lost; and
(C) Preventing, through early intervention, initial or further impairment or loss of function.
(7) Orientation and mobility services—
(i) Means services provided to blind or visually impaired children by qualified personnel to enable those students to attain systematic orientation to and safe movement within their environments in school, home, and community; and
(ii) Includes teaching children the following, as appropriate:
(A) Spatial and environmental concepts and use of information received by the senses (such as sound, temperature and vibrations) to establish, maintain, or regain orientation and line of travel (e.g., using sound at a traffic light to cross the street);
(B) To use the long cane or a service animal to supplement visual travel skills or as a tool for safely negotiating the environment for children with no available travel vision;
(C) To understand and use remaining vision and distance low vision aids; and
(D) Other concepts, techniques, and tools.
(8)(i) Parent counseling and training means assisting parents in understanding the special needs of their child;
(ii) Providing parents with information about child development; and
(iii) Helping parents to acquire the necessary skills that will allow them to support the implementation of their child's IEP or IFSP.
(9) Physical therapy means services provided by a qualified physical therapist.
(10) Psychological services includes—
(i) Administering psychological and educational tests, and other assessment procedures;
(ii) Interpreting assessment results;
(iii) Obtaining, integrating, and interpreting information about child behavior and conditions relating to learning;
(iv) Consulting with other staff members in planning school programs to meet the special educational needs of children as indicated by psychological tests, interviews, direct observation, and behavioral evaluations;
(v) Planning and managing a program of psychological services, including psychological counseling for children and parents; and
(vi) Assisting in developing positive behavioral intervention strategies.
(11) Recreation includes—
(i) Assessment of leisure function;
(ii) Therapeutic recreation services;
(iii) Recreation programs in schools and community agencies; and
(iv) Leisure education.
(12) Rehabilitation counseling services means services provided by qualified personnel in individual or group sessions that focus specifically on career development, employment preparation, achieving independence, and integration in the workplace and community of a student with a disability. The term also includes vocational rehabilitation services provided to a student with a disability by vocational rehabilitation programs funded under the Rehabilitation Act of 1973, as amended, 29 U.S.C. 701 et seq.
(13) School health services and school nurse services means health services that are designed to enable a child with a disability to receive FAPE as described in the child's IEP. School nurse services are services provided by a qualified school nurse. School health services are services that may be provided by either a qualified school nurse or other qualified person.
(14) Social work services in schools includes—
(i) Preparing a social or developmental history on a child with a disability;
(ii) Group and individual counseling with the child and family;
(iii) Working in partnership with parents and others on those problems in a child's living situation (home, school, and community) that affect the child's adjustment in school;
(iv) Mobilizing school and community resources to enable the child to learn as effectively as possible in his or her educational program; and
(v) Assisting in developing positive behavioral intervention strategies.
(15) Speech-language pathology services includes—
(i) Identification of children with speech or language impairments;
(ii) Diagnosis and appraisal of specific speech or language impairments;
(iii) Referral for medical or other professional attention necessary for the habilitation of speech or language impairments;
(iv) Provision of speech and language services for the habilitation or prevention of communicative impairments; and
(v) Counseling and guidance of parents, children, and teachers regarding speech and language impairments.
(16) Transportation includes—
(i) Travel to and from school and between schools;
(ii) Travel in and around school buildings; and
(iii) Specialized equipment (such as special or adapted buses, lifts, and ramps), if required to provide special transportation for a child with a disability.
Secondary school means a nonprofit institutional day or residential school, including a public secondary charter school that provides secondary education, as determined under State law, except that it does not include any education beyond grade 12.
Services plan means a written statement that describes the special education and related services the LEA will provide to a parentally-placed child with a disability enrolled in a private school who has been designated to receive services, including the location of the services and any transportation necessary, consistent with § 300.132, and is developed and implemented in accordance with §§ 300.137 through 300.139.
Secretary means the Secretary of Education.
(a) General. (1) Special education means specially designed instruction, at no cost to the parents, to meet the unique needs of a child with a disability, including—
(i) Instruction conducted in the classroom, in the home, in hospitals and institutions, and in other settings; and
(ii) Instruction in physical education.
(2) Special education includes each of the following, if the services otherwise meet the requirements of paragraph (a)(1) of this section—
(i) Speech-language pathology services, or any other related service, if the service is considered special education rather than a related service under State standards;
(ii) Travel training; and
(iii) Vocational education.
(b) Individual special education terms defined. The terms in this definition are defined as follows:
(1) At no cost means that all specially-designed instruction is provided without charge, but does not preclude incidental fees that are normally charged to nondisabled students or their parents as a part of the regular education program.
(2) Physical education means—
(i) The development of—
(A) Physical and motor fitness;
(B) Fundamental motor skills and patterns; and
(C) Skills in aquatics, dance, and individual and group games and sports (including intramural and lifetime sports); and
(ii) Includes special physical education, adapted physical education, movement education, and motor development.
(3) Specially designed instruction means adapting, as appropriate to the needs of an eligible child under this part, the content, methodology, or delivery of instruction—
(i) To address the unique needs of the child that result from the child's disability; and
(ii) To ensure access of the child to the general curriculum, so that the child can meet the educational standards within the jurisdiction of the public agency that apply to all children.
(4) Travel training means providing instruction, as appropriate, to children with significant cognitive disabilities, and any other children with disabilities who require this instruction, to enable them to—
(i) Develop an awareness of the environment in which they live; and
(ii) Learn the skills necessary to move effectively and safely from place to place within that environment (e.g., in school, in the home, at work, and in the community).
(5) Vocational education means organized educational programs that are directly related to the preparation of individuals for paid or unpaid employment, or for additional preparation for a career not requiring a baccalaureate or advanced degree.
State means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, and each of the outlying areas.
State educational agency or SEA means the State board of education or other agency or officer primarily responsible for the State supervision of public elementary schools and secondary schools, or, if there is no such officer or agency, an officer or agency designated by the Governor or by State law.
Supplementary aids and services means aids, services, and other supports that are provided in regular education classes, other education-related settings, and in extracurricular and nonacademic settings, to enable children with disabilities to be educated with nondisabled children to the maximum extent appropriate in accordance with §§ 300.114 through 300.116.
(a) Transition services means a coordinated set of activities for a child with a disability that—
(1) Is designed to be within a results-oriented process, that is focused on improving the academic and functional achievement of the child with a disability to facilitate the child's movement from school to post-school activities, including postsecondary education, vocational education, integrated employment (including supported employment), continuing and adult education, adult services, independent living, or community participation;
(2) Is based on the individual child's needs, taking into account the child's strengths, preferences, and interests; and includes—
(i) Instruction;
(ii) Related services;
(iii) Community experiences;
(iv) The development of employment and other post-school adult living objectives; and
(v) If appropriate, acquisition of daily living skills and provision of a functional vocational evaluation.
(b) Transition services for children with disabilities may be special education, if provided as specially designed instruction, or a related service, if required to assist a child with a disability to benefit from special education.
Universal design has the meaning given the term in section 3 of the Assistive Technology Act of 1998, as amended, 29 U.S.C. 3002.
(a) General. Subject to paragraph (b) of this section, ward of the State means a child who, as determined by the State where the child resides, is—
(1) A foster child;
(2) A ward of the State; or
(3) In the custody of a public child welfare agency.
(b) Exception. Ward of the State does not include a foster child who has a foster parent who meets the definition of a parent in § 300.30.
A State is eligible for assistance under Part B of the Act for a fiscal year if the State submits a plan that provides assurances to the Secretary that the State has in effect policies and procedures to ensure that the State meets the conditions in §§ 300.101 through 300.176.
(a) General. A free appropriate public education must be available to all children residing in the State between the ages of 3 and 21, inclusive, including children with disabilities who have been suspended or expelled from school, as provided for in § 300.530(d).
(b) FAPE for children beginning at age 3. (1) Each State must ensure that—
(i) The obligation to make FAPE available to each eligible child residing in the State begins no later than the child's third birthday; and
(ii) An IEP or an IFSP is in effect for the child by that date, in accordance with § 300.323(b).
(2) If a child's third birthday occurs during the summer, the child's IEP Team shall determine the date when services under the IEP or IFSP will begin.
(c) Children advancing from grade to grade. (1) Each State must ensure that FAPE is available to any individual child with a disability who needs special education and related services, even though the child has not failed or been retained in a course or grade, and is advancing from grade to grade.
(2) The determination that a child described in paragraph (a) of this section is eligible under this part, must be made on an individual basis by the group responsible within the child's LEA for making eligibility determinations.
(a) General. The obligation to make FAPE available to all children with disabilities does not apply with respect to the following:
(1) Children aged 3, 4, 5, 18, 19, 20, or 21 in a State to the extent that its application to those children would be inconsistent with State law or practice, or the order of any court, respecting the provision of public education to children of those ages.
(2)(i) Children aged 18 through 21 to the extent that State law does not require that special education and related services under Part B of the Act be provided to students with disabilities who, in the last educational placement prior to their incarceration in an adult correctional facility—
(A) Were not actually identified as being a child with a disability under § 300.8; and
(B) Did not have an IEP under Part B of the Act.
(ii) The exception in paragraph (a)(2)(i) of this section does not apply to children with disabilities, aged 18 through 21, who—
(A) Had been identified as a child with a disability under § 300.8 and had received services in accordance with an IEP, but who left school prior to their incarceration; or
(B) Did not have an IEP in their last educational setting, but who had actually been identified as a child with a disability under § 300.8.
(3)(i) Children with disabilities who have graduated from high school with a regular high school diploma.
(ii) The exception in paragraph (a)(3)(i) of this section does not apply to children who have graduated from high school but have not been awarded a regular high school diploma.
(iii) Graduation from high school with a regular high school diploma constitutes a change in placement, requiring written prior notice in accordance with § 300.503.
(iv) As used in paragraphs (a)(3)(i) through (iii) of this section, the term regular high school diploma means the standard high school diploma awarded to the preponderance of students in the State that is fully aligned with State standards, or a higher diploma, except that a regular high school diploma shall not be aligned to the alternate academic achievement standards described in section 1111(b)(1)(E) of the ESEA. A regular high school diploma does not include a recognized equivalent of a diploma, such as a general equivalency diploma, certificate of completion, certificate of attendance, or similar lesser credential.
(4) Children with disabilities who are eligible under subpart H of this part, but who receive early intervention services under Part C of the Act.
(b) Documents relating to exceptions. The State must assure that the information it has provided to the Secretary regarding the exceptions in paragraph (a) of this section, as required by § 300.700 (for purposes of making grants to States under this part), is current and accurate.
(a) Each State may use whatever State, local, Federal, and private sources of support that are available in the State to meet the requirements of this part. For example, if it is necessary to place a child with a disability in a residential facility, a State could use joint agreements between the agencies involved for sharing the cost of that placement.
(b) Nothing in this part relieves an insurer or similar third party from an otherwise valid obligation to provide or to pay for services provided to a child with a disability.
(c) Consistent with § 300.323(c), the State must ensure that there is no delay in implementing a child's IEP, including any case in which the payment source for providing or paying for special education and related services to the child is being determined.
If placement in a public or private residential program is necessary to provide special education and related services to a child with a disability, the program, including non-medical care and room and board, must be at no cost to the parents of the child.
(a) Each public agency must ensure that assistive technology devices or assistive technology services, or both, as those terms are defined in §§ 300.5 and 300.6, respectively, are made available to a child with a disability if required as a part of the child's—
(1) Special education under § 300.39;
(2) Related services under § 300.34; or
(3) Supplementary aids and services under §§ 300.42 and 300.114(a)(2)(ii).
(b) On a case-by-case basis, the use of school-purchased assistive technology devices in a child's home or in other settings is required if the child's IEP Team determines that the child needs access to those devices in order to receive FAPE.
(a) General. (1) Each public agency must ensure that extended school year services are available as necessary to provide FAPE, consistent with paragraph (a)(2) of this section.
(2) Extended school year services must be provided only if a child's IEP Team determines, on an individual basis, in accordance with §§ 300.320 through 300.324, that the services are necessary for the provision of FAPE to the child.
(3) In implementing the requirements of this section, a public agency may not—
(i) Limit extended school year services to particular categories of disability; or
(ii) Unilaterally limit the type, amount, or duration of those services.
(b) Definition. As used in this section, the term extended school year services means special education and related services that—
(1) Are provided to a child with a disability—
(i) Beyond the normal school year of the public agency;
(ii) In accordance with the child's IEP; and
(iii) At no cost to the parents of the child; and
(2) Meet the standards of the SEA.
The State must ensure the following:
(a) Each public agency must take steps, including the provision of supplementary aids and services determined appropriate and necessary by the child's IEP Team, to provide nonacademic and extracurricular services and activities in the manner necessary to afford children with disabilities an equal opportunity for participation in those services and activities.
(b) Nonacademic and extracurricular services and activities may include counseling services, athletics, transportation, health services, recreational activities, special interest groups or clubs sponsored by the public agency, referrals to agencies that provide assistance to individuals with disabilities, and employment of students, including both employment by the public agency and assistance in making outside employment available.
The State must ensure that public agencies in the State comply with the following:
(a) General. Physical education services, specially designed if necessary, must be made available to every child with a disability receiving FAPE, unless the public agency enrolls children without disabilities and does not provide physical education to children without disabilities in the same grades.
(b) Regular physical education. Each child with a disability must be afforded the opportunity to participate in the regular physical education program available to nondisabled children unless—
(1) The child is enrolled full time in a separate facility; or
(2) The child needs specially designed physical education, as prescribed in the child's IEP.
(c) Special physical education. If specially designed physical education is prescribed in a child's IEP, the public agency responsible for the education of that child must provide the services directly or make arrangements for those services to be provided through other public or private programs.
(d) Education in separate facilities. The public agency responsible for the education of a child with a disability who is enrolled in a separate facility must ensure that the child receives appropriate physical education services in compliance with this section.
The State must have in effect policies and procedures to demonstrate that the State has established a goal of providing full educational opportunity to all children with disabilities, aged birth through 21, and a detailed timetable for accomplishing that goal.
The State must ensure that each public agency takes steps to ensure that its children with disabilities have available to them the variety of educational programs and services available to nondisabled children in the area served by the agency, including art, music, industrial arts, consumer and homemaking education, and vocational education.
(a) General. (1) The State must have in effect policies and procedures to ensure that—
(i) All children with disabilities residing in the State, including children with disabilities who are homeless children or are wards of the State, and children with disabilities attending private schools, regardless of the severity of their disability, and who are in need of special education and related services, are identified, located, and evaluated; and
(ii) A practical method is developed and implemented to determine which children are currently receiving needed special education and related services.
(b) Use of term developmental delay. The following provisions apply with respect to implementing the child find requirements of this section:
(1) A State that adopts a definition of developmental delay under § 300.8(b) determines whether the term applies to children aged three through nine, or to a subset of that age range (e.g., ages three through five).
(2) A State may not require an LEA to adopt and use the term developmental delay for any children within its jurisdiction.
(3) If an LEA uses the term developmental delay for children described in § 300.8(b), the LEA must conform to both the State's definition of that term and to the age range that has been adopted by the State.
(4) If a State does not adopt the term developmental delay, an LEA may not independently use that term as a basis for establishing a child's eligibility under this part.
(c) Other children in child find. Child find also must include—
(1) Children who are suspected of being a child with a disability under § 300.8 and in need of special education, even though they are advancing from grade to grade; and
(2) Highly mobile children, including migrant children.
(d) Construction. Nothing in the Act requires that children be classified by their disability so long as each child who has a disability that is listed in § 300.8 and who, by reason of that disability, needs special education and related services is regarded as a child with a disability under Part B of the Act.
The State must ensure that an IEP, or an IFSP that meets the requirements of section 636(d) of the Act, is developed, reviewed, and revised for each child with a disability in accordance with §§ 300.320 through 300.324, except as provided in § 300.300(b)(3)(ii).
(a) Hearing aids. Each public agency must ensure that hearing aids worn in school by children with hearing impairments, including deafness, are functioning properly.
(b) External components of surgically implanted medical devices. (1) Subject to paragraph (b)(2) of this section, each public agency must ensure that the external components of surgically implanted medical devices are functioning properly.
(2) For a child with a surgically implanted medical device who is receiving special education and related services under this part, a public agency is not responsible for the post-surgical maintenance, programming, or replacement of the medical device that has been surgically implanted (or of an external component of the surgically implanted medical device).
(a) General. (1) Except as provided in § 300.324(d)(2) (regarding children with disabilities in adult prisons), the State must have in effect policies and procedures to ensure that public agencies in the State meet the LRE requirements of this section and §§ 300.115 through 300.120.
(2) Each public agency must ensure that—
(i) To the maximum extent appropriate, children with disabilities, including children in public or private institutions or other care facilities, are educated with children who are nondisabled; and
(ii) Special classes, separate schooling, or other removal of children with disabilities from the regular educational environment occurs only if the nature or severity of the disability is such that education in regular classes with the use of supplementary aids and services cannot be achieved satisfactorily.
(b) Additional requirement—State funding mechanism—(1) General. (i) A State funding mechanism must not result in placements that violate the requirements of paragraph (a) of this section; and
(ii) A State must not use a funding mechanism by which the State distributes funds on the basis of the type of setting in which a child is served that will result in the failure to provide a child with a disability FAPE according to the unique needs of the child, as described in the child's IEP.
(2) Assurance. If the State does not have policies and procedures to ensure compliance with paragraph (b)(1) of this section, the State must provide the Secretary an assurance that the State will revise the funding mechanism as soon as feasible to ensure that the mechanism does not result in placements that violate that paragraph.
(a) Each public agency must ensure that a continuum of alternative placements is available to meet the needs of children with disabilities for special education and related services.
(b) The continuum required in paragraph (a) of this section must—
(1) Include the alternative placements listed in the definition of special education under § 300.39 (instruction in regular classes, special classes, special schools, home instruction, and instruction in hospitals and institutions); and
(2) Make provision for supplementary services (such as resource room or itinerant instruction) to be provided in conjunction with regular class placement.
In determining the educational placement of a child with a disability, including a preschool child with a disability, each public agency must ensure that—
(a) The placement decision—
(1) Is made by a group of persons, including the parents, and other persons knowledgeable about the child, the meaning of the evaluation data, and the placement options; and
(2) Is made in conformity with the LRE provisions of this subpart, including §§ 300.114 through 300.118;
(b) The child's placement—
(1) Is determined at least annually;
(2) Is based on the child's IEP; and
(3) Is as close as possible to the child's home;
(c) Unless the IEP of a child with a disability requires some other arrangement, the child is educated in the school that he or she would attend if nondisabled;
(d) In selecting the LRE, consideration is given to any potential harmful effect on the child or on the quality of services that he or she needs; and
(e) A child with a disability is not removed from education in age-appropriate regular classrooms solely because of needed modifications in the general education curriculum.
In providing or arranging for the provision of nonacademic and extracurricular services and activities, including meals, recess periods, and the services and activities set forth in § 300.107, each public agency must ensure that each child with a disability participates with nondisabled children in the extracurricular services and activities to the maximum extent appropriate to the needs of that child. The public agency must ensure that each child with a disability has the supplementary aids and services determined by the child's IEP Team to be appropriate and necessary for the child to participate in nonacademic settings.
Except as provided in § 300.149(d) (regarding agency responsibility for general supervision of some individuals in adult prisons), an SEA must ensure that § 300.114 is effectively implemented, including, if necessary, making arrangements with public and private institutions (such as a memorandum of agreement or special implementation procedures).
Each SEA must carry out activities to ensure that teachers and administrators in all public agencies—
(a) Are fully informed about their responsibilities for implementing § 300.114; and
(b) Are provided with technical assistance and training necessary to assist them in this effort.
(a) The SEA must carry out activities to ensure that § 300.114 is implemented by each public agency.
(b) If there is evidence that a public agency makes placements that are inconsistent with § 300.114, the SEA must—
(1) Review the public agency's justification for its actions; and
(2) Assist in planning and implementing any necessary corrective action.
(a) General. The State must have procedural safeguards in effect to ensure that each public agency in the State meets the requirements of §§ 300.500 through 300.536.
(b) Procedural safeguards identified. Children with disabilities and their parents must be afforded the procedural safeguards identified in paragraph (a) of this section.
Children with disabilities must be evaluated in accordance with §§ 300.300 through 300.311 of subpart D of this part.
The State must have policies and procedures in effect to ensure that public agencies in the State comply with §§ 300.610 through 300.626 related to protecting the confidentiality of any personally identifiable information collected, used, or maintained under Part B of the Act.
The State must have in effect policies and procedures to ensure that—
(a) Children participating in early intervention programs assisted under Part C of the Act, and who will participate in preschool programs assisted under Part B of the Act, experience a smooth and effective transition to those preschool programs in a manner consistent with section 637(a)(9) of the Act;
(b) By the third birthday of a child described in paragraph (a) of this section, an IEP or, if consistent with § 300.323(b) and section 636(d) of the Act, an IFSP, has been developed and is being implemented for the child consistent with § 300.101(b); and
(c) Each affected LEA will participate in transition planning conferences arranged by the designated lead agency under section 635(a)(10) of the Act.
The State must have in effect policies and procedures that ensure that LEAs, and, if applicable, the SEA, meet the private school requirements in §§ 300.130 through 300.148.
Parentally-placed private school children with disabilities means children with disabilities enrolled by their parents in private, including religious, schools or facilities that meet the definition of elementary school in § 300.13 or secondary school in § 300.36, other than children with disabilities covered under §§ 300.145 through 300.147.
(a) General. Each LEA must locate, identify, and evaluate all children with disabilities who are enrolled by their parents in private, including religious, elementary schools and secondary schools located in the school district served by the LEA, in accordance with paragraphs (b) through (e) of this section, and §§ 300.111 and 300.201.
(b) Child find design. The child find process must be designed to ensure—
(1) The equitable participation of parentally-placed private school children; and
(2) An accurate count of those children.
(c) Activities. In carrying out the requirements of this section, the LEA, or, if applicable, the SEA, must undertake activities similar to the activities undertaken for the agency's public school children.
(d) Cost. The cost of carrying out the child find requirements in this section, including individual evaluations, may not be considered in determining if an LEA has met its obligation under § 300.133.
(e) Completion period. The child find process must be completed in a time period comparable to that for students attending public schools in the LEA consistent with § 300.301.
(f) Out-of-State children. Each LEA in which private, including religious, elementary schools and secondary schools are located must, in carrying out the child find requirements in this section, include parentally-placed private school children who reside in a State other than the State in which the private schools that they attend are located.
(a) General. To the extent consistent with the number and location of children with disabilities who are enrolled by their parents in private, including religious, elementary schools and secondary schools located in the school district served by the LEA, provision is made for the participation of those children in the program assisted or carried out under Part B of the Act by providing them with special education and related services, including direct services determined in accordance with § 300.137, unless the Secretary has arranged for services to those children under the by-pass provisions in §§ 300.190 through 300.198.
(b) Services plan for parentally-placed private school children with disabilities. In accordance with paragraph (a) of this section and §§ 300.137 through 300.139, a services plan must be developed and implemented for each private school child with a disability who has been designated by the LEA in which the private school is located to receive special education and related services under this part.
(c) Record keeping. Each LEA must maintain in its records, and provide to the SEA, the following information related to parentally-placed private school children covered under §§ 300.130 through 300.144:
(1) The number of children evaluated;
(2) The number of children determined to be children with disabilities; and
(3) The number of children served.
(a) Formula. To meet the requirement of § 300.132(a), each LEA must spend the following on providing special education and related services (including direct services) to parentally-placed private school children with disabilities:
(1) For children aged 3 through 21, an amount that is the same proportion of the LEA's total subgrant under section 611(f) of the Act as the number of private school children with disabilities aged 3 through 21 who are enrolled by their parents in private, including religious, elementary schools and secondary schools located in the school district served by the LEA, is to the total number of children with disabilities in its jurisdiction aged 3 through 21.
(2)(i) For children aged three through five, an amount that is the same proportion of the LEA's total subgrant under section 619(g) of the Act as the number of parentally-placed private school children with disabilities aged three through five who are enrolled by their parents in a private, including religious, elementary school located in the school district served by the LEA, is to the total number of children with disabilities in its jurisdiction aged three through five.
(ii) As described in paragraph (a)(2)(i) of this section, children aged three through five are considered to be parentally-placed private school children with disabilities enrolled by their parents in private, including religious, elementary schools, if they are enrolled in a private school that meets the definition of elementary school in § 300.13.
(3) If an LEA has not expended for equitable services all of the funds described in paragraphs (a)(1) and (a)(2) of this section by the end of the fiscal year for which Congress appropriated the funds, the LEA must obligate the remaining funds for special education and related services (including direct services) to parentally-placed private school children with disabilities during a carry-over period of one additional year.
(b) Calculating proportionate amount. In calculating the proportionate amount of Federal funds to be provided for parentally-placed private school children with disabilities, the LEA, after timely and meaningful consultation with representatives of private schools under § 300.134, must conduct a thorough and complete child find process to determine the number of parentally-placed children with disabilities attending private schools located in the LEA. (See appendix B for an example of how proportionate share is calculated).
(c) Annual count of the number of parentally-placed private school children with disabilities. (1) Each LEA must—
(i) After timely and meaningful consultation with representatives of parentally-placed private school children with disabilities (consistent with § 300.134), determine the number of parentally-placed private school children with disabilities attending private schools located in the LEA; and
(ii) Ensure that the count is conducted on any date between October 1 and December 1, inclusive, of each year.
(2) The count must be used to determine the amount that the LEA must spend on providing special education and related services to parentally-placed private school children with disabilities in the next subsequent fiscal year.
(d) Supplement, not supplant. State and local funds may supplement and in no case supplant the proportionate amount of Federal funds required to be expended for parentally-placed private school children with disabilities under this part.
To ensure timely and meaningful consultation, an LEA, or, if appropriate, an SEA, must consult with private school representatives and representatives of parents of parentally-placed private school children with disabilities during the design and development of special education and related services for the children regarding the following:
(a) Child find. The child find process, including—
(1) How parentally-placed private school children suspected of having a disability can participate equitably; and
(2) How parents, teachers, and private school officials will be informed of the process.
(b) Proportionate share of funds. The determination of the proportionate share of Federal funds available to serve parentally-placed private school children with disabilities under § 300.133(b), including the determination of how the proportionate share of those funds was calculated.
(c) Consultation process. The consultation process among the LEA, private school officials, and representatives of parents of parentally-placed private school children with disabilities, including how the process will operate throughout the school year to ensure that parentally-placed children with disabilities identified through the child find process can meaningfully participate in special education and related services.
(d) Provision of special education and related services. How, where, and by whom special education and related services will be provided for parentally-placed private school children with disabilities, including a discussion of—
(1) The types of services, including direct services and alternate service delivery mechanisms; and
(2) How special education and related services will be apportioned if funds are insufficient to serve all parentally-placed private school children; and
(3) How and when those decisions will be made;
(e) Written explanation by LEA regarding services. How, if the LEA disagrees with the views of the private school officials on the provision of services or the types of services (whether provided directly or through a contract), the LEA will provide to the private school officials a written explanation of the reasons why the LEA chose not to provide services directly or through a contract.
(a) When timely and meaningful consultation, as required by § 300.134, has occurred, the LEA must obtain a written affirmation signed by the representatives of participating private schools.
(b) If the representatives do not provide the affirmation within a reasonable period of time, the LEA must forward the documentation of the consultation process to the SEA.
(a) General. A private school official has the right to submit a complaint to the SEA that the LEA—
(1) Did not engage in consultation that was meaningful and timely; or
(2) Did not give due consideration to the views of the private school official.
(b) Procedure. (1) If the private school official wishes to submit a complaint, the official must provide to the SEA the basis of the noncompliance by the LEA with the applicable private school provisions in this part; and
(2) The LEA must forward the appropriate documentation to the SEA.
(3)(i) If the private school official is dissatisfied with the decision of the SEA, the official may submit a complaint to the Secretary by providing the information on noncompliance described in paragraph (b)(1) of this section; and
(ii) The SEA must forward the appropriate documentation to the Secretary.
(a) No individual right to special education and related services. No parentally-placed private school child with a disability has an individual right to receive some or all of the special education and related services that the child would receive if enrolled in a public school.
(b) Decisions. (1) Decisions about the services that will be provided to parentally-placed private school children with disabilities under §§ 300.130 through 300.144 must be made in accordance with paragraph (c) of this section and § 300.134(d).
(2) The LEA must make the final decisions with respect to the services to be provided to eligible parentally-placed private school children with disabilities.
(c) Services plan for each child served under §§ 300.130 through 300.144. If a child with a disability is enrolled in a religious or other private school by the child's parents and will receive special education or related services from an LEA, the LEA must—
(1) Initiate and conduct meetings to develop, review, and revise a services plan for the child, in accordance with § 300.138(b); and
(2) Ensure that a representative of the religious or other private school attends each meeting. If the representative cannot attend, the LEA shall use other methods to ensure participation by the religious or other private school, including individual or conference telephone calls.
(a) General. (1) The services provided to parentally-placed private school children with disabilities must be provided by personnel meeting the same standards as personnel providing services in the public schools, except that private elementary school and secondary school teachers who are providing equitable services to parentally-placed private school children with disabilities do not have to meet the special education teacher qualification requirements in § 300.156(c).
(2) Parentally-placed private school children with disabilities may receive a different amount of services than children with disabilities in public schools.
(b) Services provided in accordance with a services plan. (1) Each parentally-placed private school child with a disability who has been designated to receive services under § 300.132 must have a services plan that describes the specific special education and related services that the LEA will provide to the child in light of the services that the LEA has determined, through the process described in §§ 300.134 and 300.137, it will make available to parentally-placed private school children with disabilities.
(2) The services plan must, to the extent appropriate—
(i) Meet the requirements of § 300.320, or for a child ages three through five, meet the requirements of § 300.323(b) with respect to the services provided; and
(ii) Be developed, reviewed, and revised consistent with §§ 300.321 through 300.324.
(c) Provision of equitable services. (1) The provision of services pursuant to this section and §§ 300.139 through 300.143 must be provided:
(i) By employees of a public agency; or
(ii) Through contract by the public agency with an individual, association, agency, organization, or other entity.
(2) Special education and related services provided to parentally-placed private school children with disabilities, including materials and equipment, must be secular, neutral, and nonideological.
(a) Services on private school premises. Services to parentally-placed private school children with disabilities may be provided on the premises of private, including religious, schools, to the extent consistent with law.
(b) Transportation—(1) General. (i) If necessary for the child to benefit from or participate in the services provided under this part, a parentally-placed private school child with a disability must be provided transportation—
(A) From the child's school or the child's home to a site other than the private school; and
(B) From the service site to the private school, or to the child's home, depending on the timing of the services.
(ii) LEAs are not required to provide transportation from the child's home to the private school.
(2) Cost of transportation. The cost of the transportation described in paragraph (b)(1)(i) of this section may be included in calculating whether the LEA has met the requirement of § 300.133.
(a) Due process not applicable, except for child find. (1) Except as provided in paragraph (b) of this section, the procedures in §§ 300.504 through 300.519 do not apply to complaints that an LEA has failed to meet the requirements of §§ 300.132 through 300.139, including the provision of services indicated on the child's services plan.
(b) Child find complaints—to be filed with the LEA in which the private school is located. (1) The procedures in §§ 300.504 through 300.519 apply to complaints that an LEA has failed to meet the child find requirements in § 300.131, including the requirements in §§ 300.300 through 300.311.
(2) Any due process complaint regarding the child find requirements (as described in paragraph (b)(1) of this section) must be filed with the LEA in which the private school is located and a copy must be forwarded to the SEA.
(c) State complaints. (1) Any complaint that an SEA or LEA has failed to meet the requirements in §§ 300.132 through 300.135 and 300.137 through 300.144 must be filed in accordance with the procedures described in §§ 300.151 through 300.153.
(2) A complaint filed by a private school official under § 300.136(a) must be filed with the SEA in accordance with the procedures in § 300.136(b).
(a) An LEA may not use funds provided under section 611 or 619 of the Act to finance the existing level of instruction in a private school or to otherwise benefit the private school.
(b) The LEA must use funds provided under Part B of the Act to meet the special education and related services needs of parentally-placed private school children with disabilities, but not for meeting—
(1) The needs of a private school; or
(2) The general needs of the students enrolled in the private school.
(a) Use of public school personnel. An LEA may use funds available under sections 611 and 619 of the Act to make public school personnel available in other than public facilities—
(1) To the extent necessary to provide services under §§ 300.130 through 300.144 for parentally-placed private school children with disabilities; and
(2) If those services are not normally provided by the private school.
(b) Use of private school personnel. An LEA may use funds available under sections 611 and 619 of the Act to pay for the services of an employee of a private school to provide services under §§ 300.130 through 300.144 if—
(1) The employee performs the services outside of his or her regular hours of duty; and
(2) The employee performs the services under public supervision and control.
An LEA may not use funds available under section 611 or 619 of the Act for classes that are organized separately on the basis of school enrollment or religion of the children if—'
(a) The classes are at the same site; and
(b) The classes include children enrolled in public schools and children enrolled in private schools.
(a) A public agency must control and administer the funds used to provide special education and related services under §§ 300.137 through 300.139, and hold title to and administer materials, equipment, and property purchased with those funds for the uses and purposes provided in the Act.
(b) The public agency may place equipment and supplies in a private school for the period of time needed for the Part B program.
(c) The public agency must ensure that the equipment and supplies placed in a private school—
(1) Are used only for Part B purposes; and
(2) Can be removed from the private school without remodeling the private school facility.
(d) The public agency must remove equipment and supplies from a private school if—
(1) The equipment and supplies are no longer needed for Part B purposes; or
(2) Removal is necessary to avoid unauthorized use of the equipment and supplies for other than Part B purposes.
(e) No funds under Part B of the Act may be used for repairs, minor remodeling, or construction of private school facilities.
Sections 300.146 through 300.147 apply only to children with disabilities who are or have been placed in or referred to a private school or facility by a public agency as a means of providing special education and related services.
Each SEA must ensure that a child with a disability who is placed in or referred to a private school or facility by a public agency—
(a) Is provided special education and related services—
(1) In conformance with an IEP that meets the requirements of §§ 300.320 through 300.325; and
(2) At no cost to the parents;
(b) Is provided an education that meets the standards that apply to education provided by the SEA and LEAs including the requirements of this part, except for § 300.156(c); and
(c) Has all of the rights of a child with a disability who is served by a public agency.
In implementing § 300.146, the SEA must—
(a) Monitor compliance through procedures such as written reports, on-site visits, and parent questionnaires;
(b) Disseminate copies of applicable standards to each private school and facility to which a public agency has referred or placed a child with a disability; and
(c) Provide an opportunity for those private schools and facilities to participate in the development and revision of State standards that apply to them.
(a) General. This part does not require an LEA to pay for the cost of education, including special education and related services, of a child with a disability at a private school or facility if that agency made FAPE available to the child and the parents elected to place the child in a private school or facility. However, the public agency must include that child in the population whose needs are addressed consistent with §§ 300.131 through 300.144.
(b) Disagreements about FAPE. Disagreements between the parents and a public agency regarding the availability of a program appropriate for the child, and the question of financial reimbursement, are subject to the due process procedures in §§ 300.504 through 300.520.
(c) Reimbursement for private school placement. If the parents of a child with a disability, who previously received special education and related services under the authority of a public agency, enroll the child in a private preschool, elementary school, or secondary school without the consent of or referral by the public agency, a court or a hearing officer may require the agency to reimburse the parents for the cost of that enrollment if the court or hearing officer finds that the agency had not made FAPE available to the child in a timely manner prior to that enrollment and that the private placement is appropriate. A parental placement may be found to be appropriate by a hearing officer or a court even if it does not meet the State standards that apply to education provided by the SEA and LEAs.
(d) Limitation on reimbursement. The cost of reimbursement described in paragraph (c) of this section may be reduced or denied—
(1) If—
(i) At the most recent IEP Team meeting that the parents attended prior to removal of the child from the public school, the parents did not inform the IEP Team that they were rejecting the placement proposed by the public agency to provide FAPE to their child, including stating their concerns and their intent to enroll their child in a private school at public expense; or
(ii) At least ten (10) business days (including any holidays that occur on a business day) prior to the removal of the child from the public school, the parents did not give written notice to the public agency of the information described in paragraph (d)(1)(i) of this section;
(2) If, prior to the parents' removal of the child from the public school, the public agency informed the parents, through the notice requirements described in § 300.503(a)(1), of its intent to evaluate the child (including a statement of the purpose of the evaluation that was appropriate and reasonable), but the parents did not make the child available for the evaluation; or
(3) Upon a judicial finding of unreasonableness with respect to actions taken by the parents.
(e) Exception. Notwithstanding the notice requirement in paragraph (d)(1) of this section, the cost of reimbursement—
(1) Must not be reduced or denied for failure to provide the notice if—
(i) The school prevented the parents from providing the notice;
(ii) The parents had not received notice, pursuant to § 300.504, of the notice requirement in paragraph (d)(1) of this section; or
(iii) Compliance with paragraph (d)(1) of this section would likely result in physical harm to the child; and
(2) May, in the discretion of the court or a hearing officer, not be reduced or denied for failure to provide this notice if—
(i) The parents are not literate or cannot write in English; or
(ii) Compliance with paragraph (d)(1) of this section would likely result in serious emotional harm to the child.
(a) The SEA is responsible for ensuring—
(1) That the requirements of this part are carried out; and
(2) That each educational program for children with disabilities administered within the State, including each program administered by any other State or local agency (but not including elementary schools and secondary schools for Indian children operated or funded by the Secretary of the Interior)—
(i) Is under the general supervision of the persons responsible for educational programs for children with disabilities in the SEA; and
(ii) Meets the educational standards of the SEA (including the requirements of this part).
(3) In carrying out this part with respect to homeless children, the requirements of subtitle B of title VII of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11431 et seq.) are met.
(b) The State must have in effect policies and procedures to ensure that it complies with the monitoring and enforcement requirements in §§ 300.600 through 300.602 and §§ 300.606 through 300.608.
(c) Part B of the Act does not limit the responsibility of agencies other than educational agencies for providing or paying some or all of the costs of FAPE to children with disabilities in the State.
(d) Notwithstanding paragraph (a) of this section, the Governor (or another individual pursuant to State law) may assign to any public agency in the State the responsibility of ensuring that the requirements of Part B of the Act are met with respect to students with disabilities who are convicted as adults under State law and incarcerated in adult prisons.
The SEA (and any agency assigned responsibility pursuant to § 300.149(d)) must have in effect procedures to inform each public agency of its responsibility for ensuring effective implementation of procedural safeguards for the children with disabilities served by that public agency.
(a) General. Each SEA must adopt written procedures for—
(1) Resolving any complaint, including a complaint filed by an organization or individual from another State, that meets the requirements of § 300.153 by—
(i) Providing for the filing of a complaint with the SEA; and
(ii) At the SEA's discretion, providing for the filing of a complaint with a public agency and the right to have the SEA review the public agency's decision on the complaint; and
(2) Widely disseminating to parents and other interested individuals, including parent training and information centers, protection and advocacy agencies, independent living centers, and other appropriate entities, the State procedures under §§ 300.151 through 300.153.
(b) Remedies for denial of appropriate services. In resolving a complaint in which the SEA has found a failure to provide appropriate services, an SEA, pursuant to its general supervisory authority under Part B of the Act, must address—
(1) The failure to provide appropriate services, including corrective action appropriate to address the needs of the child (such as compensatory services or monetary reimbursement); and
(2) Appropriate future provision of services for all children with disabilities.
(a) Time limit; minimum procedures. Each SEA must include in its complaint procedures a time limit of 60 days after a complaint is filed under § 300.153 to—
(1) Carry out an independent on-site investigation, if the SEA determines that an investigation is necessary;
(2) Give the complainant the opportunity to submit additional information, either orally or in writing, about the allegations in the complaint;
(3) Provide the public agency with the opportunity to respond to the complaint, including, at a minimum—
(i) At the discretion of the public agency, a proposal to resolve the complaint; and
(ii) An opportunity for a parent who has filed a complaint and the public agency to voluntarily engage in mediation consistent with § 300.506;
(4) Review all relevant information and make an independent determination as to whether the public agency is violating a requirement of Part B of the Act or of this part; and
(5) Issue a written decision to the complainant that addresses each allegation in the complaint and contains—
(i) Findings of fact and conclusions; and
(ii) The reasons for the SEA's final decision.
(b) Time extension; final decision; implementation. The SEA's procedures described in paragraph (a) of this section also must—
(1) Permit an extension of the time limit under paragraph (a) of this section only if—
(i) Exceptional circumstances exist with respect to a particular complaint; or
(ii) The parent (or individual or organization, if mediation or other alternative means of dispute resolution is available to the individual or organization under State procedures) and the public agency involved agree to extend the time to engage in mediation pursuant to paragraph (a)(3)(ii) of this section, or to engage in other alternative means of dispute resolution, if available in the State; and
(2) Include procedures for effective implementation of the SEA's final decision, if needed, including—
(i) Technical assistance activities;
(ii) Negotiations; and
(iii) Corrective actions to achieve compliance.
(c) Complaints filed under this section and due process hearings under § 300.507 and §§ 300.530 through 300.532. (1) If a written complaint is received that is also the subject of a due process hearing under § 300.507 or §§ 300.530 through 300.532, or contains multiple issues of which one or more are part of that hearing, the State must set aside any part of the complaint that is being addressed in the due process hearing until the conclusion of the hearing. However, any issue in the complaint that is not a part of the due process action must be resolved using the time limit and procedures described in paragraphs (a) and (b) of this section.
(2) If an issue raised in a complaint filed under this section has previously been decided in a due process hearing involving the same parties—
(i) The due process hearing decision is binding on that issue; and
(ii) The SEA must inform the complainant to that effect.
(3) A complaint alleging a public agency's failure to implement a due process hearing decision must be resolved by the SEA.
(a) An organization or individual may file a signed written complaint under the procedures described in §§ 300.151 through 300.152.
(b) The complaint must include—
(1) A statement that a public agency has violated a requirement of Part B of the Act or of this part;
(2) The facts on which the statement is based;
(3) The signature and contact information for the complainant; and
(4) If alleging violations with respect to a specific child—
(i) The name and address of the residence of the child;
(ii) The name of the school the child is attending;
(iii) In the case of a homeless child or youth (within the meaning of section 725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)), available contact information for the child, and the name of the school the child is attending;
(iv) A description of the nature of the problem of the child, including facts relating to the problem; and
(v) A proposed resolution of the problem to the extent known and available to the party at the time the complaint is filed.
(c) The complaint must allege a violation that occurred not more than one year prior to the date that the complaint is received in accordance with § 300.151.
(d) The party filing the complaint must forward a copy of the complaint to the LEA or public agency serving the child at the same time the party files the complaint with the SEA.
(a) Establishing responsibility for services. The Chief Executive Officer of a State or designee of that officer must ensure that an interagency agreement or other mechanism for interagency coordination is in effect between each noneducational public agency described in paragraph (b) of this section and the SEA, in order to ensure that all services described in paragraph (b)(1) of this section that are needed to ensure FAPE are provided, including the provision of these services during the pendency of any dispute under paragraph (a)(3) of this section. The agreement or mechanism must include the following:
(1) An identification of, or a method for defining, the financial responsibility of each agency for providing services described in paragraph (b)(1) of this section to ensure FAPE to children with disabilities. The financial responsibility of each noneducational public agency described in paragraph (b) of this section, including the State Medicaid agency and other public insurers of children with disabilities, must precede the financial responsibility of the LEA (or the State agency responsible for developing the child's IEP).
(2) The conditions, terms, and procedures under which an LEA must be reimbursed by other agencies.
(3) Procedures for resolving interagency disputes (including procedures under which LEAs may initiate proceedings) under the agreement or other mechanism to secure reimbursement from other agencies or otherwise implement the provisions of the agreement or mechanism.
(4) Policies and procedures for agencies to determine and identify the interagency coordination responsibilities of each agency to promote the coordination and timely and appropriate delivery of services described in paragraph (b)(1) of this section.
(b) Obligation of noneducational public agencies. (1)(i) If any public agency other than an educational agency is otherwise obligated under Federal or State law, or assigned responsibility under State policy or pursuant to paragraph (a) of this section, to provide or pay for any services that are also considered special education or related services (such as, but not limited to, services described in § 300.5 relating to assistive technology devices, § 300.6 relating to assistive technology services, § 300.34 relating to related services, § 300.42 relating to supplementary aids and services, and § 300.43 relating to transition services) that are necessary for ensuring FAPE to children with disabilities within the State, the public agency must fulfill that obligation or responsibility, either directly or through contract or other arrangement pursuant to paragraph (a) of this section or an agreement pursuant to paragraph (c) of this section.
(ii) A noneducational public agency described in paragraph (b)(1)(i) of this section may not disqualify an eligible service for Medicaid reimbursement because that service is provided in a school context.
(2) If a public agency other than an educational agency fails to provide or pay for the special education and related services described in paragraph (b)(1) of this section, the LEA (or State agency responsible for developing the child's IEP) must provide or pay for these services to the child in a timely manner. The LEA or State agency is authorized to claim reimbursement for the services from the noneducational public agency that failed to provide or pay for these services and that agency must reimburse the LEA or State agency in accordance with the terms of the interagency agreement or other mechanism described in paragraph (a) of this section.
(c) Special rule. The requirements of paragraph (a) of this section may be met through—
(1) State statute or regulation;
(2) Signed agreements between respective agency officials that clearly identify the responsibilities of each agency relating to the provision of services; or
(3) Other appropriate written methods as determined by the Chief Executive Officer of the State or designee of that officer and approved by the Secretary.
(d) Children with disabilities who are covered by public benefits or insurance. (1) A public agency may use the Medicaid or other public benefits or insurance programs in which a child participates to provide or pay for services required under this part, as permitted under the public benefits or insurance program, except as provided in paragraph (d)(2) of this section.
(2) With regard to services required to provide FAPE to an eligible child under this part, the public agency—
(i) May not require parents to sign up for or enroll in public benefits or insurance programs in order for their child to receive FAPE under Part B of the Act;
(ii) May not require parents to incur an out-of-pocket expense such as the payment of a deductible or co-pay amount incurred in filing a claim for services provided pursuant to this part, but pursuant to paragraph (g)(2) of this section, may pay the cost that the parents otherwise would be required to pay;
(iii) May not use a child's benefits under a public benefits or insurance program if that use would—
(A) Decrease available lifetime coverage or any other insured benefit;
(B) Result in the family paying for services that would otherwise be covered by the public benefits or insurance program and that are required for the child outside of the time the child is in school;
(C) Increase premiums or lead to the discontinuation of benefits or insurance; or
(D) Risk loss of eligibility for home and community-based waivers, based on aggregate health-related expenditures; and
(iv) Prior to accessing a child's or parent's public benefits or insurance for the first time, and after providing notification to the child's parents consistent with paragraph (d)(2)(v) of this section, must obtain written, parental consent that—
(A) Meets the requirements of § 99.30 of this title and § 300.622, which consent must specify the personally identifiable information that may be disclosed (e.g., records or information about the services that may be provided to a particular child), the purpose of the disclosure (e.g., billing for services under part 300), and the agency to which the disclosure may be made (e.g., the State's public benefits or insurance program (e.g., Medicaid)); and
(B) Specifies that the parent understands and agrees that the public agency may access the parent's or child's public benefits or insurance to pay for services under part 300.
(v) Prior to accessing a child's or parent's public benefits or insurance for the first time, and annually thereafter, must provide written notification, consistent with § 300.503(c), to the child's parents, that includes—
(A) A statement of the parental consent provisions in paragraphs (d)(2)(iv)(A) and (B) of this section;
(B) A statement of the “no cost” provisions in paragraphs (d)(2)(i) through (iii) of this section;
(C) A statement that the parents have the right under 34 CFR part 99 and part 300 to withdraw their consent to disclosure of their child's personally identifiable information to the agency responsible for the administration of the State's public benefits or insurance program (e.g., Medicaid) at any time; and
(D) A statement that the withdrawal of consent or refusal to provide consent under 34 CFR part 99 and part 300 to disclose personally identifiable information to the agency responsible for the administration of the State's public benefits or insurance program (e.g., Medicaid) does not relieve the public agency of its responsibility to ensure that all required services are provided at no cost to the parents.
(e) Children with disabilities who are covered by private insurance. (1) With regard to services required to provide FAPE to an eligible child under this part, a public agency may access the parents' private insurance proceeds only if the parents provide consent consistent with § 300.9.
(2) Each time the public agency proposes to access the parents' private insurance proceeds, the agency must—
(i) Obtain parental consent in accordance with paragraph (e)(1) of this section; and
(ii) Inform the parents that their refusal to permit the public agency to access their private insurance does not relieve the public agency of its responsibility to ensure that all required services are provided at no cost to the parents.
(f) Use of Part B funds. (1) If a public agency is unable to obtain parental consent to use the parents' private insurance, or public benefits or insurance when the parents would incur a cost for a specified service required under this part, to ensure FAPE the public agency may use its Part B funds to pay for the service.
(2) To avoid financial cost to parents who otherwise would consent to use private insurance, or public benefits or insurance if the parents would incur a cost, the public agency may use its Part B funds to pay the cost that the parents otherwise would have to pay to use the parents' benefits or insurance (e.g., the deductible or co-pay amounts).
(g) Proceeds from public benefits or insurance or private insurance. (1) Proceeds from public benefits or insurance or private insurance will not be treated as program income for purposes of 2 CFR 200.307
(2) If a public agency spends reimbursements from Federal funds (e.g., Medicaid) for services under this part, those funds will not be considered “State or local” funds for purposes of the maintenance of effort provisions in §§ 300.163 and 300.203.
(h) Construction. Nothing in this part should be construed to alter the requirements imposed on a State Medicaid agency, or any other agency administering a public benefits or insurance program by Federal statute, regulations or policy under title XIX, or title XXI of the Social Security Act, 42 U.S.C. 1396 through 1396v and 42 U.S.C. 1397aa through 1397jj, or any other public benefits or insurance program.
The SEA must not make any final determination that an LEA is not eligible for assistance under Part B of the Act without first giving the LEA reasonable notice and an opportunity for a hearing under 34 CFR 76.401(d).
(a) General. The SEA must establish and maintain qualifications to ensure that personnel necessary to carry out the purposes of this part are appropriately and adequately prepared and trained, including that those personnel have the content knowledge and skills to serve children with disabilities.
(b) Related services personnel and paraprofessionals. The qualifications under paragraph (a) of this section must include qualifications for related services personnel and paraprofessionals that—
(1) Are consistent with any State-approved or State-recognized certification, licensing, registration, or other comparable requirements that apply to the professional discipline in which those personnel are providing special education or related services; and
(2) Ensure that related services personnel who deliver services in their discipline or profession—
(i) Meet the requirements of paragraph (b)(1) of this section; and
(ii) Have not had certification or licensure requirements waived on an emergency, temporary, or provisional basis; and
(iii) Allow paraprofessionals and assistants who are appropriately trained and supervised, in accordance with State law, regulation, or written policy, in meeting the requirements of this part to be used to assist in the provision of special education and related services under this part to children with disabilities.
(c) Qualifications for special education teachers. (1) The qualifications described in paragraph (a) of this section must ensure that each person employed as a public school special education teacher in the State who teaches in an elementary school, middle school, or secondary school—
(i) Has obtained full State certification as a special education teacher (including certification obtained through an alternate route to certification as a special educator, if such alternate route meets minimum requirements described in 34 CFR 200.56(a)(2)(ii) as such section was in effect on November 28, 2008), or passed the State special education teacher licensing examination, and holds a license to teach in the State as a special education teacher, except that when used with respect to any teacher teaching in a public charter school, the teacher must meet the certification or licensing requirements, if any, set forth in the State's public charter school law;
(ii) Has not had special education certification or licensure requirements waived on an emergency, temporary, or provisional basis; and
(iii) Holds at least a bachelor's degree.
(2) A teacher will be considered to meet the standard in paragraph (c)(1)(i) of this section if that teacher is participating in an alternate route to special education certification program under which—
(i) The teacher—
(A) Receives high-quality professional development that is sustained, intensive, and classroom-focused in order to have a positive and lasting impact on classroom instruction, before and while teaching;
(B) Participates in a program of intensive supervision that consists of structured guidance and regular ongoing support for teachers or a teacher mentoring program;
(C) Assumes functions as a teacher only for a specified period of time not to exceed three years; and
(D) Demonstrates satisfactory progress toward full certification as prescribed by the State; and
(ii) The State ensures, through its certification and licensure process, that the provisions in paragraph (c)(2)(i) of this section are met.
(d) Policy. In implementing this section, a State must adopt a policy that includes a requirement that LEAs in the State take measurable steps to recruit, hire, train, and retain personnel who meet the applicable requirements described in paragraph (c) of this section to provide special education and related services under this part to children with disabilities.
(e) Rule of construction. Notwithstanding any other individual right of action that a parent or student may maintain under this part, nothing in this part shall be construed to create a right of action on behalf of an individual student or a class of students for the failure of a particular SEA or LEA employee to meet the applicable requirements described in paragraph (c) of this section, or to prevent a parent from filing a complaint about staff qualifications with the SEA as provided for under this part.
The State must—
(a) Have in effect established goals for the performance of children with disabilities in the State that—
(1) Promote the purposes of this part, as stated in § 300.1;
(2) Are the same as the State's long-term goals and measurements of interim progress for children with disabilities under section 1111(c)(4)(A)(i) of the ESEA.
(3) Address graduation rates and dropout rates, as well as such other factors as the State may determine; and
(4) Are consistent, to the extent appropriate, with any other goals and academic standards for children established by the State;
(b) Have in effect established performance indicators the State will use to assess progress toward achieving the goals described in paragraph (a) of this section, including measurements of interim progress for children with disabilities under section 1111(c)(4)(A)(i)(cc) of the ESEA, 20 U.S.C. 6311; and
(c) Annually report to the Secretary and the public on the progress of the State, and of children with disabilities in the State, toward meeting the goals established under paragraph (a) of this section, which may include elements of the reports required under section 1111(h) of the ESEA.
(a) General. A State must ensure that all children with disabilities are included in all general State and district-wide assessment programs, including assessments described under section 1111 of the ESEA, 20 U.S.C. 6311, with appropriate accommodations and alternate assessments, if necessary, as indicated in their respective IEPs.
(b) Accommodation guidelines. (1) A State (or, in the case of a district-wide assessment, an LEA) must develop guidelines for the provision of appropriate accommodations.
(2) The State's (or, in the case of a district-wide assessment, the LEA's) guidelines must—
(i) Identify only those accommodations for each assessment that do not invalidate the score; and
(ii) Instruct IEP Teams to select, for each assessment, only those accommodations that do not invalidate the score.
(c) Alternate assessments aligned with alternate academic achievement standards for students with the most significant cognitive disabilities. (1) If a State has adopted alternate academic achievement standards for children with disabilities who are students with the most significant cognitive disabilities as permitted in section 1111(b)(1)(E) of the ESEA, the State (or, in the case of a district-wide assessment, an LEA) must develop and implement alternate assessments and guidelines for the participation in alternate assessments of those children with disabilities who cannot participate in regular assessments, even with accommodations, as indicated in their respective IEPs, as provided in paragraph (a) of this section.
(2) For assessing the academic progress of children with disabilities who are students with the most significant cognitive disabilities under title I of the ESEA, the alternate assessments and guidelines in paragraph (c)(1) of this section must—
(i) Be aligned with the challenging State academic content standards under section 1111(b)(1) of the ESEA and alternate academic achievement standards under section 1111(b)(1)(E) of the ESEA; and
(ii) Measure the achievement of children with disabilities who are students with the most significant cognitive disabilities against those standards.
(3) Consistent with section 1111(b)(1)(E)(ii) of the ESEA and 34 CFR 200.6(c)(6), a State may not adopt modified academic achievement standards or any other alternate academic achievement standards that do not meet the requirements in section 1111(b)(1)(E) of the ESEA for any children with disabilities under section 602(3) of the IDEA.
(d) Explanation to IEP Teams. A State (or in the case of a district-wide assessment, an LEA) must—
(1) Provide to IEP teams a clear explanation of the differences between assessments based on grade-level academic achievement standards and those based on alternate academic achievement standards, including any effects of State and local policies on a student's education resulting from taking an alternate assessment aligned with alternate academic achievement standards, such as how participation in such assessments may delay or otherwise affect the student from completing the requirements for a regular high school diploma; and
(2) Not preclude a student with the most significant cognitive disabilities who takes an alternate assessment aligned with alternate academic achievement standards from attempting to complete the requirements for a regular high school diploma.
(e) Inform parents. A State (or in the case of a district-wide assessment, an LEA) must ensure that parents of students selected to be assessed using an alternate assessment aligned with alternate academic achievement standards under the State's guidelines in paragraph (c)(1) of this section are informed, consistent with 34 CFR 200.2(e), that their child's achievement will be measured based on alternate academic achievement standards, and of how participation in such assessments may delay or otherwise affect the student from completing the requirements for a regular high school diploma.
(f) Reports. An SEA (or, in the case of a district-wide assessment, an LEA) must make available to the public, and report to the public with the same frequency and in the same detail as it reports on the assessment of nondisabled children, the following:
(1) The number of children with disabilities participating in regular assessments, and the number of those children who were provided accommodations (that did not result in an invalid score) in order to participate in those assessments.
(2) The number of children with disabilities, if any, participating in alternate assessments based on grade-level academic achievement standards in school years prior to 2017-2018.
(3) The number of children with disabilities, if any, participating in alternate assessments aligned with modified academic achievement standards in school years prior to 2016-2017.
(4) The number of children with disabilities who are students with the most significant cognitive disabilities participating in alternate assessments aligned with alternate academic achievement standards.
(5) Compared with the achievement of all children, including children with disabilities, the performance results of children with disabilities on regular assessments, alternate assessments based on grade-level academic achievement standards (prior to 2017-2018), alternate assessments based on modified academic achievement standards (prior to 2016-2017), and alternate assessments aligned with alternate academic achievement standards if—
(i) The number of children participating in those assessments is sufficient to yield statistically reliable information; and
(ii) Reporting that information will not reveal personally identifiable information about an individual student on those assessments.
(g) Universal design. An SEA (or, in the case of a district-wide assessment, an LEA) must, to the extent possible, use universal design principles in developing and administering any assessments under this section.
(a) Expenditures. Funds paid to a State under this part must be expended in accordance with all the provisions of this part.
(b) Prohibition against commingling. (1) Funds paid to a State under this part must not be commingled with State funds.
(2) The requirement in paragraph (b)(1) of this section is satisfied by the use of a separate accounting system that includes an audit trail of the expenditure of funds paid to a State under this part. Separate bank accounts are not required. (See 34 CFR 76.702 (Fiscal control and fund accounting procedures).)
(c) State-level nonsupplanting. (1) Except as provided in § 300.203, funds paid to a State under Part B of the Act must be used to supplement the level of Federal, State, and local funds (including funds that are not under the direct control of the SEA or LEAs) expended for special education and related services provided to children with disabilities under Part B of the Act, and in no case to supplant those Federal, State, and local funds.
(2) If the State provides clear and convincing evidence that all children with disabilities have available to them FAPE, the Secretary may waive, in whole or in part, the requirements of paragraph (c)(1) of this section if the Secretary concurs with the evidence provided by the State under § 300.164.
(a) General. A State must not reduce the amount of State financial support for special education and related services for children with disabilities, or otherwise made available because of the excess costs of educating those children, below the amount of that support for the preceding fiscal year.
(b) Reduction of funds for failure to maintain support. The Secretary reduces the allocation of funds under section 611 of the Act for any fiscal year following the fiscal year in which the State fails to comply with the requirement of paragraph (a) of this section by the same amount by which the State fails to meet the requirement.
(c) Waivers for exceptional or uncontrollable circumstances. The Secretary may waive the requirement of paragraph (a) of this section for a State, for one fiscal year at a time, if the Secretary determines that—
(1) Granting a waiver would be equitable due to exceptional or uncontrollable circumstances such as a natural disaster or a precipitous and unforeseen decline in the financial resources of the State; or
(2) The State meets the standard in § 300.164 for a waiver of the requirement to supplement, and not to supplant, funds received under Part B of the Act.
(d) Subsequent years. If, for any fiscal year, a State fails to meet the requirement of paragraph (a) of this section, including any year for which the State is granted a waiver under paragraph (c) of this section, the financial support required of the State in future years under paragraph (a) of this section shall be the amount that would have been required in the absence of that failure and not the reduced level of the State's support.
(a) Except as provided under §§ 300.202 through 300.205, funds paid to a State under Part B of the Act must be used to supplement and increase the level of Federal, State, and local funds (including funds that are not under the direct control of SEAs or LEAs) expended for special education and related services provided to children with disabilities under Part B of the Act and in no case to supplant those Federal, State, and local funds. A State may use funds it retains under § 300.704(a) and (b) without regard to the prohibition on supplanting other funds.
(b) If a State provides clear and convincing evidence that all eligible children with disabilities throughout the State have FAPE available to them, the Secretary may waive for a period of one year in whole or in part the requirement under § 300.162 (regarding State-level nonsupplanting) if the Secretary concurs with the evidence provided by the State.
(c) If a State wishes to request a waiver under this section, it must submit to the Secretary a written request that includes—
(1) An assurance that FAPE is currently available, and will remain available throughout the period that a waiver would be in effect, to all eligible children with disabilities throughout the State, regardless of the public agency that is responsible for providing FAPE to them. The assurance must be signed by an official who has the authority to provide that assurance as it applies to all eligible children with disabilities in the State;
(2) All evidence that the State wishes the Secretary to consider in determining whether all eligible children with disabilities have FAPE available to them, setting forth in detail—
(i) The basis on which the State has concluded that FAPE is available to all eligible children in the State; and
(ii) The procedures that the State will implement to ensure that FAPE remains available to all eligible children in the State, which must include—
(A) The State's procedures under § 300.111 for ensuring that all eligible children are identified, located and evaluated;
(B) The State's procedures for monitoring public agencies to ensure that they comply with all requirements of this part;
(C) The State's complaint procedures under §§ 300.151 through 300.153; and
(D) The State's hearing procedures under §§ 300.511 through 300.516 and §§ 300.530 through 300.536;
(3) A summary of all State and Federal monitoring reports, and State complaint decisions (see §§ 300.151 through 300.153) and hearing decisions (see §§ 300.511 through 300.516 and §§ 300.530 through 300.536), issued within three years prior to the date of the State's request for a waiver under this section, that includes any finding that FAPE has not been available to one or more eligible children, and evidence that FAPE is now available to all children addressed in those reports or decisions; and
(4) Evidence that the State, in determining that FAPE is currently available to all eligible children with disabilities in the State, has consulted with the State advisory panel under § 300.167.
(d) If the Secretary determines that the request and supporting evidence submitted by the State makes a prima facie showing that FAPE is, and will remain, available to all eligible children with disabilities in the State, the Secretary, after notice to the public throughout the State, conducts a public hearing at which all interested persons and organizations may present evidence regarding the following issues:
(1) Whether FAPE is currently available to all eligible children with disabilities in the State.
(2) Whether the State will be able to ensure that FAPE remains available to all eligible children with disabilities in the State if the Secretary provides the requested waiver.
(e) Following the hearing, the Secretary, based on all submitted evidence, will provide a waiver, in whole or in part, for a period of one year if the Secretary finds that the State has provided clear and convincing evidence that FAPE is currently available to all eligible children with disabilities in the State, and the State will be able to ensure that FAPE remains available to all eligible children with disabilities in the State if the Secretary provides the requested waiver.
(f) A State may receive a waiver of the requirement of section 612(a)(18)(A) of the Act and § 300.164 if it satisfies the requirements of paragraphs (b) through (e) of this section.
(g) The Secretary may grant subsequent waivers for a period of one year each, if the Secretary determines that the State has provided clear and convincing evidence that all eligible children with disabilities throughout the State have, and will continue to have throughout the one-year period of the waiver, FAPE available to them.
(a) Prior to the adoption of any policies and procedures needed to comply with Part B of the Act (including any amendments to those policies and procedures), the State must ensure that there are public hearings, adequate notice of the hearings, and an opportunity for comment available to the general public, including individuals with disabilities and parents of children with disabilities.
(b) Before submitting a State plan under this part, a State must comply with the public participation requirements in paragraph (a) of this section and those in 20 U.S.C. 1232d(b)(7).
In complying with §§ 300.162 and 300.163, a State may not use funds paid to it under this part to satisfy State-law mandated funding obligations to LEAs, including funding based on student attendance or enrollment, or inflation.
The State must establish and maintain an advisory panel for the purpose of providing policy guidance with respect to special education and related services for children with disabilities in the State.
(a) General. The advisory panel must consist of members appointed by the Governor, or any other official authorized under State law to make such appointments, be representative of the State population and be composed of individuals involved in, or concerned with the education of children with disabilities, including—
(1) Parents of children with disabilities (ages birth through 26);
(2) Individuals with disabilities;
(3) Teachers;
(4) Representatives of institutions of higher education that prepare special education and related services personnel;
(5) State and local education officials, including officials who carry out activities under subtitle B of title VII of the McKinney-Vento Homeless Assistance Act, (42 U.S.C. 11431 et seq.);
(6) Administrators of programs for children with disabilities;
(7) Representatives of other State agencies involved in the financing or delivery of related services to children with disabilities;
(8) Representatives of private schools and public charter schools;
(9) Not less than one representative of a vocational, community, or business organization concerned with the provision of transition services to children with disabilities;
(10) A representative from the State child welfare agency responsible for foster care; and
(11) Representatives from the State juvenile and adult corrections agencies.
(b) Special rule. A majority of the members of the panel must be individuals with disabilities or parents of children with disabilities (ages birth through 26).
The advisory panel must—
(a) Advise the SEA of unmet needs within the State in the education of children with disabilities;
(b) Comment publicly on any rules or regulations proposed by the State regarding the education of children with disabilities;
(c) Advise the SEA in developing evaluations and reporting on data to the Secretary under section 618 of the Act;
(d) Advise the SEA in developing corrective action plans to address findings identified in Federal monitoring reports under Part B of the Act; and
(e) Advise the SEA in developing and implementing policies relating to the coordination of services for children with disabilities.
(a) General. The SEA must examine data, including data disaggregated by race and ethnicity, to determine if significant discrepancies are occurring in the rate of long-term suspensions and expulsions of children with disabilities—
(1) Among LEAs in the State; or
(2) Compared to the rates for nondisabled children within those agencies.
(b) Review and revision of policies. If the discrepancies described in paragraph (a) of this section are occurring, the SEA must review and, if appropriate, revise (or require the affected State agency or LEA to revise) its policies, procedures, and practices relating to the development and implementation of IEPs, the use of positive behavioral interventions and supports, and procedural safeguards, to ensure that these policies, procedures, and practices comply with the Act.
(a) In order to receive a grant in any fiscal year a State must annually describe—
(1) How amounts retained for State administration and State-level activities under § 300.704 will be used to meet the requirements of this part; and
(2) How those amounts will be allocated among the activities described in § 300.704 to meet State priorities based on input from LEAs.
(b) If a State's plans for use of its funds under § 300.704 for the forthcoming year do not change from the prior year, the State may submit a letter to that effect to meet the requirement in paragraph (a) of this section.
(c) The provisions of this section do not apply to the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the freely associated States.
(a) General. The State must—
(1) Adopt the National Instructional Materials Accessibility Standard (NIMAS), published as appendix C to part 300, for the purposes of providing instructional materials to blind persons or other persons with print disabilities, in a timely manner after publication of the NIMAS in the
(2) Establish a State definition of “timely manner” for purposes of paragraphs (b)(2) and (b)(3) of this section if the State is not coordinating with the National Instructional Materials Access Center (NIMAC) or (b)(3) and (c)(2) of this section if the State is coordinating with the NIMAC.
(b) Rights and responsibilities of SEA. (1) Nothing in this section shall be construed to require any SEA to coordinate with the NIMAC.
(2) If an SEA chooses not to coordinate with the NIMAC, the SEA must provide an assurance to the Secretary that it will provide instructional materials to blind persons or other persons with print disabilities in a timely manner.
(3) Nothing in this section relieves an SEA of its responsibility to ensure that children with disabilities who need instructional materials in accessible formats, but are not included under the definition of blind or other persons with print disabilities in § 300.172(e)(1)(i) or who need materials that cannot be produced from NIMAS files, receive those instructional materials in a timely manner.
(4) In order to meet its responsibility under paragraphs (b)(2), (b)(3), and (c) of this section to ensure that children with disabilities who need instructional materials in accessible formats are provided those materials in a timely manner, the SEA must ensure that all public agencies take all reasonable steps to provide instructional materials in accessible formats to children with disabilities who need those instructional materials at the same time as other children receive instructional materials.
(c) Preparation and delivery of files. If an SEA chooses to coordinate with the NIMAC, as of December 3, 2006, the SEA must—
(1) As part of any print instructional materials adoption process, procurement contract, or other practice or instrument used for purchase of print instructional materials, enter into a written contract with the publisher of the print instructional materials to—
(i) Require the publisher to prepare and, on or before delivery of the print instructional materials, provide to NIMAC electronic files containing the contents of the print instructional materials using the NIMAS; or
(ii) Purchase instructional materials from the publisher that are produced in, or may be rendered in, specialized formats.
(2) Provide instructional materials to blind persons or other persons with print disabilities in a timely manner.
(d) Assistive technology. In carrying out this section, the SEA, to the maximum extent possible, must work collaboratively with the State agency responsible for assistive technology programs.
(e) Definitions. (1) In this section and § 300.210—
(i) Blind persons or other persons with print disabilities means children served under this part who may qualify to receive books and other publications produced in specialized formats in accordance with the Act entitled “An Act to provide books for adult blind,” approved March 3, 1931, 2 U.S.C. 135a;
(ii) National Instructional Materials Access Center or NIMAC means the center established pursuant to section 674(e) of the Act;
(iii) National Instructional Materials Accessibility Standard or NIMAS has the meaning given the term in section 674(e)(3)(B) of the Act;
(iv) Specialized formats has the meaning given the term in section 674(e)(3)(D) of the Act.
(2) The definitions in paragraph (e)(1) of this section apply to each State and LEA, whether or not the State or LEA chooses to coordinate with the NIMAC.
The State must have in effect, consistent with the purposes of this part and with section 618(d) of the Act, policies and procedures designed to prevent the inappropriate overidentification or disproportionate representation by race and ethnicity of children as children with disabilities, including children with disabilities with a particular impairment described in § 300.8.
(a) General. The SEA must prohibit State and LEA personnel from requiring parents to obtain a prescription for substances identified under schedules I, II, III, IV, or V in section 202(c) of the Controlled Substances Act (21 U.S.C. 812(c)) for a child as a condition of attending school, receiving an evaluation under §§ 300.300 through 300.311, or receiving services under this part.
(b) Rule of construction. Nothing in paragraph (a) of this section shall be construed to create a Federal prohibition against teachers and other school personnel consulting or sharing classroom-based observations with parents or guardians regarding a student's academic and functional performance, or behavior in the classroom or school, or regarding the need for evaluation for special education or related services under § 300.111 (related to child find).
If the SEA provides FAPE to children with disabilities, or provides direct services to these children, the agency—
(a) Must comply with any additional requirements of §§ 300.201 and 300.202 and §§ 300.206 through 300.226 as if the agency were an LEA; and
(b) May use amounts that are otherwise available to the agency under Part B of the Act to serve those children without regard to § 300.202(b) (relating to excess costs).
(a) General. If a State has on file with the Secretary policies and procedures approved by the Secretary that demonstrate that the State meets any requirement of § 300.100, including any policies and procedures filed under Part B of the Act as in effect before, December 3, 2004, the Secretary considers the State to have met the requirement for purposes of receiving a grant under Part B of the Act.
(b) Modifications made by a State. (1) Subject to paragraph (b)(2) of this section, policies and procedures submitted by a State in accordance with this subpart remain in effect until the State submits to the Secretary the modifications that the State determines necessary.
(2) The provisions of this subpart apply to a modification to an application to the same extent and in the same manner that they apply to the original plan.
(c) Modifications required by the Secretary. The Secretary may require a State to modify its policies and procedures, but only to the extent necessary to ensure the State's compliance with this part, if—
(1) After December 3, 2004, the provisions of the Act or the regulations in this part are amended;
(2) There is a new interpretation of this Act by a Federal court or a State's highest court; or
(3) There is an official finding of noncompliance with Federal law or regulations.
(a) States' sovereign immunity. (1) A State that accepts funds under this part waives its immunity under the 11th amendment of the Constitution of the United States from suit in Federal court for a violation of this part.
(2) In a suit against a State for a violation of this part, remedies (including remedies both at law and in equity) are available for such a violation in the suit against any public entity other than a State.
(3) Paragraphs (a)(1) and (a)(2) of this section apply with respect to violations that occur in whole or part after the date of enactment of the Education of the Handicapped Act Amendments of 1990.
(b) Positive efforts to employ and advance qualified individuals with disabilities. Each recipient of assistance under Part B of the Act must make positive efforts to employ, and advance in employment, qualified individuals with disabilities in programs assisted under Part B of the Act.
If the Secretary determines that a State is eligible to receive a grant under Part B of the Act, the Secretary notifies the State of that determination.
(a) General. (1) The Secretary does not make a final determination that a State is not eligible to receive a grant under Part B of the Act until providing the State—
(i) With reasonable notice; and
(ii) With an opportunity for a hearing.
(2) In implementing paragraph (a)(1)(i) of this section, the Secretary sends a written notice to the SEA by certified mail with return receipt requested.
(b) Content of notice. In the written notice described in paragraph (a)(2) of this section, the Secretary—
(1) States the basis on which the Secretary proposes to make a final determination that the State is not eligible;
(2) May describe possible options for resolving the issues;
(3) Advises the SEA that it may request a hearing and that the request for a hearing must be made not later than 30 days after it receives the notice of the proposed final determination that the State is not eligible; and
(4) Provides the SEA with information about the hearing procedures that will be followed.
(a) If the SEA requests a hearing, the Secretary designates one or more individuals, either from the Department or elsewhere, not responsible for or connected with the administration of this program, to conduct a hearing.
(b) If more than one individual is designated, the Secretary designates one of those individuals as the Chief Hearing Official of the Hearing Panel. If one individual is designated, that individual is the Hearing Official.
(a) As used in §§ 300.179 through 300.184 the term party or parties means the following:
(1) An SEA that requests a hearing regarding the proposed disapproval of the State's eligibility under this part.
(2) The Department official who administers the program of financial assistance under this part.
(3) A person, group or agency with an interest in and having relevant information about the case that has applied for and been granted leave to intervene by the Hearing Official or Hearing Panel.
(b) Within 15 days after receiving a request for a hearing, the Secretary designates a Hearing Official or Hearing Panel and notifies the parties.
(c) The Hearing Official or Hearing Panel may regulate the course of proceedings and the conduct of the parties during the proceedings. The Hearing Official or Hearing Panel takes all steps necessary to conduct a fair and impartial proceeding, to avoid delay, and to maintain order, including the following:
(1) The Hearing Official or Hearing Panel may hold conferences or other types of appropriate proceedings to clarify, simplify, or define the issues or to consider other matters that may aid in the disposition of the case.
(2) The Hearing Official or Hearing Panel may schedule a prehearing conference with the Hearing Official or Hearing Panel and the parties.
(3) Any party may request the Hearing Official or Hearing Panel to schedule a prehearing or other conference. The Hearing Official or Hearing Panel decides whether a conference is necessary and notifies all parties.
(4) At a prehearing or other conference, the Hearing Official or Hearing Panel and the parties may consider subjects such as—
(i) Narrowing and clarifying issues;
(ii) Assisting the parties in reaching agreements and stipulations;
(iii) Clarifying the positions of the parties;
(iv) Determining whether an evidentiary hearing or oral argument should be held; and
(v) Setting dates for—
(A) The exchange of written documents;
(B) The receipt of comments from the parties on the need for oral argument or evidentiary hearing;
(C) Further proceedings before the Hearing Official or Hearing Panel (including an evidentiary hearing or oral argument, if either is scheduled);
(D) Requesting the names of witnesses each party wishes to present at an evidentiary hearing and estimation of time for each presentation; or
(E) Completion of the review and the initial decision of the Hearing Official or Hearing Panel.
(5) A prehearing or other conference held under paragraph (c)(4) of this section may be conducted by telephone conference call.
(6) At a prehearing or other conference, the parties must be prepared to discuss the subjects listed in paragraph (b)(4) of this section.
(7) Following a prehearing or other conference the Hearing Official or Hearing Panel may issue a written statement describing the issues raised, the action taken, and the stipulations and agreements reached by the parties.
(d) The Hearing Official or Hearing Panel may require parties to state their positions and to provide all or part of the evidence in writing.
(e) The Hearing Official or Hearing Panel may require parties to present testimony through affidavits and to conduct cross-examination through interrogatories.
(f) The Hearing Official or Hearing Panel may direct the parties to exchange relevant documents or information and lists of witnesses, and to send copies to the Hearing Official or Panel.
(g) The Hearing Official or Hearing Panel may receive, rule on, exclude, or limit evidence at any stage of the proceedings.
(h) The Hearing Official or Hearing Panel may rule on motions and other issues at any stage of the proceedings.
(i) The Hearing Official or Hearing Panel may examine witnesses.
(j) The Hearing Official or Hearing Panel may set reasonable time limits for submission of written documents.
(k) The Hearing Official or Hearing Panel may refuse to consider documents or other submissions if they are not submitted in a timely manner unless good cause is shown.
(l) The Hearing Official or Hearing Panel may interpret applicable statutes and regulations but may not waive them or rule on their validity.
(m)(1) The parties must present their positions through briefs and the submission of other documents and may request an oral argument or evidentiary hearing. The Hearing Official or Hearing Panel shall determine whether an oral argument or an evidentiary hearing is needed to clarify the positions of the parties.
(2) The Hearing Official or Hearing Panel gives each party an opportunity to be represented by counsel.
(n) If the Hearing Official or Hearing Panel determines that an evidentiary hearing would materially assist the resolution of the matter, the Hearing Official or Hearing Panel gives each party, in addition to the opportunity to be represented by counsel—
(1) An opportunity to present witnesses on the party's behalf; and
(2) An opportunity to cross-examine witnesses either orally or with written questions.
(o) The Hearing Official or Hearing Panel accepts any evidence that it finds is relevant and material to the proceedings and is not unduly repetitious.
(p)(1) The Hearing Official or Hearing Panel—
(i) Arranges for the preparation of a transcript of each hearing;
(ii) Retains the original transcript as part of the record of the hearing; and
(iii) Provides one copy of the transcript to each party.
(2) Additional copies of the transcript are available on request and with payment of the reproduction fee.
(q) Each party must file with the Hearing Official or Hearing Panel all written motions, briefs, and other documents and must at the same time provide a copy to the other parties to the proceedings.
(a) The Hearing Official or Hearing Panel prepares an initial written decision that addresses each of the points in the notice sent by the Secretary to the SEA under § 300.179 including any amendments to or further clarifications of the issues, under § 300.181(c)(7).
(b) The initial decision of a Hearing Panel is made by a majority of Panel members.
(c) The Hearing Official or Hearing Panel mails, by certified mail with return receipt requested, a copy of the initial decision to each party (or to the party's counsel) and to the Secretary, with a notice stating that each party has an opportunity to submit written comments regarding the decision to the Secretary.
(d) Each party may file comments and recommendations on the initial decision with the Hearing Official or Hearing Panel within 15 days of the date the party receives the Panel's decision.
(e) The Hearing Official or Hearing Panel sends a copy of a party's initial comments and recommendations to the other parties by certified mail with return receipt requested. Each party may file responsive comments and recommendations with the Hearing Official or Hearing Panel within seven days of the date the party receives the initial comments and recommendations.
(f) The Hearing Official or Hearing Panel forwards the parties' initial and responsive comments on the initial decision to the Secretary who reviews the initial decision and issues a final decision.
(g) The initial decision of the Hearing Official or Hearing Panel becomes the final decision of the Secretary unless, within 25 days after the end of the time for receipt of written comments and recommendations, the Secretary informs the Hearing Official or Hearing Panel and the parties to a hearing in writing that the decision is being further reviewed for possible modification.
(h) The Secretary rejects or modifies the initial decision of the Hearing Official or Hearing Panel if the Secretary finds that it is clearly erroneous.
(i) The Secretary conducts the review based on the initial decision, the written record, the transcript of the Hearing Official's or Hearing Panel's proceedings, and written comments.
(j) The Secretary may remand the matter to the Hearing Official or Hearing Panel for further proceedings.
(k) Unless the Secretary remands the matter as provided in paragraph (j) of this section, the Secretary issues the final decision, with any necessary modifications, within 30 days after notifying the Hearing Official or Hearing Panel that the initial decision is being further reviewed.
(a) Any written submission by a party under §§ 300.179 through 300.184 must be filed by hand delivery, by mail, or by facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(b) The filing date under paragraph (a) of this section is the date the document is—
(1) Hand-delivered;
(2) Mailed; or
(3) Sent by facsimile transmission.
(c) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department.
(d) If a document is filed by facsimile transmission, the Secretary, the Hearing Official, or the Hearing Panel, as applicable, may require the filing of a follow-up hard copy by hand delivery or by mail within a reasonable period of time.
(e) If agreed upon by the parties, service of a document may be made upon the other party by facsimile transmission.
If a State is dissatisfied with the Secretary's final decision with respect to the eligibility of the State under section 612 of the Act, the State may, not later than 60 days after notice of that decision, file with the United States Court of Appeals for the circuit in which that State is located a petition for review of that decision. A copy of the petition must be transmitted by the clerk of the court to the Secretary. The Secretary then files in the court the record of the proceedings upon which the Secretary's decision was based, as provided in 28 U.S.C. 2112.
Part B of the Act may not be construed to permit a State to reduce medical and other assistance available, or to alter eligibility, under titles V and XIX of the Social Security Act with respect to the provision of FAPE for children with disabilities in the State.
(a) If, on December 2, 1983, the date of enactment of the Education of the Handicapped Act Amendments of 1983, an SEA was prohibited by law from providing for the equitable participation in special programs of children with disabilities enrolled in private elementary schools and secondary schools as required by section 612(a)(10)(A) of the Act, or if the Secretary determines that an SEA, LEA, or other public agency has substantially failed or is unwilling to provide for such equitable participation then the Secretary shall, notwithstanding such provision of law, arrange for the provision of services to these children through arrangements which shall be subject to the requirements of section 612(a)(10)(A) of the Act.
(b) The Secretary waives the requirement of section 612(a)(10)(A) of the Act and of §§ 300.131 through 300.144 if the Secretary implements a by-pass.
(a) Before implementing a by-pass, the Secretary consults with appropriate public and private school officials, including SEA officials, in the affected State, and as appropriate, LEA or other public agency officials to consider matters such as—
(1) Any prohibition imposed by State law that results in the need for a by-pass; and
(2) The scope and nature of the services required by private school children with disabilities in the State, and the number of children to be served under the by-pass.
(b) After determining that a by-pass is required, the Secretary arranges for the provision of services to private school children with disabilities in the State, LEA or other public agency in a manner consistent with the requirements of section 612(a)(10)(A) of the Act and §§ 300.131 through 300.144 by providing services through one or more agreements with appropriate parties.
(c) For any fiscal year that a by-pass is implemented, the Secretary determines the maximum amount to be paid to the providers of services by multiplying—
(1) A per child amount determined by dividing the total amount received by the State under Part B of the Act for the fiscal year by the number of children with disabilities served in the prior year as reported to the Secretary under section 618 of the Act; by
(2) The number of private school children with disabilities (as defined in §§ 300.8(a) and 300.130) in the State, LEA or other public agency, as determined by the Secretary on the basis of the most recent satisfactory data available, which may include an estimate of the number of those children with disabilities.
(d) The Secretary deducts from the State's allocation under Part B of the Act the amount the Secretary determines is necessary to implement a by-pass and pays that amount to the provider of services. The Secretary may withhold this amount from the State's allocation pending final resolution of any investigation or complaint that could result in a determination that a by-pass must be implemented.
(a) Before taking any final action to implement a by-pass, the Secretary provides the SEA and, as appropriate, LEA or other public agency with written notice.
(b) In the written notice, the Secretary—
(1) States the reasons for the proposed by-pass in sufficient detail to allow the SEA and, as appropriate, LEA or other public agency to respond; and
(2) Advises the SEA and, as appropriate, LEA or other public agency that it has a specific period of time (at least 45 days) from receipt of the written notice to submit written objections to the proposed by-pass and that it may request in writing the opportunity for a hearing to show cause why a by-pass should not be implemented.
(c) The Secretary sends the notice to the SEA and, as appropriate, LEA or other public agency by certified mail with return receipt requested.
An SEA, LEA or other public agency in receipt of a notice under § 300.192 that seeks an opportunity to show cause why a by-pass should not be implemented must submit a written request for a show cause hearing to the Secretary, within the specified time period in the written notice in § 300.192(b)(2).
(a) If a show cause hearing is requested, the Secretary—
(1) Notifies the SEA and affected LEA or other public agency, and other appropriate public and private school officials of the time and place for the hearing;
(2) Designates a person to conduct the show cause hearing. The designee must not have had any responsibility for the matter brought for a hearing; and
(3) Notifies the SEA, LEA or other public agency, and representatives of private schools that they may be represented by legal counsel and submit oral or written evidence and arguments at the hearing.
(b) At the show cause hearing, the designee considers matters such as—
(1) The necessity for implementing a by-pass;
(2) Possible factual errors in the written notice of intent to implement a by-pass; and
(3) The objections raised by public and private school representatives.
(c) The designee may regulate the course of the proceedings and the conduct of parties during the pendency of the proceedings. The designee takes all steps necessary to conduct a fair and impartial proceeding, to avoid delay, and to maintain order.
(d) The designee has no authority to require or conduct discovery.
(e) The designee may interpret applicable statutes and regulations, but may not waive them or rule on their validity.
(f) The designee arranges for the preparation, retention, and, if appropriate, dissemination of the record of the hearing.
(g) Within 10 days after the hearing, the designee—
(1) Indicates that a decision will be issued on the basis of the existing record; or
(2) Requests further information from the SEA, LEA, other public agency, representatives of private schools or Department officials.
(a) The designee who conducts the show cause hearing—
(1) Within 120 days after the record of a show cause hearing is closed, issues a written decision that includes a statement of findings; and
(2) Submits a copy of the decision to the Secretary and sends a copy to each party by certified mail with return receipt requested.
(b) Each party may submit comments and recommendations on the designee's decision to the Secretary within 30 days of the date the party receives the designee's decision.
(c) The Secretary adopts, reverses, or modifies the designee's decision and notifies all parties to the show cause hearing of the Secretary's final action. That notice is sent by certified mail with return receipt requested.
(a) Any written submission under § 300.194 must be filed by hand-delivery, by mail, or by facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(b) The filing date under paragraph (a) of this section is the date the document is—
(1) Hand-delivered;
(2) Mailed; or
(3) Sent by facsimile transmission.
(c) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department.
(d) If a document is filed by facsimile transmission, the Secretary or the hearing officer, as applicable, may require the filing of a follow-up hard copy by hand-delivery or by mail within a reasonable period of time.
(e) If agreed upon by the parties, service of a document may be made upon the other party by facsimile transmission.
(f) A party must show a proof of mailing to establish the filing date under paragraph (b)(2) of this section as provided in 34 CFR 75.102(d).
If dissatisfied with the Secretary's final action, the SEA may, within 60 days after notice of that action, file a petition for review with the United States Court of Appeals for the circuit in which the State is located. The procedures for judicial review are described in section 612(f)(3) (B) through (D) of the Act.
The Secretary continues a by-pass until the Secretary determines that the SEA, LEA or other public agency will meet the requirements for providing services to private school children.
(a) Rulemaking. Each State that receives funds under Part B of the Act must—
(1) Ensure that any State rules, regulations, and policies relating to this part conform to the purposes of this part;
(2) Identify in writing to LEAs located in the State and the Secretary any such rule, regulation, or policy as a State-imposed requirement that is not required by Part B of the Act and Federal regulations; and
(3) Minimize the number of rules, regulations, and policies to which the LEAs and schools located in the State are subject under Part B of the Act.
(b) Support and facilitation. State rules, regulations, and policies under Part B of the Act must support and facilitate LEA and school-level system improvement designed to enable children with disabilities to meet the challenging State student academic achievement standards.
An LEA is eligible for assistance under Part B of the Act for a fiscal year if the agency submits a plan that provides assurances to the SEA that the LEA meets each of the conditions in §§ 300.201 through 300.213.
The LEA, in providing for the education of children with disabilities within its jurisdiction, must have in effect policies, procedures, and programs that are consistent with the State policies and procedures established under §§ 300.101 through 300.163, and §§ 300.165 through 300.174.
(a) General. Amounts provided to the LEA under Part B of the Act—
(1) Must be expended in accordance with the applicable provisions of this part;
(2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and
(3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds.
(b) Excess cost requirement—(1) General. (i) The excess cost requirement prevents an LEA from using funds provided under Part B of the Act to pay for all of the costs directly attributable to the education of a child with a disability, subject to paragraph (b)(1)(ii) of this section.
(ii) The excess cost requirement does not prevent an LEA from using Part B funds to pay for all of the costs directly attributable to the education of a child with a disability in any of the ages 3, 4, 5, 18, 19, 20, or 21, if no local or State funds are available for nondisabled children of these ages. However, the LEA must comply with the nonsupplanting and other requirements of this part in providing the education and services for these children.
(2)(i) An LEA meets the excess cost requirement if it has spent at least a minimum average amount for the education of its children with disabilities before funds under Part B of the Act are used.
(ii) The amount described in paragraph (b)(2)(i) of this section is determined in accordance with the definition of excess costs in § 300.16. That amount may not include capital outlay or debt service.
(3) If two or more LEAs jointly establish eligibility in accordance with § 300.223, the minimum average amount is the average of the combined minimum average amounts determined in accordance with the definition of excess costs in § 300.16 in those agencies for elementary or secondary school students, as the case may be.
(a) Eligibility standard. (1) For purposes of establishing the LEA's eligibility for an award for a fiscal year, the SEA must determine that the LEA budgets, for the education of children with disabilities, at least the same amount, from at least one of the following sources, as the LEA spent for that purpose from the same source for the most recent fiscal year for which information is available:
(i) Local funds only;
(ii) The combination of State and local funds;
(iii) Local funds only on a per capita basis; or
(iv) The combination of State and local funds on a per capita basis.
(2) When determining the amount of funds that the LEA must budget to meet the requirement in paragraph (a)(1) of this section, the LEA may take into consideration, to the extent the information is available, the exceptions and adjustment provided in §§ 300.204 and 300.205 that the LEA:
(i) Took in the intervening year or years between the most recent fiscal year for which information is available and the fiscal year for which the LEA is budgeting; and
(ii) Reasonably expects to take in the fiscal year for which the LEA is budgeting.
(3) Expenditures made from funds provided by the Federal government for which the SEA is required to account to the Federal government or for which the LEA is required to account to the Federal government directly or through the SEA may not be considered in determining whether an LEA meets the standard in paragraph (a)(1) of this section.
(b) Compliance standard. (1) Except as provided in §§ 300.204 and 300.205, funds provided to an LEA under Part B of the Act must not be used to reduce the level of expenditures for the education of children with disabilities made by the LEA from local funds below the level of those expenditures for the preceding fiscal year.
(2) An LEA meets this standard if it does not reduce the level of expenditures for the education of children with disabilities made by the LEA from at least one of the following sources below the level of those expenditures from the same source for the preceding fiscal year, except as provided in §§ 300.204 and 300.205:
(i) Local funds only;
(ii) The combination of State and local funds;
(iii) Local funds only on a per capita basis; or
(iv) The combination of State and local funds on a per capita basis.
(3) Expenditures made from funds provided by the Federal government for which the SEA is required to account to the Federal government or for which the LEA is required to account to the Federal government directly or through the SEA may not be considered in determining whether an LEA meets the standard in paragraphs (b)(1) and (2) of this section.
(c) Subsequent years. (1) If, in the fiscal year beginning on July 1, 2013 or July 1, 2014, an LEA fails to meet the requirements of § 300.203 in effect at that time, the level of expenditures required of the LEA for the fiscal year subsequent to the year of the failure is the amount that would have been required in the absence of that failure, not the LEA's reduced level of expenditures.
(2) If, in any fiscal year beginning on or after July 1, 2015, an LEA fails to meet the requirement of paragraph (b)(2)(i) or (iii) of this section and the LEA is relying on local funds only, or local funds only on a per capita basis, to meet the requirements of paragraph (a) or (b) of this section, the level of expenditures required of the LEA for the fiscal year subsequent to the year of the failure is the amount that would have been required under paragraph (b)(2)(i) or (iii) in the absence of that failure, not the LEA's reduced level of expenditures.
(3) If, in any fiscal year beginning on or after July 1, 2015, an LEA fails to meet the requirement of paragraph (b)(2)(ii) or (iv) of this section and the LEA is relying on the combination of State and local funds, or the combination of State and local funds on a per capita basis, to meet the requirements of paragraph (a) or (b) of this section, the level of expenditures required of the LEA for the fiscal year subsequent to the year of the failure is the amount that would have been required under paragraph (b)(2)(ii) or (iv) in the absence of that failure, not the LEA's reduced level of expenditures.
(d) Consequence of failure to maintain effort. If an LEA fails to maintain its level of expenditures for the education of children with disabilities in accordance with paragraph (b) of this section, the SEA is liable in a recovery action under section 452 of the General Education Provisions Act (20 U.S.C. 1234a) to return to the Department, using non-Federal funds, an amount equal to the amount by which the LEA failed to maintain its level of expenditures in accordance with paragraph (b) of this section in that fiscal year, or the amount of the LEA's Part B subgrant in that fiscal year, whichever is lower.
Notwithstanding the restriction in § 300.203(b), an LEA may reduce the level of expenditures by the LEA under Part B of the Act below the level of those expenditures for the preceding fiscal year if the reduction is attributable to any of the following:
(a) The voluntary departure, by retirement or otherwise, or departure for just cause, of special education or related services personnel.
(b) A decrease in the enrollment of children with disabilities.
(c) The termination of the obligation of the agency, consistent with this part, to provide a program of special education to a particular child with a disability that is an exceptionally costly program, as determined by the SEA, because the child—
(1) Has left the jurisdiction of the agency;
(2) Has reached the age at which the obligation of the agency to provide FAPE to the child has terminated; or
(3) No longer needs the program of special education.
(d) The termination of costly expenditures for long-term purchases, such as the acquisition of equipment or the construction of school facilities.
(e) The assumption of cost by the high cost fund operated by the SEA under § 300.704(c).
(a) Amounts in excess. Notwithstanding § 300.202(a)(2) and (b) and § 300.203(b), and except as provided in paragraph (d) of this section and § 300.230(e)(2), for any fiscal year for which the allocation received by an LEA under § 300.705 exceeds the amount the LEA received for the previous fiscal year, the LEA may reduce the level of expenditures otherwise required by § 300.203(b) by not more than 50 percent of the amount of that excess.
(b) Use of amounts to carry out activities under ESEA. If an LEA exercises the authority under paragraph (a) of this section, the LEA must use an amount of local funds equal to the reduction in expenditures under paragraph (a) of this section to carry out activities that could be supported with funds under the ESEA regardless of whether the LEA is using funds under the ESEA for those activities.
(c) State prohibition. Notwithstanding paragraph (a) of this section, if an SEA determines that an LEA is unable to establish and maintain programs of FAPE that meet the requirements of section 613(a) of the Act and this part or the SEA has taken action against the LEA under section 616 of the Act and subpart F of these regulations, the SEA must prohibit the LEA from reducing the level of expenditures under paragraph (a) of this section for that fiscal year.
(d) Special rule. The amount of funds expended by an LEA for early intervening services under § 300.226 shall count toward the maximum amount of expenditures that the LEA may reduce under paragraph (a) of this section.
(a) General. Notwithstanding the provisions of §§ 300.202 and 300.203 or any other provision of Part B of the Act, an LEA may use funds received under Part B of the Act for any fiscal year to carry out a schoolwide program under section 1114 of the ESEA, except that the amount used in any schoolwide program may not exceed—
(1)(i) The amount received by the LEA under Part B of the Act for that fiscal year; divided by
(ii) The number of children with disabilities in the jurisdiction of the LEA; and multiplied by
(2) The number of children with disabilities participating in the schoolwide program.
(b) Funding conditions. The funds described in paragraph (a) of this section are subject to the following conditions:
(1) The funds must be considered as Federal Part B funds for purposes of the calculations required by § 300.202(a)(2) and (a)(3).
(2) The funds may be used without regard to the requirements of § 300.202(a)(1).
(c) Meeting other Part B requirements. Except as provided in paragraph (b) of this section, all other requirements of Part B of the Act must be met by an LEA using Part B funds in accordance with paragraph (a) of this section, including ensuring that children with disabilities in schoolwide program schools—
(1) Receive services in accordance with a properly developed IEP; and
(2) Are afforded all of the rights and services guaranteed to children with disabilities under the Act.
The LEA must ensure that all personnel necessary to carry out Part B of the Act are appropriately and adequately prepared, subject to the requirements of § 300.156 (related to personnel qualifications) and section 2102(b) of the ESEA.
(a) Uses. Notwithstanding §§ 300.202, 300.203(b), and 300.162(b), funds provided to an LEA under Part B of the Act may be used for the following activities:
(1) Services and aids that also benefit nondisabled children. For the costs of special education and related services, and supplementary aids and services, provided in a regular class or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services.
(2) Early intervening services. To develop and implement coordinated, early intervening educational services in accordance with § 300.226.
(3) High cost special education and related services. To establish and implement cost or risk sharing funds, consortia, or cooperatives for the LEA itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high cost special education and related services.
(b) Administrative case management. An LEA may use funds received under Part B of the Act to purchase appropriate technology for recordkeeping, data collection, and related case management activities of teachers and related services personnel providing services described in the IEP of children with disabilities, that is needed for the implementation of those case management activities.
(a) Rights of children with disabilities. Children with disabilities who attend public charter schools and their parents retain all rights under this part.
(b) Charter schools that are public schools of the LEA. (1) In carrying out Part B of the Act and these regulations with respect to charter schools that are public schools of the LEA, the LEA must—
(i) Serve children with disabilities attending those charter schools in the same manner as the LEA serves children with disabilities in its other schools, including providing supplementary and related services on site at the charter school to the same extent to which the LEA has a policy or practice of providing such services on the site to its other public schools; and
(ii) Provide funds under Part B of the Act to those charter schools—
(A) On the same basis as the LEA provides funds to the LEA's other public schools, including proportional distribution based on relative enrollment of children with disabilities; and
(B) At the same time as the LEA distributes other Federal funds to the LEA's other public schools, consistent with the State's charter school law.
(2) If the public charter school is a school of an LEA that receives funding under § 300.705 and includes other public schools—
(i) The LEA is responsible for ensuring that the requirements of this part are met, unless State law assigns that responsibility to some other entity; and
(ii) The LEA must meet the requirements of paragraph (b)(1) of this section.
(c) Public charter schools that are LEAs. If the public charter school is an LEA, consistent with § 300.28, that receives funding under § 300.705, that charter school is responsible for ensuring that the requirements of this part are met, unless State law assigns that responsibility to some other entity.
(d) Public charter schools that are not an LEA or a school that is part of an LEA. (1) If the public charter school is not an LEA receiving funding under § 300.705, or a school that is part of an LEA receiving funding under § 300.705, the SEA is responsible for ensuring that the requirements of this part are met.
(2) Paragraph (d)(1) of this section does not preclude a State from assigning initial responsibility for ensuring the requirements of this part are met to another entity. However, the SEA must maintain the ultimate responsibility for ensuring compliance with this part, consistent with § 300.149.
(a) General. Not later than December 3, 2006, an LEA that chooses to coordinate with the National Instructional Materials Access Center (NIMAC), when purchasing print instructional materials, must acquire those instructional materials in the same manner, and subject to the same conditions as an SEA under § 300.172.
(b) Rights of LEA. (1) Nothing in this section shall be construed to require an LEA to coordinate with the NIMAC.
(2) If an LEA chooses not to coordinate with the NIMAC, the LEA must provide an assurance to the SEA that the LEA will provide instructional materials to blind persons or other persons with print disabilities in a timely manner.
(3) Nothing in this section relieves an LEA of its responsibility to ensure that children with disabilities who need instructional materials in accessible formats but are not included under the definition of blind or other persons with print disabilities in § 300.172(e)(1)(i) or who need materials that cannot be produced from NIMAS files, receive those instructional materials in a timely manner.
The LEA must provide the SEA with information necessary to enable the SEA to carry out its duties under Part B of the Act, including, with respect to §§ 300.157 and 300.160, information relating to the performance of children with disabilities participating in programs carried out under Part B of the Act.
The LEA must make available to parents of children with disabilities and to the general public all documents relating to the eligibility of the agency under Part B of the Act.
The LEA must cooperate in the Secretary's efforts under section 1308 of the ESEA to ensure the linkage of records pertaining to migratory children with disabilities for the purpose of electronically exchanging, among the States, health and educational information regarding those children.
(a) General. If an LEA or a State agency described in § 300.228 has on file with the SEA policies and procedures that demonstrate that the LEA or State agency meets any requirement of § 300.200, including any policies and procedures filed under Part B of the Act as in effect before December 3, 2004, the SEA must consider the LEA or State agency to have met that requirement for purposes of receiving assistance under Part B of the Act.
(b) Modification made by an LEA or State agency. Subject to paragraph (c) of this section, policies and procedures submitted by an LEA or a State agency in accordance with this subpart remain in effect until the LEA or State agency submits to the SEA the modifications that the LEA or State agency determines are necessary.
(c) Modifications required by the SEA. The SEA may require an LEA or a State agency to modify its policies and procedures, but only to the extent necessary to ensure the LEA's or State agency's compliance with Part B of the Act or State law, if—
(1) After December 3, 2004, the effective date of the Individuals with Disabilities Education Improvement Act of 2004, the applicable provisions of the Act (or the regulations developed to carry out the Act) are amended;
(2) There is a new interpretation of an applicable provision of the Act by Federal or State courts; or
(3) There is an official finding of noncompliance with Federal or State law or regulations.
If the SEA determines that an LEA or State agency is not eligible under Part B of the Act, then the SEA must—
(a) Notify the LEA or State agency of that determination; and
(b) Provide the LEA or State agency with reasonable notice and an opportunity for a hearing.
(a) General. If the SEA, after reasonable notice and an opportunity for a hearing, finds that an LEA or State agency that has been determined to be eligible under this subpart is failing to comply with any requirement described in §§ 300.201 through 300.213, the SEA must reduce or must not provide any further payments to the LEA or State agency until the SEA is satisfied that the LEA or State agency is complying with that requirement.
(b) Notice requirement. Any State agency or LEA in receipt of a notice described in paragraph (a) of this section must, by means of public notice, take the measures necessary to bring the pendency of an action pursuant to this section to the attention of the public within the jurisdiction of the agency.
(c) Consideration. In carrying out its responsibilities under this section, each SEA must consider any decision resulting from a hearing held under §§ 300.511 through 300.533 that is adverse to the LEA or State agency involved in the decision.
(a) General. An SEA may require an LEA to establish its eligibility jointly with another LEA if the SEA determines that the LEA will be ineligible under this subpart because the agency will not be able to establish and maintain programs of sufficient size and scope to effectively meet the needs of children with disabilities.
(b) Charter school exception. An SEA may not require a charter school that is an LEA to jointly establish its eligibility under paragraph (a) of this section unless the charter school is explicitly permitted to do so under the State's charter school statute.
(c) Amount of payments. If an SEA requires the joint establishment of eligibility under paragraph (a) of this section, the total amount of funds made available to the affected LEAs must be equal to the sum of the payments that each LEA would have received under § 300.705 if the agencies were eligible for those payments.
(a) Requirements for LEAs in general. LEAs that establish joint eligibility under this section must—
(1) Adopt policies and procedures that are consistent with the State's policies and procedures under §§ 300.101 through 300.163, and §§ 300.165 through 300.174; and
(2) Be jointly responsible for implementing programs that receive assistance under Part B of the Act.
(b) Requirements for educational service agencies in general. If an educational service agency is required by State law to carry out programs under Part B of the Act, the joint responsibilities given to LEAs under Part B of the Act—
(1) Do not apply to the administration and disbursement of any payments received by that educational service agency; and
(2) Must be carried out only by that educational service agency.
(c) Additional requirement. Notwithstanding any other provision of §§ 300.223 through 300.224, an educational service agency must provide for the education of children with disabilities in the least restrictive environment, as required by § 300.112.
(a) General. An LEA may not use more than 15 percent of the amount the LEA receives under Part B of the Act for any fiscal year, less any amount reduced by the LEA pursuant to § 300.205, if any, in combination with other amounts (which may include amounts other than education funds), to develop and implement coordinated, early intervening services, which may include interagency financing structures, for students in kindergarten through grade 12 (with a particular emphasis on students in kindergarten through grade three) who are not currently identified as needing special education or related services, but who need additional academic and behavioral support to succeed in a general education environment. (See appendix D for examples of how § 300.205(d), regarding local maintenance of effort, and § 300.226(a) affect one another.)
(b) Activities. In implementing coordinated, early intervening services under this section, an LEA may carry out activities that include—
(1) Professional development (which may be provided by entities other than LEAs) for teachers and other school staff to enable such personnel to deliver scientifically based academic and behavioral interventions, including scientifically based literacy instruction, and, where appropriate, instruction on the use of adaptive and instructional software; and
(2) Providing educational and behavioral evaluations, services, and supports, including scientifically based literacy instruction.
(c) Construction. Nothing in this section shall be construed to either limit or create a right to FAPE under Part B of the Act or to delay appropriate evaluation of a child suspected of having a disability.
(d) Reporting. Each LEA that develops and maintains coordinated, early intervening services under this section must annually report to the SEA on—
(1) The number of children served under this section who received early intervening services; and
(2) The number of children served under this section who received early intervening services and subsequently receive special education and related services under Part B of the Act during the preceding two year period.
(e) Coordination with ESEA. Funds made available to carry out this section may be used to carry out coordinated, early intervening services aligned with activities funded by, and carried out under the ESEA if those funds are used to supplement, and not supplant, funds made available under the ESEA for the activities and services assisted under this section.
(a) General. (1) An SEA must use the payments that would otherwise have been available to an LEA or to a State agency to provide special education and related services directly to children with disabilities residing in the area served by that LEA, or for whom that State agency is responsible, if the SEA determines that the LEA or State agency—
(i) Has not provided the information needed to establish the eligibility of the LEA or State agency, or elected not to apply for its Part B allotment, under Part B of the Act;
(ii) Is unable to establish and maintain programs of FAPE that meet the requirements of this part;
(iii) Is unable or unwilling to be consolidated with one or more LEAs in order to establish and maintain the programs; or
(iv) Has one or more children with disabilities who can best be served by a regional or State program or service delivery system designed to meet the needs of these children.
(2) SEA administrative procedures. (i) In meeting the requirements in paragraph (a)(1) of this section, the SEA may provide special education and related services directly, by contract, or through other arrangements.
(ii) The excess cost requirements of § 300.202(b) do not apply to the SEA.
(b) Manner and location of education and services. The SEA may provide special education and related services under paragraph (a) of this section in the manner and at the locations (including regional or State centers) as the SEA considers appropriate. The education and services must be provided in accordance with this part.
Any State agency that desires to receive a subgrant for any fiscal year under § 300.705 must demonstrate to the satisfaction of the SEA that—
(a) All children with disabilities who are participating in programs and projects funded under Part B of the Act receive FAPE, and that those children and their parents are provided all the rights and procedural safeguards described in this part; and
(b) The agency meets the other conditions of this subpart that apply to LEAs.
(a) The State may require that a public agency include in the records of a child with a disability a statement of any current or previous disciplinary action that has been taken against the child and transmit the statement to the same extent that the disciplinary information is included in, and transmitted with, the student records of nondisabled children.
(b) The statement may include a description of any behavior engaged in by the child that required disciplinary action, a description of the disciplinary action taken, and any other information that is relevant to the safety of the child and other individuals involved with the child.
(c) If the State adopts such a policy, and the child transfers from one school to another, the transmission of any of the child's records must include both the child's current IEP and any statement of current or previous disciplinary action that has been taken against the child.
(a) Adjustment to State fiscal effort in certain fiscal years. For any fiscal year for which the allotment received by a State under § 300.703 exceeds the amount the State received for the previous fiscal year and if the State in school year 2003-2004 or any subsequent school year pays or reimburses all LEAs within the State from State revenue 100 percent of the non-Federal share of the costs of special education and related services, the SEA, notwithstanding §§ 300.162 through 300.163 (related to State-level nonsupplanting and maintenance of effort), and § 300.175 (related to direct services by the SEA) may reduce the level of expenditures from State sources for the education of children with disabilities by not more than 50 percent of the amount of such excess.
(b) Prohibition. Notwithstanding paragraph (a) of this section, if the Secretary determines that an SEA is unable to establish, maintain, or oversee programs of FAPE that meet the requirements of this part, or that the State needs assistance, intervention, or substantial intervention under § 300.603, the Secretary prohibits the SEA from exercising the authority in paragraph (a) of this section.
(c) Education activities. If an SEA exercises the authority under paragraph (a) of this section, the agency must use funds from State sources, in an amount equal to the amount of the reduction under paragraph (a) of this section, to support activities authorized under the ESEA, or to support need-based student or teacher higher education programs.
(d) Report. For each fiscal year for which an SEA exercises the authority under paragraph (a) of this section, the SEA must report to the Secretary—
(1) The amount of expenditures reduced pursuant to that paragraph; and
(2) The activities that were funded pursuant to paragraph (c) of this section.
(e) Limitation. (1) Notwithstanding paragraph (a) of this section, an SEA may not reduce the level of expenditures described in paragraph (a) of this section if any LEA in the State would, as a result of such reduction, receive less than 100 percent of the amount necessary to ensure that all children with disabilities served by the LEA receive FAPE from the combination of Federal funds received under Part B of the Act and State funds received from the SEA.
(2) If an SEA exercises the authority under paragraph (a) of this section, LEAs in the State may not reduce local effort under § 300.205 by more than the reduction in the State funds they receive.
(a) Parental consent for initial evaluation. (1)(i) The public agency proposing to conduct an initial evaluation to determine if a child qualifies as a child with a disability under § 300.8 must, after providing notice consistent with §§ 300.503 and 300.504, obtain informed consent, consistent with § 300.9, from the parent of the child before conducting the evaluation.
(ii) Parental consent for initial evaluation must not be construed as consent for initial provision of special education and related services.
(iii) The public agency must make reasonable efforts to obtain the informed consent from the parent for an initial evaluation to determine whether the child is a child with a disability.
(2) For initial evaluations only, if the child is a ward of the State and is not residing with the child's parent, the public agency is not required to obtain informed consent from the parent for an initial evaluation to determine whether the child is a child with a disability if—
(i) Despite reasonable efforts to do so, the public agency cannot discover the whereabouts of the parent of the child;
(ii) The rights of the parents of the child have been terminated in accordance with State law; or
(iii) The rights of the parent to make educational decisions have been subrogated by a judge in accordance with State law and consent for an initial evaluation has been given by an individual appointed by the judge to represent the child.
(3)(i) If the parent of a child enrolled in public school or seeking to be enrolled in public school does not provide consent for initial evaluation under paragraph (a)(1) of this section, or the parent fails to respond to a request to provide consent, the public agency may, but is not required to, pursue the initial evaluation of the child by utilizing the procedural safeguards in subpart E of this part (including the mediation procedures under § 300.506 or the due process procedures under §§ 300.507 through 300.516), if appropriate, except to the extent inconsistent with State law relating to such parental consent.
(ii) The public agency does not violate its obligation under § 300.111 and §§ 300.301 through 300.311 if it declines to pursue the evaluation.
(b) Parental consent for services. (1) A public agency that is responsible for making FAPE available to a child with a disability must obtain informed consent from the parent of the child before the initial provision of special education and related services to the child.
(2) The public agency must make reasonable efforts to obtain informed consent from the parent for the initial provision of special education and related services to the child.
(3) If the parent of a child fails to respond to a request for, or refuses to consent to, the initial provision of special education and related services, the public agency—
(i) May not use the procedures in subpart E of this part (including the mediation procedures under § 300.506 or the due process procedures under §§ 300.507 through 300.516) in order to obtain agreement or a ruling that the services may be provided to the child;
(ii) Will not be considered to be in violation of the requirement to make FAPE available to the child because of the failure to provide the child with the special education and related services for which the parent refuses to or fails to provide consent; and
(iii) Is not required to convene an IEP Team meeting or develop an IEP under §§ 300.320 and 300.324 for the child.
(4) If, at any time subsequent to the initial provision of special education and related services, the parent of a child revokes consent in writing for the continued provision of special education and related services, the public agency—
(i) May not continue to provide special education and related services to the child, but must provide prior written notice in accordance with § 300.503 before ceasing the provision of special education and related services;
(ii) May not use the procedures in subpart E of this part (including the mediation procedures under § 300.506 or the due process procedures under §§ 300.507 through 300.516) in order to obtain agreement or a ruling that the services may be provided to the child;
(iii) Will not be considered to be in violation of the requirement to make FAPE available to the child because of the failure to provide the child with further special education and related services; and
(iv) Is not required to convene an IEP Team meeting or develop an IEP under §§ 300.320 and 300.324 for the child for further provision of special education and related services.
(c) Parental consent for reevaluations. (1) Subject to paragraph (c)(2) of this section, each public agency—
(i) Must obtain informed parental consent, in accordance with § 300.300(a)(1), prior to conducting any reevaluation of a child with a disability.
(ii) If the parent refuses to consent to the reevaluation, the public agency may, but is not required to, pursue the reevaluation by using the consent override procedures described in paragraph (a)(3) of this section.
(iii) The public agency does not violate its obligation under § 300.111 and §§ 300.301 through 300.311 if it declines to pursue the evaluation or reevaluation.
(2) The informed parental consent described in paragraph (c)(1) of this section need not be obtained if the public agency can demonstrate that—
(i) It made reasonable efforts to obtain such consent; and
(ii) The child's parent has failed to respond.
(d) Other consent requirements.
(1) Parental consent is not required before—
(i) Reviewing existing data as part of an evaluation or a reevaluation; or
(ii) Administering a test or other evaluation that is administered to all children unless, before administration of that test or evaluation, consent is required of parents of all children.
(2) In addition to the parental consent requirements described in paragraphs (a), (b), and (c) of this section, a State may require parental consent for other services and activities under this part if it ensures that each public agency in the State establishes and implements effective procedures to ensure that a parent's refusal to consent does not result in a failure to provide the child with FAPE.
(3) A public agency may not use a parent's refusal to consent to one service or activity under paragraphs (a), (b), (c), or (d)(2) of this section to deny the parent or child any other service, benefit, or activity of the public agency, except as required by this part.
(4)(i) If a parent of a child who is home schooled or placed in a private school by the parents at their own expense does not provide consent for the initial evaluation or the reevaluation, or the parent fails to respond to a request to provide consent, the public agency may not use the consent override procedures (described in paragraphs (a)(3) and (c)(1) of this section); and
(ii) The public agency is not required to consider the child as eligible for services under §§ 300.132 through 300.144.
(5) To meet the reasonable efforts requirement in paragraphs (a)(1)(iii), (a)(2)(i), (b)(2), and (c)(2)(i) of this section, the public agency must document its attempts to obtain parental consent using the procedures in § 300.322(d).
(a) General. Each public agency must conduct a full and individual initial evaluation, in accordance with §§ 300.304 through 300.306, before the initial provision of special education and related services to a child with a disability under this part.
(b) Request for initial evaluation. Consistent with the consent requirements in § 300.300, either a parent of a child or a public agency may initiate a request for an initial evaluation to determine if the child is a child with a disability.
(c) Procedures for initial evaluation. The initial evaluation—
(1)(i) Must be conducted within 60 days of receiving parental consent for the evaluation; or
(ii) If the State establishes a timeframe within which the evaluation must be conducted, within that timeframe; and
(2) Must consist of procedures—
(i) To determine if the child is a child with a disability under § 300.8; and
(ii) To determine the educational needs of the child.
(d) Exception. The timeframe described in paragraph (c)(1) of this section does not apply to a public agency if—
(1) The parent of a child repeatedly fails or refuses to produce the child for the evaluation; or
(2) A child enrolls in a school of another public agency after the relevant timeframe in paragraph (c)(1) of this section has begun, and prior to a determination by the child's previous public agency as to whether the child is a child with a disability under § 300.8.
(e) The exception in paragraph (d)(2) of this section applies only if the subsequent public agency is making sufficient progress to ensure a prompt completion of the evaluation, and the parent and subsequent public agency agree to a specific time when the evaluation will be completed.
The screening of a student by a teacher or specialist to determine appropriate instructional strategies for curriculum implementation shall not be considered to be an evaluation for eligibility for special education and related services.
(a) General. A public agency must ensure that a reevaluation of each child with a disability is conducted in accordance with §§ 300.304 through 300.311—
(1) If the public agency determines that the educational or related services needs, including improved academic achievement and functional performance, of the child warrant a reevaluation; or
(2) If the child's parent or teacher requests a reevaluation.
(b) Limitation. A reevaluation conducted under paragraph (a) of this section—
(1) May occur not more than once a year, unless the parent and the public agency agree otherwise; and
(2) Must occur at least once every 3 years, unless the parent and the public agency agree that a reevaluation is unnecessary.
(a) Notice. The public agency must provide notice to the parents of a child with a disability, in accordance with § 300.503, that describes any evaluation procedures the agency proposes to conduct.
(b) Conduct of evaluation. In conducting the evaluation, the public agency must—
(1) Use a variety of assessment tools and strategies to gather relevant functional, developmental, and academic information about the child, including information provided by the parent, that may assist in determining—
(i) Whether the child is a child with a disability under § 300.8; and
(ii) The content of the child's IEP, including information related to enabling the child to be involved in and progress in the general education curriculum (or for a preschool child, to participate in appropriate activities);
(2) Not use any single measure or assessment as the sole criterion for determining whether a child is a child with a disability and for determining an appropriate educational program for the child; and
(3) Use technically sound instruments that may assess the relative contribution of cognitive and behavioral factors, in addition to physical or developmental factors.
(c) Other evaluation procedures. Each public agency must ensure that—
(1) Assessments and other evaluation materials used to assess a child under this part—
(i) Are selected and administered so as not to be discriminatory on a racial or cultural basis;
(ii) Are provided and administered in the child's native language or other mode of communication and in the form most likely to yield accurate information on what the child knows and can do academically, developmentally, and functionally, unless it is clearly not feasible to so provide or administer;
(iii) Are used for the purposes for which the assessments or measures are valid and reliable;
(iv) Are administered by trained and knowledgeable personnel; and
(v) Are administered in accordance with any instructions provided by the producer of the assessments.
(2) Assessments and other evaluation materials include those tailored to assess specific areas of educational need and not merely those that are designed to provide a single general intelligence quotient.
(3) Assessments are selected and administered so as best to ensure that if an assessment is administered to a child with impaired sensory, manual, or speaking skills, the assessment results accurately reflect the child's aptitude or achievement level or whatever other factors the test purports to measure, rather than reflecting the child's impaired sensory, manual, or speaking skills (unless those skills are the factors that the test purports to measure).
(4) The child is assessed in all areas related to the suspected disability, including, if appropriate, health, vision, hearing, social and emotional status, general intelligence, academic performance, communicative status, and motor abilities;
(5) Assessments of children with disabilities who transfer from one public agency to another public agency in the same school year are coordinated with those children's prior and subsequent schools, as necessary and as expeditiously as possible, consistent with § 300.301(d)(2) and (e), to ensure prompt completion of full evaluations.
(6) In evaluating each child with a disability under §§ 300.304 through 300.306, the evaluation is sufficiently comprehensive to identify all of the child's special education and related services needs, whether or not commonly linked to the disability category in which the child has been classified.
(7) Assessment tools and strategies that provide relevant information that directly assists persons in determining the educational needs of the child are provided.
(a) Review of existing evaluation data. As part of an initial evaluation (if appropriate) and as part of any reevaluation under this part, the IEP Team and other qualified professionals, as appropriate, must—
(1) Review existing evaluation data on the child, including—
(i) Evaluations and information provided by the parents of the child;
(ii) Current classroom-based, local, or State assessments, and classroom-based observations; and
(iii) Observations by teachers and related services providers; and
(2) On the basis of that review, and input from the child's parents, identify what additional data, if any, are needed to determine—
(i)(A) Whether the child is a child with a disability, as defined in § 300.8, and the educational needs of the child; or
(B) In case of a reevaluation of a child, whether the child continues to have such a disability, and the educational needs of the child;
(ii) The present levels of academic achievement and related developmental needs of the child;
(iii)(A) Whether the child needs special education and related services; or
(B) In the case of a reevaluation of a child, whether the child continues to need special education and related services; and
(iv) Whether any additions or modifications to the special education and related services are needed to enable the child to meet the measurable annual goals set out in the IEP of the child and to participate, as appropriate, in the general education curriculum.
(b) Conduct of review. The group described in paragraph (a) of this section may conduct its review without a meeting.
(c) Source of data. The public agency must administer such assessments and other evaluation measures as may be needed to produce the data identified under paragraph (a) of this section.
(d) Requirements if additional data are not needed. (1) If the IEP Team and other qualified professionals, as appropriate, determine that no additional data are needed to determine whether the child continues to be a child with a disability, and to determine the child's educational needs, the public agency must notify the child's parents of—
(i) That determination and the reasons for the determination; and
(ii) The right of the parents to request an assessment to determine whether the child continues to be a child with a disability, and to determine the child's educational needs.
(2) The public agency is not required to conduct the assessment described in paragraph (d)(1)(ii) of this section unless requested to do so by the child's parents.
(e) Evaluations before change in eligibility. (1) Except as provided in paragraph (e)(2) of this section, a public agency must evaluate a child with a disability in accordance with §§ 300.304 through 300.311 before determining that the child is no longer a child with a disability.
(2) The evaluation described in paragraph (e)(1) of this section is not required before the termination of a child's eligibility under this part due to graduation from secondary school with a regular diploma, or due to exceeding the age eligibility for FAPE under State law.
(3) For a child whose eligibility terminates under circumstances described in paragraph (e)(2) of this section, a public agency must provide the child with a summary of the child's academic achievement and functional performance, which shall include recommendations on how to assist the child in meeting the child's postsecondary goals.
(a) General. Upon completion of the administration of assessments and other evaluation measures—
(1) A group of qualified professionals and the parent of the child determines whether the child is a child with a disability, as defined in § 300.8, in accordance with paragraph (c) of this section and the educational needs of the child; and
(2) The public agency provides a copy of the evaluation report and the documentation of determination of eligibility at no cost to the parent.
(b) Special rule for eligibility determination. A child must not be determined to be a child with a disability under this part—
(1) If the determinant factor for that determination is—
(i) Lack of appropriate instruction in reading, including the essential components of reading instruction (as defined in section 1208(3) of the ESEA as such section was in effect on the day before the date of enactment of the Every Student Succeeds Act (December 9, 2015));
(ii) Lack of appropriate instruction in math; or
(iii) Limited English proficiency; and
(2) If the child does not otherwise meet the eligibility criteria under § 300.8(a).
(c) Procedures for determining eligibility and educational need. (1) In interpreting evaluation data for the purpose of determining if a child is a child with a disability under § 300.8, and the educational needs of the child, each public agency must—
(i) Draw upon information from a variety of sources, including aptitude and achievement tests, parent input, and teacher recommendations, as well as information about the child's physical condition, social or cultural background, and adaptive behavior; and
(ii) Ensure that information obtained from all of these sources is documented and carefully considered.
(2) If a determination is made that a child has a disability and needs special education and related services, an IEP must be developed for the child in accordance with §§ 300.320 through 300.324.
(a) General. A State must adopt, consistent with § 300.309, criteria for determining whether a child has a specific learning disability as defined in § 300.8(c)(10). In addition, the criteria adopted by the State—
(1) Must not require the use of a severe discrepancy between intellectual ability and achievement for determining whether a child has a specific learning disability, as defined in § 300.8(c)(10);
(2) Must permit the use of a process based on the child's response to scientific, research-based intervention; and
(3) May permit the use of other alternative research-based procedures for determining whether a child has a specific learning disability, as defined in § 300.8(c)(10).
(b) Consistency with State criteria. A public agency must use the State criteria adopted pursuant to paragraph (a) of this section in determining whether a child has a specific learning disability.
The determination of whether a child suspected of having a specific learning disability is a child with a disability as defined in § 300.8, must be made by the child's parents and a team of qualified professionals, which must include—
(a)(1) The child's regular teacher; or
(2) If the child does not have a regular teacher, a regular classroom teacher qualified to teach a child of his or her age; or
(3) For a child of less than school age, an individual qualified by the SEA to teach a child of his or her age; and
(b) At least one person qualified to conduct individual diagnostic examinations of children, such as a school psychologist, speech-language pathologist, or remedial reading teacher.
(a) The group described in § 300.306 may determine that a child has a specific learning disability, as defined in § 300.8(c)(10), if—
(1) The child does not achieve adequately for the child's age or to meet State-approved grade-level standards in one or more of the following areas, when provided with learning experiences and instruction appropriate for the child's age or State-approved grade-level standards:
(i) Oral expression.
(ii) Listening comprehension.
(iii) Written expression.
(iv) Basic reading skill.
(v) Reading fluency skills.
(vi) Reading comprehension.
(vii) Mathematics calculation.
(viii) Mathematics problem solving.
(2)(i) The child does not make sufficient progress to meet age or State-approved grade-level standards in one or more of the areas identified in paragraph (a)(1) of this section when using a process based on the child's response to scientific, research-based intervention; or
(ii) The child exhibits a pattern of strengths and weaknesses in performance, achievement, or both, relative to age, State-approved grade-level standards, or intellectual development, that is determined by the group to be relevant to the identification of a specific learning disability, using appropriate assessments, consistent with §§ 300.304 and 300.305; and
(3) The group determines that its findings under paragraphs (a)(1) and (2) of this section are not primarily the result of—
(i) A visual, hearing, or motor disability;
(ii) An intellectual disability;
(iii) Emotional disturbance;
(iv) Cultural factors;
(v) Environmental or economic disadvantage; or
(vi) Limited English proficiency.
(b) To ensure that underachievement in a child suspected of having a specific learning disability is not due to lack of appropriate instruction in reading or math, the group must consider, as part of the evaluation described in §§ 300.304 through 300.306—
(1) Data that demonstrate that prior to, or as a part of, the referral process, the child was provided appropriate instruction in regular education settings, delivered by qualified personnel; and
(2) Data-based documentation of repeated assessments of achievement at reasonable intervals, reflecting formal assessment of student progress during instruction, which was provided to the child's parents.
(c) The public agency must promptly request parental consent to evaluate the child to determine if the child needs special education and related services, and must adhere to the timeframes described in §§ 300.301 and 300.303, unless extended by mutual written agreement of the child's parents and a group of qualified professionals, as described in § 300.306(a)(1)—
(1) If, prior to a referral, a child has not made adequate progress after an appropriate period of time when provided instruction, as described in paragraphs (b)(1) and (b)(2) of this section; and
(2) Whenever a child is referred for an evaluation.
(a) The public agency must ensure that the child is observed in the child's learning environment (including the regular classroom setting) to document the child's academic performance and behavior in the areas of difficulty.
(b) The group described in § 300.306(a)(1), in determining whether a child has a specific learning disability, must decide to—
(1) Use information from an observation in routine classroom instruction and monitoring of the child's performance that was done before the child was referred for an evaluation; or
(2) Have at least one member of the group described in § 300.306(a)(1) conduct an observation of the child's academic performance in the regular classroom after the child has been referred for an evaluation and parental consent, consistent with § 300.300(a), is obtained.
(c) In the case of a child of less than school age or out of school, a group member must observe the child in an environment appropriate for a child of that age.
(a) For a child suspected of having a specific learning disability, the documentation of the determination of eligibility, as required in § 300.306(a)(2), must contain a statement of—
(1) Whether the child has a specific learning disability;
(2) The basis for making the determination, including an assurance that the determination has been made in accordance with § 300.306(c)(1);
(3) The relevant behavior, if any, noted during the observation of the child and the relationship of that behavior to the child's academic functioning;
(4) The educationally relevant medical findings, if any;
(5) Whether—
(i) The child does not achieve adequately for the child's age or to meet State-approved grade-level standards consistent with § 300.309(a)(1); and
(ii)(A) The child does not make sufficient progress to meet age or State-approved grade-level standards consistent with § 300.309(a)(2)(i); or
(B) The child exhibits a pattern of strengths and weaknesses in performance, achievement, or both, relative to age, State-approved grade level standards or intellectual development consistent with § 300.309(a)(2)(ii);
(6) The determination of the group concerning the effects of a visual, hearing, motor disability, or an intellectual disability; emotional disturbance; cultural factors; environmental or economic disadvantage; or limited English proficiency on the child's achievement level; and
(7) If the child has participated in a process that assesses the child's response to scientific, research-based intervention—
(i) The instructional strategies used and the student-centered data collected; and
(ii) The documentation that the child's parents were notified about—
(A) The State's policies regarding the amount and nature of student performance data that would be collected and the general education services that would be provided;
(B) Strategies for increasing the child's rate of learning; and
(C) The parents' right to request an evaluation.
(b) Each group member must certify in writing whether the report reflects the member's conclusion. If it does not reflect the member's conclusion, the group member must submit a separate statement presenting the member's conclusions.
(a) General. As used in this part, the term individualized education program or IEP means a written statement for each child with a disability that is developed, reviewed, and revised in a meeting in accordance with §§ 300.320 through 300.324, and that must include—
(1) A statement of the child's present levels of academic achievement and functional performance, including—
(i) How the child's disability affects the child's involvement and progress in the general education curriculum (i.e., the same curriculum as for nondisabled children); or
(ii) For preschool children, as appropriate, how the disability affects the child's participation in appropriate activities;
(2)(i) A statement of measurable annual goals, including academic and functional goals designed to—
(A) Meet the child's needs that result from the child's disability to enable the child to be involved in and make progress in the general education curriculum; and
(B) Meet each of the child's other educational needs that result from the child's disability;
(ii) For children with disabilities who take alternate assessments aligned to alternate academic achievement standards, a description of benchmarks or short-term objectives;
(3) A description of—
(i) How the child's progress toward meeting the annual goals described in paragraph (2) of this section will be measured; and
(ii) When periodic reports on the progress the child is making toward meeting the annual goals (such as through the use of quarterly or other periodic reports, concurrent with the issuance of report cards) will be provided;
(4) A statement of the special education and related services and supplementary aids and services, based on peer-reviewed research to the extent practicable, to be provided to the child, or on behalf of the child, and a statement of the program modifications or supports for school personnel that will be provided to enable the child—
(i) To advance appropriately toward attaining the annual goals;
(ii) To be involved in and make progress in the general education curriculum in accordance with paragraph (a)(1) of this section, and to participate in extracurricular and other nonacademic activities; and
(iii) To be educated and participate with other children with disabilities and nondisabled children in the activities described in this section;
(5) An explanation of the extent, if any, to which the child will not participate with nondisabled children in the regular class and in the activities described in paragraph (a)(4) of this section;
(6)(i) A statement of any individual appropriate accommodations that are necessary to measure the academic achievement and functional performance of the child on State and districtwide assessments consistent with section 612(a)(16) of the Act; and
(ii) If the IEP Team determines that the child must take an alternate assessment instead of a particular regular State or districtwide assessment of student achievement, a statement of why—
(A) The child cannot participate in the regular assessment; and
(B) The particular alternate assessment selected is appropriate for the child; and
(7) The projected date for the beginning of the services and modifications described in paragraph (a)(4) of this section, and the anticipated frequency, location, and duration of those services and modifications.
(b) Transition services. Beginning not later than the first IEP to be in effect when the child turns 16, or younger if determined appropriate by the IEP Team, and updated annually, thereafter, the IEP must include—
(1) Appropriate measurable postsecondary goals based upon age appropriate transition assessments related to training, education, employment, and, where appropriate, independent living skills; and
(2) The transition services (including courses of study) needed to assist the child in reaching those goals.
(c) Transfer of rights at age of majority. Beginning not later than one year before the child reaches the age of majority under State law, the IEP must include a statement that the child has been informed of the child's rights under Part B of the Act, if any, that will transfer to the child on reaching the age of majority under § 300.520.
(d) Construction. Nothing in this section shall be construed to require—
(1) That additional information be included in a child's IEP beyond what is explicitly required in section 614 of the Act; or
(2) The IEP Team to include information under one component of a child's IEP that is already contained under another component of the child's IEP.
(a) General. The public agency must ensure that the IEP Team for each child with a disability includes—
(1) The parents of the child;
(2) Not less than one regular education teacher of the child (if the child is, or may be, participating in the regular education environment);
(3) Not less than one special education teacher of the child, or where appropriate, not less than one special education provider of the child;
(4) A representative of the public agency who—
(i) Is qualified to provide, or supervise the provision of, specially designed instruction to meet the unique needs of children with disabilities;
(ii) Is knowledgeable about the general education curriculum; and
(iii) Is knowledgeable about the availability of resources of the public agency.
(5) An individual who can interpret the instructional implications of evaluation results, who may be a member of the team described in paragraphs (a)(2) through (a)(6) of this section;
(6) At the discretion of the parent or the agency, other individuals who have knowledge or special expertise regarding the child, including related services personnel as appropriate; and
(7) Whenever appropriate, the child with a disability.
(b) Transition services participants. (1) In accordance with paragraph (a)(7) of this section, the public agency must invite a child with a disability to attend the child's IEP Team meeting if a purpose of the meeting will be the consideration of the postsecondary goals for the child and the transition services needed to assist the child in reaching those goals under § 300.320(b).
(2) If the child does not attend the IEP Team meeting, the public agency must take other steps to ensure that the child's preferences and interests are considered.
(3) To the extent appropriate, with the consent of the parents or a child who has reached the age of majority, in implementing the requirements of paragraph (b)(1) of this section, the public agency must invite a representative of any participating agency that is likely to be responsible for providing or paying for transition services.
(c) Determination of knowledge and special expertise. The determination of the knowledge or special expertise of any individual described in paragraph (a)(6) of this section must be made by the party (parents or public agency) who invited the individual to be a member of the IEP Team.
(d) Designating a public agency representative. A public agency may designate a public agency member of the IEP Team to also serve as the agency representative, if the criteria in paragraph (a)(4) of this section are satisfied.
(e) IEP Team attendance. (1) A member of the IEP Team described in paragraphs (a)(2) through (a)(5) of this section is not required to attend an IEP Team meeting, in whole or in part, if the parent of a child with a disability and the public agency agree, in writing, that the attendance of the member is not necessary because the member's area of the curriculum or related services is not being modified or discussed in the meeting.
(2) A member of the IEP Team described in paragraph (e)(1) of this section may be excused from attending an IEP Team meeting, in whole or in part, when the meeting involves a modification to or discussion of the member's area of the curriculum or related services, if—
(i) The parent, in writing, and the public agency consent to the excusal; and
(ii) The member submits, in writing to the parent and the IEP Team, input into the development of the IEP prior to the meeting.
(f) Initial IEP Team meeting for child under Part C. In the case of a child who was previously served under Part C of the Act, an invitation to the initial IEP Team meeting must, at the request of the parent, be sent to the Part C service coordinator or other representatives of the Part C system to assist with the smooth transition of services.
(a) Public agency responsibility—general. Each public agency must take steps to ensure that one or both of the parents of a child with a disability are present at each IEP Team meeting or are afforded the opportunity to participate, including—
(1) Notifying parents of the meeting early enough to ensure that they will have an opportunity to attend; and
(2) Scheduling the meeting at a mutually agreed on time and place.
(b) Information provided to parents. (1) The notice required under paragraph (a)(1) of this section must—
(i) Indicate the purpose, time, and location of the meeting and who will be in attendance; and
(ii) Inform the parents of the provisions in § 300.321(a)(6) and (c) (relating to the participation of other individuals on the IEP Team who have knowledge or special expertise about the child), and § 300.321(f) (relating to the participation of the Part C service coordinator or other representatives of the Part C system at the initial IEP Team meeting for a child previously served under Part C of the Act).
(2) For a child with a disability beginning not later than the first IEP to be in effect when the child turns 16, or younger if determined appropriate by the IEP Team, the notice also must—
(i) Indicate—
(A) That a purpose of the meeting will be the consideration of the postsecondary goals and transition services for the child, in accordance with § 300.320(b); and
(B) That the agency will invite the student; and
(ii) Identify any other agency that will be invited to send a representative.
(c) Other methods to ensure parent participation. If neither parent can attend an IEP Team meeting, the public agency must use other methods to ensure parent participation, including individual or conference telephone calls, consistent with § 300.328 (related to alternative means of meeting participation).
(d) Conducting an IEP Team meeting without a parent in attendance. A meeting may be conducted without a parent in attendance if the public agency is unable to convince the parents that they should attend. In this case, the public agency must keep a record of its attempts to arrange a mutually agreed on time and place, such as—
(1) Detailed records of telephone calls made or attempted and the results of those calls;
(2) Copies of correspondence sent to the parents and any responses received; and
(3) Detailed records of visits made to the parent's home or place of employment and the results of those visits.
(e) Use of interpreters or other action, as appropriate. The public agency must take whatever action is necessary to ensure that the parent understands the proceedings of the IEP Team meeting, including arranging for an interpreter for parents with deafness or whose native language is other than English.
(f) Parent copy of child's IEP. The public agency must give the parent a copy of the child's IEP at no cost to the parent.
(a) General. At the beginning of each school year, each public agency must have in effect, for each child with a disability within its jurisdiction, an IEP, as defined in § 300.320.
(b) IEP or IFSP for children aged three through five. (1) In the case of a child with a disability aged three through five (or, at the discretion of the SEA, a two-year-old child with a disability who will turn age three during the school year), the IEP Team must consider an IFSP that contains the IFSP content (including the natural environments statement) described in section 636(d) of the Act and its implementing regulations (including an educational component that promotes school readiness and incorporates pre-literacy, language, and numeracy skills for children with IFSPs under this section who are at least three years of age), and that is developed in accordance with the IEP procedures under this part. The IFSP may serve as the IEP of the child, if using the IFSP as the IEP is—
(i) Consistent with State policy; and
(ii) Agreed to by the agency and the child's parents.
(2) In implementing the requirements of paragraph (b)(1) of this section, the public agency must—
(i) Provide to the child's parents a detailed explanation of the differences between an IFSP and an IEP; and
(ii) If the parents choose an IFSP, obtain written informed consent from the parents.
(c) Initial IEPs; provision of services. Each public agency must ensure that—
(1) A meeting to develop an IEP for a child is conducted within 30 days of a determination that the child needs special education and related services; and
(2) As soon as possible following development of the IEP, special education and related services are made available to the child in accordance with the child's IEP.
(d) Accessibility of child's IEP to teachers and others. Each public agency must ensure that—
(1) The child's IEP is accessible to each regular education teacher, special education teacher, related services provider, and any other service provider who is responsible for its implementation; and
(2) Each teacher and provider described in paragraph (d)(1) of this section is informed of—
(i) His or her specific responsibilities related to implementing the child's IEP; and
(ii) The specific accommodations, modifications, and supports that must be provided for the child in accordance with the IEP.
(e) IEPs for children who transfer public agencies in the same State. If a child with a disability (who had an IEP that was in effect in a previous public agency in the same State) transfers to a new public agency in the same State, and enrolls in a new school within the same school year, the new public agency (in consultation with the parents) must provide FAPE to the child (including services comparable to those described in the child's IEP from the previous public agency), until the new public agency either—
(1) Adopts the child's IEP from the previous public agency; or
(2) Develops, adopts, and implements a new IEP that meets the applicable requirements in §§ 300.320 through 300.324.
(f) IEPs for children who transfer from another State. If a child with a disability (who had an IEP that was in effect in a previous public agency in another State) transfers to a public agency in a new State, and enrolls in a new school within the same school year, the new public agency (in consultation with the parents) must provide the child with FAPE (including services comparable to those described in the child's IEP from the previous public agency), until the new public agency—
(1) Conducts an evaluation pursuant to §§ 300.304 through 300.306 (if determined to be necessary by the new public agency); and
(2) Develops, adopts, and implements a new IEP, if appropriate, that meets the applicable requirements in §§ 300.320 through 300.324.
(g) Transmittal of records. To facilitate the transition for a child described in paragraphs (e) and (f) of this section—
(1) The new public agency in which the child enrolls must take reasonable steps to promptly obtain the child's records, including the IEP and supporting documents and any other records relating to the provision of special education or related services to the child, from the previous public agency in which the child was enrolled, pursuant to 34 CFR 99.31(a)(2); and
(2) The previous public agency in which the child was enrolled must take reasonable steps to promptly respond to the request from the new public agency.
(a) Development of IEP—(1) General. In developing each child's IEP, the IEP Team must consider—
(i) The strengths of the child;
(ii) The concerns of the parents for enhancing the education of their child;
(iii) The results of the initial or most recent evaluation of the child; and
(iv) The academic, developmental, and functional needs of the child.
(2) Consideration of special factors. The IEP Team must—
(i) In the case of a child whose behavior impedes the child's learning or that of others, consider the use of positive behavioral interventions and supports, and other strategies, to address that behavior;
(ii) In the case of a child with limited English proficiency, consider the language needs of the child as those needs relate to the child's IEP;
(iii) In the case of a child who is blind or visually impaired, provide for instruction in Braille and the use of Braille unless the IEP Team determines, after an evaluation of the child's reading and writing skills, needs, and appropriate reading and writing media (including an evaluation of the child's future needs for instruction in Braille or the use of Braille), that instruction in Braille or the use of Braille is not appropriate for the child;
(iv) Consider the communication needs of the child, and in the case of a child who is deaf or hard of hearing, consider the child's language and communication needs, opportunities for direct communications with peers and professional personnel in the child's language and communication mode, academic level, and full range of needs, including opportunities for direct instruction in the child's language and communication mode; and
(v) Consider whether the child needs assistive technology devices and services.
(3) Requirement with respect to regular education teacher. A regular education teacher of a child with a disability, as a member of the IEP Team, must, to the extent appropriate, participate in the development of the IEP of the child, including the determination of—
(i) Appropriate positive behavioral interventions and supports and other strategies for the child; and
(ii) Supplementary aids and services, program modifications, and support for school personnel consistent with § 300.320(a)(4).
(4) Agreement. (i) In making changes to a child's IEP after the annual IEP Team meeting for a school year, the parent of a child with a disability and the public agency may agree not to convene an IEP Team meeting for the purposes of making those changes, and instead may develop a written document to amend or modify the child's current IEP.
(ii) If changes are made to the child's IEP in accordance with paragraph (a)(4)(i) of this section, the public agency must ensure that the child's IEP Team is informed of those changes.
(5) Consolidation of IEP Team meetings. To the extent possible, the public agency must encourage the consolidation of reevaluation meetings for the child and other IEP Team meetings for the child.
(6) Amendments. Changes to the IEP may be made either by the entire IEP Team at an IEP Team meeting, or as provided in paragraph (a)(4) of this section, by amending the IEP rather than by redrafting the entire IEP. Upon request, a parent must be provided with a revised copy of the IEP with the amendments incorporated.
(b) Review and revision of IEPs—(1) General. Each public agency must ensure that, subject to paragraphs (b)(2) and (b)(3) of this section, the IEP Team—
(i) Reviews the child's IEP periodically, but not less than annually, to determine whether the annual goals for the child are being achieved; and
(ii) Revises the IEP, as appropriate, to address—
(A) Any lack of expected progress toward the annual goals described in § 300.320(a)(2), and in the general education curriculum, if appropriate;
(B) The results of any reevaluation conducted under § 300.303;
(C) Information about the child provided to, or by, the parents, as described under § 300.305(a)(2);
(D) The child's anticipated needs; or
(E) Other matters.
(2) Consideration of special factors. In conducting a review of the child's IEP, the IEP Team must consider the special factors described in paragraph (a)(2) of this section.
(3) Requirement with respect to regular education teacher. A regular education teacher of the child, as a member of the IEP Team, must, consistent with paragraph (a)(3) of this section, participate in the review and revision of the IEP of the child.
(c) Failure to meet transition objectives—(1) Participating agency failure. If a participating agency, other than the public agency, fails to provide the transition services described in the IEP in accordance with § 300.320(b), the public agency must reconvene the IEP Team to identify alternative strategies to meet the transition objectives for the child set out in the IEP.
(2) Construction. Nothing in this part relieves any participating agency, including a State vocational rehabilitation agency, of the responsibility to provide or pay for any transition service that the agency would otherwise provide to children with disabilities who meet the eligibility criteria of that agency.
(d) Children with disabilities in adult prisons—(1) Requirements that do not apply. The following requirements do not apply to children with disabilities who are convicted as adults under State law and incarcerated in adult prisons:
(i) The requirements contained in section 612(a)(16) of the Act and § 300.320(a)(6) (relating to participation of children with disabilities in general assessments).
(ii) The requirements in § 300.320(b) (relating to transition planning and transition services) do not apply with respect to the children whose eligibility under Part B of the Act will end, because of their age, before they will be eligible to be released from prison based on consideration of their sentence and eligibility for early release.
(2) Modifications of IEP or placement. (i) Subject to paragraph (d)(2)(ii) of this section, the IEP Team of a child with a disability who is convicted as an adult under State law and incarcerated in an adult prison may modify the child's IEP or placement if the State has demonstrated a bona fide security or compelling penological interest that cannot otherwise be accommodated.
(ii) The requirements of §§ 300.320 (relating to IEPs), and 300.114 (relating to LRE), do not apply with respect to the modifications described in paragraph (d)(2)(i) of this section.
(a) Developing IEPs. (1) Before a public agency places a child with a disability in, or refers a child to, a private school or facility, the agency must initiate and conduct a meeting to develop an IEP for the child in accordance with §§ 300.320 and 300.324.
(2) The agency must ensure that a representative of the private school or facility attends the meeting. If the representative cannot attend, the agency must use other methods to ensure participation by the private school or facility, including individual or conference telephone calls.
(b) Reviewing and revising IEPs. (1) After a child with a disability enters a private school or facility, any meetings to review and revise the child's IEP may be initiated and conducted by the private school or facility at the discretion of the public agency.
(2) If the private school or facility initiates and conducts these meetings, the public agency must ensure that the parents and an agency representative—
(i) Are involved in any decision about the child's IEP; and
(ii) Agree to any proposed changes in the IEP before those changes are implemented.
(c) Responsibility. Even if a private school or facility implements a child's IEP, responsibility for compliance with this part remains with the public agency and the SEA.
Consistent with § 300.501(c), each public agency must ensure that the parents of each child with a disability are members of any group that makes decisions on the educational placement of their child.
When conducting IEP Team meetings and placement meetings pursuant to this subpart, and subpart E of this part, and carrying out administrative matters under section 615 of the Act (such as scheduling, exchange of witness lists, and status conferences), the parent of a child with a disability and a public agency may agree to use alternative means of meeting participation, such as video conferences and conference calls.
Each SEA must ensure that each public agency establishes, maintains, and implements procedural safeguards that meet the requirements of §§ 300.500 through 300.536.
(a) Opportunity to examine records. The parents of a child with a disability must be afforded, in accordance with the procedures of §§ 300.613 through 300.621, an opportunity to inspect and review all education records with respect to—
(1) The identification, evaluation, and educational placement of the child; and
(2) The provision of FAPE to the child.
(b) Parent participation in meetings. (1) The parents of a child with a disability must be afforded an opportunity to participate in meetings with respect to—
(i) The identification, evaluation, and educational placement of the child; and
(ii) The provision of FAPE to the child.
(2) Each public agency must provide notice consistent with § 300.322(a)(1) and (b)(1) to ensure that parents of children with disabilities have the opportunity to participate in meetings described in paragraph (b)(1) of this section.
(3) A meeting does not include informal or unscheduled conversations involving public agency personnel and conversations on issues such as teaching methodology, lesson plans, or coordination of service provision. A meeting also does not include preparatory activities that public agency personnel engage in to develop a proposal or response to a parent proposal that will be discussed at a later meeting.
(c) Parent involvement in placement decisions. (1) Each public agency must ensure that a parent of each child with a disability is a member of any group that makes decisions on the educational placement of the parent's child.
(2) In implementing the requirements of paragraph (c)(1) of this section, the public agency must use procedures consistent with the procedures described in § 300.322(a) through (b)(1).
(3) If neither parent can participate in a meeting in which a decision is to be made relating to the educational placement of their child, the public agency must use other methods to ensure their participation, including individual or conference telephone calls, or video conferencing.
(4) A placement decision may be made by a group without the involvement of a parent, if the public agency is unable to obtain the parent's participation in the decision. In this case, the public agency must have a record of its attempt to ensure their involvement.
(a) General. (1) The parents of a child with a disability have the right under this part to obtain an independent educational evaluation of the child, subject to paragraphs (b) through (e) of this section.
(2) Each public agency must provide to parents, upon request for an independent educational evaluation, information about where an independent educational evaluation may be obtained, and the agency criteria applicable for independent educational evaluations as set forth in paragraph (e) of this section.
(3) For the purposes of this subpart—
(i) Independent educational evaluation means an evaluation conducted by a qualified examiner who is not employed by the public agency responsible for the education of the child in question; and
(ii) Public expense means that the public agency either pays for the full cost of the evaluation or ensures that the evaluation is otherwise provided at no cost to the parent, consistent with § 300.103.
(b) Parent right to evaluation at public expense. (1) A parent has the right to an independent educational evaluation at public expense if the parent disagrees with an evaluation obtained by the public agency, subject to the conditions in paragraphs (b)(2) through (4) of this section.
(2) If a parent requests an independent educational evaluation at public expense, the public agency must, without unnecessary delay, either—
(i) File a due process complaint to request a hearing to show that its evaluation is appropriate; or
(ii) Ensure that an independent educational evaluation is provided at public expense, unless the agency demonstrates in a hearing pursuant to §§ 300.507 through 300.513 that the evaluation obtained by the parent did not meet agency criteria.
(3) If the public agency files a due process complaint notice to request a hearing and the final decision is that the agency's evaluation is appropriate, the parent still has the right to an independent educational evaluation, but not at public expense.
(4) If a parent requests an independent educational evaluation, the public agency may ask for the parent's reason why he or she objects to the public evaluation. However, the public agency may not require the parent to provide an explanation and may not unreasonably delay either providing the independent educational evaluation at public expense or filing a due process complaint to request a due process hearing to defend the public evaluation.
(5) A parent is entitled to only one independent educational evaluation at public expense each time the public agency conducts an evaluation with which the parent disagrees.
(c) Parent-initiated evaluations. If the parent obtains an independent educational evaluation at public expense or shares with the public agency an evaluation obtained at private expense, the results of the evaluation—
(1) Must be considered by the public agency, if it meets agency criteria, in any decision made with respect to the provision of FAPE to the child; and
(2) May be presented by any party as evidence at a hearing on a due process complaint under subpart E of this part regarding that child.
(d) Requests for evaluations by hearing officers. If a hearing officer requests an independent educational evaluation as part of a hearing on a due process complaint, the cost of the evaluation must be at public expense.
(e) Agency criteria. (1) If an independent educational evaluation is at public expense, the criteria under which the evaluation is obtained, including the location of the evaluation and the qualifications of the examiner, must be the same as the criteria that the public agency uses when it initiates an evaluation, to the extent those criteria are consistent with the parent's right to an independent educational evaluation.
(2) Except for the criteria described in paragraph (e)(1) of this section, a public agency may not impose conditions or timelines related to obtaining an independent educational evaluation at public expense.
(a) Notice. Written notice that meets the requirements of paragraph (b) of this section must be given to the parents of a child with a disability a reasonable time before the public agency—
(1) Proposes to initiate or change the identification, evaluation, or educational placement of the child or the provision of FAPE to the child; or
(2) Refuses to initiate or change the identification, evaluation, or educational placement of the child or the provision of FAPE to the child.
(b) Content of notice. The notice required under paragraph (a) of this section must include—
(1) A description of the action proposed or refused by the agency;
(2) An explanation of why the agency proposes or refuses to take the action;
(3) A description of each evaluation procedure, assessment, record, or report the agency used as a basis for the proposed or refused action;
(4) A statement that the parents of a child with a disability have protection under the procedural safeguards of this part and, if this notice is not an initial referral for evaluation, the means by which a copy of a description of the procedural safeguards can be obtained;
(5) Sources for parents to contact to obtain assistance in understanding the provisions of this part;
(6) A description of other options that the IEP Team considered and the reasons why those options were rejected; and
(7) A description of other factors that are relevant to the agency's proposal or refusal.
(c) Notice in understandable language. (1) The notice required under paragraph (a) of this section must be—
(i) Written in language understandable to the general public; and
(ii) Provided in the native language of the parent or other mode of communication used by the parent, unless it is clearly not feasible to do so.
(2) If the native language or other mode of communication of the parent is not a written language, the public agency must take steps to ensure—
(i) That the notice is translated orally or by other means to the parent in his or her native language or other mode of communication;
(ii) That the parent understands the content of the notice; and
(iii) That there is written evidence that the requirements in paragraphs (c)(2)(i) and (ii) of this section have been met.
(a) General. A copy of the procedural safeguards available to the parents of a child with a disability must be given to the parents only one time a school year, except that a copy also must be given to the parents—
(1) Upon initial referral or parent request for evaluation;
(2) Upon receipt of the first State complaint under §§ 300.151 through 300.153 and upon receipt of the first due process complaint under § 300.507 in a school year;
(3) In accordance with the discipline procedures in § 300.530(h); and
(4) Upon request by a parent.
(b) Internet Web site. A public agency may place a current copy of the procedural safeguards notice on its Internet Web site if a Web site exists.
(c) Contents. The procedural safeguards notice must include a full explanation of all of the procedural safeguards available under § 300.148, §§ 300.151 through 300.153, § 300.300, §§ 300.502 through 300.503, §§ 300.505 through 300.518, §§ 300.530 through 300.536 and §§ 300.610 through 300.625 relating to—
(1) Independent educational evaluations;
(2) Prior written notice;
(3) Parental consent;
(4) Access to education records;
(5) Opportunity to present and resolve complaints through the due process complaint and State complaint procedures, including—
(i) The time period in which to file a complaint;
(ii) The opportunity for the agency to resolve the complaint; and
(iii) The difference between the due process complaint and the State complaint procedures, including the jurisdiction of each procedure, what issues may be raised, filing and decisional timelines, and relevant procedures;
(6) The availability of mediation;
(7) The child's placement during the pendency of any due process complaint;
(8) Procedures for students who are subject to placement in an interim alternative educational setting;
(9) Requirements for unilateral placement by parents of children in private schools at public expense;
(10) Hearings on due process complaints, including requirements for disclosure of evaluation results and recommendations;
(11) State-level appeals (if applicable in the State);
(12) Civil actions, including the time period in which to file those actions; and
(13) Attorneys' fees.
(d) Notice in understandable language. The notice required under paragraph (a) of this section must meet the requirements of § 300.503(c).
A parent of a child with a disability may elect to receive notices required by §§ 300.503, 300.504, and 300.508 by an electronic mail communication, if the public agency makes that option available.
(a) General. Each public agency must ensure that procedures are established and implemented to allow parties to disputes involving any matter under this part, including matters arising prior to the filing of a due process complaint, to resolve disputes through a mediation process.
(b) Requirements. The procedures must meet the following requirements:
(1) The procedures must ensure that the mediation process—
(i) Is voluntary on the part of the parties;
(ii) Is not used to deny or delay a parent's right to a hearing on the parent's due process complaint, or to deny any other rights afforded under Part B of the Act; and
(iii) Is conducted by a qualified and impartial mediator who is trained in effective mediation techniques.
(2) A public agency may establish procedures to offer to parents and schools that choose not to use the mediation process, an opportunity to meet, at a time and location convenient to the parents, with a disinterested party—
(i) Who is under contract with an appropriate alternative dispute resolution entity, or a parent training and information center or community parent resource center in the State established under section 671 or 672 of the Act; and
(ii) Who would explain the benefits of, and encourage the use of, the mediation process to the parents.
(3)(i) The State must maintain a list of individuals who are qualified mediators and knowledgeable in laws and regulations relating to the provision of special education and related services.
(ii) The SEA must select mediators on a random, rotational, or other impartial basis.
(4) The State must bear the cost of the mediation process, including the costs of meetings described in paragraph (b)(2) of this section.
(5) Each session in the mediation process must be scheduled in a timely manner and must be held in a location that is convenient to the parties to the dispute.
(6) If the parties resolve a dispute through the mediation process, the parties must execute a legally binding agreement that sets forth that resolution and that—
(i) States that all discussions that occurred during the mediation process will remain confidential and may not be used as evidence in any subsequent due process hearing or civil proceeding; and
(ii) Is signed by both the parent and a representative of the agency who has the authority to bind such agency.
(7) A written, signed mediation agreement under this paragraph is enforceable in any State court of competent jurisdiction or in a district court of the United States.
(8) Discussions that occur during the mediation process must be confidential and may not be used as evidence in any subsequent due process hearing or civil proceeding of any Federal court or State court of a State receiving assistance under this part.
(c) Impartiality of mediator. (1) An individual who serves as a mediator under this part—
(i) May not be an employee of the SEA or the LEA that is involved in the education or care of the child; and
(ii) Must not have a personal or professional interest that conflicts with the person's objectivity.
(2) A person who otherwise qualifies as a mediator is not an employee of an LEA or State agency described under § 300.228 solely because he or she is paid by the agency to serve as a mediator.
(a) General. (1) A parent or a public agency may file a due process complaint on any of the matters described in § 300.503(a)(1) and (2) (relating to the identification, evaluation or educational placement of a child with a disability, or the provision of FAPE to the child).
(2) The due process complaint must allege a violation that occurred not more than two years before the date the parent or public agency knew or should have known about the alleged action that forms the basis of the due process complaint, or, if the State has an explicit time limitation for filing a due process complaint under this part, in the time allowed by that State law, except that the exceptions to the timeline described in § 300.511(f) apply to the timeline in this section.
(b) Information for parents. The public agency must inform the parent of any free or low-cost legal and other relevant services available in the area if—
(1) The parent requests the information; or
(2) The parent or the agency files a due process complaint under this section.
(a) General. (1) The public agency must have procedures that require either party, or the attorney representing a party, to provide to the other party a due process complaint (which must remain confidential).
(2) The party filing a due process complaint must forward a copy of the due process complaint to the SEA.
(b) Content of complaint. The due process complaint required in paragraph (a)(1) of this section must include—
(1) The name of the child;
(2) The address of the residence of the child;
(3) The name of the school the child is attending;
(4) In the case of a homeless child or youth (within the meaning of section 725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)), available contact information for the child, and the name of the school the child is attending;
(5) A description of the nature of the problem of the child relating to the proposed or refused initiation or change, including facts relating to the problem; and
(6) A proposed resolution of the problem to the extent known and available to the party at the time.
(c) Notice required before a hearing on a due process complaint. A party may not have a hearing on a due process complaint until the party, or the attorney representing the party, files a due process complaint that meets the requirements of paragraph (b) of this section.
(d) Sufficiency of complaint. (1) The due process complaint required by this section must be deemed sufficient unless the party receiving the due process complaint notifies the hearing officer and the other party in writing, within 15 days of receipt of the due process complaint, that the receiving party believes the due process complaint does not meet the requirements in paragraph (b) of this section.
(2) Within five days of receipt of notification under paragraph (d)(1) of this section, the hearing officer must make a determination on the face of the due process complaint of whether the due process complaint meets the requirements of paragraph (b) of this section, and must immediately notify the parties in writing of that determination.
(3) A party may amend its due process complaint only if—
(i) The other party consents in writing to the amendment and is given the opportunity to resolve the due process complaint through a meeting held pursuant to § 300.510; or
(ii) The hearing officer grants permission, except that the hearing officer may only grant permission to amend at any time not later than five days before the due process hearing begins.
(4) If a party files an amended due process complaint, the timelines for the resolution meeting in § 300.510(a) and the time period to resolve in § 300.510(b) begin again with the filing of the amended due process complaint.
(e) LEA response to a due process complaint. (1) If the LEA has not sent a prior written notice under § 300.503 to the parent regarding the subject matter contained in the parent's due process complaint, the LEA must, within 10 days of receiving the due process complaint, send to the parent a response that includes—
(i) An explanation of why the agency proposed or refused to take the action raised in the due process complaint;
(ii) A description of other options that the IEP Team considered and the reasons why those options were rejected;
(iii) A description of each evaluation procedure, assessment, record, or report the agency used as the basis for the proposed or refused action; and
(iv) A description of the other factors that are relevant to the agency's proposed or refused action.
(2) A response by an LEA under paragraph (e)(1) of this section shall not be construed to preclude the LEA from asserting that the parent's due process complaint was insufficient, where appropriate.
(f) Other party response to a due process complaint. Except as provided in paragraph (e) of this section, the party receiving a due process complaint must, within 10 days of receiving the due process complaint, send to the other party a response that specifically addresses the issues raised in the due process complaint.
(a) Each SEA must develop model forms to assist parents and public agencies in filing a due process complaint in accordance with §§ 300.507(a) and 300.508(a) through (c) and to assist parents and other parties in filing a State complaint under §§ 300.151 through 300.153. However, the SEA or LEA may not require the use of the model forms.
(b) Parents, public agencies, and other parties may use the appropriate model form described in paragraph (a) of this section, or another form or other document, so long as the form or document that is used meets, as appropriate, the content requirements in § 300.508(b) for filing a due process complaint, or the requirements in § 300.153(b) for filing a State complaint.
(a) Resolution meeting. (1) Within 15 days of receiving notice of the parent's due process complaint, and prior to the initiation of a due process hearing under § 300.511, the LEA must convene a meeting with the parent and the relevant member or members of the IEP Team who have specific knowledge of the facts identified in the due process complaint that—
(i) Includes a representative of the public agency who has decision-making authority on behalf of that agency; and
(ii) May not include an attorney of the LEA unless the parent is accompanied by an attorney.
(2) The purpose of the meeting is for the parent of the child to discuss the due process complaint, and the facts that form the basis of the due process complaint, so that the LEA has the opportunity to resolve the dispute that is the basis for the due process complaint.
(3) The meeting described in paragraph (a)(1) and (2) of this section need not be held if—
(i) The parent and the LEA agree in writing to waive the meeting; or
(ii) The parent and the LEA agree to use the mediation process described in § 300.506.
(4) The parent and the LEA determine the relevant members of the IEP Team to attend the meeting.
(b) Resolution period. (1) If the LEA has not resolved the due process complaint to the satisfaction of the parent within 30 days of the receipt of the due process complaint, the due process hearing may occur.
(2) Except as provided in paragraph (c) of this section, the timeline for issuing a final decision under § 300.515 begins at the expiration of this 30-day period.
(3) Except where the parties have jointly agreed to waive the resolution process or to use mediation, notwithstanding paragraphs (b)(1) and (2) of this section, the failure of the parent filing a due process complaint to participate in the resolution meeting will delay the timelines for the resolution process and due process hearing until the meeting is held.
(4) If the LEA is unable to obtain the participation of the parent in the resolution meeting after reasonable efforts have been made (and documented using the procedures in § 300.322(d)), the LEA may, at the conclusion of the 30-day period, request that a hearing officer dismiss the parent's due process complaint.
(5) If the LEA fails to hold the resolution meeting specified in paragraph (a) of this section within 15 days of receiving notice of a parent's due process complaint or fails to participate in the resolution meeting, the parent may seek the intervention of a hearing officer to begin the due process hearing timeline.
(c) Adjustments to 30-day resolution period. The 45-day timeline for the due process hearing in § 300.515(a) starts the day after one of the following events:
(1) Both parties agree in writing to waive the resolution meeting;
(2) After either the mediation or resolution meeting starts but before the end of the 30-day period, the parties agree in writing that no agreement is possible;
(3) If both parties agree in writing to continue the mediation at the end of the 30-day resolution period, but later, the parent or public agency withdraws from the mediation process.
(d) Written settlement agreement. If a resolution to the dispute is reached at the meeting described in paragraphs (a)(1) and (2) of this section, the parties must execute a legally binding agreement that is—
(1) Signed by both the parent and a representative of the agency who has the authority to bind the agency; and
(2) Enforceable in any State court of competent jurisdiction or in a district court of the United States, or, by the SEA, if the State has other mechanisms or procedures that permit parties to seek enforcement of resolution agreements, pursuant to § 300.537.
(e) Agreement review period. If the parties execute an agreement pursuant to paragraph (d) of this section, a party may void the agreement within 3 business days of the agreement's execution.
(a) General. Whenever a due process complaint is received under § 300.507 or § 300.532, the parents or the LEA involved in the dispute must have an opportunity for an impartial due process hearing, consistent with the procedures in §§ 300.507, 300.508, and 300.510.
(b) Agency responsible for conducting the due process hearing. The hearing described in paragraph (a) of this section must be conducted by the SEA or the public agency directly responsible for the education of the child, as determined under State statute, State regulation, or a written policy of the SEA.
(c) Impartial hearing officer. (1) At a minimum, a hearing officer—
(i) Must not be—
(A) An employee of the SEA or the LEA that is involved in the education or care of the child; or
(B) A person having a personal or professional interest that conflicts with the person's objectivity in the hearing;
(ii) Must possess knowledge of, and the ability to understand, the provisions of the Act, Federal and State regulations pertaining to the Act, and legal interpretations of the Act by Federal and State courts;
(iii) Must possess the knowledge and ability to conduct hearings in accordance with appropriate, standard legal practice; and
(iv) Must possess the knowledge and ability to render and write decisions in accordance with appropriate, standard legal practice.
(2) A person who otherwise qualifies to conduct a hearing under paragraph (c)(1) of this section is not an employee of the agency solely because he or she is paid by the agency to serve as a hearing officer.
(3) Each public agency must keep a list of the persons who serve as hearing officers. The list must include a statement of the qualifications of each of those persons.
(d) Subject matter of due process hearings. The party requesting the due process hearing may not raise issues at the due process hearing that were not raised in the due process complaint filed under § 300.508(b), unless the other party agrees otherwise.
(e) Timeline for requesting a hearing. A parent or agency must request an impartial hearing on their due process complaint within two years of the date the parent or agency knew or should have known about the alleged action that forms the basis of the due process complaint, or if the State has an explicit time limitation for requesting such a due process hearing under this part, in the time allowed by that State law.
(f) Exceptions to the timeline. The timeline described in paragraph (e) of this section does not apply to a parent if the parent was prevented from filing a due process complaint due to—
(1) Specific misrepresentations by the LEA that it had resolved the problem forming the basis of the due process complaint; or
(2) The LEA's withholding of information from the parent that was required under this part to be provided to the parent.
(a) General. Any party to a hearing conducted pursuant to §§ 300.507 through 300.513 or §§ 300.530 through 300.534, or an appeal conducted pursuant to § 300.514, has the right to—
(1) Be accompanied and advised by counsel and by individuals with special knowledge or training with respect to the problems of children with disabilities, except that whether parties have the right to be represented by non-attorneys at due process hearings is determined under State law;
(2) Present evidence and confront, cross-examine, and compel the attendance of witnesses;
(3) Prohibit the introduction of any evidence at the hearing that has not been disclosed to that party at least five business days before the hearing;
(4) Obtain a written, or, at the option of the parents, electronic, verbatim record of the hearing; and
(5) Obtain written, or, at the option of the parents, electronic findings of fact and decisions.
(b) Additional disclosure of information. (1) At least five business days prior to a hearing conducted pursuant to § 300.511(a), each party must disclose to all other parties all evaluations completed by that date and recommendations based on the offering party's evaluations that the party intends to use at the hearing.
(2) A hearing officer may bar any party that fails to comply with paragraph (b)(1) of this section from introducing the relevant evaluation or recommendation at the hearing without the consent of the other party.
(c) Parental rights at hearings. Parents involved in hearings must be given the right to—
(1) Have the child who is the subject of the hearing present;
(2) Open the hearing to the public; and
(3) Have the record of the hearing and the findings of fact and decisions described in paragraphs (a)(4) and (a)(5) of this section provided at no cost to parents.
(a) Decision of hearing officer on the provision of FAPE. (1) Subject to paragraph (a)(2) of this section, a hearing officer's determination of whether a child received FAPE must be based on substantive grounds.
(2) In matters alleging a procedural violation, a hearing officer may find that a child did not receive a FAPE only if the procedural inadequacies—
(i) Impeded the child's right to a FAPE;
(ii) Significantly impeded the parent's opportunity to participate in the decision-making process regarding the provision of a FAPE to the parent's child; or
(iii) Caused a deprivation of educational benefit.
(3) Nothing in paragraph (a) of this section shall be construed to preclude a hearing officer from ordering an LEA to comply with procedural requirements under §§ 300.500 through 300.536.
(b) Construction clause. Nothing in §§ 300.507 through 300.513 shall be construed to affect the right of a parent to file an appeal of the due process hearing decision with the SEA under § 300.514(b), if a State level appeal is available.
(c) Separate request for a due process hearing. Nothing in §§ 300.500 through 300.536 shall be construed to preclude a parent from filing a separate due process complaint on an issue separate from a due process complaint already filed.
(d) Findings and decision to advisory panel and general public. The public agency, after deleting any personally identifiable information, must—
(1) Transmit the findings and decisions referred to in § 300.512(a)(5) to the State advisory panel established under § 300.167; and
(2) Make those findings and decisions available to the public.
(a) Finality of hearing decision. A decision made in a hearing conducted pursuant to §§ 300.507 through 300.513 or §§ 300.530 through 300.534 is final, except that any party involved in the hearing may appeal the decision under the provisions of paragraph (b) of this section and § 300.516.
(b) Appeal of decisions; impartial review. (1) If the hearing required by § 300.511 is conducted by a public agency other than the SEA, any party aggrieved by the findings and decision in the hearing may appeal to the SEA.
(2) If there is an appeal, the SEA must conduct an impartial review of the findings and decision appealed. The official conducting the review must—
(i) Examine the entire hearing record;
(ii) Ensure that the procedures at the hearing were consistent with the requirements of due process;
(iii) Seek additional evidence if necessary. If a hearing is held to receive additional evidence, the rights in § 300.512 apply;
(iv) Afford the parties an opportunity for oral or written argument, or both, at the discretion of the reviewing official;
(v) Make an independent decision on completion of the review; and
(vi) Give a copy of the written, or, at the option of the parents, electronic findings of fact and decisions to the parties.
(c) Findings and decision to advisory panel and general public. The SEA, after deleting any personally identifiable information, must—
(1) Transmit the findings and decisions referred to in paragraph (b)(2)(vi) of this section to the State advisory panel established under § 300.167; and
(2) Make those findings and decisions available to the public.
(d) Finality of review decision. The decision made by the reviewing official is final unless a party brings a civil action under § 300.516.
(a) The public agency must ensure that not later than 45 days after the expiration of the 30 day period under § 300.510(b), or the adjusted time periods described in § 300.510(c)—
(1) A final decision is reached in the hearing; and
(2) A copy of the decision is mailed to each of the parties.
(b) The SEA must ensure that not later than 30 days after the receipt of a request for a review—
(1) A final decision is reached in the review; and
(2) A copy of the decision is mailed to each of the parties.
(c) A hearing or reviewing officer may grant specific extensions of time beyond the periods set out in paragraphs (a) and (b) of this section at the request of either party.
(d) Each hearing and each review involving oral arguments must be conducted at a time and place that is reasonably convenient to the parents and child involved.
(a) General. Any party aggrieved by the findings and decision made under §§ 300.507 through 300.513 or §§ 300.530 through 300.534 who does not have the right to an appeal under § 300.514(b), and any party aggrieved by the findings and decision under § 300.514(b), has the right to bring a civil action with respect to the due process complaint notice requesting a due process hearing under § 300.507 or §§ 300.530 through 300.532. The action may be brought in any State court of competent jurisdiction or in a district court of the United States without regard to the amount in controversy.
(b) Time limitation. The party bringing the action shall have 90 days from the date of the decision of the hearing officer or, if applicable, the decision of the State review official, to file a civil action, or, if the State has an explicit time limitation for bringing civil actions under Part B of the Act, in the time allowed by that State law.
(c) Additional requirements. In any action brought under paragraph (a) of this section, the court—
(1) Receives the records of the administrative proceedings;
(2) Hears additional evidence at the request of a party; and
(3) Basing its decision on the preponderance of the evidence, grants the relief that the court determines to be appropriate.
(d) Jurisdiction of district courts. The district courts of the United States have jurisdiction of actions brought under section 615 of the Act without regard to the amount in controversy.
(e) Rule of construction. Nothing in this part restricts or limits the rights, procedures, and remedies available under the Constitution, the Americans with Disabilities Act of 1990, title V of the Rehabilitation Act of 1973, or other Federal laws protecting the rights of children with disabilities, except that before the filing of a civil action under these laws seeking relief that is also available under section 615 of the Act, the procedures under §§ 300.507 and 300.514 must be exhausted to the same extent as would be required had the action been brought under section 615 of the Act.
(a) In general. (1) In any action or proceeding brought under section 615 of the Act, the court, in its discretion, may award reasonable attorneys' fees as part of the costs to—
(i) The prevailing party who is the parent of a child with a disability;
(ii) To a prevailing party who is an SEA or LEA against the attorney of a parent who files a complaint or subsequent cause of action that is frivolous, unreasonable, or without foundation, or against the attorney of a parent who continued to litigate after the litigation clearly became frivolous, unreasonable, or without foundation; or
(iii) To a prevailing SEA or LEA against the attorney of a parent, or against the parent, if the parent's request for a due process hearing or subsequent cause of action was presented for any improper purpose, such as to harass, to cause unnecessary delay, or to needlessly increase the cost of litigation.
(2) Nothing in this subsection shall be construed to affect section 327 of the District of Columbia Appropriations Act, 2005.
(b) Prohibition on use of funds. (1) Funds under Part B of the Act may not be used to pay attorneys' fees or costs of a party related to any action or proceeding under section 615 of the Act and subpart E of this part.
(2) Paragraph (b)(1) of this section does not preclude a public agency from using funds under Part B of the Act for conducting an action or proceeding under section 615 of the Act.
(c) Award of fees. A court awards reasonable attorneys' fees under section 615(i)(3) of the Act consistent with the following:
(1) Fees awarded under section 615(i)(3) of the Act must be based on rates prevailing in the community in which the action or proceeding arose for the kind and quality of services furnished. No bonus or multiplier may be used in calculating the fees awarded under this paragraph.
(2)(i) Attorneys' fees may not be awarded and related costs may not be reimbursed in any action or proceeding under section 615 of the Act for services performed subsequent to the time of a written offer of settlement to a parent if—
(A) The offer is made within the time prescribed by Rule 68 of the Federal Rules of Civil Procedure or, in the case of an administrative proceeding, at any time more than 10 days before the proceeding begins;
(B) The offer is not accepted within 10 days; and
(C) The court or administrative hearing officer finds that the relief finally obtained by the parents is not more favorable to the parents than the offer of settlement.
(ii) Attorneys' fees may not be awarded relating to any meeting of the IEP Team unless the meeting is convened as a result of an administrative proceeding or judicial action, or at the discretion of the State, for a mediation described in § 300.506.
(iii) A meeting conducted pursuant to § 300.510 shall not be considered—
(A) A meeting convened as a result of an administrative hearing or judicial action; or
(B) An administrative hearing or judicial action for purposes of this section.
(3) Notwithstanding paragraph (c)(2) of this section, an award of attorneys' fees and related costs may be made to a parent who is the prevailing party and who was substantially justified in rejecting the settlement offer.
(4) Except as provided in paragraph (c)(5) of this section, the court reduces, accordingly, the amount of the attorneys' fees awarded under section 615 of the Act, if the court finds that—
(i) The parent, or the parent's attorney, during the course of the action or proceeding, unreasonably protracted the final resolution of the controversy;
(ii) The amount of the attorneys' fees otherwise authorized to be awarded unreasonably exceeds the hourly rate prevailing in the community for similar services by attorneys of reasonably comparable skill, reputation, and experience;
(iii) The time spent and legal services furnished were excessive considering the nature of the action or proceeding; or
(iv) The attorney representing the parent did not provide to the LEA the appropriate information in the due process request notice in accordance with § 300.508.
(5) The provisions of paragraph (c)(4) of this section do not apply in any action or proceeding if the court finds that the State or local agency unreasonably protracted the final resolution of the action or proceeding or there was a violation of section 615 of the Act.
(a) Except as provided in § 300.533, during the pendency of any administrative or judicial proceeding regarding a due process complaint notice requesting a due process hearing under § 300.507, unless the State or local agency and the parents of the child agree otherwise, the child involved in the complaint must remain in his or her current educational placement.
(b) If the complaint involves an application for initial admission to public school, the child, with the consent of the parents, must be placed in the public school until the completion of all the proceedings.
(c) If the complaint involves an application for initial services under this part from a child who is transitioning from Part C of the Act to Part B and is no longer eligible for Part C services because the child has turned three, the public agency is not required to provide the Part C services that the child had been receiving. If the child is found eligible for special education and related services under Part B and the parent consents to the initial provision of special education and related services under § 300.300(b), then the public agency must provide those special education and related services that are not in dispute between the parent and the public agency.
(d) If the hearing officer in a due process hearing conducted by the SEA or a State review official in an administrative appeal agrees with the child's parents that a change of placement is appropriate, that placement must be treated as an agreement between the State and the parents for purposes of paragraph (a) of this section.
(a) General. Each public agency must ensure that the rights of a child are protected when—
(1) No parent (as defined in § 300.30) can be identified;
(2) The public agency, after reasonable efforts, cannot locate a parent;
(3) The child is a ward of the State under the laws of that State; or
(4) The child is an unaccompanied homeless youth as defined in section 725(6) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(6)).
(b) Duties of public agency. The duties of a public agency under paragraph (a) of this section include the assignment of an individual to act as a surrogate for the parents. This must include a method—
(1) For determining whether a child needs a surrogate parent; and
(2) For assigning a surrogate parent to the child.
(c) Wards of the State. In the case of a child who is a ward of the State, the surrogate parent alternatively may be appointed by the judge overseeing the child's case, provided that the surrogate meets the requirements in paragraphs (d)(2)(i) and (e) of this section.
(d) Criteria for selection of surrogate parents. (1) The public agency may select a surrogate parent in any way permitted under State law.
(2) Public agencies must ensure that a person selected as a surrogate parent—
(i) Is not an employee of the SEA, the LEA, or any other agency that is involved in the education or care of the child;
(ii) Has no personal or professional interest that conflicts with the interest of the child the surrogate parent represents; and
(iii) Has knowledge and skills that ensure adequate representation of the child.
(e) Non-employee requirement; compensation. A person otherwise qualified to be a surrogate parent under paragraph (d) of this section is not an employee of the agency solely because he or she is paid by the agency to serve as a surrogate parent.
(f) Unaccompanied homeless youth. In the case of a child who is an unaccompanied homeless youth, appropriate staff of emergency shelters, transitional shelters, independent living programs, and street outreach programs may be appointed as temporary surrogate parents without regard to paragraph (d)(2)(i) of this section, until a surrogate parent can be appointed that meets all of the requirements of paragraph (d) of this section.
(g) Surrogate parent responsibilities. The surrogate parent may represent the child in all matters relating to—
(1) The identification, evaluation, and educational placement of the child; and
(2) The provision of FAPE to the child.
(h) SEA responsibility. The SEA must make reasonable efforts to ensure the assignment of a surrogate parent not more than 30 days after a public agency determines that the child needs a surrogate parent.
(a) General. A State may provide that, when a child with a disability reaches the age of majority under State law that applies to all children (except for a child with a disability who has been determined to be incompetent under State law)—
(1)(i) The public agency must provide any notice required by this part to both the child and the parents; and
(ii) All rights accorded to parents under Part B of the Act transfer to the child;
(2) All rights accorded to parents under Part B of the Act transfer to children who are incarcerated in an adult or juvenile, State or local correctional institution; and
(3) Whenever a State provides for the transfer of rights under this part pursuant to paragraph (a)(1) or (a)(2) of this section, the agency must notify the child and the parents of the transfer of rights.
(b) Special rule. A State must establish procedures for appointing the parent of a child with a disability, or, if the parent is not available, another appropriate individual, to represent the educational interests of the child throughout the period of the child's eligibility under Part B of the Act if, under State law, a child who has reached the age of majority, but has not been determined to be incompetent, can be determined not to have the ability to provide informed consent with respect to the child's educational program.
(a) Case-by-case determination. School personnel may consider any unique circumstances on a case-by-case basis when determining whether a change in placement, consistent with the other requirements of this section, is appropriate for a child with a disability who violates a code of student conduct.
(b) General. (1) School personnel under this section may remove a child with a disability who violates a code of student conduct from his or her current placement to an appropriate interim alternative educational setting, another setting, or suspension, for not more than 10 consecutive school days (to the extent those alternatives are applied to children without disabilities), and for additional removals of not more than 10 consecutive school days in that same school year for separate incidents of misconduct (as long as those removals do not constitute a change of placement under § 300.536).
(2) After a child with a disability has been removed from his or her current placement for 10 school days in the same school year, during any subsequent days of removal the public agency must provide services to the extent required under paragraph (d) of this section.
(c) Additional authority. For disciplinary changes in placement that would exceed 10 consecutive school days, if the behavior that gave rise to the violation of the school code is determined not to be a manifestation of the child's disability pursuant to paragraph (e) of this section, school personnel may apply the relevant disciplinary procedures to children with disabilities in the same manner and for the same duration as the procedures would be applied to children without disabilities, except as provided in paragraph (d) of this section.
(d) Services. (1) A child with a disability who is removed from the child's current placement pursuant to paragraphs (c), or (g) of this section must—
(i) Continue to receive educational services, as provided in § 300.101(a), so as to enable the child to continue to participate in the general education curriculum, although in another setting, and to progress toward meeting the goals set out in the child's IEP; and
(ii) Receive, as appropriate, a functional behavioral assessment, and behavioral intervention services and modifications, that are designed to address the behavior violation so that it does not recur.
(2) The services required by paragraph (d)(1), (d)(3), (d)(4), and (d)(5) of this section may be provided in an interim alternative educational setting.
(3) A public agency is only required to provide services during periods of removal to a child with a disability who has been removed from his or her current placement for 10 school days or less in that school year, if it provides services to a child without disabilities who is similarly removed.
(4) After a child with a disability has been removed from his or her current placement for 10 school days in the same school year, if the current removal is for not more than 10 consecutive school days and is not a change of placement under § 300.536, school personnel, in consultation with at least one of the child's teachers, determine the extent to which services are needed, as provided in § 300.101(a), so as to enable the child to continue to participate in the general education curriculum, although in another setting, and to progress toward meeting the goals set out in the child's IEP.
(5) If the removal is a change of placement under § 300.536, the child's IEP Team determines appropriate services under paragraph (d)(1) of this section.
(e) Manifestation determination. (1) Within 10 school days of any decision to change the placement of a child with a disability because of a violation of a code of student conduct, the LEA, the parent, and relevant members of the child's IEP Team (as determined by the parent and the LEA) must review all relevant information in the student's file, including the child's IEP, any teacher observations, and any relevant information provided by the parents to determine—
(i) If the conduct in question was caused by, or had a direct and substantial relationship to, the child's disability; or
(ii) If the conduct in question was the direct result of the LEA's failure to implement the IEP.
(2) The conduct must be determined to be a manifestation of the child's disability if the LEA, the parent, and relevant members of the child's IEP Team determine that a condition in either paragraph (e)(1)(i) or (1)(ii) of this section was met.
(3) If the LEA, the parent, and relevant members of the child's IEP Team determine the condition described in paragraph (e)(1)(ii) of this section was met, the LEA must take immediate steps to remedy those deficiencies.
(f) Determination that behavior was a manifestation. If the LEA, the parent, and relevant members of the IEP Team make the determination that the conduct was a manifestation of the child's disability, the IEP Team must—
(1) Either—
(i) Conduct a functional behavioral assessment, unless the LEA had conducted a functional behavioral assessment before the behavior that resulted in the change of placement occurred, and implement a behavioral intervention plan for the child; or
(ii) If a behavioral intervention plan already has been developed, review the behavioral intervention plan, and modify it, as necessary, to address the behavior; and
(2) Except as provided in paragraph (g) of this section, return the child to the placement from which the child was removed, unless the parent and the LEA agree to a change of placement as part of the modification of the behavioral intervention plan.
(g) Special circumstances. School personnel may remove a student to an interim alternative educational setting for not more than 45 school days without regard to whether the behavior is determined to be a manifestation of the child's disability, if the child—
(1) Carries a weapon to or possesses a weapon at school, on school premises, or to or at a school function under the jurisdiction of an SEA or an LEA;
(2) Knowingly possesses or uses illegal drugs, or sells or solicits the sale of a controlled substance, while at school, on school premises, or at a school function under the jurisdiction of an SEA or an LEA; or
(3) Has inflicted serious bodily injury upon another person while at school, on school premises, or at a school function under the jurisdiction of an SEA or an LEA.
(h) Notification. On the date on which the decision is made to make a removal that constitutes a change of placement of a child with a disability because of a violation of a code of student conduct, the LEA must notify the parents of that decision, and provide the parents the procedural safeguards notice described in § 300.504.
(i) Definitions. For purposes of this section, the following definitions apply:
(1) Controlled substance means a drug or other substance identified under schedules I, II, III, IV, or V in section 202(c) of the Controlled Substances Act (21 U.S.C. 812(c)).
(2) Illegal drug means a controlled substance; but does not include a controlled substance that is legally possessed or used under the supervision of a licensed health-care professional or that is legally possessed or used under any other authority under that Act or under any other provision of Federal law.
(3) Serious bodily injury has the meaning given the term “serious bodily injury” under paragraph (3) of subsection (h) of section 1365 of title 18, United States Code.
(4) Weapon has the meaning given the term “dangerous weapon” under paragraph (2) of the first subsection (g) of section 930 of title 18, United States Code.
The child's IEP Team determines the interim alternative educational setting for services under § 300.530(c), (d)(5), and (g).
(a) General. The parent of a child with a disability who disagrees with any decision regarding placement under §§ 300.530 and 300.531, or the manifestation determination under § 300.530(e), or an LEA that believes that maintaining the current placement of the child is substantially likely to result in injury to the child or others, may appeal the decision by requesting a hearing. The hearing is requested by filing a complaint pursuant to §§ 300.507 and 300.508(a) and (b).
(b) Authority of hearing officer. (1) A hearing officer under § 300.511 hears, and makes a determination regarding an appeal under paragraph (a) of this section.
(2) In making the determination under paragraph (b)(1) of this section, the hearing officer may—
(i) Return the child with a disability to the placement from which the child was removed if the hearing officer determines that the removal was a violation of § 300.530 or that the child's behavior was a manifestation of the child's disability; or
(ii) Order a change of placement of the child with a disability to an appropriate interim alternative educational setting for not more than 45 school days if the hearing officer determines that maintaining the current placement of the child is substantially likely to result in injury to the child or to others.
(3) The procedures under paragraphs (a) and (b)(1) and (2) of this section may be repeated, if the LEA believes that returning the child to the original placement is substantially likely to result in injury to the child or to others.
(c) Expedited due process hearing. (1) Whenever a hearing is requested under paragraph (a) of this section, the parents or the LEA involved in the dispute must have an opportunity for an impartial due process hearing consistent with the requirements of §§ 300.507 and 300.508(a) through (c) and §§ 300.510 through 300.514, except as provided in paragraph (c)(2) through (4) of this section.
(2) The SEA or LEA is responsible for arranging the expedited due process hearing, which must occur within 20 school days of the date the complaint requesting the hearing is filed. The hearing officer must make a determination within 10 school days after the hearing.
(3) Unless the parents and LEA agree in writing to waive the resolution meeting described in paragraph (c)(3)(i) of this section, or agree to use the mediation process described in § 300.506—
(i) A resolution meeting must occur within seven days of receiving notice of the due process complaint; and
(ii) The due process hearing may proceed unless the matter has been resolved to the satisfaction of both parties within 15 days of the receipt of the due process complaint.
(4) A State may establish different State-imposed procedural rules for expedited due process hearings conducted under this section than it has established for other due process hearings, but, except for the timelines as modified in paragraph (c)(3) of this section, the State must ensure that the requirements in §§ 300.510 through 300.514 are met.
(5) The decisions on expedited due process hearings are appealable consistent with § 300.514.
When an appeal under § 300.532 has been made by either the parent or the LEA, the child must remain in the interim alternative educational setting pending the decision of the hearing officer or until the expiration of the time period specified in § 300.530(c) or (g), whichever occurs first, unless the parent and the SEA or LEA agree otherwise.
(a) General. A child who has not been determined to be eligible for special education and related services under this part and who has engaged in behavior that violated a code of student conduct, may assert any of the protections provided for in this part if the public agency had knowledge (as determined in accordance with paragraph (b) of this section) that the child was a child with a disability before the behavior that precipitated the disciplinary action occurred.
(b) Basis of knowledge. A public agency must be deemed to have knowledge that a child is a child with a disability if before the behavior that precipitated the disciplinary action occurred—
(1) The parent of the child expressed concern in writing to supervisory or administrative personnel of the appropriate educational agency, or a teacher of the child, that the child is in need of special education and related services;
(2) The parent of the child requested an evaluation of the child pursuant to §§ 300.300 through 300.311; or
(3) The teacher of the child, or other personnel of the LEA, expressed specific concerns about a pattern of behavior demonstrated by the child directly to the director of special education of the agency or to other supervisory personnel of the agency.
(c) Exception. A public agency would not be deemed to have knowledge under paragraph (b) of this section if—
(1) The parent of the child—
(i) Has not allowed an evaluation of the child pursuant to §§ 300.300 through 300.311; or
(ii) Has refused services under this part; or
(2) The child has been evaluated in accordance with §§ 300.300 through 300.311 and determined to not be a child with a disability under this part.
(d) Conditions that apply if no basis of knowledge. (1) If a public agency does not have knowledge that a child is a child with a disability (in accordance with paragraphs (b) and (c) of this section) prior to taking disciplinary measures against the child, the child may be subjected to the disciplinary measures applied to children without disabilities who engage in comparable behaviors consistent with paragraph (d)(2) of this section.
(2)(i) If a request is made for an evaluation of a child during the time period in which the child is subjected to disciplinary measures under § 300.530, the evaluation must be conducted in an expedited manner.
(ii) Until the evaluation is completed, the child remains in the educational placement determined by school authorities, which can include suspension or expulsion without educational services.
(iii) If the child is determined to be a child with a disability, taking into consideration information from the evaluation conducted by the agency and information provided by the parents, the agency must provide special education and related services in accordance with this part, including the requirements of §§ 300.530 through 300.536 and section 612(a)(1)(A) of the Act.
(a) Rule of construction. Nothing in this part prohibits an agency from reporting a crime committed by a child with a disability to appropriate authorities or prevents State law enforcement and judicial authorities from exercising their responsibilities with regard to the application of Federal and State law to crimes committed by a child with a disability.
(b) Transmittal of records. (1) An agency reporting a crime committed by a child with a disability must ensure that copies of the special education and disciplinary records of the child are transmitted for consideration by the appropriate authorities to whom the agency reports the crime.
(2) An agency reporting a crime under this section may transmit copies of the child's special education and disciplinary records only to the extent that the transmission is permitted by the Family Educational Rights and Privacy Act.
(a) For purposes of removals of a child with a disability from the child's current educational placement under §§ 300.530 through 300.535, a change of placement occurs if—
(1) The removal is for more than 10 consecutive school days; or
(2) The child has been subjected to a series of removals that constitute a pattern—
(i) Because the series of removals total more than 10 school days in a school year;
(ii) Because the child's behavior is substantially similar to the child's behavior in previous incidents that resulted in the series of removals; and
(iii) Because of such additional factors as the length of each removal, the total amount of time the child has been removed, and the proximity of the removals to one another.
(b)(1) The public agency determines on a case-by-case basis whether a pattern of removals constitutes a change of placement.
(2) This determination is subject to review through due process and judicial proceedings.
Notwithstanding §§ 300.506(b)(7) and 300.510(d)(2), which provide for judicial enforcement of a written agreement reached as a result of mediation or a resolution meeting, there is nothing in this part that would prevent the SEA from using other mechanisms to seek enforcement of that agreement, provided that use of those mechanisms is not mandatory and does not delay or deny a party the right to seek enforcement of the written agreement in a State court of competent jurisdiction or in a district court of the United States.
(a) The State must—
(1) Monitor the implementation of this part;
(2) Make determinations annually about the performance of each LEA using the categories in § 300.603(b)(1);
(3) Enforce this part, consistent with § 300.604, using appropriate enforcement mechanisms, which must include, if applicable, the enforcement mechanisms identified in § 300.604(a)(1) (technical assistance), (a)(3) (conditions on funding of an LEA), (b)(2)(i) (a corrective action plan or improvement plan), (b)(2)(v) (withholding funds, in whole or in part, by the SEA), and (c)(2) (withholding funds, in whole or in part, by the SEA); and
(4) Report annually on the performance of the State and of each LEA under this part, as provided in § 300.602(b)(1)(i)(A) and (b)(2).
(b) The primary focus of the State's monitoring activities must be on—
(1) Improving educational results and functional outcomes for all children with disabilities; and
(2) Ensuring that public agencies meet the program requirements under Part B of the Act, with a particular emphasis on those requirements that are most closely related to improving educational results for children with disabilities.
(c) As a part of its responsibilities under paragraph (a) of this section, the State must use quantifiable indicators and such qualitative indicators as are needed to adequately measure performance in the priority areas identified in paragraph (d) of this section, and the indicators established by the Secretary for the State performance plans.
(d) The State must monitor the LEAs located in the State, using quantifiable indicators in each of the following priority areas, and using such qualitative indicators as are needed to adequately measure performance in those areas:
(1) Provision of FAPE in the least restrictive environment.
(2) State exercise of general supervision, including child find, effective monitoring, the use of resolution meetings, mediation, and a system of transition services as defined in § 300.43 and in 20 U.S.C. 1437(a)(9).
(3) Disproportionate representation of racial and ethnic groups in special education and related services, to the extent the representation is the result of inappropriate identification.
(e) In exercising its monitoring responsibilities under paragraph (d) of this section, the State must ensure that when it identifies noncompliance with the requirements of this part by LEAs, the noncompliance is corrected as soon as possible, and in no case later than one year after the State's identification of the noncompliance.
(a) General. Not later than December 3, 2005, each State must have in place a performance plan that evaluates the State's efforts to implement the requirements and purposes of Part B of the Act, and describes how the State will improve such implementation.
(1) Each State must submit the State's performance plan to the Secretary for approval in accordance with the approval process described in section 616(c) of the Act.
(2) Each State must review its State performance plan at least once every six years, and submit any amendments to the Secretary.
(3) As part of the State performance plan, each State must establish measurable and rigorous targets for the indicators established by the Secretary under the priority areas described in § 300.600(d).
(b) Data collection. (1) Each State must collect valid and reliable information as needed to report annually to the Secretary on the indicators established by the Secretary for the State performance plans.
(2) If the Secretary permits States to collect data on specific indicators through State monitoring or sampling, and the State collects the data through State monitoring or sampling, the State must collect data on those indicators for each LEA at least once during the period of the State performance plan.
(3) Nothing in Part B of the Act shall be construed to authorize the development of a nationwide database of personally identifiable information on individuals involved in studies or other collections of data under Part B of the Act.
(a) General. Each State must use the targets established in the State's performance plan under § 300.601 and the priority areas described in § 300.600(d) to analyze the performance of each LEA.
(b) Public reporting and privacy—(1) Public report.
(i) Subject to paragraph (b)(1)(ii) of this section, the State must—
(A) Report annually to the public on the performance of each LEA located in the State on the targets in the State's performance plan as soon as practicable but no later than 120 days following the State's submission of its annual performance report to the Secretary under paragraph (b)(2) of this section; and
(B) Make each of the following items available through public means: the State's performance plan, under § 300.601(a); annual performance reports, under paragraph (b)(2) of this section; and the State's annual reports on the performance of each LEA located in the State, under paragraph (b)(1)(i)(A) of this section. In doing so, the State must, at a minimum, post the plan and reports on the SEA's Web site, and distribute the plan and reports to the media and through public agencies.
(ii) If the State, in meeting the requirements of paragraph (b)(1)(i) of this section, collects performance data through State monitoring or sampling, the State must include in its report under paragraph (b)(1)(i)(A) of this section the most recently available performance data on each LEA, and the date the data were obtained.
(2) State performance report. The State must report annually to the Secretary on the performance of the State under the State's performance plan.
(3) Privacy. The State must not report to the public or the Secretary any information on performance that would result in the disclosure of personally identifiable information about individual children, or where the available data are insufficient to yield statistically reliable information.
(a) Review. The Secretary annually reviews the State's performance report submitted pursuant to § 300.602(b)(2).
(b) Determination—(1) General. Based on the information provided by the State in the State's annual performance report, information obtained through monitoring visits, and any other public information made available, the Secretary determines if the State—
(i) Meets the requirements and purposes of Part B of the Act;
(ii) Needs assistance in implementing the requirements of Part B of the Act;
(iii) Needs intervention in implementing the requirements of Part B of the Act; or
(iv) Needs substantial intervention in implementing the requirements of Part B of the Act.
(2) Notice and opportunity for a hearing. (i) For determinations made under paragraphs (b)(1)(iii) and (b)(1)(iv) of this section, the Secretary provides reasonable notice and an opportunity for a hearing on those determinations.
(ii) The hearing described in paragraph (b)(2) of this section consists of an opportunity to meet with the Assistant Secretary for Special Education and Rehabilitative Services to demonstrate why the Department should not make the determination described in paragraph (b)(1) of this section.
(a) Needs assistance. If the Secretary determines, for two consecutive years, that a State needs assistance under § 300.603(b)(1)(ii) in implementing the requirements of Part B of the Act, the Secretary takes one or more of the following actions:
(1) Advises the State of available sources of technical assistance that may help the State address the areas in which the State needs assistance, which may include assistance from the Office of Special Education Programs, other offices of the Department of Education, other Federal agencies, technical assistance providers approved by the Secretary, and other federally funded nonprofit agencies, and requires the State to work with appropriate entities. Such technical assistance may include—
(i) The provision of advice by experts to address the areas in which the State needs assistance, including explicit plans for addressing the area for concern within a specified period of time;
(ii) Assistance in identifying and implementing professional development, instructional strategies, and methods of instruction that are based on scientifically based research;
(iii) Designating and using distinguished superintendents, principals, special education administrators, special education teachers, and other teachers to provide advice, technical assistance, and support; and
(iv) Devising additional approaches to providing technical assistance, such as collaborating with institutions of higher education, educational service agencies, national centers of technical assistance supported under Part D of the Act, and private providers of scientifically based technical assistance.
(2) Directs the use of State-level funds under section 611(e) of the Act on the area or areas in which the State needs assistance.
(3) Identifies the State as a high-risk grantee and imposes special conditions on the State's grant under Part B of the Act.
(b) Needs intervention. If the Secretary determines, for three or more consecutive years, that a State needs intervention under § 300.603(b)(1)(iii) in implementing the requirements of Part B of the Act, the following shall apply:
(1) The Secretary may take any of the actions described in paragraph (a) of this section.
(2) The Secretary takes one or more of the following actions:
(i) Requires the State to prepare a corrective action plan or improvement plan if the Secretary determines that the State should be able to correct the problem within one year.
(ii) Requires the State to enter into a compliance agreement under section 457 of the General Education Provisions Act, as amended, 20 U.S.C. 1221 et seq. (GEPA), if the Secretary has reason to believe that the State cannot correct the problem within one year.
(iii) For each year of the determination, withholds not less than 20 percent and not more than 50 percent of the State's funds under section 611(e) of the Act, until the Secretary determines the State has sufficiently addressed the areas in which the State needs intervention.
(iv) Seeks to recover funds under section 452 of GEPA.
(v) Withholds, in whole or in part, any further payments to the State under Part B of the Act.
(vi) Refers the matter for appropriate enforcement action, which may include referral to the Department of Justice.
(c) Needs substantial intervention. Notwithstanding paragraph (a) or (b) of this section, at any time that the Secretary determines that a State needs substantial intervention in implementing the requirements of Part B of the Act or that there is a substantial failure to comply with any condition of an SEA's or LEA's eligibility under Part B of the Act, the Secretary takes one or more of the following actions:
(1) Recovers funds under section 452 of GEPA.
(2) Withholds, in whole or in part, any further payments to the State under Part B of the Act.
(3) Refers the case to the Office of the Inspector General at the Department of Education.
(4) Refers the matter for appropriate enforcement action, which may include referral to the Department of Justice.
(d) Report to Congress. The Secretary reports to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate within 30 days of taking enforcement action pursuant to paragraph (a), (b), or (c) of this section, on the specific action taken and the reasons why enforcement action was taken.
(a) Opportunity for hearing. Prior to withholding any funds under Part B of the Act, the Secretary provides reasonable notice and an opportunity for a hearing to the SEA involved, pursuant to the procedures in §§ 300.180 through 300.183.
(b) Suspension. Pending the outcome of any hearing to withhold payments under paragraph (a) of this section, the Secretary may suspend payments to a recipient, suspend the authority of the recipient to obligate funds under Part B of the Act, or both, after the recipient has been given reasonable notice and an opportunity to show cause why future payments or authority to obligate funds under Part B of the Act should not be suspended.
(c) Nature of withholding. (1) If the Secretary determines that it is appropriate to withhold further payments under § 300.604(b)(2) or (c)(2), the Secretary may determine—
(i) That the withholding will be limited to programs or projects, or portions of programs or projects, that affected the Secretary's determination under § 300.603(b)(1); or
(ii) That the SEA must not make further payments under Part B of the Act to specified State agencies or LEAs that caused or were involved in the Secretary's determination under § 300.603(b)(1).
(2) Until the Secretary is satisfied that the condition that caused the initial withholding has been substantially rectified—
(i) Payments to the State under Part B of the Act must be withheld in whole or in part; and
(ii) Payments by the SEA under Part B of the Act must be limited to State agencies and LEAs whose actions did not cause or were not involved in the Secretary's determination under § 300.603(b)(1), as the case may be.
Whenever a State receives notice that the Secretary is proposing to take or is taking an enforcement action pursuant to § 300.604, the State must, by means of a public notice, take such actions as may be necessary to notify the public within the State of the pendency of an action pursuant to § 300.604, including, at a minimum, by posting the notice on the SEA's Web site and distributing the notice to the media and through public agencies.
For purposes of this subpart, if responsibility for ensuring that the requirements of Part B of the Act are met with respect to children with disabilities who are convicted as adults under State law and incarcerated in adult prisons is assigned to a public agency other than the SEA pursuant to § 300.149(d), and if the Secretary finds that the failure to comply substantially with the provisions of Part B of the Act are related to a failure by the public agency, the Secretary takes appropriate corrective action to ensure compliance with Part B of the Act, except that—
(a) Any reduction or withholding of payments to the State under § 300.604 must be proportionate to the total funds allotted under section 611 of the Act to the State as the number of eligible children with disabilities in adult prisons under the supervision of the other public agency is proportionate to the number of eligible individuals with disabilities in the State under the supervision of the SEA; and
(b) Any withholding of funds under § 300.604 must be limited to the specific agency responsible for the failure to comply with Part B of the Act.
(a) If an SEA determines that an LEA is not meeting the requirements of Part B of the Act, including the targets in the State's performance plan, the SEA must prohibit the LEA from reducing the LEA's maintenance of effort under § 300.203 for any fiscal year.
(b) Nothing in this subpart shall be construed to restrict a State from utilizing any other authority available to it to monitor and enforce the requirements of Part B of the Act.
Nothing in this subpart shall be construed to restrict the Secretary from utilizing any authority under GEPA, including the provisions in 34 CFR parts 76, 77, and 81 and 2 CFR part 200 to monitor and enforce the requirements of the Act, including the imposition of special or high-risk conditions under 2 CFR 200.207 and 3474.10.
The Secretary takes appropriate action, in accordance with section 444 of GEPA, to ensure the protection of the confidentiality of any personally identifiable data, information, and records collected or maintained by the Secretary and by SEAs and LEAs pursuant to Part B of the Act, and consistent with §§ 300.611 through 300.627.
As used in §§ 300.611 through 300.625—
(a) Destruction means physical destruction or removal of personal identifiers from information so that the information is no longer personally identifiable.
(b) Education records means the type of records covered under the definition of “education records” in 34 CFR part 99 (the regulations implementing the Family Educational Rights and Privacy Act of 1974, 20 U.S.C. 1232g (FERPA)).
(c) Participating agency means any agency or institution that collects, maintains, or uses personally identifiable information, or from which information is obtained, under Part B of the Act.
(a) The SEA must give notice that is adequate to fully inform parents about the requirements of § 300.123, including—
(1) A description of the extent that the notice is given in the native languages of the various population groups in the State;
(2) A description of the children on whom personally identifiable information is maintained, the types of information sought, the methods the State intends to use in gathering the information (including the sources from whom information is gathered), and the uses to be made of the information;
(3) A summary of the policies and procedures that participating agencies must follow regarding storage, disclosure to third parties, retention, and destruction of personally identifiable information; and
(4) A description of all of the rights of parents and children regarding this information, including the rights under FERPA and implementing regulations in 34 CFR part 99.
(b) Before any major identification, location, or evaluation activity, the notice must be published or announced in newspapers or other media, or both, with circulation adequate to notify parents throughout the State of the activity.
(a) Each participating agency must permit parents to inspect and review any education records relating to their children that are collected, maintained, or used by the agency under this part. The agency must comply with a request without unnecessary delay and before any meeting regarding an IEP, or any hearing pursuant to § 300.507 or §§ 300.530 through 300.532, or resolution session pursuant to § 300.510, and in no case more than 45 days after the request has been made.
(b) The right to inspect and review education records under this section includes—
(1) The right to a response from the participating agency to reasonable requests for explanations and interpretations of the records;
(2) The right to request that the agency provide copies of the records containing the information if failure to provide those copies would effectively prevent the parent from exercising the right to inspect and review the records; and
(3) The right to have a representative of the parent inspect and review the records.
(c) An agency may presume that the parent has authority to inspect and review records relating to his or her child unless the agency has been advised that the parent does not have the authority under applicable State law governing such matters as guardianship, separation, and divorce.
Each participating agency must keep a record of parties obtaining access to education records collected, maintained, or used under Part B of the Act (except access by parents and authorized employees of the participating agency), including the name of the party, the date access was given, and the purpose for which the party is authorized to use the records.
If any education record includes information on more than one child, the parents of those children have the right to inspect and review only the information relating to their child or to be informed of that specific information.
Each participating agency must provide parents on request a list of the types and locations of education records collected, maintained, or used by the agency.
(a) Each participating agency may charge a fee for copies of records that are made for parents under this part if the fee does not effectively prevent the parents from exercising their right to inspect and review those records.
(b) A participating agency may not charge a fee to search for or to retrieve information under this part.
(a) A parent who believes that information in the education records collected, maintained, or used under this part is inaccurate or misleading or violates the privacy or other rights of the child may request the participating agency that maintains the information to amend the information.
(b) The agency must decide whether to amend the information in accordance with the request within a reasonable period of time of receipt of the request.
(c) If the agency decides to refuse to amend the information in accordance with the request, it must inform the parent of the refusal and advise the parent of the right to a hearing under § 300.619.
The agency must, on request, provide an opportunity for a hearing to challenge information in education records to ensure that it is not inaccurate, misleading, or otherwise in violation of the privacy or other rights of the child.
(a) If, as a result of the hearing, the agency decides that the information is inaccurate, misleading or otherwise in violation of the privacy or other rights of the child, it must amend the information accordingly and so inform the parent in writing.
(b) If, as a result of the hearing, the agency decides that the information is not inaccurate, misleading, or otherwise in violation of the privacy or other rights of the child, it must inform the parent of the parent's right to place in the records the agency maintains on the child a statement commenting on the information or setting forth any reasons for disagreeing with the decision of the agency.
(c) Any explanation placed in the records of the child under this section must—
(1) Be maintained by the agency as part of the records of the child as long as the record or contested portion is maintained by the agency; and
(2) If the records of the child or the contested portion is disclosed by the agency to any party, the explanation must also be disclosed to the party.
A hearing held under § 300.619 must be conducted according to the procedures in 34 CFR 99.22.
(a) Parental consent must be obtained before personally identifiable information is disclosed to parties, other than officials of participating agencies in accordance with paragraph (b)(1) of this section, unless the information is contained in education records, and the disclosure is authorized without parental consent under 34 CFR part 99.
(b)(1) Except as provided in paragraphs (b)(2) and (b)(3) of this section, parental consent is not required before personally identifiable information is released to officials of participating agencies for purposes of meeting a requirement of this part.
(2) Parental consent, or the consent of an eligible child who has reached the age of majority under State law, must be obtained before personally identifiable information is released to officials of participating agencies providing or paying for transition services in accordance with § 300.321(b)(3).
(3) If a child is enrolled, or is going to enroll in a private school that is not located in the LEA of the parent's residence, parental consent must be obtained before any personally identifiable information about the child is released between officials in the LEA where the private school is located and officials in the LEA of the parent's residence.
(a) Each participating agency must protect the confidentiality of personally identifiable information at collection, storage, disclosure, and destruction stages.
(b) One official at each participating agency must assume responsibility for ensuring the confidentiality of any personally identifiable information.
(c) All persons collecting or using personally identifiable information must receive training or instruction regarding the State's policies and procedures under § 300.123 and 34 CFR part 99.
(d) Each participating agency must maintain, for public inspection, a current listing of the names and positions of those employees within the agency who may have access to personally identifiable information.
(a) The public agency must inform parents when personally identifiable information collected, maintained, or used under this part is no longer needed to provide educational services to the child.
(b) The information must be destroyed at the request of the parents. However, a permanent record of a student's name, address, and phone number, his or her grades, attendance record, classes attended, grade level completed, and year completed may be maintained without time limitation.
(a) The SEA must have in effect policies and procedures regarding the extent to which children are afforded rights of privacy similar to those afforded to parents, taking into consideration the age of the child and type or severity of disability.
(b) Under the regulations for FERPA in 34 CFR 99.5(a), the rights of parents regarding education records are transferred to the student at age 18.
(c) If the rights accorded to parents under Part B of the Act are transferred to a student who reaches the age of majority, consistent with § 300.520, the rights regarding educational records in §§ 300.613 through 300.624 must also be transferred to the student. However, the public agency must provide any notice required under section 615 of the Act to the student and the parents.
The SEA must have in effect the policies and procedures, including sanctions that the State uses, to ensure that its policies and procedures consistent with §§ 300.611 through 300.625 are followed and that the requirements of the Act and the regulations in this part are met.
If the Department or its authorized representatives collect any personally identifiable information regarding children with disabilities that is not subject to the Privacy Act of 1974, 5 U.S.C. 552a, the Secretary applies the requirements of 5 U.S.C. 552a(b)(1) and (b)(2), 552a(b)(4) through (b)(11); 552a(c) through 552a(e)(3)(B); 552a(e)(3)(D); 552a(e)(5) through (e)(10); 552a(h); 552a(m); and 552a(n); and the regulations implementing those provisions in 34 CFR part 5b.
(a) The SEA must annually report to the Secretary on the information required by section 618 of the Act at the times specified by the Secretary.
(b) The SEA must submit the report on forms provided by the Secretary.
(a) For purposes of the annual report required by section 618 of the Act and § 300.640, the State and the Secretary of the Interior must count and report the number of children with disabilities receiving special education and related services on any date between October 1 and December 1 of each year.
(b) For the purpose of this reporting provision, a child's age is the child's actual age on the date of the child count.
(c) The SEA may not report a child under more than one disability category.
(d) If a child with a disability has more than one disability, the SEA must report that child in accordance with the following procedure:
(1) If a child has only two disabilities and those disabilities are deafness and blindness, and the child is not reported as having a developmental delay, that child must be reported under the category “deaf-blindness.”
(2) A child who has more than one disability and is not reported as having deaf-blindness or as having a developmental delay must be reported under the category “multiple disabilities.”
(a) Protection of personally identifiable data. The data described in section 618(a) of the Act and in § 300.641 must be publicly reported by each State in a manner that does not result in disclosure of data identifiable to individual children.
(b) Sampling. The Secretary may permit States and the Secretary of the Interior to obtain data in section 618(a) of the Act through sampling.
The SEA must include in its report a certification signed by an authorized official of the agency that the information provided under § 300.640 is an accurate and unduplicated count of children with disabilities receiving special education and related services on the dates in question.
The SEA may include in its report children with disabilities who are enrolled in a school or program that is operated or supported by a public agency, and that—
(a) Provides them with both special education and related services that meet State standards;
(b) Provides them only with special education, if a related service is not required, that meets State standards; or
(c) In the case of children with disabilities enrolled by their parents in private schools, counts those children who are eligible under the Act and receive special education or related services or both that meet State standards under §§ 300.132 through 300.144.
In addition to meeting the other requirements of §§ 300.640 through 300.644, the SEA must—
(a) Establish procedures to be used by LEAs and other educational institutions in counting the number of children with disabilities receiving special education and related services;
(b) Set dates by which those agencies and institutions must report to the SEA to ensure that the State complies with § 300.640(a);
(c) Obtain certification from each agency and institution that an unduplicated and accurate count has been made;
(d) Aggregate the data from the count obtained from each agency and institution, and prepare the reports required under §§ 300.640 through 300.644; and
(e) Ensure that documentation is maintained that enables the State and the Secretary to audit the accuracy of the count.
(a) General. Each State that receives assistance under Part B of the Act, and the Secretary of the Interior, must provide for the collection and examination of data to determine if significant disproportionality based on race and ethnicity is occurring in the State and the LEAs of the State with respect to—
(1) The identification of children as children with disabilities, including the identification of children as children with disabilities in accordance with a particular impairment described in section 602(3) of the Act;
(2) The placement in particular educational settings of these children; and
(3) The incidence, duration, and type of disciplinary removals from placement, including suspensions and expulsions.
(b) Methodology. The State must apply the methods in § 300.647 to determine if significant disproportionality based on race and ethnicity is occurring in the State and the LEAs of the State under paragraph (a) of this section.
(c) Review and revision of policies, practices, and procedures. In the case of a determination of significant disproportionality with respect to the identification of children as children with disabilities or the placement in particular educational settings, including disciplinary removals of such children, in accordance with paragraphs (a) and (b) of this section, the State or the Secretary of the Interior must—
(1) Provide for the annual review and, if appropriate, revision of the policies, practices, and procedures used in identification or placement in particular education settings, including disciplinary removals, to ensure that the policies, practices, and procedures comply with the requirements of the Act.
(2) Require the LEA to publicly report on the revision of policies, practices, and procedures described under paragraph (c)(1) of this section consistent with the requirements of the Family Educational Rights and Privacy Act, its implementing regulations in 34 CFR part 99, and Section 618(b)(1) of the Act.
(d) Comprehensive coordinated early intervening services. Except as provided in paragraph (e) of this section, the State or the Secretary of the Interior shall require any LEA identified under paragraphs (a) and (b) of this section to reserve the maximum amount of funds under section 613(f) of the Act to provide comprehensive coordinated early intervening services to address factors contributing to the significant disproportionality.
(1) In implementing comprehensive coordinated early intervening services an LEA—
(i) May carry out activities that include professional development and educational and behavioral evaluations, services, and supports.
(ii) Must identify and address the factors contributing to the significant disproportionality, which may include, among other identified factors, a lack of access to scientifically based instruction; economic, cultural, or linguistic barriers to appropriate identification or placement in particular educational settings; inappropriate use of disciplinary removals; lack of access to appropriate diagnostic screenings; differences in academic achievement levels; and policies, practices, or procedures that contribute to the significant disproportionality.
(iii) Must address a policy, practice, or procedure it identifies as contributing to the significant disproportionality, including a policy, practice or procedure that results in a failure to identify, or the inappropriate identification of, a racial or ethnic group (or groups).
(2) An LEA may use funds reserved for comprehensive coordinated early intervening services to serve children from age 3 through grade 12, particularly, but not exclusively, children in those groups that were significantly overidentified under paragraph (a) or (b) of this section, including—
(i) Children who are not currently identified as needing special education or related services but who need additional academic and behavioral support to succeed in a general education environment; and
(ii) Children with disabilities.
(3) An LEA may not limit the provision of comprehensive coordinated early intervening services under this paragraph to children with disabilities.
(e) Exception to comprehensive coordinated early intervening services. The State or the Secretary of the Interior shall not require any LEA that serves only children with disabilities identified under paragraphs (a) and (b) of this section to reserve funds to provide comprehensive coordinated early intervening services.
(f) Rule of construction. Nothing in this section authorizes a State or an LEA to develop or implement policies, practices, or procedures that result in actions that violate the requirements of this part, including requirements related to child find and ensuring that a free appropriate public education is available to all eligible children with disabilities.
(a) Definitions. (1) Alternate risk ratio is a calculation performed by dividing the risk of a particular outcome for children in one racial or ethnic group within an LEA by the risk of that outcome for children in all other racial or ethnic groups in the State.
(2) Comparison group consists of the children in all other racial or ethnic groups within an LEA or within the State, when reviewing a particular racial or ethnic group within an LEA for significant disproportionality.
(3) Minimum cell size is the minimum number of children experiencing a particular outcome, to be used as the numerator when calculating either the risk for a particular racial or ethnic group or the risk for children in all other racial or ethnic groups.
(4) Minimum n-size is the minimum number of children enrolled in an LEA with respect to identification, and the minimum number of children with disabilities enrolled in an LEA with respect to placement and discipline, to be used as the denominator when calculating either the risk for a particular racial or ethnic group or the risk for children in all other racial or ethnic groups.
(5) Risk is the likelihood of a particular outcome (identification, placement, or disciplinary removal) for a specified racial or ethnic group (or groups), calculated by dividing the number of children from a specified racial or ethnic group (or groups) experiencing that outcome by the total number of children from that racial or ethnic group or groups enrolled in the LEA.
(6) Risk ratio is a calculation performed by dividing the risk of a particular outcome for children in one racial or ethnic group within an LEA by the risk for children in all other racial and ethnic groups within the LEA.
(7) Risk ratio threshold is a threshold, determined by the State, over which disproportionality based on race or ethnicity is significant under § 300.646(a) and (b).
(b) Significant disproportionality determinations. In determining whether significant disproportionality exists in a State or LEA under § 300.646(a) and (b)—
(1)(i) The State must set a:
(A) Reasonable risk ratio threshold;
(B) Reasonable minimum cell size;
(C) Reasonable minimum n-size; and
(D) Standard for measuring reasonable progress if a State uses the flexibility described in paragraph (d)(2) of this section.
(ii) The State may, but is not required to, set the standards set forth in paragraph (b)(1)(i) of this section at different levels for each of the categories described in paragraphs (b)(3) and (4) of this section.
(iii) The standards set forth in paragraph (b)(1)(i) of this section:
(A) Must be based on advice from stakeholders, including State Advisory Panels, as provided under section 612(a)(21)(D)(iii) of the Act; and
(B) Are subject to monitoring and enforcement for reasonableness by the Secretary consistent with section 616 of the Act.
(iv) When monitoring for reasonableness under paragraph (b)(1)(iii)(B) of this section, the Department finds that the following are presumptively reasonable:
(A) A minimum cell size under paragraph (b)(1)(i)(B) of this section no greater than 10; and
(B) A minimum n-size under paragraph (b)(1)(i)(C) of this section no greater than 30.
(2) The State must apply the risk ratio threshold or thresholds determined in paragraph (b)(1) of this section to risk ratios or alternate risk ratios, as appropriate, in each category described in paragraphs (b)(3) and (4) of this section and the following racial and ethnic groups:
(i) Hispanic/Latino of any race; and, for individuals who are non-Hispanic/Latino only;
(ii) American Indian or Alaska Native;
(iii) Asian;
(iv) Black or African American;
(v) Native Hawaiian or Other Pacific Islander;
(vi) White; and
(vii) Two or more races.
(3) Except as provided in paragraphs (b)(5) and (c) of this section, the State must calculate the risk ratio for each LEA, for each racial and ethnic group in paragraph (b)(2) of this section with respect to:
(i) The identification of children ages 3 through 21 as children with disabilities; and
(ii) The identification of children ages 3 through 21 as children with the following impairments:
(A) Intellectual disabilities;
(B) Specific learning disabilities;
(C) Emotional disturbance;
(D) Speech or language impairments;
(E) Other health impairments; and
(F) Autism.
(4) Except as provided in paragraphs (b)(5) and (c) of this section, the State must calculate the risk ratio for each LEA, for each racial and ethnic group in paragraph (b)(2) of this section with respect to the following placements into particular educational settings, including disciplinary removals:
(i) For children with disabilities ages 6 through 21, inside a regular class less than 40 percent of the day;
(ii) For children with disabilities ages 6 through 21, inside separate schools and residential facilities, not including homebound or hospital settings, correctional facilities, or private schools;
(iii) For children with disabilities ages 3 through 21, out-of-school suspensions and expulsions of 10 days or fewer;
(iv) For children with disabilities ages 3 through 21, out-of-school suspensions and expulsions of more than 10 days;
(v) For children with disabilities ages 3 through 21, in-school suspensions of 10 days or fewer;
(vi) For children with disabilities ages 3 through 21, in-school suspensions of more than 10 days; and
(vii) For children with disabilities ages 3 through 21, disciplinary removals in total, including in-school and out-of-school suspensions, expulsions, removals by school personnel to an interim alternative education setting, and removals by a hearing officer.
(5) The State must calculate an alternate risk ratio with respect to the categories described in paragraphs (b)(3) and (4) of this section if the comparison group in the LEA does not meet the minimum cell size or the minimum n-size.
(6) Except as provided in paragraph (d) of this section, the State must identify as having significant disproportionality based on race or ethnicity under § 300.646(a) and (b) any LEA that has a risk ratio or alternate risk ratio for any racial or ethnic group in any of the categories described in paragraphs (b)(3) and (4) of this section that exceeds the risk ratio threshold set by the State for that category.
(7) The State must report all risk ratio thresholds, minimum cell sizes, minimum n-sizes, and standards for measuring reasonable progress selected under paragraphs (b)(1)(i)(A) through (D) of this section, and the rationales for each, to the Department at a time and in a manner determined by the Secretary. Rationales for minimum cell sizes and minimum n-sizes not presumptively reasonable under paragraph (b)(1)(iv) of this section must include a detailed explanation of why the numbers chosen are reasonable and how they ensure that the State is appropriately analyzing and identifying LEAs with significant disparities, based on race and ethnicity, in the identification, placement, or discipline of children with disabilities.
(c) Exception. A State is not required to calculate a risk ratio or alternate risk ratio, as outlined in paragraphs (b)(3), (4), and (5) of this section, to determine significant disproportionality if:
(1) The particular racial or ethnic group being analyzed does not meet the minimum cell size or minimum n-size; or
(2) In calculating the alternate risk ratio under paragraph (b)(5) of this section, the comparison group in the State does not meet the minimum cell size or minimum n-size.
(d) Flexibility. A State is not required to identify an LEA as having significant disproportionality based on race or ethnicity under § 300.646(a) and (b) until—
(1) The LEA has exceeded a risk ratio threshold set by the State for a racial or ethnic group in a category described in paragraph (b)(3) or (4) of this section for up to three prior consecutive years preceding the identification; and
(2) The LEA has exceeded the risk ratio threshold and has failed to demonstrate reasonable progress, as determined by the State, in lowering the risk ratio or alternate risk ratio for the group and category in each of the two prior consecutive years.
(a) Purpose of grants. The Secretary makes grants to States, outlying areas, and freely associated States (as defined in § 300.717), and provides funds to the Secretary of the Interior, to assist them to provide special education and related services to children with disabilities in accordance with Part B of the Act.
(b) Maximum amount. The maximum amount of the grant a State may receive under section 611 of the Act is—
(1) For fiscal years 2005 and 2006—
(i) The number of children with disabilities in the State who are receiving special education and related services—
(A) Aged three through five, if the State is eligible for a grant under section 619 of the Act; and
(B) Aged 6 through 21; multiplied by—
(ii) Forty (40) percent of the average per-pupil expenditure in public elementary schools and secondary schools in the United States (as defined in § 300.717); and
(2) For fiscal year 2007 and subsequent fiscal years—
(i) The number of children with disabilities in the 2004-2005 school year in the State who received special education and related services—
(A) Aged three through five if the State is eligible for a grant under section 619 of the Act; and
(B) Aged 6 through 21; multiplied by
(ii) Forty (40) percent of the average per-pupil expenditure in public elementary schools and secondary schools in the United States (as defined in § 300.717);
(iii) Adjusted by the rate of annual change in the sum of—
(A) Eighty-five (85) percent of the State's population of children aged 3 through 21 who are of the same age as children with disabilities for whom the State ensures the availability of FAPE under Part B of the Act; and
(B) Fifteen (15) percent of the State's population of children described in paragraph (b)(2)(iii)(A) of this section who are living in poverty.
(a) Outlying areas and freely associated States—(1) Funds reserved. From the amount appropriated for any fiscal year under section 611(i) of the Act, the Secretary reserves not more than one percent, which must be used—
(i) To provide assistance to the outlying areas in accordance with their respective populations of individuals aged 3 through 21; and
(ii) To provide each freely associated State a grant in the amount that the freely associated State received for fiscal year 2003 under Part B of the Act, but only if the freely associated State—
(A) Meets the applicable requirements of Part B of the Act that apply to States.
(B) Meets the requirements in paragraph (a)(2) of this section.
(2) Application. Any freely associated State that wishes to receive funds under Part B of the Act must include, in its application for assistance—
(i) Information demonstrating that it will meet all conditions that apply to States under Part B of the Act.
(ii) An assurance that, notwithstanding any other provision of Part B of the Act, it will use those funds only for the direct provision of special education and related services to children with disabilities and to enhance its capacity to make FAPE available to all children with disabilities;
(iii) The identity of the source and amount of funds, in addition to funds under Part B of the Act, that it will make available to ensure that FAPE is available to all children with disabilities within its jurisdiction; and
(iv) Such other information and assurances as the Secretary may require.
(3) Special rule. The provisions of Public Law 95-134, permitting the consolidation of grants by the outlying areas, do not apply to funds provided to the outlying areas or to the freely associated States under Part B of the Act.
(b) Secretary of the Interior. From the amount appropriated for any fiscal year under section 611(i) of the Act, the Secretary reserves 1.226 percent to provide assistance to the Secretary of the Interior in accordance with §§ 300.707 through 300.716.
(a) In general. The Secretary may reserve not more than one-half of one percent of the amounts appropriated under Part B of the Act for each fiscal year to support technical assistance activities authorized under section 616(i) of the Act.
(b) Maximum amount. The maximum amount the Secretary may reserve under paragraph (a) of this section for any fiscal year is $25,000,000, cumulatively adjusted by the rate of inflation as measured by the percentage increase, if any, from the preceding fiscal year in the Consumer Price Index For All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor.
(a) General. After reserving funds for technical assistance under § 300.702, and for payments to the outlying areas, the freely associated States, and the Secretary of the Interior under § 300.701 (a) and (b) for a fiscal year, the Secretary allocates the remaining amount among the States in accordance with paragraphs (b), (c), and (d) of this section.
(b) Special rule for use of fiscal year 1999 amount. If a State received any funds under section 611 of the Act for fiscal year 1999 on the basis of children aged three through five, but does not make FAPE available to all children with disabilities aged three through five in the State in any subsequent fiscal year, the Secretary computes the State's amount for fiscal year 1999, solely for the purpose of calculating the State's allocation in that subsequent year under paragraph (c) or (d) of this section, by subtracting the amount allocated to the State for fiscal year 1999 on the basis of those children.
(c) Increase in funds. If the amount available for allocations to States under paragraph (a) of this section for a fiscal year is equal to or greater than the amount allocated to the States under section 611 of the Act for the preceding fiscal year, those allocations are calculated as follows:
(1) Allocation of increase—(i) General. Except as provided in paragraph (c)(2) of this section, the Secretary allocates for the fiscal year—
(A) To each State the amount the State received under this section for fiscal year 1999;
(B) Eighty-five (85) percent of any remaining funds to States on the basis of the States' relative populations of children aged 3 through 21 who are of the same age as children with disabilities for whom the State ensures the availability of FAPE under Part B of the Act; and
(C) Fifteen (15) percent of those remaining funds to States on the basis of the States' relative populations of children described in paragraph (c)(1)(i)(B) of this section who are living in poverty.
(ii) Data. For the purpose of making grants under this section, the Secretary uses the most recent population data, including data on children living in poverty, that are available and satisfactory to the Secretary.
(2) Limitations. Notwithstanding paragraph (c)(1) of this section, allocations under this section are subject to the following:
(i) Preceding year allocation. No State's allocation may be less than its allocation under section 611 of the Act for the preceding fiscal year.
(ii) Minimum. No State's allocation may be less than the greatest of—
(A) The sum of—
(1) The amount the State received under section 611 of the Act for fiscal year 1999; and
(2) One third of one percent of the amount by which the amount appropriated under section 611(i) of the Act for the fiscal year exceeds the amount appropriated for section 611 of the Act for fiscal year 1999;
(B) The sum of—
(1) The amount the State received under section 611 of the Act for the preceding fiscal year; and
(2) That amount multiplied by the percentage by which the increase in the funds appropriated for section 611 of the Act from the preceding fiscal year exceeds 1.5 percent; or
(C) The sum of—
(1) The amount the State received under section 611 of the Act for the preceding fiscal year; and
(2) That amount multiplied by 90 percent of the percentage increase in the amount appropriated for section 611 of the Act from the preceding fiscal year.
(iii) Maximum. Notwithstanding paragraph (c)(2)(ii) of this section, no State's allocation under paragraph (a) of this section may exceed the sum of—
(A) The amount the State received under section 611 of the Act for the preceding fiscal year; and
(B) That amount multiplied by the sum of 1.5 percent and the percentage increase in the amount appropriated under section 611 of the Act from the preceding fiscal year.
(3) Ratable reduction. If the amount available for allocations to States under paragraph (c) of this section is insufficient to pay those allocations in full, those allocations are ratably reduced, subject to paragraph (c)(2)(i) of this section.
(d) Decrease in funds. If the amount available for allocations to States under paragraph (a) of this section for a fiscal year is less than the amount allocated to the States under section 611 of the Act for the preceding fiscal year, those allocations are calculated as follows:
(1) Amounts greater than fiscal year 1999 allocations. If the amount available for allocations under paragraph (a) of this section is greater than the amount allocated to the States for fiscal year 1999, each State is allocated the sum of—
(i) 1999 amount. The amount the State received under section 611 of the Act for fiscal year 1999; and
(ii) Remaining funds. An amount that bears the same relation to any remaining funds as the increase the State received under section 611 of the Act for the preceding fiscal year over fiscal year 1999 bears to the total of all such increases for all States.
(2) Amounts equal to or less than fiscal year 1999 allocations—(i) General. If the amount available for allocations under paragraph (a) of this section is equal to or less than the amount allocated to the States for fiscal year 1999, each State is allocated the amount it received for fiscal year 1999.
(ii) Ratable reduction. If the amount available for allocations under paragraph (d) of this section is insufficient to make the allocations described in paragraph (d)(2)(i) of this section, those allocations are ratably reduced.
(a) State administration. (1) For the purpose of administering Part B of the Act, including paragraph (c) of this section, section 619 of the Act, and the coordination of activities under Part B of the Act with, and providing technical assistance to, other programs that provide services to children with disabilities—
(i) Each State may reserve for each fiscal year not more than the maximum amount the State was eligible to reserve for State administration under section 611 of the Act for fiscal year 2004 or $800,000 (adjusted in accordance with paragraph (a)(2) of this section), whichever is greater; and
(ii) Each outlying area may reserve for each fiscal year not more than five percent of the amount the outlying area receives under § 300.701(a) for the fiscal year or $35,000, whichever is greater.
(2) For each fiscal year, beginning with fiscal year 2005, the Secretary cumulatively adjusts—
(i) The maximum amount the State was eligible to reserve for State administration under section 611 of the Act for fiscal year 2004; and
(ii) $800,000, by the rate of inflation as measured by the percentage increase, if any, from the preceding fiscal year in the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor.
(3) Prior to expenditure of funds under paragraph (a) of this section, the State must certify to the Secretary that the arrangements to establish responsibility for services pursuant to section 612(a)(12)(A) of the Act are current.
(4) Funds reserved under paragraph (a)(1) of this section may be used for the administration of Part C of the Act, if the SEA is the lead agency for the State under that Part.
(b) Other State-level activities. (1) States may reserve a portion of their allocations for other State-level activities. The maximum amount that a State may reserve for other State-level activities is as follows:
(i) If the amount that the State sets aside for State administration under paragraph (a) of this section is greater than $850,000 and the State opts to finance a high cost fund under paragraph (c) of this section:
(A) For fiscal years 2005 and 2006, 10 percent of the State's allocation under § 300.703.
(B) For fiscal year 2007 and subsequent fiscal years, an amount equal to 10 percent of the State's allocation for fiscal year 2006 under § 300.703 adjusted cumulatively for inflation.
(ii) If the amount that the State sets aside for State administration under paragraph (a) of this section is greater than $850,000 and the State opts not to finance a high cost fund under paragraph (c) of this section—
(A) For fiscal years 2005 and 2006, nine percent of the State's allocation under § 300.703.
(B) For fiscal year 2007 and subsequent fiscal years, an amount equal to nine percent of the State's allocation for fiscal year 2006 adjusted cumulatively for inflation.
(iii) If the amount that the State sets aside for State administration under paragraph (a) of this section is less than or equal to $850,000 and the State opts to finance a high cost fund under paragraph (c) of this section:
(A) For fiscal years 2005 and 2006, 10.5 percent of the State's allocation under § 300.703.
(B) For fiscal year 2007 and subsequent fiscal years, an amount equal to 10.5 percent of the State's allocation for fiscal year 2006 under § 300.703 adjusted cumulatively for inflation.
(iv) If the amount that the State sets aside for State administration under paragraph (a) of this section is equal to or less than $850,000 and the State opts not to finance a high cost fund under paragraph (c) of this section:
(A) For fiscal years 2005 and 2006, nine and one-half percent of the State's allocation under § 300.703.
(B) For fiscal year 2007 and subsequent fiscal years, an amount equal to nine and one-half percent of the State's allocation for fiscal year 2006 under § 300.703 adjusted cumulatively for inflation.
(2) The adjustment for inflation is the rate of inflation as measured by the percentage of increase, if any, from the preceding fiscal year in the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor.
(3) Some portion of the funds reserved under paragraph (b)(1) of this section must be used to carry out the following activities:
(i) For monitoring, enforcement, and complaint investigation; and
(ii) To establish and implement the mediation process required by section 615(e) of the Act, including providing for the costs of mediators and support personnel;
(4) Funds reserved under paragraph (b)(1) of this section also may be used to carry out the following activities:
(i) For support and direct services, including technical assistance, personnel preparation, and professional development and training;
(ii) To support paperwork reduction activities, including expanding the use of technology in the IEP process;
(iii) To assist LEAs in providing positive behavioral interventions and supports and mental health services for children with disabilities;
(iv) To improve the use of technology in the classroom by children with disabilities to enhance learning;
(v) To support the use of technology, including technology with universal design principles and assistive technology devices, to maximize accessibility to the general education curriculum for children with disabilities;
(vi) Development and implementation of transition programs, including coordination of services with agencies involved in supporting the transition of students with disabilities to postsecondary activities;
(vii) To assist LEAs in meeting personnel shortages;
(viii) To support capacity building activities and improve the delivery of services by LEAs to improve results for children with disabilities;
(ix) Alternative programming for children with disabilities who have been expelled from school, and services for children with disabilities in correctional facilities, children enrolled in State-operated or State-supported schools, and children with disabilities in charter schools;
(x) To support the development and provision of appropriate accommodations for children with disabilities, or the development and provision of alternate assessments that are valid and reliable for assessing the performance of children with disabilities, in accordance with sections 1111(b) and 1201 of the ESEA; and
(xi) To provide technical assistance to schools and LEAs, and direct services, including direct student services described in section 1003A(c)(3) of the ESEA, to children with disabilities, in schools or LEAs implementing comprehensive support and improvement activities or targeted support and improvement activities under section 1111(d) of the ESEA on the basis of consistent underperformance of the disaggregated subgroup of children with disabilities, including providing professional development to special and regular education teachers who teach children with disabilities, based on scientifically based research to improve educational instruction, in order to improve academic achievement based on the challenging academic standards described in section 1111(b)(1) of the ESEA.
(c) Local educational agency high cost fund. (1) In general—
(i) For the purpose of assisting LEAs (including a charter school that is an LEA or a consortium of LEAs) in addressing the needs of high need children with disabilities, each State has the option to reserve for each fiscal year 10 percent of the amount of funds the State reserves for other State-level activities under paragraph (b)(1) of this section—
(A) To finance and make disbursements from the high cost fund to LEAs in accordance with paragraph (c) of this section during the first and succeeding fiscal years of the high cost fund; and
(B) To support innovative and effective ways of cost sharing by the State, by an LEA, or among a consortium of LEAs, as determined by the State in coordination with representatives from LEAs, subject to paragraph (c)(2)(ii) of this section.
(ii) For purposes of paragraph (c) of this section, local educational agency includes a charter school that is an LEA, or a consortium of LEAs.
(2)(i) A State must not use any of the funds the State reserves pursuant to paragraph (c)(1)(i) of this section, which are solely for disbursement to LEAs, for costs associated with establishing, supporting, and otherwise administering the fund. The State may use funds the State reserves under paragraph (a) of this section for those administrative costs.
(ii) A State must not use more than 5 percent of the funds the State reserves pursuant to paragraph (c)(1)(i) of this section for each fiscal year to support innovative and effective ways of cost sharing among consortia of LEAs.
(3)(i) The SEA must develop, not later than 90 days after the State reserves funds under paragraph (c)(1)(i) of this section, annually review, and amend as necessary, a State plan for the high cost fund. Such State plan must—
(A) Establish, in consultation and coordination with representatives from LEAs, a definition of a high need child with a disability that, at a minimum—
(1) Addresses the financial impact a high need child with a disability has on the budget of the child's LEA; and
(2) Ensures that the cost of the high need child with a disability is greater than 3 times the average per pupil expenditure (as defined in section 8101 of the ESEA) in that State;
(B) Establish eligibility criteria for the participation of an LEA that, at a minimum, take into account the number and percentage of high need children with disabilities served by an LEA;
(C) Establish criteria to ensure that placements supported by the fund are consistent with the requirements of §§ 300.114 through 300.118;
(D) Develop a funding mechanism that provides distributions each fiscal year to LEAs that meet the criteria developed by the State under paragraph (c)(3)(i)(B) of this section;
(E) Establish an annual schedule by which the SEA must make its distributions from the high cost fund each fiscal year; and
(F) If the State elects to reserve funds for supporting innovative and effective ways of cost sharing under paragraph (c)(1)(i)(B) of this section, describe how these funds will be used.
(ii) The State must make its final State plan available to the public not less than 30 days before the beginning of the school year, including dissemination of such information on the State Web site.
(4)(i) Each SEA must make all annual disbursements from the high cost fund established under paragraph (c)(1)(i) of this section in accordance with the State plan published pursuant to paragraph (c)(3) of this section.
(ii) The costs associated with educating a high need child with a disability, as defined under paragraph (c)(3)(i)(A) of this section, are only those costs associated with providing direct special education and related services to the child that are identified in that child's IEP, including the cost of room and board for a residential placement determined necessary, consistent with § 300.114, to implement a child's IEP.
(iii) The funds in the high cost fund remain under the control of the State until disbursed to an LEA to support a specific child who qualifies under the State plan for the high cost funds or distributed to LEAs, consistent with paragraph (c)(9) of this section.
(5) The disbursements under paragraph (c)(4) of this section must not be used to support legal fees, court costs, or other costs associated with a cause of action brought on behalf of a child with a disability to ensure FAPE for such child.
(6) Nothing in paragraph (c) of this section—
(i) Limits or conditions the right of a child with a disability who is assisted under Part B of the Act to receive FAPE pursuant to section 612(a)(1) of the Act in the least restrictive environment pursuant to section 612(a)(5) of the Act; or
(ii) Authorizes an SEA or LEA to establish a limit on what may be spent on the education of a child with a disability.
(7) Notwithstanding the provisions of paragraphs (c)(1) through (6) of this section, a State may use funds reserved pursuant to paragraph (c)(1)(i) of this section for implementing a placement neutral cost sharing and reimbursement program of high need, low incidence, catastrophic, or extraordinary aid to LEAs that provides services to high need children based on eligibility criteria for such programs that were created not later than January 1, 2004, and are currently in operation, if such program serves children that meet the requirement of the definition of a high need child with a disability as described in paragraph (c)(3)(i)(A) of this section.
(8) Disbursements provided under paragraph (c) of this section must not be used to pay costs that otherwise would be reimbursed as medical assistance for a child with a disability under the State Medicaid program under Title XIX of the Social Security Act.
(9) Funds reserved under paragraph (c)(1)(i) of this section from the appropriation for any fiscal year, but not expended pursuant to paragraph (c)(4) of this section before the beginning of their last year of availability for obligation, must be allocated to LEAs in the same manner as other funds from the appropriation for that fiscal year are allocated to LEAs under § 300.705 during their final year of availability.
(d) Inapplicability of certain prohibitions. A State may use funds the State reserves under paragraphs (a) and (b) of this section without regard to—
(1) The prohibition on commingling of funds in § 300.162(b).
(2) The prohibition on supplanting other funds in § 300.162(c).
(e) Special rule for increasing funds. A State may use funds the State reserves under paragraph (a)(1) of this section as a result of inflationary increases under paragraph (a)(2) of this section to carry out activities authorized under paragraph (b)(4)(i), (iii), (vii), or (viii) of this section.
(f) Flexibility in using funds for Part C. Any State eligible to receive a grant under section 619 of the Act may use funds made available under paragraph (a)(1) of this section, § 300.705(c), or § 300.814(e) to develop and implement a State policy jointly with the lead agency under Part C of the Act and the SEA to provide early intervention services (which must include an educational component that promotes school readiness and incorporates preliteracy, language, and numeracy skills) in accordance with Part C of the Act to children with disabilities who are eligible for services under section 619 of the Act and who previously received services under Part C of the Act until the children enter, or are eligible under State law to enter, kindergarten, or elementary school as appropriate.
(a) Subgrants required. Each State that receives a grant under section 611 of the Act for any fiscal year must distribute any funds the State does not reserve under § 300.704 to LEAs (including public charter schools that operate as LEAs) in the State that have established their eligibility under section 613 of the Act for use in accordance with Part B of the Act. Effective with funds that become available on the July 1, 2009, each State must distribute funds to eligible LEAs, including public charter schools that operate as LEAs, even if the LEA is not serving any children with disabilities.
(b) Allocations to LEAs. For each fiscal year for which funds are allocated to States under § 300.703, each State shall allocate funds as follows:
(1) Base payments. The State first must award each LEA described in paragraph (a) of this section the amount the LEA would have received under section 611 of the Act for fiscal year 1999, if the State had distributed 75 percent of its grant for that year under section 611(d) of the Act, as that section was then in effect.
(2) Base payment adjustments. For any fiscal year after 1999—
(i) If a new LEA is created, the State must divide the base allocation determined under paragraph (b)(1) of this section for the LEAs that would have been responsible for serving children with disabilities now being served by the new LEA, among the new LEA and affected LEAs based on the relative numbers of children with disabilities ages 3 through 21, or ages 6 through 21 if a State has had its payment reduced under § 300.703(b), currently provided special education by each of the LEAs;
(ii) If one or more LEAs are combined into a single new LEA, the State must combine the base allocations of the merged LEAs;
(iii) If, for two or more LEAs, geographic boundaries or administrative responsibility for providing services to children with disabilities ages 3 through 21 change, the base allocations of affected LEAs must be redistributed among affected LEAs based on the relative numbers of children with disabilities ages 3 through 21, or ages 6 through 21 if a State has had its payment reduced under § 300.703(b), currently provided special education by each affected LEA; and
(iv) If an LEA received a base payment of zero in its first year of operation, the SEA must adjust the base payment for the first fiscal year after the first annual child count in which the LEA reports that it is serving any children with disabilities. The State must divide the base allocation determined under paragraph (b)(1) of this section for the LEAs that would have been responsible for serving children with disabilities now being served by the LEA, among the LEA and affected LEAs based on the relative numbers of children with disabilities ages 3 through 21, or ages 6 through 21 currently provided special education by each of the LEAs. This requirement takes effect with funds that become available on July 1, 2009.
(3) Allocation of remaining funds. After making allocations under paragraph (b)(1) of this section, as adjusted by paragraph (b)(2) of this section, the State must—
(i) Allocate 85 percent of any remaining funds to those LEAs on the basis of the relative numbers of children enrolled in public and private elementary schools and secondary schools within the LEA's jurisdiction; and
(ii) Allocate 15 percent of those remaining funds to those LEAs in accordance with their relative numbers of children living in poverty, as determined by the SEA.
(c) Reallocation of LEA funds. (1) If an SEA determines that an LEA is adequately providing FAPE to all children with disabilities residing in the area served by that agency with State and local funds, the SEA may reallocate any portion of the funds under this part that are not needed by that LEA to provide FAPE, to other LEAs in the State that are not adequately providing special education and related services to all children with disabilities residing in the areas served by those other LEAs. The SEA may also retain those funds for use at the State level to the extent the State has not reserved the maximum amount of funds it is permitted to reserve for State-level activities pursuant to § 300.704.
(2) After an SEA distributes funds under this part to an eligible LEA that is not serving any children with disabilities, as provided in paragraph (a) of this section, the SEA must determine, within a reasonable period of time prior to the end of the carryover period in 34 CFR 76.709, whether the LEA has obligated the funds. The SEA may reallocate any of those funds not obligated by the LEA to other LEAs in the State that are not adequately providing special education and related services to all children with disabilities residing in the areas served by those other LEAs. The SEA may also retain those funds for use at the State level to the extent the State has not reserved the maximum amount of funds it is permitted to reserve for State-level activities pursuant to § 300.704.
(a) Definitions. For purposes of §§ 300.707 through 300.716, the following definitions apply:
(1) Reservation means Indian Country as defined in 18 U.S.C. 1151.
(2) Tribal governing body has the definition given that term in 25 U.S.C. 2021(19).
(b) Provision of amounts for assistance. The Secretary provides amounts to the Secretary of the Interior to meet the need for assistance for the education of children with disabilities on reservations aged 5 to 21, inclusive, enrolled in elementary schools and secondary schools for Indian children operated or funded by the Secretary of the Interior. The amount of the payment for any fiscal year is equal to 80 percent of the amount allotted under section 611(b)(2) of the Act for that fiscal year. Of the amount described in the preceding sentence, after the Secretary of the Interior reserves funds for administration under § 300.710, 80 percent must be allocated to such schools by July 1 of that fiscal year and 20 percent must be allocated to such schools by September 30 of that fiscal year.
(c) Additional requirement. With respect to all other children aged 3 to 21, inclusive, on reservations, the SEA of the State in which the reservation is located must ensure that all of the requirements of Part B of the Act are implemented.
The Secretary may provide the Secretary of the Interior amounts under § 300.707 for a fiscal year only if the Secretary of the Interior submits to the Secretary information that—
(a) Meets the requirements of section 612(a)(1), (3) through (9), (10)(B) through (C), (11) through (12), (14) through (16), (19), and (21) through (25) of the Act (including monitoring and evaluation activities);
(b) Meets the requirements of section 612(b) and (e) of the Act;
(c) Meets the requirements of section 613(a)(1), (2)(A)(i), (7) through (9) and section 613(i) of the Act (references to LEAs in these sections must be read as references to elementary schools and secondary schools for Indian children operated or funded by the Secretary of the Interior);
(d) Meets the requirements of section 616 of the Act that apply to States (references to LEAs in section 616 of the Act must be read as references to elementary schools and secondary schools for Indian children operated or funded by the Secretary of the Interior).
(e) Meets the requirements of this part that implement the sections of the Act listed in paragraphs (a) through (d) of this section;
(f) Includes a description of how the Secretary of the Interior will coordinate the provision of services under Part B of the Act with LEAs, tribes and tribal organizations, and other private and Federal service providers;
(g) Includes an assurance that there are public hearings, adequate notice of the hearings, and an opportunity for comment afforded to members of tribes, tribal governing bodies, and affected local school boards before the adoption of the policies, programs, and procedures related to the requirements described in paragraphs (a) through (d) of this section;
(h) Includes an assurance that the Secretary of the Interior provides the information that the Secretary may require to comply with section 618 of the Act;
(i)(1) Includes an assurance that the Secretary of the Interior and the Secretary of Health and Human Services have entered into a memorandum of agreement, to be provided to the Secretary, for the coordination of services, resources, and personnel between their respective Federal, State, and local offices and with the SEAs and LEAs and other entities to facilitate the provision of services to Indian children with disabilities residing on or near reservations.
(2) The agreement must provide for the apportionment of responsibilities and costs, including child find, evaluation, diagnosis, remediation or therapeutic measures, and (where appropriate) equipment and medical or personal supplies, as needed for a child with a disability to remain in a school or program; and
(j) Includes an assurance that the Department of the Interior will cooperate with the Department in its exercise of monitoring and oversight of the requirements in this section and §§ 300.709 through 300.711 and §§ 300.713 through 300.716, and any agreements entered into between the Secretary of the Interior and other entities under Part B of the Act, and will fulfill its duties under Part B of the Act. The Secretary withholds payments under § 300.707 with respect to the requirements described in this section in the same manner as the Secretary withholds payments under section 616(e)(6) of the Act.
In fulfilling the requirements of § 300.708 the Secretary of the Interior must provide for public participation consistent with § 300.165.
(a) The Secretary of the Interior may reserve five percent of its payment under § 300.707(b) in any fiscal year, or $500,000, whichever is greater, for administrative costs in carrying out the provisions of §§ 300.707 through 300.709, 300.711, and 300.713 through 300.716.
(b) Payments to the Secretary of the Interior under § 300.712 must be used in accordance with that section.
(a) The Secretary of the Interior may allow each elementary school and secondary school for Indian children operated or funded by the Secretary of the Interior to use not more than 15 percent of the amount the school receives under § 300.707(b) for any fiscal year, in combination with other amounts (which may include amounts other than education funds), to develop and implement coordinated, early intervening services, which may include interagency financing structures, for children in kindergarten through grade 12 (with a particular emphasis on children in kindergarten through grade three) who have not been identified as needing special education or related services but who need additional academic and behavioral support to succeed in a general education environment, in accordance with section 613(f) of the Act.
(b) Each elementary school and secondary school for Indian children operated or funded by the Secretary of the Interior that develops and maintains coordinated early intervening services in accordance with section 613(f) of the Act and § 300.226 must annually report to the Secretary of the Interior in accordance with section 613(f) of the Act.
(a) General. With funds appropriated under section 611(i) of the Act, the Secretary makes payments to the Secretary of the Interior to be distributed to tribes or tribal organizations (as defined under section 4 of the Indian Self-Determination and Education Assistance Act) or consortia of tribes or tribal organizations to provide for the coordination of assistance for special education and related services for children with disabilities aged three through five on reservations served by elementary schools and secondary schools for Indian children operated or funded by the Department of the Interior. The amount of the payments under paragraph (b) of this section for any fiscal year is equal to 20 percent of the amount allotted under § 300.701(b).
(b) Distribution of funds. The Secretary of the Interior must distribute the total amount of the payment under paragraph (a) of this section by allocating to each tribe, tribal organization, or consortium an amount based on the number of children with disabilities aged three through five residing on reservations as reported annually, divided by the total of those children served by all tribes or tribal organizations.
(c) Submission of information. To receive a payment under this section, the tribe or tribal organization must submit the figures to the Secretary of the Interior as required to determine the amounts to be allocated under paragraph (b) of this section. This information must be compiled and submitted to the Secretary.
(d) Use of funds. (1) The funds received by a tribe or tribal organization must be used to assist in child find, screening, and other procedures for the early identification of children aged three through five, parent training, and the provision of direct services. These activities may be carried out directly or through contracts or cooperative agreements with the BIA, LEAs, and other public or private nonprofit organizations. The tribe or tribal organization is encouraged to involve Indian parents in the development and implementation of these activities.
(2) The tribe or tribal organization, as appropriate, must make referrals to local, State, or Federal entities for the provision of services or further diagnosis.
(e) Biennial report. To be eligible to receive a grant pursuant to paragraph (a) of this section, the tribe or tribal organization must provide to the Secretary of the Interior a biennial report of activities undertaken under this section, including the number of contracts and cooperative agreements entered into, the number of children contacted and receiving services for each year, and the estimated number of children needing services during the two years following the year in which the report is made. The Secretary of the Interior must include a summary of this information on a biennial basis in the report to the Secretary required under section 611(h) of the Act. The Secretary may require any additional information from the Secretary of the Interior.
(f) Prohibitions. None of the funds allocated under this section may be used by the Secretary of the Interior for administrative purposes, including child count and the provision of technical assistance.
(a) The Secretary of the Interior must develop and implement a plan for the coordination of services for all Indian children with disabilities residing on reservations served by elementary schools and secondary schools for Indian children operated or funded by the Secretary of the Interior.
(b) The plan must provide for the coordination of services benefiting those children from whatever source, including tribes, the Indian Health Service, other BIA divisions, other Federal agencies, State educational agencies, and State, local, and tribal juvenile and adult correctional facilities.
(c) In developing the plan, the Secretary of the Interior must consult with all interested and involved parties.
(d) The plan must be based on the needs of the children and the system best suited for meeting those needs, and may involve the establishment of cooperative agreements between the BIA, other Federal agencies, and other entities.
(e) The plan also must be distributed upon request to States; to SEAs, LEAs, and other agencies providing services to infants, toddlers, and children with disabilities; to tribes; and to other interested parties.
(a) To meet the requirements of section 612(a)(21) of the Act, the Secretary of the Interior must establish, under the BIA, an advisory board composed of individuals involved in or concerned with the education and provision of services to Indian infants, toddlers, children, and youth with disabilities, including Indians with disabilities, Indian parents or guardians of such children, teachers, service providers, State and local educational officials, representatives of tribes or tribal organizations, representatives from State Interagency Coordinating Councils under section 641 of the Act in States having reservations, and other members representing the various divisions and entities of the BIA. The chairperson must be selected by the Secretary of the Interior.
(b) The advisory board must—
(1) Assist in the coordination of services within the BIA and with other local, State, and Federal agencies in the provision of education for infants, toddlers, and children with disabilities;
(2) Advise and assist the Secretary of the Interior in the performance of the Secretary of the Interior's responsibilities described in section 611(h) of the Act;
(3) Develop and recommend policies concerning effective inter- and intra-agency collaboration, including modifications to regulations, and the elimination of barriers to inter- and intra-agency programs and activities;
(4) Provide assistance and disseminate information on best practices, effective program coordination strategies, and recommendations for improved early intervention services or educational programming for Indian infants, toddlers, and children with disabilities; and
(5) Provide assistance in the preparation of information required under § 300.708(h).
(a) In general. The advisory board established under § 300.714 must prepare and submit to the Secretary of the Interior and to Congress an annual report containing a description of the activities of the advisory board for the preceding year.
(b) Availability. The Secretary of the Interior must make available to the Secretary the report described in paragraph (a) of this section.
The Secretary of the Interior must comply with the requirements of §§ 300.103 through 300.108, 300.110 through 300.124, 300.145 through 300.154, 300.156 through 300.160, 300.165, 300.170 through 300.186, 300.226, 300.300 through 300.606, 300.610 through 300.646, and 300.707 through 300.716.
As used in this subpart—
(a) Freely associated States means the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau;
(b) Outlying areas means the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands;
(c) State means each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico; and
(d) Average per-pupil expenditure in public elementary schools and secondary schools in the United States means—
(1) Without regard to the source of funds—
(i) The aggregate current expenditures, during the second fiscal year preceding the fiscal year for which the determination is made (or, if satisfactory data for that year are not available, during the most recent preceding fiscal year for which satisfactory data are available) of all LEAs in the 50 States and the District of Columbia; plus
(ii) Any direct expenditures by the State for the operation of those agencies; divided by (2) The aggregate number of children in average daily attendance to whom those agencies provided free public education during that preceding year.
(a) General. If the Secretary determines that a program authorized under Part B of the Act will be improved by permitting program funds to be used to acquire appropriate equipment, or to construct new facilities or alter existing facilities, the Secretary may allow the use of those funds for those purposes.
(b) Compliance with certain regulations. Any construction of new facilities or alteration of existing facilities under paragraph (a) of this section must comply with the requirements of—
(1) Appendix A of part 36 of title 28, Code of Federal Regulations (commonly known as the “Americans with Disabilities Accessibility Standards for Buildings and Facilities”); or
(2) Appendix A of subpart 101-19.6 of title 41, Code of Federal Regulations (commonly known as the “Uniform Federal Accessibility Standards”).
The Secretary provides grants under section 619 of the Act to assist States to provide special education and related services in accordance with Part B of the Act—
(a) To children with disabilities aged three through five years; and
(b) At a State's discretion, to two-year-old children with disabilities who will turn three during the school year.
As used in this subpart, State means each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.
A State is eligible for a grant under section 619 of the Act if the State—
(a) Is eligible under section 612 of the Act to receive a grant under Part B of the Act; and
(b) Makes FAPE available to all children with disabilities, aged three through five, residing in the State.
No State or LEA, or other public institution or agency, may receive a grant or enter into a contract or cooperative agreement under subpart 2 or 3 of Part D of the Act that relates exclusively to programs, projects, and activities pertaining to children aged three through five years, unless the State is eligible to receive a grant under section 619(b) of the Act.
The Secretary allocates the amount made available to carry out section 619 of the Act for a fiscal year among the States in accordance with §§ 300.808 through 300.810.
If the amount available for allocation to States under § 300.807 for a fiscal year is equal to or greater than the amount allocated to the States under section 619 of the Act for the preceding fiscal year, those allocations are calculated as follows:
(a) Except as provided in § 300.809, the Secretary—
(1) Allocates to each State the amount the State received under section 619 of the Act for fiscal year 1997;
(2) Allocates 85 percent of any remaining funds to States on the basis of the States' relative populations of children aged three through five; and
(3) Allocates 15 percent of those remaining funds to States on the basis of the States' relative populations of all children aged three through five who are living in poverty.
(b) For the purpose of making grants under this section, the Secretary uses the most recent population data, including data on children living in poverty, that are available and satisfactory to the Secretary.
(a) Notwithstanding § 300.808, allocations under that section are subject to the following:
(1) No State's allocation may be less than its allocation under section 619 of the Act for the preceding fiscal year.
(2) No State's allocation may be less than the greatest of—
(i) The sum of—
(A) The amount the State received under section 619 of the Act for fiscal year 1997; and
(B) One-third of one percent of the amount by which the amount appropriated under section 619(j) of the Act for the fiscal year exceeds the amount appropriated for section 619 of the Act for fiscal year 1997;
(ii) The sum of—
(A) The amount the State received under section 619 of the Act for the preceding fiscal year; and
(B) That amount multiplied by the percentage by which the increase in the funds appropriated under section 619 of the Act from the preceding fiscal year exceeds 1.5 percent; or
(iii) The sum of—
(A) The amount the State received under section 619 of the Act for the preceding fiscal year; and
(B) That amount multiplied by 90 percent of the percentage increase in the amount appropriated under section 619 of the Act from the preceding fiscal year.
(b) Notwithstanding paragraph (a)(2) of this section, no State's allocation under § 300.808 may exceed the sum of—
(1) The amount the State received under section 619 of the Act for the preceding fiscal year; and
(2) That amount multiplied by the sum of 1.5 percent and the percentage increase in the amount appropriated under section 619 of the Act from the preceding fiscal year.
(c) If the amount available for allocation to States under § 300.808 and paragraphs (a) and (b) of this section is insufficient to pay those allocations in full, those allocations are ratably reduced, subject to paragraph (a)(1) of this section.
If the amount available for allocations to States under § 300.807 for a fiscal year is less than the amount allocated to the States under section 619 of the Act for the preceding fiscal year, those allocations are calculated as follows:
(a) If the amount available for allocations is greater than the amount allocated to the States for fiscal year 1997, each State is allocated the sum of—
(1) The amount the State received under section 619 of the Act for fiscal year 1997; and
(2) An amount that bears the same relation to any remaining funds as the increase the State received under section 619 of the Act for the preceding fiscal year over fiscal year 1997 bears to the total of all such increases for all States.
(b) If the amount available for allocations is equal to or less than the amount allocated to the States for fiscal year 1997, each State is allocated the amount the State received for fiscal year 1997, ratably reduced, if necessary.
(a) Each State may reserve not more than the amount described in paragraph (b) of this section for administration and other State-level activities in accordance with §§ 300.813 and 300.814.
(b) For each fiscal year, the Secretary determines and reports to the SEA an amount that is 25 percent of the amount the State received under section 619 of the Act for fiscal year 1997, cumulatively adjusted by the Secretary for each succeeding fiscal year by the lesser of—
(1) The percentage increase, if any, from the preceding fiscal year in the State's allocation under section 619 of the Act; or
(2) The rate of inflation, as measured by the percentage increase, if any, from the preceding fiscal year in the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor.
(a) For the purpose of administering section 619 of the Act (including the coordination of activities under Part B of the Act with, and providing technical assistance to, other programs that provide services to children with disabilities), a State may use not more than 20 percent of the maximum amount the State may reserve under § 300.812 for any fiscal year.
(b) Funds described in paragraph (a) of this section may also be used for the administration of Part C of the Act.
Each State must use any funds the State reserves under § 300.812 and does not use for administration under § 300.813—
(a) For support services (including establishing and implementing the mediation process required by section 615(e) of the Act), which may benefit children with disabilities younger than three or older than five as long as those services also benefit children with disabilities aged three through five;
(b) For direct services for children eligible for services under section 619 of the Act;
(c) For activities at the State and local levels to meet the performance goals established by the State under section 612(a)(15) of the Act;
(d) To supplement other funds used to develop and implement a statewide coordinated services system designed to improve results for children and families, including children with disabilities and their families, but not more than one percent of the amount received by the State under section 619 of the Act for a fiscal year;
(e) To provide early intervention services (which must include an educational component that promotes school readiness and incorporates preliteracy, language, and numeracy skills) in accordance with Part C of the Act to children with disabilities who are eligible for services under section 619 of the Act and who previously received services under Part C of the Act until such children enter, or are eligible under State law to enter, kindergarten; or
(f) At the State's discretion, to continue service coordination or case management for families who receive services under Part C of the Act, consistent with § 300.814(e).
Each State that receives a grant under section 619 of the Act for any fiscal year must distribute all of the grant funds the State does not reserve under § 300.812 to LEAs (including public charter schools that operate as LEAs) in the State that have established their eligibility under section 613 of the Act. Effective with funds that become available on July 1, 2009, each State must distribute funds to eligible LEAs that are responsible for providing education to children aged three through five years, including public charter schools that operate as LEAs, even if the LEA is not serving any preschool children with disabilities.
(a) Base payments. The State must first award each LEA described in § 300.815 the amount that agency would have received under section 619 of the Act for fiscal year 1997 if the State had distributed 75 percent of its grant for that year under section 619(c)(3), as such section was then in effect.
(b) Base payment adjustments. For fiscal year 1998 and beyond—
(1) If a new LEA is created, the State must divide the base allocation determined under paragraph (a) of this section for the LEAs that would have been responsible for serving children with disabilities now being served by the new LEA, among the new LEA and affected LEAs based on the relative numbers of children with disabilities ages three through five currently provided special education by each of the LEAs;
(2) If one or more LEAs are combined into a single new LEA, the State must combine the base allocations of the merged LEAs;
(3) If for two or more LEAs, geographic boundaries or administrative responsibility for providing services to children with disabilities ages three through five changes, the base allocations of affected LEAs must be redistributed among affected LEAs based on the relative numbers of children with disabilities ages three through five currently provided special education by each affected LEA; and
(4) If an LEA received a base payment of zero in its first year of operation, the SEA must adjust the base payment for the first fiscal year after the first annual child count in which the LEA reports that it is serving any children with disabilities aged three through five years. The State must divide the base allocation determined under paragraph (a) of this section for the LEAs that would have been responsible for serving children with disabilities aged three through five years now being served by the LEA, among the LEA and affected LEAs based on the relative numbers of children with disabilities aged three through five years currently provided special education by each of the LEAs. This requirement takes effect with funds that become available on July 1, 2009.
(c) Allocation of remaining funds. After making allocations under paragraph (a) of this section, the State must—
(1) Allocate 85 percent of any remaining funds to those LEAs on the basis of the relative numbers of children enrolled in public and private elementary schools and secondary schools within the LEA's jurisdiction; and
(2) Allocate 15 percent of those remaining funds to those LEAs in accordance with their relative numbers of children living in poverty, as determined by the SEA.
(d) Use of best data. For the purpose of making grants under this section, States must apply on a uniform basis across all LEAs the best data that are available to them on the numbers of children enrolled in public and private elementary and secondary schools and the numbers of children living in poverty.
(a) If an SEA determines that an LEA is adequately providing FAPE to all children with disabilities aged three through five years residing in the area served by the LEA with State and local funds, the SEA may reallocate any portion of the funds under section 619 of the Act that are not needed by that LEA to provide FAPE, to other LEAs in the State that are not adequately providing special education and related services to all children with disabilities aged three through five years residing in the areas served by those other LEAs. The SEA may also retain those funds for use at the State level to the extent the State has not reserved the maximum amount of funds it is permitted to reserve for State-level activities pursuant to § 300.812.
(b) After an SEA distributes section 619 funds to an eligible LEA that is not serving any children with disabilities aged three through five years, as provided in § 300.815, the SEA must determine, within a reasonable period of time prior to the end of the carryover period in 34 CFR 76.709, whether the LEA has obligated the funds. The SEA may reallocate any of those funds not obligated by the LEA to other LEAs in the State that are not adequately providing special education and related services to all children with disabilities aged three through five years residing in the areas served by those other LEAs. The SEA may also retain those funds for use at the State level to the extent the State has not reserved the maximum amount of funds it is permitted to reserve for State-level activities pursuant to § 300.812.
Part C of the Act does not apply to any child with a disability receiving FAPE, in accordance with Part B of the Act, with funds received under section 619 of the Act.
Except as otherwise provided, amounts provided to an LEA under Part B of the Act may be used only to pay the excess costs of providing special education and related services to children with disabilities. Excess costs are those costs for the education of an elementary school or secondary school student with a disability that are in excess of the average annual per student expenditure in an LEA during the preceding school year for an elementary school or secondary school student, as may be appropriate. An LEA must spend at least the average annual per student expenditure on the education of an elementary school or secondary school child with a disability before funds under Part B of the Act are used to pay the excess costs of providing special education and related services.
Section 602(8) of the Act and § 300.16 require the LEA to compute the minimum average amount separately for children with disabilities in its elementary schools and for children with disabilities in its secondary schools. LEAs may not compute the minimum average amount it must spend on the education of children with disabilities based on a combination of the enrollments in its elementary schools and secondary schools.
The following example shows how to compute the minimum average amount an LEA must spend for the education of each of its elementary school children with disabilities under section 602(3) of the Act before it may use funds under Part B of the Act.
a. First the LEA must determine the total amount of its expenditures for elementary school students from all sources—local, State, and Federal (including Part B)—in the preceding school year. Only capital outlay and debt services are excluded.
| (1) | From State and local tax funds | $6,500,000 |
| (2) | From Federal funds | 600,000 |
| Total expenditures | 7,100,000 |
| (1) | Total Expenditures | $7,100,000 |
| (2) | Less capital outlay and debt | −60,000 |
| Total expenditures for elementary school students less capital outlay and debt | $7,040,000 |
b. Next, the LEA must subtract from the total expenditures amounts spent for:
(1) IDEA, Part B allocation,
(2) ESEA, Title I, Part A allocation,
(3) ESEA, Title III, Parts A and B allocation,
(4) State and local funds for children with disabilities, and
(5) State or local funds for programs under ESEA, Title I, Part A, and Title III, Parts A and B.
These are funds that the LEA actually spent, not funds received last year but carried over for the current school year.
| (1) | From funds under IDEA, Part B allocation | $ 200,000 |
| (2) | From funds under ESEA, Title I, Part A allocation | 250,000 |
| (3) | From funds under ESEA, Title III, Parts A and B allocation | 50,000 |
| (4) | From State funds and local funds for children with disabilities | 500,000 |
| (5) | From State and local funds for programs under ESEA, Title I, Part A, and Title III, Parts A and B | 150,000 |
| Total | 1,150,000 | |
| (1) | Total expenditures less capital outlay and debt | 7,040,000 |
| (2) | Other deductions | −1,150,000 |
| Total | $5,890,000 |
c. Except as otherwise provided, the LEA next must determine the average annual per student expenditure for its elementary schools dividing the average number of students enrolled in the elementary schools of the agency during the preceding year (including its children with disabilities) into the amount computed under the above paragraph. The amount obtained through this computation is the minimum amount the LEA must spend (on the average) for the education of each of its elementary school children with disabilities. Funds under Part B of the Act may be used only for costs over and above this minimum.
| (1) | Amount from Step b | $5,890,000 |
| (2) | Average number of students enrolled | 800 |
| (3) | $5,890,000/800 Average annual per student expenditure | $ 7,362 |
d. Except as otherwise provided, to determine the total minimum amount of funds the LEA must spend for the education of its elementary school children with disabilities in the LEA (not including capital outlay and debt service), the LEA must multiply the number of elementary school children with disabilities in the LEA times the average annual per student expenditure obtained in paragraph c above. Funds under Part B of the Act can only be used for excess costs over and above this minimum.
| (1) | Number of children with disabilities in the LEA's elementary schools | 100 |
| (2) | Average annual per student expenditure | $ 7,362 |
| (3) | $7,362 × 100 | |
| Total minimum amount of funds the LEA must spend for the education of children with disabilities enrolled in the LEA's elementary schools before using Part B funds | $ 736,200 |
Each LEA must expend, during the grant period, on the provision of special education and related services for the parentally-placed private school children with disabilities enrolled in private elementary schools and secondary schools located in the LEA an amount that is equal to—
(1) A proportionate share of the LEA's subgrant under section 611(f) of the Act for children with disabilities aged 3 through 21. This is an amount that is the same proportion of the LEA's total subgrant under section 611(f) of the Act as the number of parentally-placed private school children with disabilities aged 3 through 21 enrolled in private elementary schools and secondary schools located in the LEA is to the total number of children with disabilities enrolled in public and private elementary schools and secondary schools located in the LEA aged 3 through 21; and
(2) A proportionate share of the LEA's subgrant under section 619(g) of the Act for children with disabilities aged 3 through 5. This is an amount that is the same proportion of the LEA's total subgrant under section 619(g) of the Act as the total number of parentally-placed private school children with disabilities aged 3 through 5 enrolled in private elementary schools located in the LEA is to the total number of children with disabilities enrolled in public and private elementary schools located in the LEA aged 3 through 5.
Consistent with section 612(a)(10)(A)(i) of the Act and § 300.133 of these regulations, annual expenditures for parentally-placed private school children with disabilities are calculated based on the total number of children with disabilities enrolled in public and private elementary schools and secondary schools located in the LEA eligible to receive special education and related services under Part B, as compared with the total number of eligible parentally-placed private school children with disabilities enrolled in private elementary schools located in the LEA. This ratio is used to determine the proportion of the LEA's total Part B subgrants under section 611(f) of the Act for children aged 3 through 21, and under section 619(g) of the Act for children aged 3 through 5, that is to be expended on services for parentally-placed private school children with disabilities enrolled in private elementary schools and secondary schools located in the LEA.
The following is an example of how the proportionate share is calculated:
There are 300 eligible children with disabilities enrolled in the Flintstone School District and 20 eligible parentally-placed private school children with disabilities enrolled in private elementary schools and secondary schools located in the LEA for a total of 320 eligible public and private school children with disabilities (note: proportionate share for parentally-placed private school children is based on total children eligible, not children served). The number of eligible parentally-placed private school children with disabilities (20) divided by the total number of eligible public and private school children with disabilities (320) indicates that 6.25 percent of the LEA's subgrant must be spent for the group of eligible parentally-placed children with disabilities enrolled in private elementary schools and secondary schools located in the LEA. Flintstone School District receives $152,500 in Federal flow through funds. Therefore, the LEA must spend $9,531.25 on special education or related services to the group of parentally-placed private school children with disabilities enrolled in private elementary schools and secondary schools located in the LEA. (Note: The LEA must calculate the proportionate share of IDEA funds before earmarking funds for any early intervening activities in § 300.226).
The following outlines the calculations for the example of how the proportionate share is calculated.
| Proportionate Share Calculation for Parentally-Placed Private School Children with Disabilities For Flintstone School District: | |
| Number of eligible children with disabilities in public schools in the LEA | 300 |
| Number of parentally-placed eligible children with disabilities in private elementary schools and secondary schools located in the LEA | 20 |
| Total number of eligible children | 320 |
| Total allocation to Flintstone | $152,500 |
| Calculating Proportionate Share: | |
| Total allocation to Flintstone | 152,500 |
| Divided by total number of eligible children | 320 |
| Average allocation per eligible child | 476.5625 |
| Multiplied by the number of parentally-placed children with disabilities | 20 |
| Amount to be expended for parentally-placed children with disabilities | 9,531.25 |
Under sections 612(a)(23)(A) and 674(e)(4) of the Individuals with Disabilities Education Act, as amended by the Individuals with Disabilities Education Improvement Act of 2004, the Secretary of Education establishes the NIMAS. Under section 674(e)(4) of the Act, the NIMAS applies to print instructional materials published after July 19, 2006. The purpose of the NIMAS is to help increase the availability and timely delivery of print instructional materials in accessible formats to blind or other persons with print disabilities in elementary and secondary schools.
The Baseline Element Set details the minimum requirement that must be delivered to fulfill the NIMAS. It is the responsibility of publishers to provide this NIMAS-conformant XML content file, a package file (OPF), a PDF-format copy of the title page (or whichever page(s) contain(s) ISBN and copyright information), and a full set of the content's images. All of the images included within a work must be provided in a folder and placeholders entered in the relevant XML document indicating their location (all images must be included). The preferred image type is SVG, next is either PNG or JPG format. Images should be rendered in the same size/proportion as their originals at 300 dpi. Images should be named with relative path filenames in XML files (example: img id=“staricon4” src=“./images/U10C02/staricon4.jpg” alt=“star icon”).
NIMAS-conformant content must be valid to the NIMAS 1.1 [see ANSI/NISO Z39.86 2005 or subsequent revisions]. In addition, files are required to use the tags from the Baseline Element Set when such tags are appropriate. Publishers are encouraged to augment the required Baseline Element Set with tags from the Optional Element Set (elements not included in the Standard) as applicable. For the purposes of NIMAS, appropriate usage of elements, both baseline and optional, is defined by the DAISY Structure Guidelines. Files that do not follow these guidelines in the selection and application of tags are not conformant to this Standard. Both optional elements and appropriate structure guidelines may be located within Z39.86-2002 and Z39.86-2005 available from http://www.daisy.org/z3986/. Use of the most current standard is recommended.
The Baseline Element Set
| Element | Description |
|---|---|
| dtbook | The root element in the Digital Talking Book DTD. <dtbook>contains metadata in <head>and the contents itself in <book>. |
| head | Contains metainformation about the book but no actual content of the book itself, which is placed in <book>. |
| book | Surrounds the actual content of the document, which is divided into <frontmatter>, <bodymatter>, and <rearmatter>. <head>, which contains metadata, precedes <book>. |
| meta | Indicates metadata about the book. It is an empty element that may appear repeatedly only in <head>.
For the most current usage guidelines, please refer to |
| frontmatter | Usually contains <doctitle>and <docauthor>, as well as preliminary material that is often enclosed in appropriate <level>or <level1>etc. Content may include a copyright notice, a foreword, an acknowledgements section, a table of contents, etc. <frontmatter>serves as a guide to the content and nature of a <book>. |
| bodymatter | Consists of the text proper of a book, as contrasted with preliminary material <frontmatter>or supplementary information in <rearmatter>. |
| rearmatter | Contains supplementary material such as appendices, glossaries, bibliographies, and indices. It follows the <bodymatter>of the book. |
| level1 | The highest-level container of major divisions of a book. Used in <frontmatter>, <bodymatter>, and <rearmatter>to mark the largest divisions of the book (usually parts or chapters), inside which <level2>subdivisions (often sections) may nest. The class attribute identifies the actual name (e.g., part, chapter) of the structure it marks. Contrast with <level>. |
| level2 | Contains subdivisions that nest within <level1>divisions. The class attribute identifies the actual name (e.g., subpart, chapter, subsection) of the structure it marks. |
| level3 | Contains sub-subdivisions that nest within <level2>subdivisions (e.g., sub-subsections within subsections). The class attribute identifies the actual name (e.g., section, subpart, subsubsection) of the subordinate structure it marks. |
| level4 | Contains further subdivisions that nest within <level3>subdivisions. The class attribute identifies the actual name of the subordinate structure it marks. |
| level5 | Contains further subdivisions that nest within <level4>subdivisions. The class attribute identifies the actual name of the subordinate structure it marks. |
| level6 | Contains further subdivisions that nest within <level5>subdivisions. The class attribute identifies the actual name of the subordinate structure it marks. |
| h1 | Contains the text of the heading for a <level1>structure. |
| h2 | Contains the text of the heading for a <level2>structure. |
| h3 | Contains the text of the heading for a <level3>structure. |
| h4 | Contains the text of the heading for a <level4>structure. |
| h5 | Contains the text of the heading for a <level5>structure. |
| h6 | Contains the text of the heading for a <level6>structure.
For the most current usage guidelines, please refer to |
| author | Identifies the writer of a work other than this one. Contrast with <docauthor>, which identifies the author of this work. <author>typically occurs within <blockquote>and <cite>. |
| blockquote | Indicates a block of quoted content that is set off from the surrounding text by paragraph breaks. Compare with <q>, which marks short, inline quotations. |
| list | Contains some form of list, ordered or unordered. The list may have an intermixed heading <hd>(generally only one, possibly with <prodnote>), and an intermixture of list items <li>and <pagenum>. If bullets and outline enumerations are part of the print content, they are expected to prefix those list items in content, rather than be implicitly generated. |
| li | Marks each list item in a <list>. <li>content may be either inline or block and may include other nested lists. Alternatively it may contain a sequence of list item components, <lic>, that identify regularly occurring content, such as the heading and page number of each entry in a table of contents. |
| hd | Marks the text of a heading in a <list>or <sidebar>. |
| note | Marks a footnote, endnote, etc. Any local reference to <note id=“yyy”>is by <noteref idref=“#yyy””>. [Attribute id] |
| p | Contains a paragraph, which may contain subsidiary <list>or <dl>. |
| sidebar | Contains information supplementary to the main text and/or narrative flow and is often boxed and printed apart from the main text block on a page. It may have a heading <hd>. |
| cite | Marks a reference (or citation) to another document. |
| dd | Marks a definition of the preceding term <dt>within a definition list <dl>. A definition without a preceding <dt>has no semantic interpretation, but is visually presented aligned with other <dd>. |
| dl | Contains a definition list, usually consisting of pairs of terms <dt>and definitions <dd>. Any definition can contain another definition list. |
| dt | Marks a term in a definition list <dl>for which a definition <dd>follows.
For the most current usage guidelines, please refer to |
| em | Indicates emphasis. Usually <em>is rendered in italics. Compare with <strong>. |
| q | Contains a short, inline quotation. Compare with <blockquote>, which marks a longer quotation set off from the surrounding text. |
| strong | Marks stronger emphasis than <em>. Visually <strong>is usually rendered bold. |
| sub | Indicates a subscript character (printed below a character's normal baseline). Can be used recursively and/or intermixed with <sup>. |
| sup | Marks a superscript character (printed above a character's normal baseline). Can be used recursively and/or intermixed with <sub>. |
| br | Marks a forced line break. |
| line | Marks a single logical line of text. Often used in conjunction with <linenum>in documents with numbered lines. [Use only when line breaks must be preserved to capture meaning (e.g., poems, legal texts).] |
| linenum | Contains a line number, for example in legal text. [Use only when <line>is used, and only for lines numbered in print book.] |
| pagenum | Contains one page number as it appears from the print document, usually inserted at the point within the file immediately preceding the first item of content on a new page. [NB: Only valid when it includes an id attribute]. |
| noteref | Marks one or more characters that reference a footnote or endnote <note>. Contrast with <annoref>. <noteref>and <note>are independently skippable.
For the most current usage guidelines, please refer to |
| table | Contains cells of tabular data arranged in rows and columns. A <table>may have a <caption>. It may have descriptions of the columns in <col>s or groupings of several <col>in <colgroup>. A simple <table>may be made up of just rows <tr>. A long table crossing several pages of the print book should have separate <pagenum>values for each of the pages containing that <table>indicated on the page where it starts. Note the logical order of optional <thead>, optional <tfoot>, then one or more of either <tbody>or just rows <tr>. This order accommodates simple or large, complex tables. The <thead>and <tfoot>information usually helps identify content of the <tbody>rows. For a multiple-page print <table>the <thead>and <tfoot>are repeated on each page, but not redundantly tagged. |
| td | Indicates a table cell containing data. |
| tr | Marks one row of a <table>containing <th>or <td>cells.
For the most current usage guidelines, please refer to |
| imggroup | Provides a container for one or more <img>and associated <caption>(s) and <prodnote>(s). A <prodnote>may contain a description of the image. The content model allows: 1) multiple <img>if they share a caption, with the ids of each <img>in the <caption imgref=“id1 id2 ...”>, 2) multiple <caption>if several captions refer to a single <img id=“xxx”>where each caption has the same <caption imgref=“xxx”>, 3) multiple <prodnote>if different versions are needed for different media (e.g., large print, braille, or print). If several <prodnote>refer to a single <img id=“xxx”>, each prodnote has the same <prodnote imgref=“xxx”>. |
| img | Points to the image to be rendered. An <img>may stand alone or be grouped using <imggroup>. Note that providing extracted images is not a requirement of the NIMAS. If they are included, it is best to refer to them using <img>within the <imggroup>container. |
| caption | Describes a <table>or <img>. If used with <table>it must follow immediately after the <table>start tag. If used with <imggroup>it is not so constrained.
For the most current usage guidelines, please refer to |
Publishers are encouraged to apply markup beyond the baseline (required) elements. The complete DTBook Element Set reflects the tags necessary to create the six types of Digital Talking Books and Braille output. Because of the present necessity to subdivide the creation of alternate format materials into distinct phases, the Panel determined that baseline elements would be provided by publishers, and optional elements would be added to the NIMAS-conformant files by third party conversion entities. In both circumstances the protocols for tagging digital files should conform to the most current ANSI/NISO Z39.86 specification. Content converters are directed to the most current DAISY Structure Guidelines (http://www.daisy.org/z3986/) for guidance on their use.
Since the publication of the original National File Format report from which the NIMAS technical specifications were derived, ANSI/NISO Z39.86-2002 was updated and is now ANSI/NISO Z39.86-2005. It may be best to avoid using the following optional elements which are no longer included in ANSI/NISO Z39.86-2005: style, notice, hr, and levelhd.
Also, the following new elements were introduced by ANSI/NISO Z39.86-2005 and should be considered optional elements for the NIMAS: bridgehead, byline, covertitle, dateline, epigraph, linegroup, and poem. Please refer to ANSI/NISO Z39.86-2005 for additional information regarding these elements. To access the ANSI/NISO Z39.86-2005 specification, go to http://www.daisy.org/z3986/.
A package file describes a publication. It identifies all other files in the publication and provides descriptive and access information about them. A publication must include a package file conforming to the NIMAS. The package file is based on the Open eBook Publication Structure 1.2 package file specification (For most recent detail please see http://www.openebook.org/oebps/oebps1.2/download/oeb12-xhtml.htm#sec2). A NIMAS package file must be an XML-valid OeB PS 1.2 package file instance and must meet the following additional standards:
The NIMAS Package File must include the following Dublin Core (dc:)metadata:
And the following x-metadata items:
The following metadata were proposed also as a means of facilitating recordkeeping, storage and file retrieval:
An additional suggestion references the use of:
A final determination as to which of these specific metadata elements to use needs to be clarified in practice. The package manifest must list all provided files (text, images, etc.).
The most current DAISY/NISO standard, formally the ANSI/NISO Z39.86, Specifications for the Digital Talking Book defines a comprehensive system for creating Digital Talking Books. A part of this standard is DTBook, an XML vocabulary that provides a core set of elements needed to produce most types of books. However, DTBook is not intended to be an exhaustive vocabulary for all types of books.
Guidelines for the correct approach to extend the DAISY/NISO standard have been established. Mathematics, video support, testing, workbooks, music, dictionaries, chemistry, and searching are some of the extensions that have been discussed. Visit http://www.daisy.org/z3986/ to learn more about modular extensions.
LEAs that seek to reduce their local maintenance of effort in accordance with § 300.205(d) and use some of their Part B funds for early intervening services under § 300.226 must do so with caution because the local maintenance of effort reduction provision and the authority to use Part B funds for early intervening services are interconnected. The decisions that an LEA makes about the amount of funds that it uses for one purpose affect the amount that it may use for the other. Below are examples that illustrate how §§ 300.205(d) and 300.226(a) affect one another.
| Prior Year's Allocation | $900,000. |
| Current Year's Allocation | 1,000,000. |
| Increase | 100,000. |
| Maximum Available for MOE Reduction | 50,000. |
| Maximum Available for EIS | 150,000. |
If the LEA chooses to set aside $100,000 for EIS, it may not reduce its MOE (MOE maximum $50,000 less $100,000 for EIS means $0 can be used for MOE).
If the LEA chooses to set aside $50,000 for EIS, it may not reduce its MOE (MOE maximum $50,000 less $50,000 for EIS means $0 can be used for MOE).
If the LEA chooses to set aside $30,000 for EIS, it may reduce its MOE by $20,000 (MOE maximum $50,000 less $30,000 for EIS means $20,000 can be used for MOE).
If the LEA chooses to set aside $0 for EIS, it may reduce its MOE by $50,000 (MOE maximum $50,000 less $0 for EIS means $50,000 can be used for MOE).
| Prior Year's Allocation | $1,000,000. |
| Current Year's Allocation | 2,000,000. |
| Increase | 1,000,000. |
| Maximum Available for MOE Reduction | 500,000. |
| Maximum Available for EIS | 300,000. |
If the LEA chooses to use $100,000 for MOE, it may set aside $200,000 for EIS (EIS maximum $300,000 less $100,000 means $200,000 for EIS).
If the LEA chooses to use $150,000 for MOE, it may set aside $150,000 for EIS (EIS maximum $300,000 less $150,000 means $150,000 for EIS).
If the LEA chooses to use $300,000 for MOE, it may not set aside anything for EIS (EIS maximum $300,000 less $300,000 means $0 for EIS).
If the LEA chooses to use $500,000 for MOE, it may not set aside anything for EIS (EIS maximum $300,000 less $500,000 means $0 for EIS).
The following tables provide examples of calculating LEA MOE. Figures are in $10,000s. All references to a “fiscal year” in these tables refer to the fiscal year covering that school year, unless otherwise noted.
Tables 1 through 4 provide examples of how an LEA complies with the Subsequent Years rule. In Table 1, for example, an LEA spent $1 million in Fiscal Year (FY) 2012-2013 on the education of children with disabilities. In the following year, the LEA was required to spend at least $1 million but spent only $900,000. In FY 2014-2015, therefore, the LEA was required to spend $1 million, the amount it was required to spend in FY 2013-2014, not the $900,000 it actually spent.
Table 1—Example of Level of Effort Required To Meet MOE Compliance Standard in Year Following a Year in Which LEA Failed To Meet MOE Compliance Standard
| Fiscal year | Actual level
of effort | Required level of effort | Notes |
|---|---|---|---|
| 2012-2013 | $100 | $100 | LEA met MOE. |
| 2013-2014 | 90 | 100 | LEA did not meet MOE. |
| 2014-2015 | 100 | Required level of effort is $100 despite LEA's failure in 2013-2014. |
Table 2 shows how to calculate the required amount of effort when there are consecutive fiscal years in which an LEA does not meet MOE.
Table 2—Example of Level of Effort Required To Meet MOE Compliance Standard in Year Following Consecutive Years in Which LEA Failed To Meet MOE Compliance Standard
| Fiscal year | Actual level
of effort | Required level of effort | Notes |
|---|---|---|---|
| 2012-2013 | $100 | $100 | LEA met MOE. |
| 2013-2014 | 90 | 100 | LEA did not meet MOE. |
| 2014-2015 | 90 | 100 | LEA did not meet MOE. Required level of effort is $100 despite LEA's failure in 2013-2014. |
| 2015-2016 | 100 | Required level of effort is $100 despite LEA's failure in 2013-2014 and 2014-2015. |
Table 3 shows how to calculate the required level of effort in a fiscal year after the year in which an LEA spent more than the required amount on the education of children with disabilities. This LEA spent $1.1 million in FY 2015-2016 though only $1 million was required. The required level of effort in FY 2016-2017, therefore, is $1.1 million.
Table 3—Example of Level of Effort Required To Meet MOE Compliance Standard in Year Following Year in Which LEA Met MOE Compliance Standard
| Fiscal year | Actual level
of effort | Required level of effort | Notes |
|---|---|---|---|
| 2012-2013 | $100 | $100 | LEA met MOE. |
| 2013-2014 | 90 | 100 | LEA did not meet MOE. |
| 2014-2015 | 90 | 100 | LEA did not meet MOE. Required level of effort is $100 despite LEA's failure in 2013-2014. |
| 2015-2016 | 110 | 100 | LEA met MOE. |
| 2016-2017 | 110 | Required level of effort is $110 because LEA expended $110, and met MOE, in 2015-2016. |
Table 4 shows the same calculation when, in an intervening fiscal year, 2016-2017, the LEA did not maintain effort.
Table 4—Example of Level of Effort Required To Meet MOE Compliance Standard in Year Following Year in Which LEA Did Not Meet MOE Compliance Standard
| Fiscal year | Actual level
of effort | Required level of effort | Notes |
|---|---|---|---|
| 2012-2013 | $100 | $100 | LEA met MOE. |
| 2013-2014 | 90 | 100 | LEA did not meet MOE. |
| 2014-2015 | 90 | 100 | LEA did not meet MOE. Required level of effort is $100 despite LEA's failure in 2013-2014. |
| 2015-2016 | 110 | 100 | LEA met MOE. |
| 2016-2017 | 100 | 110 | LEA did not meet MOE. Required level of effort is $110 because LEA expended $110, and met MOE, in 2015-2016. |
| 2017-2018 | 110 | Required level of effort is $110, despite LEA's failure in 2016-2017. |
Table 5 provides an example of how an LEA may meet the compliance standard using alternate methods from year to year without using the exceptions or adjustment in §§ 300.204 and 300.205, and provides information on the following scenario. In FY 2015-2016, the LEA meets the compliance standard using all four methods. As a result, in order to demonstrate that it met the compliance standard using any one of the four methods in FY 2016-2017, the LEA must expend at least as much as it did in FY 2015-2016 using that same method. Because the LEA spent the same amount in FY 2016-2017 as it did in FY 2015-2016, calculated using a combination of State and local funds and a combination of State and local funds on a per capita basis, the LEA met the compliance standard using both of those methods in FY 2016-2017. However, the LEA did not meet the compliance standard in FY 2016-2017 using the other two methods—local funds only or local funds only on a per capita basis—because it did not spend at least the same amount in FY 2016-2017 as it did in FY 2015-2016 using the same methods.
Table 5—Example of How an LEA May Meet the Compliance Standard Using Alternate Methods From Year to Year
| Fiscal year | Local funds only | Combination of
State and local funds | Local funds only
on a per capita basis | Combination of
State and local funds on a per capita basis | Child count |
|---|---|---|---|---|---|
| 2015-2016 | * $500 | * $950 | * $50 | * $95 | 10 |
| 2016-2017 | 400 | * 950 | 40 | * 95 | 10 |
| 2017-2018 | * 500 | 900 | * 50 | 90 | 10 |
* LEA met compliance standard using this method.
Table 6 provides an example of how an LEA may meet the compliance standard using alternate methods from year to year in years in which the LEA used the exceptions or adjustment in §§ 300.204 and 300.205, including using the per capita methods.
Table 6—Example of How an LEA May Meet the Compliance Standard Using Alternate Methods From Year to Year and Using Exceptions or Adjustment Under §§ 300.204 and 300.205
| Fiscal year | Local funds only | Combination of State and local funds | Local funds only on a per capita basis | Combination of State and local funds on a per capita basis | Child count |
|---|---|---|---|---|---|
| 2015- 2016 | $500 * | $950 * | $50 * | $95 * | 10 |
| 2016- 2017 | 400 | 950 * | 40 | 95 * | 10 |
| 2017-2018 | 450 * | 1,000 * | 45 * | 100 * | 10 |
| In 2017-2018, the LEA was required to spend at least the same amount in local funds only that it spent in the preceding fiscal year, subject to the Subsequent Years rule. Therefore, prior to taking any exceptions or adjustment in §§ 300.204 and 300.205, the LEA was required to spend at least $500 in local funds only
In 2017-2018, the LEA properly reduced its expenditures, per an exception in § 300.204, by $50, and therefore, was required to spend at least $450 in local funds only ($500) from 2015-2016 per Subsequent Years rule − $50 allowable reduction per an exception under § 300.204) | In 2017-2018, the LEA was required to spend at least the same amount in local funds only on a per capita basis that it spent in the preceding fiscal year, subject to the Subsequent Years rule. Therefore, prior to taking any exceptions or adjustment in §§ 300.204 and 300.205, the LEA was required to spend at least $50 in local funds only on a per capita basis
In 2017-2018, the LEA properly reduced its aggregate expenditures, per an exception in § 300.204, by $50 $50/10 children with disabilities in the comparison year (2015-2016) = $5 per capita allowable reduction per an exception under § 300.204 $50 local funds only on a per capita basis (from 2015-2016 per Subsequent Years rule) − $5 allowable reduction per an exception under § 300.204 = $45 local funds only on a per capita basis to meet MOE | ||||
| 2018-2019 | 405 | 1,000 * | 45 * | 111.11 * | 9 |
| In 2018-2019, the LEA was required to spend at least the same amount in local funds only that it spent in the preceding fiscal year, subject to the Subsequent Years rule. Therefore, prior to taking any exceptions or adjustment in §§ 300.204 and 300.205, the LEA was required to spend at least $450 in local funds only
In 2018-2019, the LEA properly reduced its expenditures, per an exception in § 300.204 by $10 and the adjustment in § 300.205 by $10 Therefore, the LEA was required to spend at least $430 in local funds only. ($450 from 2017-2018 − $20 allowable reduction per an exception and the adjustment under §§ 300.204 and 300.205) | Because the LEA did not reduce its expenditures from the comparison year (2017-2018) using a combination of State and local funds, the LEA met MOE | In 2018-2019, the LEA was required to spend at least the same amount in local funds only on a per capita basis that it spent in the preceding fiscal year, subject to the Subsequent Years rule. Therefore, prior to taking any exceptions or adjustment in §§ 300.204 and 300.205, the LEA was required to spend at least $45 in local funds only on a per capita basis
In 2018-2019, the LEA properly reduced its aggregate expenditures, per an exception in § 300.204 by $10 and the adjustment in § 300.205 by $10 $20/10 children with disabilities in the comparison year (2017-2018) = $2 per capita allowable reduction per an exception and the adjustment under §§ 300.204 and 300.205 $45 local funds only on a per capita basis (from 2017-2018) − $2 allowable reduction per an exception and the adjustment under §§ 300.204 and 300.205 = $43 local funds only on a per capita basis required to meet MOE. Actual level of effort is $405/9 (the current year child count) | Because the LEA did not reduce its expenditures from the comparison year (2017-2018) using a combination of State and local funds on a per capita basis ($1,000/9 = $111.11 and $111.11 > $100), the LEA met MOE |
* LEA met MOE using this method.
Tables 7 and 8 demonstrate how an LEA could meet the eligibility standard over a period of years using different methods from year to year. These tables assume that the LEA did not take any of the exceptions or adjustment in §§ 300.204 and 300.205. Numbers are in $10,000s budgeted and spent for the education of children with disabilities.
Table 7—Example of How an LEA May Meet the Eligibility Standard in 2016-2017 Using Different Methods
| Fiscal year | Local funds
only | Combination
of State and local funds | Local funds
only on a per capita basis | Combination
of State and local funds on a per capita basis | Child count | Notes |
|---|---|---|---|---|---|---|
| 2014-2015 | * $500 | * $1,000 | * $50 | * $100 | 10 | The LEA met the compliance standard using all 4 methods.* |
| 2015-2016 | Final information not available at time of budgeting for 2016-2017. | |||||
| How much must the LEA budget for 2016-2017 to meet the eligibility standard in 2016-2017? | 500 | 1,000 | 50 | 100 | When the LEA submits a budget for 2016-2017, the most recent fiscal year for which the LEA has information is 2014-2015. It is not necessary for the LEA to consider information on expenditures for a fiscal year prior to 2014-2015 because the LEA maintained effort in 2014-2015. Therefore, the Subsequent Years rule in § 300.203(c) is not applicable. |
* The LEA met the compliance standard using all 4 methods.
Table 8—Example of How an LEA May Meet the Eligibility Standard in 2017-2018 Using Different Methods and the Application of the Subsequent Years Rule
| Fiscal year | Local funds
only | Combination
of State and local funds | Local funds
only on a per capita basis | Combination
of State and local funds on a per capita basis | Child count | Notes |
|---|---|---|---|---|---|---|
| 2014-2015 | * $500 | * $1,000 | * $50 | * $100 | 10 | |
| 2015-2016 | 450 | * 1,000 | 45 | * 100 | 10 | |
| 2016-2017 | Final information not available at time of budgeting for 2017-2018. | |||||
| How much must the LEA budget for 2017-2018 to meet the eligibility standard in 2017-2018? | 500 | 1,000 | 50 | 100 | If the LEA seeks to use a combination of State and local funds, or a combination of State and local funds on a per capita basis, to meet the eligibility standard, the LEA does not consider information on expenditures for a fiscal year prior to 2015-2016 because the LEA maintained effort in 2015-2016 using those methods. | |
| However, if the LEA seeks to use local funds only, or local funds only on a per capita basis, to meet the eligibility standard, the LEA must use information on expenditures for a fiscal year prior to 2015-2016 because the LEA did not maintain effort in 2015-2016 using either of those methods, per the Subsequent Years rule. That is, the LEA must determine what it should have spent in 2015-2016 using either of those methods, and that is the amount that the LEA must budget in 2017-2018. |
* LEA met MOE using this method.
Table 9 provides an example of how an LEA may consider the exceptions and adjustment in §§ 300.204 and 300.205 when budgeting for the expenditures for the education of children with disabilities.
Table 9—Example of How an LEA May Meet the Eligibility Standard Using Exceptions and Adjustment in §§ 300.204 and 300.205, 2016-2017
| Fiscal year | Local funds
only | Combination
of State and local funds | Local funds
only on a per capita basis | Combination
of State and local funds on a per capita basis | Child count | Notes |
|---|---|---|---|---|---|---|
| Actual 2014-2015 expenditures | * $500 | * $1,000 | * $50 | * $100 | 10 | The LEA met the compliance standard using all 4 methods.* |
| Exceptions and adjustment taken in 2015-2016 | −50 | −50 | −5 | −5 | LEA uses the child count number from the comparison year (2014-2015). | |
| Exceptions and adjustment the LEA reasonably expects to take in 2016-2017 | −25 | −25 | −2.50 | −2.50 | LEA uses the child count number from the comparison year (2014-2015). | |
| How much must the LEA budget to meet the eligibility standard in 2016-2017? | 425 | 925 | 42.50 | 92.50 | When the LEA submits a budget for 2016-2017, the most recent fiscal year for which the LEA has information is 2014-2015. However, if the LEA has information on exceptions and adjustment taken in 2015-2016, the LEA may use that information when budgeting for 2016-2017. The LEA may also use information that it has on any exceptions and adjustment it reasonably expects to take in 2016-2017 when budgeting for that year. |
Table 10 provides examples both of how to calculate the amount by which an LEA failed to maintain its level of expenditures and of the amount of non-Federal funds that an SEA must return to the Department on account of that failure.
Table 10—Example of How To Calculate the Amount of an LEA's Failure to Meet the Compliance Standard in 2016-2017 and the Amount That an SEA Must Return to the Department
| Fiscal year | Local funds
only | Combination
of State and local funds | Local funds
only on a per capita basis | Combination
of State and local funds on a per capita basis | Child count | Amount of IDEA Part B subgrant |
|---|---|---|---|---|---|---|
| 2015-2016 | * $500 | * $950 | $50 * | $95 * | Not relevant. | |
| 2016-2017 | 400 | 750 | 40 | 75 | 10 | $50 |
| Amount by which an LEA failed to maintain its level of expenditures in 2016-2017 | 100 | 200 | 100 (the amount of the failure equals the amount of the per capita shortfall ($10) times the number of children with disabilities in 2016-2017 (10)) | 200 (the amount of the failure equals the amount of the per capita shortfall ($20) times the number of children with disabilities in 2016-2017 (10)) |
The SEA determines that the amount of the LEA's failure is $100 using the calculation method that results in the lowest amount of a failure. The SEA's liability is the lesser of the four calculated shortfalls and the amount of the LEA's Part B subgrant in the fiscal year in which the LEA failed to meet the compliance standard. In this case, the SEA must return $50 to the Department because the LEA's IDEA Part B subgrant was $50, and that is the lower amount.
* LEA met MOE using this method.
| ACCESS TO | |
| • Access rights (Parents) | 300.613. |
| • Assistive technology devices in child's home | 300.105(b). |
| • Disciplinary records | 300.229. |
| • Education records (Procedural safeguards notice) | 300.504(c)(4). |
| • General curriculum (Ensure access to) | 300.39(b)(3)(ii). |
| • Instructional materials (see §§ 300.172, 300.210). | |
| • List of employees who may have access to records | 300.623(d). |
| • Parent's private insurance proceeds | 300.154(e). |
| • Record of access (Confidentiality) | 300.614. |
| ACCESSIBILITY STANDARDS (Regarding construction) | |
| • Americans with Disabilities Accessibility Standards for Buildings and Facilities | 300.718(b)(1). |
| • Uniform Federal Accessibility Standards | 300.718(b)(2). |
| ACCOMMODATIONS | |
| • In assessments | 300.320(a)(6)(i). |
| • State level activities in support of | 300.704(b)(4)(x). |
| ACT (Definition) | 300.4. |
| ADD AND ADHD (See “Attention deficit disorder” and “Attention deficit hyperactivity disorder”) | |
| ADDITIONAL DISCLOSURE OF INFORMATION REQUIREMENT | 300.512(b). |
| ADULT CORRECTIONAL FACILITIES (See “Correctional facilities”) | |
| ADULT PRISONS (Children with disabilities in) | |
| • Divided State agency responsibility | 300.607. |
| • FAPE requirements: | |
| Ο Exception to FAPE | 300.102(a)(2). |
| Ο Modifications of IEP or placement | 300.324(d)(2). |
| Ο Requirements that do not apply | 300.324(d)(1). |
| • Governor | 300.149(d). |
| • Other public agency responsibility | 300.149(d). |
| ADVERSELY AFFECTS EDUCATIONAL PERFORMANCE (See “Child with a disability,” § 300.8(c)(1)(i), (c)(3), (c)(4)(i), (c)(5), (c)(6), (c)(8), (c)(9)(ii), (c)(11), (c)(12)) | |
| ADVISORY BOARD | |
| (Secretary of the Interior) | 300.714. |
| ADVISORY PANEL (See “State advisory panel”) | |
| AGE-APPROPRIATE CLASSROOM | 300.116(e). |
| ALLOCATION(S) | |
| • By-pass for private school children (see § 300.191(d)). | |
| • To LEAs (see §§ 300.705(b), 300.816) | |
| • To Outlying areas | 300.701(a). |
| • To Secretary of the Interior | 300.707. |
| • To States (see §§ 300.703, 300.807 through 300.810) | |
| ALLOWABLE COSTS | |
| (By SEA for State administration) | 300.704(a). |
| ALTERATION OF FACILITIES | 300.718(b). |
| ALTERNATE ASSESSMENTS | |
| • Aligned with alternate academic achievement standards | 300.320(a)(2)(ii). |
| • Development and provision of in accordance with ESEA | 300.704(b)(4)(x). |
| • Participation determined by IEP Team | 300.320(a)(6)(ii). |
| ALTERNATIVE PLACEMENTS (Continuum) | 300.115. |
| ALTERNATIVE STRATEGIES to meet transition objectives | 300.324(c)(1). |
| AMENDMENTS | |
| • To LEA policies and procedures | 300.220(b). |
| • To State policies and procedures: | |
| Ο Made by State | 300.176(b). |
| Ο Required by the Secretary | 300.176(c). |
| ANNUAL GOALS (IEPs) | |
| • FAPE for children suspended or expelled (see §§ 300.101(a), 300.530(d)) | |
| • IEP content: | |
| Ο How progress will be measured | 300.320(a)(3). |
| Ο Special education and related services | 300.320(a)(4). |
| Ο Statement of measurable annual goals | 300.320(a)(2)(i). |
| • Review and revision of IEP | 300.324(b)(1). |
| • Review of existing evaluation data | 300.305(a). |
| ANNUAL REPORT | |
| Of children served (see §§ 300.640 through 300.646) | |
| On education of Indian children | 300.715. |
| APPENDICES TO PART 300 (A through E) | |
| Excess Costs Calculation (see appendix A) | |
| Proportionate Share Calculation (see appendix B) | |
| National Instructional Materials Accessibility Standard (NIMAS) (see appendix C) | |
| Maintenance of Effort and Early Intervening Services (see appendix D) | |
| Index for IDEA—Part B Regulations (This appendix E) | |
| APPLICABILITY OF THIS PART to State, local, and private agencies | 300.2. |
| APPLICATION | |
| • Initial admission to public school | 300.518(b). |
| • Initial services | 300.518(c). |
| ASSESSMENT(S) | |
| • For specific learning disability (see § 300.309(a)(2)(ii), (b)(2)) | |
| • Functional behavioral assessment (see § 300.530(d)(1)(ii), (f)(1)(i)) | |
| • In evaluation (see §§ 300.304(b), (c), 300.305(a)(1)(ii), (c), (d)) | |
| • Of leisure function (in “Recreation”) | 300.34(c)(11)(i). |
| ASSESSMENTS—STATE and DISTRICT-WIDE | |
| Alternate assessments (see § 300.320 (a)(2)(ii), (a)(6)(ii)) | |
| Performance indicators | 300.157. |
| ASSISTANCE UNDER OTHER FEDERAL PROGRAMS | 300.186. |
| ASSISTIVE TECHNOLOGY (AT) | |
| • AT devices | 300.5. |
| • AT services | 300.6. |
| • Consideration of special factors | 300.324(a)(2)(v). |
| • Hearing aids | 300.113. |
| • Requirement: | |
| Ο Ensure availability of | 300.105(a). |
| Ο Use of AT in child's home | 300.105(b). |
| • Surgically implanted medical devices (see §§ 300.5, 300.34(b), 300.113(b)) | |
| ASTHMA | 300.8(c)(9). |
| ATTENTION DEFICIT DISORDER (ADD) | 300.8(c)(9). |
| ATTENTION DEFICIT HYPERACTIVITY DISORDER (ADHD) | 300.8(c)(9). |
| ATTORNEYS' FEES | 300.517. |
| • Award of fees | 300.517(c). |
| • Prohibition on use of funds for | 300.517(b). |
| • When court reduces fee awards | 300.517(c)(4). |
| AUDIOLOGY | 300.34(c)(1). |
| AUTHORITY (A-O) | |
| • Of guardian | 300.30(a)(3). |
| • Of hearing officer (Discipline) | 300.532(b). |
| • Of school personnel (Discipline) | 300.530. |
| • Of Secretary to monitor and enforce | 300.609. |
| AUTHORITY (P-Z) | |
| • Parental authority to inspect and review records | 300.613. |
| • State complaint procedures | 300.151(b). |
| • Waiver request (Signed by person with authority) | 300.164(c)(1). |
| AUTISM | 300.8(c)(1). |
| AVERAGE PER-PUPIL EXPENDITURE | |
| (Definition) | 300.717(d). |
| BASE PAYMENTS (to LEAs) (See § 300.705(b)(1), (b)(2)) | |
| BASIS OF KNOWLEDGE: Protection for children not yet eligible | 300.534(b). |
| BEHAVIORAL ASSESSMENT (See “Functional behavioral assessment”) | |
| BEHAVIORAL INTERVENTION(S) | 300.530(f). |
| • Assist in developing | 300.34(c)(10)(vi). |
| • Behavioral intervention plan | 300.530(f). |
| • Consideration of by IEP Team | 300.324(a)(2)(i). |
| • Not a manifestation of disability | 300.530(d). |
| • Regular education teacher (Determination of) | 300.324(a)(3). |
| • Suspension and expulsion rates | 300.170(b). |
| BENCHMARKS OR SHORT TERM OBJECTIVES | 300.320(a)(2)(ii). |
| BENEFITS TO NONDISABLED (Permissive use of funds) | 300.208(a)(1). |
| BIA (See “Bureau of Indian Affairs”) | |
| BLIND(NESS): Under “Visual impairment” | |
| • Access to instructional materials (see §§ 300.172, 300.210(b)(3)) | |
| • Consideration of special factors by IEP Team | 300.324(a)(2). |
| • Definition | 300.8(c)(13). |
| BRAILLE (see §§ 300.29(b), 300.324(a)(2)(iii)) | |
| BUREAU OF INDIAN AFFAIRS (BIA) | |
| • BIA funded schools | 300.28(c). |
| • In definition of “LEA” | 300.28(c). |
| • See also §§ 300.21(c), 300.713(b), (d), 300.714 | |
| • Use of funds | 300.712(d). |
| BUSINESS DAY | |
| • Definition | 300.11(b). |
| • See “Timelines,” “Timelines—Discipline” | |
| BY-PASS: Private school children with disabilities (see §§ 300.190 through 300.198) | |
| CALENDAR DAY | |
| • Definition | 300.11(a). |
| • See “Timelines,” “Timelines—Discipline” | |
| CERTIFICATION | |
| • Annual report of children served | 300.643. |
| CHANGE OF PLACEMENT BECAUSE OF DISCIPLINARY REMOVALS | 300.536. |
| CHARTER SCHOOLS | |
| • Applicability of this part to | 300.2(b)(1)(ii). |
| • Definition | 300.7. |
| • Exception: joint establishment of eligibility | 300.223(b). |
| • In definition of “Elementary school” | 300.13. |
| • In definition of “LEA” | 300.28(b)(2). |
| • In definition of “Public agency” | 300.33. |
| • In definition of “Secondary school” | 300.36. |
| • State-level activities regarding charter schools | 300.704(b)(4)(ix). |
| • Treatment of charter schools and their students | 300.209. |
| CHIEF EXECUTIVE OFFICER (CEO) | |
| • Adult prisons (Assigned by Governor) | 300.149(d). |
| • Methods of ensuring services (see § 300.154(a), (c)) | |
| CHILD COUNT | |
| • Annual report of children served (see §§ 300.640 through 300.646) | |
| • Certification | 300.643. |
| • Criteria for | 300.644. |
| • Dates for count | 300.641(a). |
| • Indian children | 300.712(b). |
| • LEA records of private school children | 300.132(c). |
| • Procedures for counting children served | 300.645(a). |
| CHILD FIND | |
| • Basic requirement | 300.111(a). |
| • Children advancing from grade to grade | 300.111(c)(1). |
| • Developmental delay | 300.111(b). |
| • Highly mobile children | 300.111(c)(2). |
| • Homeless children | 300.111(a)(1)(i). |
| • Indian children aged 3 through 5 | 300.712(d)(1). |
| • Migrant children | 300.111(c)(2). |
| • Private school children | 300.131(b). |
| • Protections for children not determined eligible | 300.534. |
| • Secretaries of the Interior and Health and Human Services (Memo of agreement) | 300.708(i)(2). |
| CHILD WITH A DISABILITY (CWD) | |
| • Adversely affects educational performance (see § 300.8(c)(1)(i), (c)(3), (c)(4)(i), (c)(5), (c)(6), (c)(8), (c)(9)(ii), (c)(11), (c)(12), (c)(13)) | |
| • Children experiencing developmental delay(s) | 300.8(b)(1). |
| • Children who need only a related service | 300.8(a)(2). |
| • Definition | 300.8(a)(1). |
| • Individual disability terms (Defined) | 300.8(c). |
| • Requirement | 300.111(b). |
| • See “Developmental delay(s)” | |
| CHILD'S STATUS DURING PROCEEDINGS | |
| • Discipline (see §§ 300.530(f)(2), 300.533) | |
| • Pendency (Stay put) | 300.518. |
| CHILDREN ADVANCING FROM GRADE TO GRADE | |
| • Child find | 300.111(c)(1). |
| • FAPE | 300.101(c). |
| CHILDREN EXPERIENCING DEVELOPMENTAL DELAY(S) (See “Developmental delay(s)”) | |
| CHILDREN'S RIGHTS (Confidentiality) | 300.625. |
| CIVIL ACTION—PROCEEDINGS | 300.516. |
| • Finality of review decision | 300.514(d). |
| • Mediation | 300.506(b)(6)(i). |
| • Procedural safeguards notice | 300.504(c)(12). |
| • See “Court(s)” | |
| COCHLEAR IMPLANT (See “Surgically implanted medical device”) | 300.34(b). |
| CODE OF CONDUCT | |
| • Case-by-case determination | 300.530(a). |
| • Manifestation determination review | 300.530(e). |
| • Protections for children not determined eligible | 300.534(a). |
| COMMINGLING—PROHIBITION AGAINST | 300.162(b). |
| COMMUNITY-BASED WAIVERS (Public benefits or insurance) | 300.154(d)(2)(iii). |
| COMPLAINT(S): DUE PROCESS | |
| • Attorneys' fees | 300.517(a)(1). |
| • Civil action | 300.516(a). |
| • Pendency | 300.518(a). |
| • Private school children (Complaints) | 300.140(c). |
| • See “Due process hearing(s) and reviews” | |
| COMPLAINT(S): STATE COMPLAINT PROCEDURES (A-P) | |
| • Adoption of State complaint procedures | 300.151(a). |
| • Complaint investigations (SEA allocations for) | 300.704(b)(3)(i). |
| • Filing a complaint | 300.153(a). |
| • Minimum State complaint procedures | 300.152. |
| • Private schools (State complaints) | 300.140. |
| • Procedural safeguards notice | 300.504(c). |
| • Provisions for services under by-pass | 300.191(d). |
| • Public agency failure to implement hearing decision | 300.152(c)(3). |
| COMPLAINT(S): STATE COMPLAINT PROCEDURES (Q-Z) | |
| • See also §§ 300.151 through 300.153 | |
| • Time limit | 300.152(a). |
| • Waiver of nonsupplanting requirement | 300.163(c)(2). |
| COMPLIANCE—COMPLY (A-M) | |
| • Child find requirements | 300.111(a). |
| • Department procedures (If failure to comply) | 300.604(c). |
| • FAPE requirement | 300.101(a). |
| • LEA and State agency compliance | 300.222(a). |
| • LRE (State funding mechanism) | 300.114(b). |
| • Modifications of policies: | |
| Ο Made by LEA or State agency | 300.176(b). |
| Ο Required by SEA | 300.220(c). |
| Ο Required by Secretary | 300.176(c). |
| • Monitoring (See “Monitor; Monitoring activities”); | |
| COMPLIANCE—COMPLY (N-Z) | |
| • Physical education | 300.108. |
| • Private school placement by parents | 300.148(e). |
| • Private school placements by public agencies: | |
| Ο IEP requirement | 300.325(c). |
| Ο SEA (Monitor compliance) | 300.147(a) |
| • Public participation requirements | 300.165. |
| • SEA responsibility if LEA does not comply | 300.227(a). |
| • State funding mechanism (LRE) | 300.114(b). |
| • COMPREHENSIVE EVALUATION | 300.304(c)(6). |
| CONDITION OF ASSISTANCE | |
| • LEA eligibility | 300.200. |
| • State eligibility | 300.100. |
| CONFIDENTIALITY (A-C) | |
| • Access rights | 300.613. |
| • Children's rights | 300.625. |
| • Consent | 300.622. |
| CONFIDENTIALITY (D-E) | |
| Definitions: | |
| Ο Destruction of information | 300.611(a). |
| Ο Education records | 300.611(b). |
| Ο Participating agency | 300.611(c). |
| • Department use of personally identifiable information | 300.627. |
| • Disciplinary information | 300.229. |
| • Enforcement by SEA | 300.626. |
| CONFIDENTIALITY (F-Z) | |
| • Family Educational Rights and Privacy Act: | |
| Ο Children's rights | 300.625. |
| Ο Disciplinary records | 300.535(b)(2). |
| Ο In definition of “Education records” | 300.611(b). |
| Ο Notice to parents | 300.612(a)(3). |
| • Fees | 300.617. |
| • Hearing procedures | 300.621. |
| • List of types and location of information | 300.616. |
| • Notice to parents | 300.612(a). |
| • Opportunity for a hearing | 300.619. |
| • Parental authority to inspect and review records | 300.613(b). |
| • Record of access | 300.614. |
| • Records on more than one child | 300.615. |
| • Result of hearing | 300.620. |
| • Safeguards | 300.623. |
| • State eligibility requirement | 300.123. |
| CONSENT (A-I) | |
| • Confidentiality (Records to non-agency officials) | 300.622(a). |
| • Definition | 300.9. |
| • IEP vs. IFSP | 300.323(b)(2)(ii). |
| • Initial evaluations | 300.300(a). |
| • Initial provision of services | 300.300(b). |
| CONSENT (J-Z) | |
| • Not required: | |
| Ο Before administering a test or other evaluation to all children | 300.300(d)(1)(ii). |
| Ο Before reviewing existing data | 300.300(d)(1)(i). |
| Ο When screening for instructional purposes | 300.302. |
| • Private insurance (Accessing) | 300.154(e)(1). |
| • Reasonable efforts to obtain consent: | |
| Ο For initial evaluation | 300.300(a)(1)(iii). |
| Ο For initial evaluations for wards of the State | 300.300(a)(2). |
| Ο For initial provision of services | 300.300(b)(2). |
| Ο Reasonable efforts requirements | 300.300(d)(5). |
| • Reevaluations | 300.300(c)(2). |
| • Release of information from education records | 300.622. |
| CONSIDERATION OF SPECIAL FACTORS (by IEP Team) | 300.324(a)(2). |
| CONSISTENCY WITH STATE POLICIES: LEA | 300.201. |
| CONSTRUCTION | |
| • Accessibility standards | 300.718(b). |
| • Exception to maintenance of effort (Termination of costly expenditures for construction) | 300.204(d). |
| • Private schools (No funds may be used for) | 300.144(e). |
| CONSTRUCTION CLAUSES (A-I) | |
| • Child find (Nothing requires classifying children by disability) | 300.111(d). |
| • Civil action (Exhaust administrative remedies under Part B before filing a civil action) | 300.516(e). |
| • Early intervening services | 300.226(c). |
| • Funding mandated by State law | 300.166. |
| • Hearing: right of parent to appeal decision | 300.513(b). |
| • Highly qualified SEA or LEA staff | 300.156(e). |
| • Highly qualified teacher | 300.18(f). |
| • IEP (Inclusion of additional information beyond explicit requirements) | 300.320(d)(1). |
| • IEP (Information in more than one component not required) | 300.320(d)(2). |
| CONSTRUCTION CLAUSES (J-Z) | |
| • Prohibition on mandatory medication | 300.174(b). |
| • Referral to and action by law enforcement and judicial authorities | 300.535(a). |
| • Secretary's authority to monitor enforcement under GEPA | 300.609. |
| • State Medicaid agency (Nothing alters requirements imposed under Titles XIX or XXI or other public benefits or insurance program) | 300.154(h). |
| • Transition service | 300.324(c)(2). |
| CONSUMER PRICE INDEX For All Urban Consumers (regarding rate of inflation) (See §§ 300.702(b), 300.704(a)(2)(ii), (b)(2), 300.812(b)(2)) | |
| CONTENT OF IEP | 300.320(a). |
| CONTINUUM OF ALTERNATIVE PLACEMENTS (See “Least restrictive environment”) | 300.115. |
| CONTROLLED SUBSTANCE (Definition) | 300.530(i)(1). |
| COORDINATION OF SERVICES | |
| • Methods of ensuring services | 300.154(a). |
| • Secretary of the Interior | 300.708(i)(1). |
| Ο Advisory board (Service coordination within BIA) | 300.714(b)(1). |
| Ο Payments for children aged 3 through 5 | 300.712(a). |
| Ο Plan for coordination of services | 300.713. |
| • See “Interagency agreements,” “Interagency coordination” | |
| • State advisory panel (Advise SEA on) | 300.169(e). |
| • Use of LEA funds for early intervening services | 300.208(a)(2). |
| • Use of SEA allocations for transition | 300.704(b)(4)(vi). |
| CO-PAY OR DEDUCTIBLE (Public benefits or insurance) | 300.154(d)(2)(ii). |
| CORE ACADEMIC SUBJECTS | |
| • Definition | 300.10. |
| • See “Highly qualified special education teachers” | 300.18. |
| CORRECTIONAL FACILITIES | |
| • Applicability of this part to | 300.2(b)(1)(iv). |
| • Divided State agency responsibility | 300.607. |
| • Exception to FAPE (Children in adult facilities) | 300.102(a)(2). |
| • See also “Adult prisons” | |
| • State advisory panel (Representatives on) | 300.168(a)(11). |
| • State juvenile-adult correctional facilities | 300.2(b)(1)(iv). |
| • Transfer of rights to children in | 300.520(a)(2). |
| CORRECTIVE ACTION (PLAN) | |
| • Corrective actions to achieve compliance (see §§ 300.152(b)(2)(iii), 300.607) | |
| • Monitoring activities | 300.120(b)(2). |
| • Needs intervention by Secretary | 300.604(b)(2)(i). |
| • State advisory panel (Advise SEA on) | 300.169(d). |
| COUNSELING SERVICES (Definition) | 300.34(c)(2). |
| COUNT (See “Child count”) | |
| COURT(S) | |
| • Attorneys' fees | 300.517. |
| • Civil action | 300.516. |
| • Court order: | |
| Ο Exception to FAPE for certain ages | 300.102(a)(1). |
| • Judicial review: | |
| Ο By-pass | 300.197. |
| Ο Department procedures | 300.184. |
| • New interpretation of Act by courts requiring modification | 300.176(c)(2). |
| • Reimbursement for private school placement (see § 300.148(b) through (e)) | |
| CRIME (See “Reporting a crime”) | 300.535. |
| CRITERIA (A-I) | |
| • Child count | 300.644. |
| • Child eligibility (Determinant factor) | 300.306(b)(1). |
| • IEP Team (Public agency representative) | 300.321(a)(4). |
| • Independent educational evaluation | 300.502. |
| CRITERIA (J-Z) | |
| • Specific learning disability (see §§ 300.307, 300.309) | |
| • Surrogate parents | 300.519(d). |
| CURRENT PLACEMENT (Discipline) | |
| • Authority of hearing officer | 300.532(b). |
| • Placement during appeals | 300.533. |
| DATA (A-L) | |
| • Allocation of remaining funds to LEAs | 300.816(d). |
| • Average per-pupil expenditure (Definition) | 300.717(d). |
| • By-pass (Provision of services under) | 300.191(c)(2). |
| • Determination of needed evaluation data | 300.305(c). |
| • Disaggregated data | 300.704(b)(4)(xi). |
| • Evaluation data: | |
| Ο Procedures for determining eligibility and placement | 300.306(c). |
| Ο Review of existing data | 300.305(a)(1). |
| • Grants to States most recent data | 300.703(c)(1)(ii). |
| • LRE (Placements—meaning of evaluation data | 300.116(a)(1). |
| DATA (M-Z) | |
| • Parental consent (Not required for reviewing existing evaluation data) | 300.300(d)(1)(i). |
| • State advisory council (Advise SEA on) | 300.169(c). |
| • Suspension and expulsion rates | 300.170(a). |
| DAY | |
| • Business day (Definition) | 300.11(b). |
| • Day (Calendar) | 300.11(a). |
| • Discipline (See “Timelines—Discipline”) | |
| • School day (Definition) | 300.11(c). |
| • See “Timelines” | |
| DECREASE IN ENROLLMENT (Exception to LEA maintenance of effort) | 300.204(b). |
| DECREASE IN FUNDS (To States) | 300.703(d). |
| DEDUCTIBLE OR CO-PAY (Public benefits or insurance) | 300.154(d)(2)(ii). |
| DEFINITIONS (A-D) | |
| • Act | 300.4. |
| • Assistive technology device | 300.5. |
| • Assistive technology service | 300.6. |
| • At no cost | 300.39(b)(1). |
| • Audiology | 300.34(c)(1). |
| • Autism | 300.8(c)(1). |
| • Average per-pupil expenditure in public elementary and secondary schools in the United States | 300.717(d). |
| • Business day | 300.11(b). |
| • Charter school | 300.7. |
| • Child with a disability | 300.8(a)(1). |
| • Consent | 300.9. |
| • Controlled substance | 300.530(i)(1). |
| • Core academic subjects | 300.10. |
| • Counseling services | 300.34(c)(2). |
| • Day; business day; school day | 300.11. |
| • Deaf-blindness | 300.8(c)(2). |
| • Deafness | 300.8(c)(3). |
| • Destruction (Of information) | 300.611(a). |
| • Developmental delays(s) | 300.8(b). |
| DEFINITIONS (E-H) | |
| • Early identification and assessment | 300.34(c)(3). |
| • Education records | 300.611(b). |
| • Educational service agency | 300.12. |
| • Elementary school | 300.13. |
| • Emotional disturbance | 300.8(c)(4). |
| • Equipment | 300.14. |
| • Evaluation | 300.15. |
| • Excess costs | 300.16. |
| • Extended school year services | 300.106(b). |
| • Free appropriate public education | 300.17. |
| • Freely associated States | 300.717(a). |
| • Hearing impairment | 300.8(c)(5). |
| • Highly qualified special education teacher | 300.18(b). |
| • Homeless children | 300.19. |
| DEFINITIONS (I) | |
| • IEP Team | 300.23. |
| • Illegal drug | 300.530(i)(2). |
| • Include | 300.20. |
| • Independent educational evaluation | 300.502(a)(3)(i). |
| • Indian | 300.21(a). |
| • Indian tribe | 300.21(b). |
| • Individualized education program (IEP) | 300.22. |
| • Individualized family service plan | 300.24. |
| • Infant or toddler with a disability | 300.25. |
| • Institution of higher education | 300.26. |
| • Intellectual Disability | 300.8(c)(6). |
| • Interpreting services | 300.34(c)(4). |
| DEFINITIONS (J-O) | |
| • Limited English proficient (LEP) | 300.27. |
| • Local educational agency (LEA) | 300.28. |
| • Medical services | 300.34(c)(5). |
| • Multiple disabilities | 300.8(c)(7). |
| • Native language | 300.29(a). |
| • Occupational therapy | 300.34(c)(6). |
| • Orientation and mobility services | 300.34(c)(7). |
| • Orthopedic impairment | 300.8(c)(8). |
| • Other health impairment | 300.8(c)(9). |
| • Outlying areas | 300.717(b). |
| DEFINITIONS (P-R) | |
| • Parent | 300.30(a). |
| • Parent counseling and training | 300.34(c)(8). |
| • Parent training and information center | 300.31. |
| • Parentally-placed private school children with disabilities | 300.130. |
| • Participating agency (as used in “Confidentiality”) | 300.611(c). |
| • Party or parties (Regarding procedures) | 300.181(a). |
| • Personally identifiable | 300.32. |
| • Physical education | 300.39(b)(2). |
| • Physical therapy | 300.34(c)(9). |
| • Psychological services | 300.34(c)(10). |
| • Public agency | 300.33. |
| • Public expense | 300.502(a)(3)(ii). |
| • Recreation | 300.34(c)(11). |
| • Rehabilitation counseling services | 300.34(c)(12). |
| • Related services | 300.34(a). |
| DEFINITIONS (S) | |
| • School day | 300.11(c). |
| • School health services | 300.34(c)(13). |
| • School nurse services | 300.34(c)(13). |
| • Scientifically based research | 300.35. |
| • Secondary school | 300.36. |
| • Secretary | 300.38. |
| • Serious bodily injury | 300.530(i)(3). |
| • Services plan | 300.37. |
| • Social work services in schools | 300.34(c)(14). |
| • Special education | 300.39(a). |
| • Specially designed instruction | 300.39(b)(3). |
| • Specific learning disability | 300.8(c)(10). |
| • Speech-language pathology services | 300.34(c)(15). |
| • Speech or language impairment | 300.8(c)(11). |
| • State | 300.40. |
| • State (Special definition) | 300.717(c). |
| • State educational agency (SEA) | 300.41. |
| • Supplementary aids and services | 300.42. |
| DEFINITIONS (T-Z) | |
| • Transition services | 300.43. |
| • Transportation | 300.34(c)(16). |
| • Traumatic brain injury | 300.8(c)(12). |
| • Travel training | 300.38(b)(4). |
| • Universal design | 300.44. |
| • Visual impairment including blindness | 300.8(c)(13). |
| • Vocational education | 300.39(b)(5). |
| • Ward of the State | 300.45. |
| • Weapon | 300.530(i)(4). |
| DEPARTMENT OF LABOR, Bureau of Labor Statistics (Regarding rate of inflation) (see §§ 300.702(b), 300.704(a)(2)(ii), (b)(2), 300.812(b)(2)) | |
| DEPARTMENT (U.S. Department of Education) | |
| • Enforcement: hearing procedures (see §§ 300.178 through 300.184) | |
| • Monitoring (Regarding Secretary of the Interior) | 300.708(a). |
| • Personally identifiable information (Use of) | 300.627. |
| DESTRUCTION OF INFORMATION | 300.624(b). |
| • Definition | 300.611(a). |
| DETERMINANT FACTOR for eligibility determination | |
| • Lack of instruction in reading or math (see § 300.306(b)(1)(i), (b)(1)(ii)) | |
| • Limited English proficiency | 300.306(b)(1)(iii). |
| DEVELOPMENT, REVIEW, AND REVISION OF IEP | 300.324. |
| DEVELOPMENTAL DELAY(S) | |
| • In definition of “Child with a disability” | 300.8(b). |
| • Requirements for using “Developmental delay” | 300.111(b). |
| • State definition | 300.111(b). |
| • Using specified disability categories | 300.111(d). |
| DIABETES | 300.8(c)(9)(i). |
| DIRECT SERVICES | |
| • For children in private schools (see §§ 300.132(a); 300.133(a); 300.134(d)(1)) | |
| • Nature and location of services | 300.227(b). |
| • Payment by Secretary of the Interior | 300.712(d). |
| • SEA (Additional information) | 300.175(a). |
| • State-level activities | 300.704(b)(4)(i). |
| • Use of LEA allocations for | 300.227(a). |
| DISABILITY: ADVERSELY AFFECTS EDUCATIONAL PERFORMANCE (See “Adversely affects educational performance”) | |
| DISAGGREGATED DATA | |
| • Assessment results for subgroup of children with disabilities | 300.704(b)(4)(xi). |
| • For suspension and expulsion by race and ethnicity | 300.170(a). |
| DISCIPLINE (A-B) | |
| • Alternative educational setting (see §§ 300.530(d)(1), (d)(2), (d)(4), (g), 300.531, 300.533) | |
| • Appeal | 300.532(a). |
| • Behavioral interventions—intervention plan | 300.530(f). |
| DISCIPLINE (C-H) | |
| • Change of placements for disciplinary removals | 300.536. |
| • Child's status during due process hearings | 300.518. |
| • Determination of setting | 300.531. |
| • Expedited due process hearings | 300.532(c). |
| • Functional behavioral assessment (see § 300.530(d)(1)(ii), (f)(1)(i)) | |
| • Hearing officer (authority of) (see §§ 300.532(b), 300.533) | |
| DISCIPLINE (I-Z) | |
| • IEP Team (relevant members) (see §§ 300.530(e)(1), (f), 300.531) | |
| • Interim alternative educational setting (see §§ 300.530(b), (d)(2), (g), 300.531, 300.532(b)(2)(ii), 300.533) | |
| • Manifestation determination | 300.530(e). |
| • Placement during appeals | 300.533. |
| • Protections for children not determined eligible | 300.534. |
| • Referral to and action by law enforcement and judicial authorities | 300.535. |
| • School personnel (Authority of) | 300.530(b). |
| • See “Timelines—Discipline” | |
| DISCLOSURE | |
| • Additional disclosure of information requirement | 300.512(b). |
| • Consent required before disclosing: | |
| Ο Education records to public benefits or insurance agencies | 300.154(d)(2)(iv). |
| Ο Personal information to non-agency officials | 300.622(a). |
| • Notice on disclosure of evaluation results | 300.504(c)(10). |
| • Policies on disclosing information to 3rd parties | 300.612(a)(3). |
| • Prohibit evidence not disclosed | 300.512(a)(3). |
| DISPROPORTIONALITY | 300.646. |
| DISPUTES | |
| • Interagency disputes (Methods of ensuring services): | |
| Ο Ensure services during pendency of dispute | 300.154(a). |
| Ο Procedures for resolving | 300.154(a)(3). |
| • Mediation (see also § 300.532(c)(3)) | 300.506. |
| Ο Attorneys' fees for | 300.517(c)(2)(ii). |
| Ο During discipline appeal process | 300.532(c)(3). |
| Ο During resolution process (see § 300.510(b)(3), (c)(3)) | |
| Ο Enforcement of agreement (see §§ 300.506(b)(7), 300.510(d)(2), 300.537) | |
| DIVIDED STATE AGENCY RESPONSIBILITY (Adult prisons) | 300.607. |
| DIVORCE—SEPARATION (Authority to review records) | 300.613(c). |
| DROPOUT RATES (Performance indicators) | 300.157(a)(3). |
| DUE PROCESS HEARING(S) AND REVIEWS (A-E) | |
| • Agency responsible for conducting hearing | 300.511(b). |
| • Appeal of decisions; impartial review | 300.514(b). |
| • Attorneys' fees | 300.517(a). |
| • Basic requirements (see §§ 300.507 through 300.514) | |
| • Child's status during proceedings (Pendency) | 300.518. |
| Ο Parent request for hearing (Discipline) | 300.532(a). |
| • Civil action | 300.516(a). |
| • Evaluations disclosed at least 5 business days before hearing | 300.512(a)(3). |
| • Expedited due process hearings (Discipline) | 300.532(c). |
| DUE PROCESS HEARING(S) AND REVIEWS (F-I) | |
| • Failure to implement a due process hearing decision | 300.152(c)(3). |
| • Finality of decision; appeal; impartial review | 300.514. |
| • Findings of fact and decisions (see § 300.512(a)(5), (c)(3)): | |
| Ο To State advisory panel (see §§ 300.513(d), 300.514(c)) | |
| • Hearing rights | 300.512(a). |
| • Impartial hearing officer | 300.511(c). |
| Ο See “Hearing officer(s)” | |
| DUE PROCESS HEARING(S) AND REVIEWS (J-Z) | |
| • Parental rights at hearings | 300.512(c). |
| • Party notice to other party | 300.508(c). |
| Ο Model form to assist parents | 300.509. |
| • Party request for hearing (Discipline) | 300.532(a). |
| • Pendency (Stay put) | 300.518. |
| • Prohibit evidence not introduced 5 business days before hearing | 300.512(a)(3). |
| • Record of hearing | 300.512(c)(3). |
| • See “Civil action—proceedings,” “Court(s)” “Procedural safeguards,” “Timelines” | |
| • Timelines and convenience of hearings—reviews (see §§ 300.506(b)(5), 300.511(e), 300.516(b)) | |
| EARLY IDENTIFICATION AND ASSESSMENT (Definition) | 300.34(c)(3). |
| EARLY INTERVENING SERVICES | 300.226. |
| • Adjustment to local fiscal efforts | 300.205(d). |
| • Do not limit/create right to FAPE | 300.226(c). |
| • For children not currently identified as needing special education or related services | 300.226(a). |
| • Permissive use of funds | 300.208(a)(2). |
| • Scientifically based literacy instruction | 300.226(b). |
| • Use of funds: | |
| Ο By LEA | 300.226(a). |
| Ο By Secretary of the Interior | 300.711. |
| EDUCATION RECORDS (Definition) | 300.611(b). |
| EDUCATIONAL PLACEMENTS (LRE) | 300.114. |
| EDUCATIONAL SERVICE AGENCY (ESA) | |
| • Definition | 300.12. |
| • In definition of “LEA” | 300.28(b)(1). |
| • Joint establishment of eligibility (Regarding ESAs) | 300.224(b). |
| Ο Additional requirements (Regarding LRE) | 300.224(c). |
| ELEMENTARY AND SECONDARY EDUCATION ACT OF 1965 (ESEA) | |
| • Coordination of early intervening services | 300.226(e). |
| • Excess cost requirement | 300.202(b). |
| • Schoolwide programs | 300.206(a). |
| ELIGIBILITY (CHILD—STUDENT) (A-G) | |
| • Additional eligibility requirements (see §§ 300.121 through 300.124, 300.307 through 300.311) | |
| • Children with disabilities in adult prisons | 300.324(d). |
| • Children with specific learning disabilities (Documentation of eligibility determination) | 300.311(a). |
| • Determinant factor for | 300.306(b)(1). |
| • Determination of eligibility | 300.306. |
| • Developmental delay (Non-use of term by LEA if not adopted by State) | 300.111(b)(iv). |
| • Documentation of eligibility (To parent) | 300.306(a)(2). |
| • Graduation with regular diploma: termination (see §§ 300.102(a)(3), 300.305(e)(2)). | |
| ELIGIBILITY (CHILD—STUDENT) (H-Z) | |
| • Lack of instruction in reading or math | 300.306(b). |
| • Limited English proficiency | 300.306(b). |
| • Public benefits or insurance (Risk loss of eligibility) | § 300.154(d)(2) (iii). |
| • Termination of eligibility (see §§ 300.204(c), 300.305(e)(2)) | |
| • Transfer of rights (Special rule) | 300.520(b). |
| ELIGIBILITY (PUBLIC AGENCIES) | |
| • Hearings related to (See “Hearings—Hearing procedures”) | |
| • Joint establishment of (see §§ 300.202(b)(3), 300.223(a), 300.224(a)) | |
| • LEA (See “LEA eligibility”) Secretary of the Interior | 300.712(e). |
| • State (See “State eligibility”) | |
| • State agency eligibility | 300.228. |
| Ο See “State agencies” | |
| EMOTIONAL DISTURBANCE (Definition) | 300.8(c)(4). |
| ENFORCEMENT | |
| • Department procedures (see §§ 300.600, 300.604, 300.605) | |
| • Referral to law enforcement authorities | 300.535. |
| • State policies and procedures: | |
| Ο Enforcement mechanisms | 300.537. |
| Ο LEA not meeting requirements | 300.608. |
| Ο Regarding confidentiality | 300.626. |
| EPILEPSY | 300.8(c)(9)(i). |
| EQUIPMENT | |
| • Acquisition of | 300.718(a). |
| • Definition | 300.14. |
| • Exception to maintenance of effort | 300.204(d). |
| • Placement in private school | 300.144. |
| EVALUATION (A-G) | |
| • Assessments in (see §§ 300.304(b), (c) 300.305(c)). | |
| • Basic requirements (see §§ 300.301, 300.303, 300.324) | |
| • Comprehensive (Identify all special education needs) | 300.304(c)(6). |
| • Definition of | 300.15. |
| • Evaluation procedures | 300.304. |
| • Evaluation report to parents | 300.306(a)(2). |
| • Existing evaluation data (Review of) | 300.305(a)(1). |
| • Graduation (Evaluation not required for) | 300.305(e)(2). |
| EVALUATION (H-Z) | |
| • Independent educational evaluation (IEE) | 300.502. |
| • Initial evaluation (see §§ 300.301, 300.305) | |
| • Observation in determining SLD | 300.310. |
| • Parent consent | 300.300. |
| • Parent right to evaluation at public expense | 300.502(b). |
| • Reevaluation | 300.303. |
| EXCEPTION | |
| • Charter schools exception (Joint eligibility) | 300.223(b). |
| • For prior local policies and procedures | 300.220. |
| • For prior State policies and procedures | 300.176(a). |
| • To FAPE: | |
| Ο For certain ages | 300.102. |
| Ο For graduating with a regular diploma | 300.102(a)(3)(i). |
| Ο For children in adult prisons (see §§ 300.102(a)(2), 300.324(d)). | |
| • To maintenance of effort | 300.204. |
| • To reimbursement for parental placement | 300.148(e). |
| EXCESS COSTS | |
| • Calculation of (see appendix A—Excess Costs Calculation) | |
| • Definition | 300.16. |
| • Excess cost requirement | 300.202(b) |
| • Joint establishment of eligibility | 300.202(b)(3) |
| • LEA requirement | 300.202(b) |
| • Limitation on use of Part B funds | 300.202(b) |
| • Meeting the excess cost requirement | 300.202(b)(2) |
| • See also §§ 300.163(a), 300.175(b), 300.202(a), 300.227(a)(2)(ii) | |
| EXISTING EVALUATION DATA (Review of) | 300.305(a)(1). |
| EXPEDITED DUE PROCESS HEARINGS | 300.532(c). |
| • Authority of hearing officer | 300.532(b). |
| • Party appeal (Hearing requested by parents) | 300.532(a). |
| EXPULSION (See “Suspension and expulsion”) | |
| EXTENDED SCHOOL YEAR SERVICES | 300.106. |
| EXTRACURRICULAR | |
| • IEP content | 300.320(a)(4)(ii). |
| • In supplementary aids and services | 300.42. |
| • Nonacademic services | 300.107. |
| • Nonacademic settings | 300.117. |
| FACILITIES | |
| • Alteration of | 300.718. |
| • Children in private schools or facilities (see §§ 300.130, 300.142(a), 300.144(b), (c), 300.147(c)) | |
| • Construction of | 300.718. |
| • Physical education (In separate facilities) | 300.108(d). |
| • Private schools and facilities | 300.2(c). |
| • See also “Correctional facilities” | |
| • Termination of expenses for construction of | 300.204(d). |
| FAMILY EDUCATIONAL RIGHTS AND PRIVACY ACT (FERPA) (See “Confidentiality”) | |
| FAPE (A-G) | |
| • Definition | 300.17. |
| • Documentation of exceptions | 300.102(b). |
| • Exception to FAPE: | |
| Ο For certain ages | 300.102(a). |
| Ο For children receiving early intervention services | 300.102(a)(4). |
| Ο For children graduating with a regular diploma | 300.102(a)(3). |
| Ο For children in adult correctional facilities | 300.102(a)(2). |
| • For children: | |
| Ο Advancing from grade to grade | 300.101(c). |
| Ο Beginning at age 3 | 300.101(b). |
| Ο On Indian reservations | 300.707(c). |
| Ο Suspended or expelled from school | 300.101(a). |
| • General requirement | 300.101(a). |
| FAPE (H-Z) | |
| • Methods and payments | 300.103. |
| • Private school children with disabilities: | |
| Ο Placed by parents when FAPE is at issue | 300.148. |
| Ο Placed in or referred by public agencies (see §§ 300.145 through 300.147) | |
| • Reallocation of LEA funds (FAPE adequately provided) | 300.705(c). |
| • Services (and placement) for FAPE: | |
| Ο Based on child's needs (Not disability category) | 300.304(c)(6). |
| • State eligibility condition | 300.100. |
| FAS (Freely associated States) | 300.717(a). |
| FAX (FACSIMILE TRANSMISSION) | |
| • Department procedures (see §§ 300.183, 300.196(a) through (e)) | |
| FERPA (Family Educational Rights and Privacy Act) (See “Confidentiality”) | |
| FILING A CLAIM (Private insurance) | 300.154(e). |
| FILING A COMPLAINT (State complaint procedures) | 300.153. |
| FILING REQUIREMENTS | |
| • By-pass (Regarding private school children) | 300.196. |
| • Department procedures | 300.183. |
| • See §§ 300.178 through 300.186. | |
| FINALITY OF DECISION | 300.514. |
| FORMULA | |
| • Allocations to LEAs | 300.705(b). |
| • Allocations to States | 300.703. |
| • Allocation to States when by-pass is implemented | 300.191. |
| • Allocation to States regarding section 619 (see §§ 300.807, 300.810). | |
| • Parentally-placed private school children | 300.133. |
| • SEA set aside funds | 300.704(b). |
| • See also § 300.171(a). | |
| FOSTER PARENT | 300.30(a)(2). |
| • See also § 300.45(b). | |
| FREELY ASSOCIATED STATES AND OUTLYING AREAS | |
| • Funding for | 300.701(a). |
| • Purpose of grants | 300.700(a). |
| FULL EDUCATIONAL OPPORTUNITY GOAL | 300.109. |
| FUNCTIONAL BEHAVIORAL ASSESSMENT (see § 300.530(d)(1)(ii), (f)(1)(i)) | |
| FUNDING MECHANISM: LRE | 300.114(b). |
| FUNDS (See “Use of funds”) | |
| GENERAL CURRICULUM | |
| • Discipline (Continue participating in) | 300.530(d)(1)(i). |
| • Evaluation procedures: | |
| Ο Be involved and progress in | 300.304(b)(1)(ii). |
| Ο Review of existing evaluation data | 300.305(a)(1). |
| • IEPs: | |
| Ο Measurable annual goals | 300.320(a)(2)(i). |
| Ο Present levels of educational performance | 300.320(a)(1). |
| Ο Review and revision of IEPs | 300.324(b)(1)(ii). |
| Ο Special education and related services | 300.320(a)(4)(ii). |
| • IEP Team | 300.321(a)(4)(ii). |
| • Specially designed instruction (Definition) | 300.39(b)(3). |
| GOALS | |
| Annual goals (See “IEP” and “Annual goals”). | |
| • Performance goals and indicators | 300.157. |
| Ο State and local activities to meet | 300.814(c). |
| Ο Use of State-level funds to meet | 300.704(b)(4)(x). |
| GOVERNOR (Adult prisons) | 300.149(d). |
| • See also “Chief executive officer”. | |
| GRADUATION | |
| • Evaluation not required for | 300.305(e)(2). |
| • Exception to FAPE | 300.102(a)(3)(i). |
| • Graduation rates as performance indicators | 300.157(a)(3). |
| • Written prior notice required | 300.102(a)(3)(iii). |
| GRANDPARENT OR STEPPARENT (In definition of “Parent”) | 300.30(a)(4). |
| GRANTS | |
| • Grants to States: | 300.700. |
| Ο Maximum amount | 300.700(b). |
| Ο Purpose of | 300.700(a). |
| • See “Subgrants”. | |
| GUARDIAN (In definition of “Parent”) | 300.30(a)(3). |
| GUARDIANSHIP, SEPARATION, AND DIVORCE (Regarding parent's authority to review records) | 300.613(c). |
| HEALTH AND HUMAN SERVICES (Secretary of) | 300.708(i)(1). |
| HEARING AIDS: Proper functioning of | 300.113(a). |
| HEARING IMPAIRMENT | |
| • Definition | 300.8(c)(5). |
| • Related services, audiology | 300.34(c)(1). |
| HEARING OFFICER(S) (A-B) | |
| • Additional disclosure of information requirement | 300.512(b). |
| • Attorneys' fees | 300.517(c)(2)(i). |
| • Authority of (Discipline) | 300.532(b). |
| Ο Basis of decisions | 300.513(a). |
| HEARING OFFICER(S) (C-Z) | |
| • Change of placement: | |
| Ο Hearing officer decision agrees with parents | 300.518(d). |
| Ο Hearing officer may order | 300.532(b)(2)(ii). |
| • Expedited due process hearing (Discipline) | 300.532(c). |
| • Impartial hearing officer | 300.511(c). |
| • Parent appeal (Discipline) | 300.532(a). |
| • Placement during appeals | 300.533. |
| • Private school placement when FAPE is at issue | 300.148(b). |
| • Reimbursement for private school placement by parents | 300.148(c). |
| • Requests for evaluations by | 300.502(d). |
| HEARING RIGHTS | 300.512. |
| HEARINGS—HEARING PROCEDURES | |
| • Due process (See “Due process hearings”). | |
| • Public hearings on policies and procedures | 300.165(a). |
| • State and local eligibility: | |
| Ο LEA eligibility | 300.155. |
| Ο Notification in case of LEA or State ineligibility | 300.221. |
| Ο State eligibility (Notice and hearing) (see §§ 300.178, 300.179, 300.181). | |
| HEART CONDITION | 300.8(c)(9)(i). |
| HEIGHTENED ALERTNESS TO ENVIRONMENTAL STIMULI (In “Other health impairment”) | 300.8(c)(9). |
| HIGH COST FUND (LEA) | 300.704(c). |
| HIGHLY MOBILE CHILDREN (e.g., homeless and migrant children) | 300.111(c)(2). |
| HIGHLY QUALIFIED TEACHER (A-Q) | |
| • Alternative route to certification | 300.18(b)(2). |
| • Definition of | 300.18. |
| • Private school teachers | 300.18(h). |
| HIGHLY QUALIFIED TEACHER (R-Z) | |
| • Requirements for in general | 300.18(b). |
| • Requirements for teaching to alternate academic achievement standards | 300.18(c). |
| • Requirements for teaching multiple subjects | 300.18(d). |
| • Personnel qualifications | 300.156(c). |
| HIGH NEED CHILD | 300.704(c)(3)(i). |
| HOMELESS CHILDREN | |
| • Child find | 300.111(a)(1)(i). |
| • Definition of | 300.19. |
| • McKinney-Vento Homeless Assistance Act (see §§ 300.19, 300.149(a)(3), 300.153(b)(4)(iii), 300.168(a)(5), 300.508(b)(4)). | |
| • Surrogate parents for | 300.519(a)(4). |
| HYPERACTIVITY (Attention deficit hyperactivity disorder) | 300.8(c)(9)(i). |
| INAPPLICABILITY (Of requirements that prohibit commingling and supplanting of funds) | 300.704(d). |
| IEE (See “Independent educational evaluation”) | |
| IEP (A-I) | |
| • Agency responsibilities for transition services | 300.324(c)(1). |
| • Basic requirements (see §§ 300.320 through 300.324). | |
| • Child participation when considering transition | 300.321(b)(1). |
| • Consideration of special factors | 300.324(a)(2). |
| • Consolidation of IEP Team meetings | 300.324(a)(5). |
| • Content of IEPs | 300.320(a). |
| • Definition (see §§ 300.22, 300.320). | |
| • Development, review, and revision of | 300.324. |
| • IEP or IFSP for children aged 3 through 5 | 300.323(b). |
| • IEP Team | 300.321. |
| IEP (J-Z) | |
| • Modifications of IEP or placement (FAPE for children in adult prisons) | 300.324(d)(2)(i). |
| • Modify/Amend without convening meeting (see § 300.324(a)(4), (a)(6)). | |
| • Parent participation | 300.322. |
| • Alternative means | 300.328. |
| • Part C coordinator involvement | 300.321(f). |
| • Private school placements by public agencies | 300.325(a)(1). |
| • Regular education teacher (See “IEP Team”). | |
| • Review and revision of IEPs | 300.324(b). |
| • SEA responsibility regarding private school | 300.325(c). |
| • State eligibility requirement | 300.112. |
| • Transition services | 300.320(b). |
| • When IEPs must be in effect | 300.323. |
| IEP TEAM | 300.321. |
| • Alternative educational setting (Determined by) | 300.531. |
| • Consideration of special factors | 300.324(a)(2). |
| Ο Assistive technology | 300.324(a)(2)(v). |
| Ο Behavioral interventions | 300.324(a)(2)(i). |
| Ο Braille needs | 300.324(a)(2)(iii). |
| Ο Communication needs (Deafness and other needs) | 300.324(a)(2)(iv). |
| Ο Limited English proficiency | 300.324(a)(2)(ii). |
| • Determination of knowledge or special expertise | 300.321(c). |
| • Discipline procedures (see §§ 300.530(e), 300.531). | |
| • Manifestation determination | 300.530(e). |
| • Other individuals who have knowledge or special expertise (At parent or agency discretion) | 300.321(a)(6). |
| • Participation by private school (public agency placement) | 300.325(a). |
| • Regular education teacher (see §§ 300.321(a)(2), 300.324(a)(3)). | |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) | |
| • Definition | 300.24. |
| • Transition from Part C | 300.124. |
| • IFSP vs. IEP | 300.323(b). |
| ILLEGAL DRUG (Definition—discipline) | 300.530(i)(2). |
| IMPARTIAL DUE PROCESS HEARING | 300.511. |
| • See “Due process hearings and reviews”. | |
| IMPARTIAL HEARING OFFICER | 300.511(c). |
| IMPARTIALITY OF MEDIATOR | 300.506(b)(1). |
| INCIDENTAL BENEFITS (Permissive use of funds) | 300.208. |
| INCIDENTAL FEES (In definition of “at no cost” under “Special education”) | 300.39(b)(1). |
| INCLUDE (Definition) | 300.20. |
| INDEPENDENT EDUCATIONAL EVALUATION (IEE) | 300.502. |
| • Agency criteria (see § 300.502(a)(2), (b)(2)(ii), (c)(1), (e)). | |
| • Definition | 300.502(a)(3)(i). |
| • Parent-initiated evaluations | 300.502(c). |
| • Parent right to | 300.502(a)(1). |
| • Procedural safeguards notice | 300.504(c)(1). |
| • Public expense (Definition under IEE) | 300.502(a)(3)(ii). |
| • Request by hearing officers | 300.502(d). |
| • Use as evidence at hearing | 300.502(c)(2). |
| INDIAN; INDIAN CHILDREN | |
| • Child find for Indian children aged 3 through 5 | 300.712(d). |
| • Definition of “Indian” | 300.21(a). |
| • Definition of “Indian tribe” | 300.21(b). |
| • Early intervening services | 300.711. |
| • Payments and use of amounts for: | |
| Ο Education and services for children aged 3 through 5 | 300.712(a). |
| Ο Education of Indian children | 300.707. |
| • Plan for coordination of services | 300.713. |
| • Submission of information by Secretary of Interior | 300.708. |
| INDICATORS | 300.157(b). |
| • See “Performance goals and indicators”. | |
| INDIVIDUALIZED EDUCATION PROGRAM (See “IEP”) | |
| INDIVIDUALIZED FAMILY SERVICE PLAN (See “IFSP”) | |
| INFORMED CONSENT (See “Consent”) | |
| INITIAL EVALUATION | 300.301. |
| • Consent before conducting | 300.300(a)(1)(i). |
| Ο For ward of State | 300.300(a)(2). |
| Ο Not construed as consent for initial placement | 300.300(a)(1)(ii). |
| Ο When not required | 300.300(a)(2). |
| • Review of existing evaluation data | 300.305(a). |
| INSTITUTION OF HIGHER EDUCATION | |
| • Definition | 300.26. |
| INSTRUCTIONAL MATERIALS | |
| • Access to | 300.172. |
| • Audio-visual materials | 300.14(b). |
| • LEA purchase of | 300.210. |
| • NIMAC: | |
| Ο SEA coordination with | 300.172(c). |
| Ο SEA rights and responsibilities if not coordinating | 300.172(b). |
| INSURANCE | |
| • Community-based waivers (see § 300.154(d)(2)(iii)(D)). | |
| • Financial costs | 300.154(f)(2). |
| • Financial responsibility of LEA/SEA | 300.154(a)(1). |
| • Out-of-pocket expense | 300.154(d)(2)(ii). |
| • Private insurance | 300.154(e). |
| • Public benefits or insurance | 300.154(d). |
| • Risk of loss of eligibility (see § 300.154(d)(2)(iii)(D)). | |
| INTELLECTUAL DISABILITY (Definition) | 300.8(c)(6). |
| INTERAGENCY AGREEMENTS | |
| • FAPE methods and payments (Joint agreements) | 300.103(a). |
| • LRE (Children in public/private institutions) | 300.114(a)(2)(i). |
| • Methods of ensuring services | 300.154(a). |
| • SEA responsibility for general supervision | 300.149. |
| • Secretary of Interior—with Health and Human Services Secretary | 300.708(i)(1). |
| Ο Cooperative agreements (BIA and other agencies) | 300.712(d). |
| INTERAGENCY COORDINATION (See “Coordination of services,” “Interagency agreements”) | |
| INTERAGENCY DISPUTES | 300.154(a)(3). |
| INTERAGENCY RESPONSIBILITIES (Transition services) | 300.320(b). |
| INTERIM ALTERNATIVE EDUCATIONAL SETTING (See §§ 300.530(b), 300.531, 300.532(b)(2)(ii), 300.533) | |
| INTERPRETING SERVICES | |
| • As a related service | 300.34(a). |
| • Definition | 300.34(c)(4). |
| JOINT ESTABLISHMENT OF ELIGIBILITY (LEAs) | 300.223. |
| • See also §§ 300.202(b)(3), 300.224. | |
| JUDICIAL | |
| • Authorities (Referral to) | 300.535. |
| • Finding of unreasonableness | 300.148(d)(3). |
| • Proceeding (During pendency) | 300.518(a). |
| • Review | 300.197. |
| • See also: | |
| Ο Civil action (see §§ 300.504(c)(12), 300.514(d), 300.516) | |
| Ο Court(s) (see §§ 300.102(a)(1), 300.184, 300.148(c), (d)(3), 300.197, 300.516(a), (c), (d), 300.517(a), (c)) | |
| JUVENILE-ADULT CORRECTIONS FACILITIES (See “Correctional facilities”) | |
| LAW ENFORCEMENT AND JUDICIAL AUTHORITIES | |
| • Referral to | 300.535. |
| LEA (LOCAL EDUCATIONAL AGENCY) (A-C) | |
| • Allocations to LEAs | 300.705(b). |
| Ο Reallocation of funds (If LEA is adequately providing FAPE) | 300.705(c). |
| • Charter schools and LEAs (See “Charter schools”). | |
| • Child count—LEAs: | |
| Ο Parentally-placed private school children with disabilities | 300.133(c). |
| Ο Procedures for counting all children served (Annual report) | 300.645. |
| Ο See also “Child count”. | |
| • Child find—LEAs: | |
| Ο Parentally-placed private school children with disabilities | 300.131. |
| Ο See also “Child find” | |
| • Compliance (LEA and State agency) | 300.222. |
| • Consistency of LEA policies with State policies | 300.201. |
| LEA (D-G) | |
| • Definition of LEA | 300.28. |
| • Developmental delay: Use of term by LEAs (see § 300.111(b)(2) through (b)(4)). | |
| • Direct services by SEA (If LEA is unable or unwilling to serve CWDs, etc.) | 300.227. |
| • Discipline and LEAs (See “Discipline”). | |
| • Eligibility of LEA: | |
| Ο Condition of assistance (see §§ 300.200 through 300.213) | |
| Ο Exception for prior local plans. | 300.220. |
| Ο Ineligibility of LEA (Notice by SEA) | 300.221. |
| Ο SEA hearings on LEA eligibility | 300.155. |
| • Excess cost requirement—LEA: | 300.202(b). |
| Ο Use of amounts for excess costs | 300.202(a)(2). |
| Ο See also “Excess costs”. | |
| LEA (H-L) | |
| • Hearings relating to LEA eligibility | 300.155. |
| • Information for SEA | 300.211. |
| • Instructional materials (Purchase of) | 300.210. |
| • Joint establishment of eligibility (By two or more LEAs) | 300.202(b)(3). |
| Ο See also §§ 300.223, 300.224 | |
| • LEA and State agency compliance | 300.222. |
| • LEA policies (Modification of) | 300.220(b). |
| Ο See “LEA eligibility,” “Eligibility of LEA”. | |
| LEA (M-P) | |
| • Maintenance of effort regarding LEAs (See “Maintenance of effort”). | |
| • Methods of ensuring services—LEAs (see § 300.154(a)(1) through (a)(4), (b)). | |
| • Migratory children with disabilities (Linkage with records under ESEA) | 300.213. |
| • Modification of policies by LEA | 300.220(b). |
| • Noncompliance of LEA (SEA determination) | 300.222(a). |
| • Notice requirement (On LEA) | 300.222(b). |
| • Purchase of instructional materials | 300.210. |
| • Personnel shortages (Use of funds to assist LEAs in meeting) | 300.704(b)(4)(vii). |
| • Public information (By LEA) | 300.212. |
| LEA (R-T) | |
| • Reallocation of LEA funds (If LEA is adequately providing FAPE) | 300.705(c). |
| • Reimbursement of LEAs by other agencies (See “Methods of ensuring services,” § 300.154(a)(2) through (a)(3), (b)(2)). | |
| • Review and revision of policies | 300.170(b). |
| • SEA reduction in payments to LEA | 300.222(a). |
| • SEA use of LEA allocations for direct services | 300.227. |
| • Show cause hearing (By-pass requirement) | 300.194. |
| • State-level nonsupplanting | 300.162(c). |
| • Subgrants to LEAs | 300.705(a). |
| • Suspension and expulsion rates—LEAs | 300.170(a)(1). |
| • Transition planning conferences (Part C to B) | 300.124(c). |
| LEA (U-Z) | |
| • Use of amounts (by LEA) | 300.202. |
| Ο (See “Permissive use of funds”). | |
| • Use of SEA allocations (Regarding LEAs) | 300.704. |
| Ο For capacity-building, etc. (see § 300.704(b)(4)(viii)). | |
| Ο To assist in meeting personnel shortages (see § 300.704(b)(4)(vii)). | |
| LEA ELIGIBILITY (A-I) | |
| • Adjustment to local fiscal efforts in certain fiscal years | 300.205. |
| • Charter schools—public: | |
| Ο Rights of children with disabilities who attend public charter schools | 300.209(a). |
| Ο That are public schools of the LEA | 300.209(b). |
| Ο That are LEAs | 300.209(c). |
| Ο That are not an LEA or a school that is part of an LEA | 300.209(d). |
| Ο Treatment of charter schools and their students | 300.209. |
| Ο See also “Charter schools”. | |
| • Condition of assistance | 300.200. |
| Ο See §§ 300.201 through 300.213. | |
| • Consistency with State policies | 300.201. |
| • Information for SEA | 300.211. |
| LEA ELIGIBILITY (M-Z) | |
| • Maintenance of effort | 300.203. |
| Ο Exception to | 300.204. |
| • Migratory children with disabilities—records regarding | 300.213. |
| • Permissive use of funds | 300.208. |
| Ο Administrative case management | 300.208(b). |
| Ο Early intervening services | 300.208(a)(2). |
| Ο High cost special education and related services | 300.208(a)(3). |
| Ο Services and aids that also benefit nondisabled children | 300.208(a)(1). |
| • Personnel development | 300.207. |
| • Records regarding migratory children with disabilities | 300.213. |
| • State prohibition (If LEA is unable to establish/maintain programs of FAPE) | 300.205(c). |
| • Treatment of charter schools and their students | 300.209. |
| LEAD POISONING (Other health impairment) | 300.8(c)(9)(i). |
| LEAST RESTRICTIVE ENVIRONMENT (LRE) | |
| • Children in public or private institutions | 300.118. |
| • Continuum of alternative placements | 300.115. |
| • Educational service agency (Additional requirement regarding LRE) | 300.224(c). |
| • Monitoring activities | 300.120. |
| • Nonacademic settings | 300.117. |
| • Placements | 300.116. |
| • State eligibility requirements | 300.114. |
| • Additional requirement: State funding mechanism | 300.114(b). |
| • Technical assistance and training | 300.119. |
| LEISURE EDUCATION (Recreation) | 300.34(c)(11)(iv). |
| LEP (See “Limited English proficient”) | |
| LEUKEMIA (Other health impairment) | 300.8(c)(9)(i). |
| LIMITED ENGLISH PROFICIENT (LEP) | |
| • Definition of | 300.27. |
| • Determinant factor in eligibility determination | 300.306(b)(1)(iii). |
| • In development, review, and revision of IEP | 300.324(a)(2)(ii). |
| • In “native language” (Definition) | 300.29(a). |
| • Special rule—LEP not determinant factor | 300.306(b)(1)(iii). |
| LOCAL EDUCATIONAL AGENCY (See “LEA”) | |
| LRE (See “Least restrictive environment”) | |
| MAINTENANCE OF EFFORT (MOE-LEA) (A-R) | |
| • Amounts in excess (Reduce level) | 300.205(a). |
| • Exception to | 300.204. |
| • Maintenance of effort and early intervening services (see appendix D) | |
| • Maintenance of effort—LEA | 300.203. |
| • Non-reduction of (State enforcement) | 300.608. |
| • Public benefits or insurance proceeds are not MOE | 300.154(g)(2). |
| Ο See “Methods of ensuring services”. | |
| MAINTENANCE OF EFFORT (MOE-LEA) (S-Z) | |
| • SEA flexibility | 300.230(a). |
| • State enforcement (SEA must prohibit LEA from reducing MOE) | 300.608. |
| MAINTENANCE OF STATE FINANCIAL SUPPORT | 300.163. |
| • Reduction of funds for failure to maintain support | 300.163(b). |
| • Subsequent years (Regarding a waiver) | 300.163(d). |
| • Waivers: Exceptional or uncontrollable circumstances | 300.163(c). |
| MANIFESTATION DETERMINATION (See “Discipline”) | 300.530(e). |
| McKINNEY-VENTO HOMELESS ASSISTANCE ACT | |
| • In definition of “Homeless children” | 300.19. |
| • In filing a State complaint | 300.153(b)(4)(iii). |
| • SEA responsibility for general supervision (Regarding homeless children) | 300.149(a)(3). |
| • State advisory panel (Membership) | 300.168(a)(5). |
| • Surrogate parents (Homeless child's rights protected | 300.519(a)(4). |
| MEDIATION (A-O) | |
| • Benefits of (Meeting to explain) | 300.506(b)(2)(ii). |
| • Confidential discussions | 300.506(b)(6)(i). |
| • Cost of (Borne by State) | 300.506(b)(4). |
| • Disinterested party (To meet with parents and schools | 300.506(b)(2). |
| • Disputes (Resolve through mediation) | 300.506(a). |
| • Legally binding agreement | 300.506(b)(6). |
| • Mediation procedures (By public agency to allow parties to resolve disputes) | 300.506(a). |
| • Mediators: | |
| Ο Impartiality of | 300.506(c). |
| Ο List of | 300.506(b)(3)(i). |
| Ο Qualified and impartial (see § 300.506(b)(1)(iii)). | |
| • Meeting to explain benefits of | 300.506(b)(2)(ii). |
| • Not used as evidence in hearing | 300.506(b)(8). |
| • Not used to deny/delay right to hearing | 300.506(b)(1)(ii), |
| • Opportunity to meet | 30.506(b)(2). |
| MEDIATION (P-Z) | |
| • Parent training and information center | 300.506(b)(2)(i). |
| • Procedural safeguards notice | 300.504(c)(6). |
| • Random selection of mediators | 300.506(b)(3)(ii). |
| • Use of SEA allocations to establish | 300.704(b)(3)(ii). |
| • Voluntary | 300.506(b)(1)(i). |
| • Written mediation agreement | 300.506(b)(7). |
| MEDICAID | |
| • Children covered by public benefits or insurance | 300.154(d)(1). |
| • Construction (Nothing alters requirements imposed under Titles XIX or XXI) | 300.154(h). |
| • Financial responsibility of each non-educational public agency (e.g., State Medicaid) | 300.154(a)(1). |
| • LEA high cost fund (Disbursements not medical assistance under State Medicaid) | 300.704(c)(8). |
| • Medicaid reimbursement not disqualified because service in school context | 300.154(b)(1)(ii). |
| • Methods of ensuring services (see § 300.154(a)(1), (b)(1)(ii), (d), (g)(2), (h)) | |
| • Proceeds from public or private insurance | 300.154(g)(1). |
| • Public agency may use Medicaid | 300.154(a)(1). |
| • State Medicaid, etc., must precede financial responsibility of LEA | 300.154(a)(1). |
| MEDICAL (A-L) | |
| • Assistance under other Federal programs | 300.186. |
| • Assistive technology device (Does not include a surgically implanted medical device) | 300.5. |
| • LEA high cost fund (Disbursements not medical assistance under State Medicaid) | 300.704(c)(8). |
| MEDICAL (M-Q) | |
| • Medical services in (“Related services”): | |
| Ο Audiology (Referral for) | 300.34(c)(1)(ii). |
| Ο Definition of | 300.34(c)(5). |
| Ο For diagnostic purposes | 300.34(a). |
| Ο Speech-language pathology (Referral for) | 300.34(c)(15)(iii). |
| • Medical supplies, etc. (Memo of agreement between HHS and Interior) | 300.708(i)(2). |
| • Non-medical (Residential placement) | 300.104. |
| MEDICAL (R-Z) | |
| • Referral for medical services: | |
| Ο Audiology | 300.34(c)(1)(ii). |
| Ο Speech-language pathology services | 300.34(c)(15)(iii). |
| • Related services: Exception; surgically implanted devices (“Cochlear implants”) | 300.34(b). |
| • Routine checking of hearing aids and other devices | 300.113. |
| • SLD: Educationally relevant medical findings, if any | 300.311(a)(4). |
| MEDICATION | |
| • Prohibition on mandatory medication | 300.174. |
| MEETING(S) | |
| • Alternative means of meeting participation | 300.328. |
| • Consolidation of IEP Team meetings | 300.324(a)(5). |
| • Equitable services determined (Parentally-placed private school CWDs) | 300.137. |
| • IEP Team meetings (See “IEP”). | |
| • Mediation (Opportunity to meet) | 300.506(b)(2). |
| • Opportunity to examine records; participation in IEP Team meetings | 300.501. |
| • Parent participation in meetings (see § 300.506(b)(2), (b)(4)). | |
| • Private school placements by public agencies | 300.325. |
| • Reviewing and revising IEPs (Private school placements) | 300.325(b). |
| • Services plan for private school children (Meetings) | 300.137(c)(1). |
| METHODS OF ENSURING SERVICES | 300.154. |
| MIGRANT CHILDREN | |
| • Child find | 300.111(c)(2). |
| • Records regarding migratory children (Linkage with ESEA) | 300.213. |
| MINIMUM STATE COMPLAINT PROCEDURES | 300.152. |
| • See “Complaints,” “State complaint procedures”. | |
| MONITOR; MONITORING ACTIVITIES (A-N) | |
| • Allowable costs for monitoring | 300.704(b)(3)(i). |
| • Children placed in private schools by public agencies | 300.147(a). |
| • Implementation by SEA | 300.147(a). |
| • LRE (SEA monitoring activities) | 300.120. |
| • Monitoring activities (LRE) | 300.120. |
| • Monitoring—Enforcement (Subpart F) | 300.600. |
| Ο Rule of construction (Use any authority under GEPA to monitor) | 300.609. |
| Ο Secretary's review and determination regarding State performance | 300.603(b)(1). |
| Ο State exercise of general supervision | 300.600(d)(2). |
| Ο State use of targets and reporting | 300.602(a), (b)(1). |
| MONITOR; MONITORING ACTIVITIES (O-Z) | |
| • Outlying areas, etc. (see § 300.701(a)(1)(ii)). | |
| • Private school children: SEA monitoring | 300.147(a). |
| • SEA responsibility for general supervision | 300.149(b). |
| • Secretary of the Interior | 300.708. |
| • State advisory panel functions (Advise SEA on corrective action plans) | 300.169(d). |
| • Use of SEA allocations for monitoring | 300.704(b)(3)(i). |
| • Waiver (State's procedures for monitoring) | 300.164(c)(2)(ii)(B). |
| Ο Summary of monitoring reports | 300.164(c)(3). |
| MULTIPLE DISABILITIES (Definition) | 300.8(c)(7). |
| NATIONAL INSTRUCTIONAL MATERIALS ACCESS CENTER (NIMAC) | 300.172(e)(1)(ii). |
| NATIONAL INSTRUCTIONAL MATERIALS ACCESSIBILITY STANDARDS (NIMAS) | 300.172(e)(1)(iii). |
| • See also appendix C. | |
| NATIVE LANGUAGE | |
| • Confidentiality (Notice to parents) | 300.612(a)(1). |
| • Definition | 300.29. |
| • Definition of “Consent” | 300.9. |
| • Evaluation procedures (Tests in native language) | 300.304(c)(1)(ii). |
| • Notice to parents: Confidentiality (In native language) | 300.612(a)(1). |
| • Prior notice: | |
| Ο Notice in native language | 300.503(c)(1)(ii). |
| Ο Notice translated orally | 300.503(c)(2)(i). |
| Ο Steps if not a written language | 300.503(c)(2). |
| NATURE/LOCATION OF SERVICES (Direct services by SEA) | 300.227. |
| NEPHRITIS (In “Other health impairment”) | 300.8(c)(9)(i). |
| NIMAC (See “National Instructional Materials Access Center”) | |
| NIMAS (See “National Instructional Materials Accessibility Standard”) | |
| NONACADEMIC | |
| • Activities: Participate in (IEP content) | 300.320(a)(4)(ii). |
| • Services and extracurricular activities (Equal opportunity to participate in) | 300.107(a). |
| • Settings | 300.117. |
| NONCOMMINGLING | 300.162(b). |
| NONDISABLED (Children; students) (A-P) | |
| • At no cost (In definition of “special education”) | 300.39(b)(1). |
| • Disciplinary information | 300.229(a). |
| • Excess cost requirement | 300.202(b). |
| • IEP (definition) (see § 300.320(a)(1)(i), (a)(4)(iii), (a)(5)) | |
| • LRE (General requirement) | 300.114. |
| • Nonacademic settings | 300.117. |
| • Placement | 300.116. |
| • Program options | 300.110. |
| NONDISABLED (Children; students) (R-Z) | |
| • Regular physical education | 300.108(b). |
| • Services and aids that also benefit nondisabled children | 300.208(a)(1). |
| • Special education (Definition: In definition of “at no cost”) | 300.39(b)(1). |
| • Supplementary aids and services | 300.42. |
| • Suspension and expulsion rates | 300.170(a)(2). |
| NONEDUCATIONAL (Public agency) | |
| • Medicaid service (May not be disqualified because in school context) | 300.154(b)(1)(ii). |
| • Methods of ensuring services (see § 300.154(a), (b)) | |
| • Obligation of | 300.154(b). |
| • Reimbursement for services by | 300.154(b)(2). |
| NON-MEDICAL CARE (Residential placement) | 300.104. |
| NONSUPPLANTING | |
| • Excess cost requirement (Regarding children aged 3 through 5 and 18 through 21) | 300.202(b)(1)(ii). |
| • LEA nonsupplanting | 300.202(b)(1)(ii). |
| • SEA flexibility | 300.230(a). |
| • State-level activities (Inapplicability of certain provisions) | 300.704(d). |
| • State-level nonsupplanting | 300.162(c). |
| • Waiver of requirement | 300.164. |
| NOTICES: By parents or parties | |
| • Attorneys' fees: When court reduces fee award regarding due process request notice | 300.517(c)(4)(iv). |
| • Children enrolled by parents in private schools when FAPE is at issue | 300.148(d)(1)(i). |
| • Due process complaint (Notice before a hearing on a complaint) | 300.508(c). |
| • Private school placement by parents (When FAPE is at issue) | 300.148(d)(1)(i). |
| NOTICES: Public agency (A-M) | |
| • By-pass (Judicial review) | 300.197. |
| • Children's rights (Transfer of rights) | 300.625(c). |
| • Confidentiality (Notice to parents) | 300.612. |
| • Department procedures (Notice to States) | 300.179. |
| Ο See “Judicial review” | 300.184. |
| • Discipline (Notification) | 300.530(h). |
| • Exception to FAPE (Graduation) | 300.102(a)(3). |
| • Hearings relating to LEA eligibility | 300.155. |
| • IEP meetings (Parent participation) | 300.322(b). |
| • Judicial review: If State dissatisfied with eligibility determination | 300.184. |
| • LEA and State agency compliance | 300.222. |
| Ο Notification in case of ineligibility | 300.221(b). |
| NOTICES: Public agency (N-P) | |
| • Notice before a hearing on a due process complaint | 300.508(c). |
| • Notice and hearing before State ineligible | 300.179. |
| • Notice in understandable language | 300.503(c). |
| • Notification of LEA in case of ineligibility | 300.221(b). |
| • Parent participation in meetings | 300.501(b)(2). |
| • Prior notice by public agency | 300.503. |
| • Private school placement by parents when FAPE is at issue (Public agency notice) | 300.148(d)(2). |
| • Procedural safeguards notice | 300.504. |
| • Public attention | 300.606. |
| • Public participation (Notice of hearings) | 300.165(a). |
| NOTICES: Public agency (Q-Z) | |
| • Secretary of the Interior (Submission of information) | 300.708(g). |
| • Secretary's review and determination of State performance | 300.603(b)(2). |
| • Transfer of parental rights | 300.520(a)(1)(i). |
| • Use of electronic mail | 300.505. |
| • Withholding funds | 300.605. |
| OCCUPATIONAL THERAPY | 300.34(c)(6). |
| OPPORTUNITY TO EXAMINE RECORDS | 300.501. |
| ORIENTATION AND MOBILITY SERVICES | 300.34(c)(7). |
| ORTHOPEDIC IMPAIRMENT | 300.8(c)(8). |
| OTHER HEALTH IMPAIRMENT | 300.8(c)(9). |
| OTHER INDIVIDUALS ON IEP TEAM | 300.321(a)(6). |
| OUTLYING AREAS—FREELY ASSOCIATED STATES | |
| • Allocations to States (General) | 300.703(a). |
| • Annual description of use of funds | 300.171(c). |
| • Definitions applicable to allotments, grants and use of funds: | |
| Ο Freely associated States | 300.717(a). |
| Ο Outlying areas | 300.717(b). |
| • Definition of “State” (Includes “Outlying areas”) | 300.40. |
| • Outlying areas and freely associated States | 300.701. |
| • Purpose of grants | 300.700(a). |
| OUT-OF-POCKET EXPENSE (Public benefits or insurance) | 300.154(d)(2)(ii). |
| PARAPROFESSIONALS | |
| In “Personnel qualifications” | 300.156(b). |
| PARENT (Definition) | 300.30. |
| PARENT: RIGHTS AND PROTECTIONS (A-G) | |
| • Appeal (Manifestation determination) | 300.532. |
| • Confidentiality (Authority to inspect and review records) | 300.613(c). |
| • Consent (See “Consent”) | |
| • Counseling and training (Definition) | 300.34(c)(8). |
| • Definition of “Parent” | 300.30. |
| Ο Foster parent | 300.30(a)(2). |
| Ο Grandparent or stepparent | 300.30(a)(4). |
| Ο Guardian | 300.30(a)(3). |
| PARENT: RIGHTS AND PROTECTIONS (H-N) | |
| • Independent educational evaluation | 300.502. |
| Ο Parent-initiated evaluations | 300.502(c). |
| Ο Parent right to evaluation at public expense | 300.502(b). |
| • IEP and parent involvement: | |
| Ο Copy of child's IEP | 300.322(f). |
| Ο Informed of child's progress | 300.320(a)(3)(ii). |
| Ο Option to invite other individuals | 300.321(a)(6). |
| Ο Participation in meetings | 300.322. |
| Ο Team member | 300.321(a)(1). |
| • Informed consent (Accessing private insurance) | 300.154(e)(1). |
| • Involvement in placement decisions | 300.501(c). |
| • Meetings (Participation in) | 300.501(b). |
| • Notice to public agency: | |
| Ο Before a hearing on a due process complaint | 300.508(c). |
| Ο Before removing child from public school | 300.148(d)(1)(ii). |
| Ο Timeline for requesting a hearing | 300.511(e). |
| • Exceptions to timeline | 300.511(f). |
| Ο Opportunity to examine records | 300.501(a). |
| PARENT: RIGHTS AND PROTECTIONS (O-Z) | |
| • Parent counseling and training | 300.34(c)(8). |
| • Placement decisions (Involvement in) | 300.501(c). |
| • Request for hearing (Discipline) | 300.532(a). |
| • Right to an independent educational evaluation | 300.502(b). |
| PARENTAL CONSENT (See “Consent”) | |
| PARENTALLY-PLACED PRIVATE SCHOOL CHILDREN WITH DISABILITIES (A-E) | |
| • Annual count of the number of | 300.133(c). |
| • Bypass (see §§ 300.190 through 300.198) | |
| • Child find for | 300.131. |
| • Calculating proportionate amount | 300.133(b). |
| • Compliance | 300.136. |
| • Consultation with private schools | 300.134. |
| • Written affirmation | 300.135. |
| • Definition of | 300.130. |
| • Due process complaints and State complaints | 300.140. |
| • Equitable services determined | 300.137. |
| Ο Equitable services provided | 300.138. |
| • Expenditures | 300.133. |
| Ο Formula | 300.133(a). |
| PARENTALLY-PLACED PRIVATE SCHOOL CHILDREN WITH DISABILITIES (F-R) | |
| • No individual right to special education and related services | 300.137(a). |
| • Property, equipment, and supplies | 300.144. |
| • Proportionate share of funds | 300.134(b). |
| Ο See “Appendix B—Proportionate Share Calculation” | |
| • Provision of equitable services | 300.138(c). |
| • Religious schools (see §§ 300.131(a), 300.137(c), 300.139(a)) | |
| • Requirement that funds not benefit a private school | 300.141. |
| PARENTALLY-PLACED PRIVATE SCHOOL CHILDREN WITH DISABILITIES (S-T) | |
| • Separate classes prohibited | 300.143. |
| • Services on private school premises | 300.139(a). |
| • Services plan (Definition) | 300.37. |
| Ο For each child served under §§ 300.130 through 300.144 | 300.137(c). |
| Ο See also §§ 300.132(b), 300.138(b), 300.140(a) | |
| • State eligibility requirement | 300.129. |
| • Transportation (Cost of) | 300.139(b)(2). |
| PARENTALLY-PLACED PRIVATE SCHOOL CHILDREN WITH DISABILITIES (U-Z) | |
| • Use of personnel: | |
| Ο Private school personnel | 300.142(b). |
| Ο Public school personnel | 300.142(a). |
| • Written affirmation | 300.135. |
| • Written explanation by LEA regarding services | 300.134(e). |
| PARTICIPATING AGENCY | |
| • Confidentiality provisions: | |
| Ο Definition of participating agency | 300.611(c). |
| Ο See also §§ 300.613(c), 300.614, 300.616, 300.618, 300.623 | |
| • IEP requirements (Transition services) | 300.324(c). |
| PENDENCY (Stay put) | |
| • Child's status during due process proceedings | 300.518. |
| • Placement during appeals (Discipline) | 300.533. |
| • Procedural safeguards notice | 300.504(c)(7). |
| PERFORMANCE GOALS AND INDICATORS | |
| • Assess progress toward achieving goals | 300.157(c). |
| • Establishment of goals | 300.157. |
| • Other State level activities | 300.814(c). |
| • Performance goals and indicators | 300.157. |
| • State monitoring and enforcement | 300.600(c). |
| • State performance plans and data collection | 300.601. |
| PERFORMANCE; PERFORMANCE PLANS (STATE) | |
| • Enforcement | 300.604. |
| • Public reporting and privacy | 300.602(b). |
| • Secretary's review and determination regarding State performance | 300.603. |
| • State performance plans and data collection | 300.601. |
| • State performance report | 300.602(b)(2). |
| • State use of targets and reporting | 300.602. |
| Ο Public reporting | 300.602(b)(1). |
| Ο State performance report | 300.602(b)(2). |
| PERMISSIVE USE OF FUNDS (LEAs) | |
| • Administrative case management | 300.208(b). |
| • Early intervening services | 300.208(a)(2). |
| • High cost education and related services | 300.208(a)(3). |
| • Permissive use of funds | 300.208. |
| • Services and aids that also benefit nondisabled children | 300.208(a)(1). |
| PERSONALLY IDENTIFIABLE (PI) INFORMATION (A-H) | |
| • Confidentiality of (State eligibility requirement) | 300.123. |
| • Consent (confidentiality) | 300.622(a). |
| • Data collection (State performance plans) | 300.601(b)(3). |
| • Definition of “personally identifiable” | 300.32. |
| • Department use of information | 300.627. |
| • Destruction: | |
| Ο Definition of | 300.611(a). |
| Ο Destruction of information | 300.624. |
| • Hearing decisions to advisory panel and the public | 300.513(d). |
| PERSONALLY IDENTIFIABLE (PI) INFORMATION (I-Z) | |
| • Notice to parents (Confidentiality): | |
| Ο Children on whom PI information is maintained | 300.612(a)(2). |
| Ο Policies and procedures regarding disclosure to third parties, etc. | 300.612(a)(3). |
| • Participating agency (Definition) | 300.611(c). |
| • Protection of PI information | 300.642(a). |
| • See also § 300.610 | |
| • Safeguards (Protect PI information) | 300.623. |
| PERSONNEL QUALIFICATIONS | 300.156. |
| PERSONNEL SHORTAGES | |
| • Use of SEA allocations to meet | 300.704(b)(4)(vii). |
| PHYSICAL EDUCATION | |
| • Definition | 300.39(b)(2). |
| • State eligibility requirement | 300.108. |
| PHYSICAL THERAPY (Definition) | 300.34(c)(9). |
| PLACEMENT(S) (A-Co) | |
| • Adult prisons (CWDs in): | |
| Ο Last educational placement before incarceration | 300.102(a)(2)(i). |
| Ο Modifications to IEPs and placements | 300.324(d)(2). |
| • Alternative means of meeting participation (Regarding “Placement meetings”) | 300.328. |
| • Change in placement: Graduation | 300.102(a)(3)(iii). |
| • Child's placement during pendency of any complaint | 300.504(c)(7). |
| Ο See also “Pendency” (Child's status during proceedings) | 300.518. |
| • Children with disabilities in adult prisons: Placements regarding (see §§ 300.102(a)(2)(i), 300.324(d)(2)) | |
| • Continuum of alternative placements (Continuum—LRE) | 300.115. |
| PLACEMENT(S) (Cu-L) | |
| • Current placement (see § 300.530(b)((2), (d)) | |
| • Current “Educational placement:” | |
| Ο Change of placements because of disciplinary removals | 300.536. |
| Ο Child's status during proceedings | 300.518(a). |
| • Disciplinary changes in placement | 300.530(c). |
| • Discipline procedures and placements (see §§ 300.530 through 300.536) | |
| • Educational placements (Parents in any group that makes placement decisions) | 300.327. |
| • Graduation: A change in placement (Exception to FAPE) | 300.102(a)(3)(iii). |
| • Last educational placement (Before incarceration) | 300.102(a)(2)(i). |
| • Least restrictive environment (LRE) (see §§ 300.114 through 300.120) | |
| • Notification: LEA must notify parents of decision to change placement | 300.530(h). |
| PLACEMENT(S) (O-Z) | |
| • Pendency (Child's status during proceedings) | 300.518. |
| Placement of children by parents if FAPE is at issue | 300.148. |
| • Placements (LRE) | 300.116. |
| • Requirements for unilateral placement by parents of CWDs in private schools (In “Procedural safeguards notice”) | 300.504(c)(9). |
| • State funding mechanism (Must not result in placements that violate LRE) | 300.114(b)(1). |
| POLICY: POLICIES AND PROCEDURES | |
| • Condition of assistance (LEA eligibility) | 300.200. |
| Ο Consistency with State policies | 300.201. |
| Ο See also §§ 300.200 through 300.213 | |
| • Eligibility for assistance (State) | 300.100. |
| • Exception for prior policies on file: | |
| Ο With the SEA | 300.220. |
| Ο With the Secretary | 300.176(a). |
| • FAPE policy | 300.101(a). |
| • Joint establishment of eligibility (Requirements) | 300.223. |
| • Modifications of: | |
| Ο LEA or State agency policies | 300.220(b). |
| Ο Required by Secretary | 300.176(c). |
| Ο State policies (By a State) | 300.176(b). |
| • Public participation | 300.165. |
| • Secretary of the Interior | 300.708. |
| Ο Public participation | 300.709. |
| Ο Submission of information | 300.708. |
| PREPONDERANCE OF EVIDENCE | |
| • Civil action | 300.516(c)(3). |
| PRESCHOOL GRANTS | |
| • Allocations to LEAs | 300.816. |
| Ο Subgrants to LEAs | 300.815. |
| • Other State-level activities | 300.814. |
| Ο Provide early intervention services in accordance with Part C of the Act | 300.814(e). |
| Ο Service coordination or case management | 300.814(f). |
| • State administration | 300.813. |
| • Use of funds for administration of Part C | 300.813(b). |
| PRIOR NOTICE | |
| • By public agency | 300.503. |
| • Notice required before a hearing on a due process complaint | 300.508(c). |
| • Procedural safeguards notice | 300.504. |
| PRISONS (See “Adult prisons”) | |
| PRIVATE INSURANCE | |
| • Children with disabilities who are covered by | 300.154(e). |
| Ο Proceeds from public benefits or insurance or private insurance | 300.154(g). |
| Ο Use of Part B funds | 300.154(f). |
| PRIVATE SCHOOLS AND FACILITIES | |
| • Applicability of this part to State and local agencies: | |
| Ο CWDs placed in private schools by parents under § 300.148 | 300.2(c)(2). |
| Ο CWDs referred to or placed in private schools by public agency | 300.2(c)(1). |
| PRIVATE SCHOOL CHILDREN ENROLLED BY THEIR PARENTS | |
| • Placement of children by parents when FAPE is at issue | 300.148. |
| • See “Parentally-placed private school children with disabilities” | |
| PRIVATE SCHOOL PLACEMENTS BY PUBLIC AGENCIES (A-D) | |
| • Applicability of this part to private schools | 300.2(c)(1). |
| • Applicable standards (SEA to disseminate to private schools involved) | 300.147(b). |
| PRIVATE SCHOOL PLACEMENTS BY PUBLIC AGENCIES (E-Z) | |
| • Implementation by SEA (Must monitor, provide standards, etc.) | 300.147. |
| • Monitor compliance | 300.147(a). |
| • Input by private schools (Provide for) | 300.147(c). |
| • Responsibility of SEA | 300.146. |
| PROCEDURAL SAFEGUARDS: DUE PROCESS PROCEDURES (A-C) | |
| • Additional disclosure of information (5 business days before hearing) | 300.512(b). |
| • Agency responsible for conducting hearing | 300.511(b). |
| • Appeal of hearing decisions; impartial review | 300.514(b). |
| • Attorneys' fees | 300.517. |
| • Child's status during proceedings | 300.518. |
| • Civil action | 300.516. |
| • Consent (Definition) | 300.9. |
| • Court (See “Court(s)”) | |
| PROCEDURAL SAFEGUARDS: DUE PROCESS PROCEDURES (D-H) | |
| • Electronic mail (Parent may elect to receive notices by) | 300.505. |
| • Evaluation (Definition) | 300.15. |
| • Evaluations: Hearing officer requests for | 300.502(d). |
| • Finality of decision; appeal; impartial review | 300.514. |
| • Findings and decision to advisory panel and public | 300.513(d). |
| • Hearing rights | 300.512. |
| PROCEDURAL SAFEGUARDS: DUE PROCESS PROCEDURES (I-Pa) | |
| • Impartial due process hearing | 300.511. |
| • Impartial hearing officer | 300.511(c). |
| • Impartiality of mediator | 300.506(c). |
| • Independent educational evaluation | 300.502. |
| Ο Definition | 300.502(a)(3)(i). |
| • Jurisdiction of district courts | 300.516(d). |
| Ο See “Court(s)” | |
| • Mediation | 300.506. |
| Ο Opportunity to meet with a disinterested party | 300.506(b)(2). |
| • Model form to assist parties in filing a due process or State complaint | 300.509. |
| • Notice required before a hearing on a due process complaint | 300.508(c). |
| • Opportunity to examine records | 300.501(a). |
| • Parental consent | 300.300. |
| • Parent-initiated evaluations | 300.502(c). |
| • Parent involvement in placement decisions | 300.501(c). |
| • Parent participation in meetings | 300.501(b). |
| • Parental rights at hearings | 300.512(c). |
| • Parent right to evaluation at public expense | 300.502(b). |
| Ο Public expense (Definition) | 300.502(a)(3)(ii). |
| PROCEDURAL SAFEGUARDS: DUE PROCESS PROCEDURES (Pe-Z) | |
| • Pendency | 300.518. |
| • Personally identifiable (Definition) | 300.32. |
| • Prior notice by public agency | 300.503. |
| • Procedural safeguards notice | 300.504. |
| • Prohibition on introduction of undisclosed evidence 5 business days before hearing | 300.512(a)(3). |
| • Record of hearing | 300.512(a)(4). |
| • Resolution process | 300.510. |
| • SEA implementation of | 300.150. |
| • See “Civil Action Proceedings,” “Court(s),” “Hearing Officer(s),” “Timelines” | |
| • Surrogate parents | 300.519. |
| • Timelines and convenience of hearings | 300.515. |
| • Transfer of parental rights at age of majority | 300.520. |
| PROCEDURAL SAFEGUARDS NOTICE | 300.504. |
| • Internet Web site (Notice on) | 300.504(b). |
| PROCEEDS FROM PUBLIC BENEFITS OR INSURANCE OR PRIVATE INSURANCE | 300.154(g). |
| PROGRAM INCOME (Not treated as proceeds from insurance) | 300.154(g.) |
| PROGRAM MODIFICATIONS OR SUPPORTS (IEP content) | 300.320(a)(4). |
| PROPORTIONATE SHARE CALCULATION (See appendix B) | |
| PROTECTIONS FOR CHILDREN NOT DETERMINED ELIGIBLE (Discipline) | 300.534. |
| PSYCHOLOGICAL SERVICES (Definition) | 300.34(c)(10). |
| PUBLIC AGENCY (Definition) | 300.33. |
| PUBLIC BENEFITS OR INSURANCE | 300.154(d). |
| PUBLIC BENEFITS OR INSURANCE OR PRIVATE INSURANCE (Proceeds from) | 300.154(g). |
| PUBLIC CHARTER SCHOOLS (See “Charter schools”) | |
| PUBLIC EXPENSE (Definition under IEE) | 300.502(a)(3)(ii). |
| PUBLIC HEARINGS (On policies) | |
| • State eligibility | 300.165(a). |
| • Secretary of the Interior | 300.708(g). |
| PUBLIC INFORMATION (LEA) | 300.212. |
| PUBLIC NOTICE | |
| • LEA and State agency compliance | 300.222(b). |
| • Public attention (If State has received a notice under § 300.603) | 300.606. |
| PURPOSES (Of this Part 300) | 300.1. |
| QUALIFIED PERSONNEL | 300.156. |
| • Related services definitions (see § 300.34(c)(2), (c)(5), (c)(6), (c)(7), (c)(9), (c)(12), (c)(13)). | |
| RATE OF INFLATION (In the Consumer Price Index for All Urban Consumers) (see §§ 300.702(b), 300.704(a)(2)(ii), 300.704(b)(2), 300.812(b)(2)). | |
| REALLOCATION OF LEA FUNDS (If SEA determines LEA adequately providing FAPE) (see §§ 300.705(c), 300.817)). | |
| RECORDS (A-D) | |
| • Access rights (Parents' right to inspect) | 300.613. |
| Ο Fees for records | 300.617. |
| Ο Records on more than one child | 300.615. |
| • Civil action (Court shall receive records) | 300.516(c)(1). |
| • Conducting IEP Team meetings without parents (Records of attempts to convince parents) | 300.322(d). |
| Confidentiality (See “Confidentiality”) | |
| • Consent to release records | 300.622(b). |
| Disciplinary records: | |
| Ο Determination that behavior not manifestation | 300.530(e). |
| Ο Disciplinary information | 300.229(c). |
| Ο Referral to and action by law enforcement and judicial authorities | 300.535. |
| RECORDS (E-Z) | |
| • Education records (Definition) | 300.611(b). |
| • Of parentally-placed private school CWDs (LEA to SEA) | 300.132(c). |
| • Opportunity to examine records | 300.501(a). |
| • Procedural safeguards notice (Access to education records) | 300.504(c)(4). |
| • Record of access | 300.614. |
| • See also “Transfer during academic year” | |
| RECREATION (Definition) | 300.34(c)(11). |
| REDUCTION OF FUNDS FOR FAILURE TO MAINTAIN SUPPORT | 300.163(b). |
| REEVALUATION | |
| • Frequency of occurrence | 300.303(b). |
| • Parental consent required before conducting | 300.300(c)(1). |
| Ο If parent fails to consent | 300.300(c)(1)(ii). |
| • Parental consent not required for: | |
| Ο Administering a test that all children take | 300.300(d)(1)(ii). |
| Ο Reviewing existing data | 300.300(d)(1)(i). |
| • Parent refusal to consent | 300.300(c)(1)(ii). |
| • Review of existing evaluation data | 300.305(a). |
| • Revision of IEP (To address reevaluation) | 300.324(b)(1)(ii). |
| REFERRAL (A-M) | |
| • Discipline: | |
| Ο Referral to and action by law enforcement and judicial authorities | 300.535. |
| Ο Protections for children not determined eligible | 300.534. |
| • Enforcement (Referral for) | 300.604(b)(2)(vi). |
| • Indian children (Referral for services or further diagnosis) | 300.712(d)(2). |
| • Medical attention (Referral for): | |
| Ο Audiology | 300.34(c)(1)(ii). |
| Ο Speech-language pathology services | 300.34(c)(15)(iii). |
| REFERRAL (N-Z) | |
| • Nonacademic and extracurricular services (Referral to agencies regarding assistance to individuals with disabilities) | 300.107(b). |
| • Prior notice (If not initial referral for evaluation) | 300.503(b)(4). |
| • Private school placement when FAPE is at issue (Reimbursement when no referral by public agency) | 300.148(c). |
| • Procedural safeguards notice (Upon initial referral for evaluation) | 300.504(a)(1). |
| • Referral to and action by law enforcement and judicial authorities | 300.535. |
| REGULAR EDUCATION TEACHER | |
| • Access to IEP | 300.323(d). |
| • IEP Team member | 300.321(a)(2). |
| • Participate in IEP development | 300.324(a)(3). |
| Ο Behavioral interventions | 300.324(a)(3)(i). |
| Ο Supplementary aids and services | 300.324(a)(3)(ii). |
| REGULATIONS | |
| • Applicable regulations (Secretary of the Interior) | 300.716. |
| • Applicability of this part to State, local, and private agencies | 300.2. |
| REHABILITATION | |
| • Assistive technology service (see § 300.6(d), (f)) | |
| • Rehabilitation Act of 1973 (see §§ 300.34(c)(12), 300.516(e)) | |
| • Rehabilitation counseling services: | |
| Ο Definition | 300.34(c)(12). |
| Ο In vocational rehabilitation (VR) programs | 300.34(c)(12). |
| • Transition services (State VR agency responsibility) | 300.324(c)(2). |
| REHABILITATION COUNSELING SERVICES | 300.34(c)(12). |
| REIMBURSEMENT | |
| • Methods of ensuring services (see § 300.154(a)(3), (b)(1)(ii), (b)(2), (g)(2)) | |
| • Private school placement when FAPE is at issue: | |
| Ο Limitation on reimbursement | 300.148(d). |
| Ο Reimbursement for private school placement | 300.148(c). |
| Ο Subject to due process procedures | 300.148(b). |
| • Reimbursement by non-educational public agency | 300.154(b)(2). |
| • Reimbursement by SEA to LEA | 300.704(c)(7). |
| RELATED SERVICES | |
| • Definition | 300.34. |
| • Observations by teachers and related services providers regarding existing evaluation data | 300.305(a)(1)(iii). |
| RELATION OF PART B TO OTHER FEDERAL PROGRAMS | 300.186. |
| RELIGIOUS SCHOOLS | |
| • Child find for parentally-placed private school children | 300.131(a). |
| • Child find for out-of-State children | 300.131(f). |
| • Formula for LEA expenditures on | 300.133(a). |
| • See “Parentally-placed private school children with disabilities” | |
| • Services plan for each child served | 300.137(c). |
| • Services provided on-site | 300.139(a). |
| REMEDIES FOR DENIAL OF APPROPRIATE SERVICES | 300.151(b). |
| REPORTS (A-C) | |
| • Annual report of children served | 300.640. |
| Ο See also §§ 300.641 through 300.646 | |
| • Annual report to Secretary of Interior by advisory board on Indian children | 300.715(a). |
| • Biennial report (Indian tribes) | 300.712(e). |
| • Child count (Annual report of children served) | 300.641. |
| REPORTS (D-Z) | |
| • Evaluation reports to parents | 300.306(a)(2). |
| • Monitoring compliance of publicly placed children in private schools ( | 300.147(a). |
| • Monitoring reports (Waiver of nonsupplanting requirement) | 300.164(c)(3). |
| • Performance goals (Progress reports) | 300.157(c). |
| • Secretary's report to States regarding 25% of funds | 300.812(b). |
| REPORT CARDS | 300.320(a)(3)(ii). |
| REPORTING A CRIME to law enforcement and judicial authorities | 300.535. |
| RESIDENTIAL PLACEMENTS | 300.104. |
| REVOKE CONSENT AT ANY TIME (In definition of “Consent”) | 300.9(c)(1). |
| RHEUMATIC FEVER | 300.8(c)(9)(i). |
| RISK OF LOSS OF ELIGIBILITY FOR INSURANCE | 300.154(d)(2)(iii)(D). |
| SCHOOL DAY | |
| • Definition | 300.11(c). |
| • See “Timelines,” “Timelines—Discipline” | |
| SCHOOL HEALTH SERVICES AND SCHOOL NURSE SERVICES | 300.34(c)(13). |
| SCHOOL PERSONNEL | |
| • Content of IEP | 300.320(a)(4). |
| • Development, review, and revision of IEP | 300.324(a)(4). |
| • Disciplinary authority | 300.530. |
| • Use of private school personnel | 300.142(b). |
| • Use of public school personnel | 300.142(a). |
| SCHOOLWIDE PROGRAMS | 300.206. |
| SEA RESPONSIBILITY | |
| • For all education programs | 300.149. |
| • For direct services | 300.227. |
| • For each parentally-placed private school child designated to receive services | 300.132(b). |
| • For impartial review | 300.514(b)(2). |
| • Prohibition of LEA from reducing maintenance of effort | 300.608. |
| SECRETARY | |
| • Determination that a State is eligible | 300.178. |
| • Notice and hearing before determining that a State is not eligible | 300.179. |
| • Waiver of nonsupplanting requirement | 300.164. |
| SECRETARY OF THE INTERIOR | |
| • Advisory board establishment | 300.714. |
| Ο Annual report by advisory board | 300.715. |
| • Biennial report (By tribe or tribal organization) | 300.712(e). |
| • Eligibility (see §§ 300.708 through 300.716) | |
| • Payments for: | |
| Ο Children aged 3 through 5 | 300.712. |
| Ο Child find and screening | 300.712(d). |
| • Plan for coordination of services | 300.713. |
| • Use of funds for early intervening services | 300.711. |
| SEPARATION—DIVORCE (Authority to review records) | 300.613(c). |
| SERVICES PLAN for parentally-placed private school children (see §§ 300.132(b), 300.137(c) 300.138(b)) | |
| SERVICES THAT ALSO BENEFIT NONDISABLED CHILDREN | 300.208(a)(1). |
| SHORTAGE OF PERSONNEL (Policy to address) | 300.704(b)(4)(vii). |
| SHORT TERM OBJECTIVES OR BENCHMARKS | 300.320(a)(2)(ii). |
| SHOULD HAVE KNOWN (Regarding due process complaint) | 300.511(e). |
| SHOW CAUSE HEARING | 300.194. |
| • Decision | 300.195. |
| • Implementation of by-pass (see §§ 300.192(b)(2), 300.193) | |
| • Right to legal counsel | 300.194(a)(3). |
| SICKLE CELL ANEMIA | 300.8(c)(9)(i). |
| SLD (See “Specific Learning Disability”) | |
| SOCIAL WORK SERVICES IN SCHOOLS (Definition) | 300.34(b)(14). |
| SPECIAL FACTORS (IEP Team) | 300.324(a)(2). |
| SPECIAL EDUCATION (Definition) | 300.39. |
| SPECIAL EDUCATION PROVIDER | 300.321(a)(3). |
| SPECIAL EDUCATION TEACHER | |
| • IEP accessible to | 300.323(d). |
| • On IEP Team | 300.321(a)(3). |
| • Requirements regarding highly qualified | 300.18. |
| SPECIAL RULE | |
| • Adjustments to local efforts | 300.205(d). |
| • For child's eligibility determination | 300.306(b). |
| • For increasing funds | 300.704(e). |
| • Methods of ensuring services | 300.154(c). |
| • LEA high cost fund | 300.704(c). |
| • Regarding outlying areas and freely associated States | 300.701(a)(3). |
| • Regarding transfer of rights | 300.520(b). |
| • Regarding use of FY 1999 amount | 300.703(b). |
| • State advisory panel (Parent members) | 300.168(b). |
| SPECIFIC LEARNING DISABILITY | |
| • Definition | 300.8(c)(10). |
| • Evaluation requirements and report (see §§ 300.306(a), 300.307 through 300.311) | |
| • Other alternative research-based procedures | 300.307(a)(3). |
| • Response to scientific, research-based intervention (see §§ 300.307(a)(2), 300.309(a)(2)(i), 300.311(a)(7)) | |
| • Scientifically based research: | |
| Ο Definition | 300.35. |
| Ο Enforcement | 300.604(a)(1)(ii). |
| • Severe discrepancy | 300.307(a)(1). |
| SPEECH-LANGUAGE PATHOLOGY SERVICES | |
| • Definition | 300.34(b)(15). |
| • Speech or language impairment (Definition) | 300.8(c)(11). |
| STATE | |
| • Definition | 300.40. |
| • Special definition for grants | 300.717(c). |
| • Sovereign immunity | 300.177. |
| STATE ADMINISTRATION (Use of funds for) (see §§ 300.704(a), 300.812(a)). | |
| STATE ADVISORY PANEL | 300.167 |
| • Due process hearings (Findings and decisions to State advisory panel) (see §§ 300.513(d)(1), 300.514(c)(1)) | |
| • Duties | 300.169. |
| • Establishment | 300.167. |
| • Membership | 300.168. |
| • Waiver of nonsupplant requirement (State has consulted with advisory panel regarding provision of FAPE) | 300.164(c)(4). |
| STATE AGENCIES | |
| • Applicability of Part B to other State agencies | 300.2(b)(1)(iii). |
| • Compliance (LEA and State agency) | 300.222. |
| • Eligibility (LEA and State agency): | |
| Ο General conditions (see §§ 300.200 through 300.213) | |
| • Notification of LEA or State agency in case of ineligibility | 300.221. |
| • State advisory panel (Membership) | 300.168. |
| • State agency eligibility | 300.228. |
| • State Medicaid agency | 300.154(a)(1), (h). |
| STATE COMPLAINT PROCEDURES (see §§ 300.151 through 300.153) | |
| • See “Complaint(s): State complaint procedures” | |
| STATE ELIGIBILITY | |
| • Condition of assistance | 300.100. |
| • Department procedures (see §§ 300.178 through 300.186) | |
| • Determination of eligibility (By the Secretary) | 300.178. |
| • General conditions | 300.100. |
| • Notice and hearing before determining that a State is not eligible | 300.179. |
| • Specific conditions (see §§ 300.101 through 300.176) | |
| STATE JUVENILE AND ADULT CORRECTIONAL FACILITIES | 300.2(b)(1)(iv). |
| • See also “Correctional facilities,” “Adult prisons” | |
| STATE-LEVEL ACTIVITIES (With Part B funds) | 300.704. |
| STATE-LEVEL NONSUPPLANTING | 300.162(c). |
| • Waiver by Secretary | 300.162(c)(2). |
| • Waiver of requirement | 300.164. |
| STATE MAINTENANCE OF EFFORT | 300.163. |
| SUBGRANT(S) | |
| • State agency eligibility | 300.228. |
| • To LEAs | 300.705(a). |
| STATE MEDICAID AGENCY | |
| • Methods of ensuring services | 300.154(a)(1). |
| • See also “Medicaid” | |
| STATE SCHOOLS | |
| • Applicability of this part to schools for children with deafness or blindness | 300.2(b)(1)(iii). |
| STATE VOCATIONAL REHABILITATION AGENCY (See “Rehabilitation”) | |
| STATES' SOVEREIGN IMMUNITY | 300.177. |
| STAY-PUT (Child's status during proceedings) | 300.518. |
| • See also “Pendency” | |
| SUBSTANTIAL LIKELIHOOD OF INJURY (Discipline) | 300.532(a). |
| SUPPLEMENTARY AIDS AND SERVICES | |
| • Definition | 300.42. |
| • IEP content | 300.320(a)(4). |
| • In “assistive technology” | 300.105(a)(3). |
| • LRE requirements | 300.114(a)(2)(ii). |
| • Methods of ensuring services | 300.154(b). |
| • Requirement regarding regular education teacher (IEP) | 300.324(a)(3)(ii). |
| • Services that also benefit nondisabled children | 300.208(a)(1). |
| SUPPLEMENT—NOT SUPPLANT | |
| • LEA requirement | 300.202(a)(3). |
| • State level nonsupplanting | 300.162(c). |
| • See “Nonsupplanting” | |
| SUPPORT SERVICES (see §§ 300.704(b)(4)(i)), 300.814(a)) | |
| SURGICALLY IMPLANTED MEDICAL DEVICE (see §§ 300.5, 300.34(b), 300.113(b)) | |
| SURROGATE PARENTS | 300.519. |
| • Appointed for homeless youth | 300.519(f). |
| • In definition of “Parent” | 300.30(a)(5). |
| • Timeline for assignment | 300.519(h). |
| SUSPENSION (EXPULSION) | |
| • Alternative programming for children expelled | 300.704(b)(4)(ix). |
| • Provision of FAPE | 300.101(a). |
| • Suspension and expulsion rates | 300.170(a). |
| • Suspension or expulsion without services | 300.534(d)(2)(ii). |
| TEACHERS | |
| See “Regular education teacher” | |
| See “Special education teacher” | |
| TECHNICAL ASSISTANCE (Amounts to support) | 300.702. |
| TECHNICALLY SOUND INSTRUMENTS (Evaluation) | 300.304(b)(3). |
| TERMINATION OF AGENCY OBLIGATION to provide special education to a particular child (Exception to MOE) | 300.204(c). |
| THERAPEUTIC RECREATION | 300.34(b)(11)(ii). |
| TIMELINES (A-D) | |
| • Access rights (Confidentiality: 45 days) | 300.613(a). |
| • Annual report of children served (Between Oct. 1 and Dec. 1) | 300.641(a). |
| • Annual count of parentally-placed private school children (Between Oct. 1 and Dec. 1) | 300.133(c). |
| • Assignment of surrogate parent (Not more than 30 days) | 300.519(h). |
| • Attorneys' fees (10 days prohibition) | 300.517(c)(2)(i). |
| • Complaint procedures (State: 60 days) | 300.152(a). |
| • Department hearing procedures (30 days) | 300.179(b)(3). |
| Ο See also §§ 300.181 through 300.184 | |
| • Due process hearings and reviews (see §§ 300.510(b)(2), 300.511(e), (f)): | |
| Ο Conducted within 20 school days; decision within 10 school days | 300.532(c)(2). |
| Ο Decision within 45 days after expiration of 30 day period | 300.515(a). |
| Ο Disclose evaluations before hearings (5 business days) | 300.512(a)(3). |
| TIMELINES (E-H) | |
| • Hearing procedures (State eligibility: 30 days) | 300.179(b)(3). |
| • Hearing rights: | |
| Ο Disclosure of evaluations (At least 5 business days before hearing) | 300.512(b)(1). |
| Ο Prohibit introduction of evidence not disclosed (At least 5 business days before hearing) | 300.512(a)(3). |
| Ο Reviews (Decision not later than 30 days) | 300.515(b). |
| TIMELINES (I-Z) | |
| • IEP (Initial meeting: 30 days) | 300.323(c)(1). |
| • Initial evaluation (60 days) | 300.301(c)(1). |
| • Parent notice before private placement (At least 10 business days) | 300.148(d)(2). |
| • Show cause hearing | 300.194(g). |
| • Decision | 300.195(a)(1). |
| • State eligibility: Department hearing procedures (see §§ 300.179(b)(3), 300.181(b), 300.182(d), (e), (g), (k), 300.184) | |
| • Timelines and convenience of hearings and reviews | 300.515. |
| TIMELINES—DISCIPLINE (A-P) | |
| • Authority of hearing officer (May order change of placement for not more than 45 school days) | 300.532(b)(2)(ii). |
| • Authority of school personnel: | |
| Ο Change of placement for not more than 45 consecutive days for weapons or drugs | 300.530(g). |
| Ο Removal of a child for not more than 10 school days | 300.530(b). |
| • Change of placement for disciplinary removals: | |
| Ο Of more than 10 consecutive school days | 300.536(a)(1). |
| Ο Because series of removals total more than 10 school days | 300.536(a)(2)(i). |
| • Due process hearing request | 300.507(a)(2). |
| • Expedited due process hearings: | |
| Ο Conducted within 20 days | 300.532(c)(2). |
| Ο Decision within 10 days | 300.532(c)(3)(i). |
| • Hearing officer (Order change of placement for not more than 45 days) | 300.532(b)(2)(ii). |
| • Manifestation determination review (Conducted in no more than 10 school days) | 300.530(e). |
| • Placement during appeals (Not longer than 45 days) | 300.532(b)(2)(ii). |
| TIMELINES—DISCIPLINE (Q-Z) | |
| • Removals for not more than: | |
| Ο 10 school days (By school personnel) | 300.530(b). |
| Ο 45 days (To interim alternative educational setting) | 300.532(b)(2)(ii). |
| By hearing officer (For substantial likelihood of injury to child or others) | 300.532(b)(2)(ii). |
| By school personnel (For weapons or drugs) (see § 300.530(g)(1), (g)(2)) | |
| TIMETABLE: Full educational opportunity goal (FEOG) | 300.109. |
| TRAINING | |
| • Assistive technology services (see § 300.6(e), (f)) | |
| • Confidentiality procedures (Personnel using personally identifiable information must receive training) | 300.623(c). |
| • Parent counseling and training | 300.34(b)(8). |
| • Technical assistance and training for teachers and administrators | 300.119. |
| • Travel training (see § 300.39(a)(2)(ii), (b)(4)) | |
| TRANSFER DURING ACADEMIC YEAR | |
| • Assessments coordinated between public agencies | 300.304(c)(5). |
| • New school district responsibilities (see § 300.323(e), (f)) | |
| • Transmittal of records | 300.323(g). |
| TRANSFER OF PARENTAL RIGHTS | 300.520. |
| • IEP requirement | 300.320(c). |
| • Special rule | 300.520(b). |
| • To children in correctional institutions | 300.520(a)(2). |
| TRANSITION FROM PART C TO PART B | 300.124. |
| TRANSITION SERVICES (NEEDS) | |
| • Agency responsibilities for (see §§ 300.321(b)(3), 300.324(c)(2)) | |
| • Alternative strategies | 300.324(c)(1). |
| • Child participation in IEP Team meetings | 300.321(b)(1). |
| • Definition | 300.43. |
| • IEP requirement (Statement of) | |
| Ο Transition service needs | 300.320(b). |
| Ο Needed transition services | 300.43(b). |
| • State rehabilitation agency | 300.324(c)(2). |
| TRANSMITTAL OF RECORDS TO LAW ENFORCEMENT AND JUDICIAL AUTHORITIES | 300.535(b). |
| TRANSPORTATION | |
| • Definition | 300.34(c)(16). |
| • Nonacademic services | 300.107(b). |
| • Of private school children | 300.139(b). |
| TRAUMATIC BRAIN INJURY (Definition) | 300.8(c)(12). |
| TRAVEL TRAINING (see § 300.39(a)(2)(ii), (b)(4)) | |
| • Definition | 300.39(b)(4). |
| TREATMENT OF CHARTER SCHOOLS AND THEIR STUDENTS | 300.209. |
| TREATMENT OF FEDERAL FUNDS IN CERTAIN YEARS | 300.205. |
| UNIVERSAL DESIGN | |
| • Definition | 300.44. |
| • Support technology with universal design principles | 300.704(b)(4)(v). |
| USE OF AMOUNTS (LEA) | 300.202. |
| USE OF FUNDS BY LEAs | |
| • Coordinated services system | 300.208(a)(2). |
| • For school-wide programs | 300.206. |
| • For services and aids that also benefit nondisabled children | 300.208(a)(1). |
| • For use in accordance with Part B | 300.705. |
| USE OF FUNDS BY STATES (SEAs) (A-C) | |
| • Administering Part B State activities | 300.704(a)(1). |
| • Administering Part C (If SEA is Lead Agency) | 300.704(a)(4). |
| • Administrative costs of monitoring and complaint investigations | 300.704(b)(3)(i). |
| • Allowable costs | 300.704(b)(3). |
| • Amount for State administration | 300.704(a) |
| • Annual description of use of Part B funds | 300.171. |
| • Assist LEAs in meeting personnel shortages | 300.704(b)(4)(vii). |
| • Complaint investigations | 300.704(b)(3)(i). |
| • Coordination of activities with other programs | 300.704(b)(1). |
| USE OF FUNDS BY STATES (SEAs) (D-Z) | |
| • Direct and support services | 300.704(b)(4)(i). |
| • High cost fund | 300.704(c). |
| • Mediation process | 300.704(b)(3)(ii). |
| • Monitoring | 300.704(b)(3)(i). |
| • Personnel preparation, professional development and training (see § 300.704(b)(4)(i), (b)(4)(xi)). | |
| • State plan | 300.704(c)(3)(i). |
| • Statewide coordinated services system | 300.814(d). |
| • Support and direct services | 300.704(b)(4)(i). |
| • Technical assistance: | |
| Ο To LEAs | 300.704(b)(4)(xi). |
| Ο To other programs that provide services | 300.704(a)(1). |
| USE OF FUNDS BY SECRETARY OF THE INTERIOR (see §§ 300.707 through 300.716) | |
| • By Indian tribes: | |
| Ο For child find for children aged 3 throught 5 | 300.712(d). |
| Ο For coordination of assistance for services | 300.712(a). |
| • For administrative costs | 300.710(a). |
| USE OF SEA ALLOCATIONS | 300.704. |
| • Inapplicability of requirements that prohibit commingling and supplanting of funds | 300.704(d). |
| VISUAL IMPAIRMENT INCLUDING BLINDNESS (Definition) | 300.8(c)(13). |
| VOCATIONAL EDUCATION | |
| • Definition | 300.39(b)(5). |
| • In definition of “Special education” | 300.39(a)(2)(iii). |
| • Program options | 300.110. |
| • Transition services | 300.320(b)(1). |
| VOCATIONAL REHABILITATION (See “Rehabilitation”) | |
| VOLUNTARY DEPARTURE OF PERSONNEL | |
| (Exception to LEA maintenance of effort) | 300.204(a). |
| WAIVER(S) | |
| • For exceptional and uncontrollable circumstances (State maintenance of effort) | 300.163(c). |
| • “In whole or in part” | 300.164(e). |
| • Public benefits or insurance (Risk of loss of eligibility for home and community-based waivers) | 300.154(d)(2)(iii)(D). |
| • State-level nonsupplanting | 300.162(c). |
| • State maintenance of effort | 300.163. |
| • State's procedures for monitoring | 300.164(c)(2)(ii)(B). |
| • Waiver procedures | 300.164. |
| WARD OF THE STATE | |
| • Appointment of surrogate parent | 300.519(c). |
| • Definition | 300.45. |
| • See definition of “Parent” | 300.30(a)(3). |
| • See “Surrogate parents” | 300.519(a)(3). |
| WEAPON (Definition) | 300.530(i)(4). |
| WHEN IEPS MUST BE IN EFFECT | 300.323. |
The purpose of this part is to provide financial assistance to States to—
(a) Develop and implement a statewide, comprehensive, coordinated, multidisciplinary, interagency system that provides early intervention services for infants and toddlers with disabilities and their families;
(b) Facilitate the coordination of payment for early intervention services from Federal, State, local, and private sources (including public and private insurance coverage);
(c) Enhance State capacity to provide quality early intervention services and expand and improve existing early intervention services being provided to infants and toddlers with disabilities and their families;
(d) Enhance the capacity of State and local agencies and service providers to identify, evaluate, and meet the needs of all children, including historically underrepresented populations, particularly minority, low-income, inner-city, and rural children, and infants and toddlers in foster care; and
(e) Encourage States to expand opportunities for children under three years of age who would be at risk of having substantial developmental delay if they did not receive early intervention services.
(a) Eligible recipients of an award. Eligible recipients include the 50 States, the Commonwealth of Puerto Rico, the District of Columbia, the Secretary of the Interior, and the following jurisdictions: Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
(b) Applicability of this part. (1) The provisions of this part apply to—
(i) The State lead agency and any EIS provider that is part of the statewide system of early intervention, regardless of whether that EIS provider receives funds under part C of the Act; and
(ii) All children referred to the part C program, including infants and toddlers with disabilities consistent with the definitions in §§ 303.6 and 303.21, and their families.
(2) The provisions of this part do not apply to any child with a disability receiving a free appropriate public education or FAPE under 34 CFR part 300.
(a) The following regulations apply to this part:
(1) The regulations in this part 303.
(2) EDGAR, including 34 CFR parts 76 (except for § 76.103), 77, 79, 81, 82, 84, and 86.
(3) The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, as adopted in part 3474, and the OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted in 2 CFR part 3485.
(b) In applying the regulations cited in paragraph (a)(2) of this section, any reference to—
(1) State educational agency means the lead agency under this part; and
(2) Education records or records means early intervention records.
Act means the Individuals with Disabilities Education Act, as amended.
At-risk infant or toddler means an individual under three years of age who would be at risk of experiencing a substantial developmental delay if early intervention services were not provided to the individual. At the State's discretion, at-risk infant or toddler may include an infant or toddler who is at risk of experiencing developmental delays because of biological or environmental factors that can be identified (including low birth weight, respiratory distress as a newborn, lack of oxygen, brain hemorrhage, infection, nutritional deprivation, a history of abuse or neglect, and being directly affected by illegal substance abuse or withdrawal symptoms resulting from prenatal drug exposure).
Child means an individual under the age of six and may include an infant or toddler with a disability, as that term is defined in § 303.21.
Consent means that—
(a) The parent has been fully informed of all information relevant to the activity for which consent is sought, in the parent's native language, as defined in § 303.25;
(b) The parent understands and agrees in writing to the carrying out of the activity for which the parent's consent is sought, and the consent form describes that activity and lists the early intervention records (if any) that will be released and to whom they will be released; and
(c)(1) The parent understands that the granting of consent is voluntary on the part of the parent and may be revoked at any time.
(2) If a parent revokes consent, that revocation is not retroactive (i.e., it does not apply to an action that occurred before the consent was revoked).
Council means the State Interagency Coordinating Council that meets the requirements of subpart G of this part.
Day means calendar day, unless otherwise indicated.
Developmental delay, when used with respect to a child residing in a State, has the meaning given that term by the State under § 303.111.
Early intervention service program or EIS program means an entity designated by the lead agency for reporting under §§ 303.700 through 303.702.
(a) Early intervention service provider or EIS provider means an entity (whether public, private, or nonprofit) or an individual that provides early intervention services under part C of the Act, whether or not the entity or individual receives Federal funds under part C of the Act, and may include, where appropriate, the lead agency and a public agency responsible for providing early intervention services to infants and toddlers with disabilities in the State under part C of the Act.
(b) An EIS provider is responsible for—
(1) Participating in the multidisciplinary individualized family service plan (IFSP) Team's ongoing assessment of an infant or toddler with a disability and a family-directed assessment of the resources, priorities, and concerns of the infant's or toddler's family, as related to the needs of the infant or toddler, in the development of integrated goals and outcomes for the IFSP;
(2) Providing early intervention services in accordance with the IFSP of the infant or toddler with a disability; and
(3) Consulting with and training parents and others regarding the provision of the early intervention services described in the IFSP of the infant or toddler with a disability.
(a) General. Early intervention services means developmental services that—
(1) Are provided under public supervision;
(2) Are selected in collaboration with the parents;
(3) Are provided at no cost, except, subject to §§ 303.520 and 303.521, where Federal or State law provides for a system of payments by families, including a schedule of sliding fees;
(4) Are designed to meet the developmental needs of an infant or toddler with a disability and the needs of the family to assist appropriately in the infant's or toddler's development, as identified by the IFSP Team, in any one or more of the following areas, including—
(i) Physical development;
(ii) Cognitive development;
(iii) Communication development;
(iv) Social or emotional development; or
(v) Adaptive development;
(5) Meet the standards of the State in which the early intervention services are provided, including the requirements of part C of the Act;
(6) Include services identified under paragraph (b) of this section;
(7) Are provided by qualified personnel (as that term is defined in § 303.31), including the types of personnel listed in paragraph (c) of this section;
(8) To the maximum extent appropriate, are provided in natural environments, as defined in § 303.26 and consistent with §§ 303.126 and 303.344(d); and
(9) Are provided in conformity with an IFSP adopted in accordance with section 636 of the Act and § 303.20.
(b) Types of early intervention services. Subject to paragraph (d) of this section, early intervention services include the following services defined in this paragraph:
(1) Assistive technology device and service are defined as follows:
(i) Assistive technology device means any item, piece of equipment, or product system, whether acquired commercially off the shelf, modified, or customized, that is used to increase, maintain, or improve the functional capabilities of an infant or toddler with a disability. The term does not include a medical device that is surgically implanted, including a cochlear implant, or the optimization (e.g., mapping), maintenance, or replacement of that device.
(ii) Assistive technology service means any service that directly assists an infant or toddler with a disability in the selection, acquisition, or use of an assistive technology device. The term includes—
(A) The evaluation of the needs of an infant or toddler with a disability, including a functional evaluation of the infant or toddler with a disability in the child's customary environment;
(B) Purchasing, leasing, or otherwise providing for the acquisition of assistive technology devices by infants or toddlers with disabilities;
(C) Selecting, designing, fitting, customizing, adapting, applying, maintaining, repairing, or replacing assistive technology devices;
(D) Coordinating and using other therapies, interventions, or services with assistive technology devices, such as those associated with existing education and rehabilitation plans and programs;
(E) Training or technical assistance for an infant or toddler with a disability or, if appropriate, that child's family; and
(F) Training or technical assistance for professionals (including individuals providing education or rehabilitation services) or other individuals who provide services to, or are otherwise substantially involved in the major life functions of, infants and toddlers with disabilities.
(2) Audiology services include—
(i) Identification of children with auditory impairments, using at-risk criteria and appropriate audiologic screening techniques;
(ii) Determination of the range, nature, and degree of hearing loss and communication functions, by use of audiological evaluation procedures;
(iii) Referral for medical and other services necessary for the habilitation or rehabilitation of an infant or toddler with a disability who has an auditory impairment;
(iv) Provision of auditory training, aural rehabilitation, speech reading and listening devices, orientation and training, and other services;
(v) Provision of services for prevention of hearing loss; and
(vi) Determination of the child's individual amplification, including selecting, fitting, and dispensing appropriate listening and vibrotactile devices, and evaluating the effectiveness of those devices.
(3) Family training, counseling, and home visits means services provided, as appropriate, by social workers, psychologists, and other qualified personnel to assist the family of an infant or toddler with a disability in understanding the special needs of the child and enhancing the child's development.
(4) Health services has the meaning given the term in § 303.16.
(5) Medical services means services provided by a licensed physician for diagnostic or evaluation purposes to determine a child's developmental status and need for early intervention services.
(6) Nursing services include—
(i) The assessment of health status for the purpose of providing nursing care, including the identification of patterns of human response to actual or potential health problems;
(ii) The provision of nursing care to prevent health problems, restore or improve functioning, and promote optimal health and development; and
(iii) The administration of medications, treatments, and regimens prescribed by a licensed physician.
(7) Nutrition services include—
(i) Conducting individual assessments in—
(A) Nutritional history and dietary intake;
(B) Anthropometric, biochemical, and clinical variables;
(C) Feeding skills and feeding problems; and
(D) Food habits and food preferences;
(ii) Developing and monitoring appropriate plans to address the nutritional needs of children eligible under this part, based on the findings in paragraph (b)(7)(i) of this section; and
(iii) Making referrals to appropriate community resources to carry out nutrition goals.
(8) Occupational therapy includes services to address the functional needs of an infant or toddler with a disability related to adaptive development, adaptive behavior, and play, and sensory, motor, and postural development. These services are designed to improve the child's functional ability to perform tasks in home, school, and community settings, and include—
(i) Identification, assessment, and intervention;
(ii) Adaptation of the environment, and selection, design, and fabrication of assistive and orthotic devices to facilitate development and promote the acquisition of functional skills; and
(iii) Prevention or minimization of the impact of initial or future impairment, delay in development, or loss of functional ability.
(9) Physical therapy includes services to address the promotion of sensorimotor function through enhancement of musculoskeletal status, neurobehavioral organization, perceptual and motor development, cardiopulmonary status, and effective environmental adaptation. These services include—
(i) Screening, evaluation, and assessment of children to identify movement dysfunction;
(ii) Obtaining, interpreting, and integrating information appropriate to program planning to prevent, alleviate, or compensate for movement dysfunction and related functional problems; and
(iii) Providing individual and group services or treatment to prevent, alleviate, or compensate for, movement dysfunction and related functional problems.
(10) Psychological services include—
(i) Administering psychological and developmental tests and other assessment procedures;
(ii) Interpreting assessment results;
(iii) Obtaining, integrating, and interpreting information about child behavior and child and family conditions related to learning, mental health, and development; and
(iv) Planning and managing a program of psychological services, including psychological counseling for children and parents, family counseling, consultation on child development, parent training, and education programs.
(11) Service coordination services has the meaning given the term in § 303.34.
(12) Sign language and cued language services include teaching sign language, cued language, and auditory/oral language, providing oral transliteration services (such as amplification), and providing sign and cued language interpretation.
(13) Social work services include—
(i) Making home visits to evaluate a child's living conditions and patterns of parent-child interaction;
(ii) Preparing a social or emotional developmental assessment of the infant or toddler within the family context;
(iii) Providing individual and family-group counseling with parents and other family members, and appropriate social skill-building activities with the infant or toddler and parents;
(iv) Working with those problems in the living situation (home, community, and any center where early intervention services are provided) of an infant or toddler with a disability and the family of that child that affect the child's maximum utilization of early intervention services; and
(v) Identifying, mobilizing, and coordinating community resources and services to enable the infant or toddler with a disability and the family to receive maximum benefit from early intervention services.
(14) Special instruction includes—
(i) The design of learning environments and activities that promote the infant's or toddler's acquisition of skills in a variety of developmental areas, including cognitive processes and social interaction;
(ii) Curriculum planning, including the planned interaction of personnel, materials, and time and space, that leads to achieving the outcomes in the IFSP for the infant or toddler with a disability;
(iii) Providing families with information, skills, and support related to enhancing the skill development of the child; and
(iv) Working with the infant or toddler with a disability to enhance the child's development.
(15) Speech-language pathology services include—
(i) Identification of children with communication or language disorders and delays in development of communication skills, including the diagnosis and appraisal of specific disorders and delays in those skills;
(ii) Referral for medical or other professional services necessary for the habilitation or rehabilitation of children with communication or language disorders and delays in development of communication skills; and
(iii) Provision of services for the habilitation, rehabilitation, or prevention of communication or language disorders and delays in development of communication skills.
(16) Transportation and related costs include the cost of travel and other costs that are necessary to enable an infant or toddler with a disability and the child's family to receive early intervention services.
(17) Vision services mean—
(i) Evaluation and assessment of visual functioning, including the diagnosis and appraisal of specific visual disorders, delays, and abilities that affect early childhood development;
(ii) Referral for medical or other professional services necessary for the habilitation or rehabilitation of visual functioning disorders, or both; and
(iii) Communication skills training, orientation and mobility training for all environments, visual training, and additional training necessary to activate visual motor abilities.
(c) Qualified personnel. The following are the types of qualified personnel who provide early intervention services under this part:
(1) Audiologists.
(2) Family therapists.
(3) Nurses.
(4) Occupational therapists.
(5) Orientation and mobility specialists.
(6) Pediatricians and other physicians for diagnostic and evaluation purposes.
(7) Physical therapists.
(8) Psychologists.
(9) Registered dieticians.
(10) Social workers.
(11) Special educators, including teachers of children with hearing impairments (including deafness) and teachers of children with visual impairments (including blindness).
(12) Speech and language pathologists.
(13) Vision specialists, including ophthalmologists and optometrists.
(d) Other services. The services and personnel identified and defined in paragraphs (b) and (c) of this section do not comprise exhaustive lists of the types of services that may constitute early intervention services or the types of qualified personnel that may provide early intervention services. Nothing in this section prohibits the identification in the IFSP of another type of service as an early intervention service provided that the service meets the criteria identified in paragraph (a) of this section or of another type of personnel that may provide early intervention services in accordance with this part, provided such personnel meet the requirements in § 303.31.
Elementary school means a nonprofit institutional day or residential school, including a public elementary charter school, that provides elementary education, as determined under State law.
Free appropriate public education or FAPE, as used in §§ 303.211, 303.501, and 303.521, means special education and related services that—
(a) Are provided at public expense, under public supervision and direction, and without charge;
(b) Meet the standards of the State educational agency (SEA), including the requirements of part B of the Act;
(c) Include an appropriate preschool, elementary school, or secondary school education in the State involved; and
(d) Are provided in conformity with an individualized education program (IEP) that meets the requirements of 34 CFR 300.320 through 300.324.
(a) Health services mean services necessary to enable an otherwise eligible child to benefit from the other early intervention services under this part during the time that the child is eligible to receive early intervention services.
(b) The term includes—
(1) Such services as clean intermittent catheterization, tracheostomy care, tube feeding, the changing of dressings or colostomy collection bags, and other health services; and
(2) Consultation by physicians with other service providers concerning the special health care needs of infants and toddlers with disabilities that will need to be addressed in the course of providing other early intervention services.
(c) The term does not include—
(1) Services that are—
(i) Surgical in nature (such as cleft palate surgery, surgery for club foot, or the shunting of hydrocephalus);
(ii) Purely medical in nature (such as hospitalization for management of congenital heart ailments, or the prescribing of medicine or drugs for any purpose); or
(iii) Related to the implementation, optimization (e.g., mapping), maintenance, or replacement of a medical device that is surgically implanted, including a cochlear implant.
(A) Nothing in this part limits the right of an infant or toddler with a disability with a surgically implanted device (e.g., cochlear implant) to receive the early intervention services that are identified in the child's IFSP as being needed to meet the child's developmental outcomes.
(B) Nothing in this part prevents the EIS provider from routinely checking that either the hearing aid or the external components of a surgically implanted device (e.g., cochlear implant) of an infant or toddler with a disability are functioning properly;
(2) Devices (such as heart monitors, respirators and oxygen, and gastrointestinal feeding tubes and pumps) necessary to control or treat a medical condition; and
(3) Medical-health services (such as immunizations and regular “well-baby” care) that are routinely recommended for all children.
Homeless children means children who meet the definition given the term homeless children and youths in section 725 (42 U.S.C. 11434a) of the McKinney-Vento Homeless Assistance Act, as amended, 42 U.S.C. 11431 et seq.
Include or including means that the items named are not all of the possible items that are covered, whether like or unlike the ones named.
(a) Indian means an individual who is a member of an Indian tribe.
(b) Indian tribe means any Federal or State Indian tribe, band, rancheria, pueblo, colony, or community, including any Alaska Native village or regional village corporation (as defined in or established under the Alaska Native Claims Settlement Act, 43 U.S.C. 1601 et seq.).
(c) Nothing in this definition is intended to indicate that the Secretary of the Interior is required to provide services or funding to a State Indian Tribe that is not listed in the
Individualized family service plan or IFSP means a written plan for providing early intervention services to an infant or toddler with a disability under this part and the infant's or toddler's family that—
(a) Is based on the evaluation and assessment described in § 303.321;
(b) Includes the content specified in § 303.344;
(c) Is implemented as soon as possible once parental consent for the early intervention services in the IFSP is obtained (consistent with § 303.420); and
(d) Is developed in accordance with the IFSP procedures in §§ 303.342, 303.343, and 303.345.
(a) Infant or toddler with a disability means an individual under three years of age who needs early intervention services because the individual—
(1) Is experiencing a developmental delay, as measured by appropriate diagnostic instruments and procedures, in one or more of the following areas:
(i) Cognitive development.
(ii) Physical development, including vision and hearing.
(iii) Communication development.
(iv) Social or emotional development.
(v) Adaptive development; or
(2) Has a diagnosed physical or mental condition that—
(i) Has a high probability of resulting in developmental delay; and
(ii) Includes conditions such as chromosomal abnormalities; genetic or congenital disorders; sensory impairments; inborn errors of metabolism; disorders reflecting disturbance of the development of the nervous system; congenital infections; severe attachment disorders; and disorders secondary to exposure to toxic substances, including fetal alcohol syndrome.
(b) Infant or toddler with a disability may include, at a State's discretion, an at-risk infant or toddler (as defined in § 303.5).
(c) Infant or toddler with a disability may include, at a State's discretion, a child with a disability who is eligible for services under section 619 of the Act and who previously received services under this part until the child enters, or is eligible under State law to enter, kindergarten or elementary school, as appropriate, provided that any programs under this part must include—
(1) An educational component that promotes school readiness and incorporates pre-literacy, language, and numeracy skills for children ages three and older who receive part C services pursuant to § 303.211; and
(2) A written notification to parents of a child with a disability who is eligible for services under section 619 of the Act and who previously received services under this part of their rights and responsibilities in determining whether their child will continue to receive services under this part or participate in preschool programs under section 619 of the Act.
Lead agency means the agency designated by the State's Governor under section 635(a)(10) of the Act and § 303.120 that receives funds under section 643 of the Act to administer the State's responsibilities under part C of the Act.
(a) General. Local educational agency or LEA means a public board of education or other public authority legally constituted within a State for either administrative control or direction of, or to perform a service function for, public elementary schools or secondary schools in a city, county, township, school district, or other political subdivision of a State, or for a combination of school districts or counties as are recognized in a State as an administrative agency for its public elementary schools or secondary schools.
(b) Educational service agencies and other public institutions or agencies. The term includes the following:
(1) Educational service agency, defined as a regional public multiservice agency—
(i) Authorized by State law to develop, manage, and provide services or programs to LEAs; and
(ii) Recognized as an administrative agency for purposes of the provision of special education and related services provided within public elementary schools and secondary schools of the State.
(2) Any other public institution or agency having administrative control and direction of a public elementary school or secondary school, including a public charter school that is established as an LEA under State law.
(3) Entities that meet the definition of intermediate educational unit or IEU in section 602(23) of the Act, as in effect prior to June 4, 1997. Under that definition an intermediate educational unit or IEU means any public authority other than an LEA that—
(i) Is under the general supervision of a State educational agency;
(ii) Is established by State law for the purpose of providing FAPE on a regional basis; and
(iii) Provides special education and related services to children with disabilities within the State.
(c) BIE-funded schools. The term includes an elementary school or secondary school funded by the Bureau of Indian Education, and not subject to the jurisdiction of any SEA other than the Bureau of Indian Education, but only to the extent that the inclusion makes the school eligible for programs for which specific eligibility is not provided to the school in another provision of law and the school does not have a student population that is smaller than the student population of the LEA receiving assistance under the Act with the smallest student population.
Multidisciplinary means the involvement of two or more separate disciplines or professions and with respect to—
(a) Evaluation of the child in §§ 303.113 and 303.321(a)(1)(i) and assessments of the child and family in § 303.321(a)(1)(ii), may include one individual who is qualified in more than one discipline or profession; and
(b) The IFSP Team in § 303.340 must include the involvement of the parent and two or more individuals from separate disciplines or professions and one of these individuals must be the service coordinator (consistent with § 303.343(a)(1)(iv)).
(a) Native language, when used with respect to an individual who is limited English proficient or LEP (as that term is defined in section 602(18) of the Act), means—
(1) The language normally used by that individual, or, in the case of a child, the language normally used by the parents of the child, except as provided in paragraph (a)(2) of this section; and
(2) For evaluations and assessments conducted pursuant to § 303.321(a)(5) and (a)(6), the language normally used by the child, if determined developmentally appropriate for the child by qualified personnel conducting the evaluation or assessment.
(b) Native language, when used with respect to an individual who is deaf or hard of hearing, blind or visually impaired, or for an individual with no written language, means the mode of communication that is normally used by the individual (such as sign language, braille, or oral communication).
Natural environments means settings that are natural or typical for a same-aged infant or toddler without a disability, may include the home or community settings, and must be consistent with the provisions of § 303.126.
(a) Parent means—
(1) A biological or adoptive parent of a child;
(2) A foster parent, unless State law, regulations, or contractual obligations with a State or local entity prohibit a foster parent from acting as a parent;
(3) A guardian generally authorized to act as the child's parent, or authorized to make early intervention, educational, health or developmental decisions for the child (but not the State if the child is a ward of the State);
(4) An individual acting in the place of a biological or adoptive parent (including a grandparent, stepparent, or other relative) with whom the child lives, or an individual who is legally responsible for the child's welfare; or
(5) A surrogate parent who has been appointed in accordance with § 303.422 or section 639(a)(5) of the Act.
(b)(1) Except as provided in paragraph (b)(2) of this section, the biological or adoptive parent, when attempting to act as the parent under this part and when more than one party is qualified under paragraph (a) of this section to act as a parent, must be presumed to be the parent for purposes of this section unless the biological or adoptive parent does not have legal authority to make educational or early intervention service decisions for the child.
(2) If a judicial decree or order identifies a specific person or persons under paragraphs (a)(1) through (a)(4) of this section to act as the “parent” of a child or to make educational or early intervention service decisions on behalf of a child, then the person or persons must be determined to be the “parent” for purposes of part C of the Act, except that if an EIS provider or a public agency provides any services to a child or any family member of that child, that EIS provider or public agency may not act as the parent for that child.
Parent training and information center means a center assisted under section 671 or 672 of the Act.
Personally identifiable information means personally identifiable information as defined in 34 CFR 99.3, as amended, except that the term “student” in the definition of personally identifiable information in 34 CFR 99.3 means “child” as used in this part and any reference to “school” means “EIS provider” as used in this part.
As used in this part, public agency means the lead agency and any other agency or political subdivision of the State.
Qualified personnel means personnel who have met State approved or recognized certification, licensing, registration, or other comparable requirements that apply to the areas in which the individuals are conducting evaluations or assessments or providing early intervention services.
Secretary means the Secretary of Education.
(a) General. (1) As used in this part, service coordination services mean services provided by a service coordinator to assist and enable an infant or toddler with a disability and the child's family to receive the services and rights, including procedural safeguards, required under this part.
(2) Each infant or toddler with a disability and the child's family must be provided with one service coordinator who is responsible for—
(i) Coordinating all services required under this part across agency lines; and
(ii) Serving as the single point of contact for carrying out the activities described in paragraphs (a)(3) and (b) of this section.
(3) Service coordination is an active, ongoing process that involves—
(i) Assisting parents of infants and toddlers with disabilities in gaining access to, and coordinating the provision of, the early intervention services required under this part; and
(ii) Coordinating the other services identified in the IFSP under § 303.344(e) that are needed by, or are being provided to, the infant or toddler with a disability and that child's family.
(b) Specific service coordination services. Service coordination services include—
(1) Assisting parents of infants and toddlers with disabilities in obtaining access to needed early intervention services and other services identified in the IFSP, including making referrals to providers for needed services and scheduling appointments for infants and toddlers with disabilities and their families;
(2) Coordinating the provision of early intervention services and other services (such as educational, social, and medical services that are not provided for diagnostic or evaluative purposes) that the child needs or is being provided;
(3) Coordinating evaluations and assessments;
(4) Facilitating and participating in the development, review, and evaluation of IFSPs;
(5) Conducting referral and other activities to assist families in identifying available EIS providers;
(6) Coordinating, facilitating, and monitoring the delivery of services required under this part to ensure that the services are provided in a timely manner;
(7) Conducting follow-up activities to determine that appropriate part C services are being provided;
(8) Informing families of their rights and procedural safeguards, as set forth in subpart E of this part and related resources;
(9) Coordinating the funding sources for services required under this part; and
(10) Facilitating the development of a transition plan to preschool, school, or, if appropriate, to other services.
(c) Use of the term service coordination or service coordination services. The lead agency's or an EIS provider's use of the term service coordination or service coordination services does not preclude characterization of the services as case management or any other service that is covered by another payor of last resort (including Title XIX of the Social Security Act—Medicaid), for purposes of claims in compliance with the requirements of §§ 303.501 through 303.521 (Payor of last resort provisions).
Except as provided in § 303.732(d)(3) (regarding State allotments under this part), State means each of the 50 States, the Commonwealth of Puerto Rico, the District of Columbia, and the four outlying areas and jurisdictions of Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
(a) State educational agency or SEA means the State board of education or other agency or officer primarily responsible for the State supervision of public elementary schools and secondary schools, or, if there is no such officer or agency, an officer or agency designated by the Governor or by State law.
(b) The term includes the agency that receives funds under sections 611 and 619 of the Act to administer the State's responsibilities under part B of the Act.
(a) General. Subject to paragraph (b) of this section, ward of the State means a child who, as determined by the State where the child resides, is—
(1) A foster child;
(2) A ward of the State; or
(3) In the custody of a public child welfare agency.
(b) Exception. Ward of the State does not include a foster child who has a foster parent who meets the definition of a parent in § 303.27.
The Secretary, in accordance with part C of the Act, makes grants to States (from their allotments under section 643 of the Act) to assist each State to maintain and implement a statewide, comprehensive, coordinated, multidisciplinary, interagency system to provide early intervention services for infants and toddlers with disabilities and their families.
In order to be eligible for a grant under part C of the Act for any fiscal year, a State must meet the following conditions:
(a) Assurances regarding early intervention services and a statewide system. The State must provide assurances to the Secretary that—
(1) The State has adopted a policy that appropriate early intervention services, as defined in § 303.13, are available to all infants and toddlers with disabilities in the State and their families, including—
(i) Indian infants and toddlers with disabilities and their families residing on a reservation geographically located in the State;
(ii) Infants and toddlers with disabilities who are homeless children and their families; and
(iii) Infants and toddlers with disabilities who are wards of the State; and
(2) The State has in effect a statewide system of early intervention services that meets the requirements of section 635 of the Act, including policies and procedures that address, at a minimum, the components required in §§ 303.111 through 303.126.
(b) State application and assurances. The State must provide information and assurances to the Secretary, in accordance with subpart C of this part, including—
(1) Information that shows that the State meets the State application requirements in §§ 303.200 through 303.212; and
(2) Assurances that the State also meets the requirements in §§ 303.221 through 303.227.
(c) Approval before implementation. The State must obtain approval by the Secretary before implementing any policy or procedure required to be submitted as part of the State's application in §§ 303.203, 303.204, 303.206, 303.207, 303.208, 303.209, and 303.211.
Each State that receives funds under part C of the Act must ensure that any State rules, regulations, and policies relating to this part conform to the purposes and requirements of this part.
(a) General. A State is not immune under the 11th amendment of the Constitution of the United States from suit in Federal court for a violation of part C of the Act.
(b) Remedies. In a suit against a State for a violation of part C of the Act, remedies (including remedies both at law and in equity) are available for such a violation to the same extent as those remedies are available for such a violation in a suit against any public entity other than a State.
(c) Effective date. Paragraphs (a) and (b) of this section apply with respect to violations that occur in whole or part after October 30, 1990, the date of enactment of the Education of the Handicapped Act Amendments of 1990.
(a) General. If the Secretary determines that a program authorized under part C of the Act will be improved by permitting program funds to be used to acquire appropriate equipment or to construct new facilities or alter existing facilities, the Secretary may allow the use of those funds for those purposes.
(b) Compliance with certain regulations. Any construction of new facilities or alteration of existing facilities under paragraph (a) of this section must comply with the requirements of—
(1) Appendix A of part 36 of title 28, Code of Federal Regulations (commonly known as the “Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities”); or
(2) Appendix A of subpart 101-19.6 of title 41, Code of Federal Regulations (commonly known as the “Uniform Federal Accessibility Standards”).
Each recipient of assistance under part C of the Act must make positive efforts to employ and advance in employment, qualified individuals with disabilities in programs assisted under part C of the Act.
Each statewide system (system) must include, at a minimum, the components described in §§ 303.111 through 303.126.
Each system must include the State's rigorous definition of developmental delay, consistent with §§ 303.10 and 303.203(c), that will be used by the State in carrying out programs under part C of the Act in order to appropriately identify infants and toddlers with disabilities who are in need of services under part C of the Act. The definition must—
(a) Describe, for each of the areas listed in § 303.21(a)(1), the evaluation and assessment procedures, consistent with § 303.321, that will be used to measure a child's development; and
(b) Specify the level of developmental delay in functioning or other comparable criteria that constitute a developmental delay in one or more of the developmental areas identified in § 303.21(a)(1).
Each system must include a State policy that is in effect and that ensures that appropriate early intervention services are based on scientifically based research, to the extent practicable, and are available to all infants and toddlers with disabilities and their families, including—
(a) Indian infants and toddlers with disabilities and their families residing on a reservation geographically located in the State; and
(b) Infants and toddlers with disabilities who are homeless children and their families.
(a) Subject to paragraph (b) of this section, each system must ensure the performance of—
(1) A timely, comprehensive, multidisciplinary evaluation of the functioning of each infant or toddler with a disability in the State; and
(2) A family-directed identification of the needs of the family of the infant or toddler to assist appropriately in the development of the infant or toddler.
(b) The evaluation and family-directed identification required in paragraph (a) of this section must meet the requirements of § 303.321.
Each system must ensure, for each infant or toddler with a disability and his or her family in the State, that an IFSP, as defined in § 303.20, is developed and implemented that meets the requirements of §§ 303.340 through 303.345, and that includes service coordination services, as defined in § 303.34.
Each system must include a comprehensive child find system that meets the requirements in §§ 303.302 and 303.303.
Each system must include a public awareness program that—
(a) Focuses on the early identification of infants and toddlers with disabilities; and
(b) Provides information to parents of infants and toddlers through primary referral sources in accordance with § 303.301.
Each system must include a central directory that is accessible to the general public (i.e., through the lead agency's Web site and other appropriate means) and includes accurate, up-to-date information about—
(a) Public and private early intervention services, resources, and experts available in the State;
(b) Professional and other groups (including parent support, and training and information centers, such as those funded under the Act) that provide assistance to infants and toddlers with disabilities eligible under part C of the Act and their families; and
(c) Research and demonstration projects being conducted in the State relating to infants and toddlers with disabilities.
Each system must include a comprehensive system of personnel development, including the training of paraprofessionals and the training of primary referral sources with respect to the basic components of early intervention services available in the State. A comprehensive system of personnel development—
(a) Must include—
(1) Training personnel to implement innovative strategies and activities for the recruitment and retention of EIS providers;
(2) Promoting the preparation of EIS providers who are fully and appropriately qualified to provide early intervention services under this part; and
(3) Training personnel to coordinate transition services for infants and toddlers with disabilities who are transitioning from an early intervention service program under part C of the Act to a preschool program under section 619 of the Act, Head Start, Early Head Start, an elementary school program under part B of the Act, or another appropriate program.
(b) May include—
(1) Training personnel to work in rural and inner-city areas;
(2) Training personnel in the emotional and social development of young children; and
(3) Training personnel to support families in participating fully in the development and implementation of the child's IFSP; and
(4) Training personnel who provide services under this part using standards that are consistent with early learning personnel development standards funded under the State Advisory Council on Early Childhood Education and Care established under the Head Start Act, if applicable.
(a) General. Each system must include policies and procedures relating to the establishment and maintenance of qualification standards to ensure that personnel necessary to carry out the purposes of this part are appropriately and adequately prepared and trained.
(b) Qualification standards. The policies and procedures required in paragraph (a) of this section must provide for the establishment and maintenance of qualification standards that are consistent with any State-approved or State-recognized certification, licensing, registration, or other comparable requirements that apply to the profession, discipline, or area in which personnel are providing early intervention services.
(c) Use of paraprofessionals and assistants. Nothing in part C of the Act may be construed to prohibit the use of paraprofessionals and assistants who are appropriately trained and supervised in accordance with State law, regulation, or written policy to assist in the provision of early intervention services under part C of the Act to infants and toddlers with disabilities.
(d) Policy to address shortage of personnel. A State may adopt a policy that includes making ongoing good-faith efforts to recruit and hire appropriately and adequately trained personnel to provide early intervention services to infants and toddlers with disabilities, including, in a geographic area of the State where there is a shortage of such personnel, the most qualified individuals available who are making satisfactory progress toward completing applicable course work necessary to meet the standards described in paragraphs (a) and (b) of this section.
Each system must include a single line of responsibility in a lead agency designated or established by the Governor that is responsible for the following:
(a)(1) The general administration and supervision of programs and activities administered by agencies, institutions, organizations, and EIS providers receiving assistance under part C of the Act.
(2) The monitoring of programs and activities used by the State to carry out part C of the Act (whether or not the programs or activities are administered by agencies, institutions, organizations, and EIS providers that are receiving assistance under part C of the Act), to ensure that the State complies with part C of the Act, including—
(i) Monitoring agencies, institutions, organizations, and EIS providers used by the State to carry out part C of the Act;
(ii) Enforcing any obligations imposed on those agencies, institutions, organizations, and EIS providers under part C of the Act and these regulations;
(iii) Providing technical assistance, if necessary, to those agencies, institutions, organizations, and EIS providers;
(iv) Correcting any noncompliance identified through monitoring as soon as possible and in no case later than one year after the lead agency's identification of the noncompliance; and
(v) Conducting the activities in paragraphs (a)(2)(i) through (a)(2)(iv) of this section, consistent with §§ 303.700 through 303.707, and any other activities required by the State under those sections.
(b) The identification and coordination of all available resources for early intervention services within the State, including those from Federal, State, local, and private sources, consistent with subpart F of this part.
(c) The assignment of financial responsibility in accordance with subpart F of this part.
(d) The development of procedures in accordance with subpart F of this part to ensure that early intervention services are provided to infants and toddlers with disabilities and their families under part C of the Act in a timely manner, pending the resolution of any disputes among public agencies or EIS providers.
(e) The resolution of intra- and interagency disputes in accordance with subpart F of this part.
(f) The entry into formal interagency agreements or other written methods of establishing financial responsibility, consistent with § 303.511, that define the financial responsibility of each agency for paying for early intervention services (consistent with State law) and procedures for resolving disputes and that include all additional components necessary to ensure meaningful cooperation and coordination as set forth in subpart F of this part.
Each system must include a policy pertaining to the contracting or making of other arrangements with public or private individuals or agency service providers to provide early intervention services in the State, consistent with the provisions of part C of the Act, including the contents of the application, and the conditions of the contract or other arrangements. The policy must—
(a) Include a requirement that all early intervention services must meet State standards and be consistent with the provisions of this part; and
(b) Be consistent with 2 CFR part 200, as adopted at 2 CFR part 3474.
Each system must include procedures for securing the timely reimbursement of funds used under part C of the Act, in accordance with subpart F of this part.
Each system must include procedural safeguards that meet the requirements of subpart E of this part.
(a) Each statewide system must include a system for compiling and reporting timely and accurate data that meets the requirements in paragraph (b) of this section and §§ 303.700 through 303.702 and 303.720 through 303.724.
(b) The data system required in paragraph (a) of this section must include a description of the process that the State uses, or will use, to compile data on infants or toddlers with disabilities receiving early intervention services under this part, including a description of the State's sampling methods, if sampling is used, for reporting the data required by the Secretary under sections 616 and 618 of the Act and §§ 303.700 through 303.707 and 303.720 through 303.724.
Each system must include a State Interagency Coordinating Council (Council) that meets the requirements of subpart G of this part.
Each system must include policies and procedures to ensure, consistent with §§ 303.13(a)(8) (early intervention services), 303.26 (natural environments), and 303.344(d)(1)(ii) (content of an IFSP), that early intervention services for infants and toddlers with disabilities are provided—
(a) To the maximum extent appropriate, in natural environments; and
(b) In settings other than the natural environment that are most appropriate, as determined by the parent and the IFSP Team, only when early intervention services cannot be achieved satisfactorily in a natural environment.
Each application must contain—
(a) The specific State application requirements (including certifications, descriptions, methods, and policies and procedures) required in §§ 303.201 through 303.212; and
(b) The assurances required in §§ 303.221 through 303.227.
Each application must include the name of the State lead agency, as designated under § 303.120, that will be responsible for the administration of funds provided under this part.
Each application must include a certification to the Secretary that the arrangements to establish financial responsibility for the provision of part C services among appropriate public agencies under § 303.511 and the lead agency's contracts with EIS providers regarding financial responsibility for the provision of part C services both meet the requirements in subpart F of this part (§§ 303.500 through 303.521) and are current as of the date of submission of the certification.
Each application must include —
(a) A description of services to be provided under this part to infants and toddlers with disabilities and their families through the State's system;
(b) The State's policies and procedures regarding the identification and coordination of all available resources within the State from Federal, State, local, and private sources as required under subpart F of this part and including—
(1) Policies or procedures adopted by the State as its system of payments that meet the requirements in §§ 303.510, 303.520 and 303.521 (regarding the use of public insurance or benefits, private insurance, or family costs or fees); and
(2) Methods used by the State to implement the requirements in § 303.511(b)(2) and (b)(3); and
(c) The State's rigorous definition of developmental delay as required under §§ 303.10 and 303.111.
If the State provides services under this part to at-risk infants and toddlers through the statewide system, the application must include—
(a) The State's definition of at-risk infants and toddlers with disabilities who are eligible in the State for services under part C of the Act (consistent with §§ 303.5 and 303.21(b)); and
(b) A description of the early intervention services provided under this part to at-risk infants and toddlers with disabilities who meet the State's definition described in paragraph (a) of this section.
(a) General. Each State application must include a description of the uses for funds under this part for the fiscal year or years covered by the application. The description must be presented separately for the lead agency and the Council and include the information required in paragraphs (b) through (e) of this section.
(b) State administration funds including administrative positions. For lead agencies other than State educational agencies (SEAs), each application must include the total—
(1) Amount of funds retained by the lead agency for administration purposes, including the amount in paragraph (b)(2) of this section; and
(2) Number of full-time equivalent administrative positions to be used to implement part C of the Act, and the total amount of salaries (including benefits) for those positions.
(c) Maintenance and implementation activities. Each application must include a description of the nature and scope of each major activity to be carried out under this part, consistent with § 303.501, and the approximate amount of funds to be spent for each activity.
(d) Direct services. Each application must include a description of any direct services that the State expects to provide to infants and toddlers with disabilities and their families with funds under this part, consistent with § 303.501, and the approximate amount of funds under this part to be used for the provision of each direct service.
(e) Activities by other public agencies. If other public agencies are to receive funds under this part, the application must include—
(1) The name of each agency expected to receive funds;
(2) The approximate amount of funds each agency will receive; and
(3) A summary of the purposes for which the funds will be used.
Each application must include the State's policies and procedures that require the referral for early intervention services under this part of specific children under the age of three, as described in § 303.303(b).
Each application must include a description of the procedure used by the State to ensure that resources are made available under this part for all geographic areas within the State.
(a) Application. At least 60 days prior to being submitted to the Department, each application for funds under this part (including any policies, procedures, descriptions, methods, certifications, assurances and other information required in the application) must be published in a manner that will ensure circulation throughout the State for at least a 60-day period, with an opportunity for public comment on the application for at least 30 days during that period.
(b) State Policies and Procedures. Each application must include a description of the policies and procedures used by the State to ensure that, before adopting any new policy or procedure (including any revision to an existing policy or procedure) needed to comply with part C of the Act and these regulations, the lead agency—
(1) Holds public hearings on the new policy or procedure (including any revision to an existing policy or procedure);
(2) Provides notice of the hearings held in accordance with paragraph (b)(1) of this section at least 30 days before the hearings are conducted to enable public participation; and
(3) Provides an opportunity for the general public, including individuals with disabilities, parents of infants and toddlers with disabilities, EIS providers, and the members of the Council, to comment for at least 30 days on the new policy or procedure (including any revision to an existing policy or procedure) needed to comply with part C of the Act and these regulations.
(a) Application requirements. Each State must include the following in its application:
(1) A description of the policies and procedures it will use to ensure a smooth transition for infants and toddlers with disabilities under the age of three and their families from receiving early intervention services under this part to—
(i) Preschool or other appropriate services (for toddlers with disabilities); or
(ii) Exiting the program for infants and toddlers with disabilities.
(2) A description of how the State will meet each of the requirements in paragraphs (b) through (f) of this section.
(3)(i)(A) If the lead agency is not the SEA, an interagency agreement between the lead agency and the SEA; or
(B) If the lead agency is the SEA, an intra-agency agreement between the program within that agency that administers part C of the Act and the program within the agency that administers section 619 of the Act.
(ii) To ensure a seamless transition between services under this part and under part B of the Act, an interagency agreement under paragraph (a)(3)(i)(A) of this section or an intra-agency agreement under paragraph (a)(3)(i)(B) of this section must address how the lead agency and the SEA will meet the requirements of paragraphs (b) through (f) of this section (including any policies adopted by the lead agency under § 303.401(d) and (e)), § 303.344(h), and 34 CFR 300.101(b), 300.124, 300.321(f), and 300.323(b).
(4) Any policy the lead agency has adopted under § 303.401(d) and (e).
(b) Notification to the SEA and appropriate LEA. (1) The State lead agency must ensure that—
(i) Subject to paragraph (b)(2) of this section, not fewer than 90 days before the third birthday of the toddler with a disability if that toddler may be eligible for preschool services under part B of the Act, the lead agency notifies the SEA and the LEA for the area in which the toddler resides that the toddler on his or her third birthday will reach the age of eligibility for services under part B of the Act, as determined in accordance with State law;
(ii) Subject to paragraph (b)(2) of this section, if the lead agency determines that the toddler is eligible for early intervention services under part C of the Act more than 45 but less than 90 days before that toddler's third birthday and if that toddler may be eligible for preschool services under part B of the Act, the lead agency, as soon as possible after determining the child's eligibility, notifies the SEA and the LEA for the area in which the toddler with a disability resides that the toddler on his or her third birthday will reach the age of eligibility for services under part B of the Act, as determined in accordance with State law; or
(iii) Subject to paragraph (b)(2) of this section, if a toddler is referred to the lead agency fewer than 45 days before that toddler's third birthday and that toddler may be eligible for preschool services under part B of the Act, the lead agency, with parental consent required under § 303.414, refers the toddler to the SEA and the LEA for the area in which the toddler resides; but, the lead agency is not required to conduct an evaluation, assessment, or an initial IFSP meeting under these circumstances.
(2) The State must ensure that the notification required under paragraphs (b)(1)(i) and (b)(1)(ii) of this section is consistent with any policy that the State has adopted, under § 303.401(e), permitting a parent to object to disclosure of personally identifiable information.
(c) Conference to discuss services. The State lead agency must ensure that—
(1) If a toddler with a disability may be eligible for preschool services under part B of the Act, the lead agency, with the approval of the family of the toddler, convenes a conference, among the lead agency, the family, and the LEA not fewer than 90 days—and, at the discretion of all parties, not more than 9 months—before the toddler's third birthday to discuss any services the toddler may receive under part B of the Act; and.
(2) If the lead agency determines that a toddler with a disability is not potentially eligible for preschool services under part B of the Act, the lead agency, with the approval of the family of that toddler, makes reasonable efforts to convene a conference among the lead agency, the family, and providers of other appropriate services for the toddler to discuss appropriate services that the toddler may receive.
(d) Transition plan. The State lead agency must ensure that for all toddlers with disabilities—
(1)(i) It reviews the program options for the toddler with a disability for the period from the toddler's third birthday through the remainder of the school year; and
(ii) Each family of a toddler with a disability who is served under this part is included in the development of the transition plan required under this section and § 303.344(h);
(2) It establishes a transition plan in the IFSP not fewer than 90 days—and, at the discretion of all parties, not more than 9 months—before the toddler's third birthday; and
(3) The transition plan in the IFSP includes, consistent with § 303.344(h), as appropriate—
(i) Steps for the toddler with a disability and his or her family to exit from the part C program; and
(ii) Any transition services that the IFSP Team identifies as needed by that toddler and his or her family.
(e) Transition conference and meeting to develop transition plan. Any conference conducted under paragraph (c) of this section or meeting to develop the transition plan under paragraph (d) of this section (which conference and meeting may be combined into one meeting) must meet the requirements in §§ 303.342(d) and (e) and 303.343(a).
(f) Applicability of transition requirements. (1) The transition requirements in paragraphs (b)(1)(i) and (b)(1)(ii), (c)(1), and (d) of this section apply to all toddlers with disabilities receiving services under this part before those toddlers turn age three, including any toddler with a disability under the age of three who is served by a State that offers services under § 303.211.
(2) In a State that offers services under § 303.211, for toddlers with disabilities identified in § 303.209(b)(1)(i), the parent must be provided at the transition conference conducted under paragraph (c)(1) of this section:
(i) An explanation, consistent with § 303.211(b)(1)(ii), of the toddler's options to continue to receive early intervention services under this part or preschool services under section 619 of the Act.
(ii) The initial annual notice referenced in § 303.211(b)(1).
(3) For children with disabilities age three and older who receive services pursuant to § 303.211, the State must ensure that it satisfies the separate transition requirements in § 303.211(b)(6)(ii).
(a) Each application must contain a description of State efforts to promote collaboration among Head Start and Early Head Start programs under the Head Start Act (42 U.S.C. 9801, et seq., as amended), early education and child care programs, and services under this part.
(b) The State lead agency must participate, consistent with section 642B(b)(1)(C)(viii) of the Head Start Act, on the State Advisory Council on Early Childhood Education and Care established under the Head Start Act.
(a) General. (1) Subject to paragraphs (a)(2) and (b) of this section, a State may elect to include in its application for a grant under this part a State policy, developed and implemented jointly by the lead agency and the SEA, under which a parent of a child with a disability who is eligible for preschool services under section 619 of the Act and who previously received early intervention services under this part, may choose the continuation of early intervention services under this part for his or her child after the child turns three until the child enters, or is eligible under State law to enter, kindergarten or elementary school.
(2) A State that adopts the policy described in paragraph (a)(1) of this section may determine whether it applies to children with disabilities—
(i) From age three until the beginning of the school year following the child's third birthday;
(ii) From age three until the beginning of the school year following the child's fourth birthday; or
(iii) From age three until the beginning of the school year following the child's fifth birthday.
(3) In no case may a State provide services under this section beyond the age at which the child actually enters, or is eligible under State law to enter, kindergarten or elementary school in the State.
(b) Requirements. If a State's application for a grant under this part includes the State policy described in paragraph (a) of this section, the system must ensure the following:
(1) Parents of children with disabilities who are eligible for services under section 619 of the Act and who previously received early intervention services under this part will be provided an annual notice that contains—
(i) A description of the rights of the parents to elect to receive services pursuant to this section or under part B of the Act; and
(ii) An explanation of the differences between services provided pursuant to this section and services provided under part B of the Act, including—
(A) The types of services and the locations at which the services are provided;
(B) The procedural safeguards that apply; and
(C) Possible costs (including the costs or fees to be charged to families as described in §§ 303.520 and 303.521), if any, to parents of children eligible under this part.
(2) Consistent with § 303.344(d), services provided pursuant to this section will include an educational component that promotes school readiness and incorporates preliteracy, language, and numeracy skills.
(3) The State policy ensures that any child served pursuant to this section has the right, at any time, to receive FAPE (as that term is defined at § 303.15) under part B of the Act instead of early intervention services under part C of the Act.
(4) The lead agency must continue to provide all early intervention services identified in the toddler with a disability's IFSP under § 303.344 (and consented to by the parent under § 303.342(e)) beyond age three until that toddler's initial eligibility determination under part B of the Act is made under 34 CFR 300.306. This provision does not apply if the LEA has requested parental consent for the initial evaluation under 34 CFR 300.300(a) and the parent has not provided that consent.
(5) The lead agency must obtain informed consent from the parent of any child with a disability for the continuation of early intervention services pursuant to this section for that child. Consent must be obtained before the child reaches three years of age, where practicable.
(6)(i) For toddlers with disabilities under the age of three in a State that offers services under this section, the lead agency ensures that the transition requirements in § 303.209(b)(1)(i) and (b)(1)(ii), (c)(1), and (d) are met.
(ii) For toddlers with disabilities age three and older in a State that offers services under this section, the lead agency ensures a smooth transition from services under this section to preschool, kindergarten or elementary school by—
(A) Providing the SEA and LEA where the child resides, consistent with any State policy adopted under § 303.401(e), the information listed in § 303.401(d)(1) not fewer than 90 days before the child will no longer be eligible under paragraph (a)(2) of this section to receive, or will no longer receive, early intervention services under this section;
(B) With the approval of the parents of the child, convening a transition conference, among the lead agency, the parents, and the LEA, not fewer than 90 days—and, at the discretion of all parties, not more than 9 months—before the child will no longer be eligible under paragraph (a)(2) of this section to receive, or no longer receives, early intervention services under this section, to discuss any services that the child may receive under part B of the Act; and
(C) Establishing a transition plan in the IFSP not fewer than 90 days—and, at the discretion of all parties, not more than 9 months—before the child will no longer be eligible under paragraph (a)(2) of this section to receive, or no longer receives, early intervention services under this section.
(7) In States that adopt the option to make services under this part available to children ages three and older pursuant to this section, there will be a referral to the part C system, dependent upon parental consent, of a child under the age of three who directly experiences a substantiated case of trauma due to exposure to family violence, as defined in section 320 of the Family Violence Prevention and Services Act, 42 U.S.C. 10401, et seq.
(c) Reporting requirement. If a State includes in its application a State policy described in paragraph (a) of this section, the State must submit to the Secretary, in the State's report under § 303.124, the number and percentage of children with disabilities who are eligible for services under section 619 of the Act but whose parents choose for their children to continue to receive early intervention services under this part.
(d) Available funds. The State policy described in paragraph (a) of this section must describe the funds—including an identification as Federal, State, or local funds—that will be used to ensure that the option described in paragraph (a) of this section is available to eligible children and families who provide the consent described in paragraph (b)(5) of this section, including fees, if any, to be charged to families as described in §§ 303.520 and 303.521.
(e) Rules of construction. (1) If a statewide system includes a State policy described in paragraph (a) of this section, a State that provides services in accordance with this section to a child with a disability who is eligible for services under section 619 of the Act will not be required to provide the child FAPE under part B of the Act for the period of time in which the child is receiving services under this part.
(2) Nothing in this section may be construed to require a provider of services under this part to provide a child served under this part with FAPE.
Each application must contain—
(a) A description of the steps the State is taking to ensure equitable access to, and equitable participation in, the part C statewide system as required by section 427(b) of GEPA; and
(b) Other information and assurances as the Secretary may reasonably require.
Each application must contain assurances satisfactory to the Secretary that the State has met the requirements in §§ 303.221 through 303.227.
The State must ensure that Federal funds made available to the State under section 643 of the Act will be expended in accordance with the provisions of this part, including §§ 303.500 and 303.501.
The State must ensure that it will comply with the requirements in §§ 303.510 and 303.511 in subpart F of this part.
The State must ensure that—
(a) The control of funds provided under this part, and title to property acquired with those funds, will be in a public agency for the uses and purposes provided in this part; and
(b) A public agency will administer the funds and property.
The State must ensure that it will—
(a) Make reports in the form and containing the information that the Secretary may require; and
(b) Keep records and afford access to those records as the Secretary may find necessary to ensure compliance with the requirements of this part, the correctness and verification of reports, and the proper disbursement of funds provided under this part.
(a) Each application must provide satisfactory assurance that the Federal funds made available under section 643 of the Act to the State:
(1) Will not be commingled with State funds; and
(2) Will be used so as to supplement the level of State and local funds expended for infants and toddlers with disabilities and their families and in no case to supplant those State and local funds.
(b) To meet the requirement in paragraph (a) of this section, the total amount of State and local funds budgeted for expenditures in the current fiscal year for early intervention services for children eligible under this part and their families must be at least equal to the total amount of State and local funds actually expended for early intervention services for these children and their families in the most recent preceding fiscal year for which the information is available. Allowance may be made for—
(1) A decrease in the number of infants and toddlers who are eligible to receive early intervention services under this part; and
(2)) Unusually large amounts of funds expended for such long-term purposes as the acquisition of equipment and the construction of facilities.
(c) Requirement regarding indirect costs. (1) Except as provided in paragraph (c)(2) of this section, a lead agency under this part may not charge indirect costs to its part C grant.
(2) If approved by the lead agency's cognizant Federal agency or by the Secretary, the lead agency must charge indirect costs through either—
(i) A restricted indirect cost rate that meets the requirements in 34 CFR 76.560 through 76.569; or
(ii) A cost allocation plan that meets the non-supplanting requirements in paragraph (b) of this section and 34 CFR part 76 of EDGAR.
(3) In charging indirect costs under paragraph (c)(2)(i) and (c)(2)(ii) of this section, the lead agency may not charge rent, occupancy, or space maintenance costs directly to the part C grant, unless those costs are specifically approved in advance by the Secretary.
The State must ensure that fiscal control and fund accounting procedures will be adopted as necessary to ensure proper disbursement of, and accounting for, Federal funds paid under this part.
The State must ensure that policies and practices have been adopted to ensure—
(a) That traditionally underserved groups, including minority, low-income, homeless, and rural families and children with disabilities who are wards of the State, are meaningfully involved in the planning and implementation of all the requirements of this part; and
(b) That these families have access to culturally competent services within their local geographical areas.
(a) Subsequent State application. If a State has on file with the Secretary a policy, procedure, method, or assurance that demonstrates that the State meets an application requirement in this part, including any policy, procedure, method, or assurance filed under this part (as in effect before the date of enactment of the Act, December 3, 2004), the Secretary considers the State to have met that requirement for purposes of receiving a grant under this part.
(b) Modification of application. An application submitted by a State that meets the requirements of this part remains in effect until the State submits to the Secretary such modifications as the State determines necessary. This section applies to a modification of an application to the same extent and in the same manner as this paragraph applies to the original application.
(c) Modifications required by the Secretary. The Secretary may require a State to modify its application under this part to the extent necessary to ensure the State's compliance with this part if—
(1) An amendment is made to the Act or to a Federal regulation issued under the Act;
(2) A new interpretation of the Act is made by a Federal court or the State's highest court; or
(3) An official finding of noncompliance with Federal law or regulations is made with respect to the State.
If the Secretary determines that a State is eligible to receive a grant under part C of the Act, the Secretary notifies the State of that determination.
The Secretary does not disapprove an application under this part unless the Secretary determines, after notice and opportunity for a hearing in accordance with the procedures in §§ 303.231 through 303.236, that the application fails to comply with the requirements of this part.
(a) General. (1) The Secretary does not make a final determination that a State is not eligible to receive a grant under part C of the Act until providing the State—
(i) Reasonable notice; and
(ii) An opportunity for a hearing.
(2) In implementing paragraph (a)(1)(i) of this section, the Secretary sends a written notice to the lead agency by certified mail with a return receipt requested.
(b) Content of notice. In the written notice described in paragraph (a)(2) of this section, the Secretary—
(1) States the basis on which the Secretary proposes to make a final determination that the State is not eligible;
(2) May describe possible options for resolving the issues;
(3) Advises the lead agency that it may request a hearing and that the request for a hearing must be made not later than 30 days after it receives the notice of the proposed final determination that the State is not eligible; and
(4) Provides the lead agency with information about the hearing procedures that will be followed.
(a) If the lead agency requests a hearing, the Secretary designates one or more individuals, either from the Department or elsewhere, not responsible for or connected with the administration of this program, to conduct a hearing.
(b) If more than one individual is designated, the Secretary designates one of those individuals as the Chief Hearing Official of the Hearing Panel. If one individual is designated, that individual is the Hearing Official.
(a) As used in §§ 303.231 through 303.235, the term party or parties means any of the following:
(1) A lead agency that requests a hearing regarding the proposed disapproval of the State's eligibility under this part.
(2) The Department official who administers the program of financial assistance under this part.
(3) A person, group, or agency with an interest in, and having relevant information about, the case that has applied for and been granted leave to intervene by the Hearing Official or Hearing Panel.
(b) Within 15 days after receiving a request for a hearing, the Secretary designates a Hearing Official or Hearing Panel and notifies the parties.
(c) The Hearing Official or Hearing Panel may regulate the course of proceedings and the conduct of the parties during the proceedings. The Hearing Official or Panel takes all steps necessary to conduct a fair and impartial proceeding, to avoid delay, and to maintain order, including the following:
(1) The Hearing Official or Hearing Panel may hold conferences or other types of appropriate proceedings to clarify, simplify, or define the issues or to consider other matters that may aid in the disposition of the case.
(2) The Hearing Official or Hearing Panel may schedule a prehearing conference with the Hearing Official or Hearing Panel and the parties.
(3) Any party may request the Hearing Official or Hearing Panel to schedule a prehearing or other conference. The Hearing Official or Hearing Panel decides whether a conference is necessary and notifies all parties.
(4) At a prehearing or other conference, the Hearing Official or Hearing Panel and the parties may consider subjects such as—
(i) Narrowing and clarifying issues;
(ii) Assisting the parties in reaching agreements and stipulations;
(iii) Clarifying the positions of the parties;
(iv) Determining whether an evidentiary hearing or oral argument should be held; and
(v) Setting dates for—
(A) The exchange of written documents;
(B) The receipt of comments from the parties on the need for oral argument or an evidentiary hearing;
(C) Further proceedings before the Hearing Official or Hearing Panel, including an evidentiary hearing or oral argument, if either is scheduled;
(D) Requesting the names of witnesses each party wishes to present at an evidentiary hearing and an estimation of time for each presentation; and
(E) Completion of the review and the initial decision of the Hearing Official or Hearing Panel.
(5) A prehearing or other conference held under paragraph (c)(4) of this section may be conducted by telephone conference call.
(6) At a prehearing or other conference, the parties must be prepared to discuss the subjects listed in paragraph (c)(4) of this section.
(7) Following a prehearing or other conference, the Hearing Official or Hearing Panel may issue a written statement describing the issues raised, the action taken, and the stipulations and agreements reached by the parties.
(d) The Hearing Official or Hearing Panel may require the parties to state their positions and to provide all or part of their evidence in writing.
(e) The Hearing Official or Hearing Panel may require the parties to present testimony through affidavits and to conduct cross-examination through interrogatories.
(f) The Hearing Official or Hearing Panel may direct the parties to exchange relevant documents, information, and lists of witnesses, and to send copies to the Hearing Official or Hearing Panel.
(g) The Hearing Official or Hearing Panel may receive, rule on, exclude, or limit evidence at any stage of the proceedings.
(h) The Hearing Official or Hearing Panel may rule on motions and other issues at any stage of the proceedings.
(i) The Hearing Official or Hearing Panel may examine witnesses.
(j) The Hearing Official or Hearing Panel may set reasonable time limits for submission of written documents.
(k) The Hearing Official or Hearing Panel may refuse to consider documents or other submissions if they are not submitted in a timely manner unless good cause is shown.
(l) The Hearing Official or Hearing Panel may interpret applicable statutes and regulations but may not waive them or rule on their validity.
(m)(1) The parties must present their positions through briefs and the submission of other documents and may request an oral argument or evidentiary hearing. The Hearing Official or Hearing Panel must determine whether an oral argument or an evidentiary hearing is needed to clarify the positions of the parties.
(2) The Hearing Official or Hearing Panel gives each party an opportunity to be represented by counsel.
(n) If the Hearing Official or Hearing Panel determines that an evidentiary hearing would materially assist the resolution of the matter, the Hearing Official or Hearing Panel gives each party, in addition to the opportunity to be represented by counsel—
(1) An opportunity to present witnesses on the party's behalf; and
(2) An opportunity to cross-examine witnesses either orally or with written questions.
(o) The Hearing Official or Hearing Panel accepts any evidence that it finds is relevant and material to the proceedings and is not unduly repetitious.
(p)(1) The Hearing Official or Hearing Panel—
(i) Arranges for the preparation of a transcript of each hearing;
(ii) Retains the original transcript as part of the record of the hearing; and
(iii) Provides one copy of the transcript to each party.
(2) Additional copies of the transcript are available on request and with payment of the reproduction fee.
(q) Each party must file with the Hearing Official or Hearing Panel all written motions, briefs, and other documents and must at the same time provide a copy to the other parties to the proceedings.
(a) The Hearing Official or Hearing Panel prepares an initial written decision that addresses each of the points in the notice sent by the Secretary to the lead agency under § 303.231, including any amendments to or further clarification of the issues under § 303.233(c).
(b) The initial decision of a Hearing Panel is made by a majority of Hearing Panel members.
(c) The Hearing Official or Hearing Panel mails, by certified mail with return receipt requested, a copy of the initial decision to each party (or to the party's counsel) and to the Secretary, with a notice stating that each party has an opportunity to submit written comments regarding the decision to the Secretary.
(d) Each party may file comments and recommendations on the initial decision with the Hearing Official or Hearing Panel within 15 days of the date the party receives the Panel's decision.
(e) The Hearing Official or Hearing Panel sends a copy of a party's initial comments and recommendations to the other parties by certified mail with return receipt requested. Each party may file responsive comments and recommendations with the Hearing Official or Hearing Panel within seven days of the date the party receives the initial comments and recommendations.
(f) The Hearing Official or Hearing Panel forwards the parties' initial and responsive comments on the initial decision to the Secretary who reviews the initial decision and issues a final decision.
(g) The initial decision of the Hearing Official or Hearing Panel becomes the final decision of the Secretary unless, within 25 days after the end of the time for receipt of written comments, the Secretary informs the Hearing Official or Hearing Panel and the parties to a hearing in writing that the decision is being further reviewed for possible modification.
(h) The Secretary rejects or modifies the initial decision of the Hearing Official or Hearing Panel if the Secretary finds that it is clearly erroneous.
(i) The Secretary conducts the review based on the initial decision, the written record, the transcript of the Hearing Official's or Hearing Panel's proceedings, and written comments.
(j) The Secretary may remand the matter to the Hearing Official or Hearing Panel for further proceedings.
(k) Unless the Secretary remands the matter as provided in paragraph (j) of this section, the Secretary issues the final decision, with any necessary modifications, within 30 days after notifying the Hearing Official or Hearing Panel that the initial decision is being further reviewed.
(a) Any written submission by a party under §§ 303.230 through 303.236 must be filed with the Secretary by hand-delivery, by mail, or by facsimile transmission. The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(b) The filing date under paragraph (a) of this section is the date the document is—
(1) Hand-delivered;
(2) Mailed; or
(3) Sent by facsimile transmission.
(c) A party filing by facsimile transmission is responsible for confirming that a complete and legible copy of the document was received by the Department.
(d) If a document is filed by facsimile transmission, the Secretary, the Hearing Official, or the Panel, as applicable, may require the filing of a follow-up hard copy by hand-delivery or by mail within a reasonable period of time.
(e) If agreed upon by the parties, service of a document may be made upon the other party by facsimile transmission.
If a State is dissatisfied with the Secretary's final decision with respect to the eligibility of the State under part C of the Act, the State may, not later than 60 days after notice of that decision, file with the United States Court of Appeals for the circuit in which that State is located a petition for review of that decision. A copy of the petition must be transmitted by the clerk of the court to the Secretary. The Secretary then files in the court the record of the proceedings upon which the Secretary's action was based, as provided in 28 U.S.C. 2112.
The statewide comprehensive, coordinated, multidisciplinary interagency system to provide early intervention services for infants and toddlers with disabilities and their families referenced in § 303.100 must include the following components:
(a) Pre-referral policies and procedures that include—
(1) A public awareness program as described in § 303.301; and
(2) A comprehensive child find system as described in § 303.302.
(b) Referral policies and procedures as described in § 303.303.
(c) Post-referral policies and procedures that ensure compliance with the timeline requirements in § 303.310 and include—
(1) Screening, if applicable, as described in § 303.320;
(2) Evaluations and assessments as described in §§ 303.321 and 303.322; and
(3) Development, review, and implementation of IFSPs as described in §§ 303.340 through 303.346.
(a) Preparation and dissemination. In accordance with § 303.116, each system must include a public awareness program that requires the lead agency to—
(1)(i) Prepare information on the availability of early intervention services under this part, and other services, as described in paragraph (b) of this section; and
(ii) Disseminate to all primary referral sources (especially hospitals and physicians) the information to be given to parents of infants and toddlers, especially parents with premature infants or infants with other physical risk factors associated with learning or developmental complications; and
(2) Adopt procedures for assisting the primary referral sources described in § 303.303(c) in disseminating the information described in paragraph (b) of this section to parents of infants and toddlers with disabilities.
(b) Information to be provided. The information required to be prepared and disseminated under paragraph (a) of this section must include—
(1) A description of the availability of early intervention services under this part;
(2) A description of the child find system and how to refer a child under the age of three for an evaluation or early intervention services; and
(3) A central directory, as described in § 303.117.
(c) Information specific to toddlers with disabilities. Each public awareness program also must include a requirement that the lead agency provide for informing parents of toddlers with disabilities of the availability of services under section 619 of the Act not fewer than 90 days prior to the toddler's third birthday.
(a) General. Each system must include a comprehensive child find system that—
(1) Is consistent with part B of the Act (see 34 CFR 300.111);
(2) Includes a system for making referrals to lead agencies or EIS providers under this part that—
(i) Includes timelines; and
(ii) Provides for participation by the primary referral sources described in § 303.303(c);
(3) Ensures rigorous standards for appropriately identifying infants and toddlers with disabilities for early intervention services under this part that will reduce the need for future services; and
(4) Meets the requirements in paragraphs (b) and (c) of this section and §§ 303.303, 303.310, 303.320, and 303.321.
(b) Scope of child find. The lead agency, as part of the child find system, must ensure that—
(1) All infants and toddlers with disabilities in the State who are eligible for early intervention services under this part are identified, located, and evaluated, including—
(i) Indian infants and toddlers with disabilities residing on a reservation geographically located in the State (including coordination, as necessary, with tribes, tribal organizations, and consortia to identify infants and toddlers with disabilities in the State based, in part, on the information provided by them to the lead agency under § 303.731(e)(1)); and
(ii) Infants and toddlers with disabilities who are homeless, in foster care, and wards of the State; and
(iii) Infants and toddlers with disabilities that are referenced in § 303.303(b); and
(2) An effective method is developed and implemented to identify children who are in need of early intervention services.
(c) Coordination. (1) The lead agency, with the assistance of the Council, as defined in § 303.8, must ensure that the child find system under this part—
(i) Is coordinated with all other major efforts to locate and identify children by other State agencies responsible for administering the various education, health, and social service programs relevant to this part, including Indian tribes that receive payments under this part, and other Indian tribes, as appropriate; and
(ii) Is coordinated with the efforts of the—
(A) Program authorized under part B of the Act;
(B) Maternal and Child Health program, including the Maternal, Infant, and Early Childhood Home Visiting Program, under Title V of the Social Security Act, as amended, (MCHB or Title V) (42 U.S.C. 701(a));
(C) Early Periodic Screening, Diagnosis, and Treatment (EPSDT) under Title XIX of the Social Security Act (42 U.S.C. 1396(a)(43) and 1396(a)(4)(B));
(D) Programs under the Developmental Disabilities Assistance and Bill of Rights Act of 2000 (42 U.S.C. 15001 et seq.);
(E) Head Start Act (including Early Head Start programs under section 645A of the Head Start Act) (42 U.S.C. 9801 et seq.);
(F) Supplemental Security Income program under Title XVI of the Social Security Act (42 U.S.C. 1381);
(G) Child protection and child welfare programs, including programs administered by, and services provided through, the foster care agency and the State agency responsible for administering the Child Abuse Prevention and Treatment Act (CAPTA) (42 U.S.C. 5106(a));
(H) Child care programs in the State;
(I) The programs that provide services under the Family Violence Prevention and Services Act (42 U.S.C. 10401 et seq.);
(J) Early Hearing Detection and Intervention (EHDI) systems (42 U.S.C. 280g-1) administered by the Centers for Disease Control (CDC); and
(K) Children's Health Insurance Program (CHIP) authorized under Title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.).
(2) The lead agency, with the advice and assistance of the Council, must take steps to ensure that—
(i) There will not be unnecessary duplication of effort by the programs identified in paragraph (c)(1)(ii) of this section; and
(ii) The State will make use of the resources available through each public agency and EIS provider in the State to implement the child find system in an effective manner.
(a) General. (1) The lead agency's child find system described in § 303.302 must include the State's procedures for use by primary referral sources for referring a child under the age of three to the part C program.
(2) The procedures required in paragraph (a)(1) of this section must—
(i) Provide for referring a child as soon as possible, but in no case more than seven days, after the child has been identified; and
(ii) Meet the requirements in paragraphs (b) and (c) of this section.
(b) Referral of specific at-risk infants and toddlers. The procedures required in paragraph (a) of this section must provide for requiring the referral of a child under the age of three who—
(1) Is the subject of a substantiated case of child abuse or neglect; or
(2) Is identified as directly affected by illegal substance abuse or withdrawal symptoms resulting from prenatal drug exposure.
(c) Primary referral sources. As used in this subpart, primary referral sources include—
(1) Hospitals, including prenatal and postnatal care facilities;
(2) Physicians;
(3) Parents, including parents of infants and toddlers;
(4) Child care programs and early learning programs;
(5) LEAs and schools;
(6) Public health facilities;
(7) Other public health or social service agencies;
(8) Other clinics and health care providers;
(9) Public agencies and staff in the child welfare system, including child protective service and foster care;
(10) Homeless family shelters; and
(11) Domestic violence shelters and agencies.
(a) Except as provided in paragraph (b) of this section, any screening under § 303.320 (if the State has adopted a policy and elects, and the parent consents, to conduct a screening of a child); the initial evaluation and the initial assessments of the child and family under § 303.321; and the initial IFSP meeting under § 303.342 must be completed within 45 days from the date the lead agency or EIS provider receives the referral of the child.
(b) Subject to paragraph (c) of this section, the 45-day timeline described in paragraph (a) of this section does not apply for any period when—
(1) The child or parent is unavailable to complete the screening (if applicable), the initial evaluation, the initial assessments of the child and family, or the initial IFSP meeting due to exceptional family circumstances that are documented in the child's early intervention records; or
(2) The parent has not provided consent for the screening (if applicable), the initial evaluation, or the initial assessment of the child, despite documented, repeated attempts by the lead agency or EIS provider to obtain parental consent.
(c) The lead agency must develop procedures to ensure that in the event the circumstances described in (b)(1) or (b)(2) of this section exist, the lead agency or EIS provider must—
(1) Document in the child's early intervention records the exceptional family circumstances or repeated attempts by the lead agency or EIS provider to obtain parental consent;
(2) Complete the screening (if applicable), the initial evaluation, the initial assessments (of the child and family), and the initial IFSP meeting as soon as possible after the documented exceptional family circumstances described in paragraph (b)(1) of this section no longer exist or parental consent is obtained for the screening (if applicable), the initial evaluation, and the initial assessment of the child; and
(3) Develop and implement an interim IFSP, to the extent appropriate and consistent with § 303.345.
(d) The initial family assessment must be conducted within the 45-day timeline in paragraph (a) of this section if the parent concurs and even if other family members are unavailable.
(a) General. (1) The lead agency may adopt procedures, consistent with the requirements of this section, to screen children under the age of three who have been referred to the part C program to determine whether they are suspected of having a disability under this part. If the lead agency or EIS provider proposes to screen a child, it must—
(i) Provide the parent notice under § 303.421 of its intent to screen the child to identify whether the child is suspected of having a disability and include in that notice a description of the parent's right to request an evaluation under § 303.321 at any time during the screening process; and
(ii) Obtain parental consent as required in § 303.420(a)(1) before conducting the screening procedures.
(2) If the parent consents to the screening and the screening or other available information indicates that the child is—
(i) Suspected of having a disability, after notice is provided under § 303.421 and once parental consent is obtained as required in § 303.420, an evaluation and assessment of the child must be conducted under § 303.321; or
(ii) Not suspected of having a disability, the lead agency or EIS provider must ensure that notice of that determination is provided to the parent under § 303.421, and that the notice describes the parent's right to request an evaluation.
(3) If the parent of the child requests and consents to an evaluation at any time during the screening process, evaluation of the child must be conducted under § 303.321, even if the lead agency or EIS provider has determined under paragraph (a)(2)(ii) of this section that the child is not suspected of having a disability.
(b) Definition of screening procedures. Screening procedures—
(1) Means activities under paragraphs (a)(1) and (a)(2) of this section that are carried out by, or under the supervision of, the lead agency or EIS provider to identify, at the earliest possible age, infants and toddlers suspected of having a disability and in need of early intervention services; and
(2) Includes the administration of appropriate instruments by personnel trained to administer those instruments.
(c) Condition for evaluation or early intervention services. For every child under the age of three who is referred to the part C program or screened in accordance with paragraph (a) of this section, the lead agency is not required to—
(1) Provide an evaluation of the child under § 303.321 unless the child is suspected of having a disability or the parent requests an evaluation under paragraph (a)(3) of this section; or
(2) Make early intervention services available under this part to the child unless a determination is made that the child meets the definition of infant or toddler with a disability under § 303.21.
(a) General. (1) The lead agency must ensure that, subject to obtaining parental consent in accordance with § 303.420(a)(2), each child under the age of three who is referred for evaluation or early intervention services under this part and suspected of having a disability, receives—
(i) A timely, comprehensive, multidisciplinary evaluation of the child in accordance with paragraph (b) of this section unless eligibility is established under paragraph (a)(3)(i) of this section; and
(ii) If the child is determined eligible as an infant or toddler with a disability as defined in § 303.21--
(A) A multidisciplinary assessment of the unique strengths and needs of that infant or toddler and the identification of services appropriate to meet those needs;
(B) A family-directed assessment of the resources, priorities, and concerns of the family and the identification of the supports and services necessary to enhance the family's capacity to meet the developmental needs of that infant or toddler. The assessments of the child and family are described in paragraph (c) of this section and these assessments may occur simultaneously with the evaluation, provided that the requirements of paragraph (b) of this section are met.
(2) As used in this part—
(i) Evaluation means the procedures used by qualified personnel to determine a child's initial and continuing eligibility under this part, consistent with the definition of infant or toddler with a disability in § 303.21. An initial evaluation refers to the child's evaluation to determine his or her initial eligibility under this part;
(ii) Assessment means the ongoing procedures used by qualified personnel to identify the child's unique strengths and needs and the early intervention services appropriate to meet those needs throughout the period of the child's eligibility under this part and includes the assessment of the child, consistent with paragraph (c)(1) of this section and the assessment of the child's family, consistent with paragraph (c)(2) of this section; and
(iii) Initial assessment refers to the assessment of the child and the family assessment conducted prior to the child's first IFSP meeting.
(3)(i) A child's medical and other records may be used to establish eligibility (without conducting an evaluation of the child) under this part if those records indicate that the child's level of functioning in one or more of the developmental areas identified in § 303.21(a)(1) constitutes a developmental delay or that the child otherwise meets the criteria for an infant or toddler with a disability under § 303.21. If the child's part C eligibility is established under this paragraph, the lead agency or EIS provider must conduct assessments of the child and family in accordance with paragraph (c) of this section.
(ii) Qualified personnel must use informed clinical opinion when conducting an evaluation and assessment of the child. In addition, the lead agency must ensure that informed clinical opinion may be used as an independent basis to establish a child's eligibility under this part even when other instruments do not establish eligibility; however, in no event may informed clinical opinion be used to negate the results of evaluation instruments used to establish eligibility under paragraph (b) of this section.
(4) All evaluations and assessments of the child and family must be conducted by qualified personnel, in a nondiscriminatory manner, and selected and administered so as not to be racially or culturally discriminatory.
(5) Unless clearly not feasible to do so, all evaluations and assessments of a child must be conducted in the native language of the child, in accordance with the definition of native language in § 303.25.
(6) Unless clearly not feasible to do so, family assessments must be conducted in the native language of the family members being assessed, in accordance with the definition of native language in § 303.25.
(b) Procedures for evaluation of the child. In conducting an evaluation, no single procedure may be used as the sole criterion for determining a child's eligibility under this part. Procedures must include—
(1) Administering an evaluation instrument;
(2) Taking the child's history (including interviewing the parent);
(3) Identifying the child's level of functioning in each of the developmental areas in § 303.21(a)(1);
(4) Gathering information from other sources such as family members, other care-givers, medical providers, social workers, and educators, if necessary, to understand the full scope of the child's unique strengths and needs; and
(5) Reviewing medical, educational, or other records.
(c) Procedures for assessment of the child and family. (1) An assessment of each infant or toddler with a disability must be conducted by qualified personnel in order to identify the child's unique strengths and needs and the early intervention services appropriate to meet those needs. The assessment of the child must include the following—
(i) A review of the results of the evaluation conducted under paragraph (b) of this section;
(ii) Personal observations of the child; and
(iii) The identification of the child's needs in each of the developmental areas in § 303.21(a)(1).
(2) A family-directed assessment must be conducted by qualified personnel in order to identify the family's resources, priorities, and concerns and the supports and services necessary to enhance the family's capacity to meet the developmental needs of the family's infant or toddler with a disability. The family-directed assessment must—
(i) Be voluntary on the part of each family member participating in the assessment;
(ii) Be based on information obtained through an assessment tool and also through an interview with those family members who elect to participate in the assessment; and
(iii) Include the family's description of its resources, priorities, and concerns related to enhancing the child's development.
If, based on the evaluation conducted under § 303.321, the lead agency determines that a child is not eligible under this part, the lead agency must provide the parent with prior written notice required in § 303.421, and include in the notice information about the parent's right to dispute the eligibility determination through dispute resolution mechanisms under § 303.430, such as requesting a due process hearing or mediation or filing a State complaint.
For each infant or toddler with a disability, the lead agency must ensure the development, review, and implementation of an individualized family service plan or IFSP developed by a multidisciplinary team, which includes the parent, that—
(a) Is consistent with the definition of that term in § 303.20; and
(b) Meets the requirements in §§ 303.342 through 303.346 of this subpart.
(a) Meeting to develop initial IFSP—timelines. For a child referred to the part C program and determined to be eligible under this part as an infant or toddler with a disability, a meeting to develop the initial IFSP must be conducted within the 45-day time period described in § 303.310.
(b) Periodic review. (1) A review of the IFSP for a child and the child's family must be conducted every six months, or more frequently if conditions warrant, or if the family requests such a review. The purpose of the periodic review is to determine—
(i) The degree to which progress toward achieving the results or outcomes identified in the IFSP is being made; and
(ii) Whether modification or revision of the results, outcomes, or early intervention services identified in the IFSP is necessary.
(2) The review may be carried out by a meeting or by another means that is acceptable to the parents and other participants.
(c) Annual meeting to evaluate the IFSP. A meeting must be conducted on at least an annual basis to evaluate and revise, as appropriate, the IFSP for a child and the child's family. The results of any current evaluations and other information available from the assessments of the child and family conducted under § 303.321 must be used in determining the early intervention services that are needed and will be provided.
(d) Accessibility and convenience of meetings. (1) IFSP meetings must be conducted—
(i) In settings and at times that are convenient for the family; and
(ii) In the native language of the family or other mode of communication used by the family, unless it is clearly not feasible to do so.
(2) Meeting arrangements must be made with, and written notice provided to, the family and other participants early enough before the meeting date to ensure that they will be able to attend.
(e) Parental consent. The contents of the IFSP must be fully explained to the parents and informed written consent, as described in § 303.7, must be obtained, as required in § 303.420(a)(3), prior to the provision of early intervention services described in the IFSP. Each early intervention service must be provided as soon as possible after the parent provides consent for that service, as required in § 303.344(f)(1).
(a) Initial and annual IFSP Team meeting. (1) Each initial meeting and each annual IFSP Team meeting to evaluate the IFSP must include the following participants:
(i) The parent or parents of the child.
(ii) Other family members, as requested by the parent, if feasible to do so.
(iii) An advocate or person outside of the family, if the parent requests that the person participate.
(iv) The service coordinator designated by the public agency to be responsible for implementing the IFSP.
(v) A person or persons directly involved in conducting the evaluations and assessments in § 303.321.
(vi) As appropriate, persons who will be providing early intervention services under this part to the child or family.
(2) If a person listed in paragraph (a)(1)(v) of this section is unable to attend a meeting, arrangements must be made for the person's involvement through other means, including one of the following:
(i) Participating in a telephone conference call.
(ii) Having a knowledgeable authorized representative attend the meeting.
(iii) Making pertinent records available at the meeting.
(b) Periodic review. Each periodic review under § 303.342(b) must provide for the participation of persons in paragraphs (a)(1)(i) through (a)(1)(iv) of this section. If conditions warrant, provisions must be made for the participation of other representatives identified in paragraph (a) of this section.
(a) Information about the child's status. The IFSP must include a statement of the infant or toddler with a disability's present levels of physical development (including vision, hearing, and health status), cognitive development, communication development, social or emotional development, and adaptive development based on the information from that child's evaluation and assessments conducted under § 303.321.
(b) Family information. With the concurrence of the family, the IFSP must include a statement of the family's resources, priorities, and concerns related to enhancing the development of the child as identified through the assessment of the family under § 303.321(c)(2).
(c) Results or outcomes. The IFSP must include a statement of the measurable results or measurable outcomes expected to be achieved for the child (including pre-literacy and language skills, as developmentally appropriate for the child) and family, and the criteria, procedures, and timelines used to determine—
(1) The degree to which progress toward achieving the results or outcomes identified in the IFSP is being made; and
(2) Whether modifications or revisions of the expected results or outcomes, or early intervention services identified in the IFSP are necessary.
(d) Early intervention services. (1) The IFSP must include a statement of the specific early intervention services, based on peer-reviewed research (to the extent practicable), that are necessary to meet the unique needs of the child and the family to achieve the results or outcomes identified in paragraph (c) of this section, including—
(i) The length, duration, frequency, intensity, and method of delivering the early intervention services;
(ii)(A) A statement that each early intervention service is provided in the natural environment for that child or service to the maximum extent appropriate, consistent with §§ 303.13(a)(8), 303.26 and 303.126, or, subject to paragraph (d)(1)(ii)(B) of this section, a justification as to why an early intervention service will not be provided in the natural environment.
(B) The determination of the appropriate setting for providing early intervention services to an infant or toddler with a disability, including any justification for not providing a particular early intervention service in the natural environment for that infant or toddler with a disability and service, must be—
(1) Made by the IFSP Team (which includes the parent and other team members);
(2) Consistent with the provisions in §§ 303.13(a)(8), 303.26, and 303.126; and
(3) Based on the child's outcomes that are identified by the IFSP Team in paragraph (c) of this section;
(iii) The location of the early intervention services; and
(iv) The payment arrangements, if any.
(2) As used in paragraph (d)(1)(i) of this section—
(i) Frequency and intensity mean the number of days or sessions that a service will be provided, and whether the service is provided on an individual or group basis;
(ii) Method means how a service is provided;
(iii) Length means the length of time the service is provided during each session of that service (such as an hour or other specified time period); and
(iv) Duration means projecting when a given service will no longer be provided (such as when the child is expected to achieve the results or outcomes in his or her IFSP).
(3) As used in paragraph (d)(1)(iii) of this section, location means the actual place or places where a service will be provided.
(4) For children who are at least three years of age, the IFSP must include an educational component that promotes school readiness and incorporates pre-literacy, language, and numeracy skills.
(e) Other services. To the extent appropriate, the IFSP also must—
(1) Identify medical and other services that the child or family needs or is receiving through other sources, but that are neither required nor funded under this part; and
(2) If those services are not currently being provided, include a description of the steps the service coordinator or family may take to assist the child and family in securing those other services.
(f) Dates and duration of services. The IFSP must include—
(1) The projected date for the initiation of each early intervention service in paragraph (d)(1) of this section, which date must be as soon as possible after the parent consents to the service, as required in §§ 303.342(e) and 303.420(a)(3); and
(2) The anticipated duration of each service.
(g) Service coordinator. (1) The IFSP must include the name of the service coordinator from the profession most relevant to the child's or family's needs (or who is otherwise qualified to carry out all applicable responsibilities under this part), who will be responsible for implementing the early intervention services identified in a child's IFSP, including transition services, and coordination with other agencies and persons.
(2) In meeting the requirements in paragraph (g)(1) of this section, the term “profession” includes “service coordination.”
(h) Transition from Part C services. (1) The IFSP must include the steps and services to be taken to support the smooth transition of the child, in accordance with §§ 303.209 and 303.211(b)(6), from part C services to—
(i) Preschool services under part B of the Act, to the extent that those services are appropriate;
(ii) Part C services under § 303.211; or
(iii) Other appropriate services.
(2) The steps required in paragraph (h)(1) of this section must include—
(i) Discussions with, and training of, parents, as appropriate, regarding future placements and other matters related to the child's transition;
(ii) Procedures to prepare the child for changes in service delivery, including steps to help the child adjust to, and function in, a new setting;
(iii) Confirmation that child find information about the child has been transmitted to the LEA or other relevant agency, in accordance with § 303.209(b) (and any policy adopted by the State under § 303.401(e)) and, with parental consent if required under § 303.414, transmission of additional information needed by the LEA to ensure continuity of services from the part C program to the part B program, including a copy of the most recent evaluation and assessments of the child and the family and most recent IFSP developed in accordance with §§ 303.340 through 303.345; and
(iv) Identification of transition services and other activities that the IFSP Team determines are necessary to support the transition of the child.
Early intervention services for an eligible child and the child's family may commence before the completion of the evaluation and assessments in § 303.321, if the following conditions are met:
(a) Parental consent is obtained.
(b) An interim IFSP is developed that includes—
(1) The name of the service coordinator who will be responsible, consistent with § 303.344(g), for implementing the interim IFSP and coordinating with other agencies and persons; and
(2) The early intervention services that have been determined to be needed immediately by the child and the child's family.
(c) Evaluations and assessments are completed within the 45-day timeline in § 303.310.
Each public agency or EIS provider who has a direct role in the provision of early intervention services is responsible for making a good faith effort to assist each eligible child in achieving the outcomes in the child's IFSP. However, part C of the Act does not require that any public agency or EIS provider be held accountable if an eligible child does not achieve the growth projected in the child's IFSP.
Subject to paragraph (c) of this section, each lead agency must—
(a) Establish or adopt the procedural safeguards that meet the requirements of this subpart, including the provisions on confidentiality in §§ 303.401 through 303.417, parental consent and notice in §§ 303.420 and 303.421, surrogate parents in § 303.422, and dispute resolution procedures in § 303.430;
(b) Ensure the effective implementation of the safeguards by each participating agency (including the lead agency and EIS providers) in the statewide system that is involved in the provision of early intervention services under this part; and
(c) Make available to parents an initial copy of the child's early intervention record, at no cost to the parents.
(a) General. Each State must ensure that the parents of a child referred under this part are afforded the right to confidentiality of personally identifiable information, including the right to written notice of, and written consent to, the exchange of that information among agencies, consistent with Federal and State laws.
(b) Confidentiality procedures. As required under sections 617(c) and 642 of the Act, the regulations in §§ 303.401 through 303.417 ensure the protection of the confidentiality of any personally identifiable data, information, and records collected or maintained pursuant to this part by the Secretary and by participating agencies, including the State lead agency and EIS providers, in accordance with the protections under the Family Educational Rights and Privacy Act (FERPA) in 20 U.S.C. 1232g and 34 CFR part 99. Each State must have procedures in effect to ensure that—
(1) Participating agencies (including the lead agency and EIS providers) comply with the part C confidentiality procedures in §§ 303.401 through 303.417; and
(2) The parents of infants or toddlers who are referred to, or receive services under this part, are afforded the opportunity to inspect and review all part C early intervention records about the child and the child's family that are collected, maintained, or used under this part, including records related to evaluations and assessments, screening, eligibility determinations, development and implementation of IFSPs, provision of early intervention services, individual complaints involving the child, or any part of the child's early intervention record under this part.
(c) Applicability and timeframe of procedures. The confidentiality procedures described in paragraph (b) of this section apply to the personally identifiable information of a child and the child's family that—
(1) Is contained in early intervention records collected, used, or maintained under this part by the lead agency or an EIS provider; and
(2) Applies from the point in time when the child is referred for early intervention services under this part until the later of when the participating agency is no longer required to maintain or no longer maintains that information under applicable Federal and State laws.
(d) Disclosure of information. (1) Subject to paragraph (e) of this section, the lead agency must disclose to the SEA and the LEA where the child resides, in accordance with § 303.209(b)(1)(i) and (b)(1)(ii), the following personally identifiable information under the Act:
(i) A child's name.
(ii) A child's date of birth.
(iii) Parent contact information (including parents' names, addresses, and telephone numbers).
(2) The information described in paragraph (d)(1) of this section is needed to enable the lead agency, as well as LEAs and SEAs under part B of the Act, to identify all children potentially eligible for services under § 303.211 and part B of the Act.
(e) Option to inform a parent about intended disclosure. (1) A lead agency, through its policies and procedures, may require EIS providers, prior to making the limited disclosure described in paragraph (d)(1) of this section, to inform parents of a toddler with a disability of the intended disclosure and allow the parents a specified time period to object to the disclosure in writing.
(2) If a parent (in a State that has adopted the policy described in paragraph (e)(1) of this section) objects during the time period provided by the State, the lead agency and EIS provider are not permitted to make such a disclosure under paragraph (d) of this section and § 303.209(b)(1)(i) and (b)(1)(ii).
The Secretary takes appropriate action, in accordance with section 444 of GEPA, to ensure the protection of the confidentiality of any personally identifiable data, information, and records collected, maintained, or used by the Secretary and by lead agencies and EIS providers pursuant to part C of the Act, and consistent with §§ 303.401 through 303.417. The regulations in §§ 303.401 through 303.417 ensure the protection of the confidentiality of any personally identifiable data, information, and records collected or maintained pursuant to this part by the Secretary and by participating agencies, including the State lead agency and EIS providers, in accordance with the Family Educational Rights and Privacy Act (FERPA), 20 U.S.C. 1232g, and 34 CFR part 99.
The following definitions apply to §§ 303.402 through 303.417 in addition to the definition of personally identifiable information in § 303.29 and disclosure in 34 CFR 99.3:
(a) Destruction means physical destruction of the record or ensuring that personal identifiers are removed from a record so that the record is no longer personally identifiable under § 303.29.
(b) Early intervention records mean all records regarding a child that are required to be collected, maintained, or used under part C of the Act and the regulations in this part.
(c) Participating agency means any individual, agency, entity, or institution that collects, maintains, or uses personally identifiable information to implement the requirements in part C of the Act and the regulations in this part with respect to a particular child. A participating agency includes the lead agency and EIS providers and any individual or entity that provides any part C services (including service coordination, evaluations and assessments, and other part C services), but does not include primary referral sources, or public agencies (such as the State Medicaid or CHIP program) or private entities (such as private insurance companies) that act solely as funding sources for part C services.
The lead agency must give notice when a child is referred under part C of the Act that is adequate to fully inform parents about the requirements in § 303.402, including—
(a) A description of the children on whom personally identifiable information is maintained, the types of information sought, the methods the State intends to use in gathering the information (including the sources from whom information is gathered), and the uses to be made of the information;
(b) A summary of the policies and procedures that participating agencies must follow regarding storage, disclosure to third parties, retention, and destruction of personally identifiable information;
(c) A description of all the rights of parents and children regarding this information, including their rights under the part C confidentiality provisions in §§ 303.401 through 303.417; and
(d) A description of the extent that the notice is provided in the native languages of the various population groups in the State.
(a) Each participating agency must permit parents to inspect and review any early intervention records relating to their children that are collected, maintained, or used by the agency under this part. The agency must comply with a parent's request to inspect and review records without unnecessary delay and before any meeting regarding an IFSP, or any hearing pursuant to §§ 303.430(d) and 303.435 through 303.439, and in no case more than 10 days after the request has been made.
(b) The right to inspect and review early intervention records under this section includes—
(1) The right to a response from the participating agency to reasonable requests for explanations and interpretations of the early intervention records;
(2) The right to request that the participating agency provide copies of the early intervention records containing the information if failure to provide those copies would effectively prevent the parent from exercising the right to inspect and review the records; and
(3) The right to have a representative of the parent inspect and review the early intervention records.
(c) An agency may presume that the parent has authority to inspect and review records relating to his or her child unless the agency has been provided documentation that the parent does not have the authority under applicable State laws governing such matters as custody, foster care, guardianship, separation, and divorce.
Each participating agency must keep a record of parties obtaining access to early intervention records collected, maintained, or used under part C of the Act (except access by parents and authorized representatives and employees of the participating agency), including the name of the party, the date access was given, and the purpose for which the party is authorized to use the early intervention records.
If any early intervention record includes information on more than one child, the parents of those children have the right to inspect and review only the information relating to their child or to be informed of that specific information.
Each participating agency must provide parents, on request, a list of the types and locations of early intervention records collected, maintained, or used by the agency.
(a) Each participating agency may charge a fee for copies of records that are made for parents under this part if the fee does not effectively prevent the parents from exercising their right to inspect and review those records, except as provided in paragraph (c) of this section.
(b) A participating agency may not charge a fee to search for or to retrieve information under this part.
(c) A participating agency must provide at no cost to parents, a copy of each evaluation, assessment of the child, family assessment, and IFSP as soon as possible after each IFSP meeting.
(a) A parent who believes that information in the early intervention records collected, maintained, or used under this part is inaccurate, misleading, or violates the privacy or other rights of the child or parent may request that the participating agency that maintains the information amend the information.
(b) The participating agency must decide whether to amend the information in accordance with the request within a reasonable period of time of receipt of the request.
(c) If the participating agency refuses to amend the information in accordance with the request, it must inform the parent of the refusal and advise the parent of the right to a hearing under § 303.411.
The participating agency must, on request, provide parents with the opportunity for a hearing to challenge information in their child's early intervention records to ensure that it is not inaccurate, misleading, or otherwise in violation of the privacy or other rights of the child or parents. A parent may request a due process hearing under the procedures in § 303.430(d)(1) provided that such hearing procedures meet the requirements of the hearing procedures in § 303.413 or may request a hearing directly under the State's procedures in § 303.413 (i.e., procedures that are consistent with the FERPA hearing requirements in 34 CFR 99.22).
(a) If, as a result of the hearing, the participating agency decides that the information is inaccurate, misleading or in violation of the privacy or other rights of the child or parent, it must amend the information accordingly and so inform the parent in writing.
(b) If, as a result of the hearing, the agency decides that the information is not inaccurate, misleading, or in violation of the privacy or other rights of the child or parent, it must inform the parent of the right to place in the early intervention records it maintains on the child a statement commenting on the information or setting forth any reasons for disagreeing with the decision of the agency.
(c) Any explanation placed in the early intervention records of the child under this section must—
(1) Be maintained by the agency as part of the early intervention records of the child as long as the record or contested portion is maintained by the agency; and
(2) If the early intervention records of the child or the contested portion are disclosed by the agency to any party, the explanation must also be disclosed to the party.
A hearing held under § 303.411 must be conducted according to the procedures under 34 CFR 99.22.
(a) Except as provided in paragraph (b) of this section, prior parental consent must be obtained before personally identifiable information is—
(1) Disclosed to anyone other than authorized representatives, officials, or employees of participating agencies collecting, maintaining, or using the information under this part, subject to paragraph (b) of this section; or
(2) Used for any purpose other than meeting a requirement of this part.
(b) A lead agency or other participating agency may not disclose personally identifiable information, as defined in § 303.29, to any party except participating agencies (including the lead agency and EIS providers) that are part of the State's part C system without parental consent unless authorized to do so under—
(1) Sections 303.401(d), 303.209(b)(1)(i) and (b)(1)(ii), and 303.211(b)(6)(ii)(A); or
(2) One of the exceptions enumerated in 34 CFR 99.31 (where applicable to part C), which are expressly adopted to apply to part C through this reference. In applying the exceptions in 34 CFR 99.31 to this part, participating agencies must also comply with the pertinent conditions in 34 CFR 99.32, 99.33, 99.34, 99.35, 99.36, 99.38, and 99.39; in applying these provisions in 34 CFR part 99 to part C, the reference to—
(i) 34 CFR 99.30 means § 303.414(a);
(ii) “Education records” means early intervention records under § 303.403(b);
(iii) “Educational” means early intervention under this part;
(iv) “Educational agency or institution” means the participating agency under § 303.404(c);
(v) “School officials and officials of another school or school system” means qualified personnel or service coordinators under this part;
(vi) “State and local educational authorities” means the lead agency under § 303.22; and
(vii) “Student” means child under this part.
(c) The lead agency must provide policies and procedures to be used when a parent refuses to provide consent under this section (such as a meeting to explain to parents how their failure to consent affects the ability of their child to receive services under this part), provided that those procedures do not override a parent's right to refuse consent under § 303.420.
(a) Each participating agency must protect the confidentiality of personally identifiable information at the collection, maintenance, use, storage, disclosure, and destruction stages.
(b) One official at each participating agency must assume responsibility for ensuring the confidentiality of any personally identifiable information.
(c) All persons collecting or using personally identifiable information must receive training or instruction regarding the State's policies and procedures under §§ 303.401 through 303.417 and 34 CFR part 99.
(d) Each participating agency must maintain, for public inspection, a current listing of the names and positions of those employees within the agency who may have access to personally identifiable information.
(a) The participating agency must inform parents when personally identifiable information collected, maintained, or used under this part is no longer needed to provide services to the child under Part C of the Act, the GEPA provisions in 20 U.S.C. 1232f, EDGAR, 34 CFR part 76, and 2 CFR part 200, as adopted in 2 CFR part 3474.
(b) Subject to paragraph (a) of this section, the information must be destroyed at the request of the parents. However, a permanent record of a child's name, date of birth, parent contact information (including address and phone number), names of service coordinator(s) and EIS provider(s), and exit data (including year and age upon exit, and any programs entered into upon exiting) may be maintained without time limitation.
The lead agency must have in effect the policies and procedures, including sanctions and the right to file a complaint under §§ 303.432 through 303.434, that the State uses to ensure that its policies and procedures, consistent with §§ 303.401 through 303.417, are followed and that the requirements of the Act and the regulations in this part are met.
(a) The lead agency must ensure parental consent is obtained before—
(1) Administering screening procedures under § 303.320 that are used to determine whether a child is suspected of having a disability;
(2) All evaluations and assessments of a child are conducted under § 303.321;
(3) Early intervention services are provided to the child under this part;
(4) Public benefits or insurance or private insurance is used if such consent is required under § 303.520; and
(5) Disclosure of personally identifiable information consistent with § 303.414.
(b) If a parent does not give consent under paragraph (a)(1), (a)(2), or (a)(3) of this section, the lead agency must make reasonable efforts to ensure that the parent—
(1) Is fully aware of the nature of the evaluation and assessment of the child or early intervention services that would be available; and
(2) Understands that the child will not be able to receive the evaluation, assessment, or early intervention service unless consent is given.
(c) The lead agency may not use the due process hearing procedures under this part or part B of the Act to challenge a parent's refusal to provide any consent that is required under paragraph (a) of this section.
(d) The parents of an infant or toddler with a disability—
(1) Determine whether they, their infant or toddler with a disability, or other family members will accept or decline any early intervention service under this part at any time, in accordance with State law; and
(2) May decline a service after first accepting it, without jeopardizing other early intervention services under this part.
(a) General. Prior written notice must be provided to parents a reasonable time before the lead agency or an EIS provider proposes, or refuses, to initiate or change the identification, evaluation, or placement of their infant or toddler, or the provision of early intervention services to the infant or toddler with a disability and that infant's or toddler's family.
(b) Content of notice. The notice must be in sufficient detail to inform parents about—
(1) The action that is being proposed or refused;
(2) The reasons for taking the action; and
(3) All procedural safeguards that are available under this subpart, including a description of mediation in § 303.431, how to file a State complaint in §§ 303.432 through 303.434 and a due process complaint in the provisions adopted under § 303.430(d), and any timelines under those procedures.
(c) Native language. (1) The notice must be—
(i) Written in language understandable to the general public; and
(ii) Provided in the native language, as defined in § 303.25, of the parent or other mode of communication used by the parent, unless it is clearly not feasible to do so.
(2) If the native language or other mode of communication of the parent is not a written language, the public agency or designated EIS provider must take steps to ensure that—
(i) The notice is translated orally or by other means to the parent in the parent's native language or other mode of communication;
(ii) The parent understands the notice; and
(iii) There is written evidence that the requirements of this paragraph have been met.
(a) General. Each lead agency or other public agency must ensure that the rights of a child are protected when—
(1) No parent (as defined in § 303.27) can be identified;
(2) The lead agency or other public agency, after reasonable efforts, cannot locate a parent; or
(3) The child is a ward of the State under the laws of that State.
(b) Duty of lead agency and other public agencies. (1) The duty of the lead agency, or other public agency under paragraph (a) of this section, includes the assignment of an individual to act as a surrogate for the parent. This assignment process must include a method for—
(i) Determining whether a child needs a surrogate parent; and
(ii) Assigning a surrogate parent to the child.
(2) In implementing the provisions under this section for children who are wards of the State or placed in foster care, the lead agency must consult with the public agency that has been assigned care of the child.
(c) Wards of the State. In the case of a child who is a ward of the State, the surrogate parent, instead of being appointed by the lead agency under paragraph (b)(1) of this section, may be appointed by the judge overseeing the infant or toddler's case provided that the surrogate parent meets the requirements in paragraphs (d)(2)(i) and (e) of this section.
(d) Criteria for selection of surrogate parents. (1) The lead agency or other public agency may select a surrogate parent in any way permitted under State law.
(2) Public agencies must ensure that a person selected as a surrogate parent—
(i) Is not an employee of the lead agency or any other public agency or EIS provider that provides early intervention services, education, care, or other services to the child or any family member of the child;
(ii) Has no personal or professional interest that conflicts with the interest of the child he or she represents; and
(iii) Has knowledge and skills that ensure adequate representation of the child.
(e) Non-employee requirement; compensation. A person who is otherwise qualified to be a surrogate parent under paragraph (d) of this section is not an employee of the agency solely because he or she is paid by the agency to serve as a surrogate parent.
(f) Surrogate parent responsibilities. The surrogate parent has the same rights as a parent for all purposes under this part.
(g) Lead agency responsibility. The lead agency must make reasonable efforts to ensure the assignment of a surrogate parent not more than 30 days after a public agency determines that the child needs a surrogate parent.
(a) General. Each statewide system must include written procedures for the timely administrative resolution of complaints through mediation, State complaint procedures, and due process hearing procedures, described in paragraphs (b) through (e) of this section.
(b) Mediation. Each lead agency must make available to parties to disputes involving any matter under this part the opportunity for mediation that meets the requirements in § 303.431.
(c) State complaint procedures. Each lead agency must adopt written State complaint procedures to resolve any State complaints filed by any party regarding any violation of this part that meet the requirements in §§ 303.432 through 303.434.
(d) Due process hearing procedures. Each lead agency must adopt written due process hearing procedures to resolve complaints with respect to a particular child regarding any matter identified in § 303.421(a), by either adopting—
(1) The part C due process hearing procedures under section 639 of the Act that—
(i) Meet the requirements in §§ 303.435 through 303.438; and
(ii) Provide a means of filing a due process complaint regarding any matter listed in § 303.421(a); or
(2) The part B due process hearing procedures under section 615 of the Act and §§ 303.440 through 303.449 (with either a 30-day or 45-day timeline for resolving due process complaints, as provided in § 303.440(c)).
(e) Status of a child during the pendency of a due process complaint. (1) During the pendency of any proceeding involving a due process complaint under paragraph (d) of this section, unless the lead agency and parents of an infant or toddler with a disability otherwise agree, the child must continue to receive the appropriate early intervention services in the setting identified in the IFSP that is consented to by the parents.
(2) If the due process complaint under paragraph (d) of this section involves an application for initial services under part C of the Act, the child must receive those services that are not in dispute.
(a) General. Each lead agency must ensure that procedures are established and implemented to allow parties to disputes involving any matter under this part, including matters arising prior to the filing of a due process complaint, to resolve disputes through a mediation process at any time.
(b) Requirements. The procedures must meet the following requirements:
(1) The procedures must ensure that the mediation process—
(i) Is voluntary on the part of the parties;
(ii) Is not used to deny or delay a parent's right to a due process hearing, or to deny any other rights afforded under part C of the Act; and
(iii) Is conducted by a qualified and impartial mediator who is trained in effective mediation techniques.
(2)(i) The State must maintain a list of individuals who are qualified mediators and knowledgeable in laws and regulations relating to the provision of early intervention services.
(ii) The lead agency must select mediators on a random, rotational, or other impartial basis.
(3) The State must bear the cost of the mediation process, including the costs of meetings described in paragraph (d) of this section.
(4) Each session in the mediation process must be scheduled in a timely manner and must be held in a location that is convenient to the parties to the dispute.
(5) If the parties resolve a dispute through the mediation process, the parties must execute a legally binding agreement that sets forth that resolution and that—
(i) States that all discussions that occurred during the mediation process will remain confidential and may not be used as evidence in any subsequent due process hearing or civil proceeding; and
(ii) Is signed by both the parent and a representative of the lead agency who has the authority to bind such agency.
(6) A written, signed mediation agreement under this paragraph is enforceable in any State court of competent jurisdiction or in a district court of the United States.
(7) Discussions that occur during the mediation process must be confidential and may not be used as evidence in any subsequent due process hearing or civil proceeding of any Federal court or State court of a State receiving assistance under this part.
(c) Impartiality of mediator. (1) An individual who serves as a mediator under this part—
(i) May not be an employee of the lead agency or an EIS provider that is involved in the provision of early intervention services or other services to the child; and
(ii) Must not have a personal or professional interest that conflicts with the person's objectivity.
(2) A person who otherwise qualifies as a mediator is not an employee of a lead agency or an early intervention provider solely because he or she is paid by the agency or provider to serve as a mediator.
(d) Meeting to encourage mediation. A lead agency may establish procedures to offer to parents and EIS providers that choose not to use the mediation process, an opportunity to meet, at a time and location convenient to the parents, with a disinterested party—
(1) Who is under contract with an appropriate alternative dispute resolution entity, or a parent training and information center or community parent resource center in the State established under section 671 or 672 of the Act; and
(2) Who would explain the benefits of, and encourage the use of, the mediation process to the parents.
(a) General. Each lead agency must adopt written procedures for—
(1) Resolving any complaint, including a complaint filed by an organization or individual from another State, that meets the requirements in § 303.434 by providing for the filing of a complaint with the lead agency; and
(2) Widely disseminating to parents and other interested individuals, including parent training and information centers, Protection and Advocacy (P&A) agencies, and other appropriate entities, the State procedures under §§ 303.432 through 303.434.
(b) Remedies for denial of appropriate services. In resolving a complaint in which the lead agency has found a failure to provide appropriate services, the lead agency, pursuant to its general supervisory authority under part C of the Act, must address—
(1) The failure to provide appropriate services, including corrective actions appropriate to address the needs of the infant or toddler with a disability who is the subject of the complaint and the infant's or toddler's family (such as compensatory services or monetary reimbursement); and
(2) Appropriate future provision of services for all infants and toddlers with disabilities and their families.
(a) Time limit; minimum procedures. Each lead agency must include in its complaint procedures a time limit of 60 days after a complaint is filed under § 303.434 to—
(1) Carry out an independent on-site investigation, if the lead agency determines that an investigation is necessary;
(2) Give the complainant the opportunity to submit additional information, either orally or in writing, about the allegations in the complaint;
(3) Provide the lead agency, public agency, or EIS provider with an opportunity to respond to the complaint, including, at a minimum—
(i) At the discretion of the lead agency, a proposal to resolve the complaint; and
(ii) An opportunity for a parent who has filed a complaint and the lead agency, public agency, or EIS provider to voluntarily engage in mediation, consistent with §§ 303.430(b) and 303.431;
(4) Review all relevant information and make an independent determination as to whether the lead agency, public agency, or EIS provider is violating a requirement of part C of the Act or of this part; and
(5) Issue a written decision to the complainant that addresses each allegation in the complaint and contains—
(i) Findings of fact and conclusions; and
(ii) The reasons for the lead agency's final decision.
(b) Time extension; final decision; implementation. The lead agency's procedures described in paragraph (a) of this section also must—
(1) Permit an extension of the time limit under paragraph (a) of this section only if—
(i) Exceptional circumstances exist with respect to a particular complaint; or
(ii) The parent (or individual or organization, if mediation is available to the individual or organization under State procedures) and the lead agency, public agency or EIS provider involved agree to extend the time to engage in mediation pursuant to paragraph (a)(3)(ii) of this section; and
(2) Include procedures for effective implementation of the lead agency's final decision, if needed, including—
(i) Technical assistance activities;
(ii) Negotiations; and
(iii) Corrective actions to achieve compliance.
(c) Complaints filed under this section and due process hearings under § 303.430(d). (1) If a written complaint is received that is also the subject of a due process hearing under § 303.430(d), or contains multiple issues of which one or more are part of that hearing, the State must set aside any part of the complaint that is being addressed in the due process hearing until the conclusion of the hearing. However, any issue in the complaint that is not a part of the due process hearing must be resolved using the time limit and procedures described in paragraphs (a) and (b) of this section.
(2) If an issue raised in a complaint filed under this section has previously been decided in a due process hearing involving the same parties—
(i) The due process hearing decision is binding on that issue; and
(ii) The lead agency must inform the complainant to that effect.
(3) A complaint alleging a lead agency, public agency, or EIS provider's failure to implement a due process hearing decision must be resolved by the lead agency.
(a) An organization or individual may file a signed written complaint under the procedures described in §§ 303.432 and 303.433.
(b) The complaint must include—
(1) A statement that the lead agency, public agency, or EIS provider has violated a requirement of part C of the Act;
(2) The facts on which the statement is based;
(3) The signature and contact information for the complainant; and
(4) If alleging violations with respect to a specific child—
(i) The name and address of the residence of the child;
(ii) The name of the EIS provider serving the child;
(iii) A description of the nature of the problem of the child, including facts relating to the problem; and
(iv) A proposed resolution of the problem to the extent known and available to the party at the time the complaint is filed.
(c) The complaint must allege a violation that occurred not more than one year prior to the date that the complaint is received in accordance with § 303.432.
(d) The party filing the complaint must forward a copy of the complaint to the public agency or EIS provider serving the child at the same time the party files the complaint with the lead agency.
(a) Qualifications and duties. Whenever a due process complaint is received under § 303.430(d), a due process hearing officer must be appointed to implement the complaint resolution process in this subpart. The person must—
(1) Have knowledge about the provisions of this part and the needs of, and early intervention services available for, infants and toddlers with disabilities and their families; and
(2) Perform the following duties:
(i)(A) Listen to the presentation of relevant viewpoints about the due process complaint.
(B) Examine all information relevant to the issues.
(C) Seek to reach a timely resolution of the due process complaint.
(ii) Provide a record of the proceedings, including a written decision.
(b) Definition of impartial. (1) Impartial means that the due process hearing officer appointed to implement the due process hearing under this part—
(i) Is not an employee of the lead agency or an EIS provider involved in the provision of early intervention services or care of the child; and
(ii) Does not have a personal or professional interest that would conflict with his or her objectivity in implementing the process.
(2) A person who otherwise qualifies under paragraph (b)(1) of this section is not an employee of an agency solely because the person is paid by the agency to implement the due process hearing procedures or mediation procedures under this part.
(a) General. Each lead agency must ensure that the parents of a child referred to part C are afforded the rights in paragraph (b) of this section in the due process hearing carried out under § 303.430(d).
(b) Rights. Any parent involved in a due process hearing has the right to—
(1) Be accompanied and advised by counsel and by individuals with special knowledge or training with respect to early intervention services for infants and toddlers with disabilities;
(2) Present evidence and confront, cross-examine, and compel the attendance of witnesses;
(3) Prohibit the introduction of any evidence at the hearing that has not been disclosed to the parent at least five days before the hearing;
(4) Obtain a written or electronic verbatim transcription of the hearing at no cost to the parent; and
(5) Receive a written copy of the findings of fact and decisions at no cost to the parent.
(a) Any due process hearing conducted under this subpart must be carried out at a time and place that is reasonably convenient to the parents.
(b) Each lead agency must ensure that, not later than 30 days after the receipt of a parent's due process complaint, the due process hearing required under this subpart is completed and a written decision mailed to each of the parties.
(c) A hearing officer may grant specific extensions of time beyond the period set out in paragraph (b) of this section at the request of either party.
Any party aggrieved by the findings and decision issued pursuant to a due process complaint has the right to bring a civil action in State or Federal court under section 639(a)(1) of the Act.
(a) General. (1) A parent, EIS provider, or a lead agency may file a due process complaint on any of the matters described in § 303.421(a), relating to the identification, evaluation, or placement of a child, or the provision of early intervention services to the infant or toddler with a disability and his or her family under part C of the Act.
(2) The due process complaint must allege a violation that occurred not more than two years before the date the parent or EIS provider knew, or should have known, about the alleged action that forms the basis of the due process complaint, or, if the State has an explicit time limitation for filing a due process complaint under this part, in the time allowed by that State law, except that the exceptions to the timeline described in § 303.443(f) apply to the timeline in this section.
(b) Information for parents. The lead agency must inform the parent of any free or low-cost legal and other relevant services available in the area if—
(1) The parent requests the information; or
(2) The parent or EIS provider files a due process complaint under this section.
(c) Timeline for Resolution. The lead agency may adopt a 30- or 45-day timeline, subject to § 303.447(a), for the resolution of due process complaints and must specify in its written policies and procedures under § 303.123 and in its prior written notice under § 303.421, the specific timeline it has adopted.
(a) General. (1) The lead agency must have procedures that require either party, or the attorney representing a party, to provide to the other party a due process complaint (which must remain confidential).
(2) The party filing a due process complaint must forward a copy of the due process complaint to the lead agency.
(b) Content of complaint. The due process complaint required in paragraph (a)(1) of this section must include—
(1) The name of the child;
(2) The address of the residence of the child;
(3) The name of the EIS provider serving the child;
(4) In the case of a homeless child (within the meaning of section 725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)), available contact information for the child, and the name of the EIS provider serving the child;
(5) A description of the nature of the problem of the child relating to the proposed or refused initiation or change, including facts relating to the problem; and
(6) A proposed resolution of the problem to the extent known and available to the party at the time.
(c) Notice required before a hearing on a due process complaint. A party may not have a hearing on a due process complaint until the party, or the attorney representing the party, files a due process complaint that meets the requirements of paragraph (b) of this section.
(d) Sufficiency of complaint. (1) The due process complaint required by this section must be deemed sufficient unless the party receiving the due process complaint notifies the hearing officer and the other party in writing, within 15 days of receipt of the due process complaint, that the receiving party believes the due process complaint does not meet the requirements in paragraph (b) of this section.
(2) Within five days of receipt of notification under paragraph (d)(1) of this section, the hearing officer must make a determination on the face of the due process complaint of whether the due process complaint meets the requirements in paragraph (b) of this section, and must immediately notify the parties in writing of that determination.
(3) A party may amend its due process complaint only if—
(i) The other party consents in writing to the amendment and is given the opportunity to resolve the due process complaint through a meeting held pursuant to § 303.442; or
(ii) The hearing officer grants permission, except that the hearing officer may only grant permission to amend at any time not later than five days before the due process hearing begins.
(4) If a party files an amended due process complaint, the timelines for the resolution meeting in § 303.442(a) and the time period to resolve in § 303.442(b) begin again with the filing of the amended due process complaint.
(e) Lead agency response to a due process complaint. (1) If the lead agency has not sent a prior written notice under § 303.421 to the parent regarding the subject matter contained in the parent's due process complaint, the lead agency or EIS provider must, within 10 days of receiving the due process complaint, send to the parent a response that includes—
(i) An explanation of why the lead agency or EIS provider proposed or refused to take the action raised in the due process complaint;
(ii) A description of other options that the IFSP Team considered and the reasons why those options were rejected;
(iii) A description of each evaluation procedure, assessment, record, or report the lead agency or EIS provider used as the basis for the proposed or refused action; and
(iv) A description of the other factors that are relevant to the agency's or EIS provider's proposed or refused action.
(2) A response by the lead agency under paragraph (e)(1) of this section does not preclude the lead agency from asserting that the parent's due process complaint was insufficient, where appropriate.
(f) Other party response to a due process complaint. Except as provided in paragraph (e) of this section, the party receiving a due process complaint must, within 10 days of receiving the due process complaint, send to the other party a response that specifically addresses the issues raised in the due process complaint.
(a) Resolution meeting. (1) Within 15 days of receiving notice of the parent's due process complaint, and prior to the initiation of a due process hearing under § 303.443, the lead agency must convene a meeting with the parent and the relevant member or members of the IFSP Team who have specific knowledge of the facts identified in the due process complaint that—
(i) Includes a representative of the lead agency who has decision-making authority on behalf of that agency; and
(ii) May not include an attorney of the lead agency unless the parent is accompanied by an attorney.
(2) The purpose of the resolution meeting is for the parent of the child to discuss the due process complaint, and the facts that form the basis of the due process complaint, so that the lead agency has the opportunity to resolve the dispute that is the basis for the due process complaint.
(3) The meeting described in paragraphs (a)(1) and (a)(2) of this section need not be held if—
(i) The parent and lead agency agree in writing to waive the meeting; or
(ii) The parent and lead agency agree to use the mediation process described in § 303.431.
(4) The parent and the lead agency must determine the relevant members of the IFSP Team to attend the meeting.
(b) Resolution period. (1) If the lead agency has not resolved the due process complaint to the satisfaction of the parties within 30 days of the receipt of the due process complaint, the due process hearing may occur.
(2) Except as provided in paragraph (c) of this section, the timeline for issuing a final decision under § 303.447 begins at the expiration of the 30-day period in paragraph (b)(1) of this section.
(3) Except where the parties have jointly agreed to waive the resolution process or to use mediation, notwithstanding paragraphs (b)(1) and (b)(2) of this section, the failure of the parent filing a due process complaint to participate in the resolution meeting will delay the timelines for the resolution process and due process hearing until the meeting is held.
(4) If the lead agency is unable to obtain the participation of the parent in the resolution meeting after reasonable efforts have been made, including documenting its efforts, the lead agency may, at the conclusion of the 30-day period, request that the hearing officer dismiss the parent's due process complaint.
(5) If the lead agency fails to hold the resolution meeting specified in paragraph (a) of this section within 15 days of receiving notice of a parent's due process complaint or fails to participate in the resolution meeting, the parent may seek the intervention of a hearing officer to begin the due process hearing timeline.
(c) Adjustments to 30-day resolution period. The 30- or 45-day timeline adopted by the lead agency under § 303.440(c) for the due process hearing described in § 303.447(a) starts the day after one of the following events:
(1) Both parties agree in writing to waive the resolution meeting.
(2) After either the mediation or resolution meeting starts but before the end of the 30-day period, the parties agree in writing that no agreement is possible.
(3) If both parties agree in writing to continue the mediation at the end of the 30-day resolution period, but later, the parent or lead agency withdraws from the mediation process.
(d) Written settlement agreement. If a resolution to the dispute is reached at the meeting described in paragraphs (a)(1) and (a)(2) of this section, the parties must execute a legally binding agreement that is—
(1) Signed by both the parent and a representative of the lead agency who has the authority to bind the agency; and
(2) Enforceable in any State court of competent jurisdiction or in a district court of the United States, or, by the lead agency, if the State has other mechanisms or procedures that permit parties to seek enforcement of resolution agreements pursuant to this section.
(e) Agreement review period. If the parties execute an agreement pursuant to paragraph (d) of this section, a party may void the agreement within three business days of the agreement's execution.
(a) General. Whenever a due process complaint is received consistent with § 303.440, the parents or the EIS provider involved in the dispute must have an opportunity for an impartial due process hearing, consistent with the procedures in §§ 303.440 through 303.442.
(b) Agency responsible for conducting the due process hearing. The hearing described in paragraph (a) of this section must be conducted by the lead agency directly responsible for the early intervention services of the infant or toddler, as determined under State statute, State regulation, or a written policy of the lead agency.
(c) Impartial hearing officer. (1) At a minimum, a hearing officer—
(i) Must not be—
(A) An employee of the lead agency or the EIS provider that is involved in the early intervention services or care of the infant or toddler; or
(B) A person having a personal or professional interest that conflicts with the person's objectivity in the hearing;
(ii) Must possess knowledge of, and the ability to understand, the provisions of the Act, Federal and State regulations pertaining to the Act, and legal interpretations of the Act by Federal and State courts;
(iii) Must possess the knowledge and ability to conduct hearings in accordance with appropriate, standard legal practice; and
(iv) Must possess the knowledge and ability to render and write decisions in accordance with appropriate, standard legal practice.
(2) A person who otherwise qualifies to conduct a hearing under paragraph (c)(1) of this section is not an employee of the agency solely because he or she is paid by the agency to serve as a hearing officer.
(3) Each lead agency must keep a list of the persons who serve as hearing officers. The list must include a statement of the qualifications of each of those persons.
(d) Subject matter of due process hearings. The party requesting the due process hearing may not raise issues at the due process hearing that were not raised in the due process complaint filed under § 303.441(b), unless the other party agrees otherwise.
(e) Timeline for requesting a hearing. A parent, lead agency, or EIS provider must request an impartial hearing on their due process complaint within two years of the date the parent, lead agency, or EIS provider knew or should have known about the alleged action that forms the basis of the due process complaint, or if the State has an explicit time limitation for requesting such a due process hearing under this part, in the time allowed by that State law.
(f) Exceptions to the timeline. The timeline described in paragraph (e) of this section does not apply to a parent if the parent was prevented from filing a due process complaint due to—
(1) Specific misrepresentations by the lead agency or EIS provider that it had resolved the problem forming the basis of the due process complaint; or
(2) The lead agency's or EIS provider's failure to provide the parent information that was required under this part to be provided to the parent.
(a) General. Any party to a hearing conducted pursuant to §§ 303.440 through 303.445, or an appeal conducted pursuant to § 303.446, has the right to—
(1) Be accompanied and advised by counsel and by individuals with special knowledge or training with respect to the problems of infants or toddlers with disabilities;
(2) Present evidence and confront, cross-examine, and compel the attendance of witnesses;
(3) Prohibit the introduction of any evidence at the hearing that has not been disclosed to that party at least five business days before the hearing;
(4) Obtain a written or, at the option of the parents, electronic, verbatim record of the hearing; and
(5) Obtain written or, at the option of the parents, electronic findings of fact and decisions.
(b) Additional disclosure of information. (1) At least five business days prior to a hearing conducted pursuant to § 303.443(a), each party must disclose to all other parties all evaluations completed by that date and recommendations based on the offering party's evaluations that the party intends to use at the hearing.
(2) A hearing officer may bar any party that fails to comply with paragraph (b)(1) of this section from introducing the relevant evaluation or recommendation at the hearing without the consent of the other party.
(c) Parental rights at hearings. Parents involved in hearings must—
(1) Be given the right to open the hearing to the public; and
(2) Receive a copy of the record of the hearing and the findings of fact and decisions described in paragraphs (a)(4) and (a)(5) of this section at no cost.
(a) Decision of hearing officer. (1) Subject to paragraph (a)(2) of this section, a hearing officer's determination of whether an infant or toddler was appropriately identified, evaluated, or placed, or whether the infant or toddler with a disability and his or her family were appropriately provided early intervention services under part C of the Act, must be based on substantive grounds.
(2) In matters alleging a procedural violation, a hearing officer may find that a child was not appropriately identified, evaluated, placed, or provided early intervention services under part C of the Act only if the procedural inadequacies—
(i) Impeded the child's right to identification, evaluation, and placement or provision of early intervention services for the child and that child's family under part C of the Act;
(ii) Significantly impeded the parent's opportunity to participate in the decision-making process regarding identification, evaluation, placement or provision of early intervention services for the child and that child's family under part C of the Act; or
(iii) Caused a deprivation of educational or developmental benefit.
(3) Nothing in paragraph (a) of this section precludes a hearing officer from ordering the lead agency or EIS provider to comply with procedural requirements under §§ 303.400 through 303.449.
(b) Construction clause. Nothing in §§ 303.440 through 303.445 affects the right of a parent to file an appeal of the due process hearing decision with the lead agency under § 303.446(b), if the lead agency level appeal is available.
(c) Separate due process complaint. Nothing in §§ 303.440 through 303.449 precludes a parent from filing a separate due process complaint on an issue separate from a due process complaint already filed.
(d) Findings and decisions to general public. The lead agency, after deleting any personally identifiable information, must make the findings and decisions available to the public.
(a) Finality of hearing decision. A decision made in a hearing conducted pursuant to §§ 303.440 through 303.445 is final, except that any party involved in the hearing may appeal the decision under the provisions of paragraph (b) of this section and § 303.448.
(b) Appeal of decisions; impartial review. (1) The lead agency may provide for procedures to allow any party aggrieved by the findings and decision in the hearing to appeal to the lead agency.
(2) If there is an appeal, the lead agency must conduct an impartial review of the findings and decision appealed. The official conducting the review must—
(i) Examine the entire hearing record;
(ii) Ensure that the procedures at the hearing were consistent with the requirements of due process;
(iii) Seek additional evidence if necessary. If a hearing is held to receive additional evidence, the rights in § 303.444 apply;
(iv) Afford the parties an opportunity for oral or written argument, or both, at the discretion of the reviewing official;
(v) Make an independent decision on completion of the review; and
(vi) Give a copy of the written or, at the option of the parents, electronic findings of fact and decisions to the parties.
(c) Findings of fact and decision to the general public. The lead agency, after deleting any personally identifiable information, must make the findings of fact and decisions described in paragraph (b)(2)(vi) of this section available to the general public.
(d) Finality of review decision. The decision made by the reviewing official is final unless a party brings a civil action under § 303.448.
(a) The lead agency must ensure that not later than either 30 days or 45 days (consistent with the lead agency's written policies and procedures adopted under § 303.440(c)) after the expiration of the 30-day period in § 303.442(b), or the adjusted 30-day time periods described in § 303.442(c))—
(1) A final decision is reached in the hearing; and
(2) A copy of the decision is mailed to each of the parties.
(b) The lead agency must ensure that not later than 30 days after the receipt of a request for a review—
(1) A final decision is reached in the review; and
(2) A copy of the decision is mailed to each of the parties.
(c) A hearing or reviewing officer may grant specific extensions of time beyond the periods set out in paragraphs (a) and (b) of this section at the request of either party.
(d) Each hearing and each review involving oral arguments must be conducted at a time and place that is reasonably convenient to the parents and child involved.
(a) General. Any party aggrieved by the findings and decision made under §§ 303.440 through 303.445 who does not have the right to an appeal under § 303.446(b), and any party aggrieved by the findings and decision under § 303.446(b), has the right to bring a civil action with respect to the due process complaint under § 303.440. The action may be brought in any State court of competent jurisdiction or in a district court of the United States without regard to the amount in controversy.
(b) Time limitation. The party bringing the action has 90 days from the date of the decision of the hearing officer or, if applicable, the decision of the State review official, to file a civil action, or, if the State has an explicit time limitation for bringing civil actions under part C of the Act, in the time allowed by that State law.
(c) Additional requirements. In any action brought under paragraph (a) of this section, the court—
(1) Receives the records of the administrative proceedings;
(2) Hears additional evidence at the request of a party; and
(3) Basing its decision on the preponderance of the evidence, grants the relief that the court determines to be appropriate.
(d) Jurisdiction of district courts. The district courts of the United States have jurisdiction of actions brought under section 615 of the Act without regard to the amount in controversy.
(e) Rule of construction. Nothing in this part restricts or limits the rights, procedures, and remedies available under the Constitution, the Americans with Disabilities Act of 1990, title V of the Rehabilitation Act of 1973, or other Federal laws protecting the rights of children with disabilities, except that before the filing of a civil action under these laws seeking relief that is also available under section 615 of the Act, the procedures under §§ 303.440 and 303.446 must be exhausted to the same extent as would be required had the action been brought under section 615 of the Act.
Notwithstanding §§ 303.431(b)(6) and 303.442(d)(2), which provide for judicial enforcement of a written agreement reached as a result of a mediation or a resolution meeting, there is nothing in this part that would prevent the State from using other mechanisms to seek enforcement of that agreement, provided that use of those mechanisms is not mandatory and does not delay or deny a party the right to seek enforcement of the written agreement in a State court or competent jurisdiction or in a district court of the United States.
(a) Statewide system. Each statewide system must include written policies and procedures that meet the requirements of the—
(1) Use of funds provisions in § 303.501; and
(2) Payor of last resort provisions in §§ 303.510 through 303.521 (regarding the identification and coordination of funding resources for, and the provision of, early intervention services under part C of the Act within the State).
(b) System of Payments. A State may establish, consistent with §§ 303.13(a)(3) and 303.203(b), a system of payments for early intervention services under part C of the Act, including a schedule of sliding fees or cost participation fees (such as co-payments, premiums, or deductibles) required to be paid under Federal, State, local, or private programs of insurance or benefits for which the infant or toddler with a disability or the child's family is enrolled, that meets the requirements of §§ 303.520 and 303.521.
Consistent with §§ 303.120 through 303.122 and §§ 303.220 through 303.226, a lead agency may use funds under this part for activities or expenses that are reasonable and necessary for implementing the State's early intervention program for infants and toddlers with disabilities including funds—
(a) For direct early intervention services for infants and toddlers with disabilities and their families under this part that are not otherwise funded through other public or private sources (subject to §§ 303.510 through 303.521);
(b) To expand and improve services for infants and toddlers with disabilities and their families under this part that are otherwise available;
(c)(1) To provide FAPE as that term is defined in § 303.15, in accordance with part B of the Act, to children with disabilities from their third birthday to the beginning of the following school year;
(2) The provision of FAPE under paragraph (c)(1) of this section does not apply to children who continue to receive early intervention services under this part in accordance with paragraph (d) of this section and § 303.211;
(d) With the written consent of the parents, to continue to provide early intervention services under this part, in lieu of FAPE provided in accordance with part B of the Act, to children with disabilities from their third birthday (pursuant to § 303.211) until those children enter, or are eligible under State law to enter, kindergarten; and
(e) In any State that does not provide services under § 303.204 for at-risk infants and toddlers, as defined in § 303.5, to strengthen the statewide system by initiating, expanding, or improving collaborative efforts related to at-risk infants and toddlers, including establishing linkages with appropriate public and private community-based organizations, services, and personnel for the purposes of—
(1) Identifying and evaluating at-risk infants and toddlers;
(2) Making referrals for the infants and toddlers identified and evaluated under paragraph (e)(1) of this section; and
(3) Conducting periodic follow-up on each referral, to determine if the status of the infant or toddler involved has changed with respect to the eligibility of the infant or toddler for services under this part.
(a) Nonsubstitution of funds. Except as provided in paragraph (b) of this section, funds under this part may not be used to satisfy a financial commitment for services that would otherwise have been paid for from another public or private source, including any medical program administered by the Department of Defense, but for the enactment of part C of the Act. Therefore, funds under this part may be used only for early intervention services that an infant or toddler with a disability needs but is not currently entitled to receive or have payment made from any other Federal, State, local, or private source (subject to §§ 303.520 and 303.521).
(b) Interim payments—reimbursement. If necessary to prevent a delay in the timely provision of appropriate early intervention services to a child or the child's family, funds under this part may be used to pay the provider of services (for services and functions authorized under this part, including health services, as defined in § 303.16 (but not medical services), functions of the child find system described in §§ 303.115 through 303.117 and §§ 303.301 through 303.320, and evaluations and assessments in § 303.321), pending reimbursement from the agency or entity that has ultimate responsibility for the payment.
(c) Non-reduction of benefits. Nothing in this part may be construed to permit a State to reduce medical or other assistance available in the State or to alter eligibility under Title V of the Social Security Act, 42 U.S.C. 701, et seq. (SSA) (relating to maternal and child health) or Title XIX of the SSA, 42 U.S.C. 1396 (relating to Medicaid), including section 1903(a) of the SSA regarding medical assistance for services furnished to an infant or toddler with a disability when those services are included in the child's IFSP adopted pursuant to part C of the Act.
(a) General. Each State must ensure that it has in place methods for State interagency coordination. Under these methods, the Chief Executive Officer of a State or designee of the Officer must ensure that the interagency agreement or other method for interagency coordination is in effect between each State public agency and the designated lead agency in order to ensure—
(1) The provision of, and establishing financial responsibility for, early intervention services provided under this part; and
(2) Such services are consistent with the requirement in section 635 of the Act and the State's application under section 637 of the Act, including the provision of such services during the pendency of any dispute between State agencies.
(b) The methods in paragraph (a) of this section must meet all requirements in this section and be set forth in one of the following:
(1) State law or regulation;
(2) Signed interagency and intra-agency agreements between respective agency officials that clearly identify the financial and service provision responsibilities of each agency (or entity within the agency); or
(3) Other appropriate written methods determined by the Governor of the State, or the Governor's designee, and approved by the Secretary through the review and approval of the State's application.
(c) Procedures for resolving disputes. (1) Each method must include procedures for achieving a timely resolution of intra-agency and interagency disputes about payments for a given service, or disputes about other matters related to the State's early intervention service program. Those procedures must include a mechanism for resolution of disputes within agencies and for the Governor, Governor's designee, or the lead agency to make a final determination for interagency disputes, which determination must be binding upon the agencies involved.
(2) The method must—
(i) Permit the agency to resolve its own internal disputes (based on the agency's procedures that are included in the agreement), so long as the agency acts in a timely manner; and
(ii) Include the process that the lead agency will follow in achieving resolution of intra-agency disputes, if a given agency is unable to resolve its own internal disputes in a timely manner.
(3) If, during the lead agency's resolution of the dispute, the Governor, Governor's designee, or lead agency determines that the assignment of financial responsibility under this section was inappropriately made—
(i) The Governor, Governor's designee, or lead agency must reassign the financial responsibility to the appropriate agency; and
(ii) The lead agency must make arrangements for reimbursement of any expenditures incurred by the agency originally assigned financial responsibility.
(d) Delivery of services in a timely manner. The methods adopted by the State under this section must—
(1) Include a mechanism to ensure that no services that a child is entitled to receive under this part are delayed or denied because of disputes between agencies regarding financial or other responsibilities; and
(2) Be consistent with the written funding policies adopted by the State under this subpart and include any provisions the State has adopted under § 303.520 regarding the use of insurance to pay for part C services.
(e) Additional components. Each method must include any additional components necessary to ensure effective cooperation and coordination among, and the lead agency's general supervision (including monitoring) of, EIS providers (including all public agencies) involved in the State's early intervention service programs.
(a) Use of public benefits or public insurance to pay for part C services. (1) A State may not use the public benefits or insurance of a child or parent to pay for part C services unless the State provides written notification, consistent with § 303.520(a)(3), to the child's parents, and the State meets the no-cost protections identified in paragraph (a)(2) of this section.
(2) With regard to using the public benefits or insurance of a child or parent to pay for part C services, the State—
(i) May not require a parent to sign up for or enroll in public benefits or insurance programs as a condition of receiving part C services and must obtain consent prior to using the public benefits or insurance of a child or parent if that child or parent is not already enrolled in such a program;
(ii) Must obtain consent, consistent with §§ 303.7 and 303.420(a)(4), to use a child's or parent's public benefits or insurance to pay for part C services if that use would—
(A) Decrease available lifetime coverage or any other insured benefit for that child or parent under that program;
(B) Result in the child's parents paying for services that would otherwise be covered by the public benefits or insurance program;
(C) Result in any increase in premiums or discontinuation of public benefits or insurance for that child or that child's parents; or
(D) Risk loss of eligibility for the child or that child's parents for home and community-based waivers based on aggregate health-related expenditures.
(iii) If the parent does not provide consent under paragraphs (a)(2)(i) or (a)(2)(ii) of this section, the State must still make available those part C services on the IFSP to which the parent has provided consent.
(3) Prior to using a child's or parent's public benefits or insurance to pay for part C services, the State must provide written notification to the child's parents. The notification must include—
(i) A statement that parental consent must be obtained under § 303.414, if that provision applies, before the State lead agency or EIS provider discloses, for billing purposes, a child's personally identifiable information to the State public agency responsible for the administration of the State's public benefits or insurance program (e.g., Medicaid);
(ii) A statement of the no-cost protection provisions in § 303.520(a)(2) and that if the parent does not provide the consent under § 303.520(a)(2), the State lead agency must still make available those part C services on the IFSP for which the parent has provided consent;
(iii) A statement that the parents have the right under § 303.414, if that provision applies, to withdraw their consent to disclosure of personally identifiable information to the State public agency responsible for the administration of the State's public benefits or insurance program (e.g., Medicaid) at any time; and
(iv) A statement of the general categories of costs that the parent would incur as a result of participating in a public benefits or insurance program (such as co-payments or deductibles, or the required use of private insurance as the primary insurance).
(4) If a State requires a parent to pay any costs that the parent would incur as a result of the State's using a child's or parent's public benefits or insurance to pay for part C services (such as co-payments or deductibles, or the required use of private insurance as the primary insurance), those costs must be identified in the State's system of payments policies under § 303.521 and included in the notification provided to the parent under paragraph (a)(3) of this section; otherwise, the State cannot charge those costs to the parent.
(b) Use of private insurance to pay for Part C services. (1)(i) The State may not use the private insurance of a parent of an infant or toddler with a disability to pay for part C services unless the parent provides parental consent, consistent with §§ 303.7 and 303.420(a)(4), to use private insurance to pay for part C services for his or her child or the State meets one of the exceptions in paragraph (b)(2) of this section. This includes the use of private insurance when such use is a prerequisite for the use of public benefits or insurance. Parental consent must be obtained—
(A) When the lead agency or EIS provider seeks to use the parent's private insurance or benefits to pay for the initial provision of an early intervention service in the IFSP; and
(B) Each time consent for services is required under § 303.420(a)(3) due to an increase (in frequency, length, duration, or intensity) in the provision of services in the child's IFSP.
(ii) If a State requires a parent to pay any costs that the parent would incur as a result of the State's use of private insurance to pay for early intervention services (such as co-payments, premiums, or deductibles), those costs must be identified in the State's system of payments policies under § 303.521; otherwise, the State may not charge those costs to the parent.
(iii) When obtaining parental consent required under paragraph (b)(1)(i) of this section or initially using benefits under a child or parent's private insurance policy to pay for an early intervention service under paragraph (b)(2) of this section, the State must provide to the parent a copy of the State's system of payments policies that identifies the potential costs that the parent may incur when their private insurance is used to pay for early intervention services under this part (such as co-payments, premiums, or deductibles or other long-term costs such as the loss of benefits because of annual or lifetime health insurance coverage caps under the insurance policy).
(2) The parental consent requirements in paragraph (b)(1) of this section do not apply if the State has enacted a State statute regarding private health insurance coverage for early intervention services under part C of the Act, that expressly provides that—
(i) The use of private health insurance to pay for part C services cannot count towards or result in a loss of benefits due to the annual or lifetime health insurance coverage caps for the infant or toddler with a disability, the parent, or the child's family members who are covered under that health insurance policy;
(ii) The use of private health insurance to pay for part C services cannot negatively affect the availability of health insurance to the infant or toddler with a disability, the parent, or the child's family members who are covered under that health insurance policy, and health insurance coverage may not be discontinued for these individuals due to the use of the health insurance to pay for services under part C of the Act; and
(iii) The use of private health insurance to pay for part C services cannot be the basis for increasing the health insurance premiums of the infant or toddler with a disability, the parent, or the child's family members covered under that health insurance policy.
(3) If a State has enacted a State statute that meets the requirements in paragraph (b)(2) of this section, regarding the use of private health insurance coverage to pay for early intervention services under part C of the Act, the State may reestablish a new baseline of State and local expenditures under § 303.225(b) in the next Federal fiscal year following the effective date of the statute.
(c) Inability to pay. If a parent or family of an infant or toddler with a disability is determined unable to pay under the State's definition of inability to pay under § 303.521(a)(3) and does not provide consent under paragraph (b)(1), the lack of consent may not be used to delay or deny any services under this part to that child or family.
(d) Proceeds or funds from public insurance or benefits or from private insurance. (1) Proceeds or funds from public insurance or benefits or from private insurance are not treated as program income for purposes of 2 CFR 200.307.
(2) If the State receives reimbursements from Federal funds (e.g., Medicaid reimbursements attributable directly to Federal funds) for services under part C of the Act, those funds are considered neither State nor local funds under § 303.225(b).
(3) If the State spends funds from private insurance for services under this part, those funds are considered neither State nor local funds under § 303.225.
(e) Funds received from a parent or family member under a State's system of payments. Funds received by the State from a parent or family member under the State's system of payments established under § 303.521 are considered program income under 2 CFR 200.307. These funds—
(1) Are not deducted from the total allowable costs charged under part C of the Act (as set forth in 2 CFR 200.307(e)(1));
(2) Must be used for the State's part C early intervention services program, consistent with 2 CFR 200.307(e)(2); and
(3) Are considered neither State nor local funds under § 303.225(b).
(a) General. If a State elects to adopt a system of payments in § 303.500(b), the State's system of payments policies must be in writing and specify which functions or services, if any, are subject to the system of payments (including any fees charged to the family as a result of using one or more of the family's public insurance or benefits or private insurance), and include—
(1) The payment system and schedule of sliding or cost participation fees that may be charged to the parent for early intervention services under this part;
(2) The basis and amount of payments or fees;
(3) The State's definition of ability to pay (including its definition of income and family expenses, such as extraordinary medical expenses), its definition of inability to pay, and when and how the State makes its determination of the ability or inability to pay;
(4) An assurance that—
(i) Fees will not be charged to parents for the services that a child is otherwise entitled to receive at no cost (including those services identified under paragraphs (a)(4)(ii), (b), and (c) of this section);
(ii) The inability of the parents of an infant or toddler with a disability to pay for services will not result in a delay or denial of services under this part to the child or the child's family such that, if the parent or family meets the State's definition of inability to pay, the infant or toddler with a disability must be provided all part C services at no cost.
(iii) Families will not be charged any more than the actual cost of the part C service (factoring in any amount received from other sources for payment for that service); and
(iv) Families with public insurance or benefits or private insurance will not be charged disproportionately more than families who do not have public insurance or benefits or private insurance;
(5) Provisions stating that the failure to provide the requisite income information and documentation may result in a charge of a fee on the fee schedule and specify the fee to be charged; and
(6) Provisions that permit, but do not require, the lead agency to use part C or other funds to pay for costs such as the premiums, deductibles, or co-payments.
(b) Functions not subject to fees. The following are required functions that must be carried out at public expense, and for which no fees may be charged to parents:
(1) Implementing the child find requirements in §§ 303.301 through 303.303.
(2) Evaluation and assessment, in accordance with § 303.320, and the functions related to evaluation and assessment in § 303.13(b).
(3) Service coordination services, as defined in §§ 303.13(b)(11) and 303.33.
(4) Administrative and coordinative activities related to—
(i) The development, review, and evaluation of IFSPs and interim IFSPs in accordance with §§ 303.342 through 303.345; and
(ii) Implementation of the procedural safeguards in subpart E of this part and the other components of the statewide system of early intervention services in subpart D of this part and this subpart.
(c) States with FAPE mandates, or that use funds under Part B of the Act to serve children under age three. If a State has in effect a State law requiring the provision of FAPE for, or uses part B funds to serve, an infant or toddler with a disability under the age of three (or any subset of infants and toddlers with disabilities under the age of three), the State may not charge the parents of the infant or toddler with a disability for any services (e.g., physical or occupational therapy) under this part that are part of FAPE for that infant or toddler and the child's family, and those FAPE services must meet the requirements of both parts B and C of the Act.
(d) Family fees. (1) Fees or costs collected from a parent or the child's family to pay for early intervention services under a State's system of payments are program income under 2 CFR 200.307. A State may add this program income to its part C grant funds, rather than deducting the program income from the amount of the State's part C grant. Any fees collected must be used for the purposes of the grant under part C of the Act.
(2) Fees collected under a system of payments are considered neither State nor local funds under § 303.225(b).
(e) Procedural Safeguards. (1) Each State system of payments must include written policies to inform parents that a parent who wishes to contest the imposition of a fee, or the State's determination of the parent's ability to pay, may do one of the following:
(i) Participate in mediation in accordance with § 303.431.
(ii) Request a due process hearing under § 303.436 or 303.441, whichever is applicable.
(iii) File a State complaint under § 303.434.
(iv) Use any other procedure established by the State for speedy resolution of financial claims, provided that such use does not delay or deny the parent's procedural rights under this part, including the right to pursue, in a timely manner, the redress options described in paragraphs (e)(2)(i) through (e)(2)(iii) of this section.
(2) A State must inform parents of these procedural safeguard options by either—
(i) Providing parents with a copy of the State's system of payments policies when obtaining consent for provision of early intervention services under § 303.420(a)(3); or
(ii) Including this information with the notice provided to parents under § 303.421.
(a) A State that desires to receive financial assistance under part C of the Act must establish a State Interagency Coordinating Council (Council) as defined in § 303.8.
(b) The Council must be appointed by the Governor. The Governor must ensure that the membership of the Council reasonably represents the population of the State.
(c) The Governor must designate a member of the Council to serve as the chairperson of the Council or require the Council to do so. Any member of the Council who is a representative of the lead agency designated under § 303.201 may not serve as the chairperson of the Council.
(a) The Council must be composed as follows:
(1)(i) At least 20 percent of the members must be parents, including minority parents, of infants or toddlers with disabilities or children with disabilities aged 12 years or younger, with knowledge of, or experience with, programs for infants and toddlers with disabilities.
(ii) At least one parent member must be a parent of an infant or toddler with a disability or a child with a disability aged six years or younger.
(2) At least 20 percent of the members must be public or private providers of early intervention services.
(3) At least one member must be from the State legislature.
(4) At least one member must be involved in personnel preparation.
(5) At least one member must—
(i) Be from each of the State agencies involved in the provision of, or payment for, early intervention services to infants and toddlers with disabilities and their families; and
(ii) Have sufficient authority to engage in policy planning and implementation on behalf of these agencies.
(6) At least one member must—
(i) Be from the SEA responsible for preschool services to children with disabilities; and
(ii) Have sufficient authority to engage in policy planning and implementation on behalf of the SEA.
(7) At least one member must be from the agency responsible for the State Medicaid and CHIP program.
(8) At least one member must be from a Head Start or Early Head Start agency or program in the State.
(9) At least one member must be from a State agency responsible for child care.
(10) At least one member must be from the agency responsible for the State regulation of private health insurance.
(11) At least one member must be a representative designated by the Office of the Coordination of Education of Homeless Children and Youth.
(12) At least one member must be a representative from the State child welfare agency responsible for foster care.
(13) At least one member must be from the State agency responsible for children's mental health.
(b) The Governor may appoint one member to represent more than one program or agency listed in paragraphs (a)(7) through (a)(13) of this section.
(c) The Council may include other members selected by the Governor, including a representative from the Bureau of Indian Education (BIE) or, where there is no school operated or funded by the BIE in the State, from the Indian Health Service or the tribe or tribal council.
(d) No member of the Council may cast a vote on any matter that would provide direct financial benefit to that member or otherwise give the appearance of a conflict of interest under State law.
(a) The Council must meet, at a minimum, on a quarterly basis, and in such places as it determines necessary.
(b) The meetings must—
(1) Be publicly announced sufficiently in advance of the dates they are to be held to ensure that all interested parties have an opportunity to attend;
(2) To the extent appropriate, be open and accessible to the general public; and
(3) As needed, provide for interpreters for persons who are deaf and other necessary services for Council members and participants. The Council may use funds under this part to pay for those services.
(a) Subject to the approval by the Governor, the Council may use funds under this part to—
(1) Conduct hearings and forums;
(2) Reimburse members of the Council for reasonable and necessary expenses for attending Council meetings and performing Council duties (including child care for parent representatives);
(3) Pay compensation to a member of the Council if the member is not employed or must forfeit wages from other employment when performing official Council business;
(4) Hire staff; and
(5) Obtain the services of professional, technical, and clerical personnel as may be necessary to carry out the performance of its functions under part C of the Act.
(b) Except as provided in paragraph (a) of this section, Council members must serve without compensation from funds available under part C of the Act.
(a) Advising and assisting the lead agency. The Council must advise and assist the lead agency in the performance of its responsibilities in section 635(a)(10) of the Act, including—
(1) Identification of sources of fiscal and other support for services for early intervention service programs under part C of the Act;
(2) Assignment of financial responsibility to the appropriate agency;
(3) Promotion of methods (including use of intra-agency and interagency agreements) for intra-agency and interagency collaboration regarding child find under §§ 303.115 and 303.302, monitoring under § 303.120 and §§ 303.700 through 303.708, financial responsibility and provision of early intervention services under §§ 303.202 and 303.511, and transition under § 303.209; and
(4) Preparation of applications under this part and amendments to those applications.
(b) Advising and assisting on transition. The Council must advise and assist the SEA and the lead agency regarding the transition of toddlers with disabilities to preschool and other appropriate services.
(c) Annual report to the Governor and to the Secretary. (1) The Council must—
(i) Prepare and submit an annual report to the Governor and to the Secretary on the status of early intervention service programs for infants and toddlers with disabilities and their families under part C of the Act operated within the State; and
(ii) Submit the report to the Secretary by a date that the Secretary establishes.
(2) Each annual report must contain the information required by the Secretary for the year for which the report is made.
The Council may carry out the following activities:
(a) Advise and assist the lead agency and the SEA regarding the provision of appropriate services for children with disabilities from birth through age five.
(b) Advise appropriate agencies in the State with respect to the integration of services for infants and toddlers with disabilities and at-risk infants and toddlers and their families, regardless of whether at-risk infants and toddlers are eligible for early intervention services in the State.
(c) Coordinate and collaborate with the State Advisory Council on Early Childhood Education and Care for children, as described in section 642B(b)(1)(A)(i) of the Head Start Act, 42 U.S.C. 9837b(b)(1)(A)(i), if applicable, and other State interagency early learning initiatives, as appropriate.
(a) The lead agency must—
(1) Monitor the implementation of this part;
(2) Make determinations annually about the performance of each EIS program using the categories identified in § 303.703(b);
(3) Enforce this part consistent with § 303.704, using appropriate enforcement mechanisms, which must include, if applicable, the enforcement mechanisms identified in § 303.704(a)(1) (technical assistance) and § 303.704(a)(2) (imposing conditions on the lead agency's funding of an EIS program or, if the lead agency does not provide part C funds to the EIS program, an EIS provider), § 303.704(b)(2)(i) (corrective action or improvement plan) and § 303.704(b)(2)(iv) (withholding of funds, in whole or in part by the lead agency), and § 303.704(c)(2) (withholding of funds, in whole or in part by the lead agency); and
(4) Report annually on the performance of the State and of each EIS program under this part as provided in § 303.702.
(b) The primary focus of the State's monitoring activities must be on—
(1) Improving early intervention results and functional outcomes for all infants and toddlers with disabilities; and
(2) Ensuring that EIS programs meet the program requirements under part C of the Act, with a particular emphasis on those requirements that are most closely related to improving early intervention results for infants and toddlers with disabilities.
(c) As a part of its responsibilities under paragraph (a) of this section, the State must use quantifiable indicators and such qualitative indicators as are needed to adequately measure performance in the priority areas identified in paragraph (d) of this section, and the indicators established by the Secretary for the State performance plans.
(d) The lead agency must monitor each EIS program located in the State, using quantifiable indicators in each of the following priority areas, and using such qualitative indicators as are needed to adequately measure performance in those areas:
(1) Early intervention services in natural environments.
(2) State exercise of general supervision, including child find, effective monitoring, the use of resolution sessions (if the State adopts part B due process hearing procedures under § 303.430(d)(2)), mediation, and a system of transition services as defined in section 637(a)(9) of the Act.
(e) In exercising its monitoring responsibilities under paragraph (d) of this section, the State must ensure that when it identifies noncompliance with the requirements of this part by EIS programs and providers, the noncompliance is corrected as soon as possible and in no case later than one year after the State's identification of the noncompliance.
(a) General. Each State must have in place a performance plan that meets the requirements described in section 616 of the Act; is approved by the Secretary; and includes an evaluation of the State's efforts to implement the requirements and purposes of part C of the Act, a description of how the State will improve implementation, and measurable and rigorous targets for the indicators established by the Secretary under the priority areas described in § 303.700(d).
(b) Review of State performance plan. Each State must review its State performance plan at least once every six years and submit any amendments to the Secretary.
(c) Data collection. (1) Each State must collect valid and reliable information as needed to report annually to the Secretary under § 303.702(b)(2) on the indicators established by the Secretary for the State performance plans.
(2) If the Secretary permits States to collect data on specific indicators through State monitoring or sampling, and the State collects data for a particular indicator through State monitoring or sampling, the State must collect and report data on those indicators for each EIS program at least once during the six-year period of a State performance plan.
(3) Nothing in part C of the Act or these regulations may be construed to authorize the development of a nationwide database of personally identifiable information on individuals involved in studies or other collections of data under part C of the Act.
(a) General. Each State must use the targets established in the State's performance plan under § 303.701 and the priority areas described in § 303.700(d) to analyze the performance of each EIS program in implementing part C of the Act.
(b) Public reporting and privacy. (1) Public report. (i) Subject to paragraph (b)(1)(ii) of this section, the State must—
(A) Report annually to the public on the performance of each EIS program located in the State on the targets in the State's performance plan as soon as practicable but no later than 120 days following the State's submission of its annual performance report to the Secretary under paragraph (b)(2) of this section; and
(B) Make the State's performance plan under § 303.701(a), annual performance reports under paragraph (b)(2) of this section, and the State's annual reports on the performance of each EIS program under paragraph (b)(1)(i)(A) of this section available through public means, including by posting on the Web site of the lead agency, distribution to the media, and distribution to EIS programs.
(ii) If the State, in meeting the requirements of paragraph (b)(1)(i)(A) of this section, collects data through State monitoring or sampling, the State must include in its public report on EIS programs under paragraph (b)(1)(i)(A) of this section the most recently available performance data on each EIS program and the date the data were collected.
(2) State performance report. The State must report annually to the Secretary on the performance of the State under the State's performance plan.
(3) Privacy. The State must not report to the public or the Secretary any information on performance that would result in the disclosure of personally identifiable information about individual children, or where the available data are insufficient to yield statistically reliable information.
(a) Review. The Secretary annually reviews the State's performance report submitted pursuant to § 303.702(b)(2).
(b) Determination. (1) General. Based on the information provided by the State in the State's annual performance report, information obtained through monitoring visits, and any other public information made available, the Secretary determines if the State—
(i) Meets the requirements and purposes of part C of the Act;
(ii) Needs assistance in implementing the requirements of part C of the Act;
(iii) Needs intervention in implementing the requirements of part C of the Act; or
(iv) Needs substantial intervention in implementing the requirements of part C of the Act.
(2) Notice and opportunity for a hearing. (i) For determinations made under paragraphs (b)(1)(iii) and (b)(1)(iv) of this section, the Secretary provides reasonable notice and an opportunity for a hearing on those determinations.
(ii) The hearing described in paragraph (b)(2)(i) of this section consists of an opportunity to meet with the Assistant Secretary for Special Education and Rehabilitative Services to demonstrate why the Secretary should not make the determination described in paragraph (b)(1)(iii) or (b)(1)(iv) of this section.
(a) Needs assistance. If the Secretary determines, for two consecutive years, that a State needs assistance under § 303.703(b)(1)(ii) in implementing the requirements of part C of the Act, the Secretary takes one or more of the following actions:
(1) Advises the State of available sources of technical assistance that may help the State address the areas in which the State needs assistance, which may include assistance from the Office of Special Education Programs, other offices of the Department of Education, other Federal agencies, technical assistance providers approved by the Secretary, and other federally funded nonprofit agencies, and requires the State to work with appropriate entities. This technical assistance may include—
(i) The provision of advice by experts to address the areas in which the State needs assistance, including explicit plans for addressing the areas of concern within a specified period of time;
(ii) Assistance in identifying and implementing professional development, early intervention service provision strategies, and methods of early intervention service provision that are based on scientifically based research;
(iii) Designating and using administrators, service coordinators, service providers, and other personnel from the EIS program to provide advice, technical assistance, and support; and
(iv) Devising additional approaches to providing technical assistance, such as collaborating with institutions of higher education, educational service agencies, national centers of technical assistance supported under part D of the Act, and private providers of scientifically based technical assistance.
(2) Identifies the State as a high-risk grantee and imposes special conditions on the State's grant under part C of the Act.
(b) Needs intervention. If the Secretary determines, for three or more consecutive years, that a State needs intervention under § 303.703(b)(1)(iii) in implementing the requirements of part C of the Act, the following apply:
(1) The Secretary may take any of the actions described in paragraph (a) of this section.
(2) The Secretary takes one or more of the following actions:
(i) Requires the State to prepare a corrective action plan or improvement plan if the Secretary determines that the State should be able to correct the problem within one year.
(ii) Requires the State to enter into a compliance agreement under section 457 of the General Education Provisions Act, as amended (GEPA), 20 U.S.C. 1234f, if the Secretary has reason to believe that the State cannot correct the problem within one year.
(iii) Seeks to recover funds under section 452 of GEPA, 20 U.S.C. 1234a.
(iv) Withholds, in whole or in part, any further payments to the State under part C of the Act.
(v) Refers the matter for appropriate enforcement action, which may include referral to the Department of Justice.
(c) Needs substantial intervention. Notwithstanding paragraph (a) or (b) of this section, at any time that the Secretary determines that a State needs substantial intervention in implementing the requirements of part C of the Act or that there is a substantial failure to comply with any requirement under part C of the Act by the lead agency or an EIS program in the State, the Secretary takes one or more of the following actions:
(1) Recovers funds under section 452 of GEPA, 20 U.S.C. 1234a.
(2) Withholds, in whole or in part, any further payments to the State under part C of the Act.
(3) Refers the case to the Office of Inspector General of the Department of Education.
(4) Refers the matter for appropriate enforcement action, which may include referral to the Department of Justice.
(d) Report to Congress. The Secretary reports to the Committee on Education and Labor of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate within 30 days of taking enforcement action pursuant to paragraph (a), (b), or (c) of this section, on the specific action taken and the reasons why enforcement action was taken.
(a) Opportunity for hearing. Prior to withholding any funds under part C of the Act, the Secretary provides reasonable notice and an opportunity for a hearing to the lead agency involved, pursuant to the procedures in §§ 303.231 through 303.236.
(b) Suspension. Pending the outcome of any hearing to withhold payments under paragraph (a) of this section, the Secretary may suspend payments to a recipient, suspend the authority of the recipient to obligate funds under part C of the Act, or both, after the recipient has been given reasonable notice and an opportunity to show cause why future payments or authority to obligate funds under part C of the Act should not be suspended.
(c) Nature of withholding. (1) Limitation. If the Secretary determines that it is appropriate to withhold further payments under section 616(e)(2) or (e)(3) of the Act, the Secretary may determine—
(i) That such withholding will be limited to programs or projects, or portions of programs or projects, that affected the Secretary's determination under § 303.703(b)(1); or
(ii) That the lead agency must not make further payments of funds under part C of the Act to specified State agencies, EIS programs or, if the lead agency does not provide part C funds to the EIS program, EIS providers that caused or were involved in the Secretary's determination under § 303.703(b)(1).
(2) Withholding until rectified. Until the Secretary is satisfied that the condition that caused the initial withholding has been substantially rectified—
(i) Payments to the State under part C of the Act must be withheld in whole or in part; and
(ii) Payments by the lead agency under part C of the Act must be limited to State agencies and EIS providers whose actions did not cause or were not involved in the Secretary's determination under § 303.703(b)(1).
Whenever a State receives notice that the Secretary is proposing to take or is taking an enforcement action pursuant to § 303.704, the State must, by means of a public notice, take such measures as may be necessary to bring the pendency of an action pursuant to section 616(e) of the Act and § 303.704 of the regulations to the attention of the public within the State, including by posting the notice on the Web site of the lead agency and distributing the notice to the media and to EIS programs.
Nothing in this subpart may be construed to restrict the Secretary from utilizing any authority under GEPA, 20 U.S.C. 1221 et seq., the regulations in 34 CFR parts 76, 77, and 81, and 2 CFR part 200, to monitor and enforce the requirements of the Act, including the imposition of special or high-risk conditions under 2 CFR 200.207 and 3474.5(e).
Nothing in this subpart may be construed to restrict a State from utilizing any other authority available to it to monitor and enforce the requirements of the Act.
(a) The lead agency must annually report to the Secretary and to the public on the information required by section 618 of the Act at the times specified by the Secretary.
(b) The lead agency must submit the report to the Secretary in the manner prescribed by the Secretary.
(a) For the purposes of the annual report required by section 618 of the Act and § 303.720, the lead agency must count and report the number of infants and toddlers receiving early intervention services on any date between October 1 and December 1 of each year. The report must include—
(1) The number and percentage of infants and toddlers with disabilities in the State, by race, gender, and ethnicity, who are receiving early intervention services (and include in this number any children reported to it by tribes, tribal organizations, and consortia under § 303.731(e)(1));
(2) The number and percentage of infants and toddlers with disabilities, by race, gender, and ethnicity, who, from birth through age two, stopped receiving early intervention services because of program completion or for other reasons; and
(3) The number and percentage of at-risk infants and toddlers (as defined in section 632(1) of the Act), by race and ethnicity, who are receiving early intervention services under part C of the Act.
(b) If a State adopts the option under section 635(c) of the Act and § 303.211 to make services under this part available to children ages three and older, the State must submit to the Secretary a report on the number and percentage of children with disabilities who are eligible for services under section 619 of the Act but whose parents choose for those children to continue to receive early intervention services.
(c) The number of due process complaints filed under section 615 of the Act, the number of hearings conducted and the number of mediations held, and the number of settlement agreements reached through such mediations.
(a) Protection of identifiable data. The data described in section 618(a) of the Act and in § 303.721 must be publicly reported by each State in a manner that does not result in disclosure of data identifiable to individual children.
(b) Sampling. The Secretary may permit States and outlying areas to obtain data in section 618(a) of the Act through sampling.
The lead agency must include in its report a certification signed by an authorized official of the agency that the information provided under § 303.721 is an accurate and unduplicated count of infants and toddlers with disabilities receiving early intervention services.
In addition to meeting the requirements of §§ 303.721 through 303.723, the lead agency must conduct its own child count or use EIS providers to complete its child count. If the lead agency uses EIS providers to complete its child count, then the lead agency must—
(a) Establish procedures to be used by EIS providers in counting the number of children with disabilities receiving early intervention services;
(b) Establish dates by which those EIS providers must report to the lead agency to ensure that the State complies with § 303.721(a);
(c) Obtain certification from each EIS provider that an unduplicated and accurate count has been made;
(d) Aggregate the data from the count obtained from each EIS provider and prepare the report required under §§ 303.721 through 303.723; and
(e) Ensure that documentation is maintained to enable the State and the Secretary to audit the accuracy of the count.
(a) Reservation of funds for outlying areas. From the sums appropriated to carry out part C of the Act for any fiscal year, the Secretary may reserve not more than one percent for payments to American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, and the United States Virgin Islands in accordance with their respective needs for assistance under part C of the Act.
(b) Consolidation of funds. The provisions of the Omnibus Territories Act of 1977, Pub. L. 95-134, permitting the consolidation of grants to the outlying areas, do not apply to the funds provided under part C of the Act.
(a) General. (1) The Secretary makes payments to the Secretary of the Interior under part C of the Act, which the Secretary of the Interior must distribute to tribes or tribal organizations (as defined under section 4 of the Indian Self-Determination and Education Assistance Act, as amended, 25 U.S.C. 450b), or consortia of those entities, for the coordination of assistance in the provision of early intervention services by States to infants and toddlers with disabilities and their families on reservations served by elementary and secondary schools for Indian children operated or funded by the Secretary of the Interior.
(2) A tribe, tribal organization, or consortium of those entities is eligible to receive a payment under this section if the tribe, tribal organization, or consortium of those entities is on a reservation that is served by an elementary or secondary school operated or funded by the Secretary of the Interior.
(3) The amount of the payment to the Secretary of the Interior under this section for any fiscal year is 1.25 percent of the aggregate amount available to all States under part C of the Act.
(b) Allocation. For each fiscal year, the Secretary of the Interior must distribute the entire payment received under paragraph (a)(1) of this section by providing to each tribe, tribal organization, or consortium an amount based on the number of infants and toddlers residing on the reservation, as determined annually, divided by the total number of those children served by all tribes, tribal organizations, or consortia.
(c) Information. To receive a payment under this section, the tribe, tribal organization, or consortium must submit the appropriate information to the Secretary of the Interior to determine the amounts to be distributed under paragraph (b) of this section.
(d) Use of funds. (1) The funds received by a tribe, tribal organization, or consortium must be used to assist States in child find, screening, and other procedures for the early identification of Indian children under three years of age and for parent training. The funds also may be used to provide early intervention services in accordance with part C of the Act. These activities may be carried out directly or through contracts or cooperative agreements with the Bureau of Indian Education, local educational agencies, and other public or private nonprofit organizations. The tribe, tribal organization, or consortium is encouraged to involve Indian parents in the development and implementation of these activities.
(2) The tribe, tribal organization, or consortium must, as appropriate, make referrals to local, State, or Federal entities for the provision of services or further diagnosis.
(e) Reports. (1) To be eligible to receive a payment under paragraph (b) of this section, a tribe, tribal organization, or consortium must make a biennial report to the Secretary of the Interior of activities undertaken under this section, including the number of contracts and cooperative agreements entered into, the number of infants and toddlers contacted and receiving services for each year, and the estimated number of infants and toddlers needing services during the two years following the year in which the report is made. This report must include an assurance that the tribe, tribal organization, or consortium has provided the lead agency in the State child find information (including the names and dates of birth and parent contact information) for infants or toddlers with disabilities who are included in the report in order to meet the child find coordination and child count requirements in sections 618 and 643 of the Act.
(2) The Secretary of the Interior must provide a summary of this information (including confirmation that each tribe, tribal organization, or consortium has provided to the Secretary of the Interior the assurance required under paragraph (e)(1) of this section) on a biennial basis to the Secretary along with such other information as required of the Secretary of the Interior under part C of the Act. The Secretary may require additional information from the Secretary of the Interior.
(3) Within 90 days after the end of each fiscal year the Secretary of the Interior must provide the Secretary with a report on the payments distributed under this section. The report must include—
(i) The name of each tribe, tribal organization, or combination of those entities that received a payment for the fiscal year;
(ii) The amount of each payment; and
(iii) The date of each payment.
(f) Prohibited uses of funds. None of the funds under this section may be used by the Secretary of the Interior for administrative purposes, including child count and the provision of technical assistance.
(a) General. Except as provided in paragraphs (b) and (c) of this section, for each fiscal year, from the aggregate amount of funds available under part C of the Act for distribution to the States, the Secretary allots to each State an amount that bears the same ratio to the aggregate amount as the number of infants and toddlers in the State bears to the number of infants and toddlers in all States.
(b) Minimum allocations. Except as provided in paragraph (c) of this section, no State may receive less than 0.5 percent of the aggregate amount available under this section or $500,000, whichever is greater.
(c) Ratable reduction. (1) If the sums made available under part C of the Act for any fiscal year are insufficient to pay the full amount that all States are eligible to receive under this section for that year, the Secretary ratably reduces the allotments to those States for such year.
(2) If additional funds become available for making payments under this section, allotments that were reduced under paragraph (c)(1) of this section will be increased on the same basis the allotments were reduced.
(d) Definitions. For the purpose of allotting funds to the States under this section—
(1) Aggregate amount means the amount available for distribution to the States after the Secretary determines the amount of payments to be made to the Secretary of the Interior under § 303.731, to the outlying areas under § 303.730, and any amount to be reserved for State incentive grants under § 303.734;
(2) Infants and toddlers means children from birth through age two in the general population, based on the most recent satisfactory data as determined by the Secretary; and
(3) State means each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.
If a State (as defined in § 303.35) elects not to receive its allotment, the Secretary reallots those funds among the remaining States (as defined in § 303.732(d)(3)), in accordance with § 303.732(c)(2).
(a) General. For any fiscal year for which the amount appropriated pursuant to the authorization of appropriations under section 644 of the Act exceeds $460,000,000, the Secretary reserves 15 percent of the appropriated amount exceeding $460,000,000 to provide grants to States that are carrying out the policy described in section 635(c) of the Act and in § 303.211 (including a State that makes part C services available under § 303.211(a)(2)), in order to facilitate the implementation of that policy.
(b) Amount of grant. (1) General. Notwithstanding section 643(c)(2) and (c)(3) of the Act, the Secretary provides a grant to each State under this section in an amount that bears the same ratio to the amount reserved under paragraph (a) of this section as the number of infants and toddlers in the State bears to the number of infants and toddlers in all States receiving grants under paragraph (a) of this section.
(2) Maximum amount. No State may receive a grant under paragraph (a) of this section for any fiscal year in an amount that is greater than 20 percent of the amount reserved under that paragraph for the fiscal year.
(c) Carryover of amounts pursuant to section 643(e)(3) of the Act. (1) First succeeding fiscal year. Pursuant to section 421(b) of GEPA, 20 U.S.C. 1221 et seq., amounts under a grant provided under paragraph (a) of this section that are not obligated and expended prior to the beginning of the first fiscal year succeeding the fiscal year for which those amounts were appropriated must remain available for obligation and expenditure during the first succeeding fiscal year.
(2) Second succeeding fiscal year. Amounts under a grant provided under paragraph (a) of this section that are not obligated and expended prior to the beginning of the second fiscal year succeeding the fiscal year for which those amounts were appropriated must be returned to the Secretary and used to make grants to States under section 633 of the Act (from their allotments identified in §§ 303.731 through 303.733) during the second succeeding fiscal year.
| ABILITY TO PAY (State definition) | 303.521(a)(3). |
| ABROGATION OF STATE SOVEREIGN IMMUNITY | 303.103. |
| ABUSE or NEGLECT: | |
| • At-risk infant or toddler (Definition) | 303.5. |
| • Referral of specific at-risk infants and toddlers | 303.303(b). |
| ACCESS (TO); ACCESSING (A-O): | |
| • Access rights (of parents) | 303.405. |
| • Culturally competent services (Traditionally underserved groups) | 303.227(b). |
| • Early Intervention records (definition) | 303.403(b). |
| • Early Intervention services
• See also “Service Coordination (Services)” | 303.34(b)(1). |
| ACCESS (TO); ACCESSING (P-Z): | |
| • Personally identifiable information (Employees with access) | 303.415(d). |
| • Private insurance (Parental consent prior to using or accessing) | 303.520(b)(1)(i). |
| • Public Insurance (Written notification prior to using or accessing | 303.520(a). |
| • Records (Keep and afford access to the Secretary) | 303.224(b). |
| • Safeguards (Employees with access to personally identifiable information) | 303.415(d). |
| ACCESSIBLE; ACCESSIBILITY: | |
| • Central directory (Accessible to general public) | 303.117. |
| • Individualized family service plan (IFSP) meetings (Accessibility and convenience of) | 303.342(d). |
| • See also “Convenience (of hearings; meetings)” | 303.602(b)(2). |
| • Meetings (Of Council). | |
| ACCESSIBILITY STANDARDS (Construction or Alteration): | |
| • Americans with Disabilities Act Accessibility Guidelines for Buildings and Facilities | 303.104(b)(1). |
| • Uniform Federal Accessibility Standards | 303.104(b)(2). |
| ACQUISITION OF EQUIPMENT (Construction): | |
| • Appropriate equipment and construction or alteration of facilities | 303.104. |
| • See also “Accessibility standards” | |
| ACT: | |
| • Definition (Individuals with Disabilities Education Act (IDEA)) | 303.4. |
| ADAPTIVE DEVELOPMENT: | |
| • Developmental delay in | 303.21(a)(1)(v). |
| • Early Intervention services (Definition) | 303.13(a)(4)(v). |
| ○ See also in “Occupational therapy” | 303.13(b)(8). |
| • Evaluation and assessment (Of the child) | 303.321(b)(3). |
| • Individualized family service plan (IFSP) content (Child's status) | 303.344(a). |
| • Infant or toddler with a disability (Definition) | 303.21(a)(1)(v). |
| ADVOCATE (Noun): | |
| • Individualized family service plan (IFSP) Team | 303.343(a)(1)(iii). |
| AGGREGATE AMOUNT: | |
| • Payments to Indians | 303.731(a)(3). |
| • State allotments (Definition) | 303.732(d)(1). |
| ○ See also “State allotments” | 303.732(a),(b). |
| AMENDMENTS (To a State's application): | |
| • Functions of the Council (Advise and assist lead agency with) | 303.604(a)(4). |
| • Modifications required by the Secretary | 303.228(c)(1). |
| AMERICANS WITH DISABILITIES ACT: | |
| • Civil Action | 303.448(e). |
| APPLICABLE REGULATIONS | 303.3. |
| APPLICATION: | |
| • See “State Application” | |
| ASSESSMENT: | |
| • Assessment of child and family (Definition) | 303.321(a)(2)(ii). |
| • Early Intervention services (Types of services) | 303.13(b)(6)(i), (b)(7)(i), (b)(8)(i), (b)(9)(i), (b)(10)(i)-(b)(10)(ii), (b)(13)(ii), (b)(17)(i). |
| • Procedures for assessment of the child | 303.321(c)(1). |
| • Procedures for assessment of the family | 303.321(c)(2). |
| • Voluntary on part of the family | 303.321(c)(2)(i). |
| • See also “Evaluation (And Assessment)” | |
| ASSISTANTS (In personnel standards): | |
| • Use of | 303.119(c). |
| • See also “Paraprofessionals”. | |
| ASSISTIVE and ORTHOTIC DEVICES: | |
| • Occupational therapy (Fabrication of) | 303.13(b)(8)(ii). |
| ASSISTIVE TECHNOLOGY (AT): | |
| • Assistive Technology (AT) device | 303.13(b)(1)(i). |
| • Assistive Technology (AT) service | 303.13(b)(1)(ii). |
| AT NO COST: | |
| • Early Intervention services | 303.13(a)(3). |
| • Initial copy of Early Intervention record | 303.409(c). |
| • Parental rights at hearings (Record of hearing) | 303.444(c)(2). |
| • System of payments and fees | 303.521(a)(4)(i)-(a)(4)(ii). |
| AT-RISK: | |
| • Annual report of children served | 303.721(a)(3). |
| • Audiology services (At-risk criteria) | 303.13(b)(2)(i). |
| • Council (Authorized activities) | 303.605(b). |
| • Definition (Infant or toddler) | 303.5. |
| • Description of Early Intervention services to | 303.204(b). |
| • Infant or toddler with a disability | 303.21(b). |
| • Permissive use of funds by lead agency | 303.501(e). |
| • Referral of specific at-risk infants and toddlers | 303.303(b). |
| • State's definition of (Application requirements) | 303.204(a). |
| AUDIOLOGY SERVICES: | |
| • Definition | 303.13(b)(2). |
| • Qualified personnel (Audiologists) | 303.13(c)(1). |
| AUTHORIZED ACTIVITIES: | |
| • Council | 303.605. |
| AWARD: | |
| • Eligible recipients | 303.2(a). |
| • See also “Grants”. | |
| BIE: | |
| • See “Bureau of Indian Education”. | |
| BLINDNESS; BLIND: | |
| • Native language | 303.25(b). |
| • Special educators (Teachers of children with visual impairments (Including blindness)) | 303.13(c)(11). |
| BRAILLE: | |
| • Native language | 303.25(b). |
| BRAIN HEMORRAGE: | |
| • At-Risk infant or toddler (Definition). | 303.5. |
| BUREAU OF INDIAN EDUCATION (BIE): | |
| • Bureau of Indian Education (BIE)-funded schools | 303.23(c). |
| • Council Composition (Other members selected by the Governor) | 303.601(c). |
| • Payments to Indians | 303.731(d). |
| BUSINESS DAY (In Individuals with Disabilities Education Act (IDEA) Part B): | |
| • Resolution process (Agreement review period) | 303.442(e). |
| • Hearing rights | 303.444(a)(3), (b)(1). |
| CALENDAR DAY: | |
| • See “Day” (Definition) | 303.9. |
| CHILD ABUSE, PREVENTION, AND TREATMENT ACT (CAPTA): | |
| • Child protection and welfare programs under CAPTA | 303.302(c)(1)(ii)(G). |
| CASE MANAGEMENT: | |
| • In “Service coordination services” | 303.34. |
| • Medicaid reference to | 303.34(c). |
| CENTRAL DIRECTORY: | |
| • Public awareness program | 303.301(b)(3). |
| • State system requirement | 303.117. |
| CERTIFICATION (In Administration): | |
| • Annual report of children served | 303.723. |
| • Annual report of children served (Other responsibilities of the lead agency) | 303.724(c). |
| • Public participation application | 303.208(a). |
| • Regarding financial responsibility | 303.202. |
| • State application requirement | 303.200(a). |
| CERTIFICATION (Of personnel): | |
| • Personnel qualification standards | 303.119(b). |
| • Qualified personnel (Definition) | 303.31. |
| CHILD (Definition) | 303.6. |
| CHILD ABUSE, PREVENTION, AND TREATMENT ACT: | |
| • See “CAPTA”. | |
| CHILD COUNT: | |
| • Accurate and unduplicated count (Annual report of children served—certification) | 303.723. |
| • Count and report (Annual report of children served—report requirement) | 303.721(a). |
| • Other responsibilities of lead agency: | |
| ○ Aggregate count data | 303.724(d). |
| ○ Ensure documentation of count is maintained | 303.724(e). |
| ○ Obtain certification (Of unduplicated and accurate count) | 303.724(c). |
| • Prohibited uses of funds (By Secretary of the Interior) | 303.731(f). |
| CHILD'S ELIGIBILITY: | |
| • Evaluation and assessment of child | 303.320(a)(2)(i). |
| • No single procedure as sole criterion | 303.321(b). |
| • Not eligible (Agency determination) | 303.322. |
| • Parental consent before determining a child's eligibility | 303.420(a)(1)-(2). |
| • Status of child during pendency of a due process complaint | 303.430(e)(2). |
| • Transition to preschool | 303.209(b)(1). |
| CHILD FIND (A-E): | |
| • At public expense (Functions not subject to fees) | 303.521(b)(1). |
| • Comprehensive child find system: | |
| ○ State system requirement | 303.115. |
| ○ Substantive requirement | 303.302. |
| • Consistent with Part B | 303.302(a)(1). |
| • Content of an individualized family service plan (IFSP) (Transmission of child find information) | 303.344(h)(2)(iii). |
| • Coordination with other Federal and State efforts | 303.302(c)(1)-(c)(2). |
| CHILD FIND (F-PO): | |
| • Financial responsibility for | 303.511(a). |
| • Functions of the Council (Intra-agency and interagency collaboration) | 303.604(a)(3). |
| • Payments to Indians (Use of funds) | 303.731(d). |
| • Payor of last resort (Interim payments and reimbursement) | 303.510(b). |
| CHILD FIND (PR-Z): | |
| • Primary referral sources | 303.303(c). |
| • Public awareness program (Information to be provided to parents) | 303.301(b). |
| • Referral procedures (In general) | 303.303(a)(1). |
| • Scope of child find | 303.302(b). |
| • Screening procedures | 303.320. |
| • State monitoring and enforcement | 303.700(d)(2). |
| • State system requirement | 303.115. |
| CHILD WITH A DISABILITY: | |
| • Composition of the Council | 303.601(a)(1)(ii). |
| • Infant or toddler with a disability (Definition) | 303.21(c). |
| • State option to make Early Intervention services available to children three and older (Rules of construction) | 303.211(e)(1). |
| CHROMOSOMAL ABNORMALITIES: | |
| • Diagnosed physical or mental condition | 303.21(a)(2)(ii). |
| CIVIL ACTION (Part B): | |
| • Civil action (In general) | 303.448(a). |
| • Finality of review decision | 303.446(d). |
| • Rule of construction | 303.448(e). |
| • Time limitation | 303.448(b). |
| CIVIL ACTION (Part C) | 303.438. |
| CLEFT PALATE; CLUB FOOT (Surgery for): | |
| • Health services (Not included) | 303.16(c)(1)(i). |
| COCHLEAR IMPLANT: | |
| • Assistive technology device (Not included) | 303.13(b)(1)(i). |
| • Health services (Not included) | 303.16(c)(1)(iii). |
| COGNITIVE DEVELOPMENT: | |
| • Content of an individualized family service plan (IFSP) (Child's status) | 303.344(a). |
| • Developmental delay in | 303.21(a)(1)(i). |
| • Early Intervention services (Definition) | 303.13(a)(4)(ii). |
| • Evaluation and assessment (Of child) | 303.321(b)(3). |
| • Infant or toddler with a disability (Definition) | 303.21(a)(1)(i). |
| COLOSTOMY COLLECTION BAGS: | |
| • Health services (Included) | 303.16(b)(1). |
| COMMINGLING: | |
| • Prohibition against | 303.225(a)(1). |
| COMMUNICATION DEVELOPMENT: | |
| • Content of individualized family service plan (IFSP) (Child's status) | 303.344(a). |
| • Developmental delay in | 303.21(a)(1)(iii). |
| • Early Intervention services (Definition) | 303.13(a)(4)(iii). |
| • Evaluation and assessment (Of child) | 303.321(b)(3). |
| • Infant or toddler with a disability (Definition) | 303.21(a)(1)(iii). |
| COMPLAINTS: | |
| • Annual report of children served (Number of due process complaints) | 303.721(c). |
| • Confidentiality procedures | 303.401(b)(2). |
| • Minimum State complaint procedures (Comparison with due process complaints) | 303.433(c). |
| ○ See also “State Complaint Procedures”. | |
| • State dispute resolution options: | |
| ○ Due process hearing procedures | 303.430(d). |
| ○ In general | 303.430(a). |
| ○ State complaint procedures | 303.430(c). |
| COMPLIANCE: | |
| • Compliance agreement (Enforcement) | 303.704(b)(2)(ii). |
| • Compliance with certain regulations (Construction or alteration of facilities) | 303.104(b). |
| • Corrective action plans to achieve compliance (Enforcement) | 303.704(b)(2)(i). |
| • Modifications of State application required by the Secretary (For compliance) | 303.228(c). |
| • Reports and records (To ensure compliance with Part C) | 303.224(b). |
| COMPREHENSIVE SYSTEM OF PERSONNEL DEVELOPMENT (CSPD) | 303.118. |
| CONFIDENTIALITY (A-D): | |
| • Access rights | 303.405. |
| • Confidentiality and opportunity to examine records | 303.401(a)-(c). |
| • Consent prior to disclosure or use | 303.414. |
| • Definitions: | |
| ○ Destruction | 303.403(a). |
| ○ Early Intervention records | 303.403(b). |
| ○ Participating agency | 303.403(c). |
| • Destruction of information | 303.416. |
| CONFIDENTIALITY (E-N): | |
| • Enforcement by lead agency | 303.417. |
| • Family Educational Rights and Privacy Act (FERPA) | 303.401(b). |
| • Fees for records | 303.409. |
| • Hearing procedures | 303.413. |
| • List of types and locations of information | 303.408. |
| • Notice to parents | 303.404. |
| CONFIDENTIALITY (O-Z): | |
| • Opportunity for a hearing | 303.411. |
| • Parental authority to inspect and review records | 303.405(c). |
| • Record of access | 303.406. |
| • Records on more than one child | 303.407. |
| • Result of hearing | 303.412. |
| • Safeguards | 303.415. |
| • Secretary's action (To protect) | 303.402. |
| CONGENITAL DISORDERS: | |
| • Diagnosed physical or mental condition (Infant or toddler with a disability) | 303.21(a)(2)(ii). |
| CONGENITAL HEART AILMENTS: | |
| • Health services (Not included) | 303.16(c)(1)(ii). |
| CONGENITAL INFECTIONS: | |
| • Diagnosed physical or mental condition (Infant or toddler with a disability) | 303.21(a)(2)(ii). |
| CONSENT (A-H): | |
| • Continue Early Intervention services from age three to kindergarten, with consent | 303.501(d). |
| • Definition | 303.7. |
| • Due process complaint (Sufficiency to amend) | 303.441(d)(3)(i). |
| • Early Intervention services | 303.420(a)(3). |
| • Early Intervention services in lieu of Free Appropriate Public Education (FAPE) from age three to kindergarten | 303.501(d). |
| • Evaluation and assessment of a child | 303.420(a)(2). |
| • Granting of consent is voluntary | 303.7(c)(1). |
| • Hearing rights (Additional disclosure) | 303.444(b)(2). |
| CONSENT (I-Q): | |
| • Individualized family service plan (IFSP) (Definition) | 303.20(c). |
| • Insurance: | |
| ○ Private insurance | 303.520(b). |
| ○ Public insurance | 303.520(a). |
| • Interim individualized family service plan (IFSP) | 303.345(a). |
| • Lead agency responsible for procedural safeguards (Consent and notice, | 303.400(a). |
| • Lead agency role if consent not given | 303.420(b). |
| • Parental consent and ability to decline services | 303.420. |
| • Permissive use of funds by lead agency (Continue Early Intervention services in lieu of Free Appropriate Public Education (FAPE)) | 303.501(d). |
| • Prior to disclosure or use of personally identifiable information | 303.414. |
| • Provision of Early Intervention services before evaluation and assessment are completed | 303.345(a). |
| CONSENT (R-Z): | |
| • Required before: | |
| ○ Administering screening procedures | 303.420(a)(1). |
| ○ Conducting an evaluation and assessment of a child | 303.420(a)(2). |
| ○ Providing Early Intervention services | 303.420(a)(3). |
| ○ Using private insurance | 303.520(b). |
| • Revocation of consent (Not retroactive) | 303.7(c)(2). |
| • State option for Early Intervention services after age three: | |
| ○ Available funds for | 303.211(d). |
| ○ Continuation of Early Intervention services | 303.211(b)(5). |
| ○ Referral to Part C (Trauma due to exposure to family violence, under age three) | 303.211(b)(7). |
| • Status of child during due process complaint | 303.430(e). |
| • Timelines for screening, initial evaluation, or assessments | 303.310(b)(2). |
| CONSTRUCTION or ALTERATION (Of facilities): | |
| • Compliance with certain regulations | 303.104(b). |
| • Use of funds for | 303.104(a). |
| CONSTRUCTION CLAUSES (A-M): | |
| • Civil action (Nothing restricts rights, except that procedures under §§ 303.440 and 303.446 must be exhausted before filing a civil action) | 303.448(e). |
| • Hearing decisions—Nothing: | |
| ○ Affects the right of a parent to appeal a hearing decision | 303.445(b). |
| ○ Precludes a hearing officer from requiring compliance with §§ 303.440-449 | 303.445(a)(3). |
| ○ Precludes a parent from filing a separate due process complaint | 303.445(c). |
| • Indian tribe (Nothing requires services or funding to a State Indian Tribe not in the | 303.19(c). |
| CONSTRUCTION CLAUSES (N-Z): | |
| • Nationwide database of personally identifiable information on individuals involved in studies, | 303.701(c)(3). |
| • Non-reduction of benefits (Payor of last resort) | 303.510(c). |
| • Personnel standards (Nothing prohibits the use of paraprofessionals and assistants) | 303.119(c). |
| • Secretary's authority to monitor enforcement of General Education Provisions Act (GEPA) | 303.707. |
| • State option to make services available after age three: | |
| ○ If Early Intervention services provided to a child eligible under § 619, Free Appropriate Public Education (FAPE) not required | 303.211(e)(1). |
| ○ Service provider under Part C not required to provide Free Appropriate Public Education (FAPE) | 303.211(e)(2). |
| CONSULTATION: | |
| • By physicians (Health services) | 303.16(b)(2). |
| • On child development (Psychological services) | 303.13(b)(10)(iv). |
| CONTENT OF INDIVIDUALIZED FAMILY SERVICE PLAN (IFSP) | 303.344. |
| • See also “Individualized Family Service Plan (IFSP) Content”. | |
| CONTRACTS: | |
| • Certification regarding financial responsibility (Lead agency's contracts with Early Intervention service providers) | 303.202. |
| • Payments to Indians: | |
| ○ Biennial report to Secretary of the Interior (Number of contracts, | 303.731(e)(1). |
| ○ Use of funds for Early Intervention services through contracts or cooperative agreements | 303.731(d)(1). |
| • Mediation (Meeting to encourage) | 303.431(d)(1). |
| • Parent (Definition) | 303.27(a)(2). |
| • Policy for contracting for services | 303.121. |
| CONVENIENCE (OF HEARINGS; MEETINGS): | |
| • Convenience of hearings and timelines (Part C) | 303.437. |
| • Individualized family service plan (IFSP) meetings (Accessibility and convenience of) | 303.342(d). |
| • Timelines and convenience of hearings and reviews (Part B) | 303.447. |
| • See also “Accessible; Accessibility”. | |
| COORDINATION (A-O): | |
| • Child find (Coordination of lead agency's efforts with the assistance of Council) | 303.302(c)(1). |
| • Establishing financial responsibility for, and methods of, ensuring services (Additional components) | 303.511(e). |
| • Head Start, Early Head Start, early education, and child care | 303.210(a). |
| • Individualized family service plan (IFSP): | |
| ○ Content of (Service coordinator) | 303.344(g)(1). |
| ○ Statewide system requirement (Including service coordination services) | 303.114. |
| • Lead agency role in interagency coordination, | 303.120(b), (f). |
| • Methods for financial interagency coordination | 303.511. |
| COORDINATION (P-Z): | |
| • Payor of last resort (Coordination of funding resources) | 303.500(a)(2). |
| • Purpose of Early Intervention program (Facilitate coordination of payment) | 303.1(b). |
| • Service coordination services (In definition of “Early Intervention services”) | 303.13(b)(11). |
| ○ See “Service coordination services (Case management).” | 303.34. |
| ○ See also “Service Coordination”. | |
| • Services before evaluations and assessments completed (Service coordinator) | 303.345(b)(1). |
| • Statewide system and description of services | 303.203(b). |
| • Use of funds and payor of last resort (Coordination of funding resources) | 303.500(a)(2). |
| CO-PAYMENTS; CO-PAYS: | |
| • Policies related to use of insurance for payment for services: | |
| ○ Private insurance | 303.520(b). |
| ○ Public insurance | 303.520(a). |
| • System of payments and fees | 303.521(a)(6). |
| • See also “System of Payments”; “Fees”. | |
| COST PARTICIPATION FEES: | |
| • System of payments and fees | 303.521(a)(1). |
| COUNCIL: | |
| • Definition | 303.8. |
| • See “State Interagency Coordinating Council” | 303.600-303.605. |
| CRITERIA: | |
| • Assessment of the child and family | 303.321(c). |
| • At-risk criteria | 303.5, 303.204. |
| • Content of individualized family service plan (IFSP) (Results or outcomes) | 303.344(c). |
| • Early Intervention services (Audiology services) | 303.13(b)(2)(i). |
| • Early Intervention services (Other services) | 303.13(d). |
| • State definition of developmental delay | 303.111(b). |
| • Surrogate parents (Selection of) | 303.422(d). |
| CSPD (COMPREHENSIVE SYSTEM OF PERSONNEL DEVELOPMENT) | 303.118. |
| CULTURALLY COMPETENT SERVICES | 303.227(b). |
| CURRICULUM PLANNING: | |
| • In “Early Intervention services” definition (Special instruction) | 303.13(b)(14)(ii). |
| DATA (A-H): | |
| • Annual report of children served (Aggregate data) | 303.724(d). |
| • Confidentiality (Personally identifiable data) | 303.402. |
| • Data collection (Construction clause) | 303.701(c)(3). |
| • Data collection (Statewide system) | 303.124. |
| • Data reporting: | |
| ○ Protection of identifiable data | 303.722(a). |
| ○ Sampling | 303.722(b). |
| • Data requirements (In general) | 303.720. |
| • Exit data (Destruction of information) | 303.416(b). |
| DATA (I-Z): | |
| • Infants and toddlers (Definition) | 303.732(d)(2). |
| • Insufficient data (State use of targets and reporting) | 303.702(b)(3). |
| • State performance plans and data collection | 303.701. |
| ○ Construction clause (Nationwide data base) | 303.701(c)(3). |
| ○ Data collection | 303.701(c). |
| ○ Data on specific indicators | 303.701(c)(2). |
| • State use of targets and reporting. | 303.702(b)(1)(ii). |
| • Statistically reliable information (Insufficient data) | 303.702(b)(3). |
| DAY: | |
| • Definition | 303.9. |
| • See also “Timelines” | |
| DEAF; DEAFNESS: | |
| • Council Meetings (Interpreters for) | 303.602(b)(3). |
| • Early Intervention services (Special educators) | 303.13(c)(11). |
| • Native language | 303.25(b). |
| DEFINITIONS (A-D): | |
| • Ability to pay (State's definition) | 303.521(a)(3). |
| • Act | 303.4. |
| • Aggregate amount (State allotments) | 303.732(d)(1). |
| • Assessment of the child and the family | 303.321(a)(2)(ii), 303.321(c)(1)-(c)(2). |
| • Assistive technology devices and services | 303.13(b)(1). |
| • Audiology services | 303.13(b)(2). |
| • Child | 303.6. |
| • Consent | 303.7. |
| • Council | 303.8. |
| • Day | 303.9. |
| • Destruction (Of a record) | 303.403(a). |
| • Developmental delay | 303.10. |
| • Duration (Content of an individualized family service plan (IFSP)) | 303.344(d)(2)(iv). |
| DEFINITIONS (E-H): | |
| • Early Intervention record | 303.3(b)(2), 303.403(b). |
| • Early Intervention service program | 303.11. |
| • Early Intervention service provider | 303.12. |
| • Early Intervention services | 303.13. |
| • Education records | 303.3(b)(2). |
| • Elementary school | 303.14. |
| • Evaluation | 303.321(a)(2)(i). |
| • Family training, counseling, and home visits | 303.13(b)(3). |
| • Free Appropriate Public Education (FAPE) | 303.15. |
| • Frequency and intensity (Content of an individualized family service plan (IFSP)) | 303.344(d)(2)(i). |
| • Health services | 303.16. |
| • Homeless children | 303.17. |
| DEFINITIONS (I-M): | |
| • Impartial | 303.435(b). |
| • Include; including | 303.18. |
| • Indian; Indian tribe | 303.19. |
| • Individualized family service plan (IFSP) | 303.20. |
| • Infants and toddlers (State allotments) | 303.732(d)(2). |
| • Infant or toddler with a disability | 303.21. |
| • Lead agency | 303.22. |
| • Length (Content of an individualized family service plan (IFSP)) | 303.344(d)(2)(iii). |
| • Local educational agency (LEA) | 303.23. |
| • Location (Content of an individualized family service plan (IFSP)) | 303.344(d)(3). |
| • Medical services | 303.13(b)(5). |
| • Method (Content of an individualized family service plan (IFSP)) | 303.344(d)(2)(ii). |
| • Multidisciplinary | 303.24. |
| DEFINITIONS (N-R): | |
| • Native language | 303.25. |
| • Natural environments | 303.26. |
| • Nursing services | 303.13(b)(6). |
| • Nutrition services | 303.13(b)(7). |
| • Occupational therapy | 303.13(b)(8). |
| • Parent | 303.27. |
| • Participating agency (Personally identifiable information) | 303.403(c). |
| • Parent training and information center | 303.28. |
| • Personally identifiable information | 303.29, 303.401. |
| • Physical Therapy | 303.13(b)(9). |
| • Primary referral sources | 303.303(c). |
| • Psychological services | 303.13(b)(10). |
| • Public agency | 303.30. |
| • Qualified personnel | 303.31. |
| DEFINITIONS (S-Z): | |
| • Scientifically based research | 303.32. |
| • Screening procedures | 303.320(b). |
| • Secretary | 303.33. |
| • Service coordination services (Case management) | 303.34. |
| ○ See also “Early Intervention services” definition | 303.13(b)(11). |
| • Sign language and cued language | 303.13(b)(12). |
| • Social work services | 303.13(b)(13). |
| • Special instruction | 303.13(b)(14). |
| • Speech-language pathology services | 303.13(b)(15). |
| • State | 303.35. |
| • State (State allotments) | 303.732(d)(3). |
| • State educational agency (SEA) | 303.36. |
| • Transportation and related costs | 303.13(b)(16). |
| • Vision services | 303.13(b)(17). |
| • Ward of the State | 303.37. |
| DEPARTMENT PROCEDURES: | |
| • State application and assurances | 303.231-303.236. |
| DEVELOPMENTAL DELAY: | |
| • At-risk infant or toddler (Definition) | 303.5. |
| • Definition | 303.10. |
| • Infant or toddler with a disability (Definition) | 303.21(a)(1), (a)(2)(i). |
| • Purpose of the Early Intervention program | 303.1(e). |
| • Statewide system (State's rigorous definition) | 303.203(c). |
| • State definition | 303.111. |
| DEVELOPMENTAL DISABILITIES ASSISTANCE and BILL OF RIGHTS ACT: | |
| • Child find coordination | 303.302(c)(1)(ii)(D). |
| DIAGNOSED PHYSICAL OR MENTAL CONDITION: | |
| • Infant or toddler with a disability (Definition) | 303.21(a)(2). |
| DIETICIANS: | |
| • Early Intervention services (Qualified personnel) | 303.13(c)(9). |
| DIRECT SERVICES: | |
| • Description of use of funds | 303.205(d). |
| ○ See also “Use of Funds”. | |
| DISORDERS: | |
| • Infant or toddler with a disability (Definition) | 303.21(a)(2)(ii). |
| • Speech-language pathology services (Definition) | 303.13(b)(15). |
| • Vision services (Definition) | 303.13(b)(17). |
| DISPUTES; DISPUTE RESOLUTION: | |
| • Impartial due process hearing | 303.443(a). |
| • Intra-agency or interagency disputes | 303.511(c)(1). |
| • Lead agency role in resolving disputes | 303.120(d)-(f). |
| • Mediation | |
| ○ In general | 303.431. |
| ○ State dispute resolution | 303.430(b). |
| • Procedures for resolving disputes (Methods of ensuring services) | 303.511(c). |
| • Resolution process (Part B). | |
| ○ Due process procedures (Comparison of Part B and C) | 303.430(d). |
| ○ Resolution meeting | 303.442(a). |
| ○ Written settlement agreement | 303.442(d). |
| • State dispute resolution options: | |
| ○ Mediation | 303.430(b). |
| ○ Status of child during pendency of a due process complaint | 303.430(e). |
| DRESSINGS; COLOSTOMY BAGS (Changing of): | |
| • Health services (Definition) | 303.16(b)(1). |
| DUE PROCESS HEARING PROCEDURES—Options: | |
| • Part B procedures | 303.430(d)(2). |
| • Part C procedures | 303.430(d)(1). |
| DUE PROCESS PROCEDURES—Part B: | |
| • Adopting Part B procedures (By lead agency) | 303.430(d)(2). |
| • Civil action | 303.448. |
| • Due process complaint | 303.441. |
| • Filing a due process complaint | 303.440. |
| • Finality of decision; appeal; impartial review | 303.446. |
| • Hearing decisions | 303.445. |
| • Hearing rights | 303.444. |
| • Impartial due process hearing | 303.443. |
| • Resolution process | 303.442. |
| • State enforcement mechanisms | 303.449. |
| • Timelines and convenience of hearings and reviews | 303.447. |
| DUE PROCESS PROCEDURES-Part C: | |
| • Appointment of impartial hearing officer | 303.435. |
| ○ Definition of “impartial” | 303.435(b). |
| ○ Qualifications and duties | 303.435(a). |
| • Civil action | 303.438. |
| • Convenience of hearings and timelines | 303.437. |
| • Parental rights in due process hearings | 303.436. |
| • See “Status of child during pendency of a due process hearing request” | 303.430(e). |
| • See also “Procedural Safeguards”. | |
| EARLY HEAD START: | |
| • Child find Coordination | 303.302(c)(1)(ii)(E). |
| • Content of an individualized family service plan (IFSP) (Transition from Part C) | 303.344(h)(1)(ii). |
| • Coordination with Head Start and Early Head Start, early education, and child care programs | 303.210(a). |
| • Comprehensive system of personnel development (CSPD) (Transition from Part C) | 303.118(a)(3). |
| EARLY HEARING DETECTION AND INTERVENTION (EHDI): | |
| • Child find system | 303.302(c)(1)(ii)(J). |
| EARLY INTERVENTION SERVICES: | |
| • Definitions: | |
| ○ General | 303.13(a). |
| ○ Other services | 303.13(d). |
| ○ Qualified personnel | 303.13(c). |
| ○ Types of Early Intervention services | 303.13(b). |
| EARLY INTERVENTION SERVICE (EIS) PROGRAM: | |
| • Definition | 303.11. |
| • State monitoring and enforcement | 303.700. |
| • State performance plans and data collection | 303.701. |
| • State use of targets and reporting | 303.702. |
| EARLY INTERVENTION SERVICE (EIS) PROVIDER: | |
| • Applicability of this part | 303.2(b)(1)(i). |
| • Definition | 303.12(a). |
| • Participating agency (Definition) | 303.403(c). |
| • Requirement to attend individualized family service plan (IFSP) meetings | 303.343(a)(1)(vi). |
| • Responsibility and accountability | 303.12(b), 303.346. |
| • State ability to impose funding conditions (State's monitoring and enforcement) | 303.700(a)(3). |
| • State dispute resolution options | 303.430. |
| • State requirement to monitor | 303.120. |
| EARLY PERIODIC DIAGNOSIS, SCREENING, AND TREATMENT (EPSDT): | |
| • Child find (Coordination) | 303.302 (c)(1)(ii)(C). |
| EDUCATIONAL SERVICE AGENCY: | |
| • Local educational agency (LEA) (Definition) | 303.23(b)(1). |
| EHDI—Early Hearing Detection and Intervention | 303.302(c)(1)(ii)(J). |
| ELIGIBLE RECIPIENTS OF AN AWARD | 303.2. |
| ELIGIBILITY (CHILD): | |
| • See “Child Eligibility” | |
| ELIGIBILITY (STATE): | |
| • Requirements for a grant | 303.101. |
| ENVIRONMENTAL or BIOLOGICAL FACTORS: | |
| • At-risk infant or toddler (Definition) | 303.5. |
| EPSDT: | |
| • See “Early Periodic Screening, Diagnosis, and Treatment”. | |
| EQUITABLE ACCESS TO, AND EQUAL PARTICIPATION IN, THE PART C STATEWIDE SYSTEM | 303.212(a). |
| ESTABLISHING FINANCIAL RESPONSIBILITY and METHODS OF ENSURING SERVICES | 303.511. |
| EVALUATION, ASSESSMENT, and NONDISCRIMINATORY PROCEDURES | 303.113. |
| EVALUATION (AND ASSESSMENT) (A-E): | |
| • Assessment of child (Definition) | 303.321(c)(1). |
| • Assessment of family (Definition) | 303.321(c)(2). |
| • Confidentiality procedures | 303.401(b)(2). |
| • Consent before evaluations and assessments are conducted | 303.420(a)(2). |
| • Determination that a child is not eligible | 303.322. |
| • Due process complaint | 303.441(e)(1)(iii). |
| • Early Intervention services: | |
| ○ Qualified personnel (Pediatricians, | 303.13(c)(6). |
| ○ Types of services | 303.13(b)(1)(ii)(A), (b)(2)(ii), (b)(5), (b)(9)(i), (b)(17)(i). |
| • Evaluation (Definition) | 303.321(a)(2)(i). |
| EVALUATION (AND ASSESSMENT) (F-L): | |
| • Family assessment | 303.321(c)(2), 303.344(b). |
| • Family information | 303.344(b). |
| • Filing a due process complaint (Part B) | 303.440(a)(1). |
| • Financial responsibility | 303.511(a). |
| • Functions not subject to fees | 303.521(b)(2). |
| • Hearing officer decision | 303.445(a)(2)(i)-(ii). |
| • Hearing rights | 303.444(b). |
| • Individualized family service plan (IFSP): | |
| ○ Annual meeting to evaluate the individualized family service plan (IFSP) | 303.342(c). |
| ○ Child's status | 303.344(a). |
| ○ Definition | 303.20(a). |
| • Initial and annual individualized family service plan (IFSP) Team meetings | 303.343(a)(1)(v). |
| EVALUATION (AND ASSESSMENT) (M-PO): | |
| • Multidisciplinary: | |
| ○ Definition | 303.24. |
| ○ Early Intervention service (EIS) provider | 303.12(b)(1). |
| ○ Evaluation and assessment of the child | 303.321(a)(1)(i). |
| ○ Statewide system | 303.113(a)(1). |
| • Native language (Definition) | 303.25(a)(2). |
| • Nondiscriminatory: | |
| ○ Evaluation of the child (No single procedure used) | 303.321(a)(4). |
| ○ Nondiscriminatory procedures (Title) | 303.113. |
| • Parental consent | 303.420(a)(2), (b)(1)-(b)(2), (c)(1). |
| • Payor of last resort (Interim payments) | 303.510(b). |
| • Post-referral timeline (45 days) | 303.310. |
| ○ Exceptional circumstances (Not within 45 days) | 303.310(b)(1). |
| EVALUATION (AND ASSESSMENT) (PR-Z): | |
| • Prior written notice | 303.421(a). |
| • Prior written notice (Must be in native language) | 303.421(c). |
| • Provision of Services before evaluations and assessments are completed | 303.345. |
| • Public awareness program | 303.301(b)(2). |
| • Referral procedures | 303.303. |
| • Screening procedures | 303.320(a), (c). |
| • Service coordination services (Case management) | 303.34(b)(3). |
| • Timelines (45 days) | 303.310(a). |
| ○ Exception to 45-day timeline | 303.310(b). |
| • Transition from Part C services | 303.344(h)(2)(iii). |
| • See also “Assessment”. | |
| EVALUATION, ASSESSMENT, AND NONDISCRIMINATORY PROCEDURES | 303.113. |
| EXCEPTION(S): | |
| • Consent prior to disclosure (Except to lead agency and Early Intervention service (EIS) providers) | 303.414(b). |
| • Filing a due process complaint | 303.440(a)(2). |
| • Post-referral timeline (Exceptional circumstances) | 303.310(b)(1). |
| • Timeline for requesting a hearing (Exceptions) | 303.443(f). |
| • Ward of the State (Definition) | 303.37(b). |
| FAMILY; FAMILIES (A-E): | |
| • Ability to pay (State's definition) | 303.521(a)(3). |
| • Assessment of the family | 303.321(a)(1)(ii)(B). |
| • Availability of Early Intervention services | 303.112. |
| • Comprehensive system of personnel development (CSPD) (Training personnel to support families) | 303.118(b)(3). |
| • Due process | 303.435(a)(1), 303.440(a)(1). |
| • Early Intervention services | 303.13(a)(3)-(a)(4), (b)(1)(ii)(E), (b)(3), (b)(10)(iii), (b)(10)(iv), (b)(13)(iii)-(b)(13)(v), (b)(14)(iii), (b)(16). |
| • Evaluation and assessment of child and family: | |
| ○ In native language | 303.321(a)(5)-(6). |
| ○ Post-referral timeline | 303.310(a). |
| FAMILY; FAMILIES (F-H): | |
| • Family-directed identification of needs | 303.113(a)(2), (b). |
| • Family therapists | 303.13(c)(2). |
| • Family training, counseling, and home visits | 303.13(b)(3). |
| • Family Violence Prevention and Services Act | 303.211(b)(7), 303.302(c)(1)(ii)(I). |
| • Homeless family shelters (Primary referral sources) | 303.303(c)(10). |
| FAMILY; FAMILIES (INDIVIDUALIZED FAMILY SERVICE PLAN (IFSP)): | |
| • Content of an individualized family service plan (IFSP) (Family information) | 303.344(b), (c). |
| • Individualized family service plan (IFSP) Team meetings: | |
| ○ Accessibility and convenience | 303.342(d)(1)(i), (d)(2). |
| ○ Advocate outside the family | 303.343(a)(1)(iii). |
| ○ Native language (Meeting conducted in) | 303.342(d)(1)(ii). |
| ○ Other family members as requested by parent | 303.343(a)(1)(ii). |
| ○ Written notice to family | 303.342(d)(2). |
| FAMILY; FAMILIES (IN-R): | |
| • Interim individualized family service plan (IFSP) | 303.345. |
| • Parents determine whether to accept or decline service (For other family members) | 303.420(d)(1). |
| • Payor of last resort (Interim payments) | 303.510(b). |
| • Permissive use of funds by lead agency | 303.501(a)-(b). |
| • Prior written notice | 303.421(a). |
| • Private insurance | 303.520(b)(2)(i)-(b)(2)(iii). |
| FAMILY; FAMILIES (SE-ST): | |
| • Service coordination services (Case management): | |
| ○ Specific service coordination services | 303.34(b)(1), (b)(5). |
| ○ Definition | 303.34(a). |
| • State complaint procedures | 303.432(b). |
| • State eligibility requirements (Assurance regarding Early Intervention services) | 303.101(a)(1)(i)-(a)(1)(ii). |
| • State option to make Early Intervention services available for children three and older: | |
| ○ Possible costs to families | 303.211(b)(1)(ii)(C). |
| ○ Referral of a child (Substantiated case of trauma due to family violence) | 303.211(b)(7). |
| FAMILY; FAMILIES (SU-Z): | |
| • Surrogate parents | 303.422(d). |
| • Traditionally underserved groups: | |
| ○ Access to culturally competent services | 303.227(b). |
| ○ Minority, low-income, homeless, and rural families and wards of the State | 303.227(a). |
| • Transition to preschool: | |
| ○ Conference to discuss services | 303.209(c). |
| ○ Notification of local educational agency (LEA) | 303.209(b). |
| ○ Transition plan | 303.209(d)(3). |
| FAMILY ASSESSMENT: | |
| • Assessment of the family (Definition) | 303.321(c)(2). |
| • Content of an individualized family service plan (IFSP) (Family information) | 303.344(b). |
| • Evaluation and assessment of child and family | 303.321(c). |
| • Post-referral timeline | 303.310(a). |
| FAMILY-DIRECTED: | |
| • Assessment of resources | 303.12(b)(1). |
| • Identification of needs | 303.113(a)(2), (b). |
| FAMILY EDUCATIONAL RIGHTS AND PRIVACY ACT (FERPA): | |
| • Confidentiality procedures | 303.401(b)(1). |
| FAMILY THERAPISTS: | |
| • Qualified personnel (Early Intervention services) | 303.13(c)(2). |
| FAMILY TRAINING, COUNSELING, AND HOME VISITS: | |
| • Early Intervention services (Definition) | 303.13(b)(3). |
| FAMILY VIOLENCE PREVENTION AND SERVICES ACT | 303.211(b)(7), 303.302(c)(1)(ii)(A). |
| FAPE | |
| • See “Free Appropriate Public Education.” | |
| FEDERAL COURT: | |
| • Civil action (Part C) | 303.438. |
| • Impartial hearing officer | 303.443(c)(1)(ii). |
| • Mediation (Discussions not used in court) | 303.431(b)(7). |
| • State application (Modifications to) | 303.228(c)(2). |
| FEDERAL FUNDS: | |
| • Expenditure of funds | 303.221. |
| • Fiscal control | 303.226. |
| • Indirect costs (Cognizant Federal agency) | 303.225(c)(2). |
| • Proceeds from public or private insurance | 303.520(d). |
| • Requirement to supplement and not supplant | 303.225(a). |
| FEDERAL LAW(S): | |
| 1. • Alaska Native Claims Settlement Act | 303.19(b). |
| 2. • Americans With Disabilities Act (ADA) of 1990 | 303.448(e). |
| 3. • Child Abuse Prevention and Treatment Act (CAPTA), see CAPTA. | |
| 4. • Confidentiality | 303.401(a), (c)(2). |
| 5. • Developmental Disabilities Assistance and Bill of Rights Act | 303.302(c)(1)(ii)(D). |
| 6. • Early Intervention services (Services at no cost unless Federal or State law requires fees) | 303.13(a)(3). |
| 7. • Family Educational Rights and Privacy Act (FERPA) | 303.401(b). |
| 8. • Family Violence Prevention & Services Act | 303.211(b)(7), 303.302(c)(1)(ii)(A). |
| 9. • Federally Recognized Indian Tribe List Act of 1994 (section 104) | 303.19(c). |
| 10. • Head Start Act, see Head Start. | |
| 11. • Indian Self-Determination and Education Assistance Act | 303.731(a)(1). |
| 12. • Individuals with Disabilities Education Act (IDEA) | 303.4. |
| 13. • Rehabilitation Act of 1973 (title V) | 303.448(e). |
| 14. • Social Security Act (MCHB/Title V, SSI/XVI, and Medicaid/Title XIX,), see Social Security Act. | |
| 15. • State application (Modifications) | 303.228(c)(3). |
| FEDERALLY RECOGNIZED INDIAN TRIBE LIST ACT OF 1994 | 303.19(c). |
| FEDERAL REGULATIONS: | |
| • Amendment to Act or a Federal regulation | 303.228(c)(1). |
| • Knowledge of impartial hearing officer | 303.443(c)(1)(ii). |
| FEES (A-R): | |
| • Ability to pay (State's definition) | 303.521(a)(3). |
| • Assurance (Fees will not be charged for services entitled to at no cost) | 303.521(a)(4)(i). |
| • Co-payments or deductible amounts | 303.521(a)(6). |
| • Cost participation fees | 303.521(a)(1). |
| • Fees (Under confidentiality) | 303.409. |
| • Functions not subject to fees | 303.521(b). |
| • Income and family expenses (State's definition) | 303.521(a)(3). |
| • Inability to pay—State's definition | 303.521(a)(3). |
| FEES (S-Z): | |
| • State option to make services available to children ages three and older | 303.211(b)(1)(ii)(C), (d). |
| • Sliding fees (Schedule of): | |
| ○ Early Intervention services | 303.13(a)(3). |
| ○ System of payments and fees | 303.521(a)(1). |
| • State's definition of ability to pay | 303.521(a)(3). |
| • State system of payments and fees | 303.203(b). |
| • See also “INSURANCE.” | |
| FERPA (Family Educational Rights and Privacy Act) | 303.401(b)(1). |
| FETAL ALCOHOL SYNDROME: | |
| • Diagnosed physical or mental condition | 303.21(a)(2)(ii). |
| FILING (FILED) REQUIREMENTS: | |
| • Adoption of State complaint procedures | 303.432(a)(1). |
| • Civil action (Rule of construction) | 303.448(e). |
| • Due process complaint | 303.441(a)(2), (d)(4). |
| • Due process hearing procedures | 303.430(d)(1)(ii). |
| • Filing a due process complaint | 303.430(d)(1)(ii), 303.440(a)(2). |
| • Filing a State complaint | 303.434(d). |
| • Filing requirements regarding a State application | 303.235. |
| • Impartial due process hearing (Exception to timeline) | 303.443(f). |
| • Mediation | 303.431(a). |
| • Resolution process | 303.442(b)(3). |
| • Separate due process complaint | 303.445(c). |
| FISCAL CONTROL (AND FUND ACCOUNTING PROCEDURES) | 303.226. |
| FORMULA: | |
| • For State allocations | 303.730. |
| FOSTER CARE: | |
| • Child find: | |
| ○ Scope | 303.302(b)(1)(ii). |
| ○ Coordination | 303.302(c)(1)(ii)(G). |
| • Confidentiality (Access rights) | 303.405(c). |
| • Council (Composition) | 303.601(a)(12). |
| • Primary referral sources | 303.303(c)(9). |
| • Purpose of Early Intervention Program | 303.1(d). |
| FOSTER PARENT: | |
| • Parent (Definition) | 303.27(a)(2). |
| • Ward of the State (Exception) | 303.37(b). |
| FREE APPROPRIATE PUBLIC EDUCATION (FAPE): | |
| • Definition | 303.15. |
| • Permissive use of funds by lead agency | 303.501(c)-(d). |
| • State option to make services available to children ages three and older | 303.211(e)(1)-(2). |
| • States with Free Appropriate Public Education (FAPE) mandates to serve children under age three | 303.521(c). |
| FREQUENCY and INTENSITY: | |
| • Content of an individualized family service plan (IFSP) | 303.344(d)(1)(i). |
| • Definition | 303.344(d)(2)(i). |
| FUNCTIONS NOT SUBJECT TO FEES: | |
| • Administrative and coordinative activities | 303.521(b)(4). |
| • Child find requirements | 303.521(b)(1). |
| • Evaluation and assessment | 303.521(b)(2). |
| • Service coordination services | 303.521(b)(3). |
| FUNDING SOURCES: | |
| • Service coordination services | 303.34(b)(9). |
| FUNDS (A-D): | |
| • Acquisition of equipment and construction or alteration of facilities | 303.104(a). |
| • Allocation of funds (Outlying areas): | |
| ○ Consolidation of funds | 303.730(b). |
| ○ Reservation of funds | 303.730(a). |
| • Control of funds and property | 303.223. |
| • Council: | |
| ○ Funds for interpreters | 303.602(b)(3). |
| ○ Use of funds by | 303.603. |
| • Designation of lead agency | 303.201. |
| • Description of use of funds | 303.205. |
| • Direct services | 303.205(d). |
| FUNDS (E-FA): | |
| • Early Intervention service provider | 303.12(a). |
| • Enforcement (By the Secretary): | |
| ○ Needs intervention (Seeks to recover funds) | 303.704(b)(2)(iii). |
| ○ Needs substantial intervention | 303.704(c)(1). |
| ○ Opportunity for hearing | 303.705(a). |
| ○ Suspension (Of payments) | 303.705(b). |
| ○ Withholding funds | 303.705. |
| • Expenditure of (Federal) funds | 303.221. |
| • Family fees | 303.521(d). |
| FUNDS (FE-O): | |
| • Federal funds to supplement | 303.225(a)(2). |
| • Fiscal control | 303.226. |
| • Funds under a State's system of payments | 303.521(a)(6), (d). |
| • Inability to pay | 303.520(e), 303.521(a)(3). |
| • Lead agency (Receives Federal funds to administer Part C) | 303.22. |
| • Non-substitution of funds (Payor of last resort) | 303.510(a). |
| • Outlying areas (Formula for State allocations) | 303.730. |
| FUNDS (PA-R): | |
| • Payments to Indians: | |
| ○ Prohibited uses of funds | 303.731(f). |
| ○ Use of funds | 303.731(d)(1). |
| • Payor of last resort (Non-substitution of funds) | 303.510(a). |
| • Permissive use of funds | 303.501. |
| • Proceeds or funds from public or private insurance | 303.520(d). |
| • Prohibition against commingling | 303.225(a)(1). |
| • Prohibition against supplanting | 303.225(a)(2). |
| • Reallotment of (State) funds | 303.733. |
| • Reimbursement procedures | 303.122. |
| • Reports and records | 303.224. |
| • Reservation of funds for outlying areas | 303.730(a). |
| FUNDS (S-Z) | |
| • State allotments | 303.732(a), (c)(2), (d). |
| • State conformity with Part C | 303.102. |
| • State educational agency (SEA) | 303.36(b). |
| • State monitoring and enforcement | 303.700(a)(3), 303.704(b)(2)(iii), 303.704(c)(1), 300.705(a)-(b). |
| • State option to make services available to children ages three and older (Available funds) | 303.211(d). |
| • States with Free Appropriate Public Education (FAPE) mandates | 303.521(c). |
| • State's definition (Inability to pay) | 303.521(a)(3), (a)(4)(ii). |
| • Suspension (Of payments) | 303.705(b). |
| • System of payments and fees | 303.521(a)(6), (c), (d). |
| • Unable to pay | 303.520(d), 303.520(c), 303.521(a)(6). |
| • Use of funds (Payor of last resort) | 303.510(a). |
| • Withholding funds | 303.705. |
| • See also “Grants” and “Payments”. | |
| FUNDS (PART B): | |
| • States with Free Appropriate Public Education (FAPE) mandates or that use Part B funds for children under age three | 303.521(c). |
| FUNDS (PART C): | |
| • Early Intervention service provider | 303.12(a). |
| • State conformity with Part C | 303.102. |
| • Withholding funds: | |
| ○ Opportunity for a hearing | 303.705(a). |
| ○ Suspension | 303.705(b). |
| GENETIC or CONGENITAL DISORDERS: | |
| • Diagnosed physical or mental condition (Infant or toddler with a disability) | 303.21(a)(2)(ii). |
| GOVERNOR; GOVERNOR'S DESIGNEE: | |
| • Council: | |
| ○ Appointed by Governor | 303.600(b). |
| ○ Chairperson | 303.600(c). |
| ○ Composition | 303.601(b)-(c). |
| ○ Functions (Annual report to Governor) | 303.604(c). |
| ○ Use of funds by Council (Approval) | 303.603(a). |
| • Financial responsibility and methods of ensuring services: | |
| ○ Other methods determined by Governor | 303.511(b)(3). |
| ○ Procedures for resolving disputes | 303.511(c)(1). |
| • Lead agency: | |
| ○ Designated by Governor | 303.22. |
| ○ Role in supervision, | 303.120. |
| • State educational agency (SEA) | 303.36(a). |
| GRANDPARENT: | |
| • Parent (Definition) | 303.27(a)(4). |
| GRANTS; GRANTS TO STATES: | |
| • Consolidation of grants (Outlying areas) | 303.730(b). |
| • Reservation for State incentive grants | 303.734. |
| • Secretary's authority to make grants | 303.100. |
| • See also “Award” and “Payments to Indians”. | |
| GUARDIAN: | |
| • Parent (Definition) | 303.27(a)(3). |
| GUARDIANSHIP: | |
| • Confidentiality (Access rights) | 303.405(c). |
| HEAD START; HEAD START ACT: | |
| • Child find system (Coordination) | 303.302(c)(1)(ii)(E). |
| • Council (Composition) | 303.601(a)(8). |
| • Comprehensive system of personnel development (CSPD) (Training to coordinate transition services and personnel) | 303.118(a)(3), (b)(4). |
| • Early Head Start: | |
| ○ Coordination with | 303.210(a). |
| ○ Content of an individualized family service plan (IFSP) (Transition from Part C) | 303.344(h)(1)(ii). |
| • Head Start Act (References) | 303.210(a), 303.302 (c)(1)(ii)(E), 303.601(a)(8). |
| HEALTH INSURANCE | 303.520(b)(2), 303.601 (a)(10). |
| HEALTH SERVICES: | |
| • Definition | 303.16. |
| • Early Intervention services (Definition) | 303.13(b)(4). |
| • Interim payments—Reimbursement (Payor of last resort) | 303.510(b). |
| • Non-covered services and devices | 303.16(c). |
| • Services included | 303.16(b). |
| HEALTH STATUS (MEDICAL HISTORY): | |
| • Evaluation and assessment | 303.321(a)(3)(i). |
| • Content of an individualized family service plan (IFSP) (Information about child's status) | 303.344(a). |
| HEARING AID: | |
| • Health services (Nothing prevents routinely checking) | 303.16(c)(1)(iii)(B). |
| HEARING IMPAIRED; HEARING IMPAIRMENTS: | |
| • Special educators including teachers of children with hearing impairments | 303.13(c)(11). |
| HEARING LOSS: | |
| • Audiology services | 303.13(b)(2)(ii), (b)(2)(v). |
| HEARING OFFICER: | |
| • Appointment of | 303.443(c), 303.435. |
| • Dismissal of complaint | 303.442(b)(4). |
| • Duties and qualifications | 303.435(a), 303.443(c). |
| • Hearing decisions | 303.445. |
| • Impartial (Definition) | 303.435(b), 303.443(c). |
| • Sufficiency of complaint | 303.441(d). |
| HEART AILMENTS: | |
| • Health services (Non-covered services) | 303.16(c)(1)(ii). |
| HISTORY OF ABUSE OR NEGLECT: | |
| • At-risk infant or toddler (Definition) | 303.5. |
| HISTORICALLY UNDERREPRESENTED POPULATIONS: | |
| • Purpose of Early Intervention program | 303.1(d). |
| • See “Inner-city,” “Low-income,” “Minority,” and “Rural” (Children), and “Foster care.” | |
| • See also “Traditionally underserved groups.” | 303.227. |
| HOMELESS CHILDREN: | |
| • Assurances regarding Early Intervention services and a statewide system | 303.101(a)(1)(ii). |
| • Child find system | 303.302(b)(1)(ii). |
| • Council (Composition) (Representative designated by Office of the Coordination and Education of Homeless Children and Youth) | 303.601(a)(11). |
| • Definition | 303.17. |
| • Due process complaint (Content) | 303.441(b)(4). |
| • Traditionally underserved groups | 303.227(a). |
| HOMELESS FAMILY SHELTERS: | |
| • Primary referral sources | 303.303(c)(10). |
| HOSPITALS: | |
| • Primary referral sources | 303.303(c)(1). |
| • Public awareness program | 303.301(a)(1)(ii). |
| HOSPITALIZATION (For management of congenital heart ailments): | |
| • Non-covered health services | 303.16(c)(1)(ii). |
| HYDROCEPHALUS (Shunting of): | |
| • Non-covered health services | 303.16(c)(1)(i). |
| IDEA (INDIVIDUALS WITH DISABILITIES EDUCATION ACT): | |
| • Act (Definition) | 303.4. |
| IEP (INDIVIDUALIZED EDUCATION PROGRAM): | |
| • Free appropriate public education (FAPE) (Definition) | 303.15(d). |
| IEU (INTERMEDIATE EDUCATIONAL UNIT): | |
| • Local educational agency (LEA) (Definition) | 303.23(b)(3). |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) (A-F): | |
| • Acceptable time to meet for parents and others | 303.342(b)(2). |
| • Accountability and responsibility | 303.346. |
| • Annual meeting to evaluate | 303.342(c). |
| • Component of statewide system | 303.114. |
| • Content of an individualized family service plan (IFSP) | |
| ○ See “IFSP (Individualized family service plan) Content”. | |
| • Dates and duration of services | 303.344(f). |
| • Definition | 303.20. |
| • Development of | 303.342(a). |
| • Early Intervention services | 303.344(d). |
| ○ See also “IFSP (Individualized family service plan) Content”. | |
| • Educational component (For children at least three years old) | 303.344(d)(4). |
| • Family information | 303.344(b). |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) (I-N): | |
| • Individualized family service plan (IFSP) Team. | |
| ○ See “IFSP (Individualized family service plan) Team”. | |
| • Information about child's status | 303.344(a). |
| • Initial individualized family service plan (IFSP) Meeting | 303.342(a). |
| • Interim individualized family service plan (IFSP) | 303.345. |
| • Justification (Natural environments).. | 303.344(d)(1)(ii). |
| • Lead agency responsibility | 303.340. |
| • Location of services | 303.344(d)(1)(ii)-(iii), (d)(3). |
| • Meeting(s): | |
| ○ Accessibility and convenience of | 303.342(d). |
| ○ Annual meeting to evaluate individualized family service plan (IFSP) | 303.342(c). |
| ○ To develop initial individualized family service plan (IFSP) | 303.342(a). |
| • Natural environments | 303.344(d)(1)(ii). |
| ○ See also “Natural Environments”. | |
| • Numeracy skills | 303.344(d)(4). |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) (O-Q): | |
| • Other services | 303.344(e). |
| • Outcomes or results | 303.344(c). |
| ○ See also “Outcomes”. | |
| • Parental consent before providing services | 303.342(e). |
| ○ Services before evaluation completed | 303.345(a). |
| • Periodic review | 303.342(b). |
| • Pre-literacy, language, and numeracy skills | 303.344(d)(4). |
| • Procedures for individualized family service plan (IFSP) development, review, and evaluation | 303.342. |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) (R-Z): | |
| • Responsibility and accountability | 303.346. |
| • Results or outcomes | 303.344(c). |
| • Review and revision (Periodic) | 303.342(b). |
| • Service coordinator | 303.344(g). |
| • Services before evaluation completed | 303.345. |
| • Statewide system component | 303.114. |
| • Transition from Part C services | 303.344(h). |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) CONTENT (A-E): | |
| • Child's status (Information about) | 303.344(a). |
| • Dates and duration of services | 303.344(f). |
| • Early Intervention services: | |
| ○ Definition | 303.13(a). |
| ○ Duration, frequency, intensity, length, and method of services | 303.344(d)(1)(i). |
| ○ Educational component that promotes school readiness, and incorporates pre-literacy, language, and numeracy skills | 303.344(d)(4). |
| ○ Location of services | 303.344(d)(1)(iii), (d)(3). |
| ○ Payment arrangements, if any | 303.344(d)(1)(iv). |
| ○ Natural environments, including a justification, if applicable | 303.344(d)(1)(ii). |
| ○ See also “Natural Environments”. | |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) CONTENT (F-Z): | |
| • Family information | 303.344(b). |
| • Information about child's status | 303.344(a). |
| • Other services | 303.344(e). |
| • Results or outcomes | 303.344(c). |
| • Service coordinator | 303.344(g). |
| • Transition from Part C services | 303.344(h). |
| IFSP (INDIVIDUALIZED FAMILY SERVICE PLAN) TEAM: | |
| • Composition (Meetings and periodic reviews) | 303.343(a)(1). |
| • Due process complaint (Other options considered by individualized family service plan (IFSP) Team) | 303.441(e)(1)(ii). |
| • Early Intervention services in natural environments | 303.126. |
| • IFSP Team meetings and periodic reviews | 303.343. |
| • Initial and annual individualized family service plan (IFSP) Team meetings | 303.343(a). |
| • Multidisciplinary | 303.24(b). |
| • Natural environments | 303.344(d)(1)(ii)(B)(1), (d)(1)(ii)(B)(3). |
| • Resolution meeting | 303.442(a)(4). |
| • Transition from Part C services | 303.344(h)(2)(iv). |
| ILLEGAL SUBSTANCE ABUSE: | |
| • At-risk infant or toddler | 303.5. |
| • Referral of specific at-risk infants and toddlers | 303.303(b)(2). |
| IMMUNIZATIONS AND REGULAR WELL-BABY CARE: | |
| • Non-covered medical-health services | 303.16(c)(3). |
| IMPARTIAL: | |
| • Appointment of impartial hearing officer | 303.435, 303.443(c). |
| • Definition | 303.435(b)(1), 303.443(c). |
| • Hearing procedures (Impartial proceeding) | 303.233(c). |
| • Mediator (Qualified and impartial) | 303.431(b)(1)(iii), (b)(2)(ii), (c). |
| INABILITY TO PAY: | |
| • Assurance that “inability to pay” will not delay or deny services if parent or family meets State's definition | 303.521(a)(4)(ii). |
| • Lack of consent (And inability to pay) may not delay or deny services | 303.520(c). |
| • Private insurance | 303.520(c). |
| • State's definition | 303.521(a)(3). |
| • System of payments and fees | 303.521(a)(3)-(a)(4). |
| INBORN ERRORS OF METABOLISM: | |
| • Diagnosed physical or mental condition (Infant or toddler with a disability) | 303.21(a)(2)(ii). |
| INDIAN CHILDREN: | |
| • Payments to Indians | 303.731(a)(1), (d)(1). |
| • See “Indian infants and toddlers”. | |
| INDIAN; INDIAN TRIBE: | |
| • Definition | 303.19. |
| • See “Tribe; Tribal organization”. | |
| INDIAN INFANTS AND TODDLERS: | |
| • Assurances regarding Early Intervention services | 303.101(a)(1)(i). |
| • Availability of Early Intervention services | 303.112(a). |
| • Scope of child find | 303.302(b)(1)(i). |
| INDIAN SELF-DETERMINATION AND EDUCATION ASSISTANCE ACT | 303.731(a)(1). |
| INDIVIDUALIZED FAMILY SERVICE PLAN (IFSP): | |
| • See “IFSP”; “IFSP Content”; “IFSP Team.” | |
| INDIVIDUALS WITH DISABILITIES EDUCATION ACT (IDEA): | |
| • Act (Definition) | 303.4. |
| INFANT(S) and/or TODDLER(S): | |
| • Annual report of children served | 303.721(a). |
| • At-risk infant or toddler (Definition) | 303.5. |
| • Authorized activities of the Council | 303.605(b). |
| • Definition (In State allotments) | 303.732(d)(2). |
| • Permissive use of funds | 303.501(e). |
| • Payments to Indians | 303.731(b), (e). |
| • Primary referral sources | 303.303(c)(3). |
| • Public awareness program | 303.301(a)(1)(ii). |
| • Reservation for State incentive grants | 303.734(b)(1). |
| • Screening procedures | 303.320(b)(1). |
| INFANT OR TODDLER WITH A DISABILITY: | |
| • Definition | 303.21. |
| INFECTION; CONGENITAL INFECTIONS: | |
| • At-risk infant or toddler (Definition) | 303.5. |
| • Infant or toddler with a disability (Definition) | 303.21(a)(2)(ii). |
| INFORMED CLINICAL OPINION: | |
| • Procedures for assessment of child | 303.321(a)(3)(ii). |
| INFORMED WRITTEN CONSENT: | |
| • Individualized family service plan (IFSP) (Informed written consent before providing services) | 303.342(e). |
| • State option to make services available to children ages three and older | 303.211(b)(5). |
| • See also “Consent”. | |
| INNER-CITY: | |
| • Comprehensive system of personnel development (CSPD) (Training personnel to work in rural and inner-city areas) | 303.118(b)(1). |
| • Purpose of Early Intervention program (Enhance capacity to meet needs of inner-city children) | 303.1(d). |
| INSURANCE (A-E): | |
| • Consent regarding: | |
| ○ Private insurance | 303.520(b)(1), (b)(2). |
| ○ Public insurance | 303.520(a)(3)(i). |
| • Co-payments. | |
| • Composition of Council (Agency responsible for State regulation of health insurance) | 303.601(a)(10). |
| • Construction clause (Non-reduction of Medicaid benefits) | 303.510(c). |
| • Cost participation fees or sliding fees | 303.521(a)(1). |
| • Costs to parents (Use of private insurance to pay for Part C services) | 303.520(a)(4), 303.520(b)(1)(ii), 303.520(b)(1)(ii)-(b)(1)(iii). |
| • Deductible amounts or co-payments | 303.521(a)(6). |
| • Enrollment in public insurance or benefits program (May not require parent to enroll) | 303.520(a)(2)(i). |
| INSURANCE (F-O): | |
| • Family or parent funds: | |
| ○ Not treated as “program income” | 303.520(d)(1). |
| ○ Used for Part C services | 303.520(d)(2). |
| • Funds received under a State's system of payments | 303.520(e). |
| • Health insurance | 303.520(b)(2), 303.601(a)(10). |
| • Lack of consent may not delay or deny services | 303.520(b). |
| • Medicaid (Payor of last resort) | 303.510(c). |
| INSURANCE (P-PR): | |
| • Parental consent and ability to decline services | 303.420(a)(4). |
| • Parent or family funds to State not considered “program income” | 303.520(d)(1). |
| • Policies related to use of insurance to pay for services | 303.520(a), 303.520(b). |
| • Private insurance | 303.520(b). |
| • Proceeds from public or private insurance: | |
| ○ Not treated as income | 303.520(d)(1). |
| ○ Reimbursements (Medicaid, | 303.520(d)(2). |
| INSURANCE (PU-Z): | |
| • Public insurance | 303.520(a). |
| • Purpose of Early Intervention program | 303.1(b). |
| • Schedule of sliding fees: | |
| ○ Early Intervention services (Definition) | 303.13(a)(3). |
| ○ System of payments and fees | 303.521(a)(1). |
| • State, local, or private programs of insurance | 303.521(a). |
| • State statute regarding private health insurance (Impact on consent requirements) | 303.520(b)(2). |
| • System of payments and fees | 303.520(a), 303.521(a). |
| • See also “Fees” and “Inability to pay”. | |
| • Use of public insurance to pay for services | 303.520(a). |
| • Written notification (prior to use of public insurance) | 303.520(a)(3). |
| • See also “Fees” and “Inability to pay”. | |
| INTERAGENCY AGREEMENTS: | |
| • Functions of the Council (Promotion of methods for intra-agency and interagency collaboration) | 303.604(a)(3). |
| • Lead agency role (In funding, inter-agency agreements, | 303.120(f). |
| • Transition to preschool | 303.209(a)(3). |
| INTERAGENCY COORDINATION: | |
| • See “Coordination.” | |
| INTERIM INDIVIDUALIZED FAMILY SERVICE PLAN (IFSP): | |
| • Services before evaluations and assessments completed | 303.345. |
| INTERMEDIATE EDUCATIONAL UNIT (IEU): | |
| • Local educational agency (LEA) (Definition) | 303.23(b)(3). |
| JURISDICTION(S) (Geographic location): | |
| • Eligible recipients of an award | 303.2(a). |
| • State (Definition) | 303.35. |
| LACK OF CONSENT (INABILITY TO PAY) | 303.520(c). |
| • See also “Inability to Pay”. | |
| LACK OF OXYGEN: | |
| • At-risk infant or toddler (Definition) | 303.5. |
| LEAD AGENCY: | |
| • Definition | 303.22. |
| • Designation of | 303.201. |
| • Lead agency role in supervision, | 303.120. |
| • Public agency (Definition) | 303.30. |
| LIMITED ENGLISH PROFICIENCY (LEP): | |
| • Native language (Definition) | 303.25(a). |
| ○ See “Native language”. | |
| LOCAL EDUCATIONAL AGENCY (LEA): | |
| • Definition | 303.23. |
| • Notification of child transitioning to | 303.209(b). |
| LOW BIRTH WEIGHT: | |
| • At-risk infant or toddler (Definition) | 303.5. |
| LOW-INCOME (Children and families): | |
| • Purpose of Early Intervention program (Historically underrepresented populations) | 303.1(d). |
| • Traditionally underserved groups (Low-income families) | 303.227(a). |
| MAPPING: | |
| • Of surgically implanted medical devices | 303.13(b)(1)(i), 303.16(c)(1)(iii). |
| MATERNAL AND CHILD HEALTH: | |
| • Child find (Coordination) | 303.302(c)(1)(ii)(B). |
| • Payor of last resort—Non-reduction of benefits (Construction) | 303.510(c). |
| MEDIATION (A-L): | |
| • Annual report of children served (Number of mediations held) | 303.721(c). |
| • Benefits of (Meeting to explain) | 303.431(d)(1). |
| • Confidential discussions | 303.431(b)(5)(i), (b)(7). |
| • Cost of (Borne by State) | 303.431(b)(3). |
| • Disputes (Resolve through mediation) | 303.431(a). |
| • Disinterested party (to encourage) | 303.431(d). |
| • Impartiality of mediator | 303.431(c). |
| • Lead agency procedures (to resolve disputes through mediation) | 303.431(a). |
| • Legally binding agreement (if parties resolve dispute through mediation) | 303.431(b)(5). |
| MEDIATION (M-O): | |
| • Mediator(s): | |
| ○ Impartiality of | 303.431(c). |
| ○ List of | 303.431(b)(2)(i). |
| ○ Qualified and impartial | 303.431(b)(1)(iii). |
| ○ Random selection of | 303.431(b)(2)(ii). |
| ○ Trained in effective mediation techniques | 303.431(b)(1)(iii). |
| • Meeting to encourage mediation | 303.431(d). |
| • Not used as evidence in hearing or civil proceeding | 303.431(b)(7). |
| • Not used to delay/deny right of hearing | 303.431(b)(1)(ii). |
| MEDIATION (P-Z): | |
| • Parent training and information center | 303.431(d)(1). |
| • Prior written notice—Content | 303.421(b). |
| • Requirements | 303.431(b)(1)-(b)(7). |
| • Sessions scheduled—Timely manner and convenient location | 303.431(b)(4). |
| • State dispute resolution options | 303.430. |
| • State monitoring and enforcement | 303.700(d)(2). |
| • Voluntary | 303.431(b)(1)(i). |
| • Written mediation agreement (Enforceable in court) | 303.431(b)(6). |
| MEDICAID: | |
| • Council—Composition (Member from State Medicaid program) | 303.601(a)(7). |
| • Non-reduction of benefits (Payor of last resort)—Construction | 303.510(c). |
| • Proceeds from public-private insurance for Part C—Neither State nor local funds under “nonsupplant” (§ 303.325(b)) | 303.520(d)(2). |
| • “Service coordination”—Use of term not intended to affect seeking Medicaid | 303.34(c). |
| MEDICAL SERVICES: | |
| • In Early Intervention Services definition | 303.13(b)(5). |
| • Interim payments—reimbursement (Payor of last resort) | 303.510(b). |
| MEDICAL SERVICES FOR DIAGNOSTIC OR EVALUATION PURPOSES: | |
| • See “Medical services” (Definition) | 303.13(b)(5). |
| MEDICINE OR DRUGS: | |
| • Prescribing for any purpose—Not covered | 303.16(c)(1)(ii). |
| METHOD (Of delivering Individual Family Service Plan (IFSP) services) | 303.344(d)(1)(i). |
| • Definition | 303.344(d)(2)(ii). |
| METHODS OF ENSURING SERVICES | 303.511. |
| METABOLISM (Inborn errors of): | |
| • Diagnosed physical or mental condition | 303.21(a)(2)(ii). |
| MINORITY (Children, Families, Parents): | |
| • Council—Composition (Minority parents) | 303.601(a)(1)(i). |
| • Purpose of Early Intervention Program | 303.1(d). |
| • Traditionally underserved groups | 303.227(a). |
| MONITOR; MONITORING: | |
| • Council—Functions | 303.604(a)(3). |
| • Financial responsibility and methods of ensuring services—Added components | 303.511(e). |
| • Lead agency role in monitoring | 303.120(a)(2)(i), (a)(2)(iv). |
| • Rule of construction—Nothing restricts Secretary's authority under General Education Provisions Act (GEPA) to monitor-enforce requirements of the Act | 303.707. |
| • Secretary's review & determination regarding State performance | 303.703(b). |
| • State monitoring and enforcement | 303.700(a)(1), (b), (d)(2). |
| • State performance and data collection | 303.701(c)(2). |
| • State use of targets and reporting | 303.702(b)(1)(ii). |
| MULTIDISCIPLINARY: | |
| • Definition | 303.24. |
| • Evaluation and assessment | 303.321(a)(1)(i). |
| • Evaluation, assessment, and nondiscriminatory procedures | 303.113(a)(1). |
| • Purpose of Early Intervention program | 303.1(a). |
| • State eligibility (General authority) | 303.100. |
| NATIVE LANGUAGE: | |
| • Consent | 303.7(a). |
| • Definition | 303.25. |
| • Evaluation and assessment | 303.321(a)(5), (a)(6). |
| • Individualized Family Service Plan (IFSP) meetings—Accessibility and convenience | 303.342(d)(1)(ii). |
| • Notice regarding confidentiality and availability of notice in native language | 303.404. |
| • Prior written notice—Native language | 303.421(c). |
| NATURAL ENVIRONMENTS: | |
| • Definition | 303.26. |
| • Determination of appropriate setting for Early Intervention services | 303.344(d)(1)(ii)(A)-(B). |
| • Early Intervention services (Definition) | 303.13(a)(8). |
| • Early Intervention services in natural environments (Component of statewide system) | 303.126. |
| • Individualized Family Service Plan (IFSP) content—Early Intervention services in | 303.344(d)(1)(ii)(A)-(B). |
| • State monitoring and enforcement | 303.700(d)(1). |
| NEGLECT or ABUSE: | |
| • See “Abuse or neglect”. | |
| NERVOUS SYSTEM (“Disorders reflecting disturbance of development of”): | |
| • Diagnosed physical or mental condition (Infant or toddler with a disability) | 303.21(a)(2)(ii). |
| NONCOMMINGLING | 303.225(a). |
| NONDISCRIMINATORY: | |
| • Evaluation, assessment and nondiscriminatory procedures | 303.113, 303.321(a)(4). |
| • Evaluation and assessment—in a nondiscriminatory manner | 303.321(a)(4). |
| NON-REDUCTION OF BENEFITS | 303.510(c). |
| NONSUBSTITUTION OF FUNDS | 303.510(a). |
| NONSUPPLANT: | |
| • Requirement to supplement not supplant | 303.225(b). |
| • Requirement regarding indirect costs | 303.225(c)(2)(ii). |
| NOTICE & HEARING BEFORE DETERMINING A STATE NOT ELIGIBLE | 303.231. |
| NOTICES (State administration): | |
| • Public participation policies—Lead agency notice of hearings | 303.208(b)(2). |
| • State applications, eligibility determinations, | |
| ○ Determination by Secretary that a State is eligible (Secretary notifies State) | 303.229. |
| ○ Disapproval of an application—Standard for | 303.230. |
| ○ Initial decision; final decision | 303.234(a), (c). |
| ○ Judicial review | 303.236. |
| ○ Notice and hearing before determining a State not eligible | 303.231(a)(1)(i), (a)(2)(b). |
| ○ Standard for disapproval of an application | 303.230. |
| NOTICES (State monitoring & enforcement): | |
| • Public attention by State—If Secretary proposing enforcement | 303.706. |
| • Secretary's review and determination regarding State performance | 303.703(b)(2)(i). |
| • Withholding funds: | |
| ○ Opportunity for a hearing | 303.705(a). |
| ○ Suspension | 303.705(b). |
| NOTICES (To parents; family) (A-O): | |
| • Confidentiality and opportunity to examine records | 303.401(a). |
| • Due process procedures—Part B: | |
| ○ Filing a due process complaint (Time-line for resolution) | 303.440(c). |
| ○ Lead agency response to a due process complaint | 303.441(e)(1). |
| ○ Notice required before a hearing | 303.441(c). |
| ○ Resolution process | 303.442(a)(1), (b)(5). |
| • Individualized Family Service Plan (IFSP) meetings—Written notice to family, | 303.342(d)(2). |
| • Lead agency—General responsibility for procedural safeguards | 303.400(a). |
| • Native language | 303.404(d). |
| • Notice to parents Re-confidentiality | 303.404. |
| NOTICES (To parents; family) (P-Z): | |
| • Parental consent and ability to decline service | 303.420. |
| • Prior written notice and procedural safeguards notice | 303.421. |
| ○ Content of notice | 303.421(b). |
| ○ General | 303.421(a). |
| ○ Native language | 303.421(c)(1), (c)(2)(i)-(c)(2)(ii). |
| • Procedural safeguards—General responsibility of lead agency for | 303.400(a). |
| • Screening procedures | 303.320(a)(1)(i), (2). |
| • State option—Services to children three and older (Annual notice to parents) | 303.211(b)(1). |
| NUMERACY SKILLS: | |
| • Infant or toddler with a disability | 303.21(c)(1). |
| • Individualized Family Service Plan (IFSP) | 303.344(d)(4). |
| • State option—Services to children ages three and older | 303.211(b)(2). |
| NURSES: | |
| • Early Intervention services (Definition)—Qualified personnel | 303.13(c)(3). |
| NURSING SERVICES: | |
| • Definition | 303.13(b)(6). |
| NUTRITION SERVICES: | |
| Definition | 303.13(b)(7). |
| NUTRITIONAL DEPRIVATION: | |
| • At risk infant or toddler (Definition) | 303.5. |
| OCCUPATIONAL THERAPY: | |
| • Definition | 303.13(b)(8). |
| • Occupational therapists | 303.13(c)(4). |
| OPTIMIZATION (Relating to Cochlear Implants, | 303.13(b)(1)(i), 303.16(c)(1)(iii). |
| ORIENTATION AND MOBILITY TRAINING: | |
| • Early Intervention services (Definition)—In “Vision services.” | 303.13(b)(17)(iii). |
| • Orientation and mobility specialists | 303.13(c)(5). |
| OTHER SERVICES: | |
| • Early Intervention services (Definition) | 303.13(d). |
| • Individualized Family Service Plan (IFSP) content | 303.344(e). |
| OUTCOMES: | |
| • Early Intervention services provider (Definition) | 303.12(b)(1). |
| • Health services—Developmental outcomes | 303.16(c)(1)(iii)(A). |
| • Individualized Family Service Plan (IFSP)—Content: | |
| ○ Duration | 303.344(d)(2)(iv). |
| ○ Early Intervention services | 303.344(d)(1). |
| ○ Early Intervention services in natural environments | 303.344(d)(1)(ii)(B)(3). |
| ○ Results or outcomes | 303.344(c). |
| • Individualized Family Service Plan (IFSP)—Periodic review | 303.342(b)(1)(i)-(b)(1)(ii). |
| • Individualized Family Service Plan (IFSP)—Responsibility and accountability | 303.346. |
| • Special instruction (Definition) | 303.13(b)(14)(ii). |
| PARAPROFESSIONALS: | |
| • Comprehensive System of Personnel Development (CSPD) (Training of) | 303.118. |
| • Use of | 303.119(c). |
| PARENT: | |
| • Biological or adoptive parent of a child | 303.27(a)(1), (a)(4). |
| • Definition | 303.27. |
| • Foster parent | 303.27(a)(2). |
| • Grandparent | 303.27(a)(4). |
| • Guardian | 303.27(a)(3). |
| • Dissemination of Information (Public awareness program) | 303.301(a)(1)(ii). |
| • Stepparent | 303.27(a)(4). |
| • Surrogate parent | 303.27(a)(5). |
| ○ See also “Surrogate Parent(s).” | |
| PARENTAL RIGHTS (A-C): | |
| • Confidentiality: | |
| ○ Access rights | 303.405. |
| ○ Amendment of records at parent's request | 303.410. |
| ○ Consent prior to disclosure or use | 303.414. |
| ○ Council—Composition | 303.601(a)(1). |
| ○ Destruction of information | 303.416. |
| ○ List of types and locations of information | 303.408. |
| ○ Notice to parents | 303.404. |
| ○ Opportunity for a hearing on records | 303.411. |
| ○ Opportunity to inspect-review records | 303.401(b)(2). |
| ○ Right to confidentiality of personally identifiable information | 303.401(a). |
| • Consent (Definition) | 303.7. |
| PARENTAL RIGHTS (D—Part B): | |
| • Due process hearings—Part B: | |
| ○ Construction—parent's right to file an appeal | 303.445(b). |
| ○ Construction—filing a separate due process complaint | 303.445(c). |
| ○ Filing a due process complaint | 303.440(a)-(b). |
| ○ Findings of fact and decisions | 303.444(a)(5), 303.446(b)(2)(vi). |
| ○ Hearing officer finding—matters alleging procedural violations | 303.445(a)(2)(ii). |
| ○ Hearing rights | 303.444. |
| ○ Impartial due process hearing | 303.443(a), (e), (f)(2). |
| ○ Lead agency response to a due process complaint | 303.441(e). |
| ○ Parental rights at hearings | 303.444(c). |
| ○ Resolution process | 303.442. |
| ○ Separate request for a due process hearing | 303.445(c). |
| PARENTAL RIGHTS (D—Part C to IF): | |
| • Due process hearings—Part C: | |
| ○ Convenience of hearings & timelines | 303.437. |
| ○ Parental rights in due process hearings | 303.436. |
| • Functions not subject to fees | 303.521(b). |
| • Individualized Family Service Plan (IFSP)—Consent provisions: | |
| ○ Parental consent regarding IFSP contents | 303.342(e). |
| ○ Services before evaluation completed (Parental consent) | 303.345(a). |
| • Individualized Family Service Plan (IFSP) Team meeting participants: | |
| ○ An advocate or person outside the family—If parent requests | 303.343(a)(1)(iii). |
| ○ Other family members, if requested by the parent | 303.343(a)(1)(ii). |
| ○ The parent or parents | 303.343(a)(1)(i). |
| ○ See also “Family (Families) (IFSP)”. | |
| PARENTAL RIGHTS (IN-O): | |
| • Inability of parents to pay will not delay-deny services | 303.521(a)(4)(ii). |
| • Mediation: | |
| ○ Binding agreement to resolve a dispute—signed by parents & agency | 303.431(b)(5)(ii). |
| ○ Meeting to encourage | 303.431(d). |
| ○ Not used to deny or delay a parent's right to a hearing | 303.431(b)(1)(ii). |
| • Native language: | |
| ○ Consent (definition) | 303.7(a). |
| ○ Definition | 303.25. |
| ○ Prior notice—Native language | 303.421(c). |
| PARENTAL RIGHTS (P-Z): | |
| • Parental consent and ability to decline service | 303.420. |
| • Payments to Indians—Use of funds (Encouraged to involve Indian parents) | 303.731(d)(1). |
| • Pendency | 303.430(e). |
| • Prior notice | 303.421. |
| • State complaint procedures: | |
| ○ Adoption of (and widely disseminating procedures to parents) | 303.432(a). |
| ○ Opportunity to engage in mediation | 303.433(a)(3)(ii). |
| ○ Time extension | 303.433(b)(1)(ii). |
| • States with Free Appropriate Public Education (FAPE) mandates may not charge parents for services under Part B | 303.521(c). |
| • Status of child during pendency of due process hearing | 303.430(e). |
| • State system of payments copy for parents | 303.520(a)(4), 303.520(b)(1)(iii). |
| • See also “Due Process Procedures,” “Family (Families),” and “Procedural Safeguards”. | |
| PARENT TRAINING: | |
| • Payment to Indians—Use of funds | 303.731(d). |
| • Psychological services (Definition) | 303.13(b)(10)(iv). |
| PARENT TRAINING & INFORMATION CENTER(S): | |
| • Definition | 303.28. |
| • Mediation—Meeting to encourage | 303.431(d)(1). |
| • State complaint procedures—Widely disseminated to Parent Training and Information Centers | 303.432(a)(2). |
| PART B (IDEA) (A-O): | |
| • Child find—Coordination with | 303.302(a)(1), (c)(1)(ii)(A). |
| • Confidentiality | 303.401(d)(2). |
| • Comprehensive System of Personnel Development (CSPD) (Training personnel relating to transition) | 303.118(a)(3). |
| • Due process hearing procedures (Dispute resolution options) | 303.430(d)(2). |
| • Free Appropriate Public Education (FAPE) (Definition) | 303.15(b). |
| • Financial responsibility and methods of ensuring services | 303.511(b). |
| • Individualized Family Service Plan (IFSP) Content-Transition to preschool | 303.209(d)(3). |
| • Monitoring and enforcement | 303.700(d). |
| PART B (IDEA) (P-Z): | |
| • Permissive use of funds | 303.501(c)(1), (d). |
| • State educational agency (Definition) | 303.36(b). |
| • State option-Services to children three and older | 303.211(b)(1)(i)-(b)(1)(ii), (b)(3). |
| ○ Construction—If child receives Part C services, free appropriate public education (FAPE) not required | 303.211(e)(1). |
| • States with free appropriate public education (FAPE) mandates | 303.521(c). |
| PARTICIPATING AGENCY: | |
| • Definition of | 303.403(c). |
| • See also “Confidentiality” (A-D) and Personally “Identifiable Information” (A-C). | |
| PAYMENT(S) FOR EARLY INTERVENTION SERVICES: | |
| • Coordination of | 303.1(b). |
| • Individualized Family Service Plan (IFSP) content—Payment arrangements, if any | 303.344(d)(1)(iv). |
| • Interim payments—reimbursement (payor of last resort) | 303.510(b). |
| • Policies Re use of insurance for payment for services | 303.520. |
| • Timely resolution of disputes about payments (Methods of ensuring services) | 303.511(c). |
| • To outlying areas | 303.730(a). |
| • To Secretary of the Interior | 303.731(a)(1). |
| PAYMENTS TO INDIANS | 303.731. |
| • Allocation | 303.731(b). |
| • Information | 303.731(c). |
| • Prohibited use of funds | 303.731(f). |
| • Reports | 303.731(e). |
| • Use of funds | 303.731(d). |
| PAYOR OF LAST RESORT: | |
| • Assurance regarding | 303.222. |
| • General requirement | 303.500. |
| • Interim payments—reimbursement | 303.510(b). |
| • Non-reduction of benefits | 303.510(c). |
| • Nonsubstitution of funds | 303.510(a). |
| PEDIATRICIANS & OTHER PHYSICIANS: | |
| • Qualified personnel | 303.13(c)(6). |
| PENDENCY: | |
| • Enforcement action—Public attention | 303.706. |
| • Status of child during pendency of a due process hearing request | 303.430(e)(1). |
| PERIODIC REVIEW (Individualized Family Service Plan (IFSP)) | 303.342(b). |
| PERMISSIVE USE OF FUNDS BY LEAD AGENCY: | |
| • At risk infants or toddlers (strengthen statewide system) | 303.501(e). |
| • Continue Early Intervention services in lieu of FAPE | 303.501(d). |
| • Expand and improve on services | 303.501(b). |
| • For direct services | 303.501(a). |
| • Provide FAPE (See also “Use of Funds”) | 303.501(c). |
| PERSONALLY IDENTIFIABLE INFORMATION (A-C): | |
| • Confidentiality | 303.401(a). |
| ○ Applicability and timeframe of procedures | 303.401(c). |
| ○ Consent prior to disclosure or use | 303.414(a). |
| ○ Definitions of “destruction” and “participating agency” | 303.403(a), (c). |
| ○ Destruction of information | 303.416(a). |
| ○ Disclosure of information | 303.401(d)(1). |
| ○ Notice to parents | 303.404. |
| ○ Safeguards | 303.415. |
| ○ Secretary ensures protection of | 303.402. |
| PERSONALLY IDENTIFIABLE INFORMATION (D-Z): | |
| • Data collection—Construction (Nationwide database not authorized) | 303.701(c)(3). |
| • Definition | 303.29. |
| • Finality of hearing decision—Findings of fact & decisions (to public) | 303.446(c). |
| • Hearing decisions—Part B (to public) | 303.445(d). |
| • Parental consent—Exchange of | 303.420(a)(5). |
| • Public reporting and privacy | 303.702(b)(3). |
| • Transition to preschool—State policy (Parents may object to disclosure) | 303.209(b)(2). |
| PERSONNEL (Shortage of): | |
| • Personnel standards—Policy to address | 303.119(d). |
| PERSONNEL STANDARDS: | |
| • Policies and procedures relating to | 303.119(a). |
| • Qualified personnel (definition) | 303.31. |
| • Qualification standards | 303.119(b). |
| • Policy to address shortage of personnel | 303.119(d). |
| • Use of paraprofessionals and assistants | 303.119(c). |
| PHYSICAL DEVELOPMENT, including vision and hearing: | |
| • Developmental delays in | 303.21(a)(1)(ii). |
| • Early Intervention Services (Definition) | 303.13(a)(4)(i). |
| • Evaluation of child's level of functioning in | 303.321(b)(3). |
| • In definition of “Infants and toddlers with disabilities” | 303.21(a)(1)(ii). |
| • In Individualized Family Service Plan (IFSP) content (Information about child's status) | 303.344(a). |
| PHYSICAL THERAPY: | |
| • Definition | 303.13(b)(9). |
| • Physical therapists | 303.13(c)(7). |
| PHYSICIANS: | |
| • Early intervention services (Qualified personnel—Pediatricians and other) | 303.13(c)(6). |
| • Health services (Consultation by) | 303.16(b)(2). |
| • Medical services (Definition) | 303.13(b)(5). |
| • Public awareness program (Dissemination to all primary referral sources) | 303.301(a)(1)(ii). |
| • Referral procedures—Primary referral sources | 303.303(c)(2). |
| POLICIES (AND PROCEDURES) [P&P] (A-D): | |
| • Confidentiality: | |
| ○ Enforcement (To ensure requirements are met) | 303.417. |
| ○ Consent prior to disclosure—P&P to be used when parent refuses consent | 303.414(c). |
| ○ Notice to parents—summary of P&P regarding disclosure | 303.404(b). |
| ○ Option to inform parent about intended disclosure | 303.401(e). |
| ○ Safeguards—Training regarding State P&P | 303.415(c). |
| • Due process—Part B: | |
| ○ 30 or 45 day timeline for resolution (Specify in P&P) | 303.440(c). |
| ○ Timelines and convenience of hearings | 303.447(a). |
| POLICIES (AND PROCEDURES) [P&P] (E-Q): | |
| • Early Intervention services in natural environments | 303.126. |
| • Financial responsibility and methods of ensuring services—Delivery of services in a timely manner | 303.511(a). |
| • Personnel standards | 303.119. |
| • Policies related to use of insurance for services | 303.520. |
| • Public participation P&P | 303.208. |
| POLICIES (AND PROCEDURES) [P&P] (R-Z): | |
| • Referral policies for specific children | 303.206. |
| • State application and assurances | 303.200. |
| • State conformity with IDEA-Part C | 303.102. |
| • Statewide system and description of services | 303.203(b). |
| • System of payments and fees—State's policies to specify functions subject to fees | 303.521(a). |
| • Traditionally underserved groups | 303.227. |
| • Transition to preschool, | 303.209(a)(1). |
| • Use of funds—Payor of last resort | 303.500. |
| POLICIES RELATED TO USE OF PUBLIC OR PRIVATE INSURANCE OR PUBLIC BENEFITS TO PAY FOR PART C SERVICES | 303.520. |
| POSITIVE EFFORTS TO EMPLOY AND ADVANCE QUALIFIED INDIVIDUALS WITH DISABILITIES | 303.105. |
| POST-REFERRAL PROCEDURES: | |
| • Types of post-referral procedures | 303.300(c). |
| • See also “screening” (§ 303.320), “evaluation and assessment” (§ 303.321), “IFSP development” (§§ 303.342-303.345). | |
| PRELITERACY, LANGUAGE, & NUMERACY SKILLS: | |
| • Infant or toddler with a disability | 303.21(c)(1). |
| • Individualized Family Service Plan (IFSP)—Educational component | 303.344(d)(4). |
| • State option—Services to children ages three and older | 303.211(b)(2). |
| PRENATAL DRUG EXPOSURE: | |
| • At-risk infant or toddler | 303.5. |
| • Referral of specific at-risk children | 303.303(b)(2). |
| PRE-REFERRAL PROCEDURES: | |
| • Types of pre-referral procedures | 303.300(a). |
| • See also “public awareness” (§ 303.301), “child find” (§ 303.302). | |
| PRIMARY REFERRAL SOURCE(S): | |
| • Child find—Participation by | 303.302(a)(2)(ii). |
| • Comprehensive System of Personnel Development (CSPD)—Training of | 303.118. |
| • Definition | 303.303(c). |
| • Public awareness program | |
| ○ Component of a statewide system | 303.116(b). |
| ○ Dissemination of information to sources | 303.301(a)(1)(ii). |
| • Referral procedures | 303.303(a)(1). |
| • Screening procedures (Definition of) | 303.320(b). |
| PRIOR WRITTEN NOTICE: | |
| • See Notice (To parents; Family) (P-Z) | |
| PRIVATE INSURANCE: | |
| • See “Insurance”. | |
| PROCEDURAL SAFEGUARDS (A-C): | |
| • Appointment of an impartial hearing officer | 303.435. |
| • Child's status during proceedings | 303.430(e). |
| • Civil action—Part B | 303.448. |
| • Civil action—Part C | 303.438. |
| • Confidentiality and opportunity to examine records | 303.401. |
| ○ Additional requirements (see §§ 303.402-303.417). | |
| ○ See also “Confidentiality”. | |
| • Consent (Definition) | 303.7. |
| ○ See also “Consent”. | |
| • Convenience of proceedings & timelines | 303.437. |
| PROCEDURAL SAFEGUARDS (D-N): | |
| • Due process procedures | 303.430(d). |
| ○ Part B procedures | 303.440-303.449. |
| ○ Part C procedures | 303.435-303.438. |
| • Implementation of (Functions not subject to fees & carried out at public expense) | 303.521(b)(4)(ii). |
| • Lead agency responsibility for | 303.400. |
| • Mediation | 303.431. |
| • Native language (Prior written notice) | 303.421(c). |
| ○ See “Native Language”. | |
| • Nondiscriminatory evaluation and assessment procedures | 303.113. |
| ○ No single procedure used as sole criterion | 303.321(b). |
| PROCEDURAL SAFEGUARDS (O-Z): | |
| • Opportunity to examine records ( | 303.401(b)(2). |
| • Parental consent and ability to decline service | 303.420. |
| ○ See also “Consent”. | |
| • Parental rights in due process hearings | 303.436. |
| ○ See also “Due Process Rights—Part B.” | |
| • Pendency (Status of child) | 303.430(e). |
| • Prior written notice | 303.421. |
| • Procedural safeguards notice | 303.421(b)(3). |
| • State dispute resolution options | 303.430. |
| • Surrogate parents | 303.422. |
| • System of payments | 303.521(e). |
| PROTECTION & ADVOCACY AGENCIES: | |
| • State complaint procedures | 303.432(a)(2). |
| PROVISION OF SERVICES BEFORE EVALUATIONS AND ASSESSMENTS COMPLETED | 303.345. |
| PSYCHOLOGICAL SERVICES: | |
| • Early Intervention services (Definition) | 303.13(b)(10). |
| • Psychologists (Qualified personnel) | 303.13(c)(8). |
| PUBLIC AGENCY: | |
| • Confidentiality—Option to inform parent about intended disclosure | 303.401(e)(1). |
| • Definition | 303.30. |
| • IFSP Team—Service coordinator designated by public agency | 303.343(a)(1)(iv). |
| • Impartial hearing officer (Public agency—List of hearing officers) | 303.443(c)(3). |
| • Parent (Definition) | 303.27(b)(2). |
| • Prior written notice—Native language | 303.421(c)(2). |
| • State complaint procedures: | |
| ○ Filing a complaint | 303.434(b)(1). |
| • Surrogate parents | 303.422(a)(2). |
| PUBLIC HEARINGS: | |
| • Public participation policies and procedures | 303.208(b)(1). |
| • See “Public Participation”. | |
| PUBLIC AWARENESS PROGRAM: | |
| • Component of statewide system | 303.116. |
| • Public awareness program—Information for parents | 303.301(b). |
| PUBLIC INSURANCE: | |
| • See “Insurance” | |
| PUBLIC PARTICIPATION | 303.208. |
| • Requirements for State applications | 303.208(a). |
| • Requirements for State policies and procedures | 303.208(b). |
| PURPOSE OF EARLY INTERVENTION PROGRAM | 303.1. |
| QUALIFIED PERSONNEL: | |
| • All evaluations and assessments of child and family conducted by qualified personnel | 303.321(a)(2). |
| • Definition | 303.31. |
| • Early Intervention Services (Definition) | 303.13(a)(7), (b)(3), (c), (d). |
| • Evaluations and assessments of child and family—All conducted by qualified personnel | 303.321(a)(2). |
| • Informed clinical opinion | 303.321(a)(3)(ii). |
| • Procedures for assessment of child and family | 303.321(c)(1), (c)(2). |
| RECORDS: | |
| • Evaluation of child—Review of records | 303.321(b)(5). |
| • Civil action—Part B (records of administrative proceedings) | 303.448(c)(1). |
| • Confidentiality | 303.401-303.417. |
| • Consent (Definition)—Lists records to be released | 303.7(b). |
| • Records used to establish eligibility (without conducting an evaluation) | 303.321(a)(3)(i). |
| • Individualized Family Service Plan (IFSP) Team (Making pertinent records available at the meeting) | 303.343(a)(2)(iii). |
| • Parents right to inspect and review | 303.405(a). |
| • References in applicable regulations | 303.3(b)(2). |
| • Reports and records (Assurance—Application requirement) | 303.224(b). |
| REFERRAL PROCEDURES | 303.303. |
| REFERRALS: | |
| • Child find—System for making referrals to lead agencies or Early Intervention service providers | 303.302(a)(2). |
| • Permissive use of funds—At risk children | 303.501(e)(2)-(3). |
| REFERRAL SOURCES: | |
| • See “Primary Referral Sources”. | |
| REGISTERED DIETICIANS: | |
| • Qualified Personnel | 303.13(c)(9). |
| REHABILITATION (As part of Early Intervention services) | 303.13(b)(1)((ii)(D), (b)(2)(iii), (b)(15)(ii)-(b)(15)(iii), (b)(17)(ii)). |
| REIMBURSEMENT: | |
| • Financial responsibility & methods of ensuring services | 303.511(a). |
| • Payor of last resort (Interim payments—Reimbursement) | 303.510(b). |
| • Proceeds from public and private insurance | 303.520(d). |
| • Reimbursement procedures (Component of statewide system) | 303.122. |
| REPORTS (A-P): | |
| • Annual report of children served: | |
| ○ Certification | 303.723. |
| ○ Other responsibilities of lead agency | 303.724(b), (d). |
| ○ Report requirement | 303.721. |
| • Council—Annual report to Governor and Secretary | 303.604(c). |
| • Data reporting | 303.722(a). |
| • Data requirements—general | 303.720. |
| • Payments to Indians | 303.731(e). |
| REPORTS (R-Z): | |
| • Reports and records (Assurance—Application requirement) | 303.224. |
| • Reports—Program information | 303.720, 303.721, 303.722, 303.723, 303.724. |
| • State monitoring & enforcement: | |
| ○ Enforcement—Secretary's Report to Congress | 303.704(d). |
| ○ Lead agency—Annual report on performance of State | 303.700(a)(4). |
| ○ Public reporting and privacy | 303.702(b). |
| ○ Secretary's review & determination | 303.703(a)-(b). |
| ○ State performance plans & data collection | 303.701(c)(1)-(c)(2). |
| ○ State use of targets and reporting (Public reporting & privacy) | 303.702(b). |
| RESOLUTION OF DISPUTES: | |
| • See “Disputes-Dispute Resolution”. | |
| RESPIRATORY DISTRESS: | |
| • At risk infant or toddler (Definition) | 303.5. |
| ROUTINE MEDICAL SERVICES: | |
| • Not covered | 303.16(c)(3). |
| RURAL (AREAS, CHILDREN, FAMILIES): | |
| • Assurance regarding traditionally underserved groups (Rural families, | 303.227(a). |
| • Comprehensive System of Personnel Development (CSPD) (Training personnel to work in) | 303.118(b)(1). |
| • Purpose of Early Intervention program | 303.1(d). |
| STATE CHILDREN'S HEALTH INSURANCE PROGRAM (CHIP) | 303.302(c)(1)(ii)(K). |
| SCHOOL READINESS: | |
| • Infant or toddler with a disability | 303.21(c)(1). |
| • Individualized Family Service Plan) IFSP | 303.344(d)(4). |
| • State option—Serve age three to five | 303.211(a)(2). |
| SCREENING PROCEDURES | 303.320. |
| SEA: | |
| • See “State educational agency” | |
| SECRETARY (of Education): | |
| • Definition | 303.33. |
| SECRETARY OF THE INTERIOR: | |
| • Eligible recipients of an award | 303.2. |
| • Indian—Indian tribe (Definition—Construction clause) | 303.19(c). |
| • Payments to Indians | 303.731. |
| • State allotments (Definitions “Aggregate amount”) | 303.732(d)(1). |
| SENSORY IMPAIRMENTS: | |
| • Infant or toddler with a disability (Diagnosed condition) | 303.21(a)(2)(ii). |
| SERVICE COORDINATION (Services): | |
| • Definition | 303.13(b)(11), 303.34. |
| • Functions not subject to fees | 303.521(b)(3). |
| • Individualized Family Service Plans (IFSP) (Early Intervention system component) | 303.114. |
| • Early Intervention Services | 303.13(b)(11). |
| • Term “case management” not precluded | 303.34(c). |
| • Service coordinator—IFSP content (“Profession” includes “service coordination”) | 303.344(g)(2). |
| • Specific Service Coordination Services | 303.34(b). |
| SERVICE COORDINATOR: | |
| • Entitlement to | 303.34(a). |
| • Named in Individualized Family Service Plan (IFSP) | 303.344(g)(1). |
| ○ In interim IFSP | 303.345(b)(1). |
| • On Individualized Family Service Plan (IFSP) Team | 303.343(a)(1)(iv). |
| SERVICE PROVIDER(S): | |
| • General role of | 303.12(b). |
| • See “Qualified personnel” | 303.13(c). |
| SEVERE ATTACHMENT DISORDERS: | |
| • “Diagnosed physical or mental condition” | 303.21(a)(2)(ii). |
| SHORTAGE OF PERSONNEL (Policy to address) | 303.119(d). |
| SIGN LANGUAGE AND CUED LANGUAGE SERVICES: | |
| • Definition | 303.13(b)(12). |
| SLIDING FEE SCALES: | |
| • Definition of “Early Intervention services” | 303.13(a)(3). |
| • System of payments | 303.500(b), 303.521(a)(1). |
| SOCIAL OR EMOTIONAL DEVELOPMENT: | |
| • Developmental delays in | 303.21(a)(1)(iv). |
| • Early Intervention Services (Definition) | 303.13(a)(4)(iv). |
| • Evaluation of child's level of functioning in | 303.321(b)(3). |
| • In definition of “Infants and toddlers with disabilities” | 303.21(a)(1)(iv). |
| • In Individualized Family Service Plan (IFSP) content (Information about child's status) | 303.344(a). |
| SOCIAL SECURITY ACT: | |
| • Title V—Maternal and Child Health | 303.302(c)(1)(ii)(B). |
| • Title XVI: | |
| ○ Supplemental Security Income (SSI) | 303.302(c)(1)(ii)(F). |
| • Title XIX: | |
| ○ EPSDT (Early Periodic Screening, Diagnosis, and Treatment) | 303.302(c)(1)(ii)(C). |
| ○ Medicaid | 303.510, 303.520. |
| SOCIAL WORK SERVICES (Definition) | 303.13(b)(13). |
| • Social workers | 303.13(c)(10). |
| SPECIAL INSTRUCTION (Definition) | 303.13(b)(14). |
| • Special educators | 303.13(c)(11). |
| SPEECH-LANGUAGE PATHOLOGY: | |
| • Definition | 303.13(b)(15). |
| • Speech and language pathologists | 303.13(c)(12). |
| SSI (Supplemental Security Income): | |
| • Child find (Coordination) | 303.302(c)(1)(ii)(F). |
| • See “Social Security Act”. | |
| STATE (Definition) | 303.35. |
| • Special definition -State allocations | 303.732(d)(3). |
| STATE ADVISORY COUNCIL ON EARLY EDUCATION AND CARE | |
| • Comprehensive system of personnel development (CSPD) (Coordination) | 303.118(b)(4). |
| • Participation of State lead agency | 303.210(b). |
| STATE AGENCIES: | |
| • Child find (Coordination) | 303.302(c)(1)(i). |
| • ICC (Composition of Council) | 303.601(a)(5)(i). |
| • Interagency agreements | 303.511(b)(2). |
| STATE APPLICATION: | |
| • Amendments to (public participation) | 303.208(a). |
| • Conditions of assistance | 303.200. |
| • Components of a statewide system | 303.110-303.126. |
| • Council function (Advise-assist lead agency with) | 303.604(a)(4). |
| • General requirements | 303.201-303.212. |
| • Public participation | 303.208. |
| ○ Reviewing public comments received | 303.208(a). |
| STATE APPROVED OR RECOGNIZED CERTIFICATION (Qualified Personnel) | 303.31. |
| STATE COMPLAINT PROCEDURES: | |
| • Adoption of | 303.432. |
| ○ (See also §§ 303.432-303.434) | |
| • Filing a complaint | 303.434. |
| • Lead agency must adopt | 303.430(c). |
| • Minimum State complaint procedures | 303.433. |
| ○ Time extension; final decision; implementation | 303.433(b). |
| ○ Time limit (60 days) | 303.433(a). |
| • Remedies for denial of appropriate services | 303.432(b). |
| • State dispute resolution options | 303.430(a), (c). |
| • State complaints & due process hearing procedures | 303.433(c). |
| STATE DEFINITION OF “INABILITY TO PAY”: | |
| • Private insurance | 303.520(c). |
| • System of payments | 303.521(a)(3), (4)(ii). |
| STATE EDUCATIONAL AGENCY (SEA): | |
| • Applicable regulations (SEA means the lead agency) | 303.3(b)(1). |
| • Confidentiality procedures—Disclosure of information | 303.401(d). |
| • Council—Composition | 303.601(a)(6)(i). |
| • Council—Functions | 303.604(b), 303.605(a). |
| • Definition | 303.36. |
| • Free Appropriate Public Education (FAPE) (Definition)—Standards of the SEA | 303.15(b). |
| • State option—Services for children 3 and older | 303.211(a)(1). |
| • Transition to preschool | 303.209(a)(3)(i)(A)-(a)(3)(i)(B), (a)(3)(ii), (b)(2)(i)-(b)(2)(ii). |
| STATE ELIGIBILITY: | |
| • Conditions of assistance | 303.101. |
| STATE INTERAGENCY COORDINATING COUNCIL (Council): | |
| • Advising & assisting the lead agency | 303.604(a). |
| • Advising & assisting on transition | 303.604(b). |
| • Annual report to Governor & Secretary | 303.604(c). |
| • Authorized activities by the Council | 303.605. |
| • Composition | 303.601. |
| • Conflict of interest | 303.601(d). |
| • Establishment | 303.600. |
| • Functions of Council—Required duties | 303.604. |
| • Meetings | 303.602. |
| • Use of funds by the Council | 303.603. |
| STATE MONITORING and ENFORCEMENT | 303.700. |
| STATE OPTION—EARLY INTERVENTION SERVICES TO CHILDREN AGES THREE and OLDER | 303.211. |
| STATE PERFORMANCE PLANS—DATA COLLECTION | 303.701. |
| STATE USE OF TARGETS AND REPORTING | 303.702. |
| STATEWIDE SYSTEM (of Early Intervention services): | |
| • Assurances regarding Early Intervention services and a statewide system | 303.101(a). |
| • Individualized Family Service Plans (IFSP) (Component of) | 303.114. |
| • Minimum components of a statewide system (See also § 303.111-303.126) | 303.110. |
| • Required pre-referral, referral, and post-referral components | 303.300. |
| • Statewide system & description of services | 303.203. |
| SUBSTANCE ABUSE (Illegal) | 303.5, 303.303(b)(2). |
| SYSTEM OF PAYMENTS AND FEES: | |
| • See “Fees.” | |
| SUPPLEMENTAL SECURITY INCOME (SSI): | |
| • Child find—Coordination (see 303.302(c)(1)(ii)(F)). | |
| • See “Social Security Act.” | |
| SURGERY (Non-covered health service) | 303.16(c)(1)(i). |
| SURGICALLY IMPLANTED DEVICE | 303.13(b)(1)(i), 303.16(c)(1)(iii)(A), (c)(1)(iii)(B). |
| SURROGATE PARENT(S): | |
| • Assignment by lead agency | 303.422(b)(1). |
| • 30 day timeline | 303.422(g). |
| • Criteria for selecting | 303.422(d). |
| • In definition of “parent” | 303.27(a)(5). |
| • Non-employee requirement | 303.422(e). |
| • Rights or responsibilities of | 303.422(f). |
| • When a surrogate parent is needed | 303.422(a)(1)-(a)(3). |
| SYSTEM OF PAYMENTS: | |
| • Copy to parents | 303.520(a)(4), 303.520(b)(1)(iii). |
| • Family fees | 303.521(d). |
| • Funds received under a State's system of payments | 303.520(d). |
| • In definition of “Early Intervention services” | 303.13(a)(3). |
| • Policies related to use of insurance | 303.520(a)(4), 303.520(b)(1)(ii)-(b)(1)(iii). |
| • Procedural safeguards | 303.521(e). |
| • Statewide system and description of services | 303.203(b). |
| • System of payments and fees | 303.521(a), (d). |
| • See also “Fees;” “Co-payments; Co-pays.” | |
| TECHNICAL ASSISTANCE (TA): | |
| • Assistive technology service | 303.13(b)(1)(ii)(E)-(b)(1)(ii)(F). |
| • Lead agency role in monitoring, | 303.120(a)(2)(iii). |
| • Minimum State Complaint procedures (Lead agency use of TA) | 303.433(b)(2)(i). |
| • Payments to Indians (Not to be used for TA) | 303.731(f). |
| • State monitoring and enforcement | 303.700(a)(3). |
| ○ Enforcement—Needs assistance | 303.704(a)(1)(iii)-(a)(1)(iv)). |
| TIMELINES (A-O): | |
| • Child find—General | 303.302(a)(2)(i). |
| • Confidentiality—Access rights | 303.405(a). |
| • Department hearing procedures on State eligibility | 303.231(b)(3), 303.233(b), 303.234(d), (e), (g), (k), 303.236. |
| • Due process procedures—Part B (see “Timelines—Due Process (Part B)”) | |
| • Enforcement—Secretary report to Congress w/in 30 days of taking enforcement action | 303.704(d). |
| • Evaluation and Assessment & initial Individualized Family Service Plan (IFSP) meeting | 303.310. |
| ○ Exceptional circumstances | 303.310(b)(1). |
| TIMELINES (PA-PU): | |
| • Part C due process hearings; parental rights: | |
| ○ Decision not later than 30 days after receipt of complaint | 303.437(b). |
| ○ Prohibit information not disclosed (at least five days before hearing) | 303.436(b)(3). |
| • Payments to Indians—reports | 303.731(e)(1)(3). |
| • Primary referral sources | 303.303(a)(2)(i). |
| • Public reporting and privacy (State performance reports on targets) | 303.702(b)(1)(i)(A). |
| • Public participation (Application, | 303.208. |
| ○ See also “Public Participation”. | |
| TIMELINES (R-Z): | |
| • Report to Secretary on State performance | 303.702(b)(2). |
| • State complaint procedures (Time limit of 60 days) | 303.433(a). |
| • Transition—Conference to discuss services | 303.209(c). |
| • Transition—LEA notification | 303.209(b). |
| • Transition plan | 303.209(d). |
| ○ Transition timelines for child receiving services under section 303.211 | 303.211(b)(6). |
| TIMELINES-DUE PROCESS (PART B) (A-Q): | |
| • Adjustments to 30-day resolution period | 303.442(c). |
| • Agreement review period (w/in three business days of executing a settlement agreement) | 303.442(e). |
| • Civil action (90 days from date of decision) | 303.448(b). |
| • Hearing decision (30 or 45 days after expiration of 30-day period or adjustments to that period in § 303.442(b) or (c)) | 303.447(a). |
| • Hearing rights: | |
| ○ Additional disclosure (At least five business days before hearing) | 303.444(b). |
| ○ Prohibit new evidence (Not disclosed at least five business days before hearing) | 303.444(a)(3). |
| • Lead agency response to complaint (within ten days of receiving complaint) | 303.441(e). |
| • Other party response (within ten days of receiving complaint) | 303.441(f). |
| TIMELINES-DUE PROCESS (PART B) (RE): | |
| • Resolution meeting (w/in 15 days) | 303.442(a). |
| ○ If no meeting in 15 days, parent may seek intervention—hearing officer | 303.442(b)(5). |
| • Resolution period: | |
| ○ If lead agency not resolved complaint w/in 30 days, hearing may occur | 303.442(b)(1). |
| ○ If no parent participation in 30 days, complaint may be dismissed | 303.442(b)(4). |
| • Review decision (30 days after request for review) | 303.447(b). |
| TIMELINES—DUE PROCESS (PART B) (S-Z): | |
| • Sufficiency of complaint: | |
| ○ Amended complaint (Hearing officer permits—Not later than five days before hearing) | 303.441(d)(3)(ii). |
| ○ Complaint sufficient—unless party notifies hearing officer w/in 15 days | 303.441(d)(1). |
| ○ Hearing officer determination (within five days of notice) | 303.441(d)(2). |
| • Timelines—convenience of hearings and reviews and exceptions to timelines | 303.447(a)-(c). |
| • Timeline for requesting a hearing (two years) | 303.443(e). |
| ○ Exception to timeline | 303.443(f). |
| TRACHEOSTOMY CARE (see Health services) | 303.16(b)(1). |
| TRADITIONALLY UNDERSERVED GROUPS | 303.227. |
| • Purpose of Early Intervention program (“Historically underrepresented populations”) | 303.1(d). |
| ○ See also “Homeless,” “Low Income,” “Minority,” & “Rural” (children &/or families), and “Ward of the State”. | |
| • Scope of child find regarding selected groups | 303.302(b)(1)(ii). |
| • State policies and practices | 303.227. |
| TRAINING: | |
| • Comprehensive System of Personnel Development (CSPD) | 303.118. |
| • In definition of “Early Intervention services” (see § 303.13(b)(1)(ii)(E) (specific to AT services), (2)(iv) (specific to audiology services), (10) (specific to psychological services). | |
| • Personnel standards | 300.119. |
| TRANSITION TO PRESCHOOL & OTHER PROGRAMS: | |
| • Application requirements | 303.209(a). |
| • Conference to discuss services | 303.209(c). |
| • Council functions—Advising & assisting on transition | 303.604(b). |
| • Family involvement; notification of local educational agency (LEA) | 303.209(b). |
| • Individualized Family Service Plan (IFSP) content—Transition from Part C | 303.344(h). |
| • Interagency agreement | 303.209(a)(3)(i)-(ii). |
| • Policies and procedures regarding | 303.209(a)(1). |
| • Program options & transition plan | 303.209(d). |
| • Service coordination services (Facilitating development of transition plan) | 303.34(b)(10). |
| • Transition plan (Establish not fewer than 90 days, not more than nine months) | 303.209(d)(2). |
| TRANSPORTATION & RELATED COSTS | 303.13(b)(16). |
| TRAUMA DUE TO EXPOSURE TO FAMILY VIOLENCE | 303.211(b)(7). |
| TRIBE (TRIBAL ORGANIZATION): | |
| • Child find—Coordination (tribes) | 303.302(c)(1)(i). |
| • Council—Composition | 303.601(c). |
| • Indian; Indian tribe (Definition) | 303.19. |
| • Payments to Indians) | 303.731(a)(1), (2), (b), (c), (d), (e). |
| TUBE FEEDING (Health service) | 303.16(b)(1). |
| UNDERREPRESENTED POPULATIONS | 303.1(d). |
| • See also “Traditionally underserved groups.” | |
| USE OF FUNDS: | |
| • Council (Use of funds by) | 303.603. |
| • Description of use of funds (Application requirement) | 303.205. |
| • Payments to Indians (Use of funds) | 303.731(d). |
| • Payor of last resort | 303.510. |
| • Permissive use of funds by lead agency | 303.501. |
| • See “Permissive use of funds by lead agency.” | |
| • States with FAPE mandates or that use Part B funds | 303.521(c). |
| • See also “Funds” “Funds—Part B,” “Funds Part C,” and “Permissive use of funds by lead agency.” | |
| USE OF FUNDS AND PAYOR OF LAST RESORT | 300.500. |
| VISION SERVICES: | |
| • Early Intervention services (Definition) | 303.13(b)(17). |
| VISUAL IMPAIRMENTS (or BLINDNESS): | |
| • Special educators including teachers of children with visual impairments | 303.13(c)(11). |
| VISION SPECIALISTS | 303.13(c)(13). |
| WARD OF THE STATE: | |
| • Assurances regarding Early Intervention services | 303.101(a)(1)(iii). |
| • Child find—Scope | 303.302(b)(1)(ii). |
| • Definition | 303.37. |
| ○ Exception (If child has a foster parent under “Parent” § 303.27) | 303.37(b). |
| • Parent (Definition) “Guardian” (but not State, if child is a ward of State) | 303.27(a)(3). |
| • Surrogate parents | 303.422(a)(3), (b)(2). |
| • Traditionally underserved groups | 303.227(a). |
| “WELL-BABY” CARE and IMMUNIZATIONS: | |
| • Non-covered medical services | 303.16(c)(3). |
| WITHHOLDING: | |
| • State monitoring and enforcement | 303.700(a)(3). |
| • Withholding funds | 303.705. |
| ○ Nature of withholding | 303.705(c). |
| ○ Withholding until rectified | 303.705(c)(2) |
Individuals who receive scholarship assistance from projects funded under the Special Education—Personnel Development to Improve Services and Results for Children with Disabilities program are required to complete a service obligation, or repay all or part of the costs of such assistance, in accordance with section 662(h) of the Act and the regulations of this part.
The following definitions apply to this program:
(a) Academic year means—
(1) A full-time course of study—
(i) Taken for a period totaling at least nine months; or
(ii) Taken for the equivalent of at least two semesters, two trimesters, or three quarters; or
(2) For a part-time scholar, the accumulation of periods of part-time courses of study that is equivalent to an “academic year” under paragraph (a)(1) of this definition.
(b) Act means the Individuals with Disabilities Education Act, as amended, 20 U.S.C. 1400 et seq.
(c) Early intervention services means early intervention services as defined in section 632(4) of the Act and includes early intervention services to infants and toddlers with disabilities, and as applicable, to infants and toddlers at risk for disabilities under sections 632(1) and 632(5)(b) of the Act.
(d) Full-time, for purposes of determining whether an individual is employed full-time in accordance with § 304.30 means a full-time position as defined by the individual's employer or by the agencies served by the individual.
(e) Related services means related services as defined in section 602(26) of the Act.
(f) Repayment means monetary reimbursement of scholarship assistance in lieu of completion of a service obligation.
(g) Scholar means an individual who is pursuing a degree, license, endorsement, or certification related to special education, related services, or early intervention services and who receives scholarship assistance under section 662 of the Act.
(h) Scholarship means financial assistance to a scholar for training under the program and includes all disbursements or credits for tuition, fees, stipends, books, and travel in conjunction with training assignments.
(i) Service obligation means a scholar's employment obligation, as described in section 662(h) of the Act and § 304.30.
(j) Special education means special education as defined in section 602(29) of the Act.
In addition to the allowable costs established in the Education Department General Administrative Regulations in 34 CFR 75.530 through 75.562, the following items are allowable expenditures by projects funded under the program:
(a) Cost of attendance, as defined in Title IV of the Higher Education Act of 1965, as amended, 20 U.S.C. 1087ll (HEA), including the following:
(1) Tuition and fees.
(2) An allowance for books, supplies, transportation, and miscellaneous personal expenses.
(3) An allowance for room and board.
(b) Stipends.
(c) Travel in conjunction with training assignments.
Before disbursement of scholarship assistance to an individual, a grantee must—
(a) Ensure that the scholar—
(1) Is a citizen or national of the United States;
(2) Is a permanent resident of—
(i) Puerto Rico, the United States Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands; or
(ii) The Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau during the period in which these entities are eligible to receive an award under the Personnel Development to Improve Services and Results for Children with Disabilities program; or
(3) Provides evidence from the U.S. Department of Homeland Security that the individual is—
(i) A lawful permanent resident of the United States; or
(ii) In the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident;
(b) Limit the cost of attendance portion of the scholarship assistance (as discussed in § 304.21(a)) to the amount by which the individual's cost of attendance at the institution exceeds the amount of grant assistance the scholar is to receive for the same academic year under title IV of the HEA; and
(c) Obtain a Certification of Eligibility for Federal Assistance from each scholar, as prescribed in 34 CFR 75.60, 75.61, and 75.62.
Before receiving an award, a grantee that intends to grant scholarships under the program must include in its application an assurance that the following requirements will be satisfied:
(a) Requirement for agreement. Prior to granting a scholarship, the grantee will require each scholar to enter into a written agreement in which the scholar agrees to the terms and conditions set forth in § 304.30. This agreement must explain the Secretary's authority to grant deferrals and exceptions to the service obligation pursuant to § 304.31 and include the current Department address for purposes of the scholar's compliance with § 304.30(i), or any other purpose under this part.
(b) Standards for satisfactory progress. The grantee must establish, notify scholars of, and apply reasonable standards for measuring whether a scholar is maintaining satisfactory progress in the scholar's course of study.
(c) Exit certification. (1) At the time of exit from the program, the grantee must provide the following information to the scholar:
(i) The number of years the scholar needs to work to satisfy the work requirements in § 304.30(d);
(ii) The total amount of scholarship assistance received subject to § 304.30;
(iii) The time period, consistent with § 304.30(f)(1), during which the scholar must satisfy the work requirements; and
(iv) As applicable, all other obligations of the scholar under § 304.30.
(2) Upon receipt of this information from the grantee, the scholar must provide written certification to the grantee that the information is correct.
(d) Information. The grantee must forward the information and written certification required in paragraph (c) of this section to the Secretary, as well as any other information that is necessary to carry out the Secretary's functions under section 662 of the Act and this part.
(e) Notification to the Secretary. If the grantee is aware that the scholar has chosen not to fulfill or will be unable to fulfill the obligation under § 304.30(d), the grantee must notify the Secretary when the scholar exits the program.
Individuals who receive scholarship assistance from grantees funded under section 662 of the Act must—
(a) Training. Receive the training at the educational institution or agency designated in the scholarship;
(b) Educational allowances. Not accept payment of educational allowances from any other entity if that allowance conflicts with the scholar's obligation under section 662 of the Act and this part;
(c) Satisfactory progress. Maintain satisfactory progress toward the degree, certificate, endorsement, or license as determined by the grantee;
(d) Service obligation. Upon exiting the training program under paragraph (a) of this section, subsequently maintain employment—
(1) On a full-time or full-time equivalent basis; and
(2) For a period of at least two years for every academic year for which assistance was received;
(e) Eligible employment. In order to meet the requirements of paragraph (d) of this section for any project funded under section 662 of the Act, be employed in a position in which—
(1) At least 51 percent of the infants, toddlers, and children to whom the individual provides services are receiving special education, related services, or early intervention services from the individual;
(2) The individual spends at least 51 percent of his or her time providing special education, related services, or early intervention services to infants, toddlers, and children with disabilities; or
(3) If the position involves supervision (including in the capacity of a principal), teaching at the postsecondary level, research, policy, technical assistance, program development, or administration, the individual spends at least 51 percent of his or her time performing work related to the training for which a scholarship was received under section 662 of the Act.
(f) Time period. Meet the service obligation under paragraph (d) of this section as follows:
(1) A scholar must complete the service obligation within the period ending not more than the sum of the number of years required in paragraph (d)(2) of this section, as appropriate, plus five additional years, from the date the scholar completes the training for which the scholarship assistance was awarded.
(2) A scholar may begin eligible employment subsequent to the completion of one academic year of the training for which the scholarship assistance was received that otherwise meets the requirements of paragraph (1);
(g) Part-time scholars. If the scholar is pursuing coursework on a part-time basis, meet the service obligation in this section based on the accumulated academic years of training for which the scholarship is received;
(h) Information upon exit. Provide the grantee all requested information necessary for the grantee to meet the exit certification requirements under § 304.23(c);
(i) Information after exit. Within 60 days after exiting the program, and as necessary thereafter for any changes, provide the Department, via U.S. mail, all information that the Secretary needs to monitor the scholar's service obligation under this section, including social security number, address, employment setting, and employment status;
(j) Repayment. If not fulfilling the requirements in this section, subject to the provisions in § 304.31 regarding an exception or deferral, repay any scholarship received, plus interest, in an amount proportional to the service obligation not completed as follows:
(1) The Secretary charges the scholar interest on the unpaid balance owed in accordance with the Debt Collection Act of 1982, as amended, 31 U.S.C. 3717.
(2)(i) Interest on the unpaid balance accrues from the date the scholar is determined to have entered repayment status under paragraph (4) of this section.
(ii) Any accrued interest is capitalized at the time the scholar's repayment schedule is established.
(iii) No interest is charged for the period of time during which repayment has been deferred under § 304.31.
(3) Under the authority of the Debt Collection Act of 1982, as amended, the Secretary may impose reasonable collection costs.
(4) A scholar enters repayment status on the first day of the first calendar month after the earliest of the following dates, as applicable:
(i) The date the scholar informs the grantee or the Secretary that the scholar does not plan to fulfill the service obligation under the agreement.
(ii) Any date when the scholar's failure to begin or maintain employment makes it impossible for that individual to complete the service obligation within the number of years required in § 304.30(f).
(iii) Any date on which the scholar discontinues enrollment in the course of study under § 304.30(a).
(5) The scholar must make payments to the Secretary that cover principal, interest, and collection costs according to a schedule established by the Secretary.
(6) Any amount of the scholarship that has not been repaid pursuant to paragraphs (j)(1) through (j)(5) of this section will constitute a debt owed to the United States that may be collected by the Secretary in accordance with 34 CFR part 30.
(a) Based upon sufficient evidence to substantiate the grounds, the Secretary may grant an exception to the repayment requirement in § 304.30(j), in whole or part, if the scholar—
(1) Is unable to continue the course of study in § 304.30 or perform the service obligation because of a permanent disability; or
(2) Has died.
(b) Based upon sufficient evidence to substantiate the grounds, the Secretary may grant a deferral of the repayment requirement in § 304.30(j) during the time the scholar—
(1) Is engaging in a full-time course of study at an institution of higher education;
(2) Is serving on active duty as a member of the armed services of the United States;
(3) Is serving as a volunteer under the Peace Corps Act; or
(4) Is serving as a full-time volunteer under title I of the Domestic Volunteer Service Act of 1973.
Under the State Vocational Rehabilitation Services Program, the Secretary provides grants to assist States in operating statewide comprehensive, coordinated, effective, efficient, and accountable vocational rehabilitation programs, each of which is—
(a) An integral part of a statewide workforce development system; and
(b) Designed to assess, plan, develop, and provide vocational rehabilitation services for individuals with disabilities, consistent with their unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice so that they may prepare for and engage in competitive integrated employment and achieve economic self-sufficiency.
Any State that submits to the Secretary a vocational rehabilitation services portion of the Unified or Combined State Plan that meets the requirements of section 101(a) of the Act and this part is eligible for a grant under this program.
The Secretary makes payments to a State to assist in—
(a) The costs of providing vocational rehabilitation services under the vocational rehabilitation services portion of the Unified or Combined State Plan; and
(b) Administrative costs under the vocational rehabilitation services portion of the Unified or Combined State Plan, including one-stop infrastructure costs.
The following regulations apply to this program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 76 (State-Administered Programs).
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(b) The regulations in this part 361.
(c) 2 CFR part 190 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)) as adopted in 2 CFR part 3485.
(d) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) as adopted in 2 CFR part 3474, except the requirements to accept third-party in-kind contributions to meet cost-sharing or matching requirements, as otherwise authorized under 2 CFR 200.306(b).
The following definitions apply to this part:
(a) Definitions in EDGAR 77.1.
(b) Definitions in 2 CFR part 200, subpart A.
(c) The following definitions:
(1) Act means the Rehabilitation Act of 1973, as amended (29 U.S.C. 701 et seq.).
(2) Administrative costs under the vocational rehabilitation services portion of the Unified or Combined State Plan means expenditures incurred in the performance of administrative functions under the vocational rehabilitation program carried out under this part, including expenses related to program planning, development, monitoring, and evaluation, including, but not limited to, expenses for—
(i) Quality assurance;
(ii) Budgeting, accounting, financial management, information systems, and related data processing;
(iii) Providing information about the program to the public;
(iv) Technical assistance and support services to other State agencies, private nonprofit organizations, and businesses and industries, except for technical assistance and support services described in § 361.49(a)(4);
(v) The State Rehabilitation Council and other advisory committees;
(vi) Professional organization membership dues for designated State unit employees;
(vii) The removal of architectural barriers in State vocational rehabilitation agency offices and State-operated rehabilitation facilities;
(viii) Operating and maintaining designated State unit facilities, equipment, and grounds, as well as the infrastructure of the one-stop system;
(ix) Supplies;
(x) Administration of the comprehensive system of personnel development described in § 361.18, including personnel administration, administration of affirmative action plans, and training and staff development;
(xi) Administrative salaries, including clerical and other support staff salaries, in support of these administrative functions;
(xii) Travel costs related to carrying out the program, other than travel costs related to the provision of services;
(xiii) Costs incurred in conducting reviews of determinations made by personnel of the designated State unit, including costs associated with mediation and impartial due process hearings under § 361.57; and
(xiv) Legal expenses required in the administration of the program.
(3) Applicant means an individual who submits an application for vocational rehabilitation services in accordance with § 361.41(b)(2).
(4) Appropriate modes of communication means specialized aids and supports that enable an individual with a disability to comprehend and respond to information that is being communicated. Appropriate modes of communication include, but are not limited to, the use of interpreters, open and closed captioned videos, specialized telecommunications services and audio recordings, Brailled and large print materials, materials in electronic formats, augmentative communication devices, graphic presentations, and simple language materials.
(5) Assessment for determining eligibility and vocational rehabilitation needs means, as appropriate in each case—
(i)(A) A review of existing data—
(1) To determine if an individual is eligible for vocational rehabilitation services; and
(2) To assign priority for an order of selection described in § 361.36 in the States that use an order of selection; and
(B) To the extent necessary, the provision of appropriate assessment activities to obtain necessary additional data to make the eligibility determination and assignment;
(ii) To the extent additional data are necessary to make a determination of the employment outcomes and the nature and scope of vocational rehabilitation services to be included in the individualized plan for employment of an eligible individual, a comprehensive assessment to determine the unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice, including the need for supported employment, of the eligible individual. This comprehensive assessment—
(A) Is limited to information that is necessary to identify the rehabilitation needs of the individual and to develop the individualized plan for employment of the eligible individual;
(B) Uses as a primary source of information, to the maximum extent possible and appropriate and in accordance with confidentiality requirements—
(1) Existing information obtained for the purposes of determining the eligibility of the individual and assigning priority for an order of selection described in § 361.36 for the individual; and
(2) Information that can be provided by the individual and, if appropriate, by the family of the individual;
(C) May include, to the degree needed to make such a determination, an assessment of the personality, interests, interpersonal skills, intelligence and related functional capacities, educational achievements, work experience, vocational aptitudes, personal and social adjustments, and employment opportunities of the individual and the medical, psychiatric, psychological, and other pertinent vocational, educational, cultural, social, recreational, and environmental factors that affect the employment and rehabilitation needs of the individual;
(D) May include, to the degree needed, an appraisal of the patterns of work behavior of the individual and services needed for the individual to acquire occupational skills and to develop work attitudes, work habits, work tolerance, and social and behavior patterns necessary for successful job performance, including the use of work in real job situations to assess and develop the capacities of the individual to perform adequately in a work environment; and
(E) To the maximum extent possible, relies on information obtained from experiences in integrated employment settings in the community and in other integrated community settings;
(iii) Referral, for the provision of rehabilitation technology services to the individual, to assess and develop the capacities of the individual to perform in a work environment; and
(iv) An exploration of the individual's abilities, capabilities, and capacity to perform in work situations, which must be assessed periodically during trial work experiences, including experiences in which the individual is provided appropriate supports and training.
(6) Assistive technology terms—(i) Assistive technology has the meaning given such term in section 3 of the Assistive Technology Act of 1998 (29 U.S.C. 3002).
(ii) Assistive technology device has the meaning given such term in section 3 of the Assistive Technology Act of 1998, except that the reference in such section to the term individuals with disabilities will be deemed to mean more than one individual with a disability as defined in paragraph (20)(A) of the Act.
(iii) Assistive technology service has the meaning given such term in section 3 of the Assistive Technology Act of 1998, except that the reference in such section to the term—
(A) Individual with a disability will be deemed to mean an individual with a disability, as defined in paragraph (20)(A) of the Act; and
(B) Individuals with disabilities will be deemed to mean more than one such individual.
(7) Community rehabilitation program—(i) Community rehabilitation program means a program that provides directly or facilitates the provision of one or more of the following vocational rehabilitation services to individuals with disabilities to enable those individuals to maximize their opportunities for employment, including career advancement:
(A) Medical, psychiatric, psychological, social, and vocational services that are provided under one management.
(B) Testing, fitting, or training in the use of prosthetic and orthotic devices.
(C) Recreational therapy.
(D) Physical and occupational therapy.
(E) Speech, language, and hearing therapy.
(F) Psychiatric, psychological, and social services, including positive behavior management.
(G) Assessment for determining eligibility and vocational rehabilitation needs.
(H) Rehabilitation technology.
(I) Job development, placement, and retention services.
(J) Evaluation or control of specific disabilities.
(K) Orientation and mobility services for individuals who are blind.
(L) Extended employment.
(M) Psychosocial rehabilitation services.
(N) Supported employment services and extended services.
(O) Customized employment.
(P) Services to family members if necessary to enable the applicant or eligible individual to achieve an employment outcome.
(Q) Personal assistance services.
(R) Services similar to the services described in paragraphs (c)(7)(i)(A) through (Q) of this section.
(ii) For the purposes of this definition, program means an agency, organization, or institution, or unit of an agency, organization, or institution, that provides directly or facilitates the provision of vocational rehabilitation services as one of its major functions.
(8) Comparable services and benefits—(i) Comparable services and benefits means services and benefits, including accommodations and auxiliary aids and services, that are—
(A) Provided or paid for, in whole or in part, by other Federal, State, or local public agencies, by health insurance, or by employee benefits;
(B) Available to the individual at the time needed to ensure the progress of the individual toward achieving the employment outcome in the individual's individualized plan for employment in accordance with § 361.53; and
(C) Commensurate to the services that the individual would otherwise receive from the designated State vocational rehabilitation agency.
(ii) For the purposes of this definition, comparable services and benefits do not include awards and scholarships based on merit.
(9) Competitive integrated employment means work that—
(i) Is performed on a full-time or part-time basis (including self-employment) and for which an individual is compensated at a rate that-
(A) Is not less than the higher of the rate specified in section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) or the rate required under the applicable State or local minimum wage law for the place of employment;
(B) Is not less than the customary rate paid by the employer for the same or similar work performed by other employees who are not individuals with disabilities and who are similarly situated in similar occupations by the same employer and who have similar training, experience, and skills; and
(C) In the case of an individual who is self-employed, yields an income that is comparable to the income received by other individuals who are not individuals with disabilities and who are self-employed in similar occupations or on similar tasks and who have similar training, experience, and skills; and
(D) Is eligible for the level of benefits provided to other employees; and
(ii) Is at a location—
(A) Typically found in the community; and
(B) Where the employee with a disability interacts for the purpose of performing the duties of the position with other employees within the particular work unit and the entire work site, and, as appropriate to the work performed, other persons (e.g., customers and vendors), who are not individuals with disabilities (not including supervisory personnel or individuals who are providing services to such employee) to the same extent that employees who are not individuals with disabilities and who are in comparable positions interact with these persons; and
(iii) Presents, as appropriate, opportunities for advancement that are similar to those for other employees who are not individuals with disabilities and who have similar positions.
(10) Construction of a facility for a public or nonprofit community rehabilitation program means—
(i) The acquisition of land in connection with the construction of a new building for a community rehabilitation program;
(ii) The construction of new buildings;
(iii) The acquisition of existing buildings;
(iv) The expansion, remodeling, alteration, or renovation of existing buildings;
(v) Architect's fees, site surveys, and soil investigation, if necessary, in connection with the acquisition of land or existing buildings, or the construction, expansion, remodeling, or alteration of community rehabilitation facilities;
(vi) The acquisition of initial fixed or movable equipment of any new, newly acquired, newly expanded, newly remodeled, newly altered, or newly renovated buildings that are to be used for community rehabilitation program purposes; and
(vii) Other direct expenditures appropriate to the construction project, except costs of off-site improvements.
(11) Customized employment means competitive integrated employment, for an individual with a significant disability, that is—
(i) Based on an individualized determination of the unique strengths, needs, and interests of the individual with a significant disability;
(ii) Designed to meet the specific abilities of the individual with a significant disability and the business needs of the employer; and
(iii) Carried out through flexible strategies, such as—
(A) Job exploration by the individual; and
(B) Working with an employer to facilitate placement, including—
(1) Customizing a job description based on current employer needs or on previously unidentified and unmet employer needs;
(2) Developing a set of job duties, a work schedule and job arrangement, and specifics of supervision (including performance evaluation and review), and determining a job location;
(3) Using a professional representative chosen by the individual, or if elected self-representation, to work with an employer to facilitate placement; and
(4) Providing services and supports at the job location.
(12) Designated State agency or State agency means the sole State agency, designated, in accordance with § 361.13(a), to administer, or supervise the local administration of, the vocational rehabilitation services portion of the Unified or Combined State Plan. The term includes the State agency for individuals who are blind, if designated as the sole State agency with respect to that part of the Unified or Combined State Plan relating to the vocational rehabilitation of individuals who are blind.
(13) Designated State unit or State unit means either—
(i) The State vocational rehabilitation bureau, division, or other organizational unit that is primarily concerned with vocational rehabilitation or vocational and other rehabilitation of individuals with disabilities and that is responsible for the administration of the vocational rehabilitation program of the State agency, as required under § 361.13(b); or
(ii) The State agency that is primarily concerned with vocational rehabilitation or vocational and other rehabilitation of individuals with disabilities.
(14) Eligible individual means an applicant for vocational rehabilitation services who meets the eligibility requirements of § 361.42(a).
(15) Employment outcome means, with respect to an individual, entering, advancing in, or retaining full-time or, if appropriate, part-time competitive integrated employment, as defined in paragraph (c)(9) of this section (including customized employment, self-employment, telecommuting, or business ownership), or supported employment as defined in paragraph (c)(53) of this section, that is consistent with an individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
A designated State unit may continue services to individuals with uncompensated employment goals on their approved individualized plans for employment prior to September 19, 2016 until June 30, 2017, unless a longer period of time is required based on the needs of the individual with the disability, as documented in the individual's service record.
(16) Establishment, development, or improvement of a public or nonprofit community rehabilitation program means—
(i) The establishment of a facility for a public or nonprofit community rehabilitation program, as defined in paragraph (c)(17) of this section, to provide vocational rehabilitation services to applicants or eligible individuals;
(ii) Staffing, if necessary to establish, develop, or improve a public or nonprofit community rehabilitation program for the purpose of providing vocational rehabilitation services to applicants or eligible individuals, for a maximum period of four years, with Federal financial participation available at the applicable matching rate for the following levels of staffing costs:
(A) 100 percent of staffing costs for the first year;
(B) 75 percent of staffing costs for the second year;
(C) 60 percent of staffing costs for the third year; and
(D) 45 percent of staffing costs for the fourth year; and
(iii) Other expenditures and activities related to the establishment, development, or improvement of a public or nonprofit community rehabilitation program that are necessary to make the program functional or increase its effectiveness in providing vocational rehabilitation services to applicants or eligible individuals, but are not ongoing operating expenses of the program.
(17) Establishment of a facility for a public or nonprofit community rehabilitation program means—
(i) The acquisition of an existing building and, if necessary, the land in connection with the acquisition, if the building has been completed in all respects for at least one year prior to the date of acquisition and the Federal share of the cost of acquisition is not more than $300,000;
(ii) The remodeling or alteration of an existing building, provided the estimated cost of remodeling or alteration does not exceed the appraised value of the existing building;
(iii) The expansion of an existing building, provided that—
(A) The existing building is complete in all respects;
(B) The total size in square footage of the expanded building, notwithstanding the number of expansions, is not greater than twice the size of the existing building;
(C) The expansion is joined structurally to the existing building and does not constitute a separate building; and
(D) The costs of the expansion do not exceed the appraised value of the existing building;
(iv) Architect's fees, site survey, and soil investigation, if necessary in connection with the acquisition, remodeling, alteration, or expansion of an existing building; and
(v) The acquisition of fixed or movable equipment, including the costs of installation of the equipment, if necessary to establish, develop, or improve a community rehabilitation program.
(18) Extended employment means work in a non-integrated or sheltered setting for a public or private nonprofit agency or organization that provides compensation in accordance with the Fair Labor Standards Act.
(19) Extended services means ongoing support services and other appropriate services that are—
(i) Needed to support and maintain an individual with a most significant disability including a youth with a most significant disability, in supported employment;
(ii) Organized or made available, singly or in combination, in such a way as to assist an eligible individual in maintaining supported employment;
(iii) Based on the needs of an eligible individual, as specified in an individualized plan for employment;
(iv) Provided by a State agency, a private nonprofit organization, employer, or any other appropriate resource, after an individual has made the transition from support from the designated State unit; and
(v) Provided to a youth with a most significant disability by the designated State unit in accordance with requirements set forth in this part and part 363 for a period not to exceed four years, or at such time that a youth reaches age 25 and no longer meets the definition of a youth with a disability under paragraph (c)(58) of this section, whichever occurs first. The designated State unit may not provide extended services to an individual with a most significant disability who is not a youth with a most significant disability.
(20) Extreme medical risk means a probability of substantially increasing functional impairment or death if medical services, including mental health services, are not provided expeditiously.
(21) Fair hearing board means a committee, body, or group of persons established by a State prior to January 1, 1985, that—
(i) Is authorized under State law to review determinations made by personnel of the designated State unit that affect the provision of vocational rehabilitation services; and
(ii) Carries out the responsibilities of the impartial hearing officer in accordance with the requirements in § 361.57(j).
(22) Family member, for purposes of receiving vocational rehabilitation services in accordance with § 361.48(b)(9), means an individual—
(i) Who either—
(A) Is a relative or guardian of an applicant or eligible individual; or
(B) Lives in the same household as an applicant or eligible individual;
(ii) Who has a substantial interest in the well-being of that individual; and
(iii) Whose receipt of vocational rehabilitation services is necessary to enable the applicant or eligible individual to achieve an employment outcome.
(23) Governor means a chief executive officer of a State.
(24) Impartial hearing officer—(i) Impartial hearing officer means an individual who—
(A) Is not an employee of a public agency (other than an administrative law judge, hearing examiner, or employee of an institution of higher education);
(B) Is not a member of the State Rehabilitation Council for the designated State unit;
(C) Has not been involved previously in the vocational rehabilitation of the applicant or recipient of services;
(D) Has knowledge of the delivery of vocational rehabilitation services, the vocational rehabilitation services portion of the Unified or Combined State Plan, and the Federal and State regulations governing the provision of services;
(E) Has received training with respect to the performance of official duties; and
(F) Has no personal, professional, or financial interest that could affect the objectivity of the individual.
(ii) An individual is not considered to be an employee of a public agency for the purposes of this definition solely because the individual is paid by the agency to serve as a hearing officer.
(25) Indian; American Indian; Indian American; Indian Tribe—(i) In general. The terms “Indian”, “American Indian”, and “Indian American” mean an individual who is a member of an Indian tribe and include a Native and a descendant of a Native, as such terms are defined in subsections (b) and (r) of section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602).
(ii) Indian tribe. The term “Indian tribe” means any Federal or State Indian tribe, band, rancheria, pueblo, colony, or community, including any Alaska native village or regional village corporation (as defined in or established pursuant to the Alaska Native Claims Settlement Act) and a tribal organization (as defined in section 4(l) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450(b)(l)).
(26) Individual who is blind means a person who is blind within the meaning of applicable State law.
(27) Individual with a disability, except as provided in paragraph (c)(28) of this section, means an individual—
(i) Who has a physical or mental impairment;
(ii) Whose impairment constitutes or results in a substantial impediment to employment; and
(iii) Who can benefit in terms of an employment outcome from the provision of vocational rehabilitation services.
(28) Individual with a disability, for purposes of §§ 361.5(c)(13), 361.13(a), 361.13(b)(1), 361.17(a), (b), (c), and (j), 361.18(b), 361.19, 361.20, 361.23(b)(2), 361.29(a) and (d)(8), and 361.51(b), means an individual—
(i) Who has a physical or mental impairment that substantially limits one or more major life activities;
(ii) Who has a record of such an impairment; or
(iii) Who is regarded as having such an impairment.
(29) Individual with a most significant disability means an individual with a significant disability who meets the designated State unit's criteria for an individual with a most significant disability. These criteria must be consistent with the requirements in § 361.36(d)(1) and (2).
(30) Individual with a significant disability means an individual with a disability—
(i) Who has a severe physical or mental impairment that seriously limits one or more functional capacities (such as mobility, communication, self-care, self-direction, interpersonal skills, work tolerance, or work skills) in terms of an employment outcome;
(ii) Whose vocational rehabilitation can be expected to require multiple vocational rehabilitation services over an extended period of time; and
(iii) Who has one or more physical or mental disabilities resulting from amputation, arthritis, autism, blindness, burn injury, cancer, cerebral palsy, cystic fibrosis, deafness, head injury, heart disease, hemiplegia, hemophilia, respiratory or pulmonary dysfunction, mental illness, multiple sclerosis, muscular dystrophy, musculo-skeletal disorders, neurological disorders (including stroke and epilepsy), spinal cord conditions (including paraplegia and quadriplegia), sickle cell anemia, intellectual disability, specific learning disability, end-stage renal disease, or another disability or combination of disabilities determined on the basis of an assessment for determining eligibility and vocational rehabilitation needs to cause comparable substantial functional limitation.
(31) Individual's representative means any representative chosen by an applicant or eligible individual, as appropriate, including a parent, guardian, other family member, or advocate, unless a representative has been appointed by a court to represent the individual, in which case the court-appointed representative is the individual's representative.
(32) Integrated setting means—
(i) With respect to the provision of services, a setting typically found in the community in which applicants or eligible individuals interact with non-disabled individuals other than non-disabled individuals who are providing services to those applicants or eligible individuals; and
(ii) With respect to an employment outcome, means a setting—
(A) Typically found in the community; and
(B) Where the employee with a disability interacts, for the purpose of performing the duties of the position, with other employees within the particular work unit and the entire work site, and, as appropriate to the work performed, other persons (e.g., customers and vendors) who are not individuals with disabilities (not including supervisory personnel or individuals who are providing services to such employee) to the same extent that employees who are not individuals with disabilities and who are in comparable positions interact with these persons.
(33) Local workforce development board means a local board, as defined in section 3 of the Workforce Innovation and Opportunity Act.
(34) Maintenance means monetary support provided to an individual for expenses, such as food, shelter, and clothing, that are in excess of the normal expenses of the individual and that are necessitated by the individual's participation in an assessment for determining eligibility and vocational rehabilitation needs or the individual's receipt of vocational rehabilitation services under an individualized plan for employment.
(i) Examples: The following are examples of expenses that would meet the definition of maintenance. The examples are illustrative, do not address all possible circumstances, and are not intended to substitute for individual counselor judgment.
(ii) [Reserved]
(35) Mediation means the act or process of using an independent third party to act as a mediator, intermediary, or conciliator to assist persons or parties in settling differences or disputes prior to pursuing formal administrative or other legal remedies. Mediation under the program must be conducted in accordance with the requirements in § 361.57(d) by a qualified and impartial mediator as defined in § 361.5(c)(43).
(36) Nonprofit, with respect to a community rehabilitation program, means a community rehabilitation program carried out by a corporation or association, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual and the income of which is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986.
(37) Ongoing support services, as used in the definition of supported employment, means services that—
(i) Are needed to support and maintain an individual with a most significant disability, including a youth with a most significant disability, in supported employment;
(ii) Are identified based on a determination by the designated State unit of the individual's need as specified in an individualized plan for employment;
(iii) Are furnished by the designated State unit from the time of job placement until transition to extended services, unless post-employment services are provided following transition, and thereafter by one or more extended services providers throughout the individual's term of employment in a particular job placement;
(iv) Include an assessment of employment stability and provision of specific services or the coordination of services at or away from the worksite that are needed to maintain stability based on—
(A) At a minimum, twice-monthly monitoring at the worksite of each individual in supported employment; or
(B) If under specific circumstances, especially at the request of the individual, the individualized plan for employment provides for off-site monitoring, twice monthly meetings with the individual;
(v) Consist of—
(A) Any particularized assessment supplementary to the comprehensive assessment of rehabilitation needs described in paragraph (c)(5)(ii) of this section;
(B) The provision of skilled job trainers who accompany the individual for intensive job skill training at the work site;
(C) Job development and training;
(D) Social skills training;
(E) Regular observation or supervision of the individual;
(F) Follow-up services including regular contact with the employers, the individuals, the parents, family members, guardians, advocates or authorized representatives of the individuals, and other suitable professional and informed advisors, in order to reinforce and stabilize the job placement;
(G) Facilitation of natural supports at the worksite;
(H) Any other service identified in the scope of vocational rehabilitation services for individuals, described in § 361.48(b); or
(I) Any service similar to the foregoing services.
(38) Personal assistance services means a range of services, including, among other things, training in managing, supervising, and directing personal assistance services, provided by one or more persons, that are—
(i) Designed to assist an individual with a disability to perform daily living activities on or off the job that the individual would typically perform without assistance if the individual did not have a disability;
(ii) Designed to increase the individual's control in life and ability to perform everyday activities on or off the job;
(iii) Necessary to the achievement of an employment outcome; and
(iv) Provided only while the individual is receiving other vocational rehabilitation services. The services may include training in managing, supervising, and directing personal assistance services.
(39) Physical and mental restoration services means—
(i) Corrective surgery or therapeutic treatment that is likely, within a reasonable period of time, to correct or modify substantially a stable or slowly progressive physical or mental impairment that constitutes a substantial impediment to employment;
(ii) Diagnosis of and treatment for mental or emotional disorders by qualified personnel in accordance with State licensure laws;
(iii) Dentistry;
(iv) Nursing services;
(v) Necessary hospitalization (either inpatient or outpatient care) in connection with surgery or treatment and clinic services;
(vi) Drugs and supplies;
(vii) Prosthetic and orthotic devices;
(viii) Eyeglasses and visual services, including visual training, and the examination and services necessary for the prescription and provision of eyeglasses, contact lenses, microscopic lenses, telescopic lenses, and other special visual aids prescribed by personnel who are qualified in accordance with State licensure laws;
(ix) Podiatry;
(x) Physical therapy;
(xi) Occupational therapy;
(xii) Speech or hearing therapy;
(xiii) Mental health services;
(xiv) Treatment of either acute or chronic medical complications and emergencies that are associated with or arise out of the provision of physical and mental restoration services, or that are inherent in the condition under treatment;
(xv) Special services for the treatment of individuals with end-stage renal disease, including transplantation, dialysis, artificial kidneys, and supplies; and
(xvi) Other medical or medically related rehabilitation services.
(40) Physical or mental impairment means—
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological, musculo-skeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitourinary, hemic and lymphatic, skin, and endocrine; or
(ii) Any mental or psychological disorder such as intellectual disability, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
(41) Post-employment services means one or more of the services identified in § 361.48(b) that are provided subsequent to the achievement of an employment outcome and that are necessary for an individual to maintain, regain, or advance in employment, consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
Post-employment services are intended to ensure that the employment outcome remains consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice. These services are available to meet rehabilitation needs that do not require a complex and comprehensive provision of services and, thus, should be limited in scope and duration. If more comprehensive services are required, then a new rehabilitation effort should be considered. Post-employment services are to be provided under an amended individualized plan for employment; thus, a re-determination of eligibility is not required. The provision of post-employment services is subject to the same requirements in this part as the provision of any other vocational rehabilitation service. Post-employment services are available to assist an individual to maintain employment, e.g., the individual's employment is jeopardized because of conflicts with supervisors or co-workers, and the individual needs mental health services and counseling to maintain the employment, or the individual requires assistive technology to maintain the employment; to regain employment, e.g., the individual's job is eliminated through reorganization and new placement services are needed; and to advance in employment, e.g., the employment is no longer consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
(42) Pre-employment transition services means the required activities and authorized activities specified in § 361.48(a)(2) and (3).
(43) Qualified and impartial mediator—(i) Qualified and impartial mediator means an individual who—
(A) Is not an employee of a public agency (other than an administrative law judge, hearing examiner, employee of a State office of mediators, or employee of an institution of higher education);
(B) Is not a member of the State Rehabilitation Council for the designated State unit;
(C) Has not been involved previously in the vocational rehabilitation of the applicant or recipient of services;
(D) Is knowledgeable of the vocational rehabilitation program and the applicable Federal and State laws, regulations, and policies governing the provision of vocational rehabilitation services;
(E) Has been trained in effective mediation techniques consistent with any State-approved or -recognized certification, licensing, registration, or other requirements; and
(F) Has no personal, professional, or financial interest that could affect the individual's objectivity during the mediation proceedings.
(ii) An individual is not considered to be an employee of the designated State agency or designated State unit for the purposes of this definition solely because the individual is paid by the designated State agency or designated State unit to serve as a mediator.
(44) Rehabilitation engineering means the systematic application of engineering sciences to design, develop, adapt, test, evaluate, apply, and distribute technological solutions to problems confronted by individuals with disabilities in functional areas, such as mobility, communications, hearing, vision, and cognition, and in activities associated with employment, independent living, education, and integration into the community.
(45) Rehabilitation technology means the systematic application of technologies, engineering methodologies, or scientific principles to meet the needs of, and address the barriers confronted by, individuals with disabilities in areas that include education, rehabilitation, employment, transportation, independent living, and recreation. The term includes rehabilitation engineering, assistive technology devices, and assistive technology services.
(46) Reservation means a Federal or State Indian reservation, a public domain Indian allotment, a former Indian reservation in Oklahoma, and land held by incorporated Native groups, regional corporations, and village corporations under the provisions of the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.); or a defined area of land recognized by a State or the Federal Government where there is a concentration of tribal members and on which the tribal government is providing structured activities and services.
(47) Sole local agency means a unit or combination of units of general local government or one or more Indian tribes that has the sole responsibility under an agreement with, and the supervision of, the State agency to conduct a local or tribal vocational rehabilitation program, in accordance with the vocational rehabilitation services portion of the Unified or Combined State Plan.
(48) State means any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
(49) State workforce development board means a State workforce development board, as defined in section 3 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102).
(50) Statewide workforce development system means a workforce development system, as defined in section 3 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102).
(51) Student with a disability—(i) Student with a disability means, in general, an individual with a disability in a secondary, postsecondary, or other recognized education program who—
(A)(1) Is not younger than the earliest age for the provision of transition services under section 614(d)(1)(A)(i)(VIII) of the Individuals with Disabilities Education Act (20 U.S.C. 1414(d)(1)(A)(i)(VIII)); or
(2) If the State involved elects to use a lower minimum age for receipt of pre-employment transition services under this Act, is not younger than that minimum age; and
(B)(1) Is not older than 21 years of age; or
(2) If the State law for the State provides for a higher maximum age for receipt of services under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), is not older than that maximum age; and
(C)(1) Is eligible for, and receiving, special education or related services under Part B of the Individuals with Disabilities Education Act (20 U.S.C. 1411 et seq.); or
(2) Is a student who is an individual with a disability, for purposes of section 504.
(ii) Students with disabilities means more than one student with a disability.
(52) Substantial impediment to employment means that a physical or mental impairment (in light of attendant medical, psychological, vocational, educational, communication, and other related factors) hinders an individual from preparing for, entering into, engaging in, advancing in, or retaining employment consistent with the individual's abilities and capabilities.
(53) Supported employment—(i) Supported employment means competitive integrated employment, including customized employment, or employment in an integrated work setting in which an individual with a most significant disability, including a youth with a most significant disability, is working on a short-term basis toward competitive integrated employment that is individualized, and customized, consistent with the unique strengths, abilities, interests, and informed choice of the individual, including with ongoing support services for individuals with the most significant disabilities—
(A) For whom competitive integrated employment has not historically occurred, or for whom competitive integrated employment has been interrupted or intermittent as a result of a significant disability; and
(B) Who, because of the nature and severity of their disabilities, need intensive supported employment services and extended services after the transition from support provided by the designated State unit, in order to perform this work.
(ii) For purposes of this part, an individual with a most significant disability, whose supported employment in an integrated setting does not satisfy the criteria of competitive integrated employment, as defined in paragraph (c)(9) of this section is considered to be working on a short-term basis toward competitive integrated employment so long as the individual can reasonably anticipate achieving competitive integrated employment—
(A) Within six months of achieving a supported employment outcome; or
(B) In limited circumstances, within a period not to exceed 12 months from the achievement of the supported employment outcome, if a longer period is necessary based on the needs of the individual, and the individual has demonstrated progress toward competitive earnings based on information contained in the service record.
(54) Supported employment services means ongoing support services, including customized employment, and other appropriate services needed to support and maintain an individual with a most significant disability, including a youth with a most significant disability, in supported employment that are—
(i) Organized and made available, singly or in combination, in such a way as to assist an eligible individual to achieve competitive integrated employment;
(ii) Based on a determination of the needs of an eligible individual, as specified in an individualized plan for employment;
(iii) Provided by the designated State unit for a period of time not to exceed 24 months, unless under special circumstances the eligible individual and the rehabilitation counselor jointly agree to extend the time to achieve the employment outcome identified in the individualized plan for employment; and
(iv) Following transition, as post-employment services that are unavailable from an extended services provider and that are necessary to maintain or regain the job placement or advance in employment.
(55) Transition services means a coordinated set of activities for a student or youth with a disability—
(i) Designed within an outcome-oriented process that promotes movement from school to post-school activities, including postsecondary education, vocational training, competitive integrated employment, supported employment, continuing and adult education, adult services, independent living, or community participation;
(ii) Based upon the individual student's or youth's needs, taking into account the student's or youth's preferences and interests;
(iii) That includes instruction, community experiences, the development of employment and other post-school adult living objectives, and, if appropriate, acquisition of daily living skills and functional vocational evaluation;
(iv) That promotes or facilitates the achievement of the employment outcome identified in the student's or youth's individualized plan for employment; and
(v) That includes outreach to and engagement of the parents, or, as appropriate, the representative of such a student or youth with a disability.
(56) Transportation means travel and related expenses that are necessary to enable an applicant or eligible individual to participate in a vocational rehabilitation service, including expenses for training in the use of public transportation vehicles and systems.
(i) Examples. The following are examples of expenses that would meet the definition of transportation. The examples are purely illustrative, do not address all possible circumstances, and are not intended as substitutes for individual counselor judgment.
(ii) [Reserved]
(57) Vocational rehabilitation services—(i) If provided to an individual, means those services listed in § 361.48; and
(ii) If provided for the benefit of groups of individuals, means those services listed in § 361.49.
(58) Youth with a disability—(i) Youth with a disability means an individual with a disability who is not—
(A) Younger than 14 years of age; and
(B) Older than 24 years of age.
(ii) Youth with disabilities means more than one youth with a disability.
(a) Purpose. (1) To be eligible to receive funds under this part for a fiscal year, a State must submit, and have approved, a vocational rehabilitation services portion of a Unified or Combined State Plan in accordance with section 102 or 103 of the Workforce Innovation and Opportunity Act.
(2) The vocational rehabilitation services portion of the Unified or Combined State Plan must satisfy all requirements set forth in this part.
(b) Separate part relating to the vocational rehabilitation of individuals who are blind. If a separate State agency administers or supervises the administration of a separate part of the vocational rehabilitation services portion of the Unified or Combined State Plan relating to the vocational rehabilitation of individuals who are blind, that part of the vocational rehabilitation services portion of the Unified or Combined State Plan must separately conform to all applicable requirements under this part.
(c) Public participation. Prior to the adoption of any substantive policies or procedures specific to the provision of vocational rehabilitation services under the vocational rehabilitation services portion of the Unified or Combined State Plan, including making any substantive amendment to those policies and procedures, the designated State agency must conduct public meetings throughout the State, in accordance with the requirements of § 361.20.
(d) Submission, approval, disapproval, and duration. All requirements regarding the submission, approval, disapproval, and duration of the vocational rehabilitation services portion of the Unified or Combined State Plan are governed by regulations set forth in subpart D of this part.
(e) Submission of policies and procedures. The State is not required to submit policies, procedures, or descriptions required under this part that have been previously submitted to the Secretary and that demonstrate that the State meets the requirements of this part, including any policies, procedures, or descriptions submitted under this part that are in effect on July 22, 2014.
(f) Due process. If the Secretary disapproves the vocational rehabilitation services portion of the Unified or Combined State Plan, the Secretary will follow these procedures:
(1) Informal resolution. Prior to disapproving the vocational rehabilitation services portion of the Unified or Combined State Plan, the Secretary attempts to resolve disputes informally with State officials.
(2) Notice. If, after reasonable effort has been made to resolve the dispute, no resolution has been reached, the Secretary provides notice to the State agency of the intention to disapprove the vocational rehabilitation services portion of the Unified or Combined State Plan and of the opportunity for a hearing.
(3) State plan hearing. If the State agency requests a hearing, the Secretary designates one or more individuals, either from the Department or elsewhere, not responsible for or connected with the administration of this program, to conduct a hearing in accordance with the provisions of 34 CFR part 81, subpart A.
(4) Initial decision. The hearing officer issues an initial decision in accordance with 34 CFR 81.41.
(5) Petition for review of an initial decision. The State agency may seek the Secretary's review of the initial decision in accordance with 34 CFR part 81.
(6) Review by the Secretary. The Secretary reviews the initial decision in accordance with 34 CFR 81.43.
(7) Final decision of the Department. The final decision of the Department is made in accordance with 34 CFR 81.44.
(8) Judicial review. A State may appeal the Secretary's decision to disapprove the vocational rehabilitation services portion of the Unified or Combined State Plan by filing a petition for review with the United States Court of Appeals for the circuit in which the State is located, in accordance with section 107(d) of the Act.
(a) Basis for withholding. The Secretary may withhold or limit payments under section 111 or 603(a) of the Act, as provided by section 107(c) of the Act, if the Secretary determines that—
(1) The vocational rehabilitation services portion of the Unified or Combined State Plan, including the supported employment supplement, has been so changed that it no longer conforms with the requirements of this part or part 363; or
(2) In the administration of the vocational rehabilitation services portion of the Unified or Combined State Plan there is a failure to comply substantially with any provision of such plan or with an evaluation standard or performance indicator established under section 106 of the Act.
(b) Informal resolution. Prior to withholding or limiting payments in accordance with this section, the Secretary attempts to resolve disputed issues informally with State officials.
(c) Notice. If, after reasonable effort has been made to resolve the dispute, no resolution has been reached, the Secretary provides notice to the State agency of the intention to withhold or limit payments and of the opportunity for a hearing.
(d) Withholding hearing. If the State agency requests a hearing, the Secretary designates one or more individuals, either from the Department or elsewhere, not responsible for or connected with the administration of this program, to conduct a hearing in accordance with the provisions of 34 CFR part 81, subpart A.
(e) Initial decision. The hearing officer issues an initial decision in accordance with 34 CFR 81.41.
(f) Petition for review of an initial decision. The State agency may seek the Secretary's review of the initial decision in accordance with 34 CFR 81.42.
(g) Review by the Secretary. The Secretary reviews the initial decision in accordance with 34 CFR 81.43.
(h) Final decision of the Department. The final decision of the Department is made in accordance with 34 CFR 81.44.
(i) Judicial review. A State may appeal the Secretary's decision to withhold or limit payments by filing a petition for review with the United States Court of Appeals for the circuit in which the State is located, in accordance with section 107(d) of the Act.
The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State agency, and the designated State unit if applicable, employs methods of administration found necessary by the Secretary for the proper and efficient administration of the plan and for carrying out all functions for which the State is responsible under the plan and this part. These methods must include procedures to ensure accurate data collection and financial accountability.
(a) Designation of State agency. The vocational rehabilitation services portion of the Unified or Combined State Plan must designate a State agency as the sole State agency to administer the vocational rehabilitation services portion of the Unified or Combined State Plan, or to supervise its administration in a political subdivision of the State by a sole local agency, in accordance with the following requirements:
(1) General. Except as provided in paragraphs (a)(2) and (3) of this section, the vocational rehabilitation services portion of the Unified or Combined State Plan must provide that the designated State agency is one of the following types of agencies:
(i) A State agency that is primarily concerned with vocational rehabilitation or vocational and other rehabilitation of individuals with disabilities; or
(ii) A State agency that includes a vocational rehabilitation unit as provided in paragraph (b) of this section.
(2) American Samoa. In the case of American Samoa, the vocational rehabilitation services portion of the Unified or Combined State Plan must designate the Governor.
(3) Designated State agency for individuals who are blind. If a State commission or other agency that provides assistance or services to individuals who are blind is authorized under State law to provide vocational rehabilitation services to individuals who are blind, and this commission or agency is primarily concerned with vocational rehabilitation or includes a vocational rehabilitation unit as provided in paragraph (b) of this section, the vocational rehabilitation services portion of the Unified or Combined State Plan may designate that agency as the sole State agency to administer the part of the plan under which vocational rehabilitation services are provided for individuals who are blind or to supervise its administration in a political subdivision of the State by a sole local agency.
(b) Designation of State unit—(1) General. If the designated State agency is not of the type specified in paragraph (a)(1)(i) of this section or if the designated State agency specified in paragraph (a)(3) of this section is not primarily concerned with vocational rehabilitation or vocational and other rehabilitation of individuals with disabilities, the vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the agency (or each agency if two agencies are designated) includes a vocational rehabilitation bureau, division, or unit that—
(i) Is primarily concerned with vocational rehabilitation or vocational and other rehabilitation of individuals with disabilities and is responsible for the administration of the State agency's vocational rehabilitation program under the vocational rehabilitation services portion of the Unified or Combined State Plan;
(ii) Has a full-time director who is responsible for the day-to-day operations of the vocational rehabilitation program;
(iii) Has a staff, at least 90 percent of whom are employed full time on the rehabilitation work of the organizational unit;
(iv) Is located at an organizational level and has an organizational status within the State agency comparable to that of other major organizational units of the agency; and
(v) Has the sole authority and responsibility described within the designated State agency in paragraph (a) of this section to expend funds made available under the Act in a manner that is consistent with the purpose of the Act.
(2) In the case of a State that has not designated a separate State agency for individuals who are blind, as provided for in paragraph (a)(3) of this section, the State may assign responsibility for the part of the vocational rehabilitation services portion of the Unified or Combined State Plan under which vocational rehabilitation services are provided to individuals who are blind to one organizational unit of the designated State agency and may assign responsibility for the rest of the plan to another organizational unit of the designated State agency, with the provisions of paragraph (b)(1) of this section applying separately to each of these units.
(c) Responsibility for administration—(1) Required activities. At a minimum, the following activities are the responsibility of the designated State unit or the sole local agency under the supervision of the State unit:
(i) All decisions affecting eligibility for vocational rehabilitation services, the nature and scope of available services, and the provision of these services.
(ii) The determination to close the record of services of an individual who has achieved an employment outcome in accordance with § 361.56.
(iii) Policy formulation and implementation.
(iv) The allocation and expenditure of vocational rehabilitation funds.
(v) Participation as a partner in the one-stop service delivery system established under title I of the Workforce Innovation and Opportunity Act, in accordance with 20 CFR part 678.
(2) Non-delegable responsibility. The responsibility for the functions described in paragraph (c)(1) of this section may not be delegated to any other agency or individual.
(a) General provisions. (1) If the Secretary has withheld all funding from a State under § 361.11, the State may designate another agency to substitute for the designated State agency in carrying out the State's program of vocational rehabilitation services.
(2) Any public or nonprofit private organization or agency within the State or any political subdivision of the State is eligible to be a substitute agency.
(3) The substitute agency must submit a vocational rehabilitation services portion of the Unified or Combined State Plan that meets the requirements of this part.
(4) The Secretary makes no grant to a substitute agency until the Secretary approves its plan.
(b) Substitute agency matching share. The Secretary does not make any payment to a substitute agency unless it has provided assurances that it will contribute the same matching share as the State would have been required to contribute if the State agency were carrying out the vocational rehabilitation program.
(a) If the vocational rehabilitation services portion of the Unified or Combined State Plan provides for the administration of the plan by a local agency, the designated State agency must—
(1) Ensure that each local agency is under the supervision of the designated State unit and is the sole local agency as defined in § 361.5(c)(47) that is responsible for the administration of the program within the political subdivision that it serves; and
(2) Develop methods that each local agency will use to administer the vocational rehabilitation program, in accordance with the vocational rehabilitation services portion of the Unified or Combined State Plan.
(b) A separate local agency serving individuals who are blind may administer that part of the plan relating to vocational rehabilitation of individuals who are blind, under the supervision of the designated State unit for individuals who are blind.
(a) General requirement. Except as provided in paragraph (b) of this section, the vocational rehabilitation services portion of the Unified or Combined State Plan must contain one of the following two assurances:
(1) An assurance that the designated State agency is an independent State commission that—
(i) Is responsible under State law for operating, or overseeing the operation of, the vocational rehabilitation program in the State and is primarily concerned with vocational rehabilitation or vocational and other rehabilitation services, in accordance with § 361.13(a)(1)(i);
(ii) Is consumer-controlled by persons who—
(A) Are individuals with physical or mental impairments that substantially limit major life activities; and
(B) Represent individuals with a broad range of disabilities, unless the designated State unit under the direction of the commission is the State agency for individuals who are blind;
(iii) Includes family members, advocates, or other representatives of individuals with mental impairments; and
(iv) Conducts the functions identified in § 361.17(h)(4).
(2) An assurance that—
(i) The State has established a State Rehabilitation Council (Council) that meets the requirements of § 361.17;
(ii) The designated State unit, in accordance with § 361.29, jointly develops, agrees to, and reviews annually State goals and priorities and jointly submits to the Secretary annual reports of progress with the Council;
(iii) The designated State unit regularly consults with the Council regarding the development, implementation, and revision of State policies and procedures of general applicability pertaining to the provision of vocational rehabilitation services;
(iv) The designated State unit transmits to the Council—
(A) All plans, reports, and other information required under this part to be submitted to the Secretary;
(B) All policies and information on all practices and procedures of general applicability provided to or used by rehabilitation personnel providing vocational rehabilitation services under this part; and
(C) Copies of due process hearing decisions issued under this part and transmitted in a manner to ensure that the identity of the participants in the hearings is kept confidential; and
(v) The vocational rehabilitation services portion of the Unified or Combined State Plan, and any revision to the vocational rehabilitation services portion of the Unified or Combined State Plan, includes a summary of input provided by the Council, including recommendations from the annual report of the Council, the review and analysis of consumer satisfaction described in § 361.17(h)(4), and other reports prepared by the Council, and the designated State unit's response to the input and recommendations, including its reasons for rejecting any input or recommendation of the Council.
(b) Exception for separate State agency for individuals who are blind. In the case of a State that designates a separate State agency under § 361.13(a)(3) to administer the part of the vocational rehabilitation services portion of the Unified or Combined State Plan under which vocational rehabilitation services are provided to individuals who are blind, the State must either establish a separate State Rehabilitation Council for each agency that does not meet the requirements in paragraph (a)(1) of this section or establish one State Rehabilitation Council for both agencies if neither agency meets the requirements of paragraph (a)(1) of this section.
If the State has established a Council under § 361.16(a)(2) or (b), the Council must meet the following requirements:
(a) Appointment. (1) The members of the Council must be appointed by the Governor or, in the case of a State that, under State law, vests authority for the administration of the activities carried out under this part in an entity other than the Governor (such as one or more houses of the State legislature or an independent board), the chief officer of that entity.
(2) The appointing authority must select members of the Council after soliciting recommendations from representatives of organizations representing a broad range of individuals with disabilities and organizations interested in individuals with disabilities. In selecting members, the appointing authority must consider, to the greatest extent practicable, the extent to which minority populations are represented on the Council.
(b) Composition—(1) General. Except as provided in paragraph (b)(3) of this section, the Council must be composed of at least 15 members, including—
(i) At least one representative of the Statewide Independent Living Council, who must be the chairperson or other designee of the Statewide Independent Living Council;
(ii) At least one representative of a parent training and information center established pursuant to section 682(a) of the Individuals with Disabilities Education Act;
(iii) At least one representative of the Client Assistance Program established under part 370 of this chapter, who must be the director of or other individual recommended by the Client Assistance Program;
(iv) At least one qualified vocational rehabilitation counselor with knowledge of and experience with vocational rehabilitation programs who serves as an ex officio, nonvoting member of the Council if employed by the designated State agency;
(v) At least one representative of community rehabilitation program service providers;
(vi) Four representatives of business, industry, and labor;
(vii) Representatives of disability groups that include a cross section of—
(A) Individuals with physical, cognitive, sensory, and mental disabilities; and
(B) Representatives of individuals with disabilities who have difficulty representing themselves or are unable due to their disabilities to represent themselves;
(viii) Current or former applicants for, or recipients of, vocational rehabilitation services;
(ix) In a State in which one or more projects are funded under section 121 of the Act (American Indian Vocational Rehabilitation Services), at least one representative of the directors of the projects in such State;
(x) At least one representative of the State educational agency responsible for the public education of students with disabilities who are eligible to receive services under this part and part B of the Individuals with Disabilities Education Act;
(xi) At least one representative of the State workforce development board; and
(xii) The director of the designated State unit as an ex officio, nonvoting member of the Council.
(2) Employees of the designated State agency. Employees of the designated State agency may serve only as nonvoting members of the Council. This provision does not apply to the representative appointed pursuant to paragraph (b)(1)(iii) of this section.
(3) Composition of a separate Council for a separate State agency for individuals who are blind. Except as provided in paragraph (b)(4) of this section, if the State establishes a separate Council for a separate State agency for individuals who are blind, that Council must—
(i) Conform with all of the composition requirements for a Council under paragraph (b)(1) of this section, except the requirements in paragraph (b)(1)(vii), unless the exception in paragraph (b)(4) of this section applies; and
(ii) Include—
(A) At least one representative of a disability advocacy group representing individuals who are blind; and
(B) At least one representative of an individual who is blind, has multiple disabilities, and has difficulty representing himself or herself or is unable due to disabilities to represent himself or herself.
(4) Exception. If State law in effect on October 29, 1992 requires a separate Council under paragraph (b)(3) of this section to have fewer than 15 members, the separate Council is in compliance with the composition requirements in paragraphs (b)(1)(vi) and (viii) of this section if it includes at least one representative who meets the requirements for each of those paragraphs.
(c) Majority. (1) A majority of the Council members must be individuals with disabilities who meet the requirements of § 361.5(c)(28) and are not employed by the designated State unit.
(2) In the case of a separate Council established under § 361.16(b), a majority of the Council members must be individuals who are blind and are not employed by the designated State unit.
(d) Chairperson. (1) The chairperson must be selected by the members of the Council from among the voting members of the Council, subject to the veto power of the Governor; or
(2) In States in which the Governor does not have veto power pursuant to State law, the appointing authority described in paragraph (a)(1) of this section must designate a member of the Council to serve as the chairperson of the Council or must require the Council to designate a member to serve as chairperson.
(e) Terms of appointment. (1) Each member of the Council must be appointed for a term of no more than three years, and each member of the Council, other than a representative identified in paragraph (b)(1)(iii) or (ix) of this section, may serve for no more than two consecutive full terms.
(2) A member appointed to fill a vacancy occurring prior to the end of the term for which the predecessor was appointed must be appointed for the remainder of the predecessor's term.
(3) The terms of service of the members initially appointed must be, as specified by the appointing authority as described in paragraph (a)(1) of this section, for varied numbers of years to ensure that terms expire on a staggered basis.
(f) Vacancies. (1) A vacancy in the membership of the Council must be filled in the same manner as the original appointment, except the appointing authority as described in paragraph (a)(1) of this section may delegate the authority to fill that vacancy to the remaining members of the Council after making the original appointment.
(2) No vacancy affects the power of the remaining members to execute the duties of the Council.
(g) Conflict of interest. No member of the Council may cast a vote on any matter that would provide direct financial benefit to the member or the member's organization or otherwise give the appearance of a conflict of interest under State law.
(h) Functions. The Council must, after consulting with the State workforce development board—
(1) Review, analyze, and advise the designated State unit regarding the performance of the State unit's responsibilities under this part, particularly responsibilities related to—
(i) Eligibility, including order of selection;
(ii) The extent, scope, and effectiveness of services provided; and
(iii) Functions performed by State agencies that affect or potentially affect the ability of individuals with disabilities in achieving employment outcomes under this part;
(2) In partnership with the designated State unit—
(i) Develop, agree to, and review State goals and priorities in accordance with § 361.29(c); and
(ii) Evaluate the effectiveness of the vocational rehabilitation program and submit reports of progress to the Secretary in accordance with § 361.29(e);
(3) Advise the designated State agency and the designated State unit regarding activities carried out under this part and assist in the preparation of the vocational rehabilitation services portion of the Unified or Combined State Plan and amendments to the plan, applications, reports, needs assessments, and evaluations required by this part;
(4) To the extent feasible, conduct a review and analysis of the effectiveness of, and consumer satisfaction with—
(i) The functions performed by the designated State agency;
(ii) The vocational rehabilitation services provided by State agencies and other public and private entities responsible for providing vocational rehabilitation services to individuals with disabilities under the Act; and
(iii) The employment outcomes achieved by eligible individuals receiving services under this part, including the availability of health and other employment benefits in connection with those employment outcomes;
(5) Prepare and submit to the Governor and to the Secretary no later than 90 days after the end of the Federal fiscal year an annual report on the status of vocational rehabilitation programs operated within the State and make the report available to the public through appropriate modes of communication;
(6) To avoid duplication of efforts and enhance the number of individuals served, coordinate activities with the activities of other councils within the State, including the Statewide Independent Living Council established under chapter 1, title VII of the Act, the advisory panel established under section 612(a)(21) of the Individuals with Disabilities Education Act, the State Developmental Disabilities Planning Council described in section 124 of the Developmental Disabilities Assistance and Bill of Rights Act, the State mental health planning council established under section 1914(a) of the Public Health Service Act, and the State workforce development board, and with the activities of entities carrying out programs under the Assistive Technology Act of 1998;
(7) Provide for coordination and the establishment of working relationships between the designated State agency and the Statewide Independent Living Council and centers for independent living within the State; and
(8) Perform other comparable functions, consistent with the purpose of this part, as the Council determines to be appropriate, that are comparable to the other functions performed by the Council.
(i) Resources. (1) The Council, in conjunction with the designated State unit, must prepare a plan for the provision of resources, including staff and other personnel, that may be necessary and sufficient for the Council to carry out its functions under this part.
(2) The resource plan must, to the maximum extent possible, rely on the use of resources in existence during the period of implementation of the plan.
(3) Any disagreements between the designated State unit and the Council regarding the amount of resources necessary to carry out the functions of the Council must be resolved by the Governor, consistent with paragraphs (i)(1) and (2) of this section.
(4) The Council must, consistent with State law, supervise and evaluate the staff and personnel that are necessary to carry out its functions.
(5) Those staff and personnel that are assisting the Council in carrying out its functions may not be assigned duties by the designated State unit or any other agency or office of the State that would create a conflict of interest.
(j) Meetings. The Council must—
(1) Convene at least four meetings a year in locations determined by the Council to be necessary to conduct Council business. The meetings must be publicly announced, open, and accessible to the general public, including individuals with disabilities, unless there is a valid reason for an executive session; and
(2) Conduct forums or hearings, as appropriate, that are publicly announced, open, and accessible to the public, including individuals with disabilities.
(k) Compensation. Funds appropriated under title I of the Act, except funds to carry out sections 112 and 121 of the Act, may be used to compensate and reimburse the expenses of Council members in accordance with section 105(g) of the Act.
The vocational rehabilitation services portion of the Unified or Combined State Plan must describe the procedures and activities the State agency will undertake to establish and maintain a comprehensive system of personnel development designed to ensure an adequate supply of qualified rehabilitation personnel, including professionals and paraprofessionals, for the designated State unit. If the State agency has a State Rehabilitation Council, this description must, at a minimum, specify that the Council has an opportunity to review and comment on the development of plans, policies, and procedures necessary to meet the requirements of paragraphs (b) through (d) of this section. This description must also conform with the following requirements:
(a) Personnel and personnel development data system. The vocational rehabilitation services portion of the Unified or Combined State Plan must describe the development and maintenance of a system by the State agency for collecting and analyzing on an annual basis data on qualified personnel needs and personnel development, in accordance with the following requirements:
(1) Data on qualified personnel needs must include—
(i) The number of personnel who are employed by the State agency in the provision of vocational rehabilitation services in relation to the number of individuals served, broken down by personnel category;
(ii) The number of personnel currently needed by the State agency to provide vocational rehabilitation services, broken down by personnel category; and
(iii) Projections of the number of personnel, broken down by personnel category, who will be needed by the State agency to provide vocational rehabilitation services in the State in five years based on projections of the number of individuals to be served, including individuals with significant disabilities, the number of personnel expected to retire or leave the field, and other relevant factors.
(2) Data on personnel development must include—
(i) A list of the institutions of higher education in the State that are preparing vocational rehabilitation professionals, by type of program;
(ii) The number of students enrolled at each of those institutions, broken down by type of program; and
(iii) The number of students who graduated during the prior year from each of those institutions with certification or licensure, or with the credentials for certification or licensure, broken down by the personnel category for which they have received, or have the credentials to receive, certification or licensure.
(b) Plan for recruitment, preparation, and retention of qualified personnel. The vocational rehabilitation services portion of the Unified or Combined State Plan must describe the development, updating, and implementation of a plan to address the current and projected needs for personnel who are qualified in accordance with paragraph (c) of this section. The plan must identify the personnel needs based on the data collection and analysis system described in paragraph (a) of this section and must provide for the coordination and facilitation of efforts between the designated State unit and institutions of higher education and professional associations to recruit, prepare, and retain personnel who are qualified in accordance with paragraph (c) of this section, including personnel from minority backgrounds and personnel who are individuals with disabilities.
(c) Personnel standards. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must include the State agency's policies and describe—
(i) Standards that are consistent with any national or State-approved or recognized certification, licensing, or registration requirements, or, in the absence of these requirements, other comparable requirements (including State personnel requirements) that apply to the profession or discipline in which that category of personnel is providing vocational rehabilitation services; and
(ii) The establishment and maintenance of education and experience requirements, to ensure that the personnel have a 21st-century understanding of the evolving labor force and the needs of individuals with disabilities, including requirements for—
(A)(1) Attainment of a baccalaureate degree in a field of study reasonably related to vocational rehabilitation, to indicate a level of competency and skill demonstrating basic preparation in a field of study such as vocational rehabilitation counseling, social work, psychology, disability studies, business administration, human resources, special education, supported employment, customized employment, economics, or another field that reasonably prepares individuals to work with consumers and employers; and
(2) Demonstrated paid or unpaid experience, for not less than one year, consisting of—
(i) Direct work with individuals with disabilities in a setting such as an independent living center;
(ii) Direct service or advocacy activities that provide such individual with experience and skills in working with individuals with disabilities; or
(iii) Direct experience in competitive integrated employment environments as an employer, as a small business owner or operator, or in self-employment, or other experience in human resources or recruitment, or experience in supervising employees, training, or other activities; or
(B) Attainment of a master's or doctoral degree in a field of study such as vocational rehabilitation counseling, law, social work, psychology, disability studies, business administration, human resources, special education, management, public administration, or another field that reasonably provides competence in the employment sector, in a disability field, or in both business-related and rehabilitation-related fields; and
(2) As used in this section—
(i) Profession or discipline means a specific occupational category, including any paraprofessional occupational category, that—
(A) Provides rehabilitation services to individuals with disabilities;
(B) Has been established or designated by the State unit; and
(C) Has a specified scope of responsibility.
(ii) Ensuring that personnel have a 21st-century understanding of the evolving labor force and the needs of individuals with disabilities means that personnel have specialized training and experience that enables them to work effectively with individuals with disabilities to assist them to achieve competitive integrated employment and with employers who hire such individuals. Relevant personnel skills include, but are not limited to—
(A) Understanding the functional limitations of various disabilities and the vocational implications of functional limitations on employment, especially with regard to individuals whose disabilities may require specialized services or groups of individuals with disabilities who comprise an increasing proportion of the State VR caseloads, such as individuals with traumatic brain injury, post-traumatic stress syndrome, mental illnesses, autism, blindness or deaf-blindness;
(B) Vocational assessment tools and strategies and the interpretation of vocational assessment results, including, when appropriate, situational and work-based assessments and analysis of transferrable work skills;
(C) Counseling and guidance skills, including individual and group counseling and career guidance;
(D) Effective use of practices leading to competitive integrated employment, such as supported employment, customized employment, internships, apprenticeships, paid work experiences, etc.;
(E) Case management and employment services planning, including familiarity and use of the broad range of disability, employment, and social services programs in the state and local area, such as independent living programs, Social Security work incentives, and the Social Security Administration`s Ticket-to-Work program;
(F) Caseload management, including familiarity with effective caseload management practices and the use of any available automated or information technology resources;
(G) In-depth knowledge of labor market trends, occupational requirements, and other labor market information that provides information about employers, business practices, and employer personnel needs, such as data provided by the Bureau of Labor Statistics and the Department of Labor's O*NET occupational system;
(H) The use of labor market information for vocational rehabilitation counseling, vocational planning, and the provision of information to consumers for the purposes of making informed choices, business engagement and business relationships, and job development and job placement;
(I) The use of labor market information to support building and maintaining relationships with employers and to inform delivery of job development and job placement activities that respond to today's labor market;
(J) Understanding the effective utilization of rehabilitation technology and job accommodations;
(K) Training in understanding the provisions of the Americans with Disabilities Act and other employment discrimination and employment-related laws;
(L) Advocacy skills to modify attitudinal and environmental barriers to employment for individuals with disabilities, including those with the most significant disabilities;
(M) Skills to address cultural diversity among consumers, particularly affecting workplace settings, including racial and ethnic diversity and generational differences; and
(N) Understanding confidentiality and ethical standards and practices, especially related to new challenges in use of social media, new partnerships, and data sharing.
(d) Staff development. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must include the State agency's policies and describe the procedures and activities the State agency will undertake to ensure that all personnel employed by the State unit receive appropriate and adequate training, including a description of—
(i) A system of staff development for rehabilitation professionals and paraprofessionals within the State unit, particularly with respect to assessment, vocational counseling, job placement, and rehabilitation technology, including training implemented in coordination with entities carrying out State programs under section 4 of the Assistive Technology Act of 1998 (29 U.S.C. 3003);
(ii) Procedures for acquiring and disseminating to rehabilitation professionals and paraprofessionals within the designated State unit significant knowledge from research and other sources; and
(iii) Policies and procedures relating to the establishment and maintenance of standards to ensure that personnel, including rehabilitation professionals and paraprofessionals, needed within the designated State unit to carry out this part are appropriately and adequately prepared and trained.
(2) The specific training areas for staff development must be based on the needs of each State unit and may include, but are not limited to—
(i) Training regarding the Workforce Innovation and Opportunity Act and the amendments it made to the Rehabilitation Act of 1973;
(ii) Training with respect to the requirements of the Americans with Disabilities Act, the Individuals with Disabilities Education Act, and Social Security work incentive programs, including programs under the Ticket to Work and Work Incentives Improvement Act of 1999, training to facilitate informed choice under this program, and training to improve the provision of services to culturally diverse populations; and
(iii) Activities related to—
(A) Recruitment and retention of qualified rehabilitation personnel;
(B) Succession planning; and
(C) Leadership development and capacity building.
(e) Personnel to address individual communication needs. The vocational rehabilitation services portion of the Unified or Combined State Plan must describe how the designated State unit includes among its personnel, or obtains the services of—
(1) Individuals able to communicate in the native languages of applicants, recipients of services, and eligible individuals who have limited English proficiency; and
(2) Individuals able to communicate with applicants, recipients of services, and eligible individuals in appropriate modes of communication.
(f) Coordination with personnel development under the Individuals with Disabilities Education Act. The vocational rehabilitation services portion of the Unified or Combined State Plan must describe the procedures and activities the State agency will undertake to coordinate its comprehensive system of personnel development under the Act with personnel development under the Individuals with Disabilities Education Act.
The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State agency takes affirmative action to employ and advance in employment qualified individuals with disabilities covered under and on the same terms and conditions as stated in section 503 of the Act.
(a) Conduct of public meetings. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that prior to the adoption of any substantive policies or procedures governing the provision of vocational rehabilitation services under the Unified or Combined State Plan, the designated State agency conducts public meetings throughout the State to provide the public, including individuals with disabilities, an opportunity to comment on the policies or procedures.
(2) For purposes of this section, substantive changes to the policies or procedures governing the provision of vocational rehabilitation services that would require the conduct of public meetings are those that directly impact the nature and scope of the services provided to individuals with disabilities, or the manner in which individuals interact with the designated State agency or in matters related to the delivery of vocational rehabilitation services. Examples of substantive changes include, but are not limited to—
(i) Any changes to policies or procedures that fundamentally alter the rights and responsibilities of individuals with disabilities in the vocational rehabilitation process;
(ii) Organizational changes to the designated State agency or unit that would likely affect the manner in which services are delivered;
(iii) Any changes that affect the nature and scope of vocational rehabilitation services provided by the designated State agency or unit;
(iv) Changes in formal or informal dispute procedures;
(v) The adoption or amendment of policies instituting an order of selection; and
(vi) Changes to policies and procedures regarding the financial participation of eligible individuals.
(3) Non-substantive, e.g., administrative changes that would not require the need for public hearings include:
(i) Internal procedures that do not directly affect individuals receiving vocational rehabilitation services, such as payment processing or personnel procedures;
(ii) Changes to the case management system that only affect vocational rehabilitation personnel;
(iii) Changes in indirect cost allocations, internal fiscal review procedures, or routine reporting requirements;
(iv) Minor revisions to vocational rehabilitation procedures or policies to correct production errors, such as typographical and grammatical mistakes; and
(v) Changes to contract procedures that do not affect the delivery of vocational rehabilitation services.
(b) Notice requirements. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State agency, prior to conducting the public meetings, provides appropriate and sufficient notice throughout the State of the meetings in accordance with—
(1) State law governing public meetings; or
(2) In the absence of State law governing public meetings, procedures developed by the designated State agency in consultation with the State Rehabilitation Council.
(c) Summary of input of the State Rehabilitation Council. The vocational rehabilitation services portion of the Unified or Combined State Plan must provide a summary of the input of the State Rehabilitation Council, if the State agency has a Council, into the vocational rehabilitation services portion of the Unified or Combined State Plan and any amendment to that portion of the plan, in accordance with § 361.16(a)(2)(v).
(d) Special consultation requirements. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State agency actively consults with the director of the Client Assistance Program, the State Rehabilitation Council, if the State agency has a Council, and, as appropriate, Indian tribes, tribal organizations, and native Hawaiian organizations on its policies and procedures governing the provision of vocational rehabilitation services under the vocational rehabilitation services portion of the Unified or Combined State Plan.
(e) Appropriate modes of communication. The State unit must provide to the public, through appropriate modes of communication, notices of the public meetings, any materials furnished prior to or during the public meetings, and the policies and procedures governing the provision of vocational rehabilitation services under the vocational rehabilitation services portion of the Unified or Combined State Plan.
The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that, in connection with matters of general policy arising in the administration of the vocational rehabilitation services portion of the Unified or Combined State Plan, the designated State agency takes into account the views of—
(a) Individuals and groups of individuals who are recipients of vocational rehabilitation services or, as appropriate, the individuals' representatives;
(b) Personnel working in programs that provide vocational rehabilitation services to individuals with disabilities;
(c) Providers of vocational rehabilitation services to individuals with disabilities;
(d) The director of the Client Assistance Program; and
(e) The State Rehabilitation Council, if the State has a Council.
(a) Plans, policies, and procedures. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must contain plans, policies, and procedures for coordination between the designated State agency and education officials responsible for the public education of students with disabilities that are designed to facilitate the transition of students with disabilities from the receipt of educational services, including pre-employment transition services, in school to the receipt of vocational rehabilitation services under the responsibility of the designated State agency.
(2) These plans, policies, and procedures in paragraph (a)(1) of this section must provide for the development and approval of an individualized plan for employment in accordance with § 361.45 as early as possible during the transition planning process and not later than the time a student with a disability determined to be eligible for vocational rehabilitation services leaves the school setting or, if the designated State unit is operating under an order of selection, before each eligible student with a disability able to be served under the order leaves the school setting.
(b) Formal interagency agreement. The vocational rehabilitation services portion of the Unified or Combined State Plan must include information on a formal interagency agreement with the State educational agency that, at a minimum, provides for—
(1) Consultation and technical assistance, which may be provided using alternative means for meeting participation (such as video conferences and conference calls), to assist educational agencies in planning for the transition of students with disabilities from school to post-school activities, including pre-employment transition services and other vocational rehabilitation services;
(2) Transition planning by personnel of the designated State agency and educational agency personnel for students with disabilities that facilitates the development and implementation of their individualized education programs (IEPs) under section 614(d) of the Individuals with Disabilities Education Act;
(3) The roles and responsibilities, including financial responsibilities, of each agency, including provisions for determining State lead agencies and qualified personnel responsible for transition services and pre-employment transition services;
(4) Procedures for outreach to and identification of students with disabilities who are in need of transition services and pre-employment transition services. Outreach to these students should occur as early as possible during the transition planning process and must include, at a minimum, a description of the purpose of the vocational rehabilitation program, eligibility requirements, application procedures, and scope of services that may be provided to eligible individuals;
(5) Coordination necessary to satisfy documentation requirements set forth in 34 CFR part 397 with regard to students and youth with disabilities who are seeking subminimum wage employment; and
(6) Assurance that, in accordance with 34 CFR 397.31, neither the State educational agency nor the local educational agency will enter into a contract or other arrangement with an entity, as defined in 34 CFR 397.5(d), for the purpose of operating a program under which a youth with a disability is engaged in work compensated at a subminimum wage.
(c) Construction. Nothing in this part will be construed to reduce the obligation under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.) of a local educational agency or any other agency to provide or pay for any transition services that are also considered special education or related services and that are necessary for ensuring a free appropriate public education to children with disabilities within the State involved.
As a required partner in the one-stop service delivery system (which is part of the statewide workforce development system under title I of the Workforce Innovation and Opportunity Act), the designated State unit must satisfy all requirements set forth in regulations in subpart F of this part.
(a) Interagency cooperation. The vocational rehabilitation services portion of the Unified or Combined State Plan must describe the designated State agency's cooperation with and use of the services and facilities of Federal, State, and local agencies and programs, including the State programs carried out under section 4 of the Assistive Technology Act of 1998 (29 U.S.C. 3003), programs carried out by the Under Secretary for Rural Development of the Department of Agriculture, noneducational agencies serving out-of-school youth, and State use contracting programs, to the extent that such Federal, State, and local agencies and programs are not carrying out activities through the statewide workforce development system.
(b) Coordination with the Statewide Independent Living Council and independent living centers. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State unit, the Statewide Independent Living Council established under title VII, chapter 1, part B of the Act, and the independent living centers established under title VII, Chapter 1, Part C of the Act have developed working relationships and coordinate their activities.
(c) Coordination with Employers. The vocational rehabilitation services portion of the Unified or Combined State Plan must describe how the designated State unit will work with employers to identify competitive integrated employment opportunities and career exploration opportunities, in order to facilitate the provision of—
(1) Vocational rehabilitation services; and
(2) Transition services for youth with disabilities and students with disabilities, such as pre-employment transition services.
(d) Cooperative agreement with recipients of grants for services to American Indians—(1) General. In applicable cases, the vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State agency has entered into a formal cooperative agreement with each grant recipient in the State that receives funds under part C of the Act (American Indian Vocational Rehabilitation Services).
(2) Contents of formal cooperative agreement. The agreement required under paragraph (d)(1) of this section must describe strategies for collaboration and coordination in providing vocational rehabilitation services to American Indians who are individuals with disabilities, including—
(i) Strategies for interagency referral and information sharing that will assist in eligibility determinations and the development of individualized plans for employment;
(ii) Procedures for ensuring that American Indians who are individuals with disabilities and are living on or near a reservation or tribal service area are provided vocational rehabilitation services;
(iii) Strategies for the provision of transition planning by personnel of the designated State unit, the State educational agency, and the recipient of funds under part C of the Act, that will facilitate the development and approval of the individualized plan for employment under § 361.45; and
(iv) Provisions for sharing resources in cooperative studies and assessments, joint training activities, and other collaborative activities designed to improve the provision of services to American Indians who are individuals with disabilities.
(e) Reciprocal referral services between two designated State units in the same State. If there is a separate designated State unit for individuals who are blind, the two designated State units must establish reciprocal referral services, use each other's services and facilities to the extent feasible, jointly plan activities to improve services in the State for individuals with multiple impairments, including visual impairments, and otherwise cooperate to provide more effective services, including, if appropriate, entering into a written cooperative agreement.
(f) Cooperative agreement regarding individuals eligible for home and community-based waiver programs. The vocational rehabilitation services portion of the Unified or Combined State Plan must include an assurance that the designated State unit has entered into a formal cooperative agreement with the State agency responsible for administering the State Medicaid plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and the State agency with primary responsibility for providing services and supports for individuals with intellectual disabilities and individuals with developmental disabilities, with respect to the delivery of vocational rehabilitation services, including extended services, for individuals with the most significant disabilities who have been determined to be eligible for home and community-based services under a Medicaid waiver, Medicaid State plan amendment, or other authority related to a State Medicaid program.
(g) Interagency cooperation. The vocational rehabilitation services portion of the Unified or Combined State Plan shall describe how the designated State agency will collaborate with the State agency responsible for administering the State Medicaid plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), the State agency responsible for providing services for individuals with developmental disabilities, and the State agency responsible for providing mental health services, to develop opportunities for community-based employment in integrated settings, to the greatest extent practicable.
(h) Coordination with assistive technology programs. The vocational rehabilitation services portion of the Unified or Combined State Plan must include an assurance that the designated State unit, and the lead agency and implementing entity (if any) designated by the Governor of the State under section 4 of the Assistive Technology Act of 1998 (29 U.S.C. 3003), have developed working relationships and will enter into agreements for the coordination of their activities, including the referral of individuals with disabilities to programs and activities described in that section.
(i) Coordination with ticket to work and self-sufficiency program. The vocational rehabilitation services portion of the Unified or Combined State Plan must include an assurance that the designated State unit will coordinate activities with any other State agency that is functioning as an employment network under the Ticket to Work and Self-Sufficiency Program established under section 1148 of the Social Security Act (42 U.S.C. 1320b-19).
The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that services provided under the vocational rehabilitation services portion of the Unified or Combined State Plan will be available in all political subdivisions of the State, unless a waiver of statewideness is requested and approved in accordance with § 361.26.
(a) Availability. The State unit may provide services in one or more political subdivisions of the State that increase services or expand the scope of services that are available statewide under the vocational rehabilitation services portion of the Unified or Combined State Plan if—
(1) The non-Federal share of the cost of these services is met from funds provided by a local public agency, including funds contributed to a local public agency by a private agency, organization, or individual;
(2) The services are likely to promote the vocational rehabilitation of substantially larger numbers of individuals with disabilities or of individuals with disabilities with particular types of impairments; and
(3) For purposes other than those specified in § 361.60(b)(3)(i) and consistent with the requirements in § 361.60(b)(3)(ii), the State includes in its vocational rehabilitation services portion of the Unified or Combined State Plan, and the Secretary approves, a waiver of the statewideness requirement, in accordance with the requirements of paragraph (b) of this section.
(b) Request for waiver. The request for a waiver of statewideness must—
(1) Identify the types of services to be provided;
(2) Contain a written assurance from the local public agency that it will make available to the State unit the non-Federal share of funds;
(3) Contain a written assurance that State unit approval will be obtained for each proposed service before it is put into effect; and
(4) Contain a written assurance that all other requirements of the vocational rehabilitation services portion of the Unified or Combined State Plan, including a State's order of selection requirements, will apply to all services approved under the waiver.
(a) If the vocational rehabilitation services portion of the Unified or Combined State Plan provides for the designated State agency to share funding and administrative responsibility with another State agency or local public agency to carry out a joint program to provide services to individuals with disabilities, the State must submit to the Secretary for approval a plan that describes its shared funding and administrative arrangement.
(b) The plan under paragraph (a) of this section must include—
(1) A description of the nature and scope of the joint program;
(2) The services to be provided under the joint program;
(3) The respective roles of each participating agency in the administration and provision of services; and
(4) The share of the costs to be assumed by each agency.
(c) If a proposed joint program does not comply with the statewideness requirement in § 361.25, the State unit must obtain a waiver of statewideness, in accordance with § 361.26.
(a) The designated State unit may enter into a third-party cooperative arrangement for providing or contracting for the provision of vocational rehabilitation services with another State agency or a local public agency that is providing part or all of the non-Federal share in accordance with paragraph (c) of this section, if the designated State unit ensures that—
(1) The services provided by the cooperating agency are not the customary or typical services provided by that agency but are new services that have a vocational rehabilitation focus or existing services that have been modified, adapted, expanded, or reconfigured to have a vocational rehabilitation focus;
(2) The services provided by the cooperating agency are only available to applicants for, or recipients of, services from the designated State unit;
(3) Program expenditures and staff providing services under the cooperative arrangement are under the administrative supervision of the designated State unit; and
(4) All requirements of the vocational rehabilitation services portion of the Unified or Combined State Plan, including a State's order of selection, will apply to all services provided under the cooperative arrangement.
(b) If a third party cooperative arrangement does not comply with the statewideness requirement in § 361.25, the State unit must obtain a waiver of statewideness, in accordance with § 361.26.
(c) The cooperating agency's contribution toward the non-Federal share required under the arrangement, as set forth in paragraph (a) of this section, may be made through:
(1) Cash transfers to the designated State unit;
(2) Certified personnel expenditures for the time cooperating agency staff spent providing direct vocational rehabilitation services pursuant to a third-party cooperative arrangement that meets the requirements of this section. Certified personnel expenditures may include the allocable portion of staff salary and fringe benefits based upon the amount of time cooperating agency staff directly spent providing services under the arrangement; and
(3) other direct expenditures incurred by the cooperating agency for the sole purpose of providing services under this section pursuant to a third-party cooperative arrangement that—
(i) Meets the requirements of this section;
(ii) Are verifiable as being incurred under the third-party cooperative arrangement; and
(iii) Do not meet the definition of third-party in-kind contributions under 2 CFR 200.96.
(a) Comprehensive statewide assessment. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must include—
(i) The results of a comprehensive, statewide assessment, jointly conducted by the designated State unit and the State Rehabilitation Council (if the State unit has a Council) every three years. Results of the assessment are to be included in the vocational rehabilitation portion of the Unified or Combined State Plan, submitted in accordance with the requirements of § 361.10(a) and the joint regulations of this part. The comprehensive needs assessment must describe the rehabilitation needs of individuals with disabilities residing within the State, particularly the vocational rehabilitation services needs of—
(A) Individuals with the most significant disabilities, including their need for supported employment services;
(B) Individuals with disabilities who are minorities and individuals with disabilities who have been unserved or underserved by the vocational rehabilitation program carried out under this part;
(C) Individuals with disabilities served through other components of the statewide workforce development system as identified by those individuals and personnel assisting those individuals through the components of the system; and
(D) Youth with disabilities, and students with disabilities, including
(1) Their need for pre-employment transition services or other transition services; and
(2) An assessment of the needs of individuals with disabilities for transition services and pre-employment transition services, and the extent to which such services provided under this part are coordinated with transition services provided under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.) in order to meet the needs of individuals with disabilities.
(ii) An assessment of the need to establish, develop, or improve community rehabilitation programs within the State.
(2) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State will submit to the Secretary a report containing information regarding updates to the assessments under paragraph (a) of this section for any year in which the State updates the assessments at such time and in such manner as the Secretary determines appropriate.
(b) Annual estimates. The vocational rehabilitation services portion of the Unified or Combined State Plan must include, and must assure that the State will submit a report to the Secretary (at such time and in such manner determined appropriate by the Secretary) that includes, State estimates of—
(1) The number of individuals in the State who are eligible for services under this part;
(2) The number of eligible individuals who will receive services provided with funds provided under this part and under part § 363, including, if the designated State agency uses an order of selection in accordance with § 361.36, estimates of the number of individuals to be served under each priority category within the order;
(3) The number of individuals who are eligible for services under paragraph (b)(1) of this section, but are not receiving such services due to an order of selection; and
(4) The costs of the services described in paragraph (b)(2) of this section, including, if the designated State agency uses an order of selection, the service costs for each priority category within the order.
(c) Goals and priorities—(1) In general. The vocational rehabilitation services portion of the Unified or Combined State Plan must identify the goals and priorities of the State in carrying out the program.
(2) Council. The goals and priorities must be jointly developed, agreed to, reviewed annually, and, as necessary, revised by the designated State unit and the State Rehabilitation Council, if the State unit has a Council.
(3) Submission. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State will submit to the Secretary a report containing information regarding revisions in the goals and priorities for any year in which the State revises the goals and priorities at such time and in such manner as determined appropriate by the Secretary.
(4) Basis for goals and priorities. The State goals and priorities must be based on an analysis of—
(i) The comprehensive statewide assessment described in paragraph (a) of this section, including any updates to the assessment;
(ii) The performance of the State on the standards and indicators established under section 106 of the Act; and
(iii) Other available information on the operation and the effectiveness of the vocational rehabilitation program carried out in the State, including any reports received from the State Rehabilitation Council under § 361.17(h) and the findings and recommendations from monitoring activities conducted under section 107 of the Act.
(5) Service and outcome goals for categories in order of selection. If the designated State agency uses an order of selection in accordance with § 361.36, the vocational rehabilitation services portion of the Unified or Combined State Plan must identify the State's service and outcome goals and the time within which these goals may be achieved for individuals in each priority category within the order.
(d) Strategies. The vocational rehabilitation services portion of the Unified or Combined State Plan must describe the strategies the State will use to address the needs identified in the assessment conducted under paragraph (a) of this section and achieve the goals and priorities identified in paragraph (c) of this section, including—
(1) The methods to be used to expand and improve services to individuals with disabilities, including how a broad range of assistive technology services and assistive technology devices will be provided to those individuals at each stage of the rehabilitation process and how those services and devices will be provided to individuals with disabilities on a statewide basis;
(2) The methods to be used to improve and expand vocational rehabilitation services for students with disabilities, including the coordination of services designed to facilitate the transition of such students from the receipt of educational services in school to postsecondary life, including the receipt of vocational rehabilitation services under the Act, postsecondary education, employment, and pre-employment transition services;
(3) Strategies developed and implemented by the State to address the needs of students and youth with disabilities identified in the assessments described in paragraph (a) of this section and strategies to achieve the goals and priorities identified by the State to improve and expand vocational rehabilitation services for students and youth with disabilities on a statewide basis;
(4) Strategies to provide pre-employment transition services;
(5) Outreach procedures to identify and serve individuals with disabilities who are minorities and individuals with disabilities who have been unserved or underserved by the vocational rehabilitation program;
(6) As applicable, the plan of the State for establishing, developing, or improving community rehabilitation programs;
(7) Strategies to improve the performance of the State with respect to the evaluation standards and performance indicators established pursuant to section 106 of the Act and section 116 of Workforce Innovation and Opportunity Act; and
(8) Strategies for assisting other components of the statewide workforce development system in assisting individuals with disabilities.
(e) Evaluation and reports of progress. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must include—
(i) The results of an evaluation of the effectiveness of the vocational rehabilitation program; and
(ii) A joint report by the designated State unit and the State Rehabilitation Council, if the State unit has a Council, to the Secretary on the progress made in improving the effectiveness of the program from the previous year. This evaluation and joint report must include—
(A) An evaluation of the extent to which the goals and priorities identified in paragraph (c) of this section were achieved;
(B) A description of the strategies that contributed to the achievement of the goals and priorities;
(C) To the extent to which the goals and priorities were not achieved, a description of the factors that impeded that achievement; and
(D) An assessment of the performance of the State on the standards and indicators established pursuant to section 106 of the Act.
(2) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State unit and the State Rehabilitation Council, if the State unit has a Council, will jointly submit to the Secretary a report that contains the information described in paragraph (e)(1) of this section at such time and in such manner the Secretary determines appropriate.
The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State agency provides vocational rehabilitation services to American Indians who are individuals with disabilities residing in the State to the same extent as the designated State agency provides vocational rehabilitation services to other significant populations of individuals with disabilities residing in the State.
The vocational rehabilitation services portion of the Unified or Combined State Plan must describe the manner in which cooperative agreements with private nonprofit vocational rehabilitation service providers will be established.
The designated State unit may expend payments received under this part to educate and provide services to employers who have hired or are interested in hiring individuals with disabilities under the vocational rehabilitation program, including—
(a) Providing training and technical assistance to employers regarding the employment of individuals with disabilities, including disability awareness, and the requirements of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) and other employment-related laws;
(b) Working with employers to—
(1) Provide opportunities for work-based learning experiences (including internships, short-term employment, apprenticeships, and fellowships);
(2) Provide opportunities for pre-employment transition services, in accordance with the requirements under § 361.48(a);
(3) Recruit qualified applicants who are individuals with disabilities;
(4) Train employees who are individuals with disabilities; and
(5) Promote awareness of disability-related obstacles to continued employment.
(c) Providing consultation, technical assistance, and support to employers on workplace accommodations, assistive technology, and facilities and workplace access through collaboration with community partners and employers, across States and nationally, to enable the employers to recruit, job match, hire, and retain qualified individuals with disabilities who are recipients of vocational rehabilitation services under this part, or who are applicants for such services; and
(d) Assisting employers with utilizing available financial support for hiring or accommodating individuals with disabilities.
(a) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State has an acceptable plan under part 363 of this chapter that provides for the use of funds under that part to supplement funds under this part for the cost of services leading to supported employment.
(b) The supported employment plan, including any needed revisions, must be submitted as a supplement to the vocational rehabilitation services portion of the Unified or Combined State Plan submitted under this part.
(a) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State will reserve and use a portion of the funds allotted to the State under section 110 of the Act—
(1) For the development and implementation of innovative approaches to expand and improve the provision of vocational rehabilitation services to individuals with disabilities, particularly individuals with the most significant disabilities, including transition services for students and youth with disabilities and pre-employment transition services for students with disabilities, consistent with the findings of the comprehensive statewide assessment of the rehabilitation needs of individuals with disabilities under § 361.29(a) and the State's goals and priorities under § 361.29(c);
(2) To support the funding of the State Rehabilitation Council, if the State has a Council, consistent with the resource plan identified in § 361.17(i); and
(3) To support the funding of the Statewide Independent Living Council, consistent with the Statewide Independent Living Council resource plan prepared under Section 705(e)(1) of the Act.
(b) The vocational rehabilitation services portion of the Unified or Combined State Plan must—
(1) Describe how the reserved funds will be used; and
(2) Include a report describing how the reserved funds were used.
(a) General provisions—(1) The designated State unit either must be able to provide the full range of services listed in section 103(a) of the Act and § 361.48, as appropriate, to all eligible individuals or, in the event that vocational rehabilitation services cannot be provided to all eligible individuals in the State who apply for the services, include in the vocational rehabilitation services portion of the Unified or Combined State Plan the order to be followed in selecting eligible individuals to be provided vocational rehabilitation services.
(2) The ability of the designated State unit to provide the full range of vocational rehabilitation services to all eligible individuals must be supported by a determination that satisfies the requirements of paragraph (b) or (c) of this section and a determination that, on the basis of the designated State unit's projected fiscal and personnel resources and its assessment of the rehabilitation needs of individuals with significant disabilities within the State, it can—
(i) Continue to provide services to all individuals currently receiving services;
(ii) Provide assessment services to all individuals expected to apply for services in the next fiscal year;
(iii) Provide services to all individuals who are expected to be determined eligible in the next fiscal year; and
(iv) Meet all program requirements.
(3) If the designated State unit is unable to provide the full range of vocational rehabilitation services to all eligible individuals in the State who apply for the services, the vocational rehabilitation services portion of the Unified or Combined State Plan must—
(i) Show the order to be followed in selecting eligible individuals to be provided vocational rehabilitation services;
(ii) Provide a justification for the order of selection;
(iii) Identify service and outcome goals and the time within which the goals may be achieved for individuals in each priority category within the order, as required under § 361.29(c)(5);
(iv) Assure that—
(A) In accordance with criteria established by the State for the order of selection, individuals with the most significant disabilities will be selected first for the provision of vocational rehabilitation services; and
(B) Individuals who do not meet the order of selection criteria will have access to services provided through the information and referral system established under § 361.37; and
(v) State whether the designated State unit will elect to serve, in its discretion, eligible individuals (whether or not the individuals are receiving vocational rehabilitation services under the order of selection) who require specific services or equipment to maintain employment, notwithstanding the assurance provided pursuant to paragraph (3)(iv)(A) of this section.
(b) Basis for assurance that services can be provided to all eligible individuals. (1) For a designated State unit that determined, for the current fiscal year and the preceding fiscal year, that it is able to provide the full range of services, as appropriate, to all eligible individuals, the State unit, during the current fiscal and preceding fiscal year, must have in fact—
(i) Provided assessment services to all applicants and the full range of services, as appropriate, to all eligible individuals;
(ii) Made referral forms widely available throughout the State;
(iii) Conducted outreach efforts to identify and serve individuals with disabilities who have been unserved or underserved by the vocational rehabilitation system; and
(iv) Not delayed, through waiting lists or other means, determinations of eligibility, the development of individualized plans for employment for individuals determined eligible for vocational rehabilitation services, or the provision of services for eligible individuals for whom individualized plans for employment have been developed.
(2) For a designated State unit that was unable to provide the full range of services to all eligible individuals during the current or preceding fiscal year or that has not met the requirements in paragraph (b)(1) of this section, the determination that the designated State unit is able to provide the full range of vocational rehabilitation services to all eligible individuals in the next fiscal year must be based on—
(i) A demonstration that circumstances have changed that will allow the designated State unit to meet the requirements of paragraph (a)(2) of this section in the next fiscal year, including—
(A) An estimate of the number of and projected costs of serving, in the next fiscal year, individuals with existing individualized plans for employment;
(B) The projected number of individuals with disabilities who will apply for services and will be determined eligible in the next fiscal year and the projected costs of serving those individuals;
(C) The projected costs of administering the program in the next fiscal year, including, but not limited to, costs of staff salaries and benefits, outreach activities, and required statewide studies; and
(D) The projected revenues and projected number of qualified personnel for the program in the next fiscal year.
(ii) Comparable data, as relevant, for the current or preceding fiscal year, or for both years, of the costs listed in paragraphs (b)(2)(i)(A) through (C) of this section and the resources identified in paragraph (b)(2)(i)(D) of this section and an explanation of any projected increases or decreases in these costs and resources; and
(iii) A determination that the projected revenues and the projected number of qualified personnel for the program in the next fiscal year are adequate to cover the costs identified in paragraphs (b)(2)(i)(A) through (C) of this section to ensure the provision of the full range of services, as appropriate, to all eligible individuals.
(c) Determining need for establishing and implementing an order of selection. (1) The designated State unit must determine, prior to the beginning of each fiscal year, whether to establish and implement an order of selection.
(2) If the designated State unit determines that it does not need to establish an order of selection, it must reevaluate this determination whenever changed circumstances during the course of a fiscal year, such as a decrease in its fiscal or personnel resources or an increase in its program costs, indicate that it may no longer be able to provide the full range of services, as appropriate, to all eligible individuals, as described in paragraph (a)(2) of this section.
(3) If a designated State unit establishes an order of selection, but determines that it does not need to implement that order at the beginning of the fiscal year, it must continue to meet the requirements of paragraph (a)(2) of this section, or it must implement the order of selection by closing one or more priority categories.
(d) Establishing an order of selection—(1) Basis for order of selection. An order of selection must be based on a refinement of the three criteria in the definition of individual with a significant disability in section 7(21)(A) of the Act and § 361.5(c)(30).
(2) Factors that cannot be used in determining order of selection of eligible individuals. An order of selection may not be based on any other factors, including—
(i) Any duration of residency requirement, provided the individual is present in the State;
(ii) Type of disability;
(iii) Age, sex, race, color, or national origin;
(iv) Source of referral;
(v) Type of expected employment outcome;
(vi) The need for specific services except those services provided in accordance with 361.36(a)(3)(v), or anticipated cost of services required by an individual; or
(vii) The income level of an individual or an individual's family.
(e) Administrative requirements. In administering the order of selection, the designated State unit must—
(1) Implement the order of selection on a statewide basis;
(2) Notify all eligible individuals of the priority categories in a State's order of selection, their assignment to a particular category, and their right to appeal their category assignment;
(3) Continue to provide services to any recipient who has begun to receive services irrespective of the severity of the individual's disability as follows—
(i) The designated State unit must continue to provide pre-employment transition services to students with disabilities who were receiving such services prior to being determined eligible for vocational rehabilitation services; and
(ii) The designated State unit must continue to provide to an eligible individual all needed services listed on the individualized plan for employment if the individual had begun receiving such services prior to the effective date of the State's order of selection; and
(4) Ensure that its funding arrangements for providing services under the vocational rehabilitation services portion of the Unified or Combined State Plan, including third-party arrangements and awards under the establishment authority, are consistent with the order of selection. If any funding arrangements are inconsistent with the order of selection, the designated State unit must renegotiate these funding arrangements so that they are consistent with the order of selection.
(f) State Rehabilitation Council. The designated State unit must consult with the State Rehabilitation Council, if the State unit has a Council, regarding the—
(1) Need to establish an order of selection, including any reevaluation of the need under paragraph (c)(2) of this section;
(2) Priority categories of the particular order of selection;
(3) Criteria for determining individuals with the most significant disabilities; and
(4) Administration of the order of selection.
(a) General provisions. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that—
(1) The designated State agency will implement an information and referral system adequate to ensure that individuals with disabilities, including eligible individuals who do not meet the agency's order of selection criteria for receiving vocational rehabilitation services if the agency is operating on an order of selection, are provided accurate vocational rehabilitation information and guidance (which may include counseling and referral for job placement) using appropriate modes of communication to assist them in preparing for, securing, retaining, advancing in, or regaining employment; and
(2) The designated State agency will refer individuals with disabilities to other appropriate Federal and State programs, including other components of the statewide workforce development system.
(b) The designated State unit must refer to appropriate programs and service providers best suited to address the specific rehabilitation, independent living and employment needs of an individual with a disability who makes an informed choice not to pursue an employment outcome under the vocational rehabilitation program, as defined in § 361.5(c)(15). Before making the referral required by this paragraph, the State unit must—
(1) Consistent with § 361.42(a)(4)(i), explain to the individual that the purpose of the vocational rehabilitation program is to assist individuals to achieve an employment outcome as defined in § 361.5(c)(15);
(2) Consistent with § 361.52, provide the individual with information concerning the availability of employment options, and of vocational rehabilitation services, to assist the individual to achieve an appropriate employment outcome;
(3) Inform the individual that services under the vocational rehabilitation program can be provided to eligible individuals in an extended employment setting if necessary for purposes of training or otherwise preparing for employment in an integrated setting;
(4) Inform the individual that, if he or she initially chooses not to pursue an employment outcome as defined in § 361.5(c)(15), he or she can seek services from the designated State unit at a later date if, at that time, he or she chooses to pursue an employment outcome; and
(5) Refer the individual, as appropriate, to the Social Security Administration in order to obtain information concerning the ability of individuals with disabilities to work while receiving benefits from the Social Security Administration.
(c) Criteria for appropriate referrals. In making the referrals identified in paragraph (a)(2) of this section, the designated State unit must—
(1) Refer the individual to Federal or State programs, including programs carried out by other components of the statewide workforce development system, best suited to address the specific employment needs of an individual with a disability; and
(2) Provide the individual who is being referred—
(i) A notice of the referral by the designated State agency to the agency carrying out the program;
(ii) Information identifying a specific point of contact within the agency to which the individual is being referred; and
(iii) Information and advice regarding the most suitable services to assist the individual to prepare for, secure, retain, or regain employment.
(d) Order of selection. In providing the information and referral services under this section to eligible individuals who are not in the priority category or categories to receive vocational rehabilitation services under the State's order of selection, the State unit must identify, as part of its reporting under section 101(a)(10) of the Act and § 361.40, the number of eligible individuals who did not meet the agency's order of selection criteria for receiving vocational rehabilitation services and did receive information and referral services under this section.
(a) General provisions. (1) The State agency and the State unit must adopt and implement written policies and procedures to safeguard the confidentiality of all personal information, including photographs and lists of names. These policies and procedures must ensure that—
(i) Specific safeguards are established to protect current and stored personal information, including a requirement that data only be released when governed by a written agreement between the designated State unit and receiving entity under paragraphs (d) and (e)(1) of this section, which addresses the requirements in this section;
(ii) All applicants and recipients of services and, as appropriate, those individuals' representatives, service providers, cooperating agencies, and interested persons are informed through appropriate modes of communication of the confidentiality of personal information and the conditions for accessing and releasing this information;
(iii) All applicants and recipients of services or their representatives are informed about the State unit's need to collect personal information and the policies governing its use, including—
(A) Identification of the authority under which information is collected;
(B) Explanation of the principal purposes for which the State unit intends to use or release the information;
(C) Explanation of whether providing requested information to the State unit is mandatory or voluntary and the effects of not providing requested information;
(D) Identification of those situations in which the State unit requires or does not require informed written consent of the individual before information may be released; and
(E) Identification of other agencies to which information is routinely released;
(iv) An explanation of State policies and procedures affecting personal information will be provided to each individual in that individual's native language or through the appropriate mode of communication; and
(v) These policies and procedures provide no fewer protections for individuals than State laws and regulations.
(2) The State unit may establish reasonable fees to cover extraordinary costs of duplicating records or making extensive searches and must establish policies and procedures governing access to records.
(b) State program use. All personal information in the possession of the State agency or the designated State unit must be used only for the purposes directly connected with the administration of the vocational rehabilitation program. Information containing identifiable personal information may not be shared with advisory or other bodies that do not have official responsibility for administration of the program. In the administration of the program, the State unit may obtain personal information from service providers and cooperating agencies under assurances that the information may not be further divulged, except as provided under paragraphs (c), (d), and (e) of this section.
(c) Release to applicants and recipients of services. (1) Except as provided in paragraphs (c)(2) and (3) of this section, if requested in writing by an applicant or recipient of services, the State unit must make all requested information in that individual's record of services accessible to and must release the information to the individual or the individual's representative in a timely manner.
(2) Medical, psychological, or other information that the State unit determines may be harmful to the individual may not be released directly to the individual, but must be provided to the individual through a third party chosen by the individual, which may include, among others, an advocate, a family member, or a qualified medical or mental health professional, unless a representative has been appointed by a court to represent the individual, in which case the information must be released to the court-appointed representative.
(3) If personal information has been obtained from another agency or organization, it may be released only by, or under the conditions established by, the other agency or organization.
(4) An applicant or recipient of services who believes that information in the individual's record of services is inaccurate or misleading may request that the designated State unit amend the information. If the information is not amended, the request for an amendment must be documented in the record of services, consistent with § 361.47(a)(12).
(d) Release for audit, evaluation, and research. Personal information may be released to an organization, agency, or individual engaged in audit, evaluation, or research only for purposes directly connected with the administration of the vocational rehabilitation program or for purposes that would significantly improve the quality of life for applicants and recipients of services and only if, in accordance with a written agreement, the organization, agency, or individual assures that—
(1) The information will be used only for the purposes for which it is being provided;
(2) The information will be released only to persons officially connected with the audit, evaluation, or research;
(3) The information will not be released to the involved individual;
(4) The information will be managed in a manner to safeguard confidentiality; and
(5) The final product will not reveal any personal identifying information without the informed written consent of the involved individual or the individual's representative.
(e) Release to other programs or authorities. (1) Upon receiving the informed written consent of the individual or, if appropriate, the individual's representative, the State unit may release personal information to another agency or organization, in accordance with a written agreement, for its program purposes only to the extent that the information may be released to the involved individual or the individual's representative and only to the extent that the other agency or organization demonstrates that the information requested is necessary for its program.
(2) Medical or psychological information that the State unit determines may be harmful to the individual may be released if the other agency or organization assures the State unit that the information will be used only for the purpose for which it is being provided and will not be further released to the individual.
(3) The State unit must release personal information if required by Federal law or regulations.
(4) The State unit must release personal information in response to investigations in connection with law enforcement, fraud, or abuse, unless expressly prohibited by Federal or State laws or regulations, and in response to an order issued by a judge, magistrate, or other authorized judicial officer.
(5) The State unit also may release personal information in order to protect the individual or others if the individual poses a threat to his or her safety or to the safety of others.
The designated State unit must, upon request, identify those regulations and policies relating to the administration or operation of its vocational rehabilitation program that are State-imposed, including any regulations or policy based on State interpretation of any Federal law, regulation, or guideline.
(a) Reports. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State agency will submit reports, including reports required under sections 13, 14, and 101(a)(10) of the Act—
(i) In the form and level of detail and at the time required by the Secretary regarding applicants for and eligible individuals receiving services, including students receiving pre-employment transition services in accordance with § 361.48(a); and
(ii) In a manner that provides a complete count (other than the information obtained through sampling consistent with section 101(a)(10)(E) of the Act) of the applicants and eligible individuals to—
(A) Permit the greatest possible cross-classification of data; and
(B) Protect the confidentiality of the identity of each individual.
(2) The designated State agency must comply with any requirements necessary to ensure the accuracy and verification of those reports.
(b) Evaluation standards and performance indicators—(1) Standards and indicators. The evaluation standards and performance indicators for the vocational rehabilitation program carried out under this part are subject to the performance accountability provisions described in section 116(b) of the Workforce Innovation and Opportunity Act and implemented in regulations set forth in subpart E of this part.
(2) Compliance. A State's compliance with common performance measures and any necessary corrective actions will be determined in accordance with regulations set forth in subpart E of this part.
(a) Referrals. The designated State unit must establish and implement standards for the prompt and equitable handling of referrals of individuals for vocational rehabilitation services, including referrals of individuals made through the one-stop service delivery systems under section 121 of the Workforce Innovation and Opportunity Act. The standards must include timelines for making good faith efforts to inform these individuals of application requirements and to gather information necessary to initiate an assessment for determining eligibility and priority for services.
(b) Applications. (1) Once an individual has submitted an application for vocational rehabilitation services, including applications made through common intake procedures in one-stop centers under section 121 of the Workforce Innovation and Opportunity Act, an eligibility determination must be made within 60 days, unless—
(i) Exceptional and unforeseen circumstances beyond the control of the designated State unit preclude making an eligibility determination within 60 days and the designated State unit and the individual agree to a specific extension of time; or
(ii) An exploration of the individual's abilities, capabilities, and capacity to perform in work situations is carried out in accordance with § 361.42(e).
(2) An individual is considered to have submitted an application when the individual or the individual's representative, as appropriate—
(i)(A) Has completed and signed an agency application form;
(B) Has completed a common intake application form in a one-stop center requesting vocational rehabilitation services; or
(C) Has otherwise requested services from the designated State unit;
(ii) Has provided to the designated State unit information necessary to initiate an assessment to determine eligibility and priority for services; and
(iii) Is available to complete the assessment process.
(3) The designated State unit must ensure that its application forms are widely available throughout the State, particularly in the one-stop centers under section 121 of the Workforce Innovation and Opportunity Act.
In order to determine whether an individual is eligible for vocational rehabilitation services and the individual's priority under an order of selection for services (if the State is operating under an order of selection), the designated State unit must conduct an assessment for determining eligibility and priority for services. The assessment must be conducted in the most integrated setting possible, consistent with the individual's needs and informed choice, and in accordance with the following provisions:
(a) Eligibility requirements—(1) Basic requirements. The designated State unit's determination of an applicant's eligibility for vocational rehabilitation services must be based only on the following requirements:
(i) A determination by qualified personnel that the applicant has a physical or mental impairment;
(ii) A determination by qualified personnel that the applicant's physical or mental impairment constitutes or results in a substantial impediment to employment for the applicant; and
(iii) A determination by a qualified vocational rehabilitation counselor employed by the designated State unit that the applicant requires vocational rehabilitation services to prepare for, secure, retain, advance in, or regain employment that is consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interest, and informed choice. For purposes of an assessment for determining eligibility and vocational rehabilitation needs under this part, an individual is presumed to have a goal of an employment outcome.
(2) Presumption of benefit. The designated State unit must presume that an applicant who meets the eligibility requirements in paragraphs (a)(1)(i) and (ii) of this section can benefit in terms of an employment outcome.
(3) Presumption of eligibility for Social Security recipients and beneficiaries. (i) Any applicant who has been determined eligible for Social Security benefits under title II or title XVI of the Social Security Act is—
(A) Presumed eligible for vocational rehabilitation services under paragraphs (a)(1) and (2) of this section; and
(B) Considered an individual with a significant disability as defined in § 361.5(c)(29).
(ii) If an applicant for vocational rehabilitation services asserts that he or she is eligible for Social Security benefits under title II or title XVI of the Social Security Act (and, therefore, is presumed eligible for vocational rehabilitation services under paragraph (a)(3)(i)(A) of this section), but is unable to provide appropriate evidence, such as an award letter, to support that assertion, the State unit must verify the applicant's eligibility under title II or title XVI of the Social Security Act by contacting the Social Security Administration. This verification must be made within a reasonable period of time that enables the State unit to determine the applicant's eligibility for vocational rehabilitation services within 60 days of the individual submitting an application for services in accordance with § 361.41(b)(2).
(4) Achievement of an employment outcome. Any eligible individual, including an individual whose eligibility for vocational rehabilitation services is based on the individual being eligible for Social Security benefits under title II or title XVI of the Social Security Act, must intend to achieve an employment outcome that is consistent with the applicant's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
(i) The State unit is responsible for informing individuals, through its application process for vocational rehabilitation services, that individuals who receive services under the program must intend to achieve an employment outcome.
(ii) The applicant's completion of the application process for vocational rehabilitation services is sufficient evidence of the individual's intent to achieve an employment outcome, and no additional demonstration on the part of the applicant is required for purposes of satisfying paragraph (a)(4) of this section.
(5) Interpretation. Nothing in this section, including paragraph (a)(3)(i), is to be construed to create an entitlement to any vocational rehabilitation service.
(b) Interim determination of eligibility. (1) The designated State unit may initiate the provision of vocational rehabilitation services for an applicant on the basis of an interim determination of eligibility prior to the 60-day period described in § 361.41(b)(2).
(2) If a State chooses to make interim determinations of eligibility, the designated State unit must—
(i) Establish criteria and conditions for making those determinations;
(ii) Develop and implement procedures for making the determinations; and
(iii) Determine the scope of services that may be provided pending the final determination of eligibility.
(3) If a State elects to use an interim eligibility determination, the designated State unit must make a final determination of eligibility within 60 days of the individual submitting an application for services in accordance with § 361.41(b)(2).
(c) Prohibited factors. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the State unit will not impose, as part of determining eligibility under this section, a duration of residence requirement that excludes from services any applicant who is present in the State. The designated State unit may not require the applicant to demonstrate a presence in the State through the production of any documentation that under State or local law, or practical circumstances, results in a de facto duration of residence requirement.
(2) In making a determination of eligibility under this section, the designated State unit also must ensure that—
(i) No applicant or group of applicants is excluded or found ineligible solely on the basis of the type of disability; and
(ii) The eligibility requirements are applied without regard to the—
(A) Age, sex, race, color, or national origin of the applicant;
(B) Type of expected employment outcome;
(C) Source of referral for vocational rehabilitation services;
(D) Particular service needs or anticipated cost of services required by an applicant or the income level of an applicant or applicant's family;
(E) Applicants' employment history or current employment status; and
(F) Applicants' educational status or current educational credential.
(d) Review and assessment of data for eligibility determination. Except as provided in paragraph (e) of this section, the designated State unit—
(1) Must base its determination of each of the basic eligibility requirements in paragraph (a) of this section on—
(i) A review and assessment of existing data, including counselor observations, education records, information provided by the individual or the individual's family, particularly information used by education officials, and determinations made by officials of other agencies; and
(ii) To the extent existing data do not describe the current functioning of the individual or are unavailable, insufficient, or inappropriate to make an eligibility determination, an assessment of additional data resulting from the provision of vocational rehabilitation services, including trial work experiences, assistive technology devices and services, personal assistance services, and any other support services that are necessary to determine whether an individual is eligible; and
(2) Must base its presumption under paragraph (a)(3)(i) of this section that an applicant who has been determined eligible for Social Security benefits under title II or title XVI of the Social Security Act satisfies each of the basic eligibility requirements in paragraph (a) of this section on determinations made by the Social Security Administration.
(e) Trial work experiences for individuals with significant disabilities. (1) Prior to any determination that an individual with a disability is unable to benefit from vocational rehabilitation services in terms of an employment outcome because of the severity of that individual's disability or that the individual is ineligible for vocational rehabilitation services, the designated State unit must conduct an exploration of the individual's abilities, capabilities, and capacity to perform in realistic work situations.
(2)(i) The designated State unit must develop a written plan to assess periodically the individual's abilities, capabilities, and capacity to perform in competitive integrated work situations through the use of trial work experiences, which must be provided in competitive integrated employment settings to the maximum extent possible, consistent with the informed choice and rehabilitation needs of the individual.
(ii) Trial work experiences include supported employment, on-the-job training, and other experiences using realistic integrated work settings.
(iii) Trial work experiences must be of sufficient variety and over a sufficient period of time for the designated State unit to determine that—
(A) There is sufficient evidence to conclude that the individual can benefit from the provision of vocational rehabilitation services in terms of an employment outcome; or
(B) There is clear and convincing evidence that due to the severity of the individual's disability, the individual is incapable of benefitting from the provision of vocational rehabilitation services in terms of an employment outcome; and
(iv) The designated State unit must provide appropriate supports, including, but not limited to, assistive technology devices and services and personal assistance services, to accommodate the rehabilitation needs of the individual during the trial work experiences.
(f) Data for determination of priority for services under an order of selection. If the designated State unit is operating under an order of selection for services, as provided in § 361.36, the State unit must base its priority assignments on—
(1) A review of the data that was developed under paragraphs (d) and (e) of this section to make the eligibility determination; and
(2) An assessment of additional data, to the extent necessary.
Clear and convincing evidence means that the designated State unit has a high degree of certainty before it can conclude that an individual is incapable of benefiting from services in terms of an employment outcome. The clear and convincing standard constitutes the highest standard used in our civil system of law and is to be individually applied on a case-by-case basis. The term clear means unequivocal. For example, the use of an intelligence test result alone would not constitute clear and convincing evidence. Clear and convincing evidence might include a description of assessments, including situational assessments and supported employment assessments, from service providers who have concluded that they would be unable to meet the individual's needs due to the severity of the individual's disability. The demonstration of “clear and convincing evidence” must include, if appropriate, a functional assessment of skill development activities, with any necessary supports (including assistive technology), in real life settings. (S. Rep. No. 357, 102d Cong., 2d. Sess. 37-38 (1992))
If the State unit determines that an applicant is ineligible for vocational rehabilitation services or determines that an individual receiving services under an individualized plan for employment is no longer eligible for services, the State unit must—
(a) Make the determination only after providing an opportunity for full consultation with the individual or, as appropriate, with the individual's representative;
(b) Inform the individual in writing, supplemented as necessary by other appropriate modes of communication consistent with the informed choice of the individual, of the ineligibility determination, including the reasons for that determination, the requirements under this section, and the means by which the individual may express and seek remedy for any dissatisfaction, including the procedures for review of State unit personnel determinations in accordance with § 361.57;
(c) Provide the individual with a description of services available from a client assistance program established under 34 CFR part 370 and information on how to contact that program;
(d) Refer the individual—
(1) To other programs that are part of the one-stop service delivery system under the Workforce Innovation and Opportunity Act that can address the individual's training or employment-related needs; or
(2) To Federal, State, or local programs or service providers, including, as appropriate, independent living programs and extended employment providers, best suited to meet their rehabilitation needs, if the ineligibility determination is based on a finding that the individual has chosen not to pursue, or is incapable of achieving, an employment outcome as defined in § 361.5(c)(15).
(e) Review within 12 months and annually thereafter if requested by the individual or, if appropriate, by the individual's representative any ineligibility determination that is based on a finding that the individual is incapable of achieving an employment outcome. This review need not be conducted in situations in which the individual has refused it, the individual is no longer present in the State, the individual's whereabouts are unknown, or the individual's medical condition is rapidly progressive or terminal.
The designated State unit may not close an applicant's record of services prior to making an eligibility determination unless the applicant declines to participate in, or is unavailable to complete, an assessment for determining eligibility and priority for services, and the State unit has made a reasonable number of attempts to contact the applicant or, if appropriate, the applicant's representative to encourage the applicant's participation.
(a) General requirements. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that—
(1) An individualized plan for employment meeting the requirements of this section and § 361.46 is developed and implemented in a timely manner for each individual determined to be eligible for vocational rehabilitation services or, if the designated State unit is operating under an order of selection in accordance with § 361.36, for each eligible individual to whom the State unit is able to provide services; and
(2) Services will be provided in accordance with the provisions of the individualized plan for employment.
(b) Purpose. (1) The designated State unit must conduct an assessment for determining vocational rehabilitation needs, if appropriate, for each eligible individual or, if the State is operating under an order of selection, for each eligible individual to whom the State is able to provide services. The purpose of this assessment is to determine the employment outcome, and the nature and scope of vocational rehabilitation services to be included in the individualized plan for employment.
(2) The individualized plan for employment must be designed to achieve a specific employment outcome, as defined in § 361.5(c)(15), that is selected by the individual consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
(c) Required information. The State unit must provide the following information to each eligible individual or, as appropriate, the individual's representative, in writing and, if appropriate, in the native language or mode of communication of the individual or the individual's representative:
(1) Options for developing an individualized plan for employment. Information on the available options for developing the individualized plan for employment, including the option that an eligible individual or, as appropriate, the individual's representative may develop all or part of the individualized plan for employment—
(i) Without assistance from the State unit or other entity; or
(ii) With assistance from—
(A) A qualified vocational rehabilitation counselor employed by the State unit;
(B) A qualified vocational rehabilitation counselor who is not employed by the State unit;
(C) A disability advocacy organization; or
(D) Resources other than those in paragraph (c)(1)(ii)(A) through (C) of this section.
(2) Additional information. Additional information to assist the eligible individual or, as appropriate, the individual's representative in developing the individualized plan for employment, including—
(i) Information describing the full range of components that must be included in an individualized plan for employment;
(ii) As appropriate to each eligible individual—
(A) An explanation of agency guidelines and criteria for determining an eligible individual's financial commitments under an individualized plan for employment;
(B) Information on the availability of assistance in completing State unit forms required as part of the individualized plan for employment; and
(C) Additional information that the eligible individual requests or the State unit determines to be necessary to the development of the individualized plan for employment;
(iii) A description of the rights and remedies available to the individual, including, if appropriate, recourse to the processes described in § 361.57; and
(iv) A description of the availability of a client assistance program established under part 370 of this chapter and information on how to contact the client assistance program.
(3) Individuals entitled to benefits under title II or XVI of the Social Security Act. For individuals entitled to benefits under title II or XVI of the Social Security Act on the basis of a disability or blindness, the State unit must provide to the individual general information on additional supports and assistance for individuals with disabilities desiring to enter the workforce, including assistance with benefits planning.
(d) Mandatory procedures. The designated State unit must ensure that—
(1) The individualized plan for employment is a written document prepared on forms provided by the State unit;
(2) The individualized plan for employment is developed and implemented in a manner that gives eligible individuals the opportunity to exercise informed choice, consistent with § 361.52, in selecting—
(i) The employment outcome, including the employment setting;
(ii) The specific vocational rehabilitation services needed to achieve the employment outcome, including the settings in which services will be provided;
(iii) The entity or entities that will provide the vocational rehabilitation services; and
(iv) The methods available for procuring the services;
(3) The individualized plan for employment is—
(i) Agreed to and signed by the eligible individual or, as appropriate, the individual's representative; and
(ii) Approved and signed by a qualified vocational rehabilitation counselor employed by the designated State unit;
(4) A copy of the individualized plan for employment and a copy of any amendments to the individualized plan for employment are provided to the eligible individual or, as appropriate, to the individual's representative, in writing and, if appropriate, in the native language or mode of communication of the individual or, as appropriate, the individual's representative;
(5) The individualized plan for employment is reviewed at least annually by a qualified vocational rehabilitation counselor and the eligible individual or, as appropriate, the individual's representative to assess the eligible individual's progress in achieving the identified employment outcome;
(6) The individualized plan for employment is amended, as necessary, by the individual or, as appropriate, the individual's representative, in collaboration with a representative of the State unit or a qualified vocational rehabilitation counselor (to the extent determined to be appropriate by the individual), if there are substantive changes in the employment outcome, the vocational rehabilitation services to be provided, or the providers of the vocational rehabilitation services;
(7) Amendments to the individualized plan for employment do not take effect until agreed to and signed by the eligible individual or, as appropriate, the individual's representative and by a qualified vocational rehabilitation counselor employed by the designated State unit;
(8) The individualized plan for employment is amended, as necessary, to include the postemployment services and service providers that are necessary for the individual to maintain, advance in or regain employment, consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice; and
(9) An individualized plan for employment for a student with a disability is developed—
(i) In consideration of the student's individualized education program or 504 services, as applicable; and
(ii) In accordance with the plans, policies, procedures, and terms of the interagency agreement required under § 361.22.
(e) Standards for developing the individualized plan for employment. The individualized plan for employment must be developed as soon as possible, but not later than 90 days after the date of determination of eligibility, unless the State unit and the eligible individual agree to the extension of that deadline to a specific date by which the individualized plan for employment must be completed.
(f) Data for preparing the individualized plan for employment. (1) Preparation without comprehensive assessment. To the extent possible, the employment outcome and the nature and scope of rehabilitation services to be included in the individual's individualized plan for employment must be determined based on the data used for the assessment of eligibility and priority for services under § 361.42.
(2) Preparation based on comprehensive assessment.
(i) If additional data are necessary to determine the employment outcome and the nature and scope of services to be included in the individualized plan for employment of an eligible individual, the State unit must conduct a comprehensive assessment of the unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice, including the need for supported employment services, of the eligible individual, in the most integrated setting possible, consistent with the informed choice of the individual in accordance with the provisions of § 361.5(c)(5)(ii).
(ii) In preparing the comprehensive assessment, the State unit must use, to the maximum extent possible and appropriate and in accordance with confidentiality requirements, existing information that is current as of the date of the development of the individualized plan for employment, including information—
(A) Available from other programs and providers, particularly information used by education officials and the Social Security Administration;
(B) Provided by the individual and the individual's family; and
(C) Obtained under the assessment for determining the individual's eligibility and vocational rehabilitation needs.
(a) Mandatory components. Regardless of the approach in § 361.45(c)(1) that an eligible individual selects for purposes of developing the individualized plan for employment, each individualized plan for employment must—
(1) Include a description of the specific employment outcome, as defined in § 361.5(c)(15), that is chosen by the eligible individual and is consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, career interests, and informed choice consistent with the general goal of competitive integrated employment (except that in the case of an eligible individual who is a student or a youth with a disability, the description may be a description of the individual's projected post-school employment outcome);
(2) Include a description under § 361.48 of—
(i) These specific rehabilitation services needed to achieve the employment outcome, including, as appropriate, the provision of assistive technology devices, assistive technology services, and personal assistance services, including training in the management of those services; and
(ii) In the case of a plan for an eligible individual that is a student or youth with a disability, the specific transition services and supports needed to achieve the individual's employment outcome or projected post-school employment outcome.
(3) Provide for services in the most integrated setting that is appropriate for the services involved and is consistent with the informed choice of the eligible individual;
(4) Include timelines for the achievement of the employment outcome and for the initiation of services;
(5) Include a description of the entity or entities chosen by the eligible individual or, as appropriate, the individual's representative that will provide the vocational rehabilitation services and the methods used to procure those services;
(6) Include a description of the criteria that will be used to evaluate progress toward achievement of the employment outcome; and
(7) Include the terms and conditions of the individualized plan for employment, including, as appropriate, information describing—
(i) The responsibilities of the designated State unit;
(ii) The responsibilities of the eligible individual, including—
(A) The responsibilities the individual will assume in relation to achieving the employment outcome;
(B) If applicable, the extent of the individual's participation in paying for the cost of services; and
(C) The responsibility of the individual with regard to applying for and securing comparable services and benefits as described in § 361.53; and
(iii) The responsibilities of other entities as the result of arrangements made pursuant to the comparable services or benefits requirements in § 361.53.
(b) Supported employment requirements. An individualized plan for employment for an individual with a most significant disability for whom an employment outcome in a supported employment setting has been determined to be appropriate must—
(1) Specify the supported employment services to be provided by the designated State unit;
(2) Specify the expected extended services needed, which may include natural supports;
(3) Identify the source of extended services or, to the extent that it is not possible to identify the source of extended services at the time the individualized plan for employment is developed, include a description of the basis for concluding that there is a reasonable expectation that those sources will become available;
(4) Provide for periodic monitoring to ensure that the individual is making satisfactory progress toward meeting the weekly work requirement established in the individualized plan for employment by the time of transition to extended services;
(5) Provide for the coordination of services provided under an individualized plan for employment with services provided under other individualized plans established under other Federal or State programs;
(6) To the extent that job skills training is provided, identify that the training will be provided on site; and
(7) Include placement in an integrated setting for the maximum number of hours possible based on the unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice of individuals with the most significant disabilities.
(c) Post-employment services. The individualized plan for employment for each individual must contain, as determined to be necessary, statements concerning—
(1) The expected need for post-employment services prior to closing the record of services of an individual who has achieved an employment outcome;
(2) A description of the terms and conditions for the provision of any post-employment services; and
(3) If appropriate, a statement of how post-employment services will be provided or arranged through other entities as the result of arrangements made pursuant to the comparable services or benefits requirements in § 361.53.
(d) Coordination of services for students with disabilities. The individualized plan for employment for a student with a disability must be coordinated with the individualized education program or 504 services, as applicable, for that individual in terms of the goals, objectives, and services identified in the education program.
(a) The designated State unit must maintain for each applicant and eligible individual a record of services that includes, to the extent pertinent, the following documentation:
(1) If an applicant has been determined to be an eligible individual, documentation supporting that determination in accordance with the requirements under § 361.42.
(2) If an applicant or eligible individual receiving services under an individualized plan for employment has been determined to be ineligible, documentation supporting that determination in accordance with the requirements under § 361.43.
(3) Documentation that describes the justification for closing an applicant's or eligible individual's record of services if that closure is based on reasons other than ineligibility, including, as appropriate, documentation indicating that the State unit has satisfied the requirements in § 361.44.
(4) If an individual has been determined to be an individual with a significant disability or an individual with a most significant disability, documentation supporting that determination.
(5) If an individual with a significant disability requires an exploration of abilities, capabilities, and capacity to perform in realistic work situations through the use of trial work experiences to determine whether the individual is an eligible individual, documentation supporting the need for, and the plan relating to, that exploration and documentation regarding the periodic assessments carried out during the trial work experiences in accordance with the requirements under § 361.42(e).
(6) The individualized plan for employment, and any amendments to the individualized plan for employment, consistent with the requirements under § 361.46.
(7) Documentation describing the extent to which the applicant or eligible individual exercised informed choice regarding the provision of assessment services and the extent to which the eligible individual exercised informed choice in the development of the individualized plan for employment with respect to the selection of the specific employment outcome, the specific vocational rehabilitation services needed to achieve the employment outcome, the entity to provide the services, the employment setting, the settings in which the services will be provided, and the methods to procure the services.
(8) In the event that an individual's individualized plan for employment provides for vocational rehabilitation services in a non-integrated setting, a justification to support the need for the non-integrated setting.
(9) In the event that an individual obtains competitive employment, verification that the individual is compensated at or above the minimum wage and that the individual's wage and level of benefits are not less than that customarily paid by the employer for the same or similar work performed by non-disabled individuals in accordance with § 361.5(c)(9)(i).
(10) In the event an individual achieves an employment outcome in which the individual is compensated in accordance with section 14(c) of the Fair Labor Standards Act or the designated State unit closes the record of services of an individual in extended employment on the basis that the individual is unable to achieve an employment outcome consistent with § 361.5(c)(15) or that an eligible individual through informed choice chooses to remain in extended employment, documentation of the results of the semi-annual and annual reviews required under § 361.55, of the individual's input into those reviews, and of the individual's or, if appropriate, the individual's representative's acknowledgment that those reviews were conducted.
(11) Documentation concerning any action or decision resulting from a request by an individual under § 361.57 for a review of determinations made by designated State unit personnel.
(12) In the event that an applicant or eligible individual requests under § 361.38(c)(4) that documentation in the record of services be amended and the documentation is not amended, documentation of the request.
(13) In the event an individual is referred to another program through the State unit's information and referral system under § 361.37, including other components of the statewide workforce development system, documentation on the nature and scope of services provided by the designated State unit to the individual and on the referral itself, consistent with the requirements of § 361.37.
(14) In the event an individual's record of service is closed under § 361.56, documentation that demonstrates the services provided under the individual's individualized plan for employment contributed to the achievement of the employment outcome.
(15) In the event an individual's record of service is closed under § 361.56, documentation verifying that the provisions of § 361.56 have been satisfied.
(b) The State unit, in consultation with the State Rehabilitation Council if the State has a Council, must determine the type of documentation that the State unit must maintain for each applicant and eligible individual in order to meet the requirements in paragraph (a) of this section.
(a) Pre-employment transition services. Each State must ensure that the designated State unit, in collaboration with the local educational agencies involved, provide, or arrange for the provision of, pre-employment transition services for all students with disabilities, as defined in § 361.5(c)(51), in need of such services, without regard to the type of disability, from Federal funds reserved in accordance with § 361.65, and any funds made available from State, local, or private funding sources. Funds reserved and made available may be used for the required, authorized, and pre-employment transition coordination activities under paragraphs (2), (3) and (4) of this section.
(1) Availability of services. Pre-employment transition services must be made available Statewide to all students with disabilities, regardless of whether the student has applied or been determined eligible for vocational rehabilitation services.
(2) Required activities. The designated State unit must provide the following pre-employment transition services:
(i) Job exploration counseling;
(ii) Work-based learning experiences, which may include in-school or after school opportunities, or experience outside the traditional school setting (including internships), that is provided in an integrated environment in the community to the maximum extent possible;
(iii) Counseling on opportunities for enrollment in comprehensive transition or postsecondary educational programs at institutions of higher education;
(iv) Workplace readiness training to develop social skills and independent living; and
(v) Instruction in self-advocacy (including instruction in person-centered planning), which may include peer mentoring (including peer mentoring from individuals with disabilities working in competitive integrated employment).
(3) Authorized activities. Funds available and remaining after the provision of the required activities described in paragraph (a)(2) of this section may be used to improve the transition of students with disabilities from school to postsecondary education or an employment outcome by—
(i) Implementing effective strategies to increase the likelihood of independent living and inclusion in communities and competitive integrated workplaces;
(ii) Developing and improving strategies for individuals with intellectual disabilities and individuals with significant disabilities to live independently; participate in postsecondary education experiences; and obtain, advance in and retain competitive integrated employment;
(iii) Providing instruction to vocational rehabilitation counselors, school transition personnel, and other persons supporting students with disabilities;
(iv) Disseminating information about innovative, effective, and efficient approaches to achieve the goals of this section;
(v) Coordinating activities with transition services provided by local educational agencies under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.);
(vi) Applying evidence-based findings to improve policy, procedure, practice, and the preparation of personnel, in order to better achieve the goals of this section;
(vii) Developing model transition demonstration projects;
(viii) Establishing or supporting multistate or regional partnerships involving States, local educational agencies, designated State units, developmental disability agencies, private businesses, or other participants to achieve the goals of this section; and
(ix) Disseminating information and strategies to improve the transition to postsecondary activities of individuals who are members of traditionally unserved and underserved populations.
(4) Pre-employment transition coordination. Each local office of a designated State unit must carry out responsibilities consisting of—
(i) Attending individualized education program meetings for students with disabilities, when invited;
(ii) Working with the local workforce development boards, one-stop centers, and employers to develop work opportunities for students with disabilities, including internships, summer employment and other employment opportunities available throughout the school year, and apprenticeships;
(iii) Working with schools, including those carrying out activities under section 614(d) of the IDEA, to coordinate and ensure the provision of pre-employment transition services under this section;
(iv) When invited, attending person-centered planning meetings for individuals receiving services under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.); and
(b) Services for individuals who have applied for or been determined eligible for vocational rehabilitation services. As appropriate to the vocational rehabilitation needs of each individual and consistent with each individual's individualized plan for employment, the designated State unit must ensure that the following vocational rehabilitation services are available to assist the individual with a disability in preparing for, securing, retaining, advancing in or regaining an employment outcome that is consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice:
(1) Assessment for determining eligibility and priority for services by qualified personnel, including, if appropriate, an assessment by personnel skilled in rehabilitation technology, in accordance with § 361.42.
(2) Assessment for determining vocational rehabilitation needs by qualified personnel, including, if appropriate, an assessment by personnel skilled in rehabilitation technology, in accordance with § 361.45.
(3) Vocational rehabilitation counseling and guidance, including information and support services to assist an individual in exercising informed choice in accordance with § 361.52.
(4) Referral and other services necessary to assist applicants and eligible individuals to secure needed services from other agencies, including other components of the statewide workforce development system, in accordance with §§ 361.23, 361.24, and 361.37, and to advise those individuals about client assistance programs established under 34 CFR part 370.
(5) In accordance with the definition in § 361.5(c)(39), physical and mental restoration services, to the extent that financial support is not readily available from a source other than the designated State unit (such as through health insurance or a comparable service or benefit as defined in § 361.5(c)(10)).
(6) Vocational and other training services, including personal and vocational adjustment training, advanced training in, but not limited to, a field of science, technology, engineering, mathematics (including computer science), medicine, law, or business); books, tools, and other training materials, except that no training or training services in an institution of higher education (universities, colleges, community or junior colleges, vocational schools, technical institutes, or hospital schools of nursing or any other postsecondary education institution) may be paid for with funds under this part unless maximum efforts have been made by the State unit and the individual to secure grant assistance in whole or in part from other sources to pay for that training.
(7) Maintenance, in accordance with the definition of that term in § 361.5(c)(34).
(8) Transportation in connection with the provision of any vocational rehabilitation service and in accordance with the definition of that term in § 361.5(c)(57).
(9) Vocational rehabilitation services to family members, as defined in § 361.5(c)(23), of an applicant or eligible individual if necessary to enable the applicant or eligible individual to achieve an employment outcome.
(10) Interpreter services, including sign language and oral interpreter services, for individuals who are deaf or hard of hearing and tactile interpreting services for individuals who are deaf-blind provided by qualified personnel.
(11) Reader services, rehabilitation teaching services, and orientation and mobility services for individuals who are blind.
(12) Job-related services, including job search and placement assistance, job retention services, follow-up services, and follow-along services.
(13) Supported employment services in accordance with the definition of that term in § 361.5(c)(54).
(14) Personal assistance services in accordance with the definition of that term in § 361.5(c)(39).
(15) Post-employment services in accordance with the definition of that term in § 361.5(c)(42).
(16) Occupational licenses, tools, equipment, initial stocks, and supplies.
(17) Rehabilitation technology in accordance with the definition of that term in § 361.5(c)(45), including vehicular modification, telecommunications, sensory, and other technological aids and devices.
(18) Transition services for students and youth with disabilities, that facilitate the transition from school to postsecondary life, such as achievement of an employment outcome in competitive integrated employment, or pre-employment transition services for students.
(19) Technical assistance and other consultation services to conduct market analyses, develop business plans, and otherwise provide resources, to the extent those resources are authorized to be provided through the statewide workforce development system, to eligible individuals who are pursuing self-employment or telecommuting or establishing a small business operation as an employment outcome.
(20) Customized employment in accordance with the definition of that term in § 361.5(c)(11).
(21) Other goods and services determined necessary for the individual with a disability to achieve an employment outcome.
(a) The designated State unit may provide for the following vocational rehabilitation services for the benefit of groups of individuals with disabilities:
(1) The establishment, development, or improvement of a public or other nonprofit community rehabilitation program that is used to provide vocational rehabilitation services that promote integration into the community and prepare individuals with disabilities for competitive integrated employment, including supported employment and customized employment, and under special circumstances, the construction of a facility for a public or nonprofit community rehabilitation program as defined in §§ 361.5(c)(10), 361.5(c)(16) and 361.5(c)(17). Examples of special circumstances include the destruction by natural disaster of the only available center serving an area or a State determination that construction is necessary in a rural area because no other public agencies or private nonprofit organizations are currently able to provide vocational rehabilitation services to individuals.
(2) Telecommunications systems that have the potential for substantially improving vocational rehabilitation service delivery methods and developing appropriate programming to meet the particular needs of individuals with disabilities, including telephone, television, video description services, satellite, tactile-vibratory devices, and similar systems, as appropriate.
(3) Special services to provide nonvisual access to information for individuals who are blind, including the use of telecommunications, Braille, sound recordings, or other appropriate media; captioned television, films, or video cassettes for individuals who are deaf or hard of hearing; tactile materials for individuals who are deaf-blind; and other special services that provide information through tactile, vibratory, auditory, and visual media.
(4) Technical assistance to businesses that are seeking to employ individuals with disabilities.
(5) In the case of any small business enterprise operated by individuals with significant disabilities under the supervision of the designated State unit, including enterprises established under the Randolph-Sheppard program, management services and supervision provided by the State unit along with the acquisition by the State unit of vending facilities or other equipment, initial stocks and supplies, and initial operating expenses, in accordance with the following requirements:
(i) Management services and supervision includes inspection, quality control, consultation, accounting, regulating, in-service training, and related services provided on a systematic basis to support and improve small business enterprises operated by individuals with significant disabilities. Management services and supervision may be provided throughout the operation of the small business enterprise.
(ii) Initial stocks and supplies includes those items necessary to the establishment of a new business enterprise during the initial establishment period, which may not exceed six months.
(iii) Costs of establishing a small business enterprise may include operational costs during the initial establishment period, which may not exceed six months.
(iv) If the designated State unit provides for these services, it must ensure that only individuals with significant disabilities will be selected to participate in this supervised program.
(v) If the designated State unit provides for these services and chooses to set aside funds from the proceeds of the operation of the small business enterprises, the State unit must maintain a description of the methods used in setting aside funds and the purposes for which funds are set aside. Funds may be used only for small business enterprises purposes, and benefits that are provided to operators from set-aside funds must be provided on an equitable basis.
(6) Consultation and technical assistance services to assist State educational agencies and local educational agencies in planning for the transition of students and youth with disabilities from school to postsecondary life, including employment.
(7) Transition services to youth with disabilities and students with disabilities who may not have yet applied or been determined eligible for vocational rehabilitation services, for which a vocational rehabilitation counselor works in concert with educational agencies, providers of job training programs, providers of services under the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), entities designated by the State to provide services for individuals with developmental disabilities, centers for independent living (as defined in section 702 of the Act), housing and transportation authorities, workforce development systems, and businesses and employers. These specific transition services are to benefit a group of students with disabilities or youth with disabilities and are not individualized services directly related to an individualized plan for employment goal. Services may include, but are not limited to, group tours of universities and vocational training programs, employer or business site visits to learn about career opportunities, career fairs coordinated with workforce development and employers to facilitate mock interviews and resume writing, and other general services applicable to groups of students with disabilities and youth with disabilities.
(8) The establishment, development, or improvement of assistive technology demonstration, loan, reutilization, or financing programs in coordination with activities authorized under the Assistive Technology Act of 1998 (29 U.S.C. 3001 et seq.) to promote access to assistive technology for individuals with disabilities and employers.
(9) Support (including, as appropriate, tuition) for advanced training in a field of science, technology, engineering, or mathematics (including computer science), medicine, law, or business, provided after an individual eligible to receive services under this title demonstrates—
(i) Such eligibility;
(ii) Previous completion of a bachelor's degree program at an institution of higher education or scheduled completion of such a degree program prior to matriculating in the program for which the individual proposes to use the support; and
(iii) Acceptance by a program at an institution of higher education in the United States that confers a master's degree in a field of science, technology, engineering, or mathematics (including computer science), a juris doctor degree, a master of business administration degree, or a doctor of medicine degree, except that—
(A) No training provided at an institution of higher education may be paid for with funds under this program unless maximum efforts have been made by the designated State unit to secure grant assistance, in whole or in part, from other sources to pay for such training; and
(B) Nothing in this paragraph prevents any designated State unit from providing similar support to individuals with disabilities within the State who are eligible to receive support under this title and who are not served under this section.
(b) If the designated State unit provides for vocational rehabilitation services for groups of individuals, it must—
(1) Develop and maintain written policies covering the nature and scope of each of the vocational rehabilitation services it provides and the criteria under which each service is provided; and
(2) Maintain information to ensure the proper and efficient administration of those services in the form and detail and at the time required by the Secretary, including the types of services provided, the costs of those services, and, to the extent feasible, estimates of the numbers of individuals benefiting from those services.
(a) Policies. The State unit must develop and maintain written policies covering the nature and scope of each of the vocational rehabilitation services specified in § 361.48 and the criteria under which each service is provided. The policies must ensure that the provision of services is based on the rehabilitation needs of each individual as identified in that individual's individualized plan for employment and is consistent with the individual's informed choice. The written policies may not establish any arbitrary limits on the nature and scope of vocational rehabilitation services to be provided to the individual to achieve an employment outcome. The policies must be developed in accordance with the following provisions:
(b) Out-of-State services. (1) The State unit may establish a preference for in-State services, provided that the preference does not effectively deny an individual a necessary service. If the individual chooses an out-of-State service at a higher cost than an in-State service, if either service would meet the individual's rehabilitation needs, the designated State unit is not responsible for those costs in excess of the cost of the in-State service.
(2) The State unit may not establish policies that effectively prohibit the provision of out-of-State services.
(c) Payment for services. (1) The State unit must establish and maintain written policies to govern the rates of payment for all purchased vocational rehabilitation services.
(2) The State unit may establish a fee schedule designed to ensure a reasonable cost to the program for each service, if the schedule is—
(i) Not so low as to effectively deny an individual a necessary service; and
(ii) Not absolute and permits exceptions so that individual needs can be addressed.
(3) The State unit may not place absolute dollar limits on specific service categories or on the total services provided to an individual.
(d) Duration of services. (1) The State unit may establish reasonable time periods for the provision of services provided that the time periods are—
(i) Not so short as to effectively deny an individual a necessary service; and
(ii) Not absolute and permit exceptions so that individual needs can be addressed.
(2) The State unit may not establish absolute time limits on the provision of specific services or on the provision of services to an individual. The duration of each service needed by an individual must be determined on an individual basis and reflected in that individual's individualized plan for employment.
(e) Authorization of services. The State unit must establish policies related to the timely authorization of services, including any conditions under which verbal authorization can be given.
(a) Accessibility of facilities. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that any facility used in connection with the delivery of vocational rehabilitation services under this part meets program accessibility requirements consistent with the requirements, as applicable, of the Architectural Barriers Act of 1968, the Americans with Disabilities Act of 1990, section 504 of the Act, and the regulations implementing these laws.
(b) Affirmative action. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that community rehabilitation programs that receive assistance under part B of title I of the Act take affirmative action to employ and advance in employment qualified individuals with disabilities covered under and on the same terms and conditions as in section 503 of the Act.
(c) Special communication needs personnel. The designated State unit must ensure that providers of vocational rehabilitation services are able to communicate—
(1) In the native language of applicants and eligible individuals who have limited English proficiency; and
(2) By using appropriate modes of communication used by applicants and eligible individuals.
(a) General provision. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that applicants and recipients of services or, as appropriate, their representatives are provided information and support services to assist applicants and recipients of services in exercising informed choice throughout the rehabilitation process consistent with the provisions of section 102(d) of the Act and the requirements of this section.
(b) Written policies and procedures. The designated State unit, in consultation with its State Rehabilitation Council, if it has a Council, must develop and implement written policies and procedures that enable an applicant or recipient of services to exercise informed choice throughout the vocational rehabilitation process. These policies and procedures must provide for—
(1) Informing each applicant and recipient of services (including students with disabilities who are making the transition from programs under the responsibility of an educational agency to programs under the responsibility of the designated State unit and including youth with disabilities), through appropriate modes of communication, about the availability of and opportunities to exercise informed choice, including the availability of support services for individuals with cognitive or other disabilities who require assistance in exercising informed choice throughout the vocational rehabilitation process;
(2) Assisting applicants and recipients of services in exercising informed choice in decisions related to the provision of assessment services;
(3) Developing and implementing flexible procurement policies and methods that facilitate the provision of vocational rehabilitation services and that afford recipients of services meaningful choices among the methods used to procure vocational rehabilitation services;
(4) Assisting eligible individuals or, as appropriate, the individuals' representatives, in acquiring information that enables them to exercise informed choice in the development of their individualized plans for employment with respect to the selection of the—
(i) Employment outcome;
(ii) Specific vocational rehabilitation services needed to achieve the employment outcome;
(iii) Entity that will provide the services;
(iv) Employment setting and the settings in which the services will be provided; and
(v) Methods available for procuring the services; and
(5) Ensuring that the availability and scope of informed choice is consistent with the obligations of the designated State agency under this part.
(c) Information and assistance in the selection of vocational rehabilitation services and service providers. In assisting an applicant and eligible individual in exercising informed choice during the assessment for determining eligibility and vocational rehabilitation needs and during development of the individualized plan for employment, the designated State unit must provide the individual or the individual's representative, or assist the individual or the individual's representative in acquiring, information necessary to make an informed choice about the specific vocational rehabilitation services, including the providers of those services, that are needed to achieve the individual's employment outcome. This information must include, at a minimum, information relating to the—
(1) Cost, accessibility, and duration of potential services;
(2) Consumer satisfaction with those services to the extent that information relating to consumer satisfaction is available;
(3) Qualifications of potential service providers;
(4) Types of services offered by the potential providers;
(5) Degree to which services are provided in integrated settings; and
(6) Outcomes achieved by individuals working with service providers, to the extent that such information is available.
(d) Methods or sources of information. In providing or assisting the individual or the individual's representative in acquiring the information required under paragraph (c) of this section, the State unit may use, but is not limited to, the following methods or sources of information:
(1) Lists of services and service providers.
(2) Periodic consumer satisfaction surveys and reports.
(3) Referrals to other consumers, consumer groups, or disability advisory councils qualified to discuss the services or service providers.
(4) Relevant accreditation, certification, or other information relating to the qualifications of service providers.
(5) Opportunities for individuals to visit or experience various work and service provider settings.
(a) Determination of availability. The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that prior to providing an accommodation or auxiliary aid or service or any vocational rehabilitation services, except those services listed in paragraph (b) of this section, to an eligible individual or to members of the individual's family, the State unit must determine whether comparable services and benefits, as defined in § 361.5(c)(8), exist under any other program and whether those services and benefits are available to the individual unless such a determination would interrupt or delay—
(1) The progress of the individual toward achieving the employment outcome identified in the individualized plan for employment;
(2) An immediate job placement; or
(3) The provision of vocational rehabilitation services to any individual who is determined to be at extreme medical risk, based on medical evidence provided by an appropriate qualified medical professional.
(b) Exempt services. The following vocational rehabilitation services described in § 361.48(b) are exempt from a determination of the availability of comparable services and benefits under paragraph (a) of this section:
(1) Assessment for determining eligibility and vocational rehabilitation needs.
(2) Counseling and guidance, including information and support services to assist an individual in exercising informed choice.
(3) Referral and other services to secure needed services from other agencies, including other components of the statewide workforce development system, if those services are not available under this part.
(4) Job-related services, including job search and placement assistance, job retention services, follow-up services, and follow-along services.
(5) Rehabilitation technology, including telecommunications, sensory, and other technological aids and devices.
(6) Post-employment services consisting of the services listed under paragraphs (b)(1) through (5) of this section.
(c) Provision of services. (1) If comparable services or benefits exist under any other program and are available to the individual at the time needed to ensure the progress of the individual toward achieving the employment outcome in the individual's individualized plan for employment, the designated State unit must use those comparable services or benefits to meet, in whole or part, the costs of the vocational rehabilitation services.
(2) If comparable services or benefits exist under any other program, but are not available to the individual at the time needed to ensure the progress of the individual toward achieving the employment outcome specified in the individualized plan for employment, the designated State unit must provide vocational rehabilitation services until those comparable services and benefits become available.
(d) Interagency coordination. (1) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the Governor, in consultation with the entity in the State responsible for the vocational rehabilitation program and other appropriate agencies, will ensure that an interagency agreement or other mechanism for interagency coordination takes effect between the designated State vocational rehabilitation unit and any appropriate public entity, including the State entity responsible for administering the State Medicaid program, a public institution of higher education, and a component of the statewide workforce development system, to ensure the provision of vocational rehabilitation services, and, if appropriate, accommodations or auxiliary aids and services, (other than those services listed in paragraph (b) of this section) that are included in the individualized plan for employment of an eligible individual, including the provision of those vocational rehabilitation services (including, if appropriate, accommodations or auxiliary aids and services) during the pendency of any interagency dispute in accordance with the provisions of paragraph (d)(3)(iii) of this section.
(2) The Governor may meet the requirements of paragraph (d)(1) of this section through—
(i) A State statute or regulation;
(ii) A signed agreement between the respective officials of the public entities that clearly identifies the responsibilities of each public entity for the provision of the services; or
(iii) Another appropriate mechanism as determined by the designated State vocational rehabilitation unit.
(3) The interagency agreement or other mechanism for interagency coordination must include the following:
(i) Agency financial responsibility. An identification of, or description of a method for defining, the financial responsibility of the designated State unit and other public entities for the provision of vocational rehabilitation services, and, if appropriate, accommodations or auxiliary aids and services other than those listed in paragraph (b) of this section and a provision stating the financial responsibility of the public entity for providing those services.
(ii) Conditions, terms, and procedures of reimbursement. Information specifying the conditions, terms, and procedures under which the designated State unit must be reimbursed by the other public entities for providing vocational rehabilitation services, and accommodations or auxiliary aids and services based on the terms of the interagency agreement or other mechanism for interagency coordination.
(iii) Interagency disputes. Information specifying procedures for resolving interagency disputes under the interagency agreement or other mechanism for interagency coordination, including procedures under which the designated State unit may initiate proceedings to secure reimbursement from other public entities or otherwise implement the provisions of the agreement or mechanism.
(iv) Procedures for coordination of services. Information specifying policies and procedures for public entities to determine and identify interagency coordination responsibilities of each public entity to promote the coordination and timely delivery of vocational rehabilitation services, and accommodations or auxiliary aids and services, other than those listed in paragraph (b) of this section.
(e) Responsibilities under other law. (1) If a public entity (other than the designated State unit) is obligated under Federal law (such as the Americans with Disabilities Act, section 504 of the Act, or section 188 of the Workforce Innovation and Opportunity Act) or State law, or assigned responsibility under State policy or an interagency agreement established under this section, to provide or pay for any services considered to be vocational rehabilitation services (e.g., interpreter services under § 361.48(j)), and, if appropriate, accommodations or auxiliary aids and services other than those services listed in paragraph (b) of this section, the public entity must fulfill that obligation or responsibility through—
(i) The terms of the interagency agreement or other requirements of this section;
(ii) Providing or paying for the service directly or by contract; or
(iii) Other arrangement.
(2) If a public entity other than the designated State unit fails to provide or pay for vocational rehabilitation services, and, if appropriate, accommodations or auxiliary aids and services for an eligible individual as established under this section, the designated State unit must provide or pay for those services to the individual and may claim reimbursement for the services from the public entity that failed to provide or pay for those services. The public entity must reimburse the designated State unit pursuant to the terms of the interagency agreement or other mechanism described in paragraph (d) of this section in accordance with the procedures established in the agreement or mechanism pursuant to paragraph (d)(3)(ii) of this section.
(a) No Federal requirement. There is no Federal requirement that the financial need of individuals be considered in the provision of vocational rehabilitation services.
(b) State unit requirements. (1) The State unit may choose to consider the financial need of eligible individuals or individuals who are receiving services through trial work experiences under § 361.42(e) for purposes of determining the extent of their participation in the costs of vocational rehabilitation services, other than those services identified in paragraph (b)(3) of this section.
(2) If the State unit chooses to consider financial need—
(i) It must maintain written policies—
(A) Explaining the method for determining the financial need of an eligible individual; and
(B) Specifying the types of vocational rehabilitation services for which the unit has established a financial needs test;
(ii) The policies must be applied uniformly to all individuals in similar circumstances;
(iii) The policies may require different levels of need for different geographic regions in the State, but must be applied uniformly to all individuals within each geographic region; and
(iv) The policies must ensure that the level of an individual's participation in the cost of vocational rehabilitation services is—
(A) Reasonable;
(B) Based on the individual's financial need, including consideration of any disability-related expenses paid by the individual; and
(C) Not so high as to effectively deny the individual a necessary service.
(3) The designated State unit may not apply a financial needs test, or require the financial participation of the individual—
(i) As a condition for furnishing the following vocational rehabilitation services:
(A) Assessment for determining eligibility and priority for services under § 361.48(b)(1), except those non-assessment services that are provided to an individual with a significant disability during either an exploration of the individual's abilities, capabilities, and capacity to perform in work situations through the use of trial work experiences under § 361.42(e).
(B) Assessment for determining vocational rehabilitation needs under § 361.48(b)(2).
(C) Vocational rehabilitation counseling and guidance under § 361.48(b)(3).
(D) Referral and other services under § 361.48(b)(4).
(E) Job-related services under § 361.48(b)(12).
(F) Personal assistance services under § 361.48(b)(14).
(G) Any auxiliary aid or service (e.g., interpreter services under § 361.48(b)(10), reader services under § 361.48(b)(11)) that an individual with a disability requires under section 504 of the Act (29 U.S.C. 794) or the Americans with Disabilities Act (42 U.S.C. 12101, et seq.), or regulations implementing those laws, in order for the individual to participate in the vocational rehabilitation program as authorized under this part; or
(ii) As a condition for furnishing any vocational rehabilitation service if the individual in need of the service has been determined eligible for Social Security benefits under titles II or XVI of the Social Security Act.
(a) The vocational rehabilitation services portion of the Unified or Combined State Plan must assure that the designated State unit conducts a semi-annual review and reevaluation for the first two years of such employment and annually thereafter, in accordance with the requirements in paragraph (b) of this section for an individual with a disability served under this part—
(1) Who has a record of service, as described in § 361.47, as either an applicant or eligible individual under the vocational rehabilitation program; and
(2)(i) Who has achieved employment in which the individual is compensated in accordance with section 14(c) of the Fair Labor Standards Act; or
(ii) Who is in extended employment, including those individuals whose record of service is closed while the individual is in extended employment on the basis that the individual is unable to achieve an employment outcome consistent with § 361.5(c)(15) or that the individual made an informed choice to remain in extended employment.
(b) For each individual with a disability who meets the criteria in paragraph (a) of this section, the designated State unit must—
(1) Semi-annually review and reevaluate the status of each individual for two years after the individual's record of services is closed (and annually thereafter) to determine the interests, priorities, and needs of the individual with respect to competitive integrated employment or training for competitive integrated employment;
(2) Enable the individual or, if appropriate, the individual's representative to provide input into the review and reevaluation and must document that input in the record of services, consistent with § 361.47(a)(10), with the individual's or, as appropriate, the individual's representative's signed acknowledgment that the review and reevaluation have been conducted; and
(3) Make maximum efforts, including identifying and providing vocational rehabilitation services, reasonable accommodations, and other necessary support services, to assist the individual in engaging in competitive integrated employment as defined in § 361.5(c)(9).
The record of services of an individual who has achieved an employment outcome may be closed only if all of the following requirements are met:
(a) Employment outcome achieved. The individual has achieved the employment outcome that is described in the individual's individualized plan for employment in accordance with § 361.46(a)(1) and is consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
(b) Employment outcome maintained. The individual has maintained the employment outcome for an appropriate period of time, but not less than 90 days, necessary to ensure the stability of the employment outcome, and the individual no longer needs vocational rehabilitation services.
(c) Satisfactory outcome. At the end of the appropriate period under paragraph (b) of this section, the individual and the qualified rehabilitation counselor employed by the designated State unit consider the employment outcome to be satisfactory and agree that the individual is performing well in the employment.
(d) Post-employment services. The individual is informed through appropriate modes of communication of the availability of post-employment services.
(a) Procedures. The designated State unit must develop and implement procedures to ensure that an applicant or recipient of services who is dissatisfied with any determination made by personnel of the designated State unit that affects the provision of vocational rehabilitation services may request, or, if appropriate, may request through the individual's representative, a timely review of that determination. The procedures must be in accordance with paragraphs (b) through (k) of this section:
(b) General requirements. (1) Notification. Procedures established by the State unit under this section must provide an applicant or recipient or, as appropriate, the individual's representative notice of—
(i) The right to obtain review of State unit determinations that affect the provision of vocational rehabilitation services through an impartial due process hearing under paragraph (e) of this section;
(ii) The right to pursue mediation under paragraph (d) of this section with respect to determinations made by designated State unit personnel that affect the provision of vocational rehabilitation services to an applicant or recipient;
(iii) The names and addresses of individuals with whom requests for mediation or due process hearings may be filed;
(iv) The manner in which a mediator or impartial hearing officer may be selected consistent with the requirements of paragraphs (d) and (f) of this section; and
(v) The availability of the client assistance program, established under 34 CFR part 370, to assist the applicant or recipient during mediation sessions or impartial due process hearings.
(2) Timing. Notice described in paragraph (b)(1) of this section must be provided in writing—
(i) At the time the individual applies for vocational rehabilitation services under this part;
(ii) At the time the individual is assigned to a category in the State's order of selection, if the State has established an order of selection under § 361.36;
(iii) At the time the individualized plan for employment is developed; and
(iv) Whenever vocational rehabilitation services for an individual are reduced, suspended, or terminated.
(3) Evidence and representation. Procedures established under this section must—
(i) Provide an applicant or recipient or, as appropriate, the individual's representative with an opportunity to submit during mediation sessions or due process hearings evidence and other information that supports the applicant's or recipient's position; and
(ii) Allow an applicant or recipient to be represented during mediation sessions or due process hearings by counsel or other advocate selected by the applicant or recipient.
(4) Impact on provision of services. The State unit may not institute a suspension, reduction, or termination of vocational rehabilitation services being provided to an applicant or recipient, including evaluation and assessment services and individualized plan for employment development, pending a resolution through mediation, pending a decision by a hearing officer or reviewing official, or pending informal resolution under this section unless—
(i) The individual or, in appropriate cases, the individual's representative requests a suspension, reduction, or termination of services; or
(ii) The State agency has evidence that the services have been obtained through misrepresentation, fraud, collusion, or criminal conduct on the part of the individual or the individual's representative.
(5) Ineligibility. Applicants who are found ineligible for vocational rehabilitation services and previously eligible individuals who are determined to be no longer eligible for vocational rehabilitation services pursuant to § 361.43 are permitted to challenge the determinations of ineligibility under the procedures described in this section.
(c) Informal dispute resolution. The State unit may develop an informal process for resolving a request for review without conducting mediation or a formal hearing. A State's informal process must not be used to deny the right of an applicant or recipient to a hearing under paragraph (e) of this section or any other right provided under this part, including the right to pursue mediation under paragraph (d) of this section. If informal resolution under this paragraph or mediation under paragraph (d) of this section is not successful in resolving the dispute within the time period established under paragraph (e)(1) of this section, a formal hearing must be conducted within that same time period, unless the parties agree to a specific extension of time.
(d) Mediation. (1) The State must establish and implement procedures, as required under paragraph (b)(1)(ii) of this section, to allow an applicant or recipient and the State unit to resolve disputes involving State unit determinations that affect the provision of vocational rehabilitation services through a mediation process that must be made available, at a minimum, whenever an applicant or recipient or, as appropriate, the individual's representative requests an impartial due process hearing under this section.
(2) Mediation procedures established by the State unit under paragraph (d) of this section must ensure that—
(i) Participation in the mediation process is voluntary on the part of the applicant or recipient, as appropriate, and on the part of the State unit;
(ii) Use of the mediation process is not used to deny or delay the applicant's or recipient's right to pursue resolution of the dispute through an impartial hearing held within the time period specified in paragraph (e)(1) of this section or any other rights provided under this part. At any point during the mediation process, either party or the mediator may elect to terminate the mediation. In the event mediation is terminated, either party may pursue resolution through an impartial hearing;
(iii) The mediation process is conducted by a qualified and impartial mediator, as defined in § 361.5(c)(43), who must be selected from a list of qualified and impartial mediators maintained by the State—
(A) On a random basis;
(B) By agreement between the director of the designated State unit and the applicant or recipient or, as appropriate, the recipient's representative; or
(C) In accordance with a procedure established in the State for assigning mediators, provided this procedure ensures the neutrality of the mediator assigned; and
(iv) Mediation sessions are scheduled and conducted in a timely manner and are held in a location and manner that is convenient to the parties to the dispute.
(3) Discussions that occur during the mediation process must be kept confidential and may not be used as evidence in any subsequent due process hearings or civil proceedings, and the parties to the mediation process may be required to sign a confidentiality pledge prior to the commencement of the process.
(4) An agreement reached by the parties to the dispute in the mediation process must be described in a written mediation agreement that is developed by the parties with the assistance of the qualified and impartial mediator and signed by both parties. Copies of the agreement must be sent to both parties.
(5) The costs of the mediation process must be paid by the State. The State is not required to pay for any costs related to the representation of an applicant or recipient authorized under paragraph (b)(3)(ii) of this section.
(e) Impartial due process hearings. The State unit must establish and implement formal review procedures, as required under paragraph (b)(1)(i) of this section, that provide that—
(1) Hearing conducted by an impartial hearing officer, selected in accordance with paragraph (f) of this section, must be held within 60 days of an applicant's or recipient 's request for review of a determination made by personnel of the State unit that affects the provision of vocational rehabilitation services to the individual, unless informal resolution or a mediation agreement is achieved prior to the 60th day or the parties agree to a specific extension of time;
(2) In addition to the rights described in paragraph (b)(3) of this section, the applicant or recipient or, if appropriate, the individual's representative must be given the opportunity to present witnesses during the hearing and to examine all witnesses and other relevant sources of information and evidence;
(3) The impartial hearing officer must—
(i) Make a decision based on the provisions of the approved vocational rehabilitation services portion of the Unified or Combined State Plan, the Act, Federal vocational rehabilitation regulations, and State regulations and policies that are consistent with Federal requirements; and
(ii) Provide to the individual or, if appropriate, the individual's representative and to the State unit a full written report of the findings and grounds for the decision within 30 days of the completion of the hearing; and
(4) The hearing officer's decision is final, except that a party may request an impartial review under paragraph (g)(1) of this section if the State has established procedures for that review, and a party involved in a hearing may bring a civil action under paragraph (i) of this section.
(f) Selection of impartial hearing officers. The impartial hearing officer for a particular case must be selected—
(1) From a list of qualified impartial hearing officers maintained by the State unit. Impartial hearing officers included on the list must be—
(i) Identified by the State unit if the State unit is an independent commission; or
(ii) Jointly identified by the State unit and the State Rehabilitation Council if the State has a Council; and
(2)(i) On a random basis; or
(ii) By agreement between the director of the designated State unit and the applicant or recipient or, as appropriate, the individual's representative.
(g) Administrative review of hearing officer's decision. The State may establish procedures to enable a party who is dissatisfied with the decision of the impartial hearing officer to seek an impartial administrative review of the decision under paragraph (e)(3) of this section in accordance with the following requirements:
(1) A request for administrative review under paragraph (g) of this section must be made within 20 days of the mailing of the impartial hearing officer's decision.
(2) Administrative review of the hearing officer's decision must be conducted by—
(i) The chief official of the designated State agency if the State has established both a designated State agency and a designated State unit under § 361.13(b); or
(ii) An official from the office of the Governor.
(3) The reviewing official described in paragraph (g)(2)(i) of this section—
(i) Provides both parties with an opportunity to submit additional evidence and information relevant to a final decision concerning the matter under review;
(ii) May not overturn or modify the hearing officer's decision, or any part of that decision, that supports the position of the applicant or recipient unless the reviewing official concludes, based on clear and convincing evidence, that the decision of the impartial hearing officer is clearly erroneous on the basis of being contrary to the approved vocational rehabilitation services portion of the Unified or Combined State Plan, the Act, Federal vocational rehabilitation regulations, or State regulations and policies that are consistent with Federal requirements;
(iii) Makes an independent, final decision following a review of the entire hearing record and provides the decision in writing, including a full report of the findings and the statutory, regulatory, or policy grounds for the decision, to the applicant or recipient or, as appropriate, the individual's representative and to the State unit within 30 days of the request for administrative review under paragraph (g)(1) of this section; and
(iv) May not delegate the responsibility for making the final decision under paragraph (g) of this section to any officer or employee of the designated State unit.
(4) The reviewing official's decision under paragraph (g) of this section is final unless either party brings a civil action under paragraph (i) of this section.
(h) Implementation of final decisions. If a party brings a civil action under paragraph (h) of this section to challenge the final decision of a hearing officer under paragraph (e) of this section or to challenge the final decision of a State reviewing official under paragraph (g) of this section, the final decision of the hearing officer or State reviewing official must be implemented pending review by the court.
(i) Civil action. (1) Any party who disagrees with the findings and decision of an impartial hearing officer under paragraph (e) of this section in a State that has not established administrative review procedures under paragraph (g) of this section and any party who disagrees with the findings and decision under paragraph (g)(3)(iii) of this section have a right to bring a civil action with respect to the matter in dispute. The action may be brought in any State court of competent jurisdiction or in a district court of the United States of competent jurisdiction without regard to the amount in controversy.
(2) In any action brought under paragraph (i) of this section, the court—
(i) Receives the records related to the impartial due process hearing and the records related to the administrative review process, if applicable;
(ii) Hears additional evidence at the request of a party; and
(iii) Basing its decision on the preponderance of the evidence, grants the relief that the court determines to be appropriate.
(j) State fair hearing board. A fair hearing board as defined in § 361.5(c)(21) is authorized to carry out the responsibilities of the impartial hearing officer under paragraph (e) of this section in accordance with the following criteria:
(1) The fair hearing board may conduct due process hearings either collectively or by assigning responsibility for conducting the hearing to one or more members of the fair hearing board.
(2) The final decision issued by the fair hearing board following a hearing under paragraph (j)(1) of this section must be made collectively by, or by a majority vote of, the fair hearing board.
(3) The provisions of paragraphs (b)(1), (2), and (3) of this section that relate to due process hearings and of paragraphs (e), (f), (g), and (h) of this section do not apply to fair hearing boards under this paragraph (j).
(k) Data collection. (1) The director of the designated State unit must collect and submit, at a minimum, the following data to the Secretary for inclusion each year in the annual report to Congress under section 13 of the Act:
(i) A copy of the standards used by State reviewing officials for reviewing decisions made by impartial hearing officers under this section.
(ii) The number of mediations held, including the number of mediation agreements reached.
(iii) The number of hearings and reviews sought from impartial hearing officers and State reviewing officials, including the type of complaints and the issues involved.
(iv) The number of hearing officer decisions that were not reviewed by administrative reviewing officials.
(v) The number of hearing decisions that were reviewed by State reviewing officials and, based on these reviews, the number of hearing decisions that were—
(A) Sustained in favor of an applicant or recipient;
(B) Sustained in favor of the designated State unit;
(C) Reversed in whole or in part in favor of the applicant or recipient; and
(D) Reversed in whole or in part in favor of the State unit.
(2) The State unit director also must collect and submit to the Secretary copies of all final decisions issued by impartial hearing officers under paragraph (e) of this section and by State review officials under paragraph (g) of this section.
(3) The confidentiality of records of applicants and recipients maintained by the State unit may not preclude the access of the Secretary to those records for the purposes described in this section.
(a) Federal share—(1) General. Except as provided in paragraph (a)(2) of this section, the Federal share for expenditures made by the State under the vocational rehabilitation services portion of the Unified or Combined State Plan, including expenditures for the provision of vocational rehabilitation services and the administration of the vocational rehabilitation services portion of the Unified or Combined State Plan, is 78.7 percent.
(2) Construction projects. The Federal share for expenditures made for the construction of a facility for community rehabilitation program purposes may not be more than 50 percent of the total cost of the project.
(b) Non-Federal share—(1) General. Except as provided in paragraph (b)(2) and (b)(3) of this section, expenditures made under the vocational rehabilitation services portion of the Unified or Combined State Plan to meet the non-Federal share under this section must be consistent with the provisions of 2 CFR 200.306(b).
(2) Third party in-kind contributions. Third party in-kind contributions specified in 2 CFR 200.306(b) may not be used to meet the non-Federal share under this section.
(3) Contributions by private entities. Expenditures made from those cash contributions provided by private organizations, agencies, or individuals and that are deposited in the State agency's account or, if applicable, sole local agency's account, in accordance with State law prior to their expenditure and that are earmarked, under a condition imposed by the contributor, may be used as part of the non-Federal share under this section if the funds are earmarked for—
(i) Meeting in whole or in part the State's share for establishing a community rehabilitation program or constructing a particular facility for community rehabilitation program purposes;
(ii) Particular geographic areas within the State for any purpose under the vocational rehabilitation services portion of the Unified or Combined State Plan, other than those described in paragraph (b)(3)(i) of this section, in accordance with the following criteria:
(A) Before funds that are earmarked for a particular geographic area may be used as part of the non-Federal share, the State must notify the Secretary that the State cannot provide the full non-Federal share without using these funds.
(B) Funds that are earmarked for a particular geographic area may be used as part of the non-Federal share without requesting a waiver of statewideness under § 361.26.
(C) Except as provided in paragraph (b)(3)(i) of this section, all Federal funds must be used on a statewide basis consistent with § 361.25, unless a waiver of statewideness is obtained under § 361.26; and
(iii) Any other purpose under the vocational rehabilitation services portion of the Unified or Combined State Plan, provided the expenditures do not benefit in any way the donor, employee, officer, or agent, any member of his or her immediate family, his or her partner, an individual with whom the donor has a close personal relationship, or an individual, entity, or organization with whom the donor shares a financial or other interest. The Secretary does not consider a donor's receipt from the State unit of a subaward or contract with funds allotted under this part to be a benefit for the purposes of this paragraph if the subaward or contract is awarded under the State's regular competitive procedures.
No more than 10 percent of a State's allotment for any fiscal year under section 110 of the Act may be spent on the construction of facilities for community rehabilitation program purposes.
(a) General requirements. The Secretary reduces the amount otherwise payable to a State for any fiscal year by the amount by which the total expenditures from non-Federal sources under the vocational rehabilitation services portion of the Unified or Combined State Plan for any previous fiscal year were less than the total of those expenditures for the fiscal year two years prior to that previous fiscal year.
(b) Specific requirements for construction of facilities. If the State provides for the construction of a facility for community rehabilitation program purposes, the amount of the State's share of expenditures for vocational rehabilitation services under the plan, other than for the construction of a facility for community rehabilitation program purposes or the establishment of a facility for community rehabilitation purposes, must be at least equal to the expenditures for those services for the second prior fiscal year.
(c) Separate State agency for vocational rehabilitation services for individuals who are blind. If there is a separate part of the vocational rehabilitation services portion of the Unified or Combined State Plan administered by a separate State agency to provide vocational rehabilitation services for individuals who are blind—
(1) Satisfaction of the maintenance of effort requirements under paragraphs (a) and (b) of this section is determined based on the total amount of a State's non-Federal expenditures under both parts of the vocational rehabilitation services portion of the Unified or Combined State Plan; and
(2) If a State fails to meet any maintenance of effort requirement, the Secretary reduces the amount otherwise payable to the State for a fiscal year under each part of the plan in direct proportion to the amount by which non-Federal expenditures under each part of the plan in any previous fiscal year were less than they were for that part of the plan for the fiscal year 2 years prior to that previous fiscal year.
(d) Waiver or modification. (1) The Secretary may waive or modify the maintenance of effort requirement in paragraph (a) of this section if the Secretary determines that a waiver or modification is necessary to permit the State to respond to exceptional or uncontrollable circumstances, such as a major natural disaster or a serious economic downturn, that—
(i) Cause significant unanticipated expenditures or reductions in revenue that result in a general reduction of programs within the State; or
(ii) Require the State to make substantial expenditures in the vocational rehabilitation program for long-term purposes due to the one-time costs associated with the construction of a facility for community rehabilitation program purposes, the establishment of a facility for community rehabilitation program purposes, or the acquisition of equipment.
(2) The Secretary may waive or modify the maintenance of effort requirement in paragraph (b) of this section or the 10 percent allotment limitation in § 361.61 if the Secretary determines that a waiver or modification is necessary to permit the State to respond to exceptional or uncontrollable circumstances, such as a major natural disaster, that result in significant destruction of existing facilities and require the State to make substantial expenditures for the construction of a facility for community rehabilitation program purposes or the establishment of a facility for community rehabilitation program purposes in order to provide vocational rehabilitation services.
(3) A written request for waiver or modification, including supporting justification, must be submitted to the Secretary for consideration as soon as the State has determined that it has failed to satisfy its maintenance of effort requirement due to an exceptional or uncontrollable circumstance, as described in paragraphs (d)(1) and (2) of this section.
(a) Definition. For purposes of this section, program income means gross income received by the State that is directly generated by a supported activity under this part or earned as a result of the Federal award during the period of performance, as defined in 2 CFR 200.80.
(b) Sources. Sources of program income include, but are not limited to: Payments from the Social Security Administration for assisting Social Security beneficiaries and recipients to achieve employment outcomes; payments received from workers' compensation funds; payments received by the State agency from insurers, consumers, or others for services to defray part or all of the costs of services provided to particular individuals; and income generated by a State-operated community rehabilitation program for activities authorized under this part.
(c) Use of program income. (1) Except as provided in paragraph (c)(2) of this section, program income, whenever earned, must be used for the provision of vocational rehabilitation services and the administration of the vocational rehabilitation services portion of the Unified or Combined State Plan. Program income—
(i) Is considered earned in the fiscal year in which it is received; and
(ii) Must be disbursed during the period of performance of the award.
(2) Payments provided to a State from the Social Security Administration for assisting Social Security beneficiaries and recipients to achieve employment outcomes may also be used to carry out programs under part B of title I of the Act (client assistance), title VI of the Act (supported employment), and title VII of the Act (independent living).
(3)(i) The State must use program income to supplement Federal funds that support program activities that are subject to this part. See, for example, 2 CFR 200.307(e)(2).
(ii) Notwithstanding 2 CFR 200.305(a) and to the extent that program income funds are available, a State must disburse those funds (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned on such funds before requesting additional funds from the Department.
(4) Program income cannot be used to meet the non-Federal share requirement under § 361.60.
(a) Except as provided in paragraph (b) of this section, any Federal award funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State by the beginning of the succeeding fiscal year remain available for obligation by the State during that succeeding fiscal year.
(b) Federal funds appropriated for a fiscal year remain available for obligation in the succeeding fiscal year only to the extent that the State met the matching requirement for those Federal funds by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated.
(a) Allotment. (1) The allotment of Federal funds for vocational rehabilitation services for each State is computed in accordance with the requirements of section 110 of the Act, and payments are made to the State on a quarterly basis, unless some other period is established by the Secretary.
(2) If the vocational rehabilitation services portion of the Unified or Combined State Plan designates one State agency to administer, or supervise the administration of, the part of the plan under which vocational rehabilitation services are provided for individuals who are blind and another State agency to administer the rest of the plan, the division of the State's allotment is a matter for State determination.
(3) Reservation for pre-employment transition services. (i) Pursuant to section 110(d) of the Act, the State must reserve at least 15 percent of the State's allotment, received in accordance with section 110(a) of the Act for the provision of pre-employment transition services, as described in § 361.48(a) of this part.
(ii) The funds reserved in accordance with paragraph (a)(3)(i) of this section—
(A) Must only be used for pre-employment transition services specified in § 361.48(a); and
(B) Must not be used to pay for administrative costs, (as defined in § 361.5(c)(2)) associated with the provision of such services or any other vocational rehabilitation services.
(b) Reallotment. (1) The Secretary determines not later than 45 days before the end of a fiscal year which States, if any, will not use their full allotment.
(2) As soon as possible, but not later than the end of the fiscal year, the Secretary reallots these funds to other States that can use those additional funds during the period of performance of the award, provided the State can meet the matching requirement by obligating the non-Federal share of any reallotted funds in the fiscal year for which the funds were appropriated.
(3) In the event more funds are requested by agencies than are available, the Secretary will determine the process for allocating funds available for reallotment.
(4) Funds reallotted to another State are considered to be an increase in the recipient State's allotment for the fiscal year for which the funds were appropriated.
(a) The Unified and Combined State Plans provide the framework for States to outline a strategic vision of, and goals for, how their workforce development systems will achieve the purposes of the Workforce Innovation and Opportunity Act (WIOA).
(b) The Unified and Combined State Plans serve as 4-year action plans to develop, align, and integrate the State's systems and provide a platform to achieve the State's vision and strategic and operational goals. A Unified or Combined State Plan is intended to:
(1) Align, in strategic coordination, the six core programs required in the Unified State Plan pursuant to § 361.105(b), and additional Combined State Plan partner programs that may be part of the Combined State Plan pursuant to § 361.140;
(2) Direct investments in economic, education, and workforce training programs to focus on providing relevant education and training to ensure that individuals, including youth and individuals with barriers to employment, have the skills to compete in the job market and that employers have a ready supply of skilled workers;
(3) Apply strategies for job-driven training consistently across Federal programs; and
(4) Enable economic, education, and workforce partners to build a skilled workforce through innovation in, and alignment of, employment, training, and education programs.
(a) The Unified State Plan must be submitted in accordance with § 361.130 and WIOA sec. 102(c), as explained in joint planning guidelines issued by the Secretaries of Labor and Education.
(b) The Governor of each State must submit, at a minimum, in accordance with § 361.130, a Unified State Plan to the Secretary of Labor to be eligible to receive funding for the workforce development system's six core programs:
(1) The adult, dislocated worker, and youth programs authorized under subtitle B of title I of WIOA and administered by the U.S. Department of Labor (DOL);
(2) The Adult Education and Family Literacy Act (AEFLA) program authorized under title II of WIOA and administered by the U.S. Department of Education (ED);
(3) The Employment Service program authorized under the Wagner-Peyser Act of 1933, as amended by WIOA title III and administered by DOL; and
(4) The Vocational Rehabilitation program authorized under title I of the Rehabilitation Act of 1973, as amended by title IV of WIOA and administered by ED.
(c) The Unified State Plan must outline the State's 4-year strategy for the core programs described in paragraph (b) of this section and meet the requirements of sec. 102(b) of WIOA, as explained in the joint planning guidelines issued by the Secretaries of Labor and Education.
(d) The Unified State Plan must include strategic and operational planning elements to facilitate the development of an aligned, coordinated, and comprehensive workforce development system. The Unified State Plan must include:
(1) Strategic planning elements that describe the State's strategic vision and goals for preparing an educated and skilled workforce under sec. 102(b)(1) of WIOA. The strategic planning elements must be informed by and include an analysis of the State's economic conditions and employer and workforce needs, including education and skill needs.
(2) Strategies for aligning the core programs and Combined State Plan partner programs as described in § 361.140(d), as well as other resources available to the State, to achieve the strategic vision and goals in accordance with sec. 102(b)(1)(E) of WIOA.
(3) Operational planning elements in accordance with sec. 102(b)(2) of WIOA that support the strategies for aligning the core programs and other resources available to the State to achieve the State's vision and goals and a description of how the State Workforce Development Board (WDB) will implement its functions, in accordance with sec. 101(d) of WIOA. Operational planning elements must include:
(i) A description of how the State strategy will be implemented by each core program's lead State agency;
(ii) State operating systems, including data systems, and policies that will support the implementation of the State's strategy identified in paragraph (d)(1) of this section;
(iii) Program-specific requirements for the core programs required by WIOA sec. 102(b)(2)(D);
(iv) Assurances required by sec. 102(b)(2)(E) of WIOA, including an assurance that the lead State agencies responsible for the administration of the core programs reviewed and commented on the appropriate operational planning of the Unified State Plan and approved the elements as serving the needs of the population served by such programs, and other assurances deemed necessary by the Secretaries of Labor and Education under sec. 102(b)(2)(E)(x) of WIOA;
(v) A description of joint planning and coordination across core programs, required one-stop partner programs, and other programs and activities in the Unified State Plan; and
(vi) Any additional operational planning requirements imposed by the Secretary of Labor or the Secretary of Education under sec. 102(b)(2)(C)(viii) of WIOA.
(e) All of the requirements in this subpart that apply to States also apply to outlying areas.
The program-specific requirements for the adult, dislocated worker, and youth programs that must be included in the Unified State Plan are described in sec. 102(b)(2)(D) of WIOA. Additional planning requirements may be explained in joint planning guidelines issued by the Secretaries of Labor and Education.
The program-specific requirements for the AEFLA program in title II that must be included in the Unified State Plan are described in secs. 102(b)(2)(C) and 102(b)(2)(D)(ii) of WIOA.
(a) With regard to the description required in sec. 102(b)(2)(D)(ii)(I) of WIOA pertaining to content standards, the Unified State Plan must describe how the eligible agency will, by July 1, 2016, align its content standards for adult education with State-adopted challenging academic content standards under the Elementary and Secondary Education Act of 1965, as amended.
(b) With regard to the description required in sec. 102(b)(2)(C)(iv) of WIOA pertaining to the methods and factors the State will use to distribute funds under the core programs, for title II of WIOA, the Unified State Plan must include—
(1) How the eligible agency will award multi-year grants on a competitive basis to eligible providers in the State; and
(2) How the eligible agency will provide direct and equitable access to funds using the same grant or contract announcement and application procedure.
The Employment Service program authorized under the Wagner-Peyser Act of 1933, as amended by WIOA title III, is subject to requirements in sec. 102(b) of WIOA, including any additional requirements imposed by the Secretary of Labor under secs. 102(b)(2)(C)(viii) and 102(b)(2)(D)(iv) of WIOA, as explained in joint planning guidelines issued by the Secretaries of Labor and Education.
The program specific-requirements for the vocational rehabilitation services portion of the Unified or Combined State Plan are set forth in sec. 101(a) of the Rehabilitation Act of 1973, as amended. All submission requirements for the vocational rehabilitation services portion of the Unified or Combined State Plan are in addition to the jointly developed strategic and operational content requirements prescribed by sec. 102(b) of WIOA.
(a) The Unified State Plan described in § 361.105 must be submitted in accordance with WIOA sec. 102(c), as explained in joint planning guidelines issued jointly by the Secretaries of Labor and Education.
(b) A State must submit its Unified State Plan to the Secretary of Labor pursuant to a process identified by the Secretary.
(1) The initial Unified State Plan must be submitted no later than 120 days prior to the commencement of the second full program year of WIOA.
(2) Subsequent Unified State Plans must be submitted no later than 120 days prior to the end of the 4-year period covered by a preceding Unified State Plan.
(3) For purposes of paragraph (b) of this section, “program year” means July 1 through June 30 of any year.
(c) The Unified State Plan must be developed with the assistance of the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d), and must be developed in coordination with administrators with optimum policy-making authority for the core programs and required one-stop partners.
(d) The State must provide an opportunity for public comment on and input into the development of the Unified State Plan prior to its submission.
(1) The opportunity for public comment must include an opportunity for comment by representatives of Local WDBs and chief elected officials, businesses, representatives of labor organizations, community-based organizations, adult education providers, institutions of higher education, other stakeholders with an interest in the services provided by the six core programs, and the general public, including individuals with disabilities.
(2) Consistent with the “Sunshine Provision” of WIOA in sec. 101(g), the State WDB must make information regarding the Unified State Plan available to the public through electronic means and regularly occurring open meetings in accordance with State law. The Unified State Plan must describe the State's process and timeline for ensuring a meaningful opportunity for public comment.
(e) Upon receipt of the Unified State Plan from the State, the Secretary of Labor will ensure that the entire Unified State Plan is submitted to the Secretary of Education pursuant to a process developed by the Secretaries.
(f) The Unified State Plan is subject to the approval of both the Secretary of Labor and the Secretary of Education.
(g) Before the Secretaries of Labor and Education approve the Unified State Plan, the vocational rehabilitation services portion of the Unified State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be approved by the Commissioner of the Rehabilitation Services Administration.
(h) The Secretaries of Labor and Education will review and approve the Unified State Plan within 90 days of receipt by the Secretary of Labor, unless the Secretary of Labor or the Secretary of Education determines in writing within that period that:
(1) The plan is inconsistent with a core program's requirements;
(2) The Unified State Plan is inconsistent with any requirement of sec. 102 of WIOA; or
(3) The plan is incomplete or otherwise insufficient to determine whether it is consistent with a core program's requirements or other requirements of WIOA.
(i) If neither the Secretary of Labor nor the Secretary of Education makes the written determination described in paragraph (h) of this section within 90 days of the receipt by the Secretaries, the Unified State Plan will be considered approved.
(a) In addition to the required modification review set forth in paragraph (b) of this section, a Governor may submit a modification of its Unified State Plan at any time during the 4-year period of the plan.
(b) Modifications are required, at a minimum:
(1) At the end of the first 2-year period of any 4-year State Plan, wherein the State WDB must review the Unified State Plan, and the Governor must submit modifications to the plan to reflect changes in labor market and economic conditions or other factors affecting the implementation of the Unified State Plan;
(2) When changes in Federal or State law or policy substantially affect the strategies, goals, and priorities upon which the Unified State Plan is based;
(3) When there are changes in the statewide vision, strategies, policies, State negotiated levels of performance as described in § 361.170(b), the methodology used to determine local allocation of funds, reorganizations that change the working relationship with system employees, changes in organizational responsibilities, changes to the membership structure of the State WDB or alternative entity, and similar substantial changes to the State's workforce development system.
(c) Modifications to the Unified State Plan are subject to the same public review and comment requirements in § 361.130(d) that apply to the development of the original Unified State Plan.
(d) Unified State Plan modifications must be approved by the Secretaries of Labor and Education, based on the approval standards applicable to the original Unified State Plan under § 361.130. This approval must come after the approval of the Commissioner of the Rehabilitation Services Administration for modification of any portion of the plan described in sec. 102(b)(2)(D)(iii) of WIOA.
(a) A State may choose to develop and submit a 4-year Combined State Plan in lieu of the Unified State Plan described in §§ 361.105 through 361.125.
(b) A State that submits a Combined State Plan covering an activity or program described in paragraph (d) of this section that is, in accordance with WIOA sec. 103(c), approved or deemed complete under the law relating to the program will not be required to submit any other plan or application in order to receive Federal funds to carry out the core programs or the program or activities described under paragraph (d) of this section that are covered by the Combined State Plan.
(c) If a State develops a Combined State Plan, it must be submitted in accordance with the process described in § 361.143.
(d) If a State chooses to submit a Combined State Plan, the plan must include the six core programs and one or more of the Combined State Plan partner programs and activities described in sec. 103(a)(2) of WIOA. The Combined State Plan partner programs and activities that may be included in the Combined State Plan are:
(1) Career and technical education programs authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.);
(2) Temporary Assistance for Needy Families or TANF, authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);
(3) Employment and training programs authorized under sec. 6(d)(4) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
(4) Work programs authorized under sec. 6(o) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(o));
(5) Trade adjustment assistance activities under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
(6) Services for veterans authorized under chapter 41 of title 38 United States Code;
(7) Programs authorized under State unemployment compensation laws (in accordance with applicable Federal law);
(8) Senior Community Service Employment Programs under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
(9) Employment and training activities carried out by the Department of Housing and Urban Development (HUD);
(10) Employment and training activities carried out under the Community Services Block Grant Act (42 U.S.C. 9901 et seq.); and
(11) Reintegration of offenders programs authorized under sec. 212 of the Second Chance Act of 2007 (42 U.S.C. 17532).
(e) A Combined State Plan must contain:
(1) For the core programs, the information required by sec. 102(b) of WIOA and §§ 361.105 through 361.125, as explained in the joint planning guidelines issued by the Secretaries;
(2) For the Combined State Plan partner programs and activities, except as described in paragraph (h) of this section, the information required by the law authorizing and governing that program to be submitted to the appropriate Secretary, any other applicable legal requirements, and any common planning requirements described in sec. 102(b) of WIOA, as explained in the joint planning guidelines issued by the Secretaries;
(3) A description of the methods used for joint planning and coordination among the core programs, and with the required one-stop partner programs and other programs and activities included in the State Plan; and
(4) An assurance that all of the entities responsible for planning or administering the programs described in the Combined State Plan have had a meaningful opportunity to review and comment on all portions of the plan.
(f) Each Combined State Plan partner program included in the Combined State Plan remains subject to the applicable program-specific requirements of the Federal law and regulations, and any other applicable legal or program requirements, governing the implementation and operation of that program.
(g) For purposes of §§ 361.140 through 361.145 the term “appropriate Secretary” means the head of the Federal agency who exercises either plan or application approval authority for the program or activity under the Federal law authorizing the program or activity or, if there are no planning or application requirements, who exercises administrative authority over the program or activity under that Federal law.
(h) States that include employment and training activities carried out under the Community Services Block Grant (CSBG) Act (42 U.S.C. 9901 et seq.) under a Combined State Plan would submit all other required elements of a complete CSBG State Plan directly to the Federal agency that administers the program, according to the requirements of Federal law and regulations.
(i) States that submit employment and training activities carried out by HUD under a Combined State Plan would submit any other required planning documents for HUD programs directly to HUD, according to the requirements of Federal law and regulations.
(a) For purposes of § 361.140(a), if a State chooses to develop a Combined State Plan it must submit the Combined State Plan in accordance with the requirements described below and sec. 103 of WIOA, as explained in the joint planning guidelines issued by the Secretaries of Labor and Education.
(b) The Combined State Plan must be developed with the assistance of the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d), and must be developed in coordination with administrators with optimum policy-making authority for the core programs and required one-stop partners.
(c) The State must provide an opportunity for public comment on and input into the development of the Combined State Plan prior to its submission.
(1) The opportunity for public comment for the portions of the Combined State Plan that cover the core programs must include an opportunity for comment by representatives of Local WDBs and chief elected officials, businesses, representatives of labor organizations, community-based organizations, adult education providers, institutions of higher education, other stakeholders with an interest in the services provided by the six core programs, and the general public, including individuals with disabilities.
(2) Consistent with the “Sunshine Provision” of WIOA in sec. 101(g), the State WDB must make information regarding the Combined State Plan available to the public through electronic means and regularly occurring open meetings in accordance with State law. The Combined State Plan must describe the State's process and timeline for ensuring a meaningful opportunity for public comment on the portions of the plan covering core programs.
(3) The portions of the plan that cover the Combined State Plan partner programs are subject to any public comment requirements applicable to those programs.
(d) The State must submit to the Secretaries of Labor and Education and to the Secretary of the agency with responsibility for approving the program's plan or deeming it complete under the law governing the program, as part of its Combined State Plan, any plan, application, form, or any other similar document that is required as a condition for the approval of Federal funding under the applicable program or activity. Such submission must occur in accordance with a process identified by the relevant Secretaries in paragraph (a) of this section.
(e) The Combined State Plan will be approved or disapproved in accordance with the requirements of sec. 103(c) of WIOA.
(1) The portion of the Combined State Plan covering programs administered by the Departments of Labor and Education must be reviewed, and approved or disapproved, by the appropriate Secretary within 90 days beginning on the day the Combined State Plan is received by the appropriate Secretary from the State, consistent with paragraph (f) of this section. Before the Secretaries of Labor and Education approve the Combined State Plan, the vocational rehabilitation services portion of the Combined State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be approved by the Commissioner of the Rehabilitation Services Administration.
(2) If an appropriate Secretary other than the Secretary of Labor or the Secretary of Education has authority to approve or deem complete a portion of the Combined State Plan for a program or activity described in § 361.140(d), that portion of the Combined State Plan must be reviewed, and approved, disapproved, or deemed complete, by the appropriate Secretary within 120 days beginning on the day the Combined State Plan is received by the appropriate Secretary from the State consistent with paragraph (f) of this section.
(f) The appropriate Secretaries will review and approve or deem complete the Combined State Plan within 90 or 120 days, as appropriate, as described in paragraph (e) of this section, unless the Secretaries of Labor and Education or appropriate Secretary have determined in writing within that period that:
(1) The Combined State Plan is inconsistent with the requirements of the six core programs or the Federal laws authorizing or applicable to the program or activity involved, including the criteria for approval of a plan or application, or deeming the plan complete, if any, under such law;
(2) The portion of the Combined State Plan describing the six core programs or the program or activity described in paragraph (a) of this section involved does not satisfy the criteria as provided in sec. 102 or 103 of WIOA, as applicable; or
(3) The Combined State Plan is incomplete, or otherwise insufficient to determine whether it is consistent with a core program's requirements, other requirements of WIOA, or the Federal laws authorizing, or applicable to, the program or activity described in § 361.140(d), including the criteria for approval of a plan or application, if any, under such law.
(g) If the Secretary of Labor, the Secretary of Education, or the appropriate Secretary does not make the written determination described in paragraph (f) of this section within the relevant period of time after submission of the Combined State Plan, that portion of the Combined State Plan over which the Secretary has jurisdiction will be considered approved.
(h) The Secretaries of Labor and Education's written determination of approval or disapproval regarding the portion of the plan for the six core programs may be separate from the written determination of approval, disapproval, or completeness of the program-specific requirements of Combined State Plan partner programs and activities described in § 361.140(d) and included in the Combined State Plan.
(i) Special rule. In paragraphs (f)(1) and (3) of this section, the term “criteria for approval of a plan or application,” with respect to a State or a core program or a program under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), includes a requirement for agreement between the State and the appropriate Secretaries regarding State performance measures or State performance accountability measures, as the case may be, including levels of performance.
(a) For the core program portions of the Combined State Plan, modifications are required, at a minimum:
(1) By the end of the first 2-year period of any 4-year State Plan. The State WDB must review the Combined State Plan, and the Governor must submit modifications to the Combined State Plan to reflect changes in labor market and economic conditions or other factors affecting the implementation of the Combined State Plan;
(2) When changes in Federal or State law or policy substantially affect the strategies, goals, and priorities upon which the Combined State Plan is based;
(3) When there are changes in the statewide vision, strategies, policies, State negotiated levels of performance as described in § 361.170(b), the methodology used to determine local allocation of funds, reorganizations that change the working relationship with system employees, changes in organizational responsibilities, changes to the membership structure of the State WDB or alternative entity, and similar substantial changes to the State's workforce development system.
(b) In addition to the required modification review described in paragraph (a)(1) of this section, a State may submit a modification of its Combined State Plan at any time during the 4-year period of the plan.
(c) For any Combined State Plan partner programs and activities described in § 361.140(d) that are included in a State's Combined State Plan, the State—
(1) May decide if the modification requirements under WIOA sec. 102(c)(3) that apply to the core programs will apply to the Combined State Plan partner programs, as long as consistent with any other modification requirements for the programs, or may comply with the requirements applicable to only the particular program or activity; and
(2) Must submit, in accordance with the procedure described in § 361.143, any modification, amendment, or revision required by the Federal law authorizing, or applicable to, the Combined State Plan partner program or activity.
(i) If the underlying programmatic requirements change (e.g., the authorizing statute is reauthorized) for Federal laws authorizing such programs, a State must either modify its Combined State Plan or submit a separate plan to the appropriate Federal agency in accordance with the new Federal law authorizing the Combined State Plan partner program or activity and other legal requirements applicable to such program or activity.
(ii) If the modification, amendment, or revision affects the administration of only that particular Combined State Plan partner program and has no impact on the Combined State Plan as a whole or the integration and administration of the core and other Combined State Plan partner programs at the State level, modifications must be submitted for approval to only the appropriate Secretary, based on the approval standards applicable to the original Combined State Plan under § 361.143, if the State elects, or in accordance with the procedures and requirements applicable to the particular Combined State Plan partner program.
(3) A State also may amend its Combined State Plan to add a Combined State Plan partner program or activity described in § 361.140(d).
(d) Modifications of the Combined State Plan are subject to the same public review and comment requirements that apply to the development of the original Combined State Plan as described in § 361.143(c) except that, if the modification, amendment, or revision affects the administration of a particular Combined State Plan partner program and has no impact on the Combined State Plan as a whole or the integration and administration of the core and other Combined State Plan partner programs at the State level, a State may comply instead with the procedures and requirements applicable to the particular Combined State Plan partner program.
(e) Modifications for the core program portions of the Combined State Plan must be approved by the Secretaries of Labor and Education, based on the approval standards applicable to the original Combined State Plan under § 361.143. This approval must come after the approval of the Commissioner of the Rehabilitation Services Administration for modification of any portion of the Combined State Plan described in sec. 102(b)(2)(D)(iii) of WIOA.
(a) Participant. A reportable individual who has received services other than the services described in paragraph (a)(3) of this section, after satisfying all applicable programmatic requirements for the provision of services, such as eligibility determination.
(1) For the Vocational Rehabilitation (VR) program, a participant is a reportable individual who has an approved and signed Individualized Plan for Employment (IPE) and has begun to receive services.
(2) For the Workforce Innovation and Opportunity Act (WIOA) title I youth program, a participant is a reportable individual who has satisfied all applicable program requirements for the provision of services, including eligibility determination, an objective assessment, and development of an individual service strategy, and received 1 of the 14 WIOA youth program elements identified in sec. 129(c)(2) of WIOA.
(3) The following individuals are not participants:
(i) Individuals in an Adult Education and Family Literacy Act (AEFLA) program who have not completed at least 12 contact hours;
(ii) Individuals who only use the self-service system.
(A) Subject to paragraph (a)(3)(ii)(B) of this section, self-service occurs when individuals independently access any workforce development system program's information and activities in either a physical location, such as a one-stop center resource room or partner agency, or remotely via the use of electronic technologies.
(B) Self-service does not uniformly apply to all virtually accessed services. For example, virtually accessed services that provide a level of support beyond independent job or information seeking on the part of an individual would not qualify as self-service.
(iii) Individuals who receive information-only services or activities, which provide readily available information that does not require an assessment by a staff member of the individual's skills, education, or career objectives.
(4) Programs must include participants in their performance calculations.
(b) Reportable individual. An individual who has taken action that demonstrates an intent to use program services and who meets specific reporting criteria of the program, including:
(1) Individuals who provide identifying information;
(2) Individuals who only use the self-service system; or
(3) Individuals who only receive information-only services or activities.
(c) Exit. As defined for the purpose of performance calculations, exit is the point after which a participant who has received services through any program meets the following criteria:
(1) For the adult, dislocated worker, and youth programs authorized under WIOA title I, the AEFLA program authorized under WIOA title II, and the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III, exit date is the last date of service.
(i) The last day of service cannot be determined until at least 90 days have elapsed since the participant last received services; services do not include self-service, information-only services or activities, or follow-up services. This also requires that there are no plans to provide the participant with future services.
(ii) [Reserved].
(2)(i) For the VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV (VR program):
(A) The participant's record of service is closed in accordance with § 361.56 because the participant has achieved an employment outcome; or
(B) The participant's service record is closed because the individual has not achieved an employment outcome or the individual has been determined ineligible after receiving services in accordance with § 361.43.
(ii) Notwithstanding any other provision of this section, a participant will not be considered as meeting the definition of exit from the VR program if the participant's service record is closed because the participant has achieved a supported employment outcome in an integrated setting but not in competitive integrated employment.
(3)(i) A State may implement a common exit policy for all or some of the core programs in WIOA title I and the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III, and any additional required partner program(s) listed in sec. 121(b)(1)(B) of WIOA that is under the authority of the U.S. Department of Labor (DOL).
(ii) If a State chooses to implement a common exit policy, the policy must require that a participant is exited only when all of the criteria in paragraph (c)(1) of this section are met for the WIOA title I core programs and the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III, as well as any additional required partner programs listed in sec. 121(b)(1)(B) of WIOA under the authority of DOL to which the common exit policy applies in which the participant is enrolled.
(d) State. For purposes of this part, other than in regard to sanctions or the statistical adjustment model, all references to “State” include the outlying areas of American Samoa, Guam, Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, and, as applicable, the Republic of Palau.
(a) All States submitting either a Unified or Combined State Plan under §§ 361.130 and 361.143, must propose expected levels of performance for each of the primary indicators of performance for the adult, dislocated worker, and youth programs authorized under WIOA title I; the AEFLA program authorized under WIOA title II; the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III; and the VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV.
(1) Primary indicators of performance. The six primary indicators of performance for the adult and dislocated worker programs, the AEFLA program, and the VR program are:
(i) The percentage of participants who are in unsubsidized employment during the second quarter after exit from the program;
(ii) The percentage of participants who are in unsubsidized employment during the fourth quarter after exit from the program;
(iii) Median earnings of participants who are in unsubsidized employment during the second quarter after exit from the program;
(iv)(A) The percentage of those participants enrolled in an education or training program (excluding those in on-the-job training [OJT] and customized training) who attained a recognized postsecondary credential or a secondary school diploma, or its recognized equivalent, during participation in or within 1 year after exit from the program.
(B) A participant who has attained a secondary school diploma or its recognized equivalent is included in the percentage of participants who have attained a secondary school diploma or recognized equivalent only if the participant also is employed or is enrolled in an education or training program leading to a recognized postsecondary credential within 1 year after exit from the program;
(v) The percentage of participants who, during a program year, are in an education or training program that leads to a recognized postsecondary credential or employment and who are achieving measurable skill gains, defined as documented academic, technical, occupational, or other forms of progress, towards such a credential or employment. Depending upon the type of education or training program, documented progress is defined as one of the following:
(A) Documented achievement of at least one educational functioning level of a participant who is receiving instruction below the postsecondary education level;
(B) Documented attainment of a secondary school diploma or its recognized equivalent;
(C) Secondary or postsecondary transcript or report card for a sufficient number of credit hours that shows a participant is meeting the State unit's academic standards;
(D) Satisfactory or better progress report, towards established milestones, such as completion of OJT or completion of 1 year of an apprenticeship program or similar milestones, from an employer or training provider who is providing training; or
(E) Successful passage of an exam that is required for a particular occupation or progress in attaining technical or occupational skills as evidenced by trade-related benchmarks such as knowledge-based exams.
(vi) The percentage of participants in unsubsidized employment during the second quarter after exit from the program who were employed by the same employer in the second and fourth quarters after exit. For the six core programs, this indicator is a statewide indicator reported by one core program on behalf of all six core programs in the State, as described in guidance.
(2) Participants. For purposes of the primary indicators of performance in paragraph (a)(1) of this section, “participant” will have the meaning given to it in § 361.150(a), except that—
(i) For purposes of determining program performance levels under indicators set forth in paragraphs (a)(1)(i) through (iv) and (vi) of this section, a “participant” does not include a participant who received services under sec. 225 of WIOA and exits such program while still in a correctional institution as defined in sec. 225(e)(1) of WIOA; and
(ii) The Secretaries of Labor and Education may, as needed and consistent with the Paperwork Reduction Act (PRA), make further determinations as to the participants to be included in calculating program performance levels for purposes of any of the performance indicators set forth in paragraph (a)(1) of this section.
(b) The primary indicators in paragraphs (a)(1)(i) through (iii) and (vi) of this section apply to the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III.
(c) For the youth program authorized under WIOA title I, the primary indicators are:
(1) Percentage of participants who are in education or training activities, or in unsubsidized employment, during the second quarter after exit from the program;
(2) Percentage of participants in education or training activities, or in unsubsidized employment, during the fourth quarter after exit from the program;
(3) Median earnings of participants who are in unsubsidized employment during the second quarter after exit from the program;
(4) The percentage of those participants enrolled in an education or training program (excluding those in OJT and customized training) who obtained a recognized postsecondary credential or a secondary school diploma, or its recognized equivalent, during participation in or within 1 year after exit from the program, except that a participant who has attained a secondary school diploma or its recognized equivalent is included as having attained a secondary school diploma or recognized equivalent only if the participant is also employed or is enrolled in an education or training program leading to a recognized postsecondary credential within 1 year from program exit;
(5) The percentage of participants who during a program year, are in an education or training program that leads to a recognized postsecondary credential or employment and who are achieving measurable skill gains, defined as documented academic, technical, occupational or other forms of progress towards such a credential or employment. Depending upon the type of education or training program, documented progress is defined as one of the following:
(i) Documented achievement of at least one educational functioning level of a participant who is receiving instruction below the postsecondary education level;
(ii) Documented attainment of a secondary school diploma or its recognized equivalent;
(iii) Secondary or postsecondary transcript or report card for a sufficient number of credit hours that shows a participant is achieving the State unit's academic standards;
(iv) Satisfactory or better progress report, towards established milestones, such as completion of OJT or completion of 1 year of an apprenticeship program or similar milestones, from an employer or training provider who is providing training; or
(v) Successful passage of an exam that is required for a particular occupation or progress in attaining technical or occupational skills as evidenced by trade-related benchmarks such as knowledge-based exams.
(6) The percentage of participants in unsubsidized employment during the second quarter after exit from the program who were employed by the same employer in the second and fourth quarters after exit. For the six core programs, this indicator is a statewide indicator reported by one core program on behalf of all six core programs in the State, as described in guidance.
(a) The State performance report required by sec. 116(d)(2) of WIOA must be submitted annually using a template the Departments of Labor and Education will disseminate, and must provide, at a minimum, information on the actual performance levels achieved consistent with § 361.175 with respect to:
(1) The total number of participants served, and the total number of participants who exited each of the core programs identified in sec. 116(b)(3)(A)(ii) of WIOA, including disaggregated counts of those who participated in and exited a core program, by:
(i) Individuals with barriers to employment as defined in WIOA sec. 3(24); and
(ii) Co-enrollment in any of the programs in WIOA sec. 116(b)(3)(A)(ii).
(2) Information on the performance levels achieved for the primary indicators of performance for all of the core programs identified in § 361.155 including disaggregated levels for:
(i) Individuals with barriers to employment as defined in WIOA sec. 3(24);
(ii) Age;
(iii) Sex; and
(iv) Race and ethnicity.
(3) The total number of participants who received career services and the total number of participants who exited from career services for the most recent program year and the 3 preceding program years, and the total number of participants who received training services and the total number of participants who exited from training services for the most recent program year and the 3 preceding program years, as applicable to the program;
(4) Information on the performance levels achieved for the primary indicators of performance consistent with § 361.155 for career services and training services for the most recent program year and the 3 preceding program years, as applicable to the program;
(5) The percentage of participants in a program who attained unsubsidized employment related to the training received (often referred to as training-related employment) through WIOA title I, subtitle B programs;
(6) The amount of funds spent on career services and the amount of funds spent on training services for the most recent program year and the 3 preceding program years, as applicable to the program;
(7) The average cost per participant for those participants who received career services and training services, respectively, during the most recent program year and the 3 preceding program years, as applicable to the program;
(8) The percentage of a State's annual allotment under WIOA sec. 132(b) that the State spent on administrative costs; and
(9) Information that facilitates comparisons of programs with programs in other States.
(10) For WIOA title I programs, a State performance narrative, which, for States in which a local area is implementing a pay-for-performance contracting strategy, at a minimum provides:
(i) A description of pay-for-performance contract strategies being used for programs;
(ii) The performance of service providers entering into contracts for such strategies, measured against the levels of performance specified in the contracts for such strategies; and
(iii) An evaluation of the design of the programs and performance strategies and, when available, the satisfaction of employers and participants who received services under such strategies.
(b) The disaggregation of data for the State performance report must be done in compliance with WIOA sec. 116(d)(6)(C).
(c) The State performance reports must include a mechanism of electronic access to the State's local area and eligible training provider (ETP) performance reports.
(d) States must comply with these requirements from sec. 116 of WIOA as explained in joint guidance issued by the Departments of Labor and Education, which may include information on reportable individuals as determined by the Secretaries of Labor and Education.
States may identify additional indicators of performance for the six core programs. If a State does so, these indicators must be included in the Unified or Combined State Plan.
(a) A State must submit in the State Plan expected levels of performance on the primary indicators of performance for each core program as required by sec. 116(b)(3)(A)(iii) of WIOA as explained in joint guidance issued by the Secretaries of Labor and Education.
(1) The initial State Plan submitted under WIOA must contain expected levels of performance for the first 2 years of the State Plan.
(2) States must submit expected levels of performance for the third and fourth year of the State Plan before the third program year consistent with §§ 361.135 and 361.145.
(b) States must reach agreement on levels of performance with the Secretaries of Labor and Education for each indicator for each core program. These are the negotiated levels of performance. The negotiated levels must be based on the following factors:
(1) How the negotiated levels of performance compare with State levels of performance established for other States;
(2) The application of an objective statistical model established by the Secretaries of Labor and Education, subject to paragraph (d) of this section;
(3) How the negotiated levels promote continuous improvement in performance based on the primary indicators and ensure optimal return on investment of Federal funds; and
(4) The extent to which the negotiated levels assist the State in meeting the performance goals established by the Secretaries of Labor and Education for the core programs in accordance with the Government Performance and Results Act of 1993, as amended.
(c) An objective statistical adjustment model will be developed and disseminated by the Secretaries of Labor and Education. The model will be based on:
(1) Differences among States in actual economic conditions, including but not limited to unemployment rates and job losses or gains in particular industries; and
(2) The characteristics of participants, including but not limited to:
(i) Indicators of poor work history;
(ii) Lack of work experience;
(iii) Lack of educational or occupational skills attainment;
(iv) Dislocation from high-wage and high-benefit employment;
(v) Low levels of literacy;
(vi) Low levels of English proficiency;
(vii) Disability status;
(viii) Homelessness;
(ix) Ex-offender status; and
(x) Welfare dependency.
(d) The objective statistical adjustment model developed under paragraph (c) of this section will be:
(1) Applied to the core programs' primary indicators upon availability of data which are necessary to populate the model and apply the model to the local core programs;
(2) Subject to paragraph (d)(1) of this section, used before the beginning of a program year in order to reach agreement on State negotiated levels for the upcoming program year; and
(3) Subject to paragraph (d)(1) of this section, used to revise negotiated levels at the end of a program year based on actual economic conditions and characteristics of participants served, consistent with sec. 116(b)(3)(A)(vii) of WIOA.
(e) The negotiated levels revised at the end of the program year, based on the statistical adjustment model, are the adjusted levels of performance.
(f) States must comply with these requirements from sec. 116 of WIOA as explained in joint guidance issued by the Departments of Labor and Education.
(a)(1) States must, consistent with State laws, use quarterly wage record information in measuring a State's performance on the primary indicators of performance outlined in § 361.155 and a local area's performance on the primary indicators of performance identified in § 361.205.
(2) The use of social security numbers from participants and such other information as is necessary to measure the progress of those participants through quarterly wage record information is authorized.
(3) To the extent that quarterly wage records are not available for a participant, States may use other information as is necessary to measure the progress of those participants through methods other than quarterly wage record information.
(b) “Quarterly wage record information” means intrastate and interstate wages paid to an individual, the social security number (or numbers, if more than one) of the individual, and the name, address, State, and the Federal employer identification number of the employer paying the wages to the individual.
(c) The Governor may designate a State agency (or appropriate State entity) to assist in carrying out the performance reporting requirements for WIOA core programs and ETPs. The Governor or such agency (or appropriate State entity) is responsible for:
(1) Facilitating data matches;
(2) Data quality reliability; and
(3) Protection against disaggregation that would violate applicable privacy standards.
A State will be subject to financial sanction under WIOA sec. 116(f) if it fails to:
(a) Submit the State annual performance report required under WIOA sec. 116(d)(2); or
(b) Meet adjusted levels of performance for the primary indicators of performance in accordance with sec. 116(f) of WIOA.
(a) Sanctions will be applied when a State fails to submit the State annual performance report required under sec. 116(d)(2) of WIOA. A State fails to report if the State either:
(1) Does not submit a State annual performance report by the date for timely submission set in performance reporting guidance; or
(2) Submits a State annual performance report by the date for timely submission, but the report is incomplete.
(b) Sanctions will not be applied if the reporting failure is due to exceptional circumstances outside of the State's control. Exceptional circumstances may include, but are not limited to:
(1) Natural disasters;
(2) Unexpected personnel transitions; and
(3) Unexpected technology related issues.
(c) In the event that a State may not be able to submit a complete and accurate performance report by the deadline for timely reporting:
(1) The State must notify the Secretary of Labor or Secretary of Education as soon as possible, but no later than 30 days prior to the established deadline for submission, of a potential impact on the State's ability to submit its State annual performance report in order to not be considered failing to report.
(2) In circumstances where unexpected events occur less than 30 days before the established deadline for submission of the State annual performance reports, the Secretaries of Labor and Education will review requests for extending the reporting deadline in accordance with the Departments of Labor and Education's procedures that will be established in guidance.
(a) States' negotiated levels of performance will be adjusted through the application of the statistical adjustment model established under § 361.170 to account for actual economic conditions experienced during a program year and characteristics of participants, annually at the close of each program year.
(b) Any State that fails to meet adjusted levels of performance for the primary indicators of performance outlined in § 361.155 for any year will receive technical assistance, including assistance in the development of a performance improvement plan provided by the Secretary of Labor or Secretary of Education.
(c) Whether a State has failed to meet adjusted levels of performance will be determined using the following criteria:
(1) The overall State program score, which is expressed as the percent achieved, compares the actual results achieved by a core program on the primary indicators of performance, except for the effectiveness in serving employers indicator described in § 361.155(a)(1)(vi), to the adjusted levels of performance for that core program. The average of the percentages achieved of the adjusted level of performance for each of the primary indicators, except for the effectiveness in serving employers indicator described in § 361.155(a)(1)(vi), by a core program will constitute the overall State program score.
(2) However, until all indicators for the core program have at least 2 years of complete data, the overall State program score will be based on a comparison of the actual results achieved to the adjusted level of performance for each of the primary indicators that have at least 2 years of complete data for that program.
(3) The overall State indicator score, which is expressed as the percent achieved, compares the actual results achieved on a primary indicator of performance by all core programs in a State to the adjusted levels of performance for that primary indicator.
(i) The average of the percentages achieved of the adjusted level of performance by all of the core programs on that indicator will constitute the overall State indicator score, except for the effectiveness in serving employers indicator described in § 361.155(a)(1)(vi).
(ii) The overall State indicator score for effectiveness in serving employers, as reported by one core program on behalf of all six core programs in the State, as described in guidance, is a statewide indicator that reflects the performance for all core programs. It is calculated as the statewide percentage achieved of the statewide adjusted level of performance.
(4) However, until all indicators for the State have at least 2 years of complete data, the overall State indicator score will be based on a comparison of the actual results achieved to the adjusted level of performance for each of the primary indicators that have at least 2 years of complete data in a State.
(5) The individual indicator score, which is expressed as the percent achieved, compares the actual results achieved by each core program on each of the individual primary indicators to the adjusted levels of performance for each of the program's primary indicators of performance, except for the effectiveness in serving employers indicator described in § 361.155(a)(1)(vi).
(d) A performance failure occurs when:
(1) Any overall State program score or overall State indicator score falls below 90 percent for the program year; or
(2) Any of the States' individual indicator scores fall below 50 percent for the program year.
(e) Sanctions based on performance failure will be applied to States if, for 2 consecutive years, the State fails to meet:
(1) 90 percent of the overall State program score for the same core program;
(2) 90 percent of the overall State indicator score for the same primary indicator; or
(3) 50 percent of the same indicator score for the same program.
(a) The Secretaries of Labor and Education will reduce the Governor's Reserve Allotment by five percent of the maximum available amount for the immediately succeeding program year if:
(1) The State fails to submit the State annual performance reports as required under WIOA sec. 116(d)(2), as defined in § 361.185;
(2) The State fails to meet State adjusted levels of performance for the same primary performance indicator(s) under either § 361.190(d)(1) for the second consecutive year as defined in § 361.190; or
(3) The State's score on the same indicator for the same program falls below 50 percent under § 361.190(d)(2) for the second consecutive year as defined in § 361.190.
(b) If the State fails under paragraphs (a)(1) and either (a)(2) or (3) of this section in the same program year, the Secretaries of Labor and Education will reduce the Governor's Reserve Allotment by 10 percent of the maximum available amount for the immediately succeeding program year.
(c) If a State's Governor's Reserve Allotment is reduced:
(1) The reduced amount will not be returned to the State in the event that the State later improves performance or submits its annual performance report; and
(2) The Governor's Reserve will continue to be set at the reduced level in each subsequent year until the Secretary of Labor or the Secretary of Education, depending on which program is impacted, determines that the State met the State adjusted levels of performance for the applicable primary performance indicators and has submitted all of the required performance reports.
(d) A State may request review of a sanction the Secretary of Labor imposes in accordance with the provisions of 20 CFR 683.800.
(a) In addition to sanctions for failure to report or failure to meet adjusted levels of performance, States will be subject to administrative actions in the case of poor performance.
(b) States' performance achievement on the individual primary indicators will be assessed in addition to the overall State program score and overall State indicator score. Based on this assessment, as clarified and explained in guidance, for performance on any individual primary indicator, the Secretary of Labor or the Secretary of Education will require the State to establish a performance risk plan to address continuous improvement on the individual primary indicator.
(a) Each local area in a State under WIOA title I is subject to the same primary indicators of performance for the core programs for WIOA title I under § 361.155(a)(1) and (c) that apply to the State.
(b) In addition to the indicators described in paragraph (a) of this section, under § 361.165, the Governor may apply additional indicators of performance to local areas in the State.
(c) States must annually make local area performance reports available to the public using a template that the Departments of Labor and Education will disseminate in guidance, including by electronic means. The State must provide electronic access to the public local area performance report in its annual State performance report.
(d) The local area performance report must include:
(1) The actual results achieved under § 361.155 and the information required under § 361.160(a);
(2) The percentage of a local area's allotment under WIOA secs. 128(b) and 133(b) that the local area spent on administrative costs; and
(3) Other information that facilitates comparisons of programs with programs in other local areas (or planning regions if the local area is part of a planning region).
(e) The disaggregation of data for the local area performance report must be done in compliance with WIOA sec. 116(d)(6)(C).
(f) States must comply with any requirements from sec. 116(d)(3) of WIOA as explained in guidance, including the use of the performance reporting template, issued by DOL.
(a) The objective statistical adjustment model required under sec. 116(b)(3)(A)(viii) of WIOA and described in § 361.170(c) must be:
(1) Applied to the core programs' primary indicators upon availability of data which are necessary to populate the model and apply the model to the local core programs;
(2) Used in order to reach agreement on local negotiated levels of performance for the upcoming program year; and
(3) Used to establish adjusted levels of performance at the end of a program year based on actual conditions, consistent with WIOA sec. 116(c)(3).
(b) Until all indicators for the core program in a local area have at least 2 years of complete data, the comparison of the actual results achieved to the adjusted levels of performance for each of the primary indicators only will be applied where there are at least 2 years of complete data for that program.
(c) The Governor, Local Workforce Development Board (WDB), and chief elected official must reach agreement on local negotiated levels of performance based on a negotiations process before the start of a program year with the use of the objective statistical model described in paragraph (a) of this section. The negotiations will include a discussion of circumstances not accounted for in the model and will take into account the extent to which the levels promote continuous improvement. The objective statistical model will be applied at the end of the program year based on actual economic conditions and characteristics of the participants served.
(d) The negotiations process described in paragraph (c) of this section must be developed by the Governor and disseminated to all Local WDBs and chief elected officials.
(e) The Local WDBs may apply performance measures to service providers that differ from the performance indicators that apply to the local area. These performance measures must be established after considering:
(1) The established local negotiated levels;
(2) The services provided by each provider; and
(3) The populations the service providers are intended to serve.
(a) The Governor is not required to award local incentive funds, but is authorized to provide incentive grants to local areas for performance on the primary indicators of performance consistent with WIOA sec. 134(a)(3)(A)(xi).
(b) The Governor may use non-Federal funds to create incentives for the Local WDBs to implement pay-for-performance contract strategies for the delivery of training services described in WIOA sec. 134(c)(3) or activities described in WIOA sec. 129(c)(2) in the local areas served by the Local WDBs. Pay-for-performance contract strategies must be implemented in accordance with 20 CFR part 683, subpart E and § 361.160.
(a) If a local area fails to meet the adjusted levels of performance agreed to under § 361.210 for the primary indicators of performance in the adult, dislocated worker, and youth programs authorized under WIOA title I in any program year, technical assistance must be provided by the Governor or, upon the Governor's request, by the Secretary of Labor.
(1) A State must establish the threshold for failure to meet adjusted levels of performance for a local area before coming to agreement on the negotiated levels of performance for the local area.
(i) A State must establish the adjusted level of performance for a local area, using the statistical adjustment model described in § 361.170(c).
(ii) At least 2 years of complete data on any indicator for any local core program are required in order to establish adjusted levels of performance for a local area.
(2) The technical assistance may include:
(i) Assistance in the development of a performance improvement plan;
(ii) The development of a modified local or regional plan; or
(iii) Other actions designed to assist the local area in improving performance.
(b) If a local area fails to meet the adjusted levels of performance agreed to under § 361.210 for the same primary indicators of performance for the same core program authorized under WIOA title I for a third consecutive program year, the Governor must take corrective actions. The corrective actions must include the development of a reorganization plan under which the Governor:
(1) Requires the appointment and certification of a new Local WDB, consistent with the criteria established under 20 CFR 679.350;
(2) Prohibits the use of eligible providers and one-stop partners that have been identified as achieving poor levels of performance; or
(3) Takes such other significant actions as the Governor determines are appropriate.
(a) The Local WDB and chief elected official for a local area that is subject to a reorganization plan under WIOA sec. 116(g)(2)(A) may appeal to the Governor to rescind or revise the reorganization plan not later than 30 days after receiving notice of the reorganization plan. The Governor must make a final decision within 30 days after receipt of the appeal.
(b) The Local WDB and chief elected official may appeal the final decision of the Governor to the Secretary of Labor not later than 30 days after receiving the decision from the Governor. Any appeal of the Governor's final decision must be:
(1) Appealed jointly by the Local WDB and chief elected official to the Secretary of Labor under 20 CFR 683.650; and
(2) Must be submitted by certified mail, return receipt requested, to the Secretary of Labor, U.S. Department of Labor, 200 Constitution Ave. NW., Washington, DC 20210, Attention: ASET. A copy of the appeal must be simultaneously provided to the Governor.
(c) Upon receipt of the joint appeal from the Local WDB and chief elected official, the Secretary of Labor must make a final decision within 30 days. In making this determination the Secretary of Labor may consider any comments submitted by the Governor in response to the appeals.
(d) The decision by the Governor on the appeal becomes effective at the time it is issued and remains effective unless the Secretary of Labor rescinds or revises the reorganization plan under WIOA sec. 116(g)(2)(C).
(a) States are required to make available and publish annually using a template the Departments of Labor and Education will disseminate including through electronic means, the ETP performance reports for ETPs who provide services under sec. 122 of WIOA that are described in 20 CFR 680.400 through 680.530. These reports at a minimum must include, consistent with § 361.175 and with respect to each program of study that is eligible to receive funds under WIOA:
(1) The total number of participants as defined by § 361.150(a) who received training services under the adult and dislocated worker programs authorized under WIOA title I for the most recent year and the 3 preceding program years, including:
(i) The number of participants under the adult and dislocated worker programs disaggregated by barriers to employment;
(ii) The number of participants under the adult and dislocated worker programs disaggregated by race, ethnicity, sex, and age;
(iii) The number of participants under the adult and dislocated worker programs disaggregated by the type of training entity for the most recent program year and the 3 preceding program years;
(2) The total number of participants who exit a program of study or its equivalent, including disaggregate counts by the type of training entity during the most recent program year and the 3 preceding program years;
(3) The average cost-per-participant for participants who received training services for the most recent program year and the 3 preceding program years disaggregated by type of training entity;
(4) The total number of individuals exiting from the program of study (or the equivalent) with respect to all individuals engaging in the program of study (or the equivalent); and
(5) The levels of performance achieved for the primary indicators of performance identified in § 361.155(a)(1)(i) through (iv) with respect to all individuals engaging in a program of study (or the equivalent).
(b) Apprenticeship programs registered under the National Apprenticeship Act are not required to submit ETP performance information. If a registered apprenticeship program voluntarily submits performance information to a State, the State must include this information in the report.
(c) The State must provide a mechanism of electronic access to the public ETP performance report in its annual State performance report.
(d) States must comply with any requirements from sec. 116(d)(4) of WIOA as explained in guidance issued by DOL.
(e) The Governor may designate one or more State agencies such as a State Education Agency or other State Educational Authority to assist in overseeing ETP performance and facilitating the production and dissemination of ETP performance reports. These agencies may be the same agencies that are designated as responsible for administering the ETP list as provided under 20 CFR 680.500. The Governor or such agencies, or authorities, is responsible for:
(1) Facilitating data matches between ETP records and unemployment insurance (UI) wage data in order to produce the report;
(2) The creation and dissemination of the reports as described in paragraphs (a) through (d) of this section;
(3) Coordinating the dissemination of the performance reports with the ETP list and the information required to accompany the list, as provided in 20 CFR 680.500.
(a) On a quarterly basis, each State must submit to the Secretary of Labor or the Secretary of Education, as appropriate, individual records that include demographic information, information on services received, and information on resulting outcomes, as appropriate, for each reportable individual in either of the following programs administered by the Secretary of Labor or Secretary of Education: A WIOA title I core program; the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III; or the VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV.
(b) For individual records submitted to the Secretary of Labor, those records may be required to be integrated across all programs administered by the Secretary of Labor in one single file.
(c) States must comply with the requirements of sec. 116(d)(2) of WIOA as explained in guidance issued by the Departments of Labor and Education.
(a) States must establish procedures, consistent with guidelines issued by the Secretary of Labor or the Secretary of Education, to ensure that they submit complete annual performance reports that contain information that is valid and reliable, as required by WIOA sec. 116(d)(5).
(b) If a State fails to meet standards in paragraph (a) of this section as determined by the Secretary of Labor or the Secretary of Education, the appropriate Secretary will provide technical assistance and may require the State to develop and implement corrective actions, which may require the State to provide training for its subrecipients.
(c) The Secretaries of Labor and Education will provide training and technical assistance to States in order to implement this section. States must comply with the requirements of sec. 116(d)(5) of WIOA as explained in guidance.
(a) The one-stop delivery system brings together workforce development, educational, and other human resource services in a seamless customer-focused service delivery network that enhances access to the programs' services and improves long-term employment outcomes for individuals receiving assistance. One-stop partners administer separately funded programs as a set of integrated streamlined services to customers.
(b) Title I of the Workforce Innovation and Opportunity Act (WIOA) assigns responsibilities at the local, State, and Federal level to ensure the creation and maintenance of a one-stop delivery system that enhances the range and quality of education and workforce development services that employers and individual customers can access.
(c) The system must include at least one comprehensive physical center in each local area as described in § 361.305.
(d) The system may also have additional arrangements to supplement the comprehensive center. These arrangements include:
(1) An affiliated site or a network of affiliated sites, where one or more partners make programs, services, and activities available, as described in § 361.310;
(2) A network of eligible one-stop partners, as described in §§ 361.400 through 361.410, through which each partner provides one or more of the programs, services, and activities that are linked, physically or technologically, to an affiliated site or access point that assures customers are provided information on the availability of career services, as well as other program services and activities, regardless of where they initially enter the public workforce system in the local area; and
(3) Specialized centers that address specific needs, including those of dislocated workers, youth, or key industry sectors, or clusters.
(e) Required one-stop partner programs must provide access to programs, services, and activities through electronic means if applicable and practicable. This is in addition to providing access to services through the mandatory comprehensive physical one-stop center and any affiliated sites or specialized centers. The provision of programs and services by electronic methods such as Web sites, telephones, or other means must improve the efficiency, coordination, and quality of one-stop partner services. Electronic delivery must not replace access to such services at a comprehensive one-stop center or be a substitute to making services available at an affiliated site if the partner is participating in an affiliated site. Electronic delivery systems must be in compliance with the nondiscrimination and equal opportunity provisions of WIOA sec. 188 and its implementing regulations at 29 CFR part 38.
(f) The design of the local area's one-stop delivery system must be described in the Memorandum of Understanding (MOU) executed with the one-stop partners, described in § 361.500.
(a) A comprehensive one-stop center is a physical location where job seeker and employer customers can access the programs, services, and activities of all required one-stop partners. A comprehensive one-stop center must have at least one title I staff person physically present.
(b) The comprehensive one-stop center must provide:
(1) Career services, described in § 361.430;
(2) Access to training services described in 20 CFR 680.200;
(3) Access to any employment and training activities carried out under sec. 134(d) of WIOA;
(4) Access to programs and activities carried out by one-stop partners listed in §§ 361.400 through 361.410, including the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III (Wagner-Peyser Act Employment Service program); and
(5) Workforce and labor market information.
(c) Customers must have access to these programs, services, and activities during regular business days at a comprehensive one-stop center. The Local Workforce Development Board (WDB) may establish other service hours at other times to accommodate the schedules of individuals who work on regular business days. The State WDB will evaluate the hours of access to service as part of the evaluation of effectiveness in the one-stop certification process described in § 361.800(b).
(d) “Access” to each partner program and its services means:
(1) Having a program staff member physically present at the one-stop center;
(2) Having a staff member from a different partner program physically present at the one-stop center appropriately trained to provide information to customers about the programs, services, and activities available through partner programs; or
(3) Making available a direct linkage through technology to program staff who can provide meaningful information or services.
(i) A “direct linkage” means providing direct connection at the one-stop center, within a reasonable time, by phone or through a real-time Web-based communication to a program staff member who can provide program information or services to the customer.
(ii) A “direct linkage” cannot exclusively be providing a phone number or computer Web site or providing information, pamphlets, or materials.
(e) All comprehensive one-stop centers must be physically and programmatically accessible to individuals with disabilities, as described in 29 CFR part 38, the implementing regulations of WIOA sec. 188.
(a) An affiliated site, or affiliate one-stop center, is a site that makes available to job seeker and employer customers one or more of the one-stop partners' programs, services, and activities. An affiliated site does not need to provide access to every required one-stop partner program. The frequency of program staff's physical presence in the affiliated site will be determined at the local level. Affiliated sites are access points in addition to the comprehensive one-stop center(s) in each local area. If used by local areas as a part of the service delivery strategy, affiliate sites must be implemented in a manner that supplements and enhances customer access to services.
(b) As described in § 361.315, Wagner-Peyser Act employment services cannot be a stand-alone affiliated site.
(c) States, in conjunction with the Local WDBs, must examine lease agreements and property holdings throughout the one-stop delivery system in order to use property in an efficient and effective way. Where necessary and appropriate, States and Local WDBs must take expeditious steps to align lease expiration dates with efforts to consolidate one-stop operations into service points where Wagner-Peyser Act employment services are colocated as soon as reasonably possible. These steps must be included in the State Plan.
(d) All affiliated sites must be physically and programmatically accessible to individuals with disabilities, as described in 29 CFR part 38, the implementing regulations of WIOA sec. 188.
(a) Separate stand-alone Wagner-Peyser Act Employment Service offices are not permitted under WIOA, as also described in 20 CFR 652.202.
(b) If Wagner-Peyser Act employment services are provided at an affiliated site, there must be at least one or more other partners in the affiliated site with a physical presence of combined staff more than 50 percent of the time the center is open. Additionally, the other partner must not be the partner administering local veterans' employment representatives, disabled veterans' outreach program specialists, or unemployment compensation programs. If Wagner-Peyser Act employment services and any of these 3 programs are provided at an affiliated site, an additional partner or partners must have a presence of combined staff in the center more than 50 percent of the time the center is open.
Any network of one-stop partners or specialized centers, as described in § 361.300(d)(3), must be connected to the comprehensive one-stop center and any appropriate affiliate one-stop centers, for example, by having processes in place to make referrals to these centers and the partner programs located in them. Wagner-Peyser Act employment services cannot stand alone in a specialized center. Just as described in § 361.315 for an affiliated site, a specialized center must include other programs besides Wagner-Peyser Act employment services, local veterans' employment representatives, disabled veterans' outreach program specialists, and unemployment compensation.
(a) Section 121(b)(1)(B) of WIOA identifies the entities that are required partners in the local one-stop delivery systems.
(b) The required partners are the entities responsible for administering the following programs and activities in the local area:
(1) Programs authorized under title I of WIOA, including:
(i) Adults;
(ii) Dislocated workers;
(iii) Youth;
(iv) Job Corps;
(v) YouthBuild;
(vi) Native American programs; and
(vii) Migrant and seasonal farmworker programs;
(2) The Wagner-Peyser Act Employment Service program authorized under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), as amended by WIOA title III;
(3) The Adult Education and Family Literacy Act (AEFLA) program authorized under title II of WIOA;
(4) The Vocational Rehabilitation (VR) program authorized under title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), as amended by WIOA title IV;
(5) The Senior Community Service Employment Program authorized under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
(6) Career and technical education programs at the postsecondary level authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.);
(7) Trade Adjustment Assistance activities authorized under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
(8) Jobs for Veterans State Grants programs authorized under chapter 41 of title 38, U.S.C.;
(9) Employment and training activities carried out under the Community Services Block Grant (42 U.S.C. 9901 et seq.);
(10) Employment and training activities carried out by the Department of Housing and Urban Development;
(11) Programs authorized under State unemployment compensation laws (in accordance with applicable Federal law);
(12) Programs authorized under sec. 212 of the Second Chance Act of 2007 (42 U.S.C. 17532); and
(13) Temporary Assistance for Needy Families (TANF) authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), unless exempted by the Governor under § 361.405(b).
(a) Yes, TANF, authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), is a required partner.
(b) The Governor may determine that TANF will not be a required partner in the State, or within some specific local areas in the State. In this instance, the Governor must notify the Secretaries of the U.S. Departments of Labor and Health and Human Services in writing of this determination.
(c) In States, or local areas within a State, where the Governor has determined that TANF is not required to be a partner, local TANF programs may still work in collaboration or partnership with the local one-stop centers to deliver employment and training services to the TANF population unless inconsistent with the Governor's direction.
(a) Other entities that carry out a workforce development program, including Federal, State, or local programs and programs in the private sector, may serve as additional partners in the one-stop delivery system if the Local WDB and chief elected official(s) approve the entity's participation.
(b) Additional partners may include, but are not limited to:
(1) Employment and training programs administered by the Social Security Administration, including the Ticket to Work and Self-Sufficiency Program established under sec. 1148 of the Social Security Act (42 U.S.C. 1320b-19);
(2) Employment and training programs carried out by the Small Business Administration;
(3) Supplemental Nutrition Assistance Program (SNAP) employment and training programs, authorized under secs. 6(d)(4) and 6(o) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
(4) Client Assistance Program authorized under sec. 112 of the Rehabilitation Act of 1973 (29 U.S.C. 732);
(5) Programs authorized under the National and Community Service Act of 1990 (42 U.S.C. 12501 et seq.); and
(6) Other appropriate Federal, State or local programs, including, but not limited to, employment, education, and training programs provided by public libraries or in the private sector.
(a) The entity that carries out the program and activities listed in § 361.400 or § 361.410, and therefore serves as the one-stop partner, is the grant recipient, administrative entity, or organization responsible for administering the funds of the specified program in the local area. The term “entity” does not include the service providers that contract with, or are subrecipients of, the local administrative entity. For programs that do not include local administrative entities, the responsible State agency must be the partner. Specific entities for particular programs are identified in paragraphs (b) through (e) of this section. If a program or activity listed in § 361.400 is not carried out in a local area, the requirements relating to a required one-stop partner are not applicable to such program or activity in that local one-stop delivery system.
(b) For title II of WIOA, the entity or agency that carries out the program for the purposes of paragraph (a) of this section is the sole entity or agency in the State or outlying area responsible for administering or supervising policy for adult education and literacy activities in the State or outlying area. The State eligible entity or agency may delegate its responsibilities under paragraph (a) of this section to one or more eligible providers or consortium of eligible providers.
(c) For the VR program, authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV, the entity that carries out the program for the purposes of paragraph (a) of this section is the designated State agencies or designated State units specified under sec. 101(a)(2) of the Rehabilitation Act that is primarily concerned with vocational rehabilitation, or vocational and other rehabilitation, of individuals with disabilities.
(d) Under WIOA title I, the national programs, including Job Corps, the Native American program, YouthBuild, and Migrant and Seasonal Farmworker programs are required one-stop partners. The entity for the Native American program, YouthBuild, and Migrant and Seasonal Farmworker programs is the grantee of those respective programs. The entity for Job Corps is the Job Corps center.
(e) For the Carl D. Perkins Career and Technical Education Act of 2006, the entity that carries out the program for the purposes of paragraph (a) of this section is the eligible recipient or recipients at the postsecondary level, or a consortium of eligible recipients at the postsecondary level in the local area. The eligible recipient at the postsecondary level may also request assistance from the State eligible agency in completing its responsibilities under paragraph (a) of this section.
Each required partner must:
(a) Provide access to its programs or activities through the one-stop delivery system, in addition to any other appropriate locations;
(b) Use a portion of funds made available to the partner's program, to the extent consistent with the Federal law authorizing the partner's program and with Federal cost principles in 2 CFR parts 200 and 3474 (requiring, among other things, that costs are allowable, reasonable, necessary, and allocable), to:
(1) Provide applicable career services; and
(2) Work collaboratively with the State and Local WDBs to establish and maintain the one-stop delivery system. This includes jointly funding the one-stop infrastructure through partner contributions that are based upon:
(i) A reasonable cost allocation methodology by which infrastructure costs are charged to each partner based on proportionate use and relative benefit received;
(ii) Federal cost principles; and
(iii) Any local administrative cost requirements in the Federal law authorizing the partner's program. (This is further described in § 361.700.)
(c) Enter into an MOU with the Local WDB relating to the operation of the one-stop delivery system that meets the requirements of § 361.500(b);
(d) Participate in the operation of the one-stop delivery system consistent with the terms of the MOU, requirements of authorizing laws, the Federal cost principles, and all other applicable legal requirements; and
(e) Provide representation on the State and Local WDBs as required and participate in Board committees as needed.
(a) The applicable career services to be delivered by required one-stop partners are those services listed in § 361.430 that are authorized to be provided under each partner's program.
(b) One-stop centers provide services to individual customers based on individual needs, including the seamless delivery of multiple services to individual customers. There is no required sequence of services.
Career services, as identified in sec. 134(c)(2) of WIOA, consist of three types:
(a) Basic career services must be made available and, at a minimum, must include the following services, as consistent with allowable program activities and Federal cost principles:
(1) Determinations of whether the individual is eligible to receive assistance from the adult, dislocated worker, or youth programs;
(2) Outreach, intake (including worker profiling), and orientation to information and other services available through the one-stop delivery system. For the TANF program, States must provide individuals with the opportunity to initiate an application for TANF assistance and non-assistance benefits and services, which could be implemented through the provision of paper application forms or links to the application Web site;
(3) Initial assessment of skill levels including literacy, numeracy, and English language proficiency, as well as aptitudes, abilities (including skills gaps), and supportive services needs;
(4) Labor exchange services, including—
(i) Job search and placement assistance, and, when needed by an individual, career counseling, including—
(A) Provision of information on in-demand industry sectors and occupations (as defined in sec. 3(23) of WIOA); and
(B) Provision of information on nontraditional employment; and
(ii) Appropriate recruitment and other business services on behalf of employers, including information and referrals to specialized business services other than those traditionally offered through the one-stop delivery system;
(5) Provision of referrals to and coordination of activities with other programs and services, including programs and services within the one-stop delivery system and, when appropriate, other workforce development programs;
(6) Provision of workforce and labor market employment statistics information, including the provision of accurate information relating to local, regional, and national labor market areas, including—
(i) Job vacancy listings in labor market areas;
(ii) Information on job skills necessary to obtain the vacant jobs listed; and
(iii) Information relating to local occupations in demand and the earnings, skill requirements, and opportunities for advancement for those jobs;
(7) Provision of performance information and program cost information on eligible providers of education, training, and workforce services by program and type of providers;
(8) Provision of information, in usable and understandable formats and languages, about how the local area is performing on local performance accountability measures, as well as any additional performance information relating to the area's one-stop delivery system;
(9) Provision of information, in usable and understandable formats and languages, relating to the availability of supportive services or assistance, and appropriate referrals to those services and assistance, including: Child care; child support; medical or child health assistance available through the State's Medicaid program and Children's Health Insurance Program; benefits under SNAP; assistance through the earned income tax credit; and assistance under a State program for TANF, and other supportive services and transportation provided through that program;
(10) Provision of information and meaningful assistance to individuals seeking assistance in filing a claim for unemployment compensation.
(i) “Meaningful assistance” means:
(A) Providing assistance on-site using staff who are well-trained in unemployment compensation claims filing and the rights and responsibilities of claimants; or
(B) Providing assistance by phone or via other technology, as long as the assistance is provided by trained and available staff and within a reasonable time.
(ii) The costs associated in providing this assistance may be paid for by the State's unemployment insurance program, or the WIOA adult or dislocated worker programs, or some combination thereof.
(11) Assistance in establishing eligibility for programs of financial aid assistance for training and education programs not provided under WIOA.
(b) Individualized career services must be made available if determined to be appropriate in order for an individual to obtain or retain employment. These services include the following services, as consistent with program requirements and Federal cost principles:
(1) Comprehensive and specialized assessments of the skill levels and service needs of adults and dislocated workers, which may include—
(i) Diagnostic testing and use of other assessment tools; and
(ii) In-depth interviewing and evaluation to identify employment barriers and appropriate employment goals;
(2) Development of an individual employment plan, to identify the employment goals, appropriate achievement objectives, and appropriate combination of services for the participant to achieve his or her employment goals, including the list of, and information about, the eligible training providers (as described in 20 CFR 680.180);
(3) Group counseling;
(4) Individual counseling;
(5) Career planning;
(6) Short-term pre-vocational services including development of learning skills, communication skills, interviewing skills, punctuality, personal maintenance skills, and professional conduct services to prepare individuals for unsubsidized employment or training;
(7) Internships and work experiences that are linked to careers (as described in 20 CFR 680.170);
(8) Workforce preparation activities;
(9) Financial literacy services as described in sec. 129(b)(2)(D) of WIOA and 20 CFR 681.500;
(10) Out-of-area job search assistance and relocation assistance; and
(11) English language acquisition and integrated education and training programs.
(c) Follow-up services must be provided, as appropriate, including: Counseling regarding the workplace, for participants in adult or dislocated worker workforce investment activities who are placed in unsubsidized employment, for up to 12 months after the first day of employment.
(d) In addition to the requirements in paragraph (a)(2) of this section, TANF agencies must identify employment services and related support being provided by the TANF program (within the local area) that qualify as career services and ensure access to them via the local one-stop delivery system.
(a) Certain career services must be made available to local employers, specifically labor exchange activities and labor market information described in § 361.430(a)(4)(ii) and (a)(6). Local areas must establish and develop relationships and networks with large and small employers and their intermediaries. Local areas also must develop, convene, or implement industry or sector partnerships.
(b) Customized business services may be provided to employers, employer associations, or other such organizations. These services are tailored for specific employers and may include:
(1) Customized screening and referral of qualified participants in training services to employers;
(2) Customized services to employers, employer associations, or other such organizations, on employment-related issues;
(3) Customized recruitment events and related services for employers including targeted job fairs;
(4) Human resource consultation services, including but not limited to assistance with:
(i) Writing/reviewing job descriptions and employee handbooks;
(ii) Developing performance evaluation and personnel policies;
(iii) Creating orientation sessions for new workers;
(iv) Honing job interview techniques for efficiency and compliance;
(v) Analyzing employee turnover;
(vi) Creating job accommodations and using assistive technologies; or
(vii) Explaining labor and employment laws to help employers comply with discrimination, wage/hour, and safety/health regulations;
(5) Customized labor market information for specific employers, sectors, industries or clusters; and
(6) Other similar customized services.
(c) Local areas may also provide other business services and strategies that meet the workforce investment needs of area employers, in accordance with partner programs' statutory requirements and consistent with Federal cost principles. These business services may be provided through effective business intermediaries working in conjunction with the Local WDB, or through the use of economic development, philanthropic, and other public and private resources in a manner determined appropriate by the Local WDB and in cooperation with the State. Allowable activities, consistent with each partner's authorized activities, include, but are not limited to:
(1) Developing and implementing industry sector strategies (including strategies involving industry partnerships, regional skills alliances, industry skill panels, and sectoral skills partnerships);
(2) Customized assistance or referral for assistance in the development of a registered apprenticeship program;
(3) Developing and delivering innovative workforce investment services and strategies for area employers, which may include career pathways, skills upgrading, skill standard development and certification for recognized postsecondary credential or other employer use, and other effective initiatives for meeting the workforce investment needs of area employers and workers;
(4) Assistance to area employers in managing reductions in force in coordination with rapid response activities and with strategies for the aversion of layoffs, which may include strategies such as early identification of firms at risk of layoffs, use of feasibility studies to assess the needs of and options for at-risk firms, and the delivery of employment and training activities to address risk factors;
(5) The marketing of business services to appropriate area employers, including small and mid-sized employers; and
(6) Assisting employers with accessing local, State, and Federal tax credits.
(d) All business services and strategies must be reflected in the local plan, described in 20 CFR 679.560(b)(3).
(a) There is no requirement that a fee-for-service be charged to employers.
(b) No fee may be charged for services provided in § 361.435(a).
(c) A fee may be charged for services provided under § 361.435(b) and (c). Services provided under § 361.435(c) may be provided through effective business intermediaries working in conjunction with the Local WDB and may also be provided on a fee-for-service basis or through the leveraging of economic development, philanthropic, and other public and private resources in a manner determined appropriate by the Local WDB. The Local WDB may examine the services provided compared with the assets and resources available within the local one-stop delivery system and through its partners to determine an appropriate cost structure for services, if any.
(d) Any fees earned are recognized as program income and must be expended by the partner in accordance with the partner program's authorizing statute, implementing regulations, and Federal cost principles identified in Uniform Guidance.
(a) The MOU is the product of local discussion and negotiation, and is an agreement developed and executed between the Local WDB and the one-stop partners, with the agreement of the chief elected official and the one-stop partners, relating to the operation of the one-stop delivery system in the local area. Two or more local areas in a region may develop a single joint MOU, if they are in a region that has submitted a regional plan under sec. 106 of WIOA.
(b) The MOU must include:
(1) A description of services to be provided through the one-stop delivery system, including the manner in which the services will be coordinated and delivered through the system;
(2) Agreement on funding the costs of the services and the operating costs of the system, including:
(i) Funding of infrastructure costs of one-stop centers in accordance with §§ 361.700 through 361.755; and
(ii) Funding of the shared services and operating costs of the one-stop delivery system described in § 361.760;
(3) Methods for referring individuals between the one-stop operators and partners for appropriate services and activities;
(4) Methods to ensure that the needs of workers, youth, and individuals with barriers to employment, including individuals with disabilities, are addressed in providing access to services, including access to technology and materials that are available through the one-stop delivery system;
(5) The duration of the MOU and procedures for amending it; and
(6) Assurances that each MOU will be reviewed, and if substantial changes have occurred, renewed, not less than once every 3-year period to ensure appropriate funding and delivery of services.
(c) The MOU may contain any other provisions agreed to by the parties that are consistent with WIOA title I, the authorizing statutes and regulations of one-stop partner programs, and the WIOA regulations.
(d) When fully executed, the MOU must contain the signatures of the Local WDB, one-stop partners, the chief elected official(s), and the time period in which the agreement is effective. The MOU must be updated not less than every 3 years to reflect any changes in the signatory official of the Board, one-stop partners, and chief elected officials, or one-stop infrastructure funding.
(e) If a one-stop partner appeal to the State regarding infrastructure costs, using the process described in § 361.750, results in a change to the one-stop partner's infrastructure cost contributions, the MOU must be updated to reflect the final one-stop partner infrastructure cost contributions.
(a) A single “umbrella” MOU may be developed that addresses the issues relating to the local one-stop delivery system for the Local WDB, chief elected official and all partners. Alternatively, the Local WDB (with agreement of chief elected official) may enter into separate agreements between each partner or groups of partners.
(b) Under either approach, the requirements described in § 361.500 apply. Since funds are generally appropriated annually, the Local WDB may negotiate financial agreements with each partner annually to update funding of services and operating costs of the system under the MOU.
(a) WIOA emphasizes full and effective partnerships between Local WDBs, chief elected officials, and one-stop partners. Local WDBs and partners must enter into good-faith negotiations. Local WDBs, chief elected officials, and one-stop partners may also request assistance from a State agency responsible for administering the partner program, the Governor, State WDB, or other appropriate parties on other aspects of the MOU.
(b) Local WDBs and one-stop partners must establish, in the MOU, how they will fund the infrastructure costs and other shared costs of the one-stop centers. If agreement regarding infrastructure costs is not reached when other sections of the MOU are ready, an interim infrastructure funding agreement may be included instead, as described in § 361.715(c). Once agreement on infrastructure funding is reached, the Local WDB and one-stop partners must amend the MOU to include the infrastructure funding of the one-stop centers. Infrastructure funding is described in detail in §§ 361.700 through 361.760.
(c) The Local WDB must report to the State WDB, Governor, and relevant State agency when MOU negotiations with one-stop partners have reached an impasse.
(1) The Local WDB and partners must document the negotiations and efforts that have taken place in the MOU. The State WDB, one-stop partner programs, and the Governor may consult with the appropriate Federal agencies to address impasse situations related to issues other than infrastructure funding after attempting to address the impasse. Impasses related to infrastructure cost funding must be resolved using the State infrastructure cost funding mechanism described in § 361.730.
(2) The Local WDB must report failure to execute an MOU with a required partner to the Governor, State WDB, and the State agency responsible for administering the partner's program. Additionally, if the State cannot assist the Local WDB in resolving the impasse, the Governor or the State WDB must report the failure to the Secretary of Labor and to the head of any other Federal agency with responsibility for oversight of a partner's program.
(a) One-stop operators may be a single entity (public, private, or nonprofit) or a consortium of entities. If the consortium of entities is one of one-stop partners, it must include a minimum of three of the one-stop partners described in § 361.400.
(b) The one-stop operator may operate one or more one-stop centers. There may be more than one one-stop operator in a local area.
(c) The types of entities that may be a one-stop operator include:
(1) An institution of higher education;
(2) An Employment Service State agency established under the Wagner-Peyser Act;
(3) A community-based organization, nonprofit organization, or workforce intermediary;
(4) A private for-profit entity;
(5) A government agency;
(6) A Local WDB, with the approval of the chief elected official and the Governor; or
(7) Another interested organization or entity, which is capable of carrying out the duties of the one-stop operator. Examples may include a local chamber of commerce or other business organization, or a labor organization.
(d) Elementary schools and secondary schools are not eligible as one-stop operators, except that a nontraditional public secondary school such as a night school, adult school, or an area career and technical education school may be selected.
(e) The State and Local WDBs must ensure that, in carrying out WIOA programs and activities, one-stop operators:
(1) Disclose any potential conflicts of interest arising from the relationships of the operators with particular training service providers or other service providers (further discussed in 20 CFR 679.430);
(2) Do not establish practices that create disincentives to providing services to individuals with barriers to employment who may require longer-term career and training services; and
(3) Comply with Federal regulations and procurement policies relating to the calculation and use of profits, including those at 20 CFR 683.295, the Uniform Guidance at 2 CFR part 200, and other applicable regulations and policies.
(a) Consistent with paragraphs (b) and (c) of this section, the Local WDB must select the one-stop operator through a competitive process, as required by sec. 121(d)(2)(A) of WIOA, at least once every 4 years. A State may require, or a Local WDB may choose to implement, a competitive selection process more than once every 4 years.
(b) In instances in which a State is conducting the competitive process described in paragraph (a) of this section, the State must follow the same policies and procedures it uses for procurement with non-Federal funds.
(c) All other non-Federal entities, including subrecipients of a State (such as local areas), must use a competitive process based on local procurement policies and procedures and the principles of competitive procurement in the Uniform Guidance set out at 2 CFR 200.318 through 200.326. All references to “noncompetitive proposals” in the Uniform Guidance at 2 CFR 200.320(f) will be read as “sole source procurement” for the purposes of implementing this section.
(d) Entities must prepare written documentation explaining the determination concerning the nature of the competitive process to be followed in selecting a one-stop operator.
(a) States may select a one-stop operator through sole source selection when allowed under the same policies and procedures used for competitive procurement with non-Federal funds, while other non-Federal entities including subrecipients of a State (such as local areas) may select a one-stop operator through sole selection when consistent with local procurement policies and procedures and the Uniform Guidance set out at 2 CFR 200.320.
(b) In the event that sole source procurement is determined necessary and reasonable, in accordance with § 361.605(c), written documentation must be prepared and maintained concerning the entire process of making such a selection.
(c) Such sole source procurement must include appropriate conflict of interest policies and procedures. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
(d) A Local WDB may be selected as a one-stop operator through sole source procurement only with agreement of the chief elected official in the local area and the Governor. The Local WDB must establish sufficient conflict of interest policies and procedures and these policies and procedures must be approved by the Governor.
(a) Local WDBs may compete for and be selected as one-stop operators, as long as appropriate firewalls and conflict of interest policies and procedures are in place. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
(b) State and local agencies may compete for and be selected as one-stop operators by the Local WDB, as long as appropriate firewalls and conflict of interest policies and procedures are in place. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
(c) In the case of single-area States where the State WDB serves as the Local WDB, the State agency is eligible to compete for and be selected as operator as long as appropriate firewalls and conflict of interest policies are in place and followed for the competition. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflicts of interest.
(a) At a minimum, the one-stop operator must coordinate the service delivery of required one-stop partners and service providers. Local WDBs may establish additional roles of one-stop operator, including, but not limited to: Coordinating service providers across the one-stop delivery system, being the primary provider of services within the center, providing some of the services within the center, or coordinating service delivery in a multi-center area, which may include affiliated sites. The competition for a one-stop operator must clearly articulate the role of the one-stop operator.
(b)(1) Subject to paragraph (b)(2) of this section, a one-stop operator may not perform the following functions: Convene system stakeholders to assist in the development of the local plan; prepare and submit local plans (as required under sec. 107 of WIOA); be responsible for oversight of itself; manage or significantly participate in the competitive selection process for one-stop operators; select or terminate one-stop operators, career services, and youth providers; negotiate local performance accountability measures; or develop and submit budget for activities of the Local WDB in the local area.
(2) An entity serving as a one-stop operator, that also serves a different role within the one-stop delivery system, may perform some or all of these functions when it is acting in its other role, if it has established sufficient firewalls and conflict of interest policies and procedures. The policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
Yes, but there must be appropriate firewalls in place in regards to the competition, and subsequent oversight, monitoring, and evaluation of performance of the service provider. The operator cannot develop, manage, or conduct the competition of a service provider in which it intends to compete. In cases where an operator is also a service provider, there must be firewalls and internal controls within the operator-service provider entity, as well as specific policies and procedures at the Local WDB level regarding oversight, monitoring, and evaluation of performance of the service provider. The firewalls must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflicts of interest.
Yes. State merit staff can continue to perform functions and activities in the one-stop center. The Local WDB and one-stop operator must establish a system for management of merit staff in accordance with State policies and procedures. Continued use of State merit staff for the provision of Wagner-Peyser Act services or services from other programs with merit staffing requirements must be included in the competition for and final contract with the one-stop operator when Wagner-Peyser Act services or services from other programs with merit staffing requirements are being provided.
(a) No later than July 1, 2017, one-stop operators selected under the competitive process described in this subpart must be in place and operating the one-stop center.
(b) By November 17, 2016, every Local WDB must demonstrate it is taking steps to prepare for competition of its one-stop operator. This demonstration may include, but is not limited to, market research, requests for information, and conducting a cost and price analysis.
(a) Infrastructure costs of one-stop centers are nonpersonnel costs that are necessary for the general operation of the one-stop center, including:
(1) Rental of the facilities;
(2) Utilities and maintenance;
(3) Equipment (including assessment-related products and assistive technology for individuals with disabilities); and
(4) Technology to facilitate access to the one-stop center, including technology used for the center's planning and outreach activities.
(b) Local WDBs may consider common identifier costs as costs of one-stop infrastructure.
(c) Each entity that carries out a program or activities in a local one-stop center, described in §§ 361.400 through 361.410, must use a portion of the funds available for the program and activities to maintain the one-stop delivery system, including payment of the infrastructure costs of one-stop centers. These payments must be in accordance with this subpart; Federal cost principles, which require that all costs must be allowable, reasonable, necessary, and allocable to the program; and all other applicable legal requirements.
(a) The Governor, after consultation with chief elected officials, the State WDB, and Local WDBs, and consistent with guidance and policies provided by the State WDB, must develop and issue guidance for use by local areas, specifically:
(1) Guidelines for State-administered one-stop partner programs for determining such programs' contributions to a one-stop delivery system, based on such programs' proportionate use of such system, and relative benefit received, consistent with Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, including determining funding for the costs of infrastructure; and
(2) Guidance to assist Local WDBs, chief elected officials, and one-stop partners in local areas in determining equitable and stable methods of funding the costs of infrastructure at one-stop centers based on proportionate use and relative benefit received, and consistent with Federal cost principles contained in the Uniform Guidance at 2 CFR part 200.
(b) The guidance must include:
(1) The appropriate roles of the one-stop partner programs in identifying one-stop infrastructure costs;
(2) Approaches to facilitate equitable and efficient cost allocation that results in a reasonable cost allocation methodology where infrastructure costs are charged to each partner based on its proportionate use of the one-stop centers and relative benefit received, consistent with Federal cost principles at 2 CFR part 200; and
(3) The timelines regarding notification to the Governor for not reaching local agreement and triggering the State funding mechanism described in § 361.730, and timelines for a one-stop partner to submit an appeal in the State funding mechanism.
Infrastructure costs are funded either through the local funding mechanism described in § 361.715 or through the State funding mechanism described in § 361.730.
(a) In the local funding mechanism, the Local WDB, chief elected officials, and one-stop partners agree to amounts and methods of calculating amounts each partner will contribute for one-stop infrastructure funding, include the infrastructure funding terms in the MOU, and sign the MOU. The local funding mechanism must meet all of the following requirements:
(1) The infrastructure costs are funded through cash and fairly evaluated non-cash and third-party in-kind partner contributions and include any funding from philanthropic organizations or other private entities, or through other alternative financing options, to provide a stable and equitable funding stream for ongoing one-stop delivery system operations;
(2) Contributions must be negotiated between one-stop partners, chief elected officials, and the Local WDB and the amount to be contributed must be included in the MOU;
(3) The one-stop partner program's proportionate share of funding must be calculated in accordance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200 based upon a reasonable cost allocation methodology whereby infrastructure costs are charged to each partner in proportion to its use of the one-stop center, relative to benefits received. Such costs must also be allowable, reasonable, necessary, and allocable;
(4) Partner shares must be periodically reviewed and reconciled against actual costs incurred, and adjusted to ensure that actual costs charged to any one-stop partners are proportionate to the use of the one-stop center and relative to the benefit received by the one-stop partners and their respective programs or activities.
(b) In developing the section of the MOU on one-stop infrastructure funding described in § 361.755, the Local WDB and chief elected officials will:
(1) Ensure that the one-stop partners adhere to the guidance identified in § 361.705 on one-stop delivery system infrastructure costs.
(2) Work with one-stop partners to achieve consensus and informally mediate any possible conflicts or disagreements among one-stop partners.
(3) Provide technical assistance to new one-stop partners and local grant recipients to ensure that those entities are informed and knowledgeable of the elements contained in the MOU and the one-stop infrastructure costs arrangement.
(c) The MOU may include an interim infrastructure funding agreement, including as much detail as the Local WDB has negotiated with one-stop partners, if all other parts of the MOU have been negotiated, in order to allow the partner programs to operate in the one-stop centers. The interim infrastructure funding agreement must be finalized within 6 months of when the MOU is signed. If the interim infrastructure funding agreement is not finalized within that timeframe, the Local WDB must notify the Governor, as described in § 361.725.
(a) In the local funding mechanism, one-stop partner programs may determine what funds they will use to pay for infrastructure costs. The use of these funds must be in accordance with the requirements in this subpart, and with the relevant partner's authorizing statutes and regulations, including, for example, prohibitions against supplanting non-Federal resources, statutory limitations on administrative costs, and all other applicable legal requirements. In the case of partners administering programs authorized by title I of WIOA, these infrastructure costs may be considered program costs. In the case of partners administering adult education and literacy programs authorized by title II of WIOA, these funds must include Federal funds made available for the local administration of adult education and literacy programs authorized by title II of WIOA. These funds may also include non-Federal resources that are cash, in-kind or third-party contributions. In the case of partners administering the Carl D. Perkins Career and Technical Education Act of 2006, funds used to pay for infrastructure costs may include funds available for local administrative expenses, non-Federal resources that are cash, in-kind or third-party contributions, and may include other funds made available by the State.
(b) There are no specific caps on the amount or percent of overall funding a one-stop partner may contribute to fund infrastructure costs under the local funding mechanism, except that contributions for administrative costs may not exceed the amount available for administrative costs under the authorizing statute of the partner program. However, amounts contributed for infrastructure costs must be allowable and based on proportionate use of the one-stop centers and relative benefit received by the partner program, taking into account the total cost of the one-stop infrastructure as well as alternate financing options, and must be consistent with 2 CFR part 200, including the Federal cost principles.
(c) Cash, non-cash, and third-party in-kind contributions may be provided by one-stop partners to cover their proportionate share of infrastructure costs.
(1) Cash contributions are cash funds provided to the Local WDB or its designee by one-stop partners, either directly or by an interagency transfer.
(2) Non-cash contributions are comprised of—
(i) Expenditures incurred by one-stop partners on behalf of the one-stop center; and
(ii) Non-cash contributions or goods or services contributed by a partner program and used by the one-stop center.
(3) Non-cash contributions, especially those set forth in paragraph (c)(2)(ii) of this section, must be valued consistent with 2 CFR 200.306 to ensure they are fairly evaluated and meet the partners' proportionate share.
(4) Third-party in-kind contributions are:
(i) Contributions of space, equipment, technology, non-personnel services, or other like items to support the infrastructure costs associated with one-stop operations, by a non-one-stop partner to support the one-stop center in general, not a specific partner; or
(ii) Contributions by a non-one-stop partner of space, equipment, technology, non-personnel services, or other like items to support the infrastructure costs associated with one-stop operations, to a one-stop partner to support its proportionate share of one-stop infrastructure costs.
(iii) In-kind contributions described in paragraphs (c)(4)(i) and (ii) of this section must be valued consistent with 2 CFR 200.306 and reconciled on a regular basis to ensure they are fairly evaluated and meet the proportionate share of the partner.
(5) All partner contributions, regardless of the type, must be reconciled on a regular basis (i.e., monthly or quarterly), comparing actual expenses incurred to relative benefits received, to ensure each partner program is contributing its proportionate share in accordance with the terms of the MOU.
With regard to negotiations for infrastructure funding for Program Year (PY) 2017 and for each subsequent program year thereafter, if the Local WDB, chief elected officials, and one-stop partners do not reach consensus on methods of sufficiently funding local infrastructure through the local funding mechanism in accordance with the Governor's guidance issued under § 361.705 and consistent with the regulations in §§ 361.715 and 361.720, and include that consensus agreement in the signed MOU, then the Local WDB must notify the Governor by the deadline established by the Governor under § 361.705(b)(3). Once notified, the Governor must administer funding through the State funding mechanism, as described in §§ 361.730 through 361.738, for the program year impacted by the local area's failure to reach consensus.
(a) Consistent with sec. 121(h)(1)(A)(i)(II) of WIOA, if the Local WDB, chief elected official, and one-stop partners in a local area do not reach consensus agreement on methods of sufficiently funding the costs of infrastructure of one-stop centers for a program year, the State funding mechanism is applicable to the local area for that program year.
(b) In the State funding mechanism, the Governor, subject to the limitations in paragraph (c) of this section, determines one-stop partner contributions after consultation with the chief elected officials, Local WDBs, and the State WDB. This determination involves:
(1) The application of a budget for one-stop infrastructure costs as described in § 361.735, based on either agreement reached in the local area negotiations or the State WDB formula outlined in § 361.745;
(2) The determination of each local one-stop partner program's proportionate use of the one-stop delivery system and relative benefit received, consistent with the Uniform Guidance at 2 CFR part 200, including the Federal cost principles, the partner programs' authorizing laws and regulations, and other applicable legal requirements described in § 361.736; and
(3) The calculation of required statewide program caps on contributions to infrastructure costs from one-stop partner programs in areas operating under the State funding mechanism as described in § 361.738.
(c) In certain situations, the Governor does not determine the infrastructure cost contributions for some one-stop partner programs under the State funding mechanism.
(1) The Governor will not determine the contribution amounts for infrastructure funds for Native American program grantees described in 20 CFR part 684. The appropriate portion of funds to be provided by Native American program grantees to pay for one-stop infrastructure must be determined as part of the development of the MOU described in § 361.500 and specified in that MOU.
(2) In States in which the policy-making authority is placed in an entity or official that is independent of the authority of the Governor with respect to the funds provided for adult education and literacy activities authorized under title II of WIOA, postsecondary career and technical education activities authorized under the Carl D. Perkins Career and Technical Education Act of 2006, or VR services authorized under title I of the Rehabilitation Act of 1973 (other than sec. 112 or part C), as amended by WIOA title IV, the determination of the amount each of the applicable partners must contribute to assist in paying the infrastructure costs of one-stop centers must be made by the official or chief officer of the entity with such authority, in consultation with the Governor.
(d) Any duty, ability, choice, responsibility, or other action otherwise related to the determination of infrastructure costs contributions that is assigned to the Governor in §§ 361.730 through 361.745 also applies to this decision-making process performed by the official or chief officer described in paragraph (c)(2) of this section.
(a) To initiate the State funding mechanism, a Local WDB that has not reached consensus on methods of sufficiently funding local infrastructure through the local funding mechanism as provided in § 361.725 must notify the Governor by the deadline established by the Governor under § 361.705(b)(3).
(b) Once a Local WDB has informed the Governor that no consensus has been reached:
(1) The Local WDB must provide the Governor with local negotiation materials in accordance with § 361.735(a).
(2) The Governor must determine the one-stop center budget by either:
(i) Accepting a budget previously agreed upon by partner programs in the local negotiations, in accordance with § 361.735(b)(1); or
(ii) Creating a budget for the one-stop center using the State WDB formula (described in § 361.745) in accordance with § 361.735(b)(3).
(3) The Governor then must establish a cost allocation methodology to determine the one-stop partner programs' proportionate shares of infrastructure costs, in accordance with § 361.736.
(4)(i) Using the methodology established under paragraph (b)(2)(ii) of this section, and taking into consideration the factors concerning individual partner programs listed in § 361.737(b)(2), the Governor must determine each partner's proportionate share of the infrastructure costs, in accordance with § 361.737(b)(1), and
(ii) In accordance with § 361.730(c), in some instances, the Governor does not determine a partner program's proportionate share of infrastructure funding costs, in which case it must be determined by the entities named in § 361.730(c)(1) and (2).
(5) The Governor must then calculate the statewide caps on the amounts that partner programs may be required to contribute toward infrastructure funding, according to the steps found at § 361.738(a)(1) through (4).
(6) The Governor must ensure that the aggregate total of the infrastructure contributions according to proportionate share required of all local partner programs in local areas under the State funding mechanism do not exceed the cap for that particular program, in accordance with § 361.738(b)(1). If the total does not exceed the cap, the Governor must direct each one-stop partner program to pay the amount determined under § 361.737(a) toward the infrastructure funding costs of the one-stop center. If the total does exceed the cap, then to determine the amount to direct each one-stop program to pay, the Governor may:
(i) Ascertain, in accordance with § 361.738(b)(2)(i), whether the local partner or partners whose proportionate shares are calculated above the individual program caps are willing to voluntarily contribute above the capped amount to equal that program's proportionate share; or
(ii) Choose from the options provided in § 361.738(b)(2)(ii), including having the local area re-enter negotiations to reassess each one-stop partner's proportionate share and make adjustments or identify alternate sources of funding to make up the difference between the capped amount and the proportionate share of infrastructure funding of the one-stop partner.
(7) If none of the solutions given in paragraphs (b)(6)(i) and (ii) of this section prove to be viable, the Governor must reassess the proportionate shares of each one-stop partner so that the aggregate amount attributable to the local partners for each program is less than that program's cap amount. Upon such reassessment, the Governor must direct each one-stop partner program to pay the reassessed amount toward the infrastructure funding costs of the one-stop center.
(a) Local WDBs must provide to the Governor appropriate and relevant materials and documents used in the negotiations under the local funding mechanism, including but not limited to: the local WIOA plan, the cost allocation method or methods proposed by the partners to be used in determining proportionate share, the proposed amounts or budget to fund infrastructure, the amount of total partner funds included, the type of funds or non-cash contributions, proposed one-stop center budgets, and any agreed upon or proposed MOUs.
(b)(1) If a local area has reached agreement as to the infrastructure budget for the one-stop centers in the local area, it must provide this budget to the Governor as required by paragraph (a) of this section. If, as a result of the agreed upon infrastructure budget, only the individual programmatic contributions to infrastructure funding based upon proportionate use of the one-stop centers and relative benefit received are at issue, the Governor may accept the budget, from which the Governor must calculate each partner's contribution consistent with the cost allocation methodologies contained in the Uniform Guidance found in 2 CFR part 200, as described in § 361.736.
(2) The Governor may also take into consideration the extent to which the partners in the local area have agreed in determining the proportionate shares, including any agreements reached at the local level by one or more partners, as well as any other element or product of the negotiating process provided to the Governor as required by paragraph (a) of this section.
(3) If a local area has not reached agreement as to the infrastructure budget for the one-stop centers in the local area, or if the Governor determines that the agreed upon budget does not adequately meet the needs of the local area or does not reasonably work within the confines of the local area's resources in accordance with the Governor's one-stop budget guidance (which is required to be issued by WIOA sec. 121(h)(1)(B) and under § 361.705), then, in accordance with § 361.745, the Governor must use the formula developed by the State WDB based on at least the factors required under § 361.745, and any associated weights to determine the local area budget.
Once the appropriate budget is determined for a local area through either method described in § 361.735 (by acceptance of a budget agreed upon in local negotiation or by the Governor applying the formula detailed in § 361.745), the Governor must determine the appropriate cost allocation methodology to be applied to the one-stop partners in such local area, consistent with the Federal cost principles permitted under 2 CFR part 200, to fund the infrastructure budget.
(a) The Governor must direct the one-stop partners in each local area that have not reached agreement under the local funding mechanism to pay what the Governor determines is each partner program's proportionate share of infrastructure funds for that area, subject to the application of the caps described in § 361.738.
(b)(1) The Governor must use the cost allocation methodology—as determined under § 361.736—to determine each partner's proportionate share of the infrastructure costs under the State funding mechanism, subject to considering the factors described in paragraph (b)(2) of this section.
(2) In determining each partner program's proportionate share of infrastructure costs, the Governor must take into account the costs of administration of the one-stop delivery system for purposes not related to one-stop centers for each partner (such as costs associated with maintaining the Local WDB or information technology systems), as well as the statutory requirements for each partner program, the partner program's ability to fulfill such requirements, and all other applicable legal requirements. The Governor may also take into consideration the extent to which the partners in the local area have agreed in determining the proportionate shares, including any agreements reached at the local level by one or more partners, as well as any other materials or documents of the negotiating process, which must be provided to the Governor by the Local WDB and described in § 361.735(a).
(a) The Governor must calculate the statewide cap on the contributions for one-stop infrastructure funding required to be provided by each one-stop partner program for those local areas that have not reached agreement. The cap is the amount determined under paragraph (a)(4) of this section, which the Governor derives by:
(1) First, determining the amount resulting from applying the percentage for the corresponding one-stop partner program provided in paragraph (d) of this section to the amount of Federal funds provided to carry out the one-stop partner program in the State for the applicable fiscal year;
(2) Second, selecting a factor (or factors) that reasonably indicates the use of one-stop centers in the State, applying such factor(s) to all local areas in the State, and determining the percentage of such factor(s) applicable to the local areas that reached agreement under the local funding mechanism in the State;
(3) Third, determining the amount resulting from applying the percentage determined in paragraph (a)(2) of this section to the amount determined under paragraph (a)(1) of this section for the one-stop partner program; and
(4) Fourth, determining the amount that results from subtracting the amount determined under paragraph (a)(3) of this section from the amount determined under paragraph (a)(1) of this section. The outcome of this final calculation results in the partner program's cap.
(b)(1) The Governor must ensure that the funds required to be contributed by each partner program in the local areas in the State under the State funding mechanism, in aggregate, do not exceed the statewide cap for each program as determined under paragraph (a) of this section.
(2) If the contributions initially determined under § 361.737 would exceed the applicable cap determined under paragraph (a) of this section, the Governor may:
(i) Ascertain if the one-stop partner whose contribution would otherwise exceed the cap determined under paragraph (a) of this section will voluntarily contribute above the capped amount, so that the total contributions equal that partner's proportionate share. The one-stop partner's contribution must still be consistent with the program's authorizing laws and regulations, the Federal cost principles in 2 CFR part 200, and other applicable legal requirements; or
(ii) Direct or allow the Local WDB, chief elected officials, and one-stop partners to: Re-enter negotiations, as necessary; reduce the infrastructure costs to reflect the amount of funds that are available for such costs without exceeding the cap levels; reassess the proportionate share of each one-stop partner; or identify alternative sources of financing for one-stop infrastructure funding, consistent with the requirement that each one-stop partner pay an amount that is consistent with the proportionate use of the one-stop center and relative benefit received by the partner, the program's authorizing laws and regulations, the Federal cost principles in 2 CFR part 200, and other applicable legal requirements.
(3) If applicable under paragraph (b)(2)(ii) of this section, the Local WDB, chief elected officials, and one-stop partners, after renegotiation, may come to agreement, sign an MOU, and proceed under the local funding mechanism. Such actions do not require the redetermination of the applicable caps under paragraph (a) of this section.
(4) If, after renegotiation, agreement among partners still cannot be reached or alternate financing cannot be identified, the Governor may adjust the specified allocation, in accordance with the amounts available and the limitations described in paragraph (d) of this section. In determining these adjustments, the Governor may take into account information relating to the renegotiation as well as the information described in § 361.735(a).
(c) Limitations. Subject to paragraph (a) of this section and in accordance with WIOA sec. 121(h)(2)(D), the following limitations apply to the Governor's calculations of the amount that one-stop partners in local areas that have not reached agreement under the local funding mechanism may be required under § 361.736 to contribute to one-stop infrastructure funding:
(1) WIOA formula programs and Wagner-Peyser Act Employment Service. The portion of funds required to be contributed under the WIOA youth, adult, or dislocated worker programs, or under the Wagner-Peyser Act (29 U.S.C. 49 et seq.) must not exceed three percent of the amount of the program in the State for a program year.
(2) Other one-stop partners. For required one-stop partners other than those specified in paragraphs (c)(1), (3), (5), and (6) of this section, the portion of funds required to be contributed must not exceed 1.5 percent of the amount of Federal funds provided to carry out that program in the State for a fiscal year. For purposes of the Carl D. Perkins Career and Technical Education Act of 2006, the cap on contributions is determined based on the funds made available by the State for postsecondary level programs and activities under sec. 132 of the Carl D. Perkins Career and Technical Education Act and the amount of funds used by the State under sec. 112(a)(3) of the Perkins Act during the prior year to administer postsecondary level programs and activities, as applicable.
(3) Vocational rehabilitation. (i) Within a State, for the entity or entities administering the programs described in WIOA sec. 121(b)(1)(B)(iv) and § 361.400, the allotment is based on the one State Federal fiscal year allotment, even in instances where that allotment is shared between two State agencies, and the cumulative portion of funds required to be contributed must not exceed—
(A) 0.75 percent of the amount of Federal funds provided to carry out such program in the State for Fiscal Year 2016 for purposes of applicability of the State funding mechanism for PY 2017;
(B) 1.0 percent of the amount provided to carry out such program in the State for Fiscal Year 2017 for purposes of applicability of the State funding mechanism for PY 2018;
(C) 1.25 percent of the amount provided to carry out such program in the State for Fiscal Year 2018 for purposes of applicability of the State funding mechanism for PY 2019;
(D) 1.5 percent of the amount provided to carry out such program in the State for Fiscal Year 2019 and following years for purposes of applicability of the State funding mechanism for PY 2020 and subsequent years.
(ii) The limitations set forth in paragraph (d)(3)(i) of this section for any given fiscal year must be based on the final VR allotment to the State in the applicable Federal fiscal year.
(4) Federal direct spending programs. For local areas that have not reached a one-stop infrastructure funding agreement by consensus, an entity administering a program funded with direct Federal spending, as defined in sec. 250(c)(8) of the Balanced Budget and Emergency Deficit Control Act of 1985, as in effect on February 15, 2014 (2 U.S.C. 900(c)(8)), must not be required to provide more for infrastructure costs than the amount that the Governor determined (as described in § 361.737).
(5) TANF programs. For purposes of TANF, the cap on contributions is determined based on the total Federal TANF funds expended by the State for work, education, and training activities during the prior Federal fiscal year (as reported to the Department of Health and Human Services (HHS) on the quarterly TANF Financial Report form), plus any additional amount of Federal TANF funds that the State TANF agency reasonably determines was expended for administrative costs in connection with these activities but that was separately reported to HHS as an administrative cost. The State's contribution to the one-stop infrastructure must not exceed 1.5 percent of these combined expenditures.
(6) Community Services Block Grant (CSBG) programs. For purposes of CSBG, the cap on contributions will be based on the total amount of CSBG funds determined by the State to have been expended by local CSBG-eligible entities for the provision of employment and training activities during the prior Federal fiscal year for which information is available (as reported to HHS on the CSBG Annual Report) and any additional amount that the State CSBG agency reasonably determines was expended for administrative purposes in connection with these activities and was separately reported to HHS as an administrative cost. The State's contribution must not exceed 1.5 percent of these combined expenditures.
(d) For programs for which it is not otherwise feasible to determine the amount of Federal funding used by the program until the end of that program's operational year—because, for example, the funding available for education, employment, and training activities is included within funding for the program that may also be used for other unrelated activities—the determination of the Federal funds provided to carry out the program for a fiscal year under paragraph (a)(1) of this section may be determined by:
(1) The percentage of Federal funds available to the one-stop partner program that were used by the one-stop partner program for education, employment, and training activities in the previous fiscal year for which data are available; and
(2) Applying the percentage determined under paragraph (d)(1) of this section to the total amount of Federal funds available to the one-stop partner program for the fiscal year for which the determination under paragraph (a)(1) of this section applies.
(a) In the State funding mechanism, infrastructure costs for WIOA title I programs, including Native American Programs described in 20 CFR part 684, may be paid using program funds, administrative funds, or both. Infrastructure costs for the Senior Community Service Employment Program under title V of the Older Americans Act (42 U.S.C. 3056 et seq.) may also be paid using program funds, administrative funds, or both.
(b) In the State funding mechanism, infrastructure costs for other required one-stop partner programs (listed in §§ 361.400 through 361.410) are limited to the program's administrative funds, as appropriate.
(c) In the State funding mechanism, infrastructure costs for the adult education program authorized by title II of WIOA must be paid from the funds that are available for local administration and may be paid from funds made available by the State or non-Federal resources that are cash, in-kind, or third-party contributions.
(d) In the State funding mechanism, infrastructure costs for the Carl D. Perkins Career and Technical Education Act of 2006 must be paid from funds available for local administration of postsecondary level programs and activities to eligible recipients or consortia of eligible recipients and may be paid from funds made available by the State or non-Federal resources that are cash, in-kind, or third-party contributions.
The State WDB must develop a formula, as described in WIOA sec. 121(h)(3)(B), to be used by the Governor under § 361.735(b)(3) in determining the appropriate budget for the infrastructure costs of one-stop centers in the local areas that do not reach agreement under the local funding mechanism and are, therefore, subject to the State funding mechanism. The formula identifies the factors and corresponding weights for each factor that the Governor must use, which must include: The number of one-stop centers in a local area; the population served by such centers; the services provided by such centers; and any factors relating to the operations of such centers in the local area that the State WDB determines are appropriate. As indicated in § 361.735(b)(1), if the local area has agreed on such a budget, the Governor may accept that budget in lieu of applying the formula factors.
(a) The Governor must establish a process, described under sec. 121(h)(2)(E) of WIOA, for a one-stop partner administering a program described in §§ 361.400 through 361.410 to appeal the Governor's determination regarding the one-stop partner's portion of funds to be provided for one-stop infrastructure costs. This appeal process must be described in the Unified State Plan.
(b) The appeal may be made on the ground that the Governor's determination is inconsistent with proportionate share requirements in § 361.735(a), the cost contribution limitations in § 361.735(b), the cost contribution caps in § 361.738, consistent with the process described in the State Plan.
(c) The process must ensure prompt resolution of the appeal in order to ensure the funds are distributed in a timely manner, consistent with the requirements of 20 CFR 683.630.
(d) The one-stop partner must submit an appeal in accordance with State's deadlines for appeals specified in the guidance issued under § 361.705(b)(3), or if the State has not set a deadline, within 21 days from the Governor's determination.
The MOU, fully described in § 361.500, must contain the following information whether the local areas use either the local one-stop or the State funding method:
(a) The period of time in which this infrastructure funding agreement is effective. This may be a different time period than the duration of the MOU.
(b) Identification of an infrastructure and shared services budget that will be periodically reconciled against actual costs incurred and adjusted accordingly to ensure that it reflects a cost allocation methodology that demonstrates how infrastructure costs are charged to each partner in proportion to its use of the one-stop center and relative benefit received, and that complies with 2 CFR part 200 (or any corresponding similar regulation or ruling).
(c) Identification of all one-stop partners, chief elected officials, and Local WDB participating in the infrastructure funding arrangement.
(d) Steps the Local WDB, chief elected officials, and one-stop partners used to reach consensus or an assurance that the local area followed the guidance for the State funding process.
(e) Description of the process to be used among partners to resolve issues during the MOU duration period when consensus cannot be reached.
(f) Description of the periodic modification and review process to ensure equitable benefit among one-stop partners.
(a) In addition to jointly funding infrastructure costs, one-stop partners listed in §§ 361.400 through 361.410 must use a portion of funds made available under their programs' authorizing Federal law (or fairly evaluated in-kind contributions) to pay the additional costs relating to the operation of the one-stop delivery system. These other costs must include applicable career services and may include other costs, including shared services.
(b) For the purposes of paragraph (a) of this section, shared services' costs may include the costs of shared services that are authorized for and may be commonly provided through the one-stop partner programs to any individual, such as initial intake, assessment of needs, appraisal of basic skills, identification of appropriate services to meet such needs, referrals to other one-stop partners, and business services. Shared operating costs may also include shared costs of the Local WDB's functions.
(c) Contributions to the additional costs related to operation of the one-stop delivery system may be cash, non-cash, or third-party in-kind contributions, consistent with how these are described in § 361.720(c).
(d) The shared costs described in paragraph (a) of this section must be allocated according to the proportion of benefit received by each of the partners, consistent with the Federal law authorizing the partner's program, and consistent with all other applicable legal requirements, including Federal cost principles in 2 CFR part 200 (or any corresponding similar regulation or ruling) requiring that costs are allowable, reasonable, necessary, and allocable.
(e) Any shared costs agreed upon by the one-stop partners must be included in the MOU.
(a) The State WDB, in consultation with chief elected officials and Local WDBs, must establish objective criteria and procedures for Local WDBs to use when certifying one-stop centers.
(1) The State WDB, in consultation with chief elected officials and Local WDBs, must review and update the criteria every 2 years as part of the review and modification of State Plans pursuant to § 361.135.
(2) The criteria must be consistent with the Governor's and State WDB's guidelines, guidance, and policies on infrastructure funding decisions, described in § 361.705. The criteria must evaluate the one-stop centers and one-stop delivery system for effectiveness, including customer satisfaction, physical and programmatic accessibility, and continuous improvement.
(3) When the Local WDB is the one-stop operator as described in 20 CFR 679.410, the State WDB must certify the one-stop center.
(b) Evaluations of effectiveness must include how well the one-stop center integrates available services for participants and businesses, meets the workforce development needs of participants and the employment needs of local employers, operates in a cost-efficient manner, coordinates services among the one-stop partner programs, and provides access to partner program services to the maximum extent practicable, including providing services outside of regular business hours where there is a workforce need, as identified by the Local WDB. These evaluations must take into account feedback from one-stop customers. They must also include evaluations of how well the one-stop center ensures equal opportunity for individuals with disabilities to participate in or benefit from one-stop center services. These evaluations must include criteria evaluating how well the centers and delivery systems take actions to comply with the disability-related regulations implementing WIOA sec. 188, set forth at 29 CFR part 38. Such actions include, but are not limited to:
(1) Providing reasonable accommodations for individuals with disabilities;
(2) Making reasonable modifications to policies, practices, and procedures where necessary to avoid discrimination against persons with disabilities;
(3) Administering programs in the most integrated setting appropriate;
(4) Communicating with persons with disabilities as effectively as with others;
(5) Providing appropriate auxiliary aids and services, including assistive technology devices and services, where necessary to afford individuals with disabilities an equal opportunity to participate in, and enjoy the benefits of, the program or activity; and
(6) Providing for the physical accessibility of the one-stop center to individuals with disabilities.
(c) Evaluations of continuous improvement must include how well the one-stop center supports the achievement of the negotiated local levels of performance for the indicators of performance for the local area described in sec. 116(b)(2) of WIOA and part 361. Other continuous improvement factors may include a regular process for identifying and responding to technical assistance needs, a regular system of continuing professional staff development, and having systems in place to capture and respond to specific customer feedback.
(d) Local WDBs must assess at least once every 3 years the effectiveness, physical and programmatic accessibility, and continuous improvement of one-stop centers and the one-stop delivery systems using the criteria and procedures developed by the State WDB. The Local WDB may establish additional criteria, or set higher standards for service coordination, than those set by the State criteria. Local WDBs must review and update the criteria every 2 years as part of the Local Plan update process described in § 361.580. Local WDBs must certify one-stop centers in order to be eligible to use infrastructure funds in the State funding mechanism described in § 361.730.
(e) All one-stop centers must comply with applicable physical and programmatic accessibility requirements, as set forth in 29 CFR part 38, the implementing regulations of WIOA sec. 188.
(a) The common one-stop delivery system identifier is “American Job Center.”
(b) As of November 17, 2016, each one-stop delivery system must include the “American Job Center” identifier or “a proud partner of the American Job Center network” on all primary electronic resources used by the one-stop delivery system, and on any newly printed, purchased, or created materials.
(c) As of July 1, 2017, each one-stop delivery system must include the “American Job Center” identifier or “a proud partner of the American Job Center network” on all products, programs, activities, services, electronic resources, facilities, and related property and new materials used in the one-stop delivery system.
(d) One-stop partners, States, or local areas may use additional identifiers on their products, programs, activities, services, facilities, and related property and materials.
(a) Under the State supported employment services program, the Secretary provides grants to assist States in developing and implementing collaborative programs with appropriate entities to provide programs of supported employment services for individuals with the most significant disabilities, including youth with the most significant disabilities, to enable them to achieve an employment outcome of supported employment in competitive integrated employment. Grants made under the State supported employment services program supplement a State's vocational rehabilitation program grants under 34 CFR part 361.
(b) For purposes of this part and 34 CFR part 361, “supported employment” means competitive integrated employment, including customized employment, or employment in an integrated work setting in which an individual with a most significant disability, including a youth with a most significant disability, is working on a short-term basis toward competitive integrated employment, that is individualized and customized, consistent with the unique strengths, abilities, interests, and informed choice of the individual, including with ongoing support services for individuals with the most significant disabilities—
(1)(i) For whom competitive integrated employment has not historically occurred; or
(ii) For whom competitive integrated employment has been interrupted or intermittent as a result of a significant disability; and
(2) Who, because of the nature and severity of the disability, need intensive supported employment services, and extended services after the transition from support provided by the designated State unit in order to perform the work.
(c) Short-term basis. For purposes of this part, an individual with a most significant disability, whose supported employment in an integrated setting does not satisfy the criteria of competitive integrated employment, as defined in 34 CFR 361.5(c)(9), is considered to be working on a short-term basis toward competitive integrated employment so long as the individual can reasonably anticipate achieving competitive integrated employment—
(1) Within six months of achieving a supported employment outcome; or,
(2) In limited circumstances, within a period not to exceed 12 months from the achievement of the supported employment outcome, if a longer period is necessary based on the needs of the individual, and the individual has demonstrated progress toward competitive earnings based on information contained in the service record.
Any State that submits the documentation required by § 363.10, as part of the vocational rehabilitation services portion of the Unified or Combined State Plan under 34 CFR part 361, is eligible for an award under this part.
A State may provide services under this part to any individual, including a youth with a disability, if—
(a) The individual has been determined to be—
(1) Eligible for vocational rehabilitation services in accordance with 34 CFR 361.42; and
(2) An individual with a most significant disability;
(b) For purposes of activities carried out under § 363.4(a)(2), the individual is a youth with a disability, as defined in 34 CFR 361.5(c)(59), who satisfies the requirements of this section; and
(c) Supported employment has been identified as the appropriate employment outcome for the individual on the basis of a comprehensive assessment of rehabilitation needs, as defined in 34 CFR 361.5(c)(5), including an evaluation of rehabilitation, career, and job needs.
(a) The State may use funds allotted under this part to—
(1) Provide supported employment services, as defined in 34 CFR 361.5(c)(54);
(2) Provide extended services, as defined in 34 CFR 361.5(c)(19), to youth with the most significant disabilities, in accordance with § 363.11(f), for a period of time not to exceed four years, or until such time that a youth reaches the age of 25 and no longer meets the definition of a youth with a disability under 34 CFR 361.5(c)(58), whichever occurs first; and
(3) With funds reserved, in accordance with § 363.22 for the provision of supported employment services to youth with the most significant disabilities, leverage other public and private funds to increase resources for extended services and expand supported employment opportunities.
(b) Except as provided in paragraph (a)(2) of this section, a State may not use funds under this part to provide extended services to individuals with the most significant disabilities.
(c) Nothing in this part will be construed to prohibit a State from providing—
(1) Supported employment services in accordance with the vocational rehabilitation services portion of the Unified or Combined State Plan submitted under 34 CFR part 361 by using funds made available through a State allotment under that part.
(2) Discrete postemployment services in accordance with 34 CFR 361.48(b) by using funds made available under 34 CFR part 361 to an individual who is eligible under this part.
(d) A State must coordinate with the entities described in § 363.50(a) regarding the services provided to individuals with the most significant disabilities, including youth with the most significant disabilities, under this part and under 34 CFR part 361 to ensure that the services are complementary and not duplicative.
The following regulations apply to the State supported employment services program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 76 (State-Administered Programs).
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(b) The regulations in this part 363.
(c) The following regulations in 34 CFR part 361 (The State Vocational Rehabilitation Services Program): §§ 361.5, 361.31, 361.32, 361.34, 361.35, 361.39, 361.40, 361.41, 361.42, 361.47(a), 361.48, 361.49, and 361.53.
(d) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted in 2 CFR part 3474.
(e) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted in 2 CFR part 3485.
The following definitions apply to this part:
(a) Definitions in 34 CFR part 361.
(b) Definitions in 34 CFR part 77.
(c) Definitions in 2 CFR part 200, subpart A.
(a) To be eligible to receive a grant under this part, a State must submit to the Secretary, as part of the vocational rehabilitation services portion of the Unified or Combined State Plan under 34 CFR part 361, a State plan supplement that meets the requirements of § 363.11.
(b) A State must submit revisions to the vocational rehabilitation services portion of the Unified or Combined State Plan supplement submitted under this part as may be necessary.
Each State plan supplement, submitted in accordance with § 363.10, must—
(a) Designate a designated State unit or, as applicable, units, as defined in 34 CFR 361.5(c)(13), as the State agency or agencies to administer the Supported Employment program under this part;
(b) Summarize the results of the needs assessment of individuals with most significant disabilities, including youth with the most significant disabilities, conducted under 34 CFR 361.29(a), with respect to the rehabilitation and career needs of individuals with most significant disabilities and their need for supported employment services. The results of the needs assessment must also address needs relating to coordination;
(c) Describe the quality, scope, and extent of supported employment services to be provided to eligible individuals with the most significant disabilities under this part, including youth with the most significant disabilities;
(d) Describe the State's goals and plans with respect to the distribution of funds received under § 363.20;
(e) Demonstrate evidence of the designated State unit's efforts to identify and make arrangements, including entering into cooperative agreements, with—
(1) Other State agencies and other appropriate entities to assist in the provision of supported employment services; and
(2) Other public or non-profit agencies or organizations within the State, employers, natural supports, and other entities with respect to the provision of extended services;
(f) Describe the activities to be conducted for youth with the most significant disabilities with the funds reserved in accordance with § 363.22, including—
(1) The provision of extended services to youth with the most significant disabilities for a period not to exceed four years, in accordance with § 363.4(a)(2); and
(2) How the State will use supported employment funds reserved under § 363.22 to leverage other public and private funds to increase resources for extended services and expand supported employment opportunities for youth with the most significant disabilities;
(g) Assure that—
(1) Funds made available under this part will only be used to provide authorized supported employment services to individuals who are eligible under this part to receive such services;
(2) The comprehensive assessments of individuals with significant disabilities, including youth with the most significant disabilities, conducted under 34 CFR part 361 will include consideration of supported employment as an appropriate employment outcome;
(3) An individualized plan for employment, as described in 34 CFR 361.45 and 361.46, will be developed and updated, using funds received under 34 CFR part 361, in order to—
(i) Specify the supported employment services to be provided, including, as appropriate, transition services and pre-employment transition services to be provided for youth with the most significant disabilities;
(ii) Specify the expected extended services needed, including the extended services that may be provided under this part to youth with the most significant disabilities in accordance with an approved individualized plan for employment for a period not to exceed four years; and
(iii) Identify, as appropriate, the source of extended services, which may include natural supports, programs, or other entities, or an indication that it is not possible to identify the source of extended services at the time the individualized plan for employment is developed;
(4) The State will use funds provided under this part only to supplement, and not supplant, the funds received under 34 CFR part 361, in providing supported employment services specified in the individualized plan for employment;
(5) Services provided under an individualized plan for employment will be coordinated with services provided under other individualized plans established under other Federal or State programs;
(6) To the extent job skills training is provided, the training will be provided onsite;
(7) Supported employment services will include placement in an integrated setting based on the unique strengths, resources, interests, concerns, abilities, and capabilities of individuals with the most significant disabilities, including youth with the most significant disabilities;
(8) The designated State agency or agencies, as described in paragraph (a) of this section, will expend no more than 2.5 percent of the State's allotment under this part for administrative costs of carrying out this program; and
(9) The designated State agency or agencies will provide, directly or indirectly through public or private entities, non-Federal contributions in an amount that is not less than 10 percent of the costs of carrying out supported employment services provided to youth with the most significant disabilities with the funds reserved for such purpose under § 363.22; and
(h) Contain any other information and be submitted in the form and in accordance with the procedures that the Secretary may require.
(a) States. The Secretary will allot the sums appropriated for each fiscal year to carry out the activities of this part among the States on the basis of relative population of each State, except that—
(1) No State will receive less than $250,000, or
(2) If the sums appropriated to carry out this part for the fiscal year exceed the sums appropriated to carry out this part (as in effect on September 30, 1992) in fiscal year 1992 by $1,000,000 or more, no State will receive less than $300,000, or
(b) Certain Territories. (1) For the purposes of this section, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands are not considered to be States.
(2) Each jurisdiction described in paragraph (b)(1) of this section will be allotted not less than
(a) Whenever the Secretary determines that any amount of an allotment to a State under § 363.20 for any fiscal year will not be expended by such State for carrying out the provisions of this part, the Secretary will make such amount available for carrying out the provisions of this part to one or more of the States that the Secretary determines will be able to use additional amounts during such year for carrying out such provisions.
(b) Any amount made available to a State for any fiscal year in accordance with paragraph (a) will be regarded as an increase in the State's allotment under this part for such year.
A State that receives an allotment under this part must reserve and expend 50 percent of such allotment for the provision of supported employment services, including extended services, to youth with the most significant disabilities in order to assist those youth in achieving an employment outcome in supported employment.
(a) Non-Federal share. (1) For funds allotted under § 363.20 and not reserved under § 363.22 for the provision of supported employment services to youth with the most significant disabilities, there is no non-Federal share requirement.
(2)(i) For funds allotted under § 363.20 and reserved under § 363.22 for the provision of supported employment services to youth with the most significant disabilities, a designated State agency must provide non-Federal expenditures in an amount that is not less than 10 percent of the total expenditures, including the Federal reserved funds and the non-Federal share, incurred for the provision of supported employment services to youth with the most significant disabilities, including extended services.
(ii) In the event that a designated State agency uses more than 50 percent of its allotment under this part to provide supported employment services to youth with the most significant disabilities as required by § 363.22, there is no requirement that a designated State agency provide non-Federal expenditures to match the excess Federal funds spent for this purpose.
(3) Except as provided under paragraphs (b) and (c) of this section, non-Federal expenditures made under the vocational rehabilitation services portion of the Unified or Combined State Plan supplement to meet the non-Federal share requirement under this section must be consistent with the provision of 2 CFR 200.306.
(b) Third-party in-kind contributions. Third-party in-kind contributions, as described in 2 CFR 200.306(b), may not be used to meet the non-Federal share under this section.
(c)(1) Contributions by private entities. Expenditures made from contributions by private organizations, agencies, or individuals that are deposited into the sole account of the State agency, in accordance with State law may be used as part of the non-Federal share under this section, provided the expenditures under the vocational rehabilitation services portion of the Unified or Combined State Plan supplement, as described in § 363.11, do not benefit in any way the donor, an individual to whom the donor is related by blood or marriage or with whom the donor shares a financial interest.
(2) The Secretary does not consider a donor's receipt from the State unit of a contract or subaward with funds allotted under this part to be a benefit for the purpose of this paragraph if the contract or subaward is awarded under the State's regular competitive procedures.
(a) Definition. (1) Program income means gross income earned by the State that is directly generated by authorized activities supported under this part or earned as a result of the Federal award during the period of performance.
(2) Program income received through the transfer of Social Security Administration payments from the State Vocational Rehabilitation Services program, in accordance with 34 CFR 361.63(c)(2), will be treated as program income received under this part.
(b) Use of program income. (1) Program income must be used for the provision of services authorized under § 363.4. Program income earned or received during the fiscal year must be disbursed during the period of performance of the award, prior to requesting additional cash payments.
(2) States are authorized to treat program income as an addition to the grant funds to be used for additional allowable program expenditures, in accordance with 2 CFR 200.307(e)(2).
(3) Program income cannot be used to meet the non-Federal share requirement under § 363.23.
(a) Except as provided in paragraph (b) of this section, any Federal award funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State by the beginning of the succeeding fiscal year, and any program income received during a fiscal year that is not obligated or expended by the State prior to the beginning of the succeeding fiscal year in which the program income was received, remain available for obligation by the State during that succeeding fiscal year.
(b) Federal funds appropriated for a fiscal year and reserved for the provision of supported employment services to youth with the most significant disabilities, in accordance with § 363.22 of this part, remain available for obligation in the succeeding fiscal year only to the extent that the State met the matching requirement, as described in § 363.23, for those Federal funds by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated. Any reserved funds carried over may only be obligated and expended in that succeeding Federal fiscal year for the provision of supported employment services to youth with the most significant disabilities.
(a) A designated State unit must enter into one or more written collaborative agreements, memoranda of understanding, or other appropriate mechanisms with other public agencies, private nonprofit organizations, and other available funding sources, including employers and other natural supports, as appropriate, to assist with the provision of supported employment services and extended services to individuals with the most significant disabilities in the State, including youth with the most significant disabilities, to enable them to achieve an employment outcome of supported employment in competitive integrated employment.
(b) These agreements provide the mechanism for collaboration at the State level that is necessary to ensure the smooth transition from supported employment services to extended services, the transition of which is inherent to the definition of “supported employment” in § 363.1(b). The agreement may contain information regarding the—
(1) Supported employment services to be provided, for a period not to exceed 24 months, by the designated State unit with funds received under this part;
(2) Extended services to be provided to youth with the most significant disabilities, for a period not to exceed four years, by the designated State unit with the funds reserved under § 363.22 of this part;
(3) Extended services to be provided by other public agencies, private nonprofit organizations, or other sources, including employers and other natural supports, following the provision of authorized supported employment services, or extended services as appropriate for youth with the most significant disabilities, under this part; and
(4) Collaborative efforts that will be undertaken by all relevant entities to increase opportunities for competitive integrated employment in the State for individuals with the most significant disabilities, especially youth with the most significant disabilities.
(a) A State may use funds under this part to pay for expenditures incurred in the administration of activities carried out under this part, consistent with the definition of administrative costs in 34 CFR 361.5(c)(2).
(b) A designated State agency may not expend more than 2.5 percent of a State's allotment under this part for administrative costs for carrying out the State supported employment program.
Each State agency designated in § 363.11(a) must collect and report separately the information required under 34 CFR 361.40 for—
(a) Eligible individuals receiving supported employment services under this part;
(b) Eligible individuals receiving supported employment services under 34 CFR part 361;
(c) Eligible youth receiving supported employment services and extended services under this part; and
(d) Eligible youth receiving supported employment services under 34 CFR part 361 and extended services.
(a) A designated State unit must provide for the transition of an individual with a most significant disability, including a youth with a most significant disability, to extended services, as defined in 34 CFR 361.5(c)(19), no later than 24 months after the individual enters supported employment, unless a longer period is established in the individualized plan for employment.
(b) Prior to assisting the individual in transitioning from supported employment services to extended services, the designated State unit must ensure—
(1) The counselor and individual have considered extending the provision of supported employment services beyond 24 months, as appropriate, and have determined that no further supported employment services are necessary to support and maintain the individual in supported employment before the individual transitions to extended services; and
(2) The source of extended services for the individual has been identified in order to ensure there will be no interruption of services. The providers of extended services may include—
(i) A State agency, a private nonprofit organization, employer, or any other appropriate resource, after an individual has made the transition from support from the designated State unit; or,
(ii) The designated State unit, in the case of a youth with a most significant disability, in accordance with requirements set forth in 34 CFR 361.5(c)(19) and this part for a period not to exceed four years, or at such time that a youth reaches the age of 25 and no longer meets the definition of a youth with a disability under 34 CFR 361.5(c)(58), whichever occurs first. For youth who still require extended services after they can no longer receive them from the designated State unit, the designated State unit must identify another source of extended services for those youth in order to ensure there will be no interruption of services. The designated State unit may not provide extended services to individuals with the most significant disabilities who are not youth with the most significant disabilities.
An individual with a most significant disability, including a youth with a most significant disability, who is employed in competitive integrated employment or who is employed in an integrated setting working on a short-term basis to achieve competitive integrated employment will be considered to have achieved an employment outcome, including customized employment, in supported employment when—
(a) The individual has completed supported employment services provided under this part and 34 CFR part 361, except for any other vocational rehabilitation services listed on the individualized plan for employment provided to individuals who are working on a short-term basis toward the achievement of competitive integrated employment in supported employment. An individual has completed supported employment services when—
(1) The individual has received up to 24 months of supported employment services; or
(2) The counselor and individual have determined that an extension of time to provide supported employment services beyond 24 months is necessary to support and maintain the individual in supported employment before the individual transitions to extended services and that extension of time has concluded; and
(b) The individual has transitioned to extended services provided by either the designated State unit for youth with the most significant disabilities, or another provider, consistent with the provisions of §§ 363.4(a)(2) and 363.22; and
(c) The individual has maintained employment and achieved stability in the work setting for at least 90 days after transitioning to extended services; and
(d) The employment is individualized and customized consistent with the strengths, abilities, interests, and informed choice of the individual.
(a) The service record of an individual with a most significant disability, including a youth with a most significant disability, who has achieved an employment outcome in supported employment in competitive integrated employment will be closed concurrently with the achievement of the employment outcome in supported employment when the individual—
(1) Satisfies requirements for case closure, as set forth in 34 CFR 361.56; and
(2) Is not receiving extended services or any other vocational rehabilitation service provided by the designated State unit with funds under this part or 34 CFR part 361.
(b) The service record of an individual with a most significant disability, including a youth with a most significant disability who is working toward competitive integrated employment on a short-term basis and is receiving extended services from funds other than those allotted under this part and 34 CFR part 361 will be closed when the individual—
(1) Achieves competitive integrated employment within the short-term basis period established pursuant to § 363.1(c); and the individual—
(i) Satisfies requirements for case closure, as set forth in 34 CFR 361.56; and
(ii) Is no longer receiving vocational rehabilitation services provided by the designated State unit with funds under 34 CFR part 361; or
(2) Does not achieve competitive integrated employment within the short-term basis period established pursuant to § 363.1(c).
(c) The service record of a youth with a most significant disability who is receiving extended services provided by the designated State unit from funds under this part or 34 CFR part 361 will be closed when—
(1) The youth with a most significant disability achieves an employment outcome in supported employment in competitive integrated employment without entering the short-term basis period; and
(i) Is no longer eligible to receive extended services provided by the designated State unit with funds allotted under this part and 34 CFR part 361 because the individual—
(A) No longer meets age requirements established in the definition of a youth with a disability pursuant to 34 CFR 361.5(c)(58); or
(B) Has received extended services for a period of four years; or
(C) Has transitioned to extended services provided with funds other than those allotted under this part or part 361 prior to meeting the age or time restrictions established under paragraphs (c)(1)(i)(A) and (B) of this section, respectively; and
(ii) Satisfies requirements for case closure, as set forth in 34 CFR 361.56; and
(iii) The individual is no longer receiving any other vocational rehabilitation service from the designated State unit provided with funds under 34 CFR part 361; or
(2) The youth with a most significant disability who is working toward competitive integrated employment on a short-term basis—
(i) Achieves competitive integrated employment within the short-term basis period established pursuant to § 363.1(c);
(ii) Is no longer eligible to receive extended services provided by the designated State unit with funds allotted under this part and 34 CFR part 361 because the individual—
(A) No longer meets age requirements established in the definition of a youth with a disability pursuant to 34 CFR 361.5(c)(58); or
(B) Has received extended services for a period of four years; or
(C) Has transitioned to extended services provided with funds other than those allotted under this part or 34 CFR part 361 prior to meeting the age or time restrictions established under paragraphs (c)(2)(ii)(A) and (B) of this section, respectively; and
(iii) Satisfies requirements for case closure, as set forth in 34 CFR 361.56; or
(3) The youth with a most significant disability working toward competitive integrated employment on a short-term basis does not achieve competitive integrated employment within the short-term basis period established pursuant to § 363.1(c).
Each grantee must advise applicants for or recipients of services under this part, or as appropriate, the parents, family members, guardians, advocates, or authorized representatives of those individuals, including youth with the most significant disabilities, of the availability and purposes of the Client Assistance Program, including information on seeking assistance from that program.
This program supports projects that—
(a) Provide any of the independent living (IL) services to older individuals who are blind that are described in § 367.3(b);
(b) Conduct activities that will improve or expand services for these individuals; and
(c) Conduct activities to help improve public understanding of the challenges of these individuals.
Any designated State agency (DSA) is eligible for an award under this program if the DSA—
(a) Is authorized to provide rehabilitation services to individuals who are blind; and
(b) Submits to and obtains approval from the Secretary of an application that meets the requirements of section 752(h) of the Act and §§ 367.30-367.31.
(a) The DSA may use funds awarded under this part for the activities described in § 367.1 and paragraph (b) of this section.
(b) For purposes of § 367.1(a), IL services for older individuals who are blind include—
(1) Services to help correct blindness, such as—
(i) Outreach services;
(ii) Visual screening;
(iii) Surgical or therapeutic treatment to prevent, correct, or modify disabling eye conditions; and
(iv) Hospitalization related to these services;
(2) The provision of eyeglasses and other visual aids;
(3) The provision of services and equipment to assist an older individual who is blind to become more mobile and more self-sufficient;
(4) Mobility training, Braille instruction, and other services and equipment to help an older individual who is blind adjust to blindness;
(5) Guide services, reader services, and transportation;
(6) Any other appropriate service designed to assist an older individual who is blind in coping with daily living activities, including supportive services and rehabilitation teaching services;
(7) IL skills training, information and referral services, peer counseling, individual advocacy training, facilitating the transition from nursing homes and other institutions to home and community-based residences with the requisite supports and services, and providing assistance to older individuals who are blind who are at risk of entering institutions so that the individuals may remain in the community; and
(8) Other IL services, as defined in § 367.5.
The following regulations apply to the Independent Living Services for Older Individuals Who Are Blind program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 75 (Direct Grant Programs), with respect to grants under subpart B and D.
(2) 34 CFR part 76 (State-Administered Programs), with respect to grants under subpart E.
(3) 34 CFR part 77 (Definitions That Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 2 CFR part 180 (OMB Guidelines to Agencies on Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485.
(8) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(b) The regulations in this part 367.
(a) The definitions of terms used in this part that are included in the regulations identified in § 367.4 as applying to this program.
(b) In addition, the following definitions also apply to this part:
(1) Act means the Rehabilitation Act, as amended by WIOA.
(2) Advocacy means pleading an individual's cause or speaking or writing in support of an individual. To the extent permitted by State law or the rules of the agency before which an individual is appearing, a non-lawyer may engage in advocacy on behalf of another individual. Advocacy may—
(i) Involve representing an individual—
(A) Before private entities or organizations, government agencies (whether State, local, or Federal), or in a court of law (whether State or Federal); or
(B) In negotiations or mediation, in formal or informal administrative proceedings before government agencies (whether State, local, or Federal), or in legal proceedings in a court of law; and
(ii) Be on behalf of—
(A) A single individual, in which case it is individual advocacy;
(B) A group or class of individuals, in which case it is systems (or systemic) advocacy; or
(C) Oneself, in which case it is self advocacy.
(3) Attendant care means a personal assistance service provided to an individual with significant disabilities in performing a variety of tasks required to meet essential personal needs in areas such as bathing, communicating, cooking, dressing, eating, homemaking, toileting, and transportation.
(4) Contract means a legal instrument by which RSA in subpart B or the DSA receiving a grant under this part purchases property or services needed to carry out the program under this Part. The term as used in this part does not include a legal instrument, even if RSA or the DSA considers it a contract, when the substance of the transaction meets the definition of a Federal award or subaward.
(5) Designated State Agency means the agency described in section 101(a)(2)(A)(i) of the Rehabilitation Act as the sole State agency authorized to provide rehabilitation services to individuals who are blind and administer the OIB grant.
(6) Independent living services for older individuals who are blind means those services listed in § 367.3(b).
(7) Legally authorized advocate or representative means an individual who is authorized under State law to act or advocate on behalf of another individual. Under certain circumstances, State law permits only an attorney, legal guardian, or individual with a power of attorney to act or advocate on behalf of another individual. In other circumstances, State law may permit other individuals to act or advocate on behalf of another individual.
(8) Minority group means Alaska Natives, American Indians, Asians, Blacks (African Americans), Hispanics (Latinos), Native Hawaiians, and Pacific Islanders.
(9) Older individual who is blind means an individual age fifty-five or older whose severe visual impairment makes competitive employment extremely difficult to obtain but for whom IL goals are feasible.
(10) Other IL services include:
(i) Counseling services, including psychological, psychotherapeutic, and related services;
(ii) Services related to securing housing or shelter, including services related to community group living, that are supportive of the purposes of the Act, and adaptive housing services, including appropriate accommodations to and modifications of any space used to serve, or to be occupied by, older individuals who are blind;
(iii) Rehabilitation technology;
(iv) Services and training for older individuals who are blind who also have cognitive and sensory disabilities, including life skills training and interpreter services;
(v) Personal assistance services, including attendant care and the training of personnel providing these services;
(vi) Surveys, directories, and other activities to identify appropriate housing, recreation opportunities, and accessible transportation, and other support services;
(vii) Consumer information programs on rehabilitation and IL services available under the Act, especially for minorities and other older individuals who are blind who have traditionally been unserved or underserved by programs under the Act;
(viii) Education and training necessary for living in a community and participating in community activities;
(ix) Supported living;
(x) Transportation, including referral and assistance for transportation;
(xi) Physical rehabilitation;
(xii) Therapeutic treatment;
(xiii) Provision of needed prostheses and other appliances and devices;
(xiv) Individual and group social and recreational services;
(xv) Services under other Federal, State, or local programs designed to provide resources, training, counseling, or other assistance of substantial benefit in enhancing the independence, productivity, and quality of life of older individuals who are blind;
(xvi) Appropriate preventive services to decrease the need of older individuals who are blind who are assisted under the Act for similar services in the future;
(xvii) Community awareness programs to enhance the understanding and integration into society of older individuals who are blind; and
(xviii) Any other services that may be necessary to improve the ability of an older individual who is blind to function, continue functioning, or move toward functioning independently in the family or community or to continue in employment and that are not inconsistent with any other provisions of the Act.
(11) Peer relationships mean relationships involving mutual support and assistance among individuals with significant disabilities who are actively pursuing IL goals.
(12) Peer role models means individuals with significant disabilities whose achievements can serve as a positive example for other older individuals who are blind.
(13) Personal assistance services means a range of IL services, provided by one or more persons, designed to assist an older individual who is blind to perform daily living activities on or off the job that the individual would typically perform if the individual was not blind. These IL services must be designed to increase the individual's control in life and ability to perform everyday activities on or off the job.
(14) Service provider means—
(i) The DSA that directly provides services authorized under § 367.3; or
(ii) Any other entity that receives a subaward or contract from the DSA to provide services authorized under § 367.3.
(15) Significant disability means a severe physical, mental, cognitive, or sensory impairment that substantially limits an individual's ability to function independently in the family or community or to obtain, maintain, or advance in employment.
(16) State means, except where otherwise specified in the Act, in addition to each of the several States of the United States, the District of Columbia, the Commonwealth of Puer5to Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
(17) Subaward means a grant or a cooperative agreement provided by the DSA to a subrecipient for the subrecipient to carry out part of the Federal award received by the DSA under this part. It does not include payments to a contractor or payments to an individual that is a beneficiary of a program funded under this part. A subaward may be provided through any form of legal agreement, including an agreement that the DSA considers a contract.
(18) Subrecipient means a non-Federal entity that receives a subaward from the DSA to carry out part of the program funded under this part; but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency.
(19) Transportation means travel and related expenses that are necessary to enable an older individual who is blind to benefit from another IL service and travel and related expenses for an attendant or aide if the services of that attendant or aide are necessary to enable an older individual who is blind to benefit from that IL service.
(20) Unserved and underserved groups or populations, with respect to groups or populations of older individuals who are blind in a State, include, but are not limited to, groups or populations of older individuals who are blind who—
(i) Have cognitive and sensory impairments;
(ii) Are members of racial and ethnic minority groups;
(iii) Live in rural areas; or
(iv) Have been identified by the DSA as unserved or underserved.
For any fiscal year, beginning with fiscal year 2015, the Secretary shall first reserve not less than 1.8 percent and not more than 2 percent of funds appropriated and made available to carry out this chapter to provide training and technical assistance to DSAs, or other providers of independent living services for older individuals who are blind, that are funded under this chapter for such fiscal year.
(a) The Secretary uses these funds to provide training and technical assistance, either directly or through grants, contracts, or cooperative agreements with State and public or non-profit agencies and organizations and institutions of higher education that have the capacity to provide technical assistance and training in the provision of independent living services for older individuals who are blind.
(b) An entity receiving assistance in accordance with paragraph (a) of this section shall provide training and technical assistance to DSAs or other service providers to assist them in improving the operation and performance of programs and services for older individuals who are blind resulting in their enhanced independence and self-sufficiency.
(a) To be eligible to receive a grant or enter into a contract or cooperative agreement under section 751A of the Act and this subpart, an applicant shall submit an application to the Secretary containing a proposal to provide training and technical assistance to DSAs or other service providers of IL services to older individuals who are blind and any additional information at the time and in the manner that the Secretary may require.
(b) The Secretary shall provide for peer review of applications by panels that include persons who are not Federal or State government employees and who have experience in the provision of services to older individuals who are blind.
The Secretary shall conduct a survey of DSAs that receive grants under section 752 regarding training and technical assistance needs in order to inform funding priorities for such training and technical assistance.
(a) The Secretary evaluates each application for a grant, cooperative agreement or contract under this subpart on the basis of the selection criteria chosen from the general selection criteria found in EDGAR regulations at 34 CFR 75.210.
(b) If using a contract to award funds under this subpart, the Secretary may conduct the application process and make the subsequent award in accordance with 34 CFR part 75.
To receive a grant under section 752(h) or a reallotment grant under section 752(i)(4) of the Act, a DSA must submit to and obtain approval from the Secretary of an application for assistance under this program at the time, in the form and manner, and containing the agreements, assurances, and information, that the Secretary determines to be necessary to carry out this program.
An application for a grant under section 752(h) or a reallotment grant under section 752(i)(4) of the Act must contain an assurance that—
(a) Grant funds will be expended only for the purposes described in § 367.1;
(b) With respect to the costs of the program to be carried out by the State pursuant to this part, the State will make available, directly or through donations from public or private entities, non-Federal contributions toward these costs in an amount that is not less than $1 for each $9 of Federal funds provided in the grant;
(c) At the end of each fiscal year, the DSA will prepare and submit to the Secretary a report, with respect to each project or program the DSA operates or administers under this part, whether directly or through a grant or contract, that contains information that the Secretary determines necessary for the proper and efficient administration of this program, including—
(1) The number and demographics of older individuals who are blind, including older individuals who are blind from minority backgrounds, and are receiving services;
(2) The types of services provided and the number of older individuals who are blind and are receiving each type of service;
(3) The sources and amounts of funding for the operation of each project or program;
(4) The amounts and percentages of resources committed to each type of service provided;
(5) Data on actions taken to employ, and advance in employment, qualified—
(i) Individuals with significant disabilities; and
(ii) Older individuals with significant disabilities who are blind;
(6) A comparison, if appropriate, of prior year activities with the activities of the most recent year; and
(7) Any new methods and approaches relating to IL services for older individuals who are blind that are developed by projects funded under this part;
(d) The DSA will—
(1) Provide services that contribute to the maintenance of, or the increased independence of, older individuals who are blind; and
(2) Engage in—
(i) Capacity-building activities, including collaboration with other agencies and organizations;
(ii) Activities to promote community awareness, involvement, and assistance; and
(iii) Outreach efforts; and
(e) The applicant has been designated by the State as the sole State agency authorized to provide rehabilitation services to individuals who are blind.
(a) In the case of a fiscal year for which the amount appropriated under section 753 of the Act is less than $13,000,000, the Secretary awards discretionary grants under this part on a competitive basis to States in accordance with section 752(b) of the Act and EDGAR regulations at 34 CFR part 75 (Direct Grant Programs).
(b) The Secretary awards noncompetitive continuation grants for a multi-year project to pay for the costs of activities for which a grant was awarded under this part—as long as the grantee satisfies the applicable requirements in this part, the terms of the grant, and 34 CFR 75.250 through 75.253 (Approval of Multi-year Projects).
(c) Subparts A, C, D, and F of this part govern the award of competitive grants under this part.
(a) The Secretary evaluates an application for a discretionary grant based on the selection criteria chosen from the general selection criteria found in EDGAR regulations at 34 CFR 75.210.
(b) In addition to the selection criteria, the Secretary considers the geographic distribution of projects in making an award.
(a) In the case of a fiscal year for which the amount appropriated under section 753 of the Act is equal to or greater than $13,000,000, grants under this part are made to States from allotments under section 752(c)(2) of the Act.
(b) Subparts A, C, E, and F of this part govern the award of formula grants under this part.
(a) For purposes of making grants under section 752(c) of the Act and this subpart, the Secretary makes an allotment to each State in an amount determined in accordance with section 752(i) of the Act.
(b) The Secretary makes a grant to a DSA in the amount of the allotment to the State under section 752(i) of the Act if the DSA submits to and obtains approval from the Secretary of an application for assistance under this program that meets the requirements of section 752(h) of the Act and §§ 367.30 and 367.31.
(a) From the amounts specified in paragraph (b) of this section, the Secretary may make reallotment grants to States, as determined by the Secretary, whose population of older individuals who are blind has a substantial need for the services specified in section 752(d) of the Act and § 367.3(b), relative to the populations in other States of older individuals who are blind.
(b) The amounts referred to in paragraph (a) of this section are any amounts that are not paid to States under section 752(c)(2) of the Act and § 367.51 as a result of—
(1) The failure of a DSA to prepare, submit, and receive approval of an application under section 752(h) of the Act and in accordance with §§ 367.30 and 367.31; or
(2) Information received by the Secretary from the DSA that the DSA does not intend to expend the full amount of the State's allotment under section 752(c) of the Act and this subpart.
(c) A reallotment grant to a State under paragraph (a) of this section is subject to the same conditions as grants made under section 752(a) of the Act and this part.
(d) Any funds made available to a State for any fiscal year pursuant to this section are regarded as an increase in the allotment of the State under § 367.51 for that fiscal year only.
(e) A State that does not intend to expend the full amount of its allotment must notify RSA at least 45 days prior to the end of the fiscal year that its grant, or a portion of it, is available for reallotment.
A DSA may operate or administer the program or projects under this part to carry out the purposes specified in § 367.1, either directly or through—
(a) Subawards to public or private nonprofit agencies or organizations; or
(b) Contracts with individuals, entities, or organizations that are not public or private nonprofit agencies or organizations.
Non-Federal contributions required by § 367.31(b) must meet the requirements in 2 CFR 200.306 (Cost sharing or matching).
(a) Expenditures that meet the non-Federal share requirements of 2 CFR 200.306 may be used to meet the non-Federal share matching requirement. Expenditures used as non-Federal share must also meet the following requirements:
(1) The expenditures are made with funds made available by appropriation directly to the DSA or with funds made available by allotment or transfer from any other unit of State or local government;
(2) The expenditures are made with cash contributions from a donor that are deposited in the account of the DSA in accordance with State law for expenditure by, and at the sole discretion of, the DSA for activities authorized by § 367.3; or
(3) The expenditures are made with cash contributions from a donor that are earmarked for meeting the State's share for activities listed in § 367.3;
(b) Cash contributions are permissible under paragraph (a)(3) of this section only if the cash contributions are not used for expenditures that benefit or will benefit in any way the donor, an individual to whom the donor is related by blood or marriage or with whom the donor has a close personal relationship, or an individual, entity, or organization with whom the donor shares a financial interest.
(c) The receipt of a subaward or contract under section 752(g) of the Act from the DSA is not considered a benefit to the donor of a cash contribution for purposes of paragraph (b) of this section if the subaward or contract was awarded under the State's regular competitive procedures. The State may not exempt the awarding of the subaward or contract from its regular competitive procedures.
(d) For purposes of this section, a donor may be a private agency, a profit-making or nonprofit organization, or an individual.
In-kind contributions may be—
(a) Used to meet the matching requirement under section 752(f) of the Act if the in-kind contributions meet the requirements and are allowable under 2 CFR 200.306; and
(b) Made to the program or project by the State or by a third party (i.e., an individual, entity, or organization, whether local, public, private, for profit, or nonprofit), including a third party that is a subrecipient or contractor that is receiving or will receive assistance under section 752(g) of the Rehabilitation Act.
(a) A State may not condition the making of a subaward or contract under section 752(g) of the Act on the requirement that the applicant for the subaward or contract make a cash or in-kind contribution of any particular amount or value to the State.
(b) An individual, entity, or organization that is a subrecipient or contractor of the State, may not condition the award of a subcontract on the requirement that the applicant for the subcontract make a cash or in-kind contribution of any particular amount or value to the State or to the subrecipient or contractor of the State.
(a) Definition—Program income means gross income earned by the grantee, subrecipient, or contractor that is directly generated by a supported activity or earned as a result of the grant, subaward, or contract.
(1) Program income received through the transfer of Social Security Administration program income from the State Vocational Rehabilitation Services program (Title I) in accordance with 34 CFR 361.63(c)(2) will be treated as program income received under this part.
(2) Payments received by the State agency, subrecipients, or contractors from insurers, consumers, or other for IL services provided under the Independent Living Services for Older Individuals Who Are Blind program to defray part or all of the costs of services provided to individual consumers will be treated as program income received under this part.
(b) Use of program income. (1) Program income, whenever earned, must be used for the provision of services authorized under § 367.3.
(2) Program income must be added to the Federal Award in accordance with 2 CFR 200.307(e)(2).
(3) Program income may not be used to meet the non-Federal share requirement under § 367.31(b).
(a) Except as provided in paragraph (b) of this section, any Federal funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated or expended by the DSA prior to the beginning of the succeeding fiscal year, and any program income received during a fiscal year that is not obligated or expended by the DSA prior to the beginning of the succeeding fiscal year in which the program income was received, remain available for obligation and expenditure by the DSA during that succeeding fiscal year.
(b) Federal funds appropriated for a fiscal year under this part remain available for obligation in the succeeding fiscal year only to the extent that the DSA complied with its matching requirement by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated.
(c) Program income is considered earned in the fiscal year in which it is received. Program income earned during the fiscal year must be disbursed during the time in which new obligations may be incurred to carry out the work authorized under the award, and prior to requesting additional cash payments.
(a) Participation of individuals in cost of services. (1) A State is neither required to charge nor prohibited from charging consumers for the cost of IL services provided under the Independent Living Services for Older Individuals Who Are Blind program;
(2) If a State charges consumers or allows other service providers to charge for the cost of IL services provided under the Independent Living Services for Older Individuals Who Are Blind program, a State is neither required to nor prohibited from considering the ability of individual consumers to pay for the cost of these services in determining how much a particular consumer must contribute to the costs of a particular service.
(b) State policies on cost of services. If a State chooses to charge or allow other service providers to charge consumers for the cost of IL services provided under the Independent Living Services for Older Individuals Who Are Blind program and if a State chooses to consider and allow other service providers to consider the ability of individual consumers to pay for the cost of IL services provided under the Independent Living Services for Older Individual Who Are Blind program, the State must maintain policies that—
(1) Specify the type of IL services for which costs may be charged and the type of IL services for which a financial need test may be applied;
(2) Explain the method for determining the amount charged for the IL services and how any financial need test will be applied;
(3) Ensure costs are charged uniformly so that all individuals are treated equally;
(4) Ensure that if costs are charged or financial need is considered, the consumer's required participation is not so high that it effectively denies the individual a necessary service;
(5) Require documentation of an individual's participation in the cost of any IL services provided, including the determination of an individual's financial need; and
(6) Provide that individuals who have been determined eligible for Social Security benefits under Titles II and XVI of the Social Security Act may not be charged any cost to receive IL services under this program.
(c) Policies on consumer financial participation. If a State permits other service providers to charge the costs of IL services provided under the Independent Living Services for Older Individuals Who Are Blind program, or chooses to allow other service providers to consider the ability of individual consumers to contribute to the cost of IL services provided through the Independent Living Services for Older Individuals Who Are Blind program, the State must require that such service providers comply with the State's written policies regarding consumer financial participation in the cost of IL services.
The DSA and all other service providers under this part shall use formats that are accessible to notify individuals seeking or receiving services under this part about—
(a) The availability of CAP authorized by section 112 of the Act;
(b) The purposes of the services provided under the CAP; and
(c) How to contact the CAP.
(a) General provisions. The DSA and all other service providers under this part shall adopt and implement policies and procedures to safeguard the confidentiality of all personal information, including photographs and lists of names. These policies and procedures must assure that—
(1) Specific safeguards protect current and stored personal information, including a requirement that data only be released when governed by a written agreement between the DSA and other service providers and the receiving entity under paragraphs (d) and (e)(1) of this section, which addresses the requirements in this section;
(2) All applicants for, or recipients of, services under this part and, as appropriate, those individuals' legally authorized representatives, service providers, cooperating agencies, and interested persons are informed of the confidentiality of personal information and the conditions for gaining access to and releasing this information;
(3) All applicants or their legally authorized representatives are informed about the service provider's need to collect personal information and the policies governing its use, including—
(i) Identification of the authority under which information is collected;
(ii) Explanation of the principal purposes for which the service provider intends to use or release the information;
(iii) Explanation of whether providing requested information to the service provider is mandatory or voluntary and the effects to the individual of not providing requested information;
(iv) Identification of those situations in which the service provider requires or does not require informed written consent of the individual or his or her legally authorized representative before information may be released; and
(v) Identification of other agencies to which information is routinely released;
(4) Persons who do not speak, listen, read, or write English proficiently or who rely on alternative modes of communication must be provided an explanation of service provider policies and procedures affecting personal information through methods that can be meaningfully understood by them;
(5) At least the same protections are provided to individuals served under this part as provided by State laws and regulations; and
(6) Access to records is governed by rules established by the service provider and any fees charged for copies of records are reasonable and cover only extraordinary costs of duplication or making extensive searches.
(b) Service provider use. All personal information in the possession of the service provider may be used only for the purposes directly connected with the provision of services under this part and the administration of the program under which services are provided under this part. Information containing identifiable personal information may not be shared with advisory or other bodies that do not have official responsibility for the provision of services under this part or the administration of the program under which services are provided under this part. In the provision of services under this part or the administration of the program under which services are provided under this part, the service provider may obtain personal information from other service providers and cooperating agencies under assurances that the information may not be further divulged, except as provided under paragraphs (c), (d), and (e) of this section.
(c) Release to recipients of services under this part. (1) Except as provided in paragraphs (c)(2) and (3) of this section, if requested in writing by a recipient of services under this part, the service provider shall release all information in that individual's record of services to the individual or the individual's legally authorized representative in a timely manner.
(2) Medical, psychological, or other information that the service provider determines may be harmful to the individual may not be released directly to the individual, but must be provided through a qualified medical or psychological professional or the individual's legally authorized representative.
(3) If personal information has been obtained from another agency or organization, it may be released only by, or under the conditions established by, the other agency or organization.
(d) Release for audit, evaluation, and research. Personal information may be released to an organization, agency, or individual engaged in audit, evaluation, or research activities only for purposes directly connected with the administration of a program under this part, or for purposes that would significantly improve the quality of life for individuals served under this part and only if, in accordance with a written agreement, the organization, agency, or individual assures that—
(1) The information will be used only for the purposes for which it is being provided;
(2) The information will be released only to persons officially connected with the audit, evaluation, or research;
(3) The information will not be released to the involved individual;
(4) The information will be managed in a manner to safeguard confidentiality; and
(5) The final product will not reveal any personally identifying information without the informed written consent of the involved individual or the individual's legally authorized representative.
(e) Release to other programs or authorities. (1) Upon receiving the informed written consent of the individual or, if appropriate, the individual's legally authorized representative, the service provider may release personal information to another agency or organization, in accordance with a written agreement, for the latter's program purposes only to the extent that the information may be released to the involved individual and only to the extent that the other agency or organization demonstrates that the information requested is necessary for the proper administration of its program.
(2) Medical or psychological information may be released pursuant to paragraph (e)(1) of this section if the other agency or organization assures the service provider that the information will be used only for the purpose for which it is being provided and will not be further released to the individual.
(3) The service provider shall release personal information if required by Federal laws or regulations.
(4) The service provider shall release personal information in response to investigations in connection with law enforcement, fraud, or abuse, unless expressly prohibited by Federal or State laws or regulations, and in response to judicial order.
(5) The service provider also may release personal information to protect the individual or others if the individual poses a threat to his or her safety or to the safety of others.
For the purpose of conducting audits, examinations, and compliance reviews, the DSA and all other service providers shall provide access to the Secretary and the Comptroller General, or any of their duly authorized representatives, to—
(a) The records maintained under this part;
(b) Any other books, documents, papers, and records of the recipients that are pertinent to the financial assistance received under this part; and
(c) All individual case records or files or consumer service records of individuals served under this part, including names, addresses, photographs, and records of evaluation included in those individual case records or files or consumer service records.
The DSA and all other service providers shall maintain—
(a) Records that fully disclose and document—
(1) The amount and disposition by the recipient of that financial assistance;
(2) The total cost of the project or undertaking in connection with which the financial assistance is given or used;
(3) The amount of that portion of the cost of the project or undertaking supplied by other sources; and
(4) Compliance with the requirements of this part; and
(b) Other records that the Secretary determines to be appropriate to facilitate an effective audit.
The purpose of this program is to establish and carry out CAPs that—
(a) Advise and inform clients and client-applicants of all services and benefits available to them through programs authorized under the Rehabilitation Act of 1973, as amended (Act), including activities carried out under sections 113 and 511;
(b) Assist and advocate for clients and client-applicants in their relationships with projects, programs, and community rehabilitation programs providing services under the Act; and
(c) Inform individuals with disabilities in the State, especially individuals with disabilities who have traditionally been unserved or underserved by vocational rehabilitation programs, of the services and benefits available to them under the Act and under title I of the Americans with Disabilities Act of 1990 (ADA) (42 U.S.C. 12111 et seq.).
(a)(1) Any State, through its Governor, and the protection and advocacy system serving the American Indian Consortium are eligible for an award under this part if the State or eligible protection and advocacy system submits, and receives approval of, an application in accordance with § 370.20.
(2) For purposes of this part, the terms—
(i) “American Indian Consortium” has the meaning given the term in section 102 of the Developmental Disabilities Assistance and Bill of Rights Act of 2000 (DD Act) (42 U.S.C. 15002); and
(ii) “Protection and advocacy system” means a protection and advocacy system established under subtitle C of title I of the DD Act (42 U.S.C. 15041 et seq.).
(b) Notwithstanding the protection and advocacy system serving the American Indian Consortium, the Governor of each State shall designate a public or private agency to conduct the State's CAP under this part.
(c) Except as provided in paragraph (d) of this section, the Governor shall designate an agency that is independent of any agency that provides treatment, services, or rehabilitation to individuals under the Act.
(d) The Governor may, in the initial designation, designate an agency that provides treatment, services, or rehabilitation to individuals with disabilities under the Act if, at any time before February 22, 1984, there was an agency in the State that both—
(1) Was a grantee under section 112 of the Act by serving as a client assistance agency and directly carrying out a CAP; and
(2) Was, at the same time, a grantee under any other provision of the Act.
(e) An agency designated by the Governor of a State to conduct the State's CAP or the protection and advocacy system serving the American Indian Consortium under this part may not make a subaward to or enter into a contract with an agency that provides services under this Act either to carry out the CAP or to provide services under the CAP.
(f) A designated agency, including the protection and advocacy system serving the American Indian Consortium, that contracts to provide CAP services with another entity or individual remains responsible for—
(1) The conduct of a CAP that meets all of the requirements of this part;
(2) Ensuring that the entity or individual expends CAP funds in accordance with—
(i) The regulations in this part; and
(ii) The regulations at 2 CFR part 200 applicable to the designated agency identified in paragraph (b) or the protection and advocacy system serving the American Indian Consortium, as described in paragraph (a) of this section; and
(3) The direct day-to-day supervision of the CAP services being carried out by the contractor. This day-to-day supervision must include the direct supervision of the individuals who are employed or used by the contractor to provide CAP services.
(a) Any client or client-applicant is eligible for the services described in § 370.4.
(b) Any individual with a disability is eligible to receive information on the services and benefits available to individuals with disabilities under the Act and title I of the ADA.
(a) Funds made available under this part must be used for activities consistent with the purposes of this program, including—
(1) Advising and informing clients, client-applicants, and individuals with disabilities in the State, especially individuals with disabilities who have traditionally been unserved or underserved by vocational rehabilitation programs, of—
(i) All services and benefits available to them through programs authorized under the Act; and
(ii) Their rights in connection with those services and benefits;
(2) Informing individuals with disabilities in the State, especially individuals with disabilities who have traditionally been unserved or underserved by vocational rehabilitation programs, of the services and benefits available to them under title I of the ADA;
(3) Upon the request of the client or client-applicant, assisting and advocating on behalf of the client or client-applicant in his or her relationship with projects, programs, and community rehabilitation programs that provide services under the Act by engaging in individual or systemic advocacy and pursuing, or assisting and advocating on behalf of the client or client-applicant to pursue, legal, administrative, and other available remedies, if necessary—
(i) To ensure the protection of the rights of a client or client-applicant under the Act; and
(ii) To facilitate access by individuals with disabilities, including students and youth with disabilities who are making the transition from school programs, to services funded under the Act; and
(4) Providing information to the public concerning the CAP.
(b) In providing assistance and advocacy services under this part with respect to services under title I of the Act, a designated agency may provide assistance and advocacy services to a client or client-applicant to facilitate the individual's employment, including assistance and advocacy services with respect to the individual's claims under title I of the ADA, if those claims under title I of the ADA are directly related to services under title I of the Act that the individual is receiving or seeking.
The following regulations apply to the expenditure of funds and the administration of the program under this part:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 75 (Direct Grant Programs) for purposes of an award made under § 370.30(d)(1) when the CAP appropriation equals or exceeds $14,000,000.
(2) 34 CFR part 76 (State-Administered Programs) applies to the State and, if the designated agency is a State or local government agency, to the designated agency, except for—
(i) Section 76.103;
(ii) Sections 76.125 through 76.137;
(iii) Sections 76.300 through 76.401;
(iv) Section 76.708;
(v) Section 76.734; and
(vi) Section 76.740.
(3) 34 CFR part 77 (Definitions That Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 81 (General Education Provisions Act—Enforcement) applies to both the State and the designated agency, whether or not the designated agency is the actual recipient of the CAP grant. As the entity that eventually, if not directly, receives the CAP grant funds, the designated agency is considered a recipient for purposes of Part 81.
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(b) Other regulations as follows:
(1) 2 CFR part 180 (OMB Guidelines to Agencies on Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485.
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(c) The regulations in this part 370.
Any funds made available to a State under this program that are transferred by a State to a designated agency do not make a subaward as that term is defined in 2 CFR 200.330. The designated agency is not, therefore, in these circumstances a subrecipient, as that term is defined in 2 CFR 200.330.
(a) Definitions in EDGAR at 34 CFR part 77.
(b) Definitions in 2 CFR part 200, subpart A.
(c) Other definitions. The following definitions also apply to this part:
Act means the Rehabilitation Act of 1973, as amended.
Advocacy means pleading an individual's cause or speaking or writing in support of an individual. Advocacy may be formal, as in the case of a lawyer representing an individual in a court of law or in formal administrative proceedings before government agencies (whether tribal, State, local, or Federal). Advocacy also may be informal, as in the case of a lawyer or non-lawyer representing an individual in negotiations, mediation, or informal administrative proceedings before government agencies (whether tribal, State, local, or Federal), or as in the case of a lawyer or non-lawyer representing an individual's cause before private entities or organizations, or government agencies (whether tribal, State, local, or Federal). Advocacy may be on behalf of—
(1) A single individual, in which case it is individual advocacy;
(2) More than one individual or a group of individuals, in which case it is systems (or systemic) advocacy, but systems or systemic advocacy, for the purposes of this part, does not include class actions, or
(3) Oneself, in which case it is self advocacy.
American Indian Consortium means that entity described in § 370.2(a).
Class action means a formal legal suit on behalf of a group or class of individuals filed in a Federal or State court that meets the requirements for a “class action” under Federal or State law. “Systems (or systemic) advocacy” that does not include filing a formal class action in a Federal or State court is not considered a class action for purposes of this part.
Client or client-applicant means an individual receiving or seeking services under the Act, respectively.
Designated agency means the agency designated by the Governor under § 370.2 or the protection and advocacy system serving the American Indian Consortium that is conducting a CAP under this part.
Mediation means the act or process of using an independent third party to act as a mediator, intermediary, or conciliator to settle differences or disputes between persons or parties. The third party who acts as a mediator, intermediary, or conciliator may not be any entity or individual who is connected in any way with the eligible system or the agency, entity, or individual with whom the individual with a disability has a dispute. Mediation may involve the use of professional mediators or any other independent third party mutually agreed to by the parties to the dispute.
Protection and Advocacy System has the meaning set forth at § 370.2(a).
Services under the Act means vocational rehabilitation, independent living, supported employment, and other similar rehabilitation services provided under the Act. For purposes of the CAP, the term “services under the Act” does not include activities carried out under the protection and advocacy program authorized by section 509 of the Act (i.e., the Protection and Advocacy of Individual Rights (PAIR) program, 34 CFR part 381).
State means, in addition to each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, The United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, except for purposes of the allotments under § 370.30, in which case “State” does not mean or include Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
The designated agency shall provide, as appropriate, the CAP services described in § 370.4 in formats that are accessible to clients or client-applicants who seek or receive CAP services.
(a) The Governor shall redesignate the designated agency for carrying out the CAP to an agency that is independent of any agency that provides treatment, services, or rehabilitation to individuals under the Act if, after August 7, 1998—
(1) The designated State agency undergoes any change in the organizational structure of the agency that results in one or more new State agencies or departments, or results in the merger with one or more other State agencies or departments, and
(2) The designated State agency contains an office or unit conducting the CAP.
(3) For purposes of paragraph (a) of this section, the designated State agency has the meaning given to that term at 34 CFR 361.5(c)(12) and described at 34 CFR 361.13.
(b) The Governor may not redesignate the agency designated pursuant to section 112(c) of the Act and § 370.2(b) without good cause and without complying with the requirements of §§ 370.10 through 370.17.
(c) For purposes of §§ 370.10 through 370.17, a “redesignation of” or “to redesignate” a designated agency means any change in or transfer of the designation of an agency previously designated by the Governor to conduct the State's CAP to a new or different agency, unit, or organization, including—
(1) A decision by a designated agency to cancel its existing contract with another entity with which it has previously contracted to carry out and operate all or part of its responsibilities under the CAP (including providing advisory, assistance, or advocacy services to eligible clients and client-applicants); or
(2) A decision by a designated agency not to renew its existing contract with another entity with which it has previously contracted. Therefore, an agency that is carrying out a State's CAP under a contract with a designated agency is considered a designated agency for purposes of §§ 370.10 through 370.17.
(d) For purposes of paragraph (b) of this section, a designated agency that does not renew a contract for CAP services because it is following State procurement laws that require contracts to be awarded through a competitive bidding process is presumed to have good cause for not renewing an existing contract. However, this presumption may be rebutted.
(e) If State procurement laws require a designated agency to award a contract through a competitive bidding process, the designated agency must hold public hearings on the request for proposal before awarding the new contract.
(a) Prior to any redesignation of the agency that conducts the CAP, the Governor shall give written notice of the proposed redesignation to the designated agency, the State Rehabilitation Council (SRC), and the State Independent Living Council (SILC) and publish a public notice of the Governor's intention to redesignate. Both the notice to the designated agency, the SRC, and the SILC and the public notice must include, at a minimum, the following:
(1) The Federal requirements for the CAP (section 112 of the Act).
(2) The goals and function of the CAP.
(3) The name of the current designated agency.
(4) A description of the current CAP and how it is administered.
(5) The reason or reasons for proposing the redesignation, including why the Governor believes good cause exists for the proposed redesignation.
(6) The effective date of the proposed redesignation.
(7) The name of the agency the Governor proposes to administer the CAP.
(8) A description of the system that the redesignated (i.e., new) agency would administer.
(b) The notice to the designated agency must—
(1) Be given at least 30 days in advance of the Governor's written decision to redesignate; and
(2) Advise the designated agency that it has at least 30 days from receipt of the notice of proposed redesignation to respond to the Governor and that the response must be in writing.
(c) The notice of proposed redesignation must be published in a place and manner that provides the SRC, the SILC, individuals with disabilities or their representatives, and the public with at least 30 days to submit oral or written comments to the Governor.
(d) Following public notice, public hearings concerning the proposed redesignation must be conducted in an accessible format that provides individuals with disabilities or their representatives an opportunity for comment. The Governor shall maintain a written public record of these hearings.
(e) The Governor shall fully consider any public comments before issuing a written decision to redesignate.
(a) To preserve its right to appeal a Governor's written decision to redesignate (see § 370.13), a designated agency must respond in writing to the Governor within 30 days after it receives the Governor's notice of proposed redesignation.
(b) The designated agency shall send its response to the Governor by registered or certified mail, return receipt requested, or other means that provides a record that the Governor received the designated agency's response.
(a) If, after complying with the requirements of § 370.11, the Governor decides to redesignate the designated agency, the Governor shall provide to the designated agency a written decision to redesignate that includes the rationale for the redesignation. The Governor shall send the written decision to redesignate to the designated agency by registered or certified mail, return receipt requested, or other means that provides a record that the designated agency received the Governor's written decision to redesignate.
(b) If the designated agency submitted to the Governor a timely response to the Governor's notice of proposed redesignation, the Governor shall inform the designated agency that it has at least 15 days from receipt of the Governor's written decision to redesignate to file a formal written appeal with the Secretary.
(a) A designated agency may appeal to the Secretary a Governor's written decision to redesignate only if the designated agency submitted to the Governor a timely written response to the Governor's notice of proposed redesignation in accordance with § 370.12.
(b) To appeal to the Secretary a Governor's written decision to redesignate, a designated agency shall file a formal written appeal with the Secretary within 15 days after the designated agency's receipt of the Governor's written decision to redesignate. The date of filing of the designated agency's written appeal with the Secretary will be determined in a manner consistent with the requirements of 34 CFR 81.12.
(c) If the designated agency files a written appeal with the Secretary, the designated agency shall send a separate copy of this appeal to the Governor by registered or certified mail, return receipt requested, or other means that provides a record that the Governor received a copy of the designated agency's appeal to the Secretary.
(d) The designated agency's written appeal to the Secretary must state why the Governor has not met the burden of showing that good cause for the redesignation exists or has not met the procedural requirements under §§ 370.11 and 370.13.
(e) The designated agency's written appeal must be accompanied by the designated agency's written response to the Governor's notice of proposed redesignation and may be accompanied by any other written submissions or documentation the designated agency wishes the Secretary to consider.
(f) As part of its submissions under this section, the designated agency may request an informal meeting with the Secretary at which representatives of both parties will have an opportunity to present their views on the issues raised in the appeal.
(a) If the designated agency files a formal written appeal in accordance with § 370.14, the Governor shall, within 15 days of receipt of the designated agency's appeal, submit to the Secretary copies of the following:
(1) The written notice of proposed redesignation sent to the designated agency.
(2) The public notice of proposed redesignation.
(3) Transcripts of all public hearings held on the proposed redesignation.
(4) Written comments received by the Governor in response to the public notice of proposed redesignation.
(5) The Governor's written decision to redesignate, including the rationale for the decision.
(6) Any other written documentation or submissions the Governor wishes the Secretary to consider.
(7) Any other information requested by the Secretary.
(b) As part of the submissions under this section, the Governor may request an informal meeting with the Secretary at which representatives of both parties will have an opportunity to present their views on the issues raised in the appeal.
(a) If either party requests a meeting under § 370.14(f) or § 370.15(b), the meeting is to be held within 30 days of the submissions by the Governor under § 370.15, unless both parties agree to waive this requirement. The Secretary promptly notifies the parties of the date and place of the meeting.
(b) Within 30 days of the informal meeting permitted under paragraph (a) of this section or, if neither party has requested an informal meeting, within 60 days of the submissions required from the Governor under § 370.15, the Secretary issues to the parties a final written decision on whether the redesignation was for good cause.
(c) The Secretary reviews a Governor's decision based on the record submitted under §§ 370.14 and 370.15 and any other relevant submissions of other interested parties. The Secretary may affirm or, if the Secretary finds that the redesignation is not for good cause, remand for further findings or reverse a Governor's redesignation.
(d) The Secretary sends copies of the decision to the parties by registered or certified mail, return receipt requested, or other means that provide a record of receipt by both parties.
A redesignation does not take effect for at least 15 days following the designated agency's receipt of the Governor's written decision to redesignate or, if the designated agency appeals, for at least 5 days after the Secretary has affirmed the Governor's written decision to redesignate.
(a) Each State and the protection and advocacy system serving the American Indian Consortium seeking assistance under this part shall submit to the Secretary, in writing, at the time and in the manner determined by the Secretary to be appropriate, an application that includes, at a minimum—
(1) The name of the designated agency; and
(2) An assurance that the designated agency meets the independence requirement of section 112(c)(1)(A) of the Act and § 370.2(c), or that the State is exempted from that requirement under section 112(c)(1)(A) of the Act and § 370.2(d).
(b)(1) Each State and the protection and advocacy system serving the American Indian Consortium also shall submit to the Secretary an assurance that the designated agency has the authority to pursue legal, administrative, and other appropriate remedies to ensure the protection of the rights of clients or client-applicants within the State or American Indian Consortium.
(2) The authority to pursue remedies described in paragraph (b)(1) of this section must include the authority to pursue those remedies against the State vocational rehabilitation agency and other appropriate State agencies. The designated agency meets this requirement if it has the authority to pursue those remedies either on its own behalf or by obtaining necessary services, such as legal representation, from outside sources.
(c) Each State and the protection and advocacy system serving the American Indian Consortium also shall submit to the Secretary assurances that—
(1) All entities conducting, administering, operating, or carrying out programs within the State that provide services under the Act to individuals with disabilities in the State will advise all clients and client-applicants of the existence of the CAP, the services provided under the program, and how to contact the designated agency;
(2) The designated agency will meet each of the requirements in this part; and
(3) The designated agency will provide the Secretary with the annual report required by section 112(g)(4) of the Act and § 370.44.
(d) To allow a designated agency to receive direct payment of funds under this part, a State or the protection and advocacy system serving the American Indian Consortium must provide to the Secretary, as part of its application for assistance, an assurance that direct payment to the designated agency is not prohibited by or inconsistent with State or tribal law, regulation, or policy.
(a) After reserving funds required under paragraphs (c) and (d) of this section, the Secretary shall allot the remainder of the sums appropriated for each fiscal year under this section among the States on the basis of relative population of each State, except that no such entity shall receive less than $50,000.
(b) The Secretary allocates $30,000 each, unless the provisions of section 112(e)(1)(D) of the Act are applicable, to American Samoa, Guam, the Virgin Islands, and the Commonwealth of Northern Mariana Islands.
(c) The Secretary shall reserve funds, from the amount appropriated to carry out this part, to make a grant to the protection and advocacy system serving the American Indian Consortium to provide services in accordance with this part. The amount of the grant to the protection and advocacy system serving the American Indian Consortium shall be the same amount as is provided to a territory under paragraph (b) of this section.
(d)(1) For any fiscal year for which the amount appropriated equals or exceeds $14,000,000, the Secretary may reserve not less than 1.8 percent and not more than 2.2 percent of such amount to provide a grant for training and technical assistance for the programs established under this part.
(2) All training and technical assistance shall be coordinated with activities provided under 34 CFR 381.22.
(3) The Secretary shall make a grant pursuant to paragraph (d)(1) of this section to an entity that has experience in or knowledge related to the provision of services authorized under this part.
(4) An entity receiving a grant under paragraph (d)(1) of this section shall provide training and technical assistance to the designated agencies or entities carrying out the CAP to assist them in improving the provision of services authorized under this part and the administration of the program.
(e)(1) Unless prohibited or otherwise provided by State or tribal law, regulation, or policy, the Secretary pays to the designated agency, from the State allotment under paragraph (a), (b), or (c) of this section, the amount specified in the State's or the eligible protection and advocacy system's approved request. Because the designated agency, including the protection and advocacy system serving the American Indian Consortium, is the eventual, if not the direct, recipient of the CAP funds, 34 CFR part 81 and 2 CFR part 200 apply to the designated agency, whether or not the designated agency is the actual recipient of the CAP grant.
(2) Notwithstanding the grant made to the protection and advocacy system serving the American Indian Consortium under paragraph (c) of this section, the State remains the grantee for purposes of 34 CFR part 76 and 2 CFR part 200 because it is the State that submits an application for and receives the CAP grant. In addition, both the State and the designated agency are considered recipients for purposes of 34 CFR part 81.
(a) The Secretary reallocates funds in accordance with section 112(e)(2) of the Act.
(b) A designated agency shall inform the Secretary at least 45 days before the end of the fiscal year for which CAP funds were received whether the designated agency is making available for reallotment any of those CAP funds that it will be unable to obligate in that fiscal year or the succeeding fiscal year.
(a) The designated agency, including the eligible protection and advocacy system serving the American Indian Consortium, shall apply the regulations at 2 CFR part 200.
(b) Consistent with the program activities listed in § 370.4, the cost of travel in connection with the provision to a client or client-applicant of assistance under this program is allowable, in accordance with 2 CFR part 200. The cost of travel includes the cost of travel for an attendant if the attendant must accompany the client or client-applicant.
(c)(1) The State and the designated agency are accountable, both jointly and severally, to the Secretary for the proper use of funds made available under this part. However, the Secretary may choose to recover funds under the procedures in 34 CFR part 81 from either the State or the designated agency, or both, depending on the circumstances of each case.
(2) For purposes of the grant made under this part to the protection and advocacy system serving the American Indian Consortium, such entity will be solely accountable to the Secretary for the proper use of funds made available under this part. If the Secretary determines it necessary, the Secretary may recover funds from the protection and advocacy system serving the American Indian Consortium pursuant to the procedures in 34 CFR part 81.
(a) Except as permitted by paragraph (b) of this section, an employee of a designated agency, or of an entity or individual under contract with a designated agency, who carries out any CAP duties or responsibilities, while so employed, may not—
(1) Serve concurrently as a staff member of, consultant to, or in any other capacity within, any other rehabilitation project, program, or community rehabilitation program receiving assistance under the Act in the State; or
(2) Provide any services under the Act, other than CAP and PAIR services.
(b) An employee of a designated agency under contract with a designated agency, may—
(1) Receive a traineeship under section 302 of the Act;
(2) Provide services under the PAIR program;
(3) Represent the CAP on any board or council (such as the SRC) if CAP representation on the board or council is specifically permitted or mandated by the Act; and
(4) Consult with policymaking and administrative personnel in State and local rehabilitation programs, projects, and community rehabilitation programs, if consultation with the designated agency is specifically permitted or mandated by the Act.
The CAP must be afforded reasonable access to policymaking and administrative personnel in State and local rehabilitation programs, projects, and community rehabilitation programs. One way in which the CAP may be provided that access would be to include the director of the designated agency among the individuals to be consulted on matters of general policy development and implementation, as required by section 101(a)(16) of the Act.
(a) Each designated agency shall implement procedures designed to ensure that, to the maximum extent possible, good faith negotiations and mediation procedures are used before resorting to formal administrative or legal remedies. In designing these procedures, the designated agency may take into account its level of resources.
(b) For purposes of this section, mediation may involve the use of professional mediators, other independent third parties mutually agreed to by the parties to the dispute, or an employee of the designated agency who—
(1) Is not assigned to advocate for or otherwise represent or is not involved with advocating for or otherwise representing the client or client-applicant who is a party to the mediation; and
(2) Has not previously advocated for or otherwise represented or been involved with advocating for or otherwise representing that same client or client-applicant.
In addition to the program and fiscal reporting requirements in 34 CFR 76.720 and 2 CFR 200.327
(a) The number of requests received by the designated agency for information on services and benefits under the Act and title I of the ADA;
(b) The number of referrals to other agencies made by the designated agency and the reason or reasons for those referrals;
(c) The number of requests for advocacy services received by the designated agency from clients or client-applicants;
(d) The number of requests for advocacy services from clients or client-applicants that the designated agency was unable to serve;
(e) The reasons that the designated agency was unable to serve all of the requests for advocacy services from clients or client-applicants; and
(f) Any other information that the Secretary may require.
A designated agency may not bring any class action in carrying out its responsibilities under this part.
In designating a client assistance agency under § 370.2, redesignating a client assistance agency under § 370.10, and carrying out the other provisions of this part, the Governor shall consult with the director of the State vocational rehabilitation agency (or, in States with both a general agency and an agency for the blind, the directors of both agencies), the head of the developmental disability protection and advocacy agency, and representatives of professional and consumer organizations serving individuals with disabilities in the State.
(a) Definition. (1) Consistent with 2 CFR 200.80 and for purposes of this part, program income means gross income earned by the designated agency that is directly generated by an activity supported under this part.
(2) Funds received through the transfer of Social Security Administration payments from the designated State unit, as defined in 34 CFR 361.5(c)(13), in accordance with 34 CFR 361.63(c)(2) will be treated as program income received under this part.
(b) Use of program income. (1) Program income, whenever earned or received, must be used for the provision of services authorized under § 370.4.
(2)(i) The designated agency must use program income to supplement Federal funds that support program activities that are subject to this part. See, for example 2 CFR 200.307(e)(2).
(ii) Notwithstanding 2 CFR 200.305(a) and consistent with 2 CFR 200.305(b)(5), and to the extent that program income funds are available, a designated agency, regardless of whether it is a State agency, must disburse those funds (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned on such funds before requesting additional funds from the Department.
Any Federal funds, including reallotted funds, that are appropriated for a fiscal year to carry out the activities under this part that are not obligated or expended by the designated agency prior to the beginning of the succeeding fiscal year, and any program income received during a fiscal year that is not obligated or expended by the designated agency prior to the beginning of the succeeding fiscal year in which the program income was received, remain available for obligation and expenditure by the designated agency during that succeeding fiscal year in accordance with section 19 of the Act.
(a) All personal information about individuals served by any designated agency under this part, including lists of names, addresses, photographs, and records of evaluation, must be held strictly confidential.
(b) The designated agency's use of information and records concerning individuals must be limited only to purposes directly connected with the CAP, including program evaluation activities. Except as provided in paragraphs (c) and (e) of this section, this information may not be disclosed, directly or indirectly, other than in the administration of the CAP, unless the consent of the individual to whom the information applies, or his or her parent, legal guardian, or other legally authorized representative or advocate (including the individual's advocate from the designated agency), has been obtained in writing. A designated agency may not produce any report, evaluation, or study that reveals any personally identifying information without the written consent of the individual or his or her representative.
(c) Except as limited in paragraphs (d) and (e) of this section, the Secretary or other Federal or State officials responsible for enforcing legal requirements are to have complete access to all—
(1) Records of the designated agency that receives funds under this program; and
(2) All individual case records of clients served under this part without the consent of the client.
(d) For purposes of conducting any periodic audit, preparing or producing any report, or conducting any evaluation of the performance of the CAP established or assisted under this part, the Secretary does not require the designated agency to disclose the identity of, or any other personally identifiable information related to, any individual requesting assistance under the CAP.
(e) Notwithstanding paragraph (d) of this section and consistent with paragraph (f) of this section, a designated agency shall disclose to the Secretary, if the Secretary so requests, the identity of, or any other personally identifiable information (i.e., name, address, telephone number, social security number, or any other official code or number by which an individual may be readily identified) related to, any individual requesting assistance under the CAP if—
(1) An audit, evaluation, monitoring review, State plan assurance review, or other investigation produces reliable evidence that there is probable cause to believe that the designated agency has violated its legislative mandate or misused Federal funds; or
(2) The Secretary determines that this information may reasonably lead to further evidence that is directly related to alleged misconduct of the designated agency.
(f) In addition to the protection afforded by paragraph (d) of this section, the right of a person or designated agency not to produce documents or disclose information to the Secretary is governed by the common law of privileges, as interpreted by the courts of the United States.
This program is designed to provide vocational rehabilitation services, including culturally appropriate services, to American Indians with disabilities who reside on or near Federal or State reservations, consistent with such eligible individual's strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice, so that such individual may prepare for, and engage in, high-quality employment that will increase opportunities for economic self-sufficiency.
(a) Applications may be made only by Indian tribes and consortia of those Indian tribes located on Federal and State reservations.
(1) The applicant for the grant must be
(i) The governing body of an Indian tribe, either on behalf the Indian tribe or on behalf of a consortium of Indian tribes; or
(ii) A tribal organization that is a separate legal organization from an Indian tribe.
(2) In order to receive a grant under this section, a tribal organization that is not a governing body of an Indian tribe must:
(i) Have as one of its functions the vocational rehabilitation of American Indians with disabilities; and
(ii) Have the approval of the tribe to be served by such organization.
(3) If a grant is made to the governing body of an Indian tribe, either on its own behalf or on behalf of a consortium, or to a tribal organization to perform services benefiting more than one Indian tribe, the approval of each such Indian tribe shall be a prerequisite to the making of such a grant.
(b) Applications for awards under Subpart B may be made by State, local or tribal governments, non-profit organizations, or institutions of higher education.
The American Indian Vocational Rehabilitation Services program provides financial assistance for the establishment and operation of tribal vocational rehabilitation services programs for American Indians with disabilities who reside on or near Federal or State reservations.
The Secretary approves a project period of up to sixty months.
The following regulations apply to this program—
(a) The regulations in this part 371.
(b) 2 CFR part 180 (OMB Guidelines to Agencies on Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485;
(c) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) as adopted at 2 CFR part 3474.
(d) 34 CFR part 75 Direct Grant Programs
(e) 34 CFR part 77 Definitions that Apply to Department Regulations
(f) 34 CFR part 81 General Education Provisions Act—Enforcement
(g) 34 CFR part 82 New Restrictions on Lobbying
(h) 34 CFR part 84 Governmentwide Requirements for Drug-Free Workplace
(a) The definitions of terms included in the applicable regulations listed in § 371.5;
(b) The following definitions also apply to this program—
Act means the Rehabilitation Act of 1973, as amended.
Assessment for determining eligibility and vocational rehabilitation needs means as appropriate in each case—
(i)(A) A review of existing data—
(1) To determine if an individual is eligible for vocational rehabilitation services; and
(2) To assign priority for an order of selection described in an approved plan or the approved grant application; and
(B) To the extent necessary, the provision of appropriate assessment activities to obtain necessary additional data to make the eligibility determination and assignment;
(ii) To the extent additional data are necessary to make a determination of the employment outcomes, and the nature and scope of vocational rehabilitation services, to be included in the individualized plan for employment of an eligible individual, a comprehensive assessment to determine the unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice, including the need for supported employment, of the eligible individual, this comprehensive assessment—
(A) Is limited to information that is necessary to identify the rehabilitation needs of the individual and to develop the individualized plan for employment of the eligible individual;
(B) Uses as a primary source of information, to the maximum extent possible and appropriate and in accordance with confidentiality requirements—
(1) Existing information obtained for the purposes of determining the eligibility of the individual and assigning priority for an order of selection described in an approved plan or the approved grant application for the individual; and
(2) Information that can be provided by the individual and, if appropriate, by the family of the individual;
(C) May include, to the degree needed to make such a determination, an assessment of the personality, interests, interpersonal skills, intelligence and related functional capacities, educational achievements, work experience, vocational aptitudes, personal and social adjustments, and employment opportunities of the individual, and the medical, psychiatric, psychological, and other pertinent vocational, educational, cultural, social, recreational, and environmental factors, that affect the employment and rehabilitation needs of the individual;
(D) May include, to the degree needed, an appraisal of the patterns of work behavior of the individual and services needed for the individual to acquire occupational skills, and to develop work attitudes, work habits, work tolerance, and social and behavior patterns necessary for successful job performance, including the use of work in real job situations to assess and develop the capacities of the individual to perform adequately in a work environment; and
(E) To the maximum extent possible, relies on information obtained from experiences in integrated employment settings in the community, and other integrated community settings;
(iii) Referral, for the provision of rehabilitation technology services to the individual, to assess and develop the capacities of the individual to perform in a work environment; and
(iv) An exploration of the individual's abilities, capabilities, and capacity to perform in work situations, which must be assessed periodically during trial work experiences, including experiences in which the individual is provided appropriate supports and training.
Community rehabilitation program means a program that provides directly, or facilitates the provision of, one or more of the following vocational rehabilitation services to individuals with disabilities to enable those individuals to maximize their opportunities for employment, including career advancement—
(i) Medical, psychiatric, psychological, social, and vocational services that are provided under one management;
(ii) Testing, fitting, or training in the use of prosthetic and orthotic devices;
(iii) Recreational therapy;
(iv) Physical and occupational therapy;
(v) Speech, language, and hearing therapy;
(vi) Psychiatric, psychological, and social services, including positive behavior management;
(vii) Assessment for determining eligibility and vocational rehabilitation needs;
(viii) Rehabilitation technology;
(ix) Job development, placement, and retention services;
(x) Evaluation or control of specific disabilities;
(xi) Orientation and mobility services for individuals who are blind;
(xii) Extended employment;
(xiii) Psychosocial rehabilitation services;
(xiv) Supported employment services and extended services;
(xv) Customized employment;
(xvi) Services to family members if necessary to enable the applicant or eligible individual to achieve an employment outcome;
(xvii) Personal assistance services; or
(xviii) Services similar to the services described in paragraphs (i) through (xvii) of this definition.
Comparable services and benefits means—
(i) Services and benefits, including accommodations and auxiliary aids and services, that are—
(A) Provided or paid for, in whole or in part, by other Federal, State, or local public agencies, by health insurance, or by employee benefits;
(B) Available to the individual at the time needed to ensure the progress of the individual toward achieving the employment outcome in the individual's individualized plan for employment; and
(C) Commensurate to the services that the individual would otherwise receive from the Tribal Vocational Rehabilitation unit.
(ii) For the purposes of this definition, comparable benefits do not include awards and scholarships based on merit.
Competitive integrated employment means work that—
(i) Is performed on a full-time or part-time basis (including self-employment) and for which an individual is compensated at a rate that—
(A) Is not less than the higher of the rate specified in section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) or the rate required under the applicable State or local minimum wage law;
(B) Is not less than the customary rate paid by the employer for the same or similar work performed by other employees who are not individuals with disabilities and who are similarly situated in similar occupations by the same employer and who have similar training, experience, and skills; and
(C) In the case of an individual who is self-employed, yields an income that is comparable to the income received by other individuals who are not individuals with disabilities and who are self-employed in similar occupations or on similar tasks and who have similar training, experience, and skills; and
(D) Is eligible for the level of benefits provided to other employees; and
(ii) Is at a location—
(A) Typically found in the community; and
(B) Where the employee with a disability interacts for the purpose of performing the duties of the position with other employees within the particular work unit and the entire work site, and, as appropriate to the work performed, other persons (e.g., customers and vendors), who are not individuals with disabilities (not including supervisory personnel or individuals who are providing services to such employee) to the same extent that employees who are not individuals with disabilities and who are in comparable positions interact with these persons; and
(C) Presents, as appropriate, opportunities for advancement that are similar to those for other employees who are not individuals with disabilities and who have similar positions.
Consortium means two or more eligible governing bodies of Indian tribes that apply for an award under this program by either:
(i) Designating one governing body to apply for the grant; or
(ii) Establishing and designating a tribal organization to apply for a grant.
Customized employment means competitive integrated employment, for an individual with a significant disability, that is based on an individualized determination of the unique strengths, needs, and interests of the individual with a significant disability, is designed to meet the specific abilities of the individual with a significant disability and the business needs of the employer, and is carried out through flexible strategies, such as—
(i) Job exploration by the individual;
(ii) Working with an employer to facilitate placement, including—
(A) Customizing a job description based on current employer needs or on previously unidentified and unmet employer needs; and
(B) Developing a set of job duties, a work schedule and job arrangement, and specifics of supervision (including performance evaluation and review), and determining a job location;
(iii) Using a professional representative chosen by the individual, or if elected self-representation, to work with an employer to facilitate placement; and
(iv) Providing services and supports at the job location.
Eligible individual means an applicant for vocational rehabilitation services who meets the eligibility requirements of Section 102(a)(1) of the Act.
Employment outcome means, with respect to an individual, entering, advancing in or retaining full-time or, if appropriate, part-time competitive integrated employment (including customized employment, self-employment, telecommuting or business ownership), or supported employment, that is consistent with an individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
Family member for purposes of receiving vocational rehabilitation services means an individual—
(i) Who either—
(A) Is a relative or guardian of an applicant or eligible individual; or
(B) Lives in the same household as an applicant or eligible individual;
(ii) Who has a substantial interest in the well-being of that individual; and
(iii) Whose receipt of vocational rehabilitation services is necessary to enable the applicant or eligible individual to achieve an employment outcome.
Governing bodies of Indian tribes means those duly elected or appointed representatives of an Indian tribe or of an Alaskan native village. These representatives must have the authority to enter into contracts, agreements, and grants on behalf of their constituency.
Indian; American Indian; Indian American; Indian tribe means—-
(i) Indian, American Indian, and Indian American mean an individual who is a member of an Indian tribe and includes a Native and a descendant of a Native, as such terms are defined in subsections (b) and (r) of section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602).
(ii) Indian tribe means any Federal or State Indian tribe, band, rancheria, pueblo, colony, or community, including any Alaskan native village or regional village corporation (as defined in or established pursuant to the Alaska Native Claims Settlement Act) and a tribal organization (as defined in section 4(l) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450(b)(l)) and this section.
Individual with a disability means—
In general any individual—
(i) Who has a physical or mental impairment;
(ii) Whose impairment constitutes or results in a substantial impediment to employment; and
(iii) Who can benefit in terms of an employment outcome from the provision of vocational rehabilitation services.
Individual with a significant disability means—
In general an individual with a disability—
(i) Who has a severe physical or mental impairment that seriously limits one or more functional capacities (such as mobility, communication, self-care, self-direction, interpersonal skills, work tolerance, or work skills) in terms of an employment outcome;
(ii) Whose vocational rehabilitation can be expected to require multiple vocational rehabilitation services over an extended period of time; and
(iii) Who has one or more physical or mental disabilities resulting from amputation, arthritis, autism, blindness, burn injury, cancer, cerebral palsy, cystic fibrosis, deafness, head injury, heart disease, hemiplegia, hemophilia, respiratory or pulmonary dysfunction, intellectual disability, mental illness, multiple sclerosis, muscular dystrophy, musculo-skeletal disorders, neurological disorders (including stroke and epilepsy), spinal cord conditions (including paraplegia and quadriplegia), sickle cell anemia, specific learning disability, end-stage renal disease, or another disability or combination of disabilities determined on the basis of an assessment for determining eligibility and vocational rehabilitation needs to cause comparable substantial functional limitation.
Maintenance means monetary support provided to an individual for expenses, such as food, shelter, and clothing, that are in excess of the normal expenses of the individual and that are necessitated by the individual's participation in an assessment for determining eligibility and vocational rehabilitation needs or the individual's receipt of vocational rehabilitation services under an individualized plan for employment.
Examples: The following are examples of expenses that would meet the definition of maintenance. The examples are illustrative, do not address all possible circumstances, and are not intended to substitute for individual counselor judgment.
Physical and mental restoration services means—
(i) Corrective surgery or therapeutic treatment that is likely, within a reasonable period of time, to correct or modify substantially a stable or slowly progressive physical or mental impairment that constitutes a substantial impediment to employment;
(ii) Diagnosis of and treatment for mental or emotional disorders by qualified personnel in accordance with State licensure laws;
(iii) Dentistry;
(iv) Nursing services;
(v) Necessary hospitalization (either inpatient or outpatient care) in connection with surgery or treatment and clinic services;
(vi) Drugs and supplies;
(vii) Prosthetic and orthotic devices;
(viii) Eyeglasses and visual services, including visual training, and the examination and services necessary for the prescription and provision of eyeglasses, contact lenses, microscopic lenses, telescopic lenses, and other special visual aids prescribed by personnel that are qualified in accordance with State licensure laws;
(ix) Podiatry;
(x) Physical therapy;
(xi) Occupational therapy;
(xii) Speech or hearing therapy;
(xiii) Mental health services;
(xiv) Treatment of either acute or chronic medical complications and emergencies that are associated with or arise out of the provision of physical and mental restoration services, or that are inherent in the condition under treatment;
(xv) Special services for the treatment of individuals with end-stage renal disease, including transplantation, dialysis, artificial kidneys, and supplies; and
(xvi) Other medical or medically related rehabilitation services.
(xvii) Services reflecting the cultural background of the American Indian being served, including treatment provided by native healing practitioners in accordance with 34 CFR 371.41(a)(2).
Physical or mental impairment means—
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological, musculo-skeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genitourinary, hemic and lymphatic, skin, and endocrine; or
(ii) Any mental or psychological disorder such as intellectual or developmental disability, organic brain syndrome, emotional or mental illness, and specific learning disabilities.
Post-employment services means one or more of the services that are provided subsequent to the achievement of an employment outcome and that are necessary for an individual to maintain, regain, or advance in employment, consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
Post-employment services are intended to ensure that the employment outcome remains consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice. These services are available to meet rehabilitation needs that do not require a complex and comprehensive provision of services and, thus, should be limited in scope and duration. If more comprehensive services are required, then a new rehabilitation effort should be considered. Post-employment services are to be provided under an amended individualized plan for employment; thus, a re-determination of eligibility is not required. The provision of post-employment services is subject to the same requirements in this part as the provision of any other vocational rehabilitation service. Post-employment services are available to assist an individual to maintain employment, e.g., the individual's employment is jeopardized because of conflicts with supervisors or co-workers, and the individual needs mental health services and counseling to maintain the employment; or the individual requires assistive technology to maintain the employment; to regain employment, e.g., the individual's job is eliminated through reorganization and new placement services are needed; and to advance in employment, e.g., the employment is no longer consistent with the individual's unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
Representatives of the Tribal Vocational Rehabilitation program means, consistent with 34 CFR 371.21(b), those individuals specifically responsible for determining eligibility, the nature and scope of vocational rehabilitation services, and the provision of those services.
Reservation means a Federal or State Indian reservation, public domain Indian allotment, former Indian reservation in Oklahoma, land held by incorporated Native groups, regional corporations and village corporations under the provisions of the Alaska Native Claims Settlement Act; or a defined area of land recognized by a State or the Federal Government where there is a concentration of tribal members and on which the tribal government is providing structured activities and services.
Subsistence means a form of self-employment in which individuals produce, using culturally relevant and traditional methods, goods or services that are predominantly consumed by their own household or used for noncommercial customary trade or barter and that constitute an important basis for the worker's livelihood.
Substantial impediment to employment means that a physical or mental impairment (in light of attendant medical, psychological, vocational, educational, communication, and other related factors) hinders an individual from preparing for, entering into, engaging in, advancing in or retaining employment consistent with the individual's abilities and capabilities.
Supported employment—(i) Supported employment means competitive integrated employment, including customized employment, or employment in an integrated work setting in which an individual with a most significant disability, including a youth with a most significant disability, is working on a short-term basis toward competitive integrated employment that is individualized, consistent with the unique strengths, abilities, interests, and informed choice of the individual, including with ongoing support services for individuals with the most significant disabilities—
(A) For whom competitive integrated employment has not historically occurred, or for whom competitive integrated employment has been interrupted or intermittent as a result of a significant disability; and
(B) Who, because of the nature and severity of their disability, need intensive supported employment services and extended services after the transition from support provided by the Tribal Vocational Rehabilitation Unit, in order to perform this work.
(ii) For purposes of this part, an individual with the most significant disabilities, whose supported employment in an integrated setting does not satisfy the criteria of competitive integrated employment is considered to be working on a short-term basis toward competitive integrated employment so long as the individual can reasonably anticipate achieving competitive integrated employment:
(A) Within six months of achieving a supported employment outcome; or
(B) Within a period not to exceed 12 months from the achievement of the supported employment outcome, if a longer period is necessary based on the needs of the individual, and the individual has demonstrated progress toward competitive earnings based on information contained in the service record.
Supported employment services means ongoing support services, including customized employment, and other appropriate services needed to support and maintain an individual with a most significant disability, including a youth with a most significant disability, in supported employment that are:
(i) Organized and made available, singly or in combination, in such a way as to assist an eligible individual to achieve competitive integrated employment;
(ii) Based on a determination of the needs of an eligible individual, as specified in an individualized plan for employment;
(iii) Provided by the Tribal Vocational Rehabilitation Unit for a period of time not to exceed 24 months, unless under special circumstances the eligible individual and the rehabilitation counselor or coordinator jointly agree to extend the time to achieve the employment outcome identified in the individualized plan for employment; and
(iv) Following transition, as post-employment services that are unavailable from an extended services provider and that are necessary to maintain or regain the job placement or advance in employment.
Transition services means a coordinated set of activities for a student or youth with a disability—
(i) Designed within an outcome-oriented process that promotes movement from school to post-school activities, including postsecondary education, vocational training, competitive integrated employment, supported employment, continuing and adult education, adult services, independent living, or community participation;
(ii) Based upon the individual student's or youth's needs, taking into account the student's or youth's preferences and interests;
(iii) That includes instruction, community experiences, the development of employment and other post-school adult living objectives, and, if appropriate, acquisition of daily living skills and functional vocational evaluation;
(iv) That promotes or facilitates the achievement of the employment outcome identified in the student's or youth's individualized plan for employment; and
(v) That includes outreach to and engagement of the parents, or, as appropriate, the representative of such a student or youth with a disability.
Transportation means travel and related expenses that are necessary to enable an applicant or eligible individual to participate in a vocational rehabilitation service, including expenses for training in the use of public transportation vehicles and systems.
Tribal organization means the recognized governing body of any Indian tribe or any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities.
Tribal Vocational Rehabilitation program means the unit designated by the governing bodies of an Indian Tribe, or consortia of governing bodies, to implement and administer the grant under this program in accordance with the purpose of the grant and all applicable programmatic and fiscal requirements.
Vocational Rehabilitation Services for Individuals means any services described in an individualized plan for employment necessary to assist an individual with a disability in preparing for, securing, retaining, advancing in or regaining an employment outcome that is consistent with the unique strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice of the individual, including, but not limited to—
(i) An assessment for determining eligibility, priority for services, and vocational rehabilitation needs by qualified personnel, including, if appropriate, an assessment by personnel skilled in rehabilitation technology.
(ii) Vocational rehabilitation counseling and guidance, including information and support services to assist an individual in exercising informed choice.
(iii) Referral and other services necessary to assist applicants and eligible individuals to secure needed services from other agencies and to advise those individuals about client assistance programs established under 34 CFR part 370.
(iv) Physical and mental restoration services, to the extent that financial support is not readily available from a source other than the Tribal Vocational Rehabilitation unit (such as through health insurance or a comparable service or benefit).
(v) Vocational and other training services, including personal and vocational adjustment training, advanced training (particularly advanced training in a field of science, technology, engineering, or mathematics (including computer science), medicine, law or business); books, tools, and other training materials, except that no training or training services in an institution of higher education (universities, colleges, community or junior colleges, vocational schools, technical institutes, or hospital schools of nursing or any other postsecondary education institution) may be paid for with funds under this part unless maximum efforts have been made by the Tribal Vocational Rehabilitation unit and the individual to secure grant assistance in whole or in part from other sources to pay for that training.
(vi) Maintenance.
(vii) Transportation in connection with the provision of any vocational rehabilitation service.
(viii) Vocational rehabilitation services to family members of an applicant or eligible individual if necessary to enable the applicant or eligible individual to achieve an employment outcome.
(ix) Interpreter services, including sign language and oral interpreter services, for individuals who are deaf or hard of hearing and tactile interpreting services for individuals who are deaf-blind provided by qualified personnel.
(x) Reader services, rehabilitation teaching services, and orientation and mobility services for individuals who are blind.
(xi) Job-related services, including job search and placement assistance, job retention services, follow-up services, and follow-along services.
(xii) Supported employment services.
(xiii) Personal assistance services.
(xiv) Post-employment services.
(xv) Occupational licenses, tools, equipment, initial stocks, and supplies.
(xvi) Rehabilitation technology, including vehicular modification, telecommunications, sensory, and other technological aids and devices.
(xvii) Transition services for students and youth with disabilities that facilitate the transition from school to postsecondary life, such as achievement of an employment outcome in competitive integrated employment.
(xviii) Technical assistance and other consultation services to conduct market analyses, develop business plans, and otherwise provide resources to eligible individuals who are pursuing self-employment or telecommuting or establishing a small business operation as an employment outcome.
(xix) Customized employment.
(x) Other goods and services determined necessary for the individual with a disability to achieve an employment outcome.
Vocational Rehabilitation Services for Groups of Individuals provided for the benefit of groups of individuals with disabilities—
(i) May be provided by the Tribal Vocational Rehabilitation Unit and may include the following:
(A) In the case of any small business enterprise operated by individuals with significant disabilities under the supervision of the Tribal Vocational Rehabilitation unit, management services and supervision provided by the Tribal Vocational Rehabilitation unit, along with the acquisition by the Tribal Vocational Rehabilitation unit of vending facilities or other equipment and initial stocks and supplies in accordance with the following requirements:
(1) Management services and supervision includes inspection, quality control, consultation, accounting, regulating, in-service training, and related services provided on a systematic basis to support and improve small business enterprises operated by individuals with significant disabilities. Management services and supervision may be provided throughout the operation of the small business enterprise.
(2) Initial stocks and supplies include those items necessary to the establishment of a new business enterprise during the initial establishment period, which may not exceed 6 months.
(3) Costs of establishing a small business enterprise may include operational costs during the initial establishment period, which may not exceed six months.
(4) If the Tribal Vocational Rehabilitation unit provides for these services, it must ensure that only individuals with significant disabilities will be selected to participate in this supervised program.
(5) If the Tribal Vocational Rehabilitation unit provides for these services and chooses to set aside funds from the proceeds of the operation of the small business enterprises, the Tribal Vocational Rehabilitation unit must maintain a description of the methods used in setting aside funds and the purposes for which funds are set aside. Funds may be used only for small business enterprises purposes, and benefits that are provided to operators from set-aside funds must be provided on an equitable basis.
(B) The establishment, development, or improvement of a community rehabilitation program that is used to provide vocational rehabilitation services that promote integration into the community and prepare individuals with disabilities for competitive integrated employment, including supported employment and customized employment, and under special circumstances, the construction of a community rehabilitation facility. Examples of “special circumstances” include the destruction by natural disaster of the only available center serving an area or a Tribal Vocational Rehabilitation unit determination that construction is necessary in a rural area because no other public agencies or private nonprofit organizations are currently able to provide vocational rehabilitation services to individuals.
(C) Telecommunications systems (that have the potential for substantially improving vocational rehabilitation service delivery methods and developing appropriate programming to meet the particular needs of individuals with disabilities including telephone, television, video description services, satellite, tactile-vibratory devices, and similar systems, as appropriate.
(D) Special services to provide nonvisual access to information for individuals who are blind, including the use of telecommunications, Braille, sound recordings, or other appropriate media; captioned television, films, or video cassettes for individuals who are deaf or hard of hearing; tactile materials for individuals who are deaf-blind; and other special services that provide information through tactile, vibratory, auditory, and visual media.
(E) Technical assistance to businesses that are seeking to employ individuals with disabilities.
(F) Consultation and technical assistance services to assist State educational agencies and local educational agencies, and, where appropriate, Tribal Educational agencies, in planning for the transition of students with disabilities from school to postsecondary life, including employment.
(G) Transition services to youth with disabilities and students with disabilities, for which a vocational rehabilitation counselor works in concert with educational agencies, providers of job training programs, providers of services under the Medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), entities designated by the Tribal Vocational Rehabilitation unit to provide services for individuals with developmental disabilities, centers for independent living (as defined in section 702 of the Act), housing and transportation authorities, workforce development systems, and businesses and employers. These specific transition services are to benefit a group of students with disabilities or youth with disabilities and are not individualized services directly related to a goal in an individualized plan for employment (IPE). Services may include, but are not limited to group tours of universities and vocational training programs, employer or business site visits to learn about career opportunities, career fairs coordinated with workforce development and employers to facilitate mock interviews and resume writing, and other general services applicable to groups of students with disabilities and youth with disabilities.
(H) The establishment, development, or improvement of assistive technology demonstration, loan, reutilization, or financing programs in coordination with activities authorized under the Assistive Technology Act of 1998 (29 U.S.C. 3001 et seq.) to promote access to assistive technology for individuals with disabilities and employers.
(I) Support (including, as appropriate, tuition) for advanced training in a field of science, technology, engineering, or mathematics (including computer science), medicine, law, or business, provided after an individual eligible to receive services under this title, demonstrates:
(1) Such eligibility;
(2) Previous completion of a bachelor's degree program at an institution of higher education or scheduled completion of such degree program prior to matriculating in the program for which the individual proposes to use the support; and
(3) Acceptance by a program at an institution of higher education in the United States that confers a master's degree in a field of science, technology, engineering, or mathematics (including computer science), a juris doctor degree, a master of business administration degree, or a doctor of medicine degree, except that—
(i) No training provided at an institution of higher education shall be paid for with funds under this program unless maximum efforts have been made by the Tribal Vocational Rehabilitation unit and the individual to secure grant assistance, in whole or in part, from other sources to pay for such training; and
(ii) Nothing in this paragraph prevents any Tribal Vocational Rehabilitation unit from providing similar support to individuals with disabilities pursuant to their approved IPEs who are eligible to receive support under this program and who are not served under this paragraph.
(ii) If the Tribal Vocational Rehabilitation Unit provides for vocational rehabilitation services for groups of individuals it must —
(A) Develop and maintain written policies covering the nature and scope of each of the vocational rehabilitation services it provides and the criteria under which each service is provided; and
(B) Maintain information to ensure the proper and efficient administration of those services in the form and detail and at the time required by the Secretary, including the types of services provided, the costs of those services, and to the extent feasible, estimates of the numbers of individuals benefiting from those services.
The Secretary shall first reserve not less than 1.8 percent and not more than 2 percent of funds appropriated and made available to carry out this program to provide training and technical assistance to the governing bodies of Indian tribes and consortia of those governing bodies awarded a grant under this program.
(a) The Secretary uses these funds to make grants to, or enter into contracts or other cooperative agreements with, entities that have staff with experience in the operation of vocational rehabilitation services programs under this part.
(b) An entity receiving assistance in accordance with paragraph (a) of this section shall provide training and technical assistance with respect to developing, conducting, administering, and evaluating tribal vocational rehabilitation programs funded under this part.
(a) To be eligible to receive a grant or enter into a contract or cooperative agreement under section 121(c) of the Act and this subpart, an applicant shall submit an application to the Secretary at such time, in such manner, and containing a proposal to provide such training and technical assistance, and any additional information as the Secretary may require.
(b) The Secretary shall provide for peer review of applications by panels that include persons who are not Federal or State government employees and who have experience in the operation of vocational rehabilitation services programs under this part.
The Secretary shall conduct a survey of the governing bodies of Indian tribes funded under this part regarding training and technical assistance needs in order to determine funding priorities for such training and technical assistance.
(a) The Secretary evaluates each application for a grant, cooperative agreement or contract under this subpart on the basis of the selection criteria chosen from the general selection criteria found in EDGAR regulations at 34 CFR 75.210.
(b) The Secretary may award a competitive preference consistent with 34 CFR 75.102(c)(2) to applications that include as project personnel in a substantive role, individuals that have been employed as a project director or VR counselor by a Tribal Vocational Rehabilitation unit funded under this part.
(c) If using a contract to award funds under this subpart, the Secretary may conduct the application process and make the subsequent award in accordance with 34 CFR part 75.
(a) In the development of an application, the applicant is required to consult with the designated State unit (DSU) for the state vocational rehabilitation program in the State or States in which vocational rehabilitation services are to be provided.
(b) The procedures for the review and comment by the DSU or the DSUs of the State or States in which vocational rehabilitation services are to be provided on applications submitted from within the State that the DSU or DSUs serve are in 34 CFR 75.155-75.159.
Each applicant under this program must provide evidence that—
(a) Effort will be made to provide a broad scope of vocational rehabilitation services in a manner and at a level of quality at least comparable to those services provided by the designated State unit.
(b) All decisions affecting eligibility for vocational rehabilitation services, the nature and scope of available vocational rehabilitation services and the provision of such services will be made by a representative of the tribal vocational rehabilitation program funded through this grant and such decisions will not be delegated to another agency or individual.
(c) Priority in the delivery of vocational rehabilitation services will be given to those American Indians with disabilities who are the most significantly disabled.
(d) An order of selection of individuals with disabilities to be served under the program will be specified if services cannot be provided to all eligible American Indians with disabilities who apply.
(e) All vocational rehabilitation services will be provided according to an individualized plan for employment which has been developed jointly by the representative of the tribal vocational rehabilitation program and each American Indian with disabilities being served.
(f) American Indians with disabilities living on or near Federal or State reservations where tribal vocational rehabilitation service programs are being carried out under this part will have an opportunity to participate in matters of general policy development and implementation affecting vocational rehabilitation service delivery by the tribal vocational rehabilitation program.
(g) Cooperative working arrangements will be developed with the DSU, or DSUs, as appropriate, which are providing vocational rehabilitation services to other individuals with disabilities who reside in the State or States being served.
(h) Any comparable services and benefits available to American Indians with disabilities under any other program, which might meet in whole or in part the cost of any vocational rehabilitation service, will be fully considered in the provision of vocational rehabilitation services.
(i) Any American Indian with disabilities who is an applicant or recipient of services, and who is dissatisfied with a determination made by a representative of the tribal vocational rehabilitation program and files a request for a review, will be afforded a review under procedures developed by the grantee comparable to those under the provisions of section 102(c)(1)-(5) and (7) of the Act.
(j) The tribal vocational rehabilitation program funded under this part must assure that any facility used in connection with the delivery of vocational rehabilitation services meets facility and program accessibility requirements consistent with the requirements, as applicable, of the Architectural Barriers Act of 1968, the Americans with Disabilities Act of 1990, section 504 of the Act, and the regulations implementing these laws.
(k) The tribal vocational rehabilitation program funded under this part must ensure that providers of vocational rehabilitation services are able to communicate in the native language of, or by using an appropriate mode of communication with, applicants and eligible individuals who have limited English proficiency, unless it is clearly not feasible to do so.
To the extent that funds have been appropriated under this program, the Secretary approves all applications which meet acceptable standards of program quality. If any application is not approved because of deficiencies in proposed program standards, the Secretary provides technical assistance to the applicant Indian tribe with respect to any areas of the proposal which were judged to be deficient.
(a) In addition to the selection criteria used in accordance with the procedures in 34 CFR part 75, the Secretary, in making an award under this program, considers the past performance of the applicant in carrying out similar activities under previously awarded grants, as indicated by such factors as compliance with grant conditions, soundness of programmatic and financial management practices and attainment of established project objectives.
(b) The Secretary may award a competitive preference consistent with 34 CFR 75.102(c)(2) to applications for the continuation of programs which have been funded under this program.
(a) Federal share Except as provided in paragraph (c) of this section, the Federal share may not be more than 90 percent of the total cost of the project.
(b) Non-Federal share The non-Federal share of the cost of the project may be in cash or in kind, fairly valued pursuant to match requirements in 2 CFR 200.306.
(c) Waiver of non-Federal share In order to carry out the purposes of the program, the Secretary may waive the non-Federal share requirement, in part or in whole, only if the applicant demonstrates that it does not have sufficient resources to contribute the non-Federal share of the cost of the project.
(a) In addition to those allowable cost established in 2 CFR 200.400—200.475, the following items are allowable costs under this program—
(1) Expenditures for the provision of vocational rehabilitation services and for the administration, including staff development, of a program of vocational rehabilitation services.
(2) Expenditures for services reflecting the cultural background of the American Indians being served, including treatment provided by native healing practitioners who are recognized as such by the tribal vocational rehabilitation program when the services are necessary to assist an individual with disabilities to achieve his or her vocational rehabilitation objective.
(b) Expenditures may not be made under this program to cover the costs of providing vocational rehabilitation services to individuals with disabilities not residing on or near Federal or State reservations.
(a) Directly or by contract. A grantee under this part may provide the vocational rehabilitation services directly or it may contract or otherwise enter into an agreement with a DSU, a community rehabilitation program, or another agency to assist in the implementation of the tribal vocational rehabilitation program.
(b) Inter-tribal agreement. A grantee under this part may enter into an inter-tribal arrangement with governing bodies of other Indian tribes for carrying out a project that serves more than one Indian tribe.
(c) Comparable services. To the maximum extent feasible, services provided by a grantee under this part must be comparable to vocational rehabilitation services provided under the State vocational rehabilitation program to other individuals with disabilities residing in the State.
(a) Any American Indian with disabilities who is eligible for services under this program but who wishes to be provided services by the DSU must be referred to the DSU for such services.
(b) Preference in employment in connection with the provision of vocational rehabilitation services under this section must be given to American Indians, with a special priority being given to American Indians with disabilities.
(c) The provisions of sections 5, 6, 7, and 102(a) of the Indian Self-Determination and Education Assistance Act also apply under this program (25 U.S.C. 450c, 450d, 450e, and 450f(a)). These provisions relate to grant reporting and audit requirements, maintenance of records, access to records, availability of required reports and information to Indian people served or represented, repayment of unexpended Federal funds, criminal activities involving grants, penalties, wage and labor standards, preference requirements for American Indians in the conduct and administration of the grant, and requirements affecting requests of tribal organizations to enter into contracts. For purposes of applying these requirements to this program, the Secretary carries out those responsibilities assigned to the Secretary of Interior.
(d) The Tribal Vocational Rehabilitation unit must develop and maintain written policies regarding the provision of vocational rehabilitation services that ensure that the provision of services is based on the vocational rehabilitation needs of each individual as identified in that individual's IPE and is consistent with the individual's informed choice. The written policies may not establish any arbitrary limits on the nature and scope of vocational rehabilitation services to be provided to the individual to achieve an employment outcome. The policies must be developed in accordance with the following provisions:
(1) Off-reservation services. (i) The Tribal Vocational Rehabilitation unit may establish a preference for on- or near-reservation services, provided that the preference does not effectively deny an individual a necessary service. If the individual chooses an equivalent off-reservation service at a higher cost than an available on- or near-reservation service, the Tribal Vocational Rehabilitation unit is not responsible for those costs in excess of the cost of the on- or near-reservation service, if either service would meet the individual's rehabilitation needs.
(ii) The Tribal Vocational Rehabilitation unit may not establish policies that effectively prohibit the provision of off-reservation services.
(2) Payment for services (i) The Tribal Vocational Rehabilitation unit must establish and maintain written policies to govern the rates of payment for all purchased vocational rehabilitation services.
(ii) The Tribal Vocational Rehabilitation unit may establish a fee schedule designed to ensure the program pays a reasonable cost for each service, as long as the fee schedule—
(A) Is not so low as effectively to deny an individual a necessary service; and
(B) permits exceptions so that individual needs can be addressed.
(C) The Tribal Vocational Rehabilitation unit may not place absolute dollar limits on the amount it will pay for specific service categories or on the total services provided to an individual.
(3) Duration of services (i) The Tribal Vocational Rehabilitation unit may establish reasonable time periods for the provision of services provided that the time periods—
(A) Are not so short as effectively to deny an individual a necessary service; and
(B) Permit exceptions so that individual needs can be addressed.
(ii) The Tribal Vocational Rehabilitation unit may not place time limits on the provision of specific services or on the provision of services to an individual. The duration of each service needed by an individual must be determined on the basis of that individual's needs and reflected in that individual's individualized plan for employment.
(4) Authorization of services. The Tribal Vocational Rehabilitation unit must establish policies related to the timely authorization of services.
(e) Informed choice. Each individual who is an applicant for or eligible to receive vocational rehabilitation services must be afforded the opportunity to exercise informed choice throughout the vocational rehabilitation process carried out under programs funded under this part. The Tribal Vocational Rehabilitation unit must develop and maintain written policies and procedures that require it—
(1) To inform each applicant and eligible individual, through appropriate modes of communication, about the availability of, and opportunities to exercise, informed choice, including the availability of support services for individuals with cognitive or other disabilities who require assistance in exercising informed choice, throughout the vocational rehabilitation process;
(2) To assist applicants and eligible individuals in exercising informed choice in decisions related to the provision of assessment services;
(3) To develop and implement flexible procurement policies and methods that facilitate the provision of vocational rehabilitation services, and that afford eligible individuals meaningful choices among the methods used to procure vocational rehabilitation services;
(4) To provide or assist eligible individuals in acquiring information that enables them to exercise informed choice in the development of their IPEs and selection of—
(i) The employment outcome;
(ii) The specific vocational rehabilitation services needed to achieve the employment outcome;
(iii) The entity that will provide the services;
(iv) The employment setting and the settings in which the services will be provided; and
(v) The methods available for procuring the services; and
(5) To ensure that the availability and scope of informed choice is consistent with the obligations of the Tribal Vocational Rehabilitation unit.
(6) Information and assistance in the selection of vocational rehabilitation services and service providers: In assisting an applicant and eligible individual in exercising informed choice during the assessment for determining eligibility and vocational rehabilitation needs and during development of the IPE, the Tribal Vocational Rehabilitation unit must provide the individual or the individual's representative, or assist the individual or the individual's representative in acquiring, information necessary to make an informed choice about the specific vocational rehabilitation services, including the providers of those services, that are needed to achieve the individual's employment outcome. This information must include, at a minimum, information relating to the—
(i) Cost, accessibility, and duration of potential services;
(ii) Consumer satisfaction with those services to the extent that information relating to consumer satisfaction is available;
(iii) Qualifications of potential service providers;
(iv) Types of services offered by the potential providers;
(v) Degree to which services are provided in integrated settings; and
(vi) Outcomes achieved by individuals working with service providers, to the extent that such information is available.
(7) Methods or sources of information: In providing or assisting the individual or the individual's representative in acquiring the information required under paragraph (c) of this section, the Tribal Vocational Rehabilitation unit may use, but is not limited to, the following methods or sources of information:
(i) Lists of services and service providers.
(ii) Periodic consumer satisfaction surveys and reports.
(iii) Referrals to other consumers, consumer groups, or disability advisory councils qualified to discuss the services or service providers.
(iv) Relevant accreditation, certification, or other information relating to the qualifications of service providers.
(v) Opportunities for individuals to visit or experience various work and service provider settings.
(a) General provisions. (1) The Tribal Vocational Rehabilitation unit must adopt and implement written policies and procedures to safeguard the confidentiality of all personal information, including photographs and lists of names. These policies and procedures must ensure that—
(i) Specific safeguards are established to protect current and stored personal information, including a requirement that data only be released when governed by a written agreement between the Tribal Vocational Rehabilitation unit and receiving entity under paragraphs (d) and (e)(1) of this section, which addresses the requirements in this section;
(ii) All applicants and eligible individuals and, as appropriate, those individuals' representatives, service providers, cooperating agencies, and interested persons are informed through appropriate modes of communication of the confidentiality of personal information and the conditions for accessing and releasing this information;
(iii) All applicants or their representatives are informed about the Tribal Vocational Rehabilitation unit's need to collect personal information and the policies governing its use, including—
(A) Identification of the authority under which information is collected;
(B) Explanation of the principal purposes for which the Tribal Vocational Rehabilitation unit intends to use or release the information;
(C) Explanation of whether providing requested information to the Tribal Vocational Rehabilitation unit is mandatory or voluntary and the effects of not providing requested information;
(D) Identification of those situations in which the Tribal Vocational Rehabilitation unit requires or does not require informed written consent of the individual before information may be released; and
(E) Identification of other agencies to which information is routinely released;
(iv) An explanation of the Tribal Vocational Rehabilitation unit's policies and procedures affecting personal information will be provided to each individual in that individual's native language or through the appropriate mode of communication; and
(v) These policies and procedures provide no fewer protections for individuals than State laws and regulations.
(2) The Tribal Vocational Rehabilitation unit may establish reasonable fees to cover extraordinary costs of duplicating records or making extensive searches and must establish policies and procedures governing access to records.
(b) Tribal Vocational Rehabilitation Program Use. All personal information in the possession of the Tribal Vocational Rehabilitation unit must be used only for the purposes directly connected with the administration of the Tribal Vocational Rehabilitation program. Information containing identifiable personal information may not be shared with advisory or other bodies or other tribal agencies that do not have official responsibility for administration of the program. In the administration of the program, the Tribal Vocational Rehabilitation unit may obtain personal information from service providers and cooperating agencies under assurances that the information may not be further divulged, except as provided under paragraphs (c), (d), and (e) of this section.
(c) Release to applicants and eligible individuals. (1) Except as provided in paragraphs (c)(2) and (3) of this section, if requested in writing by an applicant or eligible individual, the Tribal Vocational Rehabilitation unit must make all requested information in that individual's record of services accessible to and must release the information to the individual or the individual's representative in a timely manner.
(2) Medical, psychological, or other information that the Tribal Vocational Rehabilitation unit determines may be harmful to the individual may not be released directly to the individual, but must be provided to the individual through a third party chosen by the individual, which may include, among others, an advocate, a family member, or a qualified medical or mental health professional, unless a representative has been appointed by a court to represent the individual, in which case the information must be released to the court-appointed representative.
(3) If personal information has been obtained from another agency or organization, it may be released only by, or under the conditions established by, the other agency or organization.
(4) An applicant or eligible individual who believes that information in the individual's record of services is inaccurate or misleading may request that the Tribal Vocational Rehabilitation unit amend the information. If the information is not amended, the request for an amendment must be documented in the record of services.
(d) Release for audit, evaluation, and research. Personal information may be released to an organization, agency, or individual engaged in audit, evaluation, or research only for purposes directly connected with the administration of the tribal vocational rehabilitation program or for purposes that would significantly improve the quality of life for applicants and eligible individuals and only if, in accordance with a written agreement, the organization, agency, or individual assures that—
(1) The information will be used only for the purposes for which it is being provided;
(2) The information will be released only to persons officially connected with the audit, evaluation, or research;
(3) The information will not be released to the involved individual;
(4) The information will be managed in a manner to safeguard confidentiality; and
(5) The final product will not reveal any personal identifying information without the informed written consent of the involved individual or the individual's representative.
(e) Release to other programs or authorities. (1) Upon receiving the informed written consent of the individual or, if appropriate, the individual's representative, the Tribal Vocational Rehabilitation unit may release personal information to another agency or organization, in accordance with a written agreement, for its program purposes only to the extent that the information may be released to the involved individual or the individual's representative and only to the extent that the other agency or organization demonstrates that the information requested is necessary for its program.
(2) Medical or psychological information that the Tribal Vocational Rehabilitation unit determines may be harmful to the individual may be released if the other agency or organization assures the Tribal Vocational Rehabilitation unit that the information will be used only for the purpose for which it is being provided and will not be further released to the individual.
(3) The Tribal Vocational Rehabilitation unit must release personal information if required by Federal law or regulations.
(4) The Tribal Vocational Rehabilitation unit must release personal information in response to investigations in connection with law enforcement, fraud, or abuse, unless expressly prohibited by Federal or State laws or regulations, and in response to an order issued by a judge, magistrate, or other authorized judicial officer.
(5) The Tribal Vocational Rehabilitation unit also may release personal information in order to protect the individual or others if the individual poses a threat to his or her safety or to the safety of others.
The Tribal Vocational Rehabilitation unit shall use formats that are accessible to notify individuals seeking or receiving services under this part, or as appropriate, the parents, family members, guardians, advocates, or authorized representatives of those individuals, about—
(a) The availability of CAP authorized by section 112 of the Act;
(b) The purposes of the services provided under the CAP; and
(c) How to contact the CAP.
The purpose of this program is to provide competitive grants, including cooperative agreements, to, or enter into contracts with, eligible entities to expand and improve the provision of vocational rehabilitation and other services authorized under the Rehabilitation Act of 1973, as amended (Act), or to further the purposes and policies in sections 2(b) and (c) of the Act by supporting activities that increase the provision, extent, availability, scope, and quality of rehabilitation services under the Act, including related research and evaluation activities.
(a) The following types of organizations are eligible for assistance under this program:
(1) State vocational rehabilitation agencies.
(2) Community rehabilitation programs.
(3) Indian tribes or tribal organizations.
(4) Other public or nonprofit agencies or organizations, including institutions of higher education.
(5) For-profit organizations, if the Secretary considers them to be appropriate.
(6) Consortia that meet the requirements of 34 CFR 75.128 and 75.129.
(7) Other organizations identified by the Secretary and published in the
(b) In competitions held under this program, the Secretary may limit competitions to one or more types of these organizations.
The following regulations apply to this program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 75 (Direct Grant Programs).
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(5) 35 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance).
(7) 34 CFR part 86 (Drug and Alcohol Abuse Prevention).
(8) 34 CFR part 97 (Protection of Human Subjects).
(9) 34 CFR part 98 (Student Rights in Research, Experimental Programs, and Testing.
(10) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 373.
(c) The regulations in 48 CFR part 31 (Contracts Cost Principles and Procedures).
(d)(1) 2 CFR part 180 (Nonprocurement Debarment and Suspension), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) as adopted at 2 CFR part 3474.
The following definitions apply to this part:
Act means the Rehabilitation Act of 1973, as amended.
Competitive integrated employment is defined in 34 CFR 361.5(c)(9).
Early intervention means a service delivery or model demonstration program for adults with disabilities designed to begin the rehabilitation services as soon as possible after the onset or identification of actually or potentially disabling conditions. The populations served may include, but are not limited to, the following:
(1) Individuals with chronic and progressive diseases that may become more disabling, such as multiple sclerosis, progressive visual disabilities, or HIV.
(2) Individuals in the acute stages of injury or illness, including, but not limited to, diabetes, traumatic brain injury, stroke, burns, or amputation.
(3) Individuals receiving an employer's short-term or long-term disability insurance benefits.
Employment outcome is defined in 34 CFR 361.5.
Individual with a disability is defined as follows:
(1) For an individual who will receive rehabilitation services under this part, an individual with a disability means an individual—
(i) Who has a physical or mental impairment which, for that individual, constitutes or results in a substantial impediment to employment; and
(ii) Who can benefit in terms of an employment outcome from vocational rehabilitation services.
(2) For all other purposes of this part, an individual with a disability means an individual—
(i) Who has a physical or mental impairment that substantially limits one or more major life activities;
(ii) Who has a record of such an impairment; or
(iii) Who is regarded as having such an impairment.
(3) For purposes of paragraph (2) of this definition, projects that carry out services or activities pertaining to Title V of the Act must also meet the requirements for “an individual with a disability” in section 7(20)(c) through (e) of the Act, as applicable.
Individual with a significant disability means an individual—
(1) Who has a severe physical or mental impairment that seriously limits one or more functional capacities (such as mobility, communication, self-care, self-direction, interpersonal skills, work tolerance, or work skills) in terms of an employment outcome;
(2) Whose vocational rehabilitation can be expected to require multiple vocational rehabilitation services over an extended period of time; and
(3) Who has one or more physical or mental disabilities resulting from amputation, arthritis, autism, blindness, burn injury, cancer, cerebral palsy, cystic fibrosis, deafness, head injury, heart disease, hemiplegia, hemophilia, intellectual disability, respiratory or pulmonary dysfunction, mental illness, multiple sclerosis, muscular dystrophy, musculo-skeletal disorders, neurological disorders (including stroke and epilepsy), paraplegia, quadriplegia and other spinal cord conditions, sickle-cell anemia, specific learning disabilities, end-stage renal disease, or another disability or combination of disabilities determined on the basis of an assessment for determining eligibility and vocational rehabilitation needs to cause comparable substantial functional limitation.
Informed choice means the provision of activities whereby individuals with disabilities served by projects under this part have the opportunity to be active, full partners in the rehabilitation process, making meaningful and informed choices as follows:
(1) During assessments of eligibility and vocational rehabilitation needs.
(2) In the selection of employment outcomes, services needed to achieve the outcomes, entities providing these services, and the methods used to secure these services.
Rehabilitation services means services, including vocational, medical, social, and psychological rehabilitation services and other services under the Rehabilitation Act, provided to individuals with disabilities in performing functions necessary in preparing for, securing, retaining, or regaining an employment or independent living outcome.
Substantial impediment to employment means that a physical or mental impairment (in light of attendant medical, psychological, vocational, educational, and other related factors) hinders an individual from preparing for, entering into, engaging in, or retaining employment consistent with the individual's abilities and capabilities.
Supported employment is defined in 34 CFR 361.5(c)(53).
Vocational Rehabilitation Services means services provided to an individual with a disability in preparing for, securing, retaining, or regaining an employment outcome that is consistent with the strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice of the individual. Vocational Rehabilitation Services for an individual with a disability may include—
(1) An assessment for determining eligibility and vocational rehabilitation needs by qualified personnel, including, if appropriate, an assessment by personnel skilled in rehabilitation technology;
(2) Counseling and guidance, including information and support services to assist an individual in exercising informed choice;
(3) Referral and other services to secure needed services from other agencies;
(4) Job-related services, including job search and placement assistance, job retention services, follow-up services, and follow-along services;
(5) Vocational and other training services, including the provision of personal and vocational adjustment services, books, tools, and other training materials;
(6) Diagnosis and treatment of physical and mental impairments;
(7) Maintenance for additional costs incurred while the individual is receiving services;
(8) Transportation;
(9) On-the-job or other related personal assistance services;
(10) Interpreter and reader services;
(11) Rehabilitation teaching services, and orientation and mobility services;
(12) Occupational licenses, tools, equipment, and initial stocks and supplies;
(13) Technical assistance and other consultation services to conduct market analysis, develop business plans, and otherwise provide resources to eligible individuals who are pursuing self-employment or telecommuting or establishing a small business operation as an employment outcome;
(14) Rehabilitation technology, including telecommunications, sensory, and other technological aids and devices;
(15) Transition services for individuals with disabilities that facilitate the achievement of employment outcomes;
(16) Supported employment services;
(17) Services to the family of an individual with a disability necessary to assist the individual to achieve an employment outcome;
(18) Post-employment services necessary to assist an individual with a disability to retain, regain, or advance in employment; and
(19) Expansion of employment opportunities for individuals with disabilities, which includes, but is not limited to—
(i) Self-employment, business ownership, and entrepreneurship;
(ii) Non-traditional jobs, professional employment, and work settings;
(iii) Collaborating with employers, Economic Development Councils, and others in creating new jobs and career advancement options in local job markets through the use of job restructuring and other methods; and
(iv) Other services as identified by the Secretary and published in the
Youth or Young adults with disabilities means individuals with disabilities who are between the ages of 14 and 24 inclusive when entering the program.
(a)(1) For projects that provide rehabilitation services or activities to expand and improve the provision of rehabilitation services and other services authorized under Titles I, III, and VI of the Act, individuals are eligible who meet the definition in paragraph (a) of an “individual with a disability” as stated in § 373.4.
(2) For projects that provide independent living services or activities, individuals are eligible who meet the definition in paragraph (b) of an “individual with a disability” as stated in § 373.4.
(3) For projects that provide other services or activities that further the purposes of the Act, individuals are eligible who meet the definition in paragraph (b) of an “individual with a disability” as stated in § 373.4.
(b) By publishing a notice in the
The Secretary may fund the following types of projects under this program:
(a) Special projects of service delivery.
(b) Model demonstration.
(c) Technical assistance.
(d) Systems change.
(e) Special studies, research, or evaluations.
(f) Dissemination and utilization.
(a) In announcing competitions for grants and contracts, the Secretary gives priority consideration to—
(1) Initiatives focused on improving transition from education, including postsecondary education, to employment, particularly in competitive integrated employment, for youth who are individuals with significant disabilities.
(2) Supported employment, including community-based supported employment programs to meet the needs of individuals with the most significant disabilities or to provide technical assistance to States and community organizations to improve and expand the provision of supported employment services.
(3) Increasing competitive integrated employment for individuals with significant disabilities.
(b) In announcing competitions for grants and contracts, the Secretary may also identify one or more of the following as priorities—
(1) Expansion of employment opportunities for individuals with disabilities, as authorized in paragraph(s) of the definition of “vocational rehabilitation services” as stated in § 373.4.
(2) System change projects to promote meaningful access of individuals with disabilities to employment-related services under subtitle B of title I of the Workforce Innovation and Opportunity Act and under other Federal laws.
(3) Innovative methods of promoting achievement of high-quality employment outcomes.
(4) The demonstration of the effectiveness of early intervention activities in improving employment outcomes.
(5) Projects to find alternative methods of providing affordable transportation services to individuals with disabilities.
(6) Technical assistance to designated State units and their personnel in working with employers to identify competitive integrated employment opportunities and career exploration opportunities in order to facilitate the provision of vocational rehabilitation services and transition services for youth with disabilities and students with disabilities.
(7) Consultation, training and technical assistance to businesses that have hired or are interested in hiring individuals with disabilities.
(8) Technical assistance and training to designated State units and their personnel on establishment and maintenance of education and experience requirements, to ensure that the personnel have a 21st century understanding of the evolving labor force and the needs of individuals with disabilities.
(9) Technical assistance to State vocational rehabilitation agencies or State vocational rehabilitation units to improve management practices that will improve the provision of vocational rehabilitation services and increase competitive employment outcomes for individuals with disabilities.
(10) Other projects that will expand and improve the provision, extent, availability, scope, and quality of rehabilitation and other services under the Act or that further the purpose and policy of the Act as stated in sections 2(b) and (c) of the Act.
(c) In announcing competitions of grants and contract the Secretary may limit the priorities listed in paragraphs (a) and (b) of this section to address one or more of the following factors:
(1) Age ranges.
(2) Types of disabilities.
(3) Types of services.
(4) Models of service delivery.
(5) Stages of the vocational rehabilitation process;
(6) Unserved and underserved populations.
(7) Unserved and underserved geographical areas.
(8) Individuals with significant disabilities.
(9) Low-incidence disability populations.
(10) Individuals residing in federally designated Empowerment Zones and Enterprise Communities.
(d) The Secretary may require that an applicant certify that the project does not include building upon or expanding activities that have previously been conducted or funded, for that applicant or in that service area.
(e) The Secretary may require that the project widely disseminate the methods of vocational rehabilitation service delivery or model proven to be effective, so that they may be adapted, replicated, or purchased under fee-for-service arrangements by State vocational rehabilitation agencies and other disability organizations in the project's targeted service area or other locations.
The Secretary publishes in the
(a) Selection criteria established under 34 CFR 75.209.
(b) Selection criteria in 34 CFR 75.210.
(c) Any combination of selection criteria from paragraphs (a) and (b) of this section.
(a) The Secretary funds only those applications submitted in response to competitions announced in the
(b) The Secretary may consider the past performance of the applicant in carrying out activities under previously awarded grants.
(c) The Secretary awards bonus points if identified and published in the
The Secretary may make grants to pay all or part of the cost of activities covered under this program. If the Secretary determines that the grantee is required to pay part of the costs, the amount of grantee participation is specified in the application notice, and the Secretary will not require grantee participation to be more than 10 percent of the total cost of the project.
(a) In addition to the program and fiscal reporting requirements in 34 CFR 75.720 and 2 CFR 200.327 that are applicable to projects funded under this program, the Secretary may require that recipients of grants under this part submit information determined by the Secretary to be necessary to measure project outcomes and performance, including any data needed to comply with the Government Performance and Results Act.
(b) Specific reporting requirements for competitions will be identified by the Secretary and published in the
(a) Indirect cost reimbursement for grants under this program is limited to the recipient's actual indirect costs, as determined by its negotiated indirect cost rate agreement, or 10 percent of the total direct cost base, whichever amount is less.
(b) Indirect costs in excess of the 10 percent limit may be used to satisfy matching or cost-sharing requirements.
(c) The 10 percent limit does not apply to federally recognized Indian tribal governments and their tribal representatives.
(a) Each grantee must do the following:
(1) Ensure equal access and treatment for eligible project participants who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disabilities.
(2) Encourage applications for employment from persons who are members of groups that have traditionally been underrepresented based on race, color, national origin, gender, age, or disabilities.
(3) Advise individuals with disabilities who are applicants for or recipients of the services, or the applicants' representatives or the individuals' representatives, of the availability and purposes of the Client Assistance Program, including information on means of seeking assistance under that program.
(4) Provide, through a careful appraisal and study, an assessment and evaluation of the project that indicates the significance or worth of processes, methodologies, and practices implemented by the project.
(b) A grantee may not make a subgrant under this part. However, a grantee may contract for supplies, equipment, and other services, in accordance with 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) as adopted at 2 CFR part 3474.
(a) All personal information about individuals served by any project under this part, including lists of names, addresses, photographs, and records of evaluation, must be confidential.
(b) The use of information and records concerning individuals must be limited only to purposes directly connected with the project, including project reporting and evaluation activities. This information may not be disclosed, directly or indirectly, other than in the administration of the project unless the consent of the agency providing the information and the individual to whom the information applies, or his or her representative, has been obtained in writing. The Secretary or other Federal officials responsible for enforcing legal requirements have access to this information without written consent being obtained. The final products of the project may not reveal any personal identifying information without written consent of the individual or his or her representative.
This program is designed to support a system in each State to protect the legal and human rights of eligible individuals with disabilities.
(a)(1) A protection and advocacy system that is established under part C of title I of the Developmental Disabilities Assistance and Bill of Rights Act of 2000 (DD Act), 42 U.S.C. 15041 et seq., and that meets the requirements of § 381.10 is eligible to apply for a grant award under this part.
(2)(i) For any fiscal year in which the appropriation to carry out the activities of this part equals or exceeds $10,500,000, the eligible system serving the American Indian Consortium is eligible to apply for a grant award under this part.
(ii) For purposes of this part, an eligible system is defined at § 381.5(c).
(iii) For purposes of this part, the American Indian Consortium means a consortium established as described in section 102 of the DD Act (42 U.S.C. 15002).
(b) In any fiscal year in which the amount appropriated to carry out this part is less than $5,500,000, a protection and advocacy system from any State or from Guam, American Samoa, the United States Virgin Islands, or the Commonwealth of the Northern Mariana Islands, may apply for a grant under the Protection and Advocacy of Individual Rights (PAIR) program to plan for, develop outreach strategies for, and carry out a protection and advocacy program authorized under this part.
(c) In any fiscal year in which the amount appropriated to carry out this part is equal to or greater than $5,500,000, an eligible system from any State and from any of the jurisdictions named in paragraph (b) of this section may apply to receive the amount allotted pursuant to section 509(c)-(e) of the Act.
(a) Funds made available under this part must be used for the following activities:
(1) Establishing a system to protect, and advocate for, the rights of individuals with disabilities.
(2) Pursuing legal, administrative, and other appropriate remedies or approaches to ensure the protection of, and advocacy for, the rights of eligible individuals with disabilities within the State or the American Indian Consortium.
(3) Providing information on and making referrals to programs and services addressing the needs of individuals with disabilities in the State or American Indian Consortium, including individuals with disabilities who are exiting from school programs.
(4) Coordinating the protection and advocacy program provided through an eligible system with the advocacy programs under—
(i) Section 112 of the Act (the Client Assistance Program (CAP));
(ii) The Older Americans Act of 1965 (the State long-term care ombudsman program) (42 U.S.C. 3001 et seq.);
(iii) Part C of the DD Act; and
(iv) The Protection and Advocacy for Individuals with Mental Illness Act of 2000 (PAIMI) (42 U.S.C. 10801-10807).
(5) Developing a statement of objectives and priorities on an annual basis and a plan for achieving these objectives and priorities.
(6) Providing to the public, including individuals with disabilities and, as appropriate, their representatives, an opportunity to comment on the objectives and priorities described in § 381.10(a)(6).
(7) Establishing a grievance procedure for clients or prospective clients of the eligible system to ensure that individuals with disabilities are afforded equal access to the services of the eligible system.
(b) Funds made available under this part also may be used to carry out any other activities consistent with the purpose of this part and the activities listed in paragraph (a) of this section.
The following regulations apply to the PAIR program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 75 (Direct Grant Programs) for purposes of an award made under § § 381.20 or 381.22(a)(1).
(2) 34 CFR part 76 (State-Administered Programs), if the appropriation for the PAIR program is equal to or greater than $5,500,000 and the eligible system is a State or local government agency, except for—
(i) Section 76.103;
(ii) Sections 76.125 through 76.137;
(iii) Sections 76.300 through 76.401;
(iv) Section 76.704;
(v) Section 76.734; and
(vi) Section 76.740.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(b) 2 CFR part 180 (OMB Guidelines to Agencies on Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485.
(c) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(d) The regulations in this part 381.
(a) Definitions in EDGAR at 34 CFR part 77.
(b) Definitions in 2 CFR part 200 subpart A.
(c) Other definitions. The following definitions also apply to this part:
Act means the Rehabilitation Act of 1973, as amended.
Advocacy means pleading an individual's cause or speaking or writing in support of an individual. Advocacy may be formal, as in the case of a lawyer representing an individual in a court of law or in formal administrative proceedings before government agencies (whether tribal, State, local, or Federal). Advocacy also may be informal, as in the case of a lawyer or non-lawyer representing an individual in negotiations, mediation, or informal administrative proceedings before government agencies (whether tribal, State, local, or Federal), or as in the case of a lawyer or non-lawyer representing an individual's cause before private entities or organizations, or government agencies (whether tribal, State, local, or Federal). Advocacy may be on behalf of—
(i) A single individual, in which case it is individual advocacy;
(ii) More than one individual or a group or class of individuals, in which case it is systems (or systemic) advocacy; or
(iii) Oneself, in which case it is self advocacy.
Eligible individual with a disability means an individual who—
(i) Needs protection and advocacy services that are beyond the scope of services authorized to be provided by the CAP under section 112 of the Act; and
(ii) Is ineligible for—
(A) Protection and advocacy programs under part C of the DD Act; and
(B) Protection and advocacy programs under the PAIMI.
Eligible system means a protection and advocacy system that is established under part C of the DD Act and that meets the requirements of § 381.10.
Mediation means the act or process of using an independent third party to act as a mediator, intermediary, or conciliator to settle differences or disputes between persons or parties. The third party who acts as a mediator, intermediary, or conciliator must not be any entity or individual who is connected in any way with the eligible system or the agency, entity, or individual with whom the individual with a disability has a dispute. Mediation may involve the use of professional mediators or any other independent third party mutually agreed to by the parties to the dispute.
State means, in addition to each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, except for purposes of sections 509(c)(3)(B) and (c)(4) of the Act, in which case State does not mean or include Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
(a) Regardless of the amount of funds appropriated for the PAIR program in a fiscal year, an eligible system shall submit to the Secretary an application for assistance under this part at the time and in the form and manner determined by the Secretary that contains all information that the Secretary determines necessary, including assurances that the eligible system will—
(1) Have in effect a system to protect, and advocate for, the rights of eligible individuals with disabilities;
(2) Have the same general authorities, including the authority to access records and program income, as in part C of title I of the DD Act;
(3) Have the authority to pursue legal, administrative, and other appropriate remedies or approaches to ensure the protection of, and advocacy for, the rights of eligible individuals with disabilities within the State and the American Indian Consortium;
(4) Provide information on and make referrals to programs and services addressing the needs of individuals with disabilities in the State and the American Indian Consortium, including individuals with disabilities who are exiting from school programs;
(5) Develop a statement of objectives and priorities on an annual basis and a plan for achieving these objectives and priorities;
(6) Provide to the public, including individuals with disabilities and, as appropriate, their representatives, an opportunity to comment on the objectives and priorities established by, and activities of, the eligible system including—
(i) The objectives and priorities for the activities of the eligible system for each year and the rationale for the establishment of those objectives and priorities; and
(ii) The coordination of the PAIR program provided through eligible systems with the advocacy programs under—
(A) Section 112 of the Act (CAP);
(B) The Older Americans Act of 1965 (the State long-term care ombudsman program);
(C) Part C of the DD Act; and
(D) The PAIMI;
(7) Establish a grievance procedure for clients or prospective clients of the eligible system to ensure that individuals with disabilities are afforded equal access to the services of the eligible system;
(8) Use funds made available under this part to supplement and not supplant the non-Federal funds that would otherwise be made available for the purpose for which Federal funds are provided; and
(9) Implement procedures designed to ensure that, to the maximum extent possible, mediation (and other alternative dispute resolution) procedures, which include good faith negotiation, are used before resorting to formal administrative or legal remedies.
(b) To receive direct payment of funds under this part, an eligible system must provide to the Secretary, as part of its application for assistance, an assurance that direct payment is not prohibited by or inconsistent with tribal or State law, regulation, or policy.
In any fiscal year in which the amount appropriated for the PAIR program is less than $5,500,000, the Secretary evaluates applications under the procedures in 34 CFR part 75.
(a) In any fiscal year in which the amount appropriated for this program is equal to or greater than $5,500,000—
(1) The Secretary sets aside not less than 1.8 percent but not more than 2.2 percent of the amount appropriated to provide a grant, contract, or cooperative agreement for training and technical assistance to eligible systems carrying out activities under this part.
(2) After the reservation required by paragraph (a)(1) of this section, the Secretary makes allotments from the remainder of the amount appropriated in accordance with section 509(c)(2)-(d) of the Act.
(b) Notwithstanding any other provision of law, in any fiscal year in which the amount appropriated for this program is equal to or greater than $5,500,000, the Secretary pays directly to an eligible system that submits an application that meets the requirements of § 381.10 the amount of the allotment to the State pursuant to section 509 of the Act, unless the State provides otherwise.
(c) For any fiscal year in which the amount appropriated to carry out this program equals or exceeds $10,500,000, the Secretary shall reserve a portion, and use the portion to make a grant for the eligible system serving the American Indian Consortium. The Secretary shall make the grant in an amount of not less than $50,000 for the fiscal year.
(d) Reallotment:
(1) For any fiscal year in which the amount appropriated to carry out this program equals or exceeds $5,500,000 and if the Secretary determines that any amount of an allotment to an eligible system within a State will not be expended by such system in carrying out the provisions of this part, the Secretary shall make such amount available to one or more of the eligible systems that the Secretary determines will be able to use additional amounts during such year for carrying out this part.
(2) Any reallotment amount made available to an eligible system for any fiscal year shall, for the purposes of this section, be regarded as an increase in the eligible system's allotment under this part for that fiscal year.
(a) Each eligible system shall carry out the protection and advocacy program authorized under this part.
(b) An eligible system may not award a grant or make a subaward to another entity to carry out, in whole or in part, the protection and advocacy program authorized under this part.
(c) An eligible system may contract with another agency, entity, or individual to carry out the PAIR program in whole or in part, but only if the agency, entity, or individual with whom the eligible system has contracted—
(1) Does not provide services under the Act or does not provide treatment, services, or habilitation to persons with disabilities; and
(2) Is independent of, and not connected financially or through a board of directors to, an entity or individual that provides services under the Act or that provides treatment, services, or habilitation to persons with disabilities.
(d) For purposes of paragraph (c) of this section, “services under the Act” and “treatment, services, or habilitation” does not include client assistance services under CAP, protection and advocacy services authorized under the protection and advocacy programs under part C of the DD Act and the PAIMI, or any other protection and advocacy services.
(a) All personal information about individuals served by any eligible system under this part, including lists of names, addresses, photographs, and records of evaluation, must be held confidential.
(b) The eligible system's use of information and records concerning individuals must be limited only to purposes directly connected with the protection and advocacy program, including program evaluation activities. Except as provided in paragraph (c) of this section, an eligible system may not disclose personal information about an individual, directly or indirectly, other than in the administration of the protection and advocacy program, unless the consent of the individual to whom the information applies, or his or her guardian, parent, or other authorized representative or advocate (including the individual's advocate from the eligible system), has been obtained in writing. An eligible system may not produce any report, evaluation, or study that reveals any personally identifying information without the written consent of the individual or his or her representative.
(c) Except as limited in paragraph (d) of this section, the Secretary or other Federal or State officials responsible for enforcing legal requirements must be given complete access to all—
(1) Records of the eligible system receiving funds under this program; and
(2) All individual case records of clients served under this part without the consent of the client.
(d)(1) The privilege of a person or eligible system not to produce documents or provide information pursuant to paragraph (c) of this section is governed by the principles of common law as interpreted by the courts of the United States, except that, for purposes of any periodic audit, report, or evaluation of the performance of the eligible system established or assisted under this part, the Secretary does not require the eligible system to disclose the identity of, or any other personally identifiable information related to, any individual requesting assistance under the PAIR program.
(2) However, notwithstanding paragraph (d)(1) of this section, if an audit, monitoring review, State plan assurance review, evaluation, or other investigation has already produced independent and reliable evidence that there is probable cause to believe that the eligible system has violated its legislative mandate or misused Federal funds, the eligible system shall disclose, if the Secretary so requests, the identity of, or any other personally identifiable information (i.e., name, address, telephone number, social security number, or other official code or number by which an individual may be readily identified) related to, any individual requesting assistance under the PAIR program, in accordance with the principles of common law as interpreted by the courts of the United States.
Each eligible system shall provide to the Secretary, no later than 90 days after the end of each fiscal year, an annual report that includes information on the following:
(a) The types of services and activities undertaken by the eligible system and how these services and activities addressed the objectives and priorities developed pursuant to § 381.10(a)(6).
(b) The total number of individuals, by race, color, national origin, gender, age, and disabling condition, who requested services from the eligible system and the total number of individuals, by race, color, national origin, gender, age, and disabling condition, who were served by the eligible system.
(c) The types of disabilities represented by individuals served by the eligible system.
(d) The types of issues being addressed on behalf of individuals served by the eligible system.
(e) Any other information that the Secretary may require.
(a) Funds made available under this part must be used to supplement and not supplant the non-Federal funds that would otherwise be made available for the purpose for which Federal funds are provided under this part.
(b) In any State in which an eligible system is located within a State agency, that State or State agency may not use more than five percent of any allotment for the costs of administration of the eligible system supported under this part. For purposes of this paragraph, “costs of administration” include, but are not limited to, administrative salaries (including salaries for clerical and support staff), supplies, depreciation, the cost of operating and maintaining facilities, equipment, and grounds (e.g., rental of office space or equipment, telephone, postage, maintenance agreements), and other similar types of costs that may be incurred by the State or State agency to administer the eligible system.
(c) Funds paid to an eligible system within a State for a fiscal year, including reallotment funds, to carry out this program that are not expended or obligated prior to the end of that fiscal year remain available to the eligible system within a State for obligation during the succeeding fiscal year in accordance with sections 19 and 509(g) of the Act.
(d) For determining when an eligible system makes an obligation for various kinds of property or services, 34 CFR 75.707 and 76.707, as appropriate, apply to this program. If the appropriation for the PAIR program is less than $5,500,000, § 75.707 applies. If the appropriation for the PAIR program is equal to or greater than $5,500,000, § 76.707 applies. An eligible system is considered a State for purposes of § 76.707.
(e) Program income:
(1) Consistent with 2 CFR 200.80 and for purposes of this part, program income means gross income earned by the designated agency that is directly generated by an activity supported under this part.
(2)(i) The designated agency must use program income to supplement Federal funds that support program activities that are subject to this part. See, for example 2 CFR 200.307(e)(2).
(ii) Notwithstanding 2 CFR 200.305(a) and consistent with 2 CFR 200.305(b)(5), and to the extent that program income funds are available, all designated agencies, regardless of whether they are a State agency, must disburse those funds (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned on such funds before requesting additional funds from the Department.
(3) Any program income received during a fiscal year that is not obligated or expended prior to the beginning of the succeeding fiscal year in which the program income was received, remain available for obligation and expenditure by the grantee during that succeeding fiscal year.
(a) Purpose. The Rehabilitation Training program is designed to—
(1) Ensure that skilled personnel are available to provide rehabilitation services to individuals with disabilities through vocational, medical, social, and psychological rehabilitation programs (including supported employment programs), through economic and business development programs, through independent living services programs, and through client assistance programs;
(2) Maintain and upgrade basic skills and knowledge of personnel employed, including personnel specifically trained to deliver rehabilitation services, including supported employment services and customized employment services, to individuals with the most significant disabilities, and personnel specifically trained to deliver services to individuals with disabilities whose employment outcome is self-employment, business ownership, or telecommuting, to provide state-of-the-art service delivery and rehabilitation technology services; and
(3) Provide training and information to individuals with disabilities, the parents, families, guardians, advocates, and authorized representatives of the individuals, and other appropriate parties to develop the skills necessary for individuals with disabilities to access the rehabilitation system and to become active decision makers in the vocational rehabilitation process.
(b) The Secretary awards grants and contracts on a competitive basis to pay part of the costs of projects for training, traineeships or scholarships, and related activities, including the provision of technical assistance, to assist in increasing the numbers of qualified personnel trained in providing vocational rehabilitation services and other services provided under the Act, to individuals with disabilities. Financial assistance is provided through multiple training programs, including:
(1) Rehabilitation Long-Term Training (34 CFR part 386).
(2) Innovative Rehabilitation Training (34 CFR part 387).
(3) Rehabilitation Short-Term Training (34 CFR part 390).
(4) Training of Interpreters for Individuals Who Are Deaf and Hard of Hearing and Individuals Who Are Deaf-Blind (34 CFR part 396).
States and public or private nonprofit agencies and organizations, including Indian tribes and institutions of higher education, are eligible for assistance under the Rehabilitation Training program.
The following regulations apply to the Rehabilitation Training program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 75 (Direct Grant Programs).
(2) 34 CFR part 77 (Definitions That Apply to Department Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance).
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(8) 34 CFR part 97 (Protection of Human Subjects).
(9) 34 CFR part 98 (Student Rights in Research, Experimental Programs, and Testing.
(10) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 385.
(c) [Reserved]
(d)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) as adopted at 2 CFR part 3474.
(a) The following definitions in 34 CFR part 77 apply to the programs under the Rehabilitation Training Program—
(b) The following definitions also apply to programs under the Rehabilitation Training program:
Act means the Rehabilitation Act of 1973, as amended (29 U.S.C. 701 et seq.).
Assistive technology means technology designed to be utilized in an assistive technology device or assistive technology service.
Assistive technology device means any item, piece of equipment, or product system, whether acquired commercially off the shelf, modified, or customized, that is used to increase, maintain, or improve functional capabilities of individuals with disabilities.
Assistive technology service means any service that directly assists an individual with a disability in the selection, acquisition, or use of an assistive technology device. The term includes—
(i) The evaluation of the needs of an individual with a disability, including a functional evaluation of the individual in the individual's customary environment;
(ii) Purchasing, leasing, or otherwise providing for the acquisition of assistive technology devices by individuals with disabilities;
(iii) Selecting, designing, fitting, customizing, adapting, applying, maintaining, repairing, or replacing of assistive technology devices;
(iv) Coordinating and using other therapies, interventions, or services with assistive technology devices, such as those associated with existing education and rehabilitation plans and programs;
(v) Training or technical assistance for an individual with disabilities, or, if appropriate, the family of an individual with disabilities;
(vi) Training or technical assistance for professionals (including individuals providing education and rehabilitation services), employers, or other individuals who provide services to, employ, or are otherwise substantially involved in the major life functions of individuals with disabilities; and
(vii) A service consisting of expanding the availability of access to technology, including electronic and information technology, to individuals with disabilities.
Community rehabilitation program means a program that provides directly or facilitates the provision of vocational rehabilitation services to individuals with disabilities, and that provides, singly or in combination, for an individual with a disability to enable the individual to maximize opportunities for employment, including career advancement—
(i) Medical, psychiatric, psychological, social, and vocational services that are provided under one management;
(ii) Testing, fitting, or training in the use of prosthetic and orthotic devices;
(iii) Recreational therapy;
(iv) Physical and occupational therapy;
(v) Speech, language, and hearing therapy;
(vi) Psychiatric, psychological, and social services, including positive behavior management;
(vii) Assessment for determining eligibility and vocational rehabilitation needs;
(viii) Rehabilitation technology;
(ix) Job development, placement, and retention services;
(x) Evaluation or control of specific disabilities;
(xi) Orientation and mobility services for individuals who are blind;
(xii) Extended employment;
(xiii) Psychosocial rehabilitation services;
(xiv) Supported employment services and extended services;
(xv) Services to family members when necessary to the vocational rehabilitation of the individual;
(xvi) Personal assistance services; or
(xvii) Services similar to the services described in paragraphs (i) through (xvi) of this definition.
Designated State agency means an agency designated under section 7(8) and 101(a)(2)(A) of the Act.
Designated State unit means
(i) Any State agency unit required under section 7(8) and 101(a)(2)(B) of the Act, or
(ii) In cases in which no State agency unit is required, the State agency described in section 101(a)(2)(B)(ii) of the Act.
Independent living core services means—
(i) Information and referral services;
(ii) Independent living skills training;
(iii) Peer counseling, including cross-disability peer counseling; and
(iv) Individual and systems advocacy.
Independent living services includes—
(i) Independent living core services; and
(ii)(A) Counseling services, including psychological, psychotherapeutic, and related services;
(B) Services related to securing housing or shelter, including services related to community group living, and supportive of the purposes of this Act and of the titles of this Act, and adaptive housing services (including appropriate accommodations to and modifications of any space used to serve, or occupied by, individuals with disabilities);
(C) Rehabilitation technology;
(D) Mobility training;
(E) Services and training for individuals with cognitive and sensory disabilities, including life skills training, and interpreter and reader services;
(F) Personal assistance services, including attendant care and the training of personnel providing these services;
(G) Surveys, directories, and other activities to identify appropriate housing, recreation opportunities, and accessible transportation, and other support services;
(H) Consumer information programs on rehabilitation and independent living services available under this Act, especially for minorities and other individuals with disabilities who have traditionally been unserved or underserved by programs under this Act;
(I) Education and training necessary for living in the community and participating in community activities;
(J) Supported living;
(K) Transportation, including referral and assistance for transportation;
(L) Physical rehabilitation;
(M) Therapeutic treatment;
(N) Provision of needed prostheses and other appliances and devices;
(O) Individual and group social and recreational services;
(P) Training to develop skills specifically designed for youths who are individuals with disabilities to promote self-awareness and esteem, develop advocacy and self-empowerment skills, and explore career options;
(Q) Services for children;
(R) Services under other Federal, State, or local programs designed to provide resources, training, counseling, or other assistance of substantial benefit in enhancing the independence, productivity, and quality of life of individuals with disabilities;
(S) Appropriate preventive services to decrease the need of individuals assisted under this Act for similar services in the future;
(T) Community awareness programs to enhance the understanding and integration of individuals with disabilities; and
(U) Such other services as may be necessary and not inconsistent with the provisions of this Act.
Individual with a disability means any individual who—
(i) Has a physical or mental impairment, which for that individual constitutes or results in a substantial impediment to employment;
(ii) Can benefit in terms of an employment outcome from vocational rehabilitation services provided pursuant to title I, III, or VI of the Rehabilitation Act of 1973, as amended; and
(iii) Has a disability as defined in section 7(20)(B) of the Act.
Individual with a significant disability means an individual with a disability—
(i) Who has a severe physical or mental impairment that seriously limits one or more functional capacities (such as mobility, communication, self-care, self-direction, interpersonal skills, work tolerance, or work skills) in terms of an employment outcome;
(ii) Whose vocational rehabilitation can be expected to require multiple vocational rehabilitation services over an extended period of time; and
(iii) Who has one or more physical or mental disabilities resulting from amputation, arthritis, autism, blindness, burn injury, cancer, cerebral palsy, cystic fibrosis, deafness, head injury, heart disease, hemiplegia, hemophilia, intellectual disability, respiratory or pulmonary dysfunction, mental illness, multiple sclerosis, muscular dystrophy, musculo-skeletal disorders, neurological disorders (including stroke and epilepsy), paraplegia, quadriplegia and other spinal cord conditions, sickle-cell anemia, specific learning disabilities, end-stage renal disease, or another disability or combination of disabilities determined on the basis of an assessment for determining eligibility and vocational rehabilitation needs.
Institution of higher education has the meaning given the term in section 101(a) of the Higher Education Act (20 U.S.C. 1001(a)).
Personal assistance services means a range of services provided by one or more persons designed to assist an individual with a disability to perform daily living activities on or off the job that the individual would typically perform if the individual did not have a disability. The services shall be designed to increase the individual's control in life and ability to perform everyday activities on or off the job.
Qualified personnel. (i) For designated State agencies or designated State units, means personnel who have met standards that are consistent with existing national or State approved or recognized certification, licensing, registration, or other comparable requirements that apply to the area in which such personnel are providing vocational rehabilitation services.
(ii) For other than designated State agencies or designated State units, means personnel who have met existing State certification or licensure requirements, or, in the absence of State requirements, have met professionally accepted requirements established by national certification boards.
Rehabilitation services means services, including vocational, medical, social, and psychological rehabilitation services and other services under the Rehabilitation Act, provided to individuals with disabilities in performing functions necessary in preparing for, securing, retaining, or regaining an employment or independent living outcome.
Rehabilitation technology means the systematic application of technologies, engineering methodologies, or scientific principles to meet the needs of and address the barriers confronted by individuals with disabilities in areas that include education, rehabilitation, employment, transportation, independent living, and recreation. The term includes rehabilitation engineering, assistive technology devices, and assistive technology services.
State includes, in addition to each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
Stipend means financial assistance on behalf of individuals in support of their training, as opposed to salary payment for services provided within the project.
Supported employment means competitive integrated employment, including customized employment, or employment in an integrated work setting in which individuals are working on a short-term basis toward competitive integrated employment, that is individualized and customized consistent with the strengths, abilities, interests, and informed choice of the individuals involved, for individuals with the most severe disabilities—
(i)(A) For whom competitive integrated employment has not traditionally occurred; or
(B) For whom competitive employment has been interrupted or intermittent as a result of a severe disability; and
(ii) Who, because of the nature and severity of their disability, need intensive supported employment services from the designated State unit and extended services after transition in order to perform the work involved.
Supported employment services means ongoing support services, including customized employment, and other appropriate services needed to support and maintain an individual with most severe disability in supported employment, that are—
(i) Provided singly or in combination and are organized and made available in such a way as to assist an eligible individual in entering or maintaining integrated, competitive employment;
(ii) Based on a determination of the needs of an eligible individual, as specified in an individualized written rehabilitation program; and
(iii) Provided by the designated State unit for a period of time not more than 24 months, unless under special circumstances the eligible individual and the rehabilitation counselor or coordinator jointly agree to extend the time in order to achieve the rehabilitation objectives identified in the individualized plan for employment.
Vocational rehabilitation services means services provided to an individual with a disability in preparing for, securing, retaining, or regaining an employment outcome that is consistent with the strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice of the individual, and services provided for the benefit of groups of individuals with disabilities. Vocational Rehabilitation Services for an individual with a disability may include—
(i) An assessment for determining eligibility and vocational rehabilitation needs by qualified personnel, including, if appropriate, an assessment by personnel skilled in rehabilitation technology;
(ii) Counseling and guidance, including information and support services to assist an individual in exercising informed choice;
(iii) Referral and other services to secure needed services from other agencies;
(iv) Job-related services, including job search and placement assistance, job retention services, follow-up services, and follow-along services;
(v) Vocational and other training services, including the provision of personal and vocational adjustment services, books, tools, and other training materials;
(vi) Diagnosis and treatment of physical and mental impairments;
(vii) Maintenance for additional costs incurred while the individual is receiving services;
(viii) Transportation;
(ix) On-the-job or other related personal assistance services;
(x) Interpreter and reader services;
(xi) Rehabilitation teaching services, and orientation and mobility services;
(xii) Occupational licenses, tools, equipment, and initial stocks and supplies;
(xiii) Technical assistance and other consultation services to conduct market analysis, develop business plans, and otherwise provide resources to eligible individuals who are pursuing self-employment or telecommuting or establishing a small business operation as an employment outcome;
(xiv) Rehabilitation technology, including telecommunications, sensory, and other technological aids and devices;
(xv) Transition services for individuals with disabilities that facilitate the achievement of employment outcomes;
(xvi) Supported employment services;
(xvii) Services to the family of an individual with a disability necessary to assist the individual to achieve an employment outcome;
(xviii) Post-employment services necessary to assist an individual with a disability to retain, regain, or advance in employment; and
(xix) Expansion of employment opportunities for individuals with disabilities, which includes, but is not limited to—
(A) Self-employment, business ownership, and entrepreneurship;
(B) Non-traditional jobs, professional employment, and work settings;
(C) Collaborating with employers, Economic Development Councils, and others in creating new jobs and career advancement options in local job markets through the use of job restructuring and other methods; and
(D) Other services as identified by the Secretary and published in the
The Secretary gives the designated State agency an opportunity to review and comment on applications submitted from within the State that it serves. The procedures to be followed by the applicant and the State are in 34 CFR 75.155 through 75.159.
(a) The Secretary evaluates applications under the procedures in 34 CFR part 75.
(b) The Secretary evaluates each application using selection criteria identified in parts 386, 387, and 390, as appropriate.
(c) In addition to the selection criteria described in paragraph (b) of this section, the Secretary evaluates each application using—
(1) Selection criteria in 34 CFR 75.210;
(2) Selection criteria established under 34 CFR 75.209; or
(3) A combination of selection criteria established under 34 CFR 75.209 and selection criteria in 34 CFR 75.210.
In addition to the selection criteria listed in § 75.210 and parts 386, 387, and 390, the Secretary, in making awards under this program, considers such factors as—
(a) The geographical distribution of projects in each Rehabilitation Training Program category throughout the country; and
(b) The past performance of the applicant in carrying out similar training activities under previously awarded grants, as indicated by such factors as compliance with grant conditions, soundness of programmatic and financial management practices and attainment of established project objectives.
If a project establishes an advisory committee, its membership must include individuals with disabilities or parents, family members, guardians, advocates, or other authorized representatives of the individuals; members of minority groups; trainees; and providers of vocational rehabilitation and independent living rehabilitation services.
If the collection of data is necessary from individuals with disabilities being served by two or more designated State agencies or from employees of two or more of these agencies, the project director must submit requests for the data to appropriate representatives of the affected agencies, as determined by the Secretary. This requirement also applies to employed project staff and individuals enrolled in courses of study supported under these programs.
A set of any training materials developed under the Rehabilitation Training Program must be submitted to any information clearinghouse designated by the Secretary.
Any grantee who provides training of rehabilitation counselors or other rehabilitation personnel must train those counselors and personnel on the services provided under this Act, and, in particular, services provided in accordance with amendments made to the Rehabilitation Act by the Workforce Innovation and Opportunity Act of 2014. The grantee must also furnish training to these counselors and personnel regarding applications of rehabilitation technology in vocational rehabilitation services, the applicability of section 504 of this Act, title I of the Americans with Disabilities Act of 1990, and the provisions of titles II and XVI of the Social Security Act that are related to work incentives for individuals with disabilities.
Any grantee or contractor who provides training shall give due regard to the training of individuals with disabilities as part of its effort to increase the number of qualified personnel available to provide rehabilitation services.
(a) All applicants for a grant or contract to provide training shall demonstrate how the training they plan to provide will prepare rehabilitation professionals to address the needs of individuals with disabilities from minority backgrounds.
(b) All applicants for a grant shall include a detailed description of strategies that will be utilized to recruit and train persons so as to reflect the diverse populations of the United States, as part of the effort to increase the number of individuals with disabilities, individuals who are members of minority groups, who are available to provide rehabilitation services.
An expert or consultant appointed or serving under contract pursuant to this section shall be compensated at a rate subject to approval of the Commissioner which shall not exceed the daily equivalent of the rate of pay for level 4 of the Senior Executive Service Schedule under section 5382 of title 5, United States Code. Such an expert or consultant may be allowed travel and transportation expenses in accordance with section 5703 of title 5, United States Code.
(a) The Rehabilitation Long-Term Training program provides financial assistance for—
(1) Projects that provide basic or advanced training leading to an academic degree in one of those fields of study identified in paragraph (b) of this section;
(2) Projects that provide a specified series of courses or program of study leading to award of a certificate in one of those fields of study identified in paragraph (b) of this section; and
(3) Projects that provide support for medical residents enrolled in residency training programs in the specialty of physical medicine and rehabilitation.
(b) The Rehabilitation Long-Term Training program is designed to provide academic training that leads to an academic degree or academic certificate in areas of personnel shortages identified by the Secretary and published in a notice in the
(1) Assisting and supporting individuals with disabilities pursuing self-employment, business ownership, and telecommuting;
(2) Vocational rehabilitation counseling;
(3) Rehabilitation technology, including training on its use, applications, and benefits;
(4) Rehabilitation medicine;
(5) Rehabilitation nursing;
(6) Rehabilitation social work;
(7) Rehabilitation psychiatry;
(8) Rehabilitation psychology;
(9) Rehabilitation dentistry;
(10) Physical therapy;
(11) Occupational therapy;
(12) Speech pathology and audiology;
(13) Physical education;
(14) Therapeutic recreation;
(15) Community rehabilitation program personnel;
(16) Prosthetics and orthotics;
(17) Rehabilitation of individuals who are blind or visually impaired, including rehabilitation teaching and orientation and mobility;
(18) Rehabilitation of individuals who are deaf or hard of hearing;
(19) Rehabilitation of individuals who are mentally ill;
(20) Undergraduate education in the rehabilitation services;
(21) Independent living;
(22) Client assistance;
(23) Administration of community rehabilitation programs;
(24) Rehabilitation administration;
(25) Vocational evaluation and work adjustment;
(26) Services to individuals with specific disabilities or specific impediments to rehabilitation, including individuals who are members of populations that are unserved or underserved by programs under this Act;
(27) Job development and job placement services to individuals with disabilities;
(28) Supported employment services and customized employment services for individuals with the most significant disabilities;
(29) Specialized services for individuals with significant disabilities;
(30) Other fields contributing to the rehabilitation of individuals with disabilities.
Those agencies and organizations eligible for assistance under this program are described in 34 CFR 385.2.
The following regulations apply to the Rehabilitation Training: Rehabilitation Long-Term Training program:
(a) The regulations in this part 386.
(b) The regulations in 34 CFR part 385.
The following definitions apply to this program:
(a) Definitions in 34 CFR 385.4.
(b) Other definitions. The following definitions also apply to this part:
Academic year means a full-time course of study—
(i) Taken for a period totaling at least nine months; or
(ii) Taken for the equivalent of at least two semesters, two trimesters, or three quarters.
Certificate means a recognized educational credential awarded by a grantee under this part that attests to the completion of a specified series of courses or program of study.
Professional corporation or professional practice means—
(i) A professional service corporation or practice formed by one or more individuals duly authorized to render the same professional service, for the purpose of rendering that service; and
(ii) The corporation or practice and its members are subject to the same supervision by appropriate State regulatory agencies as individual practitioners.
Related agency means—
(i) An American Indian rehabilitation program; or
(ii) Any of the following agencies that provide services to individuals with disabilities under an agreement or other arrangement with a designated State agency in the area of specialty for which training is provided:
(A) A Federal, State, or local agency.
(B) A nonprofit organization.
(C) A professional corporation or professional practice group.
Scholar means an individual who is enrolled in a certificate or degree granting course of study in one of the areas listed in § 386.1(b) and who receives scholarship assistance under this part.
Scholarship means an award of financial assistance to a scholar for training and includes all disbursements or credits for student stipends, tuition and fees, books and supplies, and student travel in conjunction with training assignments.
State vocational rehabilitation agency means the designated State agency as defined in 34 CFR 361.5(c)(13).
In addition to the criteria in 34 CFR 385.31(c), the Secretary uses the following additional selection criteria to evaluate an application:
(a) Relevance to State-Federal vocational rehabilitation service program. (1) The Secretary reviews each application for information that shows that the proposed project appropriately relates to the mission of the State-Federal vocational rehabilitation service program.
(2) The Secretary looks for information that shows that the project can be expected either—
(i) To increase the supply of trained personnel available to State and other public or nonprofit agencies involved in the rehabilitation of individuals with disabilities through degree or certificate granting programs; or
(ii) To improve the skills and quality of professional personnel in the rehabilitation field in which the training is to be provided through the granting of a degree or certificate.
(b) Nature and scope of curriculum. (1) The Secretary reviews each application for information that demonstrates the adequacy of the proposed curriculum.
(2) The Secretary looks for information that shows—
(i) The scope and nature of the coursework reflect content that can be expected to enable the achievement of the established project objectives;
(ii) The curriculum and teaching methods provide for an integration of theory and practice relevant to the educational objectives of the program;
(iii) For programs whose curricula require them, there is evidence of educationally focused practical and other field experiences in settings that ensure student involvement in the provision of vocational rehabilitation, supported employment, customized employment, pre-employment transition services, transition services, or independent living rehabilitation services to individuals with disabilities, especially individuals with significant disabilities;
(iv) The coursework includes student exposure to vocational rehabilitation, supported employment, customized employment, employer engagement, and independent living rehabilitation processes, concepts, programs, and services; and
(v) If applicable, there is evidence of current professional accreditation by the designated accrediting agency in the professional field in which grant support is being requested.
(a) Application. No grant shall be awarded or contract entered into under the Rehabilitation Long-Term Training program unless the applicant has submitted to the Secretary an application at such time, in such form, in accordance with such procedures identified by the Secretary and, and including such information as the Secretary may require, including—
(1) A description of how the designated State unit or units will participate in the project to be funded under the grant or contract, including, as appropriate, participation on advisory committees, as practicum sites, in curriculum development, and in other ways so as to build closer relationships between the applicant and the designated State unit and to encourage students to pursue careers in public vocational rehabilitation programs;
(2) The identification of potential employers that provide employment that meets the requirements in § 386.33(c); and
(3) An assurance that data on the employment of graduates or trainees who participate in the project is accurate.
(b) The Secretary gives the designated State agency an opportunity to review and comment on applications submitted from within the State that it serves. The procedures to be followed by the applicant and the State are in 34 CFR 75.155-75.159.
The grantee is required to contribute at least ten percent of the total cost of a project under this program. However, if the grantee can demonstrate that it has insufficient resources to contribute the entire match but that it can fulfill all other requirements for receiving an award, the Secretary may waive part of the non-Federal share of the cost of the project after negotiations with Department staff.
(a) A grantee must use at least 65 percent of the total cost of a project under this program for scholarships as defined in § 386.4.
(b) The Secretary may waive the requirement in (a) and award grants that use less than 65 percent of the total cost of the project for scholarships based upon the unique nature of the project, such as the establishment of a new training program or long-term training in an emerging field that does not award degrees or certificates.
(c) Before providing a scholarship to a scholar, a grantee must make good faith efforts to determine that the scholar is not concurrently receiving more than one scholarship under this program for the same academic term.
In addition to those allowable costs established in the Education Department General Administrative Regulations in 34 CFR 75.530 through 75.562, the following items are allowable under long-term training projects:
(a) Student stipends.
(b) Tuition and fees.
(c) Books and supplies.
(d) Student travel in conjunction with training assignments.
Before disbursement of scholarship assistance to an individual, a grantee—
(a)(1) Must obtain documentation that the individual is—
(i) A U.S. citizen or national; or
(ii) A permanent resident of the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands;
(2) Must confirm from documentation issued to the individual by the U.S. Department of Homeland Security that he or she—
(i) Is a lawful permanent resident of the United States; or
(ii) Is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident; and
(b) Must confirm that the applicant has expressed interest in a career in clinical practice, administration, supervision, teaching, or research in the vocational rehabilitation, supported employment, or independent living rehabilitation of individuals with disabilities, especially individuals with significant disabilities;
(c) Must obtain documentation, as described in § 386.40(a)(7), that the individual expects to seek and maintain employment in a designated State agency or in a related agency as defined in § 386.4 where
(1) The employment is in the field of study in which the training was received or
(2) Where the job functions are directly relevant to the field of study in which the training was received.
(d) Must ensure that the scholarship, when added to the amount of financial aid the scholar receives for the same academic year under title IV of the Higher Education Act, does not exceed the scholar's cost of attendance;
(e) Must limit scholarship assistance to no more than four academic years, unless the grantee provides an extension consistent with the institution's accommodations under section 504 of the Act; and
(f) Must obtain a Certification of Eligibility for Federal Assistance from each scholar as prescribed in 34 CFR 75.60, 75.61, and 75.62.
A grantee under this part that intends to grant scholarships for any academic year must provide the following assurances before an award is made:
(a) Requirement for agreement. No individual will be provided a scholarship without entering into a written agreement containing the terms and conditions required by this section. An individual will sign and date the agreement prior to the initial disbursement of scholarship funds to the individual for payment of the individual's expenses. An agreement must be executed between the grantee and scholar for each subsequent year that scholarship funds are disbursed and must contain the terms and conditions required by this section.
(b) Disclosure to applicants. The terms and conditions of the agreement between the grantee and a scholar will be fully disclosed in the application for scholarship.
(c) Form and terms of agreement. Prior to granting each year of a scholarship, the grantee will require each scholar to enter into a signed written agreement in which the scholar agrees to the terms and conditions set forth in § 386.40. This agreement must be in the form and contain any additional terms and conditions that the Secretary may require.
(d) Executed agreement. The grantee will provide an original signed executed payback agreement upon request to the Secretary.
(e) Standards for satisfactory progress. The grantee will establish, publish, and apply reasonable standards for measuring whether a scholar is maintaining satisfactory progress in the scholar's course of study. The Secretary considers an institution's standards to be reasonable if the standards—
(1) Conform with the standards of satisfactory progress of the nationally recognized accrediting agency that accredits the institution's program of study, if the institution's program of study is accredited by such an agency, and if the agency has those standards;
(2) For a scholar enrolled in an eligible program who is to receive assistance under the Rehabilitation Act, are the same as or stricter than the institution's standards for a student enrolled in the same academic program who is not receiving assistance under the Rehabilitation Act; and
(3) Include the following elements:
(i) Grades, work projects completed, or comparable factors that are measurable against a norm.
(ii) A maximum timeframe in which the scholar must complete the scholar's educational objective, degree, or certificate.
(iii) Consistent application of standards to all scholars within categories of students; e.g., full-time, part-time, undergraduates, graduate students, and students attending programs established by the institution.
(iv) Specific policies defining the effect of course incompletes, withdrawals, repetitions, and noncredit remedial courses on satisfactory progress.
(v) Specific procedures for appeal of a determination that a scholar is not making satisfactory progress and for reinstatement of aid.
(f) Exit certification. (1) At the time of exit from the program, the grantee will provide the following information to the scholar:
(i) The name of the institution and the number of the Federal grant that provided the scholarship.
(ii) the total amount of scholarship assistance received subject to § 386.40(a)(7).
(iii) The scholar's field of study and the obligation of the scholar to perform the service obligation with employment that meets the requirements in § 386.40(a)(7)(i).
(iv) The number of years the scholar needs to work to satisfy the work requirements in § 386.40(a)(7)(ii).
(v) The time period during which the scholar must satisfy the work requirements in § 386.40(a)(8).
(vi) As applicable, all other obligations of the scholar in § 386.40.
(2) Upon receipt of this information from the grantee, the scholar must provide written and signed certification to the grantee that the information is correct.
(g) Tracking system. The grantee has established policies and procedures to determine compliance of the scholar with the terms of the signed payback agreement. In order to determine whether a scholar has met the terms and conditions set forth in § 386.40, the tracking system must include for each employment position maintained by the scholar—
(1) Documentation of the employer's name, address, dates of the scholar's employment, name of supervisor, position title, a description of the duties the scholar performed, and whether the employment is full- or part-time;
(2) Documentation of how the employment meets the requirements in § 386.40(a)(7); and
(3) In the event a grantee is experiencing difficulty locating a scholar, documentation that the grantee has checked with existing tracking systems operated by alumni organizations.
(h) Reports. The grantee will make annual reports to the Secretary, unless more frequent reporting is required by the Secretary, that are necessary to carry out the Secretary's functions under this part.
(i) Repayment status. The grantee will immediately report to the Secretary whenever a scholar has entered repayment status under § 386.43(e) and provide all necessary documentation in support thereof.
(j) Records. The grantee will maintain accurate and complete records as outlined in paragraphs (g) and (h) of this section for a period of time not less than one year beyond the date that all scholars provided financial assistance under the grant—
(1) Have completed their service obligation or
(2) Have entered into repayment status pursuant to § 386.43(e).
A grantee that is an institution of higher education provided assistance under this part must cooperate with the following requests for information from a designated State agency:
(a) Information required by section 101(a)(7) of the Act which may include, but is not limited to—
(1) The number of students enrolled by the grantee in rehabilitation training programs; and
(2) The number of rehabilitation professionals trained by the grantee who graduated with certification or licensure, or with credentials to qualify for certification or licensure, during the past year.
(b) Information on the availability of rehabilitation courses leading to certification or licensure, or the credentials to qualify for certification or licensure, to assist State agencies in the planning of a program of staff development for all classes of positions that are involved in the administration and operation of the State vocational rehabilitation program.
The Department may recover, in whole or in part, from the grantee the debt amount and any collection costs described in §§ 386.40(d) and 386.43, if the Department:
(a) Is unable to collect, or improperly collected, some or all of these amounts or costs from a scholar and
(b) Determines that the grantee failed to provide to the Department accurate and complete documentation described in § 386.34.
(a) A scholar must—
(1) Be enrolled in a course of study leading to a certificate or degree in one of the fields designated in § 386.1(b);
(2) Receive the training at the educational institution or agency designated in the scholarship;
(3) Not accept payment of educational allowances from any other entity if that allowance conflicts with the scholar's obligation under section 302 of the Act and this part;
(4) Not receive concurrent scholarships for the same academic term from more than one project under this program;
(5) Enter into a signed written agreement with the grantee, prior to the receipt of scholarship funds, as required in § 386.34(c);
(6) Maintain satisfactory progress toward the certificate or degree as determined by the grantee;
(7) Upon exiting the training program under paragraph (a)(1) of this section, subsequently maintain employment on a full- or part-time basis subject to the provisions in paragraph (b) of this section—
(i)(A) In a State vocational rehabilitation agency or related agency as defined in § 386.4; and
(B)(1) In the field of study for which training was received, or
(2) Where the field of study is directly relevant to the job functions performed; and
(ii) For a period of at least the full-time equivalent of two years for every academic year for which assistance under this section was received subject to the provisions in paragraph (c) of this section for part-time coursework;
(8) Complete the service obligation within a period, beginning after the recipient exits the training program for which the scholarship was awarded, of not more than the sum of the number of years in the period described in paragraph (a)(7)(ii) of this section and two additional years;
(9) Repay all or part of any scholarship received, plus interest, if the individual does not fulfill the requirements of this section, except as provided for in § 386.41 for exceptions and deferrals; and
(10) Provide the grantee all requested information necessary for the grantee to meet the exit certification requirements in § 386.34(f) and, as necessary, thereafter for any changes necessary for the grantee to monitor the scholar's service obligation under this section.
(b)(1) The period of qualifying employment that meets the requirements of paragraph (a)(7) of this section may begin—
(i) For courses of study of at least one year, only subsequent to the completion of one academic year of the training for which the scholarship assistance was received.
(ii) For courses of study of less than one year, only upon completion of the training for which the scholarship assistance was received.
(2) The work completed as part of an internship, practicum, or any other work-related requirement necessary to complete the educational program is not considered qualifying employment.
(c) If the scholar is pursuing coursework on a part-time basis, the service obligation for these part-time courses is based on the equivalent total of actual academic years of training received.
(d) If a scholar fails to provide the information in paragraph (a)(10) of this section or otherwise maintain contact with the grantee pursuant to the terms of the signed payback agreement and enters into repayment status pursuant to § 386.43, the scholar will be held responsible for any costs assessed in the collection process under that section even if that information is subsequently provided.
Based upon sufficient evidence to substantiate the grounds as detailed in § 386.42, a repayment exception to or deferral of the requirements of § 386.40(a)(7) may be granted, in whole or in part, by the Secretary as follows:
(a) Repayment is not required if the scholar—
(1) Is unable to continue the course of study or perform the work obligation because of a permanent disability that meets one of the following conditions:
(i) The disability had not been diagnosed at the time the scholar signed the agreement in § 386.34(c); or
(ii) The disability did not prevent the scholar from performing the requirements of the course of study or the work obligation at the time the scholar signed the agreement in § 386.34(c) but subsequently worsened; or
(2) Has died.
(b) Repayment of a scholarship may be deferred during the time the scholar is—
(1) Engaging in a full-time course of study in the field of rehabilitation at an institution of higher education;
(2) Serving on active duty as a member of the armed services of the United States for a period not in excess of four years;
(3) Serving as a volunteer under the Peace Corps Act;
(4) Serving as a full-time volunteer under title I of the Domestic Volunteer Service Act of 1973;
(5) Experiencing a temporary disability that affects the scholar's ability to continue the course of study or perform the work obligation, for a period not to exceed three years; or
(c) Under limited circumstances as determined by the Secretary and based upon credible evidence submitted on behalf of the scholar, the Secretary may grant an exception to, or deferral of, the requirement to repay a scholarship in instances not specified in this section. These instances could include, but are not limited to, the care of a disabled spouse, partner, or child or the need to accompany a spouse or partner on active duty in the Armed Forces.
To obtain an exception or a deferral to performance or repayment under a scholarship agreement under § 386.41, a scholar must provide the following:
(a) Written application. A written application must be made to the Secretary to request a deferral or an exception to performance or repayment of a scholarship.
(b) Documentation. Sufficient documentation must be provided to substantiate the grounds for all deferrals or exceptions, including the following, as appropriate.
(1) Documentation necessary to substantiate an exception under § 386.41(a)(1) or a deferral under § 386.41(b)(5) must include a letter from a qualified physician or other medical professional, on official stationery, attesting how the disability affects the scholar in completing the course of study or performing the work obligation. The documentation must be less than three months old and include the scholar's diagnosis and prognosis and ability to complete the course of study or work with accommodations.
(2) Documentation to substantiate an exception under § 386.41(a)(2) must include a death certificate or other evidence conclusive under State law.
(3) Documentation necessary to substantiate a deferral or exception under 386.41(c) based upon the disability of a spouse, partner, or child must meet the criteria, as relevant, in paragraph (b)(1) of this section.
In the event of a failure to meet the terms and conditions of a scholarship agreement or to obtain a deferral or an exception as provided in § 386.41, the scholar must repay all or part of the scholarship as follows:
(a) Amount. The amount of the scholarship to be repaid is proportional to the employment obligation not completed.
(b) Interest rate. The Secretary charges the scholar interest on the unpaid balance owed in accordance with 31 U.S.C. 3717.
(c) Interest accrual. (1) Interest on the unpaid balance accrues from the date the scholar is determined to have entered repayment status under paragraph (e) of this section.
(2) Any accrued interest is capitalized at the time the scholar's repayment schedule is established.
(3) No interest is charged for the period of time during which repayment has been deferred under § 386.41.
(d) Collection costs. Under the authority of 31 U.S.C. 3717, the Secretary may impose reasonable collection costs.
(e) Repayment status. A scholar enters repayment status on the first day of the first calendar month after the earliest of the following dates, as applicable:
(1) The date the scholar informs the Secretary he or she does not plan to fulfill the employment obligation under the agreement.
(2) Any date when the scholar's failure to begin or maintain employment makes it impossible for that individual to complete the employment obligation within the number of years required in § 386.40(a)(8).
(f) Amounts and frequency of payment. The scholar shall make payments to the Secretary that cover principal, interest, and collection costs according to a schedule established by the Secretary.
This program is designed—
(a) To develop new types of training programs for rehabilitation personnel and to demonstrate the effectiveness of these new types of training programs for rehabilitation personnel in providing rehabilitation services to individuals with disabilities;
(b) To develop new and improved methods of training rehabilitation personnel so that there may be a more effective delivery of rehabilitation services to individuals with disabilities by designated State rehabilitation agencies and designated State rehabilitation units or other public or non-profit rehabilitation service agencies or organizations; and
(c) To develop new innovative training programs for vocational rehabilitation professionals and paraprofessionals to have a 21st century understanding of the evolving labor force and the needs of individuals with disabilities so they can more effectively provide vocational rehabilitation services to individuals with disabilities.
Those agencies and organizations eligible for assistance under this program are described in 34 CFR 385.2.
(a) 34 CFR part 385 (Rehabilitation Training); and
(b) The regulations in this part 387.
The definitions in 34 CFR part 385 apply to this program.
The Innovative Rehabilitation Training Program supports time-limited pilot projects through which new types of rehabilitation workers may be trained or through which innovative methods of training rehabilitation personnel may be demonstrated.
In addition to the criteria in 34 CFR 385.31(c), the Secretary uses the following additional selection criteria to evaluate an application:
(a) Relevance to State-Federal rehabilitation service program. (1) The Secretary reviews each application for information that shows that the proposed project appropriately relates to the mission of the State-Federal rehabilitation service program.
(2) The Secretary looks for information that shows that the project can be expected either—
(i) To increase the supply of trained personnel available to public and private agencies involved in the rehabilitation of individuals with disabilities; or
(ii) To maintain and improve the skills and quality of rehabilitation personnel.
(b) Nature and scope of curriculum. (1) The Secretary reviews each application for information that demonstrates the adequacy and scope of the proposed curriculum.
(2) The Secretary looks for information that shows that—
(i) The scope and nature of the training content can be expected to enable the achievement of the established project objectives of the training project;
(ii) The curriculum and teaching methods provide for an integration of theory and practice relevant to the educational objectives of the program;
(iii) There is evidence of educationally focused practicum or other field experiences in settings that assure student involvement in the provision of vocational rehabilitation or independent living rehabilitation services to individuals with disabilities, especially individuals with significant disabilities; and
(iv) The didactic coursework includes student exposure to vocational rehabilitation processes, concepts, programs, and services.
A grantee must contribute to the cost of a project under this program in an amount satisfactory to the Secretary. The part of the costs to be borne by the grantee is determined by the Secretary at the time of the grant award.
In addition to those allowable costs established under 34 CFR 75.530-75.562, the following items are allowable under Innovative Rehabilitation training projects—
(a) Student stipends;
(b) Tuition and fees; and
(c) Student travel in conjunction with training assignments.
This program is designed for the support of special seminars, institutes, workshops, and other short-term courses in technical matters relating to the vocational, medical, social, and psychological rehabilitation programs, independent living services programs, and client assistance programs.
Those agencies and organizations eligible for assistance under this program are described in 34 CFR 385.2.
(a) 34 CFR part 385 (Rehabilitation Training); and
(b) The regulations in this part 390.
The definitions in 34 CFR part 385 apply to this program.
(a) Projects under this program are designed to provide short-term training and technical instruction in areas of special significance to the vocational, medical, social, and psychological rehabilitation programs, supported employment programs, independent living services programs, and client assistance programs.
(b) Short-term training projects may be of regional or national scope.
(c) Conferences and meetings in which training is not the primary focus may not be supported under this program.
In addition to the criteria in 34 CFR 385.31(c), the Secretary uses the following additional selection criterion to evaluate an application:
(a) Relevance to State-Federal rehabilitation service program. (1) The Secretary reviews each application for information that shows that the proposed project appropriately relates to the mission of the State-Federal rehabilitation service programs.
(2) The Secretary looks for information that shows that the proposed project can be expected to improve the skills and competence of—
(i) Personnel engaged in the administration or delivery of rehabilitation services; and
(ii) Others with an interest in the delivery of rehabilitation services.
(b) Evidence of training needs. The Secretary reviews each application for evidence of training needs as identified through training needs assessment conducted by the applicant or by designated State agencies or designated State units or any other public and private nonprofit rehabilitation service agencies or organizations that provide rehabilitation services and other services authorized under the Act, whose personnel will receive the training.
A grantee must contribute to the cost of a project under this program in an amount satisfactory to the Secretary. The part of the costs to be borne by the grantee is determined by the Secretary at the time of the award.
(a) In addition to those allowable costs established in 34 CFR 75.530-75.562, the following items are allowable under short-term training projects:
(1) Trainee per diem costs;
(2) Trainee travel in connection with a training course;
(3) Trainee registration fees; and
(4) Special accommodations for trainees with handicaps.
(b) The preparation of training materials may not be supported under a short-term training grant unless the materials are essential for the conduct of the seminar, institute, workshop or other short course for which the grant support has been provided.
Unless otherwise indicated in this part, the terms below are defined as follows:
(a) Act means the Randolph-Sheppard Vending Stand Act (Pub. L. 74-732), as amended by Pub. L. 83-565 and Pub. L. 93-516, 20 U.S.C., ch. 6A, Sec 107.
(b) Blind licensee means a blind person licensed by the State licensing agency to operate a vending facility on Federal or other property.
(c) Blind person means a person who, after examination by a physician skilled in diseases of the eye or by an optometrist, whichever such person shall select, has been determined to have
(1) Not more than 20/200 central visual acuity in the better eye with correcting lenses, or
(2) An equally disabling loss of the visual field as evidenced by a limitation to the field of vision in the better eye to such a degree that its widest diameter subtends an angle of no greater than 20°.
(d) Cafeteria means a food dispensing facility capable of providing a broad variety of prepared foods and beverages (including hot meals) primarily through the use of a line where the customer serves himself from displayed selections. A cafeteria may be fully automatic or some limited waiter or waitress service may be available and provided within a cafeteria and table or booth seating facilities are always provided.
(e) Secretary means the Secretary of the Rehabilitation Services Administration.
(f) Direct competition means the presence and operation of a vending machine or a vending facility on the same premises as a vending facility operated by a blind vendor, except that vending machines or vending facilities operated in areas serving employees the majority of whom normally do not have direct access (in terms of uninterrupted ease of approach and the amount of time required to patronize the vending facility) to the vending facility operated by a blind vendor shall not be considered to be in direct competition with the vending facility operated by a blind vendor.
(g) Federal property means any building, land, or other real property owned, leased, or occupied by any department, agency or instrumentality of the United States (including the Department of Defense and the U.S. Postal Service), or any other instrumentality wholly owned by the United States, or by any department or agency of the District of Columbia or any territory or possession of the United States.
(h) Individual location installation or facility means a single building or a self-contained group of buildings. In order for two or more buildings to be considered to be a self-contained group of buildings, such buildings must be located in close proximity to each other, and a majority of the Federal employees housed in any such building must regularly move from one building to another in the course of official business during normal working days.
(i) License means a written instrument issued by the State licensing agency to a blind person, authorizing such person to operate a vending facility on Federal or other property.
(j) Management services means supervision, inspection, quality control, consultation, accounting, regulating, in-service training, and other related services provided on a systematic basis to support and improve vending facilities operated by blind vendors. Management services does not include those services or costs which pertain to the on-going operation of an individual facility after the initial establishment period.
(k) Net proceeds means the amount remaining from the sale of articles or services of vending facilities, and any vending machine or other income accruing to blind vendors after deducting the cost of such sale and other expenses (excluding set-aside charges required to be paid by such blind vendors).
(l) Nominee means a nonprofit agency or organization designated by the State licensing agency through a written agreement to act as its agent in the provision of services to blind licensees under the State's vending facility program.
(m) Normal working hours means an eight hour work period between the approximate hours of 8:00 a.m., to 6:00 p.m., Monday through Friday.
(n) Other property means property which is not Federal property and on which vending facilities are established or operated by the use of any funds derived in whole or in part, directly or indirectly, from the operation of vending facilities on any Federal property.
(o) Permit means the official approval given a State licensing agency by a department, agency or instrumentality in control of the maintenance, operation, and protection of Federal property, or person in control of other property, whereby the State licensing agency is authorized to establish a vending facility.
(p) Program means all the activities of the licensing agency under this part related to vending facilities on Federal and other property.
(q) Satisfactory site means an area fully accessible to vending facility patrons and having:
(1) Effective on March 23, 1977 a minimum of 250 square feet available for the vending and storage of articles necessary for the operation of a vending facility; and
(2) Sufficient electrical plumbing, heating, and ventilation outlets for the location and operation of a vending facility in accordance with applicable health laws and building codes.
(r) Secretary means the Secretary of Education.
(s) Set-aside funds means funds which accrue to a State licensing agency from an assessment against the net proceeds of each vending facility in the State's vending facility program and any income from vending machines on Federal property which accrues to the State licensing agency.
(t) State means a State, territory, possession, Puerto Rico, or the District of Columbia.
(u) State vocational rehabilitation agency means that agency in the State providing vocational rehabilitation services to the blind as the sole State agency under a State plan for vocational rehabilitation services approved pursuant to the provisions of the Rehabilitation Act of 1973 (29 U.S.C., ch. 16).
(v) State licensing agency means the State agency designated by the Secretary under this part to issue licenses to blind persons for the operation of vending facilities on Federal and other property.
(w) United States includes the several States, territories, and possessions of the United States, Puerto Rico, and the District of Columbia.
(x) Vending facility means automatic vending machines, cafeterias, snack bars, cart service, shelters, counters, and such other appropriate auxiliary equipment which may be operated by blind licensees and which is necessary for the sale of newspapers, periodicals, confections, tobacco products, foods, beverages, and other articles or services dispensed automatically or manually and prepared on or off the premises in accordance with all applicable health laws, and including the vending or exchange of changes for any lottery authorized by State law and conducted by an agency of a State within such State.
(y) Vending machine, for the purpose of assigning vending machine income under this part, means a coin or currency operated machine which dispenses articles or services, except that those machines operated by the United States Postal Service for the sale of postage stamps or other postal products and services, machines providing services of a recreational nature, and telephones shall not be considered to be vending machines.
(z) Vending machine income means receipts (other than those of a blind vendor) from vending machine operations on Federal property, after deducting the cost of goods sold (including reasonable service and maintenance costs in accordance with customary business practices of commercial vending concerns, where the machines are operated, serviced, or maintained by, or with the approval of, a department, agency, or instrumentality of the United States, or commissions paid (other than to a blind vendor) by a commercial vending concern which operates, services, and maintains vending machines on Federal property for, or with the approval of, a department, agency, or instrumentality of the United States.
(aa) Vendor means a blind licensee who is operating a vending facility on Federal or other property.
(bb) Vocational rehabilitation services means those services as defined in § 1361.1(ee) (1) and (2) of this chapter.
(a) An application for designation as a State licensing agency may be submitted only by the State vocational rehabilitation agency providing vocational rehabilitation services to the blind under an approved State plan for vocational rehabilitation services under part 1361 of this chapter.
(b) Such application shall be:
(1) Submitted in writing to the Secretary;
(2) Approved by the chief executive of the State; and
(3) Transmitted over the signature of the administrator of the State agency making application.
(a) An application for designation as a State licensing agency under § 395.2 shall indicate:
(1) The State licensing agency's legal authority to administer the program, including its authority to promulgate rules and regulations to govern the program;
(2) The State licensing agency's organization for carrying out the program, including a description of the methods for coordinating the State's vending facility program and the State's vocational rehabilitation program, with special reference to the provision of such post-employment services necessary to assure that the maximum vocational potential of each blind vendor is achieved;
(3) The policies and standards to be employed in the selection of suitable locations for vending facilities;
(4) The methods to be used to ensure the continuing and active participation of the State Committee of Blind Vendors in matters affecting policy and program development and administration.
(5) The policies to be followed in making suitable vending facility equipment and adequate initial stock available to a vendor;
(6) The sources of funds for the administration of the program;
(7) The policies and standards governing the relationship of the State licensing agency to the vendors, including their selection, duties, supervision, transfer, promotion, financial participation, rights to a full evidentiary hearing concerning a State licensing agency action, and, where necessary, rights for the submittal of complaints to an arbitration panel;
(8) The methods to be followed in providing suitable training, including on-the-job training and, where appropriate, upward mobility training, to blind vendors;
(9) The arrangements made or contemplated, if any, for the utilization of the services of any nominee under § 395.15; the agreements therefor and the services to be provided; the procedures for the supervision and control of the services provided by such nominee and the methods used in evaluating services received, the basis for remuneration, and the fiscal controls and accounting procedures;
(10) The arrangements made or contemplated, if any, for the vesting in accordance with the laws of the State, of the right, title to, and interest in vending facility equipment or stock (including vending machines), used in the program, in a nominee to hold such right, title to, and interest for program purposes; and
(11) The assurances of the State licensing agency that it will:
(i) Cooperate with the Secretary in applying the requirements of the Act in a uniform manner;
(ii) Take effective action, including the termination of licenses, to carry out full responsibility for the supervision and management of each vending facility in its program in accordance with its established rules and regulations, this part, and the terms and conditions governing the permit;
(iii) Submit promptly to the Secretary for approval a description of any changes in the legal authority of the State licensing agency, its rules and regulations, blind vendor agreements, schedules for the setting aside of funds, contractual arrangements for the furnishing of services by a nominee, arrangements for carrying general liability and product liability insurance, and any other matters which form a part of the application;
(iv) If it intends to set aside, or cause to be set aside, funds from the net proceeds of the operation of vending facilities, obtain a prior determination by the Secretary that the amount of such funds to be set aside is reasonable;
(v) Establish policies against discrimination of any blind vendor on the basis of sex, age, physical or mental impairment, creed, color, national origin, or political affiliation;
(vi) Furnish each vendor a copy of its rules and regulations and a description of the arrangements for providing services, and take adequate steps to assure that each vendor understands the provisions of the permit and any agreement under which he operates, as evidenced by his signed statements:
(vii) Submit to an arbitration panel those grievances of any vendor unresolved after a full evidentiary hearing;
(viii) Adopt accounting procedures and maintain financial records in a manner necessary to provide for each vending facility and for the State's vending facility program a classification of financial transactions in such detail as is sufficient to enable evaluation of performance; and
(ix) Maintain records and make reports in such form and containing such information as the Secretary may require, make such records available for audit purposes, and comply with such provisions as the Secretary may find necessary to assure the correctness and verification of such reports.
(b) An application submitted under § 395.2 shall be accompanied by a copy of State rules and regulations affecting the administration and operation of the State's vending facility program.
(a) The State licensing agency shall promulgate rules and regulations which have been approved by the Secretary and which shall be adequate to assure the effective conduct of the State's vending facility program (including State licensing agency procedures covering the conduct of full evidentiary hearings) and the operation of each vending facility in accordance with this part and with the requirements and conditions of each department, agency, and instrumentality in control of the maintenance, operation, and protection of Federal property, including the conditions contained in permits, as well as in all applicable Federal and State laws, local ordinances and regulations.
(b) Such rules and regulations and amendments thereto shall be filed or published in accordance with State law.
(c) Such rules and regulations shall include provisions adequate to insure that the right, title to, and interest in each vending facility used in the program and the stock will be vested in accordance with the laws of the State in only the following:
(1) The State licensing agency; or
(2) Its nominee, subject to the conditions specified in § 395.15(b); or
(3) The vendor, in accordance with State determination.
(d) Notwithstanding the provisions of paragraph (c) of this section, any right, title to, or interest which existed on June 30, 1955, in stock may continue so long as:
(1) The interest is in the stock of a facility established under the program prior to July 1, 1955, and
(2) The vendor was licensed in the program (whether or not for the operation of the vending facility in question) prior to July 1, 1955.
When the Secretary determines that an application submitted by a State vocational rehabilitation agency under § 395.2, and the accompanying rules and regulations indicate a plan of program operations which will stimulate and enlarge the economic opportunities for the blind, and which will meet all other requirements of this part, he shall approve the application and shall designate the applying State vocational rehabilitation agency as the State licensing agency.
(a) If a State licensing agency determines under § 395.4(c) that the right, title to, and interest in a vending facility may be vested in the blind vendor, the State licensing agency shall enter into a written agreement with each vendor who is to have such ownership. Such agreement shall contain in full the terms and conditions governing such ownership in accordance with criteria in the State licensing agency's regulations, this part, and the terms and conditions of the permit. The criteria established to govern the determination that the title may be so vested shall contain reasonable provisions to enable a vendor to purchase vending facility equipment and to ensure that no individual will be denied the opportunity to become a vendor because of his inability to purchase the vending facility equipment or the initial stock;
(b) The State licensing agency shall establish in writing and maintain policies determining whether the vendor-owner or the State licensing agency shall be required to maintain the vending facility in good repair and in an attractive condition and replace worn-out or obsolete equipment; and if the former, such policies shall provide that upon such vendor-owner's failure to do so, the State licensing agency may make the necessary maintenance, replacement, or repairs and make equitable arrangements for reimbursement;
(c) Where the vendor owns such equipment and is required to maintain the vending facility in good repair and in an attractive condition and replace worn-out or obsolete equipment, or agrees to purchase additional new equipment, service charges for such purposes shall be equitably reduced and the method for determining such amount shall be established by the State licensing agency in writing;
(d) Where the vendor owns such equipment, the State licensing agency shall retain a first option to repurchase such equipment, and in the event the vendor-owner dies, or for any other reason ceases to be a licensee, or transfers to another vending facility, ownership of such equipment shall become vested in the State licensing agency for transfer to a successor licensee subject to an obligation on its part to pay to such vendor-owner or his estate, the fair value therein; and
(e) The vendor-owner, his personal representative or next of kin shall be entitled to an opportunity for a full evidentiary hearing with respect to the determination of the amount to be paid by the State licensing agency for a vendor's ownership in the equipment. When the vendor-owner is dissatisfied with any decision rendered as a result of such hearing, he may file a complaint with the Secretary under § 395.13 to request the convening of an ad hoc arbitration panel.
(a) The State licensing agency shall establish in writing and maintain objective criteria for licensing qualified applicants, including a provision for giving preference to blind persons who are in need of employment. Such criteria shall also include provisions to assure that licenses will be issued only to persons who are determined by the State licensing agency to be:
(1) Blind;
(2) Citizens of the United States; and
(3) Certified by the State vocational rehabilitation agency as qualified to operate a vending facility.
(b) The State licensing agency shall provide for the issuance of licenses for an indefinite period but subject to suspension or termination if, after affording the vendor an opportunity for a full evidentiary hearing, the State licensing agency finds that the vending facility is not being operated in accordance with its rules and regulations, the terms and conditions of the permit, and the terms and conditions of the agreement with the vendor.
(c) The State licensing agency shall further establish in writing and maintain policies which have been developed with the active participation of the State Committee of Blind Vendors and which govern the duties, supervision, transfer, promotion, and financial participation of the vendors. The State licensing agency shall also establish procedures to assure that such policies have been explained to each blind vendor.
(a) Vending machine income from vending machines on Federal property which has been disbursed to the State licensing agency by a property managing department, agency, or instrumentality of the United States under § 395.32 shall accrue to each blind vendor operating a vending facility on such Federal property in each State in an amount not to exceed the average net income of the total number of blind vendors within such State, as determined each fiscal year on the basis of each prior year's operation, except that vending machine income shall not accrue to any blind vendor in any amount exceeding the average net income of the total number of blind vendors in the United States. No blind vendor shall receive less vending machine income than he was receiving during the calendar year prior to January 1, 1974, as a direct result of any limitation imposed on such income under this paragraph. No limitation shall be imposed on income from vending machines, combined to create a vending facility, when such facility is maintained, serviced, or operated by a blind vendor. Vending machine income disbursed by a property managing department, agency or instrumentality of the United States to a State licensing agency in excess of the amounts eligible to accrue to blind vendors in accordance with this paragraph shall be retained by the appropriate State licensing agency.
(b) The State licensing agency shall disburse vending machine income to blind vendors within the State on at least a quarterly basis.
(c) Vending machine income which is retained under paragraph (a) of this section by a State licensing agency shall be used by such agency for the establishment and maintenance of retirement or pension plans, for health insurance contributions, and for the provision of paid sick leave and vacation time for blind vendors in such State, if it is so determined by a majority vote of blind vendors licensed by the State licensing agency, after such agency has provided to each such vendor information on all matters relevant to such purposes. Any vending machine income not necessary for such purposes shall be used by the State licensing agency for the maintenance and replacement of equipment, the purchase of new equipment, management services, and assuring a fair minimum return to vendors. Any assessment charged to blind vendors by a State licensing agency shall be reduced pro rata in an amount equal to the total of such remaining vending machine income.
(a) The State licensing agency shall establish in writing the extent to which funds are to be set aside or caused to be set aside from the net proceeds of the operation of the vending facilities and, to the extent applicable, from vending machine income under § 395.8(c) in an amount determined by the Secretary to be reasonable.
(b) Funds may be set aside under paragraph (a) of this section only for the purposes of:
(1) Maintenance and replacement of equipment;
(2) The purchase of new equipment;
(3) Management services;
(4) Assuring a fair minimum of return to vendors; or
(5) The establishment and maintenance of retirement or pension funds, health insurance contributions, and provision for paid sick leave and vacation time, if it is so determined by a majority vote of blind vendors licensed by the State licensing agency, after such agency provides to each such vendor information on all matters relevant to such proposed purposes.
(c) The State licensing agency shall further set out the method of determining the charge for each of the above purposes listed in paragraph (b) of this section, which will be determined with the active participation of the State Committee of Blind Vendors and which will be designed to prevent, so far as is practicable, a greater charge for any purpose than is reasonably required for that purpose. The State licensing agency shall maintain adequate records to support the reasonableness of the charges for each of the purposes listed in this section, including any reserves necessary to assure that such purposes can be achieved on a consistent basis.
The State licensing agency shall maintain (or cause to be maintained) all vending facility equipment in good repair and in an attractive condition and shall replace or cause to be replaced worn-out and obsolete equipment as required to ensure the continued successful operation of the facility.
The State licensing agency shall ensure that effective programs of vocational and other training services, including personal and vocational adjustment, books, tools, and other training materials, shall be provided to blind individuals as vocational rehabilitation services under the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended by the Rehabilitation Act Amendments of 1974 (Pub. L. 93-516). Such programs shall include on-the-job training in all aspects of vending facility operation for blind persons with the capacity to operate a vending facility, and upward mobility training (including further education and additional training or retraining for improved work opportunities) for all blind licensees. The State licensing agency shall further ensure that post-employment services shall be provided to blind vendors as vocational rehabilitation services as necessary to assure that the maximum vocational potential of such vendors is achieved and suitable employment is maintained within the State's vending facility program.
Each blind vendor under this part shall be provided access to all financial data of the State licensing agency relevant to the operation of the State vending facility program, including quarterly and annual financial reports, provided that such disclosure does not violate applicable Federal or State laws pertaining to the disclosure of confidential information. Insofar as practicable, such data shall be made available in braille or recorded tape. At the request of a blind vendor State licensing agency staff shall arrange a convenient time to assist in the interpretation of such financial data.
(a) The State licensing agency shall specify in writing and maintain procedures whereby such agency affords an opportunity for a full evidentiary hearing to each blind vendor (which procedures shall also apply to cases under § 395.6(e)) dissatisfied with any State licensing agency action arising from the operation or administration of the vending facility program. When such blind vendor is dissatisfied with any action taken or decision rendered as a result of such hearing, he may file a complaint with the Secretary. Such complaint shall be accompanied by all available supporting documents, including a statement of the decision which was rendered and the reasons in support thereof.
(b) The filing of a complaint under paragraph (a) of this section with either the State licensing agency or the Secretary shall indicate consent by the blind vendor for the release of such information as is necessary for the conduct of a full evidentiary hearing or the hearing of an ad hoc arbitration panel.
(c) Upon receipt of a complaint filed by a blind vendor which meets the requirements established by the Secretary, the Secretary shall convene an ad hoc arbitration panel which shall, in accordance with the provisions of 5 U.S.C. chapter 5, subchapter II, give notice, conduct a hearing, and render its decision which shall be final and binding on the parties except that such decision shall be subject to appeal and review as a final agency action for purposes of the provisions of 5 U.S.C. chapter 7.
(d) The arbitration panel convened by the Secretary to hear the grievances of blind vendors shall be composed of three members appointed as follows:
(1) One individual designated by the State licensing agency;
(2) One individual designated by the blind vendor; and
(3) One individual not employed by the State licensing agency or, where appropriate, its parent agency, who shall be jointly designated by the other members of the panel and who shall serve as chairman of the panel.
(e) If either the State licensing agency or the blind vendor fails to designate a member of an arbitration panel, the Secretary shall designate such member on behalf of such party.
(f) The decisions of an arbitration panel convened by the Secretary under this section shall be matters of public record and shall be published in the
(g) The Secretary shall pay all reasonable costs of arbitration under this section in accordance with a schedule of fees and expenses which shall be published in the
(h) The provisions of this section shall not require the participation of grantors of permits for the operation of vending facilities on property other than Federal property.
(a) The State licensing agency shall provide for the biennial election of a State Committee of Blind Vendors which, to the extent possible, shall be fully representative of all blind vendors in the State program on the basis of such factors as geography and vending facility type with a goal of providing for proportional representation of blind vendors on Federal property and blind vendors on other property. Participation by any blind vendor in any election shall not be conditioned upon the payment of dues or any other fees.
(b) The State Committee of Blind Vendors shall:
(1) Actively participate with the State licensing agency in major administrative decisions and policy and program development decisions affecting the overall administration of the State's vending facility program;
(2) Receive and transmit to the State licensing agency grievances at the request of blind vendors and serve as advocates for such vendors in connection with such grievances;
(3) Actively participate with the State licensing agency in the development and administration of a State system for the transfer and promotion of blind vendors;
(4) Actively participate with the State licensing agency in the development of training and retraining programs for blind vendors; and
(5) Sponsor, with the assistance of the State licensing agency, meetings and instructional conferences for blind vendors within the State.
(a) The State licensing agency may enter into an agreement whereby another agency or organization undertakes to furnish services to blind vendors. Such agreement shall be in writing and shall contain provisions which:
(1) Clearly insure the retention by the State licensing agency of full responsibility for the administration and operation of all phases of the program;
(2) Specify the type and extent of the services to be provided under such agreement;
(3) Provide that no set-aside charges will be collected from blind vendors except as specified in such agreement;
(4) Specify that no nominee will be allowed to exercise any function with respect to funds for the purchase of new equipment or for assuring a fair minimum of return to vendors, except to collect and hold solely for disposition in accordance with the order of the State licensing agency any charges authorized for those purposes by the licensing agency; and
(5) Specify that only the State licensing agency shall have control with respect to selection, placement, transfer, financial participation and termination of the vendors, and the preservation, utilization, and disposition of program assets.
(b) If the State licensing agency permits any agency or organization other than a vendor to hold any right, title to, or interest in vending facilities or stock, the arrangement shall be one permitted by State law and shall specify in writing that all such right, title to, or interest is held by such agency or organization as the nominee of the State licensing agency for program purposes and subject to the paramount right of the State licensing agency to direct and control the use, transfer, and disposition of such vending facilities or stock.
Prior to the establishment of each vending facility, other than a cafeteria, the State licensing agency shall submit an application for a permit setting forth the location, the amount of space necessary for the operation of the vending facility; the type of facility and equipment, the number, location and type of vending machines and other terms and conditions desired to be included in the permit. Such application shall be submitted for the approval of the head of the Federal property managing department, agency, or instrumentality. When an application is not approved, the head of the Federal property managing department, agency, or instrumentality shall advise the State licensing agency in writing and shall indicate the reasons for the disapproval.
(a) If the Secretary has reason to believe that, in the administration of the program, there is a failure on the part of any State licensing agency to comply substantially with the Act and this part, he shall so inform such agency in writing, setting forth, in detail, the areas in which there is such failure and giving it a reasonable opportunity to comply.
(b) If, after the lapse of a reasonable time, the Secretary is of the opinion that such failure to comply still continues and that the State licensing agency is not taking the necessary steps to comply, he shall offer to such agency, by reasonable notice in writing thereto and to the chief executive of the State, an opportunity for a hearing before the Secretary (or person designated by the Secretary) to determine whether there is a failure on the part of such agency to comply substantially with the provisions of the Act and of this part.
(c) If it is thereupon determined that there is a failure on the part of such agency to comply substantially with the Act and this part, appropriate written notice shall be given to such agency and to the chief executive of the State suspending such agency's designation as licensing agency effective 90 days from the date of such notice. A copy of such written notice shall be given to each department, agency, or instrumentality of the United States responsible for the maintenance, operation, and protection of Federal property on which vending machines subject to the requirements of § 395.32 are located in the State. Upon the suspension of such designation, vending machine income from vending machines on Federal property due for accrual to the State licensing agency under § 395.32 shall be retained in escrow by such department, agency, or instrumentality of the United States responsible for the maintenance, operation and protection of the Federal property on which such vending machines are located, pending redesignation of the State licensing agency or rescission of the suspension under paragraph (e) of this section.
(d) If, before the expiration of such 90 days, the Secretary (or person designated by him) determines that the State licensing agency is taking the necessary steps to comply, he may postpone the effective date of such suspension for such time as he deems necessary in the best interest of the program.
(e) If, prior to the effective date of such suspension, the Secretary (or person designated by him) finds that there is no longer a failure on the part of the State licensing agency to comply substantially with the provisions of the Act and this part, he shall so notify the agency, the chief executive of the State, and each Federal department, agency, or instrumentality required to place funds in escrow under paragraph (c) of this section, in which event the suspension of the designation shall not become effective and the requirement to place funds in escrow shall be terminated.
(a) Each department, agency, or instrumentality of the United States in control of the maintenance, operation, and protection of Federal property shall take all steps necessary to assure that, wherever feasible, in light of appropriate space and potential patronage, one or more vending facilities for operation by blind licensees shall be located on all Federal property Provided that the location or operation of such facility or facilities would not adversely affect the interests of the United States. Blind persons licensed by State licensing agencies shall be given priority in the operation of vending facilities on any Federal property.
(b) Any limitation on the location or operation of a vending facility for blind vendors by a department, agency or instrumentality of the United States based on a finding that such location or operation or type of location or operation would adversely affect the interests of the United States shall be fully justified in writing to the Secretary who shall determine whether such limitation is warranted. A determination made by the Secretary concerning such limitation shall be binding on any department, agency, or instrumentality of the United States affected by such determination. The Secretary shall publish such determination in the
(c) Priority in the operation of vending facilities in areas administered by the National Park Service or the National Aeronautics and Space Administration shall be given to blind vendors. Priority in the awarding of contracts for the operation of concessions in such areas when such concessions provide accommodations, facilities, and services of a scope or of a character not generally available in vending facilities operated by blind vendors shall be given in accordance with the provisions of the Concession Policy Act (Pub. L. 98-249, 16 U.S.C. 1) or the National Aeronautics and Space Act of 1958, as amended (Pub. L. 85-568, 42 U.S.C. 2473). The provisions of this part shall not apply when all accommodations, facilities, or services in such areas are operated by a single responsible concessioner.
(a) Effective January 2, 1975, no department, agency, or instrumentality of the United States shall undertake to acquire by ownership, rent, or lease, or to otherwise occupy, in whole or in part, any building unless it is determined that such building includes a satisfactory site or sites for the location and operation of a vending facility by a blind vendor. In those cases where a purchase contract, an agreement to lease, or other similar commitment was entered into prior to January 2, 1975, the provisions of this paragraph shall not apply.
(b) Effective January 2, 1975, no department, agency, or instrumentality of the United States, shall undertake to occupy, in whole or in part, any building which is to be constructed, substantially altered, or renovated, or in the case of a building which is occupied on January 2, 1975 by a department, agency, or instrumentality of the United States, no such department, agency, or instrumentality shall undertake to substantially alter or renovate such building, unless it is determined that the design for such construction, substantial alteration, or renovation includes a satisfactory site or sites for the location and operation of a vending facility by a blind vendor. In those cases where a design contract or other similar commitment was entered into prior to January 2, 1975, the provisions of this paragraph shall not apply. For purposes of this paragraph, substantial alteration or renovation of a building means a permanent material change in the floor area of such building which would render such building appropriate for the location and operation of a vending facility by a blind vendor.
(c) The determination that a building contains a satisfactory site or sites under paragraph (a) or (b) of this section shall be made after consultation between the State licensing agency and the head of the department, agency, or instrumentality of the United States which is planning to acquire or otherwise occupy such building. In order to make such determination, effective on the publication date of this part each such department, agency, or instrumentality shall provide to the appropriate State licensing agency written notice of its intention to acquire or otherwise occupy such building. Such written notice shall be by certified or registered mail with return receipt and shall be provided as early as practicable but no later than 60 days prior to such intended action. The written notice shall indicate that a satisfactory site or sites for the location and operation of a vending facility by blind persons is included in the plans for the building to be acquired or otherwise occupied and shall further assure that the State licensing agency shall be afforded the opportunity to determine whether such building includes a satisfactory site or sites for a vending facility. The written notice shall further assure that the State licensing agency, subject to the approval of the head of the Federal property managing department, agency, or instrumentality, shall be offered the opportunity to select the location and type of vending facility to be operated by a blind vendor prior to the completion of the final space layout of the building. The receipt of such written notice shall be acknowledged in writing promptly by the State licensing agency but no later than within 30 days and the State licensing agency shall indicate at that time whether it is interested in establishing a vending facility. A copy of the written notice to the State licensing agency and the State licensing agency's acknowledgement shall be provided to the Secretary.
(d) When, after a written notice has been provided under paragraph (c) of this section, the State licensing agency determines that the number of persons using the Federal property is or will be insufficient to support a vending facility, and the Secretary concurs with such determination, the provisions of paragraphs (a) and (b) of this section shall not apply. The provisions of paragraphs (a) and (b) of this section shall also not apply when fewer than 100 Federal Government employees are or will be located during normal working hours in the building to be acquired or otherwise occupied or when such building contains less than 15,000 square feet of interior space to be utilized for Federal Government purposes in the case of buildings in which services are to be provided to the public.
(e) The operation of a vending facility established under pre-existing arrangements shall not be affected by the provisions of this section. The provisions of this section shall further not preclude future arrangements under which vending facilities to be operated by blind vendors may be established in buildings of a size or with an employee population less than that specified in paragraph (d) of this section: Provided, That both the State licensing agency and the Federal property managing department, agency or instrumentality concur in such establishment.
(f) Each department, agency, and instrumentality of the United States, when leasing property in privately owned buildings, shall make every effort to lease property capable of accommodating a vending facility. When, however, such department, agency, or instrumentality is leasing part of a privately owned building in which prior to the execution of the lease, the lessor or any of his tenants had in operation or had entered into a contract for the operation of a restaurant or other food facility in a part of the building not included in such lease and the operation of a vending facility by a blind vendor would be in proximate and substantial direct competition with such restaurant or other food facility, the provisions of paragraphs (a), (b), and (c) of this section shall not apply.
(a) The on-site official responsible for the Federal property of each property managing department, agency, or instrumentality of the United States, in accordance with established procedures of such department, agency, or instrumentality, shall be responsible for the collection of, and accounting for, vending machine income from vending machines on Federal property under his control and shall otherwise ensure compliance with the provisions of this section.
(b) Effective January 2, 1975, 100 per centum of all vending machine income from vending machines on Federal property which are in direct competition with a vending facility operated by a blind vendor shall accure to the State licensing agency which shall disburse such income to such blind vendor operating such vending facility on such property provided that the total amount of such income accruing to such blind vendor does not exceed the maximum amount determined under § 395.8(a). In the event that there is income from such vending machines in excess of the maximum amount which may be disbursed to the blind vendor under § 395.8(a), such additional income shall accrue to the State licensing agency for purposes determined in accordance with § 395.8(c).
(c) Effective January 2, 1975, 50 per centum of all vending machine income from vending machines on Federal property which are not in direct competition with a vending facility operated by a blind vendor shall accrue to the State licensing agency which shall disburse such income to the blind vendor operating such vending facility on such property. In the event that there is no blind vendor, such income shall accrue to the State licensing agency, except as indicated under paragraph (d) of this section. The total amount of such income disbursed to such blind vendor shall not exceed the maximum amount determined under § 395.8(a). In the event that there is income from such vending machines in excess of the maximum amount which may accrue to the blind vendor under § 395.8(a), such additional income shall accrue to the State licensing agency for purposes determined in accordance with § 395.8(c).
(d) Effective January 2, 1975, 30 per centum of all vending machine income from vending machines, which are not in direct competition with a vending facility operated by a blind vendor and which are on Federal property at which at least 50 per centum of the total hours worked on the premises occurs during a period other than normal working hours, shall accrue to the State licensing agency which shall disburse such income to the blind vendor operating a vending facility on such property. In the event that there is no blind vendor on such property, such income shall accrue to the State licensing agency. The total amount of such income disbursed to such blind vendor shall not exceed the maximum amount determined under § 395.8(a). In the event that there is income from such vending machines in excess of the maximum amount which may be disbursed to the blind vendor under § 395.8(a), such additional income shall accrue to the State licensing agency for purposes determined in accordance with § 395.8(c).
(e) The determination that a vending machine on Federal property is in direct competition with a vending facility operated by a blind vendor shall be the responsibility of the on-site official responsible for the Federal property of each property managing department, agency or instrumentality of the United States, subject to the concurrence of the State licensing agency.
(f) In the case of vending machine income which, prior to the effective date of this part, has been disbursed to a blind vendor by a property managing department, agency, or instrumentality from proceeds which accrued from operations subsequent to January 2, 1975, pursuant to agreements in effect prior to such time, such income may be deducted, at the discretion of such property managing department, agency or instrumentality, from vending machine income due to the State licensing agency under paragraphs (b), (c), or (d) of this section.
(g) The collection of vending machine income and its disbursement to the appropriate State licensing agency shall be conducted on at least a quarterly basis.
(h) All arrangements pertaining to the operation of vending machines on Federal property not covered by contract with, or by permits issued to, State licensing agencies, shall be renegotiated upon the expiration of the existing contract or other arrangement for consistency with the provisions of this section.
(i) The provisions of this section shall not apply to income from vending machines within operated retail sales outlets under the control of post exchange or ships' stores systems authorized under title 10 U.S.C.; to income from vending machines operated by the Veterans Canteen Service; or to income from vending machines not in direct competition with a blind vending facility at individual locations, installations, or facilities on Federal property the total of which at such individual locations, installations, or facilities does not exceed $3,000 annually.
(j) The provisions of this section shall not operate to preclude pre-existing or future arrangements, or regulations of departments, agencies, or instrumentalities of the United States, under which blind vendors or State licensing agencies may:
(1) Receive a greater percentage or amount of vending machine income than that specified in paragraphs (b), (c), and (d) of this section, or
(2) Receive vending machine income from individual locations, installations, or facilities on Federal property the total of which at such individual locations, installations, or facilities does not exceed $3,000 annually.
(a) Priority in the operation of cafeterias by blind vendors on Federal property shall be afforded when the Secretary determines, on an individual basis, and after consultation with the appropriate property managing department, agency, or instrumentality, that such operation can be provided at a reasonable cost, with food of a high quality comparable to that currently provided employees, whether by contract or otherwise. Such operation shall be expected to provide maximum employment opportunities to blind vendors to the greatest extent possible.
(b) In order to establish the ability of blind vendors to operate a cafeteria in such a manner as to provide food service at comparable cost and of comparable high quality as that available from other providers of cafeteria services, the appropriate State licensing agency shall be invited to respond to solicitations for offers when a cafeteria contract is contemplated by the appropriate property managing department, agency, or instrumentality. Such solicitations for offers shall establish criteria under which all responses will be judged. Such criteria may include sanitation practices, personnel, staffing, menu pricing and portion sizes, menu variety, budget and accounting practices. If the proposal received from the State licensing agency is judged to be within a competitive range and has been ranked among those proposals which have a reasonable chance of being selected for final award, the property managing department, agency, or instrumentality shall consult with the Secretary as required under paragraph (a) of this section. If the State licensing agency is dissatisfied with an action taken relative to its proposal, it may file a complaint with the Secretary under the provisions of § 395.37.
(c) All contracts or other existing arrangements pertaining to the operation of cafeterias on Federal property not covered by contract with, or by permits issued to, State licensing agencies shall be renegotiated subsequent to the effective date of this part on or before the expiration of such contracts or other arrangements pursuant to the provisions of this section.
(d) Notwithstanding the requirements of paragraphs (a) and (b) of this section, Federal property managing departments, agencies, and instrumentalities may afford priority in the operation of cafeterias by blind vendors on Federal property through direct negotiations with State licensing agencies whenever such department, agency, or instrumentality determines, on an individual basis, that such operation can be provided at a reasonable cost, with food of a high quality comparable to that currently provided employees: Provided, however, That the provisions of paragraphs (a) and (b) of this section shall apply in the event that the negotiations authorized by this paragraph do not result in a contract.
Applications for permits for the operation of vending facilities other than cafeterias shall be made in writing on the appropriate form, and submitted for the review and approval of the head of the Federal property managing department, agency, or instrumentality.
Every permit shall describe the location of the vending facility including any vending machines located on other than the facility premises and shall be subject to the following provisions:
(a) The permit shall be issued in the name of the applicant State licensing agency which shall:
(1) Prescribe such procedures as are necessary to assure that in the selection of vendors and employees for vending facilities there shall be no discrimination because of sex, race, age, creed, color, national origin, physical or mental disability, or political affiliation; and
(2) Take the necessary action to assure that vendors do not discriminate against any person or persons in furnishing, or by refusing to furnish, to such person or persons the use of any vending facility, including any and all services, privileges, accommodations, and activities provided thereby, and comply with title VI of the Civil Rights Act of 1964 and regulations issued pursuant thereto.
(b) The permit shall be issued for an indefinite period of time subject to suspension or termination on the basis of compliance with agreed upon terms.
(c) The permit shall provide that:
(1) No charge shall be made to the State licensing agency for normal cleaning, maintenance, and repair of the building structure in and adjacent to the vending facility areas;
(2) Cleaning necessary for sanitation, and the maintenance of vending facilities and vending machines in an orderly condition at all times, and the installation, maintenance, repair, replacement, servicing, and removal of vending facility equipment shall be without cost to the department, agency, or instrumentality responsible for the maintenance of the Federal property; and
(3) Articles sold at vending facilities operated by blind licensees may consist of newspapers, periodicals, publications, confections, tobacco products, foods, beverages, chances for any lottery authorized by State law and conducted by an agency of a State within such State, and other articles or services as are determined by the State licensing agency, in consultation with the on-site official responsible for the Federal property of the property managing department, agency or instrumentality, to be suitable for a particular location. Such articles and services may be dispensed automatically or manually and may be prepared on or off the premises in accordance with all applicable health laws.
(d) The permit shall further provide that vending facilities shall be operated in compliance with applicable health, sanitation, and building codes or ordinances.
(e) The permit shall further provide that installation, modification, relocation, removal, and renovation of vending facilities shall be subject to the prior approval and supervision of the on-site official responsible for the Federal property of the property managing department, agency, or instrumentality, and the State licensing agency; that costs of relocations initiated by the State licensing agency shall be paid by the State licensing agency; and that costs of relocations initiated by the department, agency, or instrumentality shall be borne by such department, agency, or instrumentality.
(f) The operation of a cafeteria by a blind vendor shall be covered by a contractual agreement and not by a permit.
(a) The State licensing agency shall attempt to resolve day-to-day problems pertaining to the operation of the vending facility in an informal manner with the participation of the blind vendor and the on-site official responsible for the property of the property managing department, agency, or instrumentality as necessary.
(b) Unresolved disagreements concerning the terms of the permit, the Act, or the regulations in this part and any other unresolved matters shall be reported in writing to the State licensing agency supervisory personnel by the Regional or other appropriate official of the Federal property managing department, agency, or instrumentality in an attempt to resolve the issue.
(a) Whenever any State licensing agency determines that any department, agency, or instrumentality of the United States which has control of the maintenance, operation, and protection of Federal property is failing to comply with the provisions of the Act or of this part and all informal attempts to resolve the issues have been unsuccessful, such licensing agency may file a complaint with the Secretary.
(b) Upon receipt of a complaint filed under paragraph (a) of this section, the Secretary shall convene an ad hoc arbitration panel which shall, in accordance with the provisions of 5 U.S.C. ch. 5, subchapter II, give notice, conduct a hearing and render its decision which shall be final and binding on the parties except that such decision shall be subject to appeal and review as a final agency action for purposes of the provisions of 5 U.S.C. ch. 7. The arbitration panel convened by the Secretary to hear complaints filed by a State licensing agency shall be composed of three members appointed as follows:
(1) One individual designated by the State licensing agency;
(2) One individual designated by the head of the Federal department, agency, or instrumentality controlling the Federal property over which the dispute arose; and
(3) One individual, not employed by the Federal department, agency, or instrumentality controlling the Federal property over which the dispute arose, who shall be jointly designated by the other members of the panel and who shall serve as chairman of the panel.
(c) If either the State licensing agency or the head of the Federal department, agency, or instrumentality fails to designate a member of an arbitration panel, the Secretary shall designate such member on behalf of such party.
(d) If the panel finds that the acts or practices of any department, agency, or instrumentality are in violation of the Act or of this part, the head of any such department, agency, or instrumentality (subject to any appeal under paragraph (b) of this section) shall cause such acts or practices to be terminated promptly and shall take such other action as may be necessary to carry out the decision of the panel.
(e) The decisions of an arbitration panel convened by the Secretary under this section shall be matters of public record and shall be published in the
(f) The Secretary shall pay all reasonable costs of arbitration under this section in accordance with a schedule of fees and expenses which shall be published in the
At the end of each fiscal year, each property managing department, agency, or instrumentality of the United States shall report to the Secretary the total number of applications for vending facility locations received from State licensing agencies, the number accepted, the number denied, the number still pending, the total amount of vending machine income collected and the amount of such vending machine income disbursed to the State licensing agency in each State.
The Training of Interpreters for Individuals Who Are Deaf or Hard of Hearing and Individuals Who Are Deaf-Blind program is designed to establish interpreter training programs or to provide financial assistance for ongoing interpreter programs to train a sufficient number of qualified interpreters throughout the country in order to meet the communication needs of individuals who are deaf or hard of hearing and individuals who are deaf-blind by—
(a) Training interpreters to effectively interpret and transliterate between spoken language and sign language and to transliterate between spoken language and oral or tactile modes of communication;
(b) Ensuring the maintenance of the interpreting skills of qualified interpreters; and
(c) Providing opportunities for interpreters to raise their skill level competence in order to meet the highest standards approved by certifying associations.
Public and private nonprofit agencies and organizations, including institutions of higher education, are eligible for assistance under this program.
The following regulations apply to the Training of Interpreters for Individuals Who Are Deaf or Hard of Hearing and Individuals Who Are Deaf-Blind program:
(a) 34 CFR part 385 (Rehabilitation Training), sections—
(1) 385.3(a) and (d);
(2) 385.40 through 385.46; and
(b) The regulations under this part 396.
(a) Definitions in EDGAR. The following terms defined in 34 CFR 77.1 apply to this part:
(b) Definitions in the rehabilitation training regulations. The following terms defined in 34 CFR 385.4(b) apply to this part:
Individual With a Disability
Institution of Higher Education
(c) Other definitions. The following definitions also apply to this part:
Existing program that has demonstrated its capacity for providing interpreter training services means an established program with—
(i) A record of training qualified interpreters who are serving the deaf, hard of hearing, and deaf-blind communities; and
(ii) An established curriculum that uses evidence-based practices in the training of interpreters and promising practices when evidence-based practices are not available.
Individual who is deaf means an individual who, in order to communicate, depends primarily upon visual modes, such as sign language, speech reading, and gestures, or reading and writing.
Individual who is deaf-blind means an individual—
(i)(A) Who has a central visual acuity of 20/200 or less in the better eye with corrective lenses, or a field defect such that the peripheral diameter of visual field subtends an angular distance no greater than 20 degrees, or a progressive visual loss having a prognosis leading to one or both of these conditions;
(B) Who has a chronic hearing impairment so severe that most speech cannot be understood with optimum amplification, or a progressive hearing loss having a prognosis leading to this condition; and
(C) For whom the combination of impairments described in paragraphs (i)(A) and (B) of this definition causes extreme difficulty in attaining independence in daily life activities, achieving psychosocial adjustment, or obtaining a vocation;
(ii) Who, despite the inability to be measured accurately for hearing and vision loss due to cognitive or behavioral constraints, or both, can be determined through functional and performance assessment to have severe hearing and visual disabilities that cause extreme difficulty in attaining independence in daily life activities, achieving psychosocial adjustment, or obtaining vocational objectives; or
(iii) Who meets any other requirements that the Secretary may prescribe.
Individual who is hard of hearing means an individual who, in order to communicate, needs to supplement auditory information by depending primarily upon visual modes, such as sign language, speech reading, and gestures, or reading and writing.
Interpreter for individuals who are deaf or hard of hearing means a qualified professional who uses sign language skills, cued speech, or oral interpreting skills, as appropriate to the needs of individuals who are deaf or hard of hearing, to facilitate communication between individuals who are deaf or hard of hearing and other individuals.
Interpreter for individuals who are deaf-blind means a qualified professional who uses tactile or other manual language or fingerspelling modes, as appropriate to the needs of individuals who are deaf-blind, to facilitate communication between individuals who are deaf-blind and other individuals.
Novice Interpreter means an interpreter who has graduated from an interpreter education program or enters the field through an alternate pathway, is at the start of his or her professional career with some level of proficiency in American Sign Language, and is working toward becoming a qualified professional.
Qualified professional means an individual who has—
(i) Met existing certification or evaluation requirements equivalent to the highest standards approved by certifying associations; and
(ii) Successfully demonstrated interpreting skills that reflect the highest standards approved by certifying associations through prior work experience.
Related agency means—
(i) An American Indian rehabilitation program; or
(ii) Any of the following agencies that provide services to individuals with disabilities under an agreement or other arrangement with a designated State agency in the area of specialty for which training is provided:
(A) A Federal, State, or local agency.
(B) A nonprofit organization.
(C) A professional corporation or professional practice group.
The Secretary may award grants to public or private nonprofit agencies or organizations, including institutions of higher educations, to provide assistance for establishment of interpreter training programs or for projects that provide training in interpreting skills for persons preparing to serve, and persons who are already serving, as interpreters for individuals who are deaf or hard of hearing, and as interpreters for individuals who are deaf-blind in public and private agencies, schools, and other service-providing institutions.
Each applicant shall include in the application—
(a) A description of the manner in which the proposed interpreter training program will be developed and operated during the five-year period following the award of the grant;
(b) A description of the communication needs for training interpreters for the population(s) or in the geographical area(s) to be served by the project;
(c) A description of the applicant's capacity or potential for providing training of interpreters for individuals who are deaf or hard of hearing and interpreters for individuals who are deaf-blind that is evidence-based, and based on promising practices when evidence-based practices are not available;
(d) An assurance that any interpreter trained or retrained under this program shall meet those standards of competency for a qualified professional, that the Secretary may establish;
(e) An assurance that the project shall cooperate or coordinate its activities, as appropriate, with the activities of other projects funded under this program;
(f) The descriptions required in 34 CFR 385.45 with regard to the training of individuals with disabilities, including those from minority groups, for rehabilitation careers; and
(g) Such other information as the Secretary may require.
(a) The Secretary evaluates applications under the procedures in 34 CFR part 75.
(b) The Secretary evaluates each application using selection criteria in § 396.31.
(c) In addition to the selection criteria described in paragraph (b) of this section, the Secretary evaluates each application using—
(1) Selection criteria in 34 CFR 75.210;
(2) Selection criteria established under 34 CFR 75.209; or
(3) A combination of selection criteria established under 34 CFR 75.209 and selection criteria in 34 CFR 75.210.
In addition to the criteria in 34 CFR 396.30(c), the Secretary uses the following additional selection criterion to evaluate an application. The Secretary reviews each application to determine the extent to which—
(a) The proposed interpreter training project was developed in consultation with State Vocational Rehabilitation agencies and their related agencies and consumers;
(b) The training is appropriate to the needs of both individuals who are deaf or hard of hearing and individuals who are deaf-blind and to the needs of public and private agencies that provide services to either individuals who are deaf or hard of hearing or individuals who are deaf-blind in the geographical area to be served by the training project;
(c) Any curricula for the training of interpreters includes evidence-based practices and promising practices when evidence-based practices are not available;
(d) There is a working relationship between the interpreter training project and State Vocational Rehabilitation agencies and their related agencies, and consumers; and
(e) There are opportunities for individuals who are deaf or hard of hearing and individuals who are deaf-blind to provide input regarding the design and management of the training project.
In addition to the selection criteria listed in § 396.31 and 34 CFR 75.210, the Secretary, in making awards under this part, considers the geographical distribution of projects throughout the country, as appropriate, in order to best carry out the purposes of this program. To accomplish this, the Secretary may in any fiscal year make awards of regional or national scope.
(a) The Secretary, in making awards under this part, gives priority to public or private nonprofit agencies or organizations, including institutions of higher education, with existing programs that have demonstrated their capacity for providing interpreter training.
(b) In announcing competitions for grants and contracts, the Secretary may give priority consideration to—
(1) Increasing the skill level of interpreters for individuals who are deaf or hard of hearing and individuals who are deaf-blind in unserved or underserved populations or in unserved or underserved geographic areas;
(2) Existing programs that have demonstrated their capacity for providing interpreter training services that raise the skill level of interpreters in order to meet the highest standards approved by certifying associations; and
(3) Specialized topical training based on the communication needs of individuals who are deaf or hard of hearing and individuals who are deaf-blind.
A grantee must contribute to the cost of a project under this program in an amount satisfactory to the Secretary. The part of the costs to be borne by the grantee is determined by the Secretary at the time of the grant award.
(a) The purpose of this part is to set forth requirements the designated State units and State and local educational agencies must satisfy to ensure that individuals with disabilities, especially youth with disabilities, have a meaningful opportunity to prepare for, obtain, maintain, advance in, or regain competitive integrated employment, including supported or customized employment.
(b) This part requires—
(1) A designated State unit to provide youth with disabilities documentation demonstrating that they have completed certain requirements, as described in this part, prior to starting subminimum wage employment with entities (as defined in § 397.5(d)) holding special wage certificates under section 14(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 214(c));
(2) A designated State unit to provide, at certain prescribed intervals for the duration of such employment, career counseling and information and referral services, designed to promote opportunities for competitive integrated employment, to individuals with disabilities, regardless of age, who are known to be employed at subminimum wage; and
(3) A designated State unit, in consultation with the State educational agency, to develop a process or utilize an existing process, to document completion of required activities under this part by a youth with a disability known to be seeking employment at subminimum wage.
(c) This part authorizes a designated State unit, or a representative of a designated State unit, to review individual documentation required to be maintained by these entities under this part.
(d) The provisions in this part work in concert with requirements in 34 CFR parts 300, 361, and 363, and do not alter any requirements under those parts.
(a) The Department of Education has jurisdiction under this part to implement guidelines for—
(1) Documentation requirements imposed on designated State units and local educational agencies, including the documentation process that the designated State unit must develop in consultation with the State educational agency;
(2) Requirements related to the services that designated State units must provide to individuals regardless of age who are employed at subminimum wage; and
(3) Requirements under § 397.31.
(b) Nothing in this part will be construed to grant to the Department of Education, or its grantees, jurisdiction over requirements set forth in the Fair Labor Standards Act, including those imposed on entities holding special wage certificates under section 14(c) of that Act, which is administered by the Department of Labor.
Nothing in this part will be construed to—
(a) Change the purpose of the Rehabilitation Act, which is to empower individuals with disabilities to maximize opportunities for achieving competitive integrated employment;
(b) Promote subminimum wage employment as a vocational rehabilitation strategy or employment outcome, as defined in 34 CFR 361.5(c)(15); or
(c) Be inconsistent with the provisions of the Fair Labor Standards Act, as amended before or after July 22, 2014.
(a) The regulations in 34 CFR part 300 governing the definition of transition services, and the Individualized Education Program requirements related to the development of postsecondary goals and the transition services needed to assist the eligible child in reaching those goals (§§ 300.320(b), 300.321(b), 300.324(c), and 300.43).
(b) The regulations in 34 CFR part 361 governing the vocational rehabilitation program, especially those regarding protection and use of personal information in 34 CFR 361.38; eligibility determinations in 34 CFR 361.42; individualized plans for employment in 34 CFR 361.45 and 34 CFR 361.46; provision of vocational rehabilitation services, including pre-employment transition services, transition services, and supported employment services in 34 CFR 361.48; ineligibility determinations in 34 CFR 361.43; informed choice in 34 CFR 361.52; and case closures in 34 CFR 361.56.
(c) The regulations in 29 CFR part 525 governing the employment of individuals with disabilities at subminimum wage rates pursuant to a certificate issued by the Secretary of Labor.
(d) The regulations in this part 397.
(a) The following terms have the meanings given to them in 34 CFR 361.5(c):
(1) Act;
(2) Competitive integrated employment;
(3) Customized employment;
(4) Designated State unit;
(5) Extended services;
(6) Individual with a disability;
(7) Individual with a most significant disability;
(8) Individual's representative;
(9) Individualized plan for employment;
(10) Pre-employment transition services;
(11) Student with a disability;
(12) Supported employment;
(13) Vocational rehabilitation services; and
(14) Youth with a disability.
(b) The following terms have the meanings given to them in 34 CFR part 300:
(1) Local educational agency (§ 300.28);
(2) State educational agency (§ 300.41); and
(3) Transition services (§ 300.43).
(c) The following terms have the meanings given to them in 29 CFR 525.3 and section 6(a)(1) of the Fair Labor Standards Act (29 U.S.C. 206(a)(1)):
(1) Federal minimum wage has the meaning given to that term in section 6(a)(1) of the Fair Labor Standards Act (29 U.S.C. 206(a)(1)); and
(2) Special wage certificate means a certificate issued to an employer under section 14(c) of the Fair Labor Standards Act (29 U.S.C. 214(c)) and 29 CFR part 525 that authorizes payment of subminimum wages, wages less than the statutory minimum wage.
(d) Entity means an employer, or a contractor or subcontractor of that employer, that holds a special wage certificate described in section 14(c) of the Fair Labor Standards Act (29 U.S.C. 214(c)).
(a) The designated State unit, in consultation with the State educational agency, must develop a new process, or utilize an existing process, to document the completion of the actions described in § 397.20 and § 397.30 by a youth with a disability, as well as a process for the transmittal of that documentation from the educational agency to the designated State unit, consistent with confidentiality requirements of the Family Education Rights and Privacy Act (20 U.S.C. 1232g(b) and 34 CFR 99.30 and 99.31) and the Individuals with Disabilities Education Act (20 U.S.C. 1417(c) and 34 CFR 300.622).
(1) Such documentation must, at a minimum, contain the—
(i) Youth's name;
(ii) Determination made, including a summary of the reason for the determination, or description of the service or activity completed;
(iii) Name of the individual making the determination or the provider of the required service or activity;
(iv) Date determination made or required service or activity completed;
(v) Signature of the designated State unit or educational personnel making the determination or documenting completion of the required services or activity;
(vi) Date of signature described in paragraph (a)(1)(v) of this section;
(vii) Signature of designated State unit personnel transmitting documentation to the youth with a disability; and
(viii) Date and method (e.g., hand-delivered, faxed, mailed, emailed, etc.) by which document was transmitted to the youth.
(2) In the event a youth with a disability or, as applicable, the youth's parent or guardian, refuses, through informed choice, to participate in the activities required by this part, such documentation must, at a minimum, contain the—
(i) Youth's name;
(ii) Description of the refusal and the reason for such refusal;
(iii) Signature of the youth or, as applicable, the youth's parent or guardian;
(iv) Signature of the designated State unit or educational personnel documenting the youth's refusal;
(v) Date of signatures; and
(vi) Date and method (e.g., hand-delivered, faxed, mailed, emailed, etc.) by which documentation was transmitted to the youth.
(3) The documentation process must include procedures for the designated State unit to retain a copy of all documentation required by this part in a manner consistent with the designated State unit's case management system and the requirements of 2 CFR 200.333.
(b) The documentation process must ensure that—
(1) A designated State unit provides, in the case of a student with a disability, documentation of completion of appropriate pre-employment transition services, in accordance with § 361.48(a) of this chapter and as required by § 397.20(a)(1);
(2) In the case of a student with a disability, for actions described in § 397.30—
(i) The appropriate school official, responsible for the provision of transition services, must provide the designated State unit documentation of completion of appropriate transition services under the Individuals with Disabilities Education Act, including those provided under section 614(d)(1)(A)(i)(VIII) (20 U.S.C. 1414(d)(1)(A)(i)(VIII));
(ii) The designated State unit must provide documentation of completion of the transition services, as documented and provided by the appropriate school official in accordance with paragraph (b)(2) of this section, to the youth with a disability.
(c) The designated State unit must provide—
(1) Documentation required by this part in a form and manner consistent with this part and in an accessible format for the youth; and
(2)(i) Documentation required by paragraph (a)(1) of this section to a youth as soon as possible upon the completion of each of the required actions, but no later than—
(A) 45 calendar days after the determination or completion of the required activity or service; or
(B) 90 calendar days, if additional time is necessary due to extenuating circumstances, after the determination or completion of each of the required actions in § 397.20 and § 397.30(a). Extenuating circumstances should be interpreted narrowly to include circumstances such as the unexpected lengthy absence of the educational or designated State unit personnel necessary for the production of the documentation or the transmittal of that documentation due to illness or family emergency, or a natural disaster.
(ii) Documentation required by paragraph (a)(2) of this section, when a youth has refused to participate in an action required by this part, must be provided to the youth within 10 calendar days of the youth's refusal to participate.
(3) When transmitting documentation of the final determination or activity completed, as required by § 397.20 and § 397.30(a), the designated State unit must provide a coversheet that itemizes each of the documents that have been provided to the youth.
(a) A designated State unit must provide youth with disabilities documentation upon the completion of the following actions:
(1)(i) Pre-employment transition services that are available to a student with a disability under 34 CFR 361.48; or
(ii) Transition services under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), such as transition services available to the individual under section 614(d) of that Act (20 U.S.C. 1414(d));
(2) Application for vocational rehabilitation services, in accordance with 34 CFR 361.41(b), with the result that the individual was determined—
(i) Ineligible for vocational rehabilitation services, in accordance with 34 CFR 361.43; or
(ii) Eligible for vocational rehabilitation services, in accordance with 34 CFR 361.42; and
(A) The youth with a disability had an approved individualized plan for employment, in accordance with 34 CFR 361.46;
(B) The youth with a disability was unable to achieve the employment outcome specified in the individualized plan for employment, as described in 34 CFR 361.5(c)(15) and 361.46, despite working toward the employment outcome with reasonable accommodations and appropriate supports and services, including supported employment services and customized employment services, for a reasonable period of time; and
(C) The youth with a disability's case record, which meets all of the requirements of 34 CFR 361.47, is closed.
(3)(i) Regardless of the determination made under paragraph (a)(2) of this section, the youth with a disability has received career counseling, and information and referrals from the designated State unit to Federal and State programs and other resources in the individual's geographic area that offer employment-related services and supports designed to enable the individual to explore, discover, experience, and attain competitive integrated employment.
(ii) The career counseling and information and referral services provided in accordance with paragraph (a)(3)(i) of this section must—
(A) Be provided by the designated State unit in a manner that facilitates informed choice and decision-making by the youth, or the youth's representative as appropriate;
(B) Not be for subminimum wage employment by an entity defined in § 397.5(d), and such employment-related services are not compensated at a subminimum wage and do not directly result in employment compensated at a subminimum wage provided by such an entity; and
(C) Be provided within 30 calendar days of a determination under paragraph (a)(2)(i) or (a)(2)(ii)(C) of this section for a youth known by the designated State unit to be seeking employment at subminimum wage.
(b) The following special requirements apply—
(1) For purposes of this part, all documentation provided by a designated State unit must satisfy the requirements for such documentation, as applicable, under 34 CFR part 361.
(2) The individualized plan for employment, required in paragraph (a)(2)(ii)(A) of this section, must include a specific employment goal consistent with competitive integrated employment, including supported or customized employment.
(3)(i) For purposes of paragraph (a)(2)(ii)(B) of this section, a determination as to what constitutes a “reasonable period of time” must be consistent with the disability-related and vocational needs of the individual, as well as the anticipated length of time required to complete the services identified in the individualized plan for employment.
(ii) For an individual whose specified employment goal is in supported employment, such reasonable period of time is up to 24 months, unless under special circumstances the individual and the rehabilitation counselor jointly agree to extend the time to achieve the employment outcome identified in the individualized plan for employment.
(a) Of the documentation to demonstrate a youth with a disability's completion of the actions described in § 397.20(a), a local educational agency, as defined in § 397.5(b)(1), must provide the designated State unit with documentation that the youth has received transition services under the Individuals with Disabilities Education Act (20 U.S.C. 1400 et seq.), such as transition services available to the individual under section 614(d) of that Act (20 U.S.C. 1414(d)). The documentation must be provided to the designated State unit in a manner that complies with confidentiality requirements of the Family Education Rights and Privacy Act (20 U.S.C. 1232g(b) and 34 CFR 99.30 and 99.31) and the Individuals with Disabilities Education Act (20 U.S.C. 1417(c) and 34 CFR 300.622).
(b)(1) The documentation of completed services or activities required by paragraph (a) of this section must, at a minimum, contain the—
(i) Youth's name;
(ii) Description of the service or activity completed;
(iii) Name of the provider of the required service or activity;
(iv) Date required service or activity completed;
(v) Signature of educational personnel documenting completion of the required service or activity;
(vi) Date of signature described in paragraph (b)(1)(v) of this section; and
(vii) Signature of educational personnel transmitting documentation to the designated State unit; and
(viii) Date and method (e.g., hand-delivered, faxed, mailed, emailed, etc.) by which document was transmitted to the designated State unit.
(2) In the event a youth with a disability or, as applicable, the youth's parent or guardian, refuses, through informed choice, to participate in the activities required by this part, such documentation must, at a minimum, contain the—
(i) Youth's name;
(ii) Description of the refusal and the reason for such refusal;
(iii) Signature of the youth or, as applicable, the youth's parent or guardian;
(iv) Signature of the educational personnel documenting the youth's refusal;
(v) Date of signatures required by paragraphs (b)(2)(iii) and (iv) of this section;
(vi) Signature of educational personnel transmitting documentation of the refusal to the designated State unit; and
(vii) Date and method (e.g., hand-delivered, faxed, mailed, emailed, etc.) by which documentation was transmitted to the designated State unit.
(c)(1)(i) The educational personnel must transmit the documentation required by paragraph (b)(1) of this section to the designated State unit as soon as possible upon the completion of each of the required actions, but no later than—
(A) 30 calendar days after the completion of the required activity or service; or
(B) 60 calendar days, if additional time is necessary due to extenuating circumstances, after the completion of each of the required actions in paragraph (a) of this section. Extenuating circumstances should be interpreted narrowly to include the unexpected lengthy absence due to illness or family emergency of the educational personnel necessary to produce or transmit the documentation, or a natural disaster.
(ii) Documentation required by paragraph (b)(2) of this section, when a youth has refused to participate in an action required by this part, must be provided to the DSU within 5 calendar days of the youth's refusal to participate.
(2) When the educational personnel transmits the last documentation to the designated State unit regarding the services provided to the youth under paragraph (a) of this section, the educational personnel must provide a cover sheet that itemizes the documentation that has been provided to the designated State unit regarding that youth.
(d) The educational agency must retain a copy of all documentation provided to the designated State unit under this section in a manner consistent with the requirements of 2 CFR 200.333.
Neither a local educational agency, as defined in § 397.5(b)(1), nor a State educational agency, as defined in § 397.5(b)(2), may enter into a contract or other arrangement with an entity, as defined in § 397.5(d), for the purpose of operating a program for a youth under which work is compensated at a subminimum wage.
(a) Counseling and information services. (1) A designated State unit must provide career counseling and information and referral services, as described in § 397.20(a)(3), to individuals with disabilities, regardless of age, or the individual's representative as appropriate, who are known by the designated State unit to be employed by an entity, as defined in § 397.5(d), at a subminimum wage level.
(2) A designated State unit may know of an individual with a disability described in this paragraph through the vocational rehabilitation process, self-referral, or by referral from the client assistance program, another agency, or an entity, as defined in § 397.5(d).
(3) The career counseling and information and referral services must be provided in a manner that—
(i) Is understandable to the individual with a disability; and
(ii) Facilitates independent decision-making and informed choice as the individual makes decisions regarding opportunities for competitive integrated employment and career advancement, particularly with respect to supported employment, including customized employment.
(4) The career counseling and information and referral services provided under this section may include benefits counseling, particularly with regard to the interplay between earned income and income-based financial, medical, and other benefits.
(b) Other services. (1) Upon a referral by an entity, as defined in § 397.5(d), that has fewer than 15 employees, of an individual with a disability who is employed at a subminimum wage by that entity, a designated State unit must also inform the individual within 30 calendar days of the referral by the entity, of self-advocacy, self-determination, and peer mentoring training opportunities available in the community.
(2) The services described in paragraph (b)(1) of this section must not be provided by an entity as defined in § 397.5(d).
(c) Required intervals. (1) For individuals hired at subminimum wage on or after July 22, 2016, the services required by this section must be carried out once every six months for the first year of the individual's subminimum wage employment and annually thereafter for the duration of such employment.
(2) For individuals already employed at subminimum wage prior to July 22, 2016, the services required by this section must be carried out once by July 22, 2017, and annually thereafter for the duration of such employment.
(3)(i) With regard to the intervals required by paragraphs (c)(1) and (2) of this section for purposes of the designated State unit's responsibilities to provide certain services to individuals employed at subminimum wage, the applicable intervals will be calculated based upon the date the individual becomes known to the designated State unit.
(ii) An individual with a disability may become “known” to the designated State unit through self-identification by the individual with a disability, referral by a third-party (including an entity as defined in § 397.5(d)), through the individual's involvement with the vocational rehabilitation process, or any other method.
(d) Documentation. (1)(i) The designated State unit must provide documentation to the individual as soon as possible, but no later than—
(A) 45 calendar days after completion of the activities required under this section; or
(B) 90 calendar days, if additional time is necessary due to extenuating circumstances, after the completion of the required actions in this section. Extenuating circumstances should be interpreted narrowly to include circumstances such as the unexpected lengthy absence of the designated State unit personnel, due to illness or other family emergency, who is responsible for producing or transmitting the documentation to the individual with a disability, or a natural disaster.
(ii) Documentation required by paragraph (d)(3) of this section, when an individual has refused to participate in an activity required by this section, must be provided to the individual within 10 calendar days of the individual's refusal to participate.
(2) Such documentation must, at a minimum, contain the—
(i) Name of the individual;
(ii) Description of the service or activity completed;
(iii) Name of the provider of the required service or activity;
(iv) Date required service or activity completed;
(v) Signature of individual documenting completion of the required service or activity;
(vi) Date of signature described in paragraph (d)(2)(v) of this section;
(vii) Signature of designated State unit personnel (if different from that in paragraph (d)(2)(v) of this section) transmitting documentation to the individual with a disability; and
(viii) Date and method (e.g., hand-delivered, faxed, mailed, emailed, etc.) by which document was transmitted to the individual.
(3) In the event an individual with a disability or, as applicable, the individual's representative, refuses, through informed choice, to participate in the activities required by this section, such documentation must, at a minimum, contain the—
(i) Name of the individual;
(ii) Description of the refusal and the reason for such refusal;
(iii) Signature of the individual or, as applicable, the individual's representative;
(iv) Signature of the designated State unit personnel documenting the individual's refusal;
(v) Date of signatures; and
(vi) Date and method (e.g., hand-delivered, faxed, mailed, emailed, etc.) by which documentation was transmitted to the individual.
(4) The designated State unit must retain a copy of all documentation required by this part in a manner consistent with the designated State unit's case management system and the requirements of 2 CFR 200.333.
(e) Provision of services. Nothing in this section will be construed as requiring a designated State unit to provide the services required by this section directly. A designated State unit may contract with other entities, i.e., other public and private service providers, as appropriate, to fulfill the requirements of this section. The contractor providing the services on behalf of the designated State unit may not be an entity holding a special wage certificate under section 14(c) of the Fair Labor Standards Act (29 U.S.C. 214(c)) as defined in 397.5(d).
(a) The designated State unit, or a contractor working directly for the designated State unit, is authorized to engage in the review of individual documentation required under this part that is maintained by an entity, as defined in 397.5(d), under this part. The contractor referred in this section may not be an entity holding a special wage certificate under section 14(c) of the Fair Labor Standards Act (29 U.S.C. 214(c)).
(b) If deficiencies are noted during a documentation review conducted under paragraph (a) of this section, the designated State unit should report the deficiency to the U.S. Department of Labor's Wage and Hour Division.
(a) After receiving written notice from an authorized official of the Department that the Secretary will not award a grant or cooperative agreement to an eligible applicant, an Indian tribal organization has 30 calendar days to make a written request to the Secretary for a hearing to review the Secretary's decision.
(b) Within 10 business days of the Department's receipt of a hearing request, the Secretary designates a Department employee who is not assigned to the Office of Career, Technical, and Adult Education to serve as a hearing officer. The hearing officer conducts a hearing and issues a written decision within 75 calendar days of the Department's receipt of the hearing request. The hearing officer establishes rules for the conduct of the hearing. The hearing officer conducts the hearing solely on the basis of written submissions unless the officer determines, in accordance with standards in 34 CFR 81.6(b), that oral argument or testimony is necessary.
(c) The Secretary does not make any award under this part to an Indian tribal organization until the hearing officer issues a written decision on any appeal brought under this section.
The regulations in this part establish the—
(a) Procedures the Secretary uses to determine the suitability of standardized tests for use in the National Reporting System for Adult Education (NRS) to measure educational gain of participants in an adult education program required to report under the NRS; and
(b) Procedures States and local eligible providers must follow when measuring educational gain for use in the NRS.
The following regulations apply to this part:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR part 76 (State-Administered Programs).
(2) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(3) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(4) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) 34 CFR part 84 (Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)).
(7) 34 CFR part 86 (Drug and Alcohol Abuse Prevention).
(8) 34 CFR part 97 (Protection of Human Subjects).
(9) 34 CFR part 98 (Student Rights in Research, Experimental Programs, and Testing).
(10) 34 CFR part 99 (Family Educational Rights and Privacy).
(b) The regulations in this part 462.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) Definitions in the Adult Education and Family Literacy Act (Act). The following terms used in these regulations are defined in section 203 of the Adult Education and Family Literacy Act, 20 U.S.C. 3292 (Act):
(b) Other definitions. The following definitions also apply to this part:
Adult basic education (ABE) means instruction designed for an adult whose educational functioning level is equivalent to a particular ABE literacy level listed in the NRS educational functioning level table in the Guidelines.
Adult education population means individuals—
(1) Who have attained 16 years of age;
(2) Who are not enrolled or required to be enrolled in secondary school under State law; and
(3) Who—
(i) Are basic skills deficient;
(ii) Do not have a secondary school diploma or its recognized equivalent, and have not achieved an equivalent level of education; or
(iii) Are English language learners.
Adult secondary education (ASE) means instruction designed for an adult whose educational functioning level is equivalent to a particular ASE literacy level listed in the NRS educational functioning level table in the Guidelines.
Content domains, content specifications, or NRS skill areas mean, for the purpose of the NRS, reading, writing, and speaking the English language, mathematics, problem solving, English language acquisition, and other literacy skills as defined by the Secretary.
Educational functioning levels mean the ABE, ASE, and ESL literacy levels, as provided in the Guidelines, that describe a set of skills and competencies that students demonstrate in the NRS skill areas.
English as a Second Language (ESL) means instruction designed for an adult whose educational functioning level is equivalent to a particular ESL English language proficiency level listed in the NRS educational functioning level table in the Guidelines.
Guidelines means the Implementation Guidelines: Measures and Methods for the National Reporting System for Adult Education (OMB Control Number: 1830-0027) (also known as NRS Implementation Guidelines) posted on the Internet at: www.nrsweb.org.
Local eligible provider means an “eligible provider” as defined in the Act that operates an adult education program that is required to report under the NRS.
State means “State” and “Outlying area” as defined in the Act.
Test means a standardized test, assessment, or instrument that has a formal protocol on how it is to be administered. These protocols include, for example, the use of parallel, equated forms, testing conditions, time allowed for the test, standardized scoring, and the amount of instructional time a student needs before post-testing. Violation of these protocols often invalidates the test scores. Tests are not limited to traditional paper and pencil (or computer-administered) instruments for which forms are constructed prior to administration to examinees. Tests may also include adaptive tests that use computerized algorithms for selecting and administering items in real time; however, for such instruments, the size of the item pool and the method of item selection must ensure negligible overlap in items across pre- and post-testing.
Test administrator means an individual who is trained to administer tests the Secretary determines to be suitable under this part.
Test publisher means an entity, individual, organization, or agency that owns a registered copyright of a test or is licensed by the copyright holder to sell or distribute a test.
A State or an eligible provider may continue to measure educational gain for the NRS using tests that the Secretary has identified in the most recent notice published in the
(a) The Secretary only reviews tests under this part that are submitted by a test publisher.
(b) A test publisher that wishes to have the suitability of its test determined by the Secretary under this part must submit an application to the Secretary, in the manner the Secretary may prescribe, by October 1, 2016, April 1, 2017, October 1, 2017, April 1, 2018, October 1, 2018, and by October 1 of each year thereafter.
(a) Application content and format. In order for the Secretary to determine whether a standardized test is suitable for measuring the gains of participants in an adult education program required to report under the NRS, a test publisher must—
(1) Include with its application information listed in paragraphs (b) through (i) of this section, and, if applicable, the information listed in paragraph (j) of this section;
(2) Provide evidence that it holds a registered copyright of a test or is licensed by the copyright holder to sell or distribute a test.
(3)(i) Arrange the information in its application in the order it is presented in paragraphs (b) through (j) of this section; or
(ii) Include a table of contents in its application that identifies the location of the information required in paragraphs (b) through (j) of this section.
(4) Submit to the Secretary four copies of its application.
(b) General information. (1) A statement, in the technical manual for the test, of the intended purpose of the test and how the test will allow examinees to demonstrate the skills that are associated with the NRS educational functioning levels in the Guidelines.
(2) The name, address, e-mail address, and telephone and fax numbers of a contact person to whom the Secretary may address inquiries.
(3) A summary of the precise editions, forms, levels, and, if applicable, sub-tests and abbreviated tests that the test publisher is requesting that the Secretary review and determine to be suitable for use in the NRS.
(c) Development. Documentation of how the test was developed, including a description of—
(1) The nature of samples of examinees administered the test during pilot or field testing, such as—
(i) The number of examinees administered each item;
(ii) How similar the sample or samples of examinees used to develop and evaluate the test were to the adult education population of interest to the NRS; and
(iii) The steps, if any, taken to ensure that the examinees were motivated while responding to the test; and
(2) The steps taken to ensure the quality of test items or tasks, such as—
(i) The extent to which items or tasks on the test were reviewed for fairness and sensitivity; and
(ii) The extent to which items or tasks on the test were screened for the adequacy of their psychometric properties.
(3) The procedures used to assign items to—
(i) Forms, for tests that are constructed prior to being administered to examinees; or
(ii) Examinees, for adaptive tests in which items are selected in real time.
(d) Maintenance. Documentation of how the test is maintained, including a description of—
(1) How frequently, if ever, new forms of the test are developed;
(2) The steps taken to ensure the comparability of scores across forms of the test;
(3) The steps taken to maintain the security of the test;
(4) A history of the test's use, including the number of times the test has been administered; and
(5) For a computerized adaptive test, the procedures used to—
(i) Select subsets of items for administration;
(ii) Determine the starting point and termination conditions;
(iii) Score the test; and
(iv) Control for item exposure.
(e) Match of content to the NRS educational functioning levels (content validity). Documentation of the extent to which the items or tasks on the test cover the skills in the NRS educational functioning levels in the Guidelines, including—
(1) Whether the items or tasks on the test require the types and levels of skills used to describe the NRS educational functioning levels;
(2) Whether the items or tasks measure skills that are not associated with the NRS educational functioning levels;
(3) Whether aspects of a particular NRS educational functioning level are not covered by any of the items or tasks;
(4) The procedures used to establish the content validity of the test;
(5) The number of subject-matter experts who provided judgments linking the items or tasks to the NRS educational functioning levels and their qualifications for doing so, particularly their familiarity with adult education and the NRS educational functioning levels; and
(6) The extent to which the judgments of the subject matter experts agree.
(f) Match of scores to NRS educational functioning levels. Documentation of the adequacy of the procedure used to translate the performance of an examinee on a particular test to an estimate of the examinee's standing with respect to the NRS educational functioning levels in the Guidelines, including—
(1) The standard-setting procedures used to establish cut scores for transforming raw or scale scores on the test into estimates of an examinee's NRS educational functioning level;
(2) If judgment-based procedures were used—
(i) The number of subject-matter experts who provided judgments, and their qualifications; and
(ii) Evidence of the extent to which the judgments of subject-matter experts agree;
(3) The standard error of each cut score, and how it was established; and
(4) The extent to which the cut scores might be expected to differ if they had been established by a different (though similar) panel of experts.
(g) Reliability. Documentation of the degree of consistency in performance across different forms of the test in the absence of any external interventions, including—
(1) The correlation between raw (or scale) scores across alternate forms of the test or, in the case of computerized adaptive tests, across alternate administrations of the test;
(2) The consistency with which examinees are classified into the same NRS educational functioning levels across forms of the test. Information regarding classification consistency should be reported for each NRS educational functioning level that the test is being considered for use in measuring;
(3) The adequacy of the research design leading to the estimates of the reliability of the test, including—
(i) The size of the sample(s);
(ii) The similarity between the sample(s) used in the data collection and the adult education population; and
(iii) The steps taken to ensure the motivation of the examinees; and
(4) Any other information explaining the methodology and procedures used to measure the reliability of the test.
(h) Construct validity. Documentation of the appropriateness of a given test for measuring educational gain for the NRS, i.e., documentation that the test measures what it is intended to measure, including—
(1) The extent to which the raw or scale scores and the educational functioning classifications associated with the test correlate (or agree) with scores or classifications associated with other tests designed or intended to assess educational gain in the same adult education population as the NRS;
(2) The extent to which the raw or scale scores are related to other relevant variables, such as teacher evaluation, hours of instruction, or other measures that may be related to test performance;
(3) The adequacy of the research designs associated with these sources of evidence (see paragraph (g)(3) of this section); and
(4) Other evidence demonstrating that the test measures gains in educational functioning resulting from adult education and not from other construct-irrelevant variables, such as practice effects.
(i) Other information. (1) A description of the manner in which test administration time was determined, and an analysis of the speededness of the test.
(2) Additional guidance on the interpretation of scores resulting from any modifications of the tests for an individual with a disability.
(3) The manual provided to test administrators containing procedures and instructions for test security and administration.
(4) A description of the training or certification required of test administrators and scorers by the test publisher.
(5) A description of retesting (e.g., re-administration of a test because of problems in the original administration such as the test taker becomes ill during the test and cannot finish, there are external interruptions during testing, or there are administration errors) procedures and the analysis upon which the criteria for retesting are based.
(6) Such other evidence as the Secretary may determine is necessary to establish the test's compliance with the criteria and requirements the Secretary uses to determine the suitability of tests as provided in § 462.13.
(j) Previous tests. (1) For a test used to measure educational gain in the NRS before the effective date of these regulations that is submitted to the Secretary for review under this part, the test publisher must provide documentation of periodic review of the content and specifications of the test to ensure that the test continues to reflect NRS educational functioning levels.
(2) For a test first published five years or more before the date it is submitted to the Secretary for review under this part, the test publisher must provide documentation of periodic review of the content and specifications of the test to ensure that the test continues to reflect NRS educational functioning levels.
(3) For a test that has not changed in the seven years since the Secretary determined, under § 462.13, that it was suitable for use in the NRS that is again being submitted to the Secretary for review under this part, the test publisher must provide updated data supporting the validity of the test for use in classifying adult learners with respect to the NRS educational functioning levels and the measurement of educational gain as defined in § 462.43 of this part.
(4) If a test has been substantially revised—for example by changing its mode of administration, administration procedures, structure, number of items, content specifications, item types, forms, sub-tests, or number of hours between pre- and post-testing from the most recent edition reviewed by the Secretary under this part—the test publisher must provide an analysis of the revisions, including the reasons for the revisions, the implications of the revisions for the comparability of scores on the current test to scores on the previous test, and results from validity, reliability, and equating or standard-setting studies undertaken subsequent to the revisions.
(a) Review. (1) When the Secretary receives a complete application from a test publisher, the Secretary selects experts in the field of educational testing and assessment who possess appropriate advanced degrees and experience in test development or psychometric research, or both, to advise the Secretary on the extent to which a test meets the criteria and requirements in § 462.13.
(2) The Secretary reviews and determines the suitability of a test only if an application—
(i) Is submitted by a test publisher;
(ii) Meets the deadline established by the Secretary;
(iii) Includes a test that—
(A) Has two or more secure, parallel, equated forms of the same test—either traditional paper and pencil or computer-administered instruments—for which forms are constructed prior to administration to examinees; or
(B) Is an adaptive test that uses computerized algorithms for selecting and administering items in real time; however, for such an instrument, the size of the item pool and the method of item selection must ensure negligible overlap in items across pre- and post-testing;
(iv) Includes a test that samples one or more of the major content domains of the NRS educational functioning levels of ABE, ASE or ESL with sufficient numbers of questions to represent adequately the domain or domains; and
(v) Includes the information prescribed by the Secretary, including the information in § 462.11 of this part.
(b) Secretary's determination. (1) The Secretary determines whether a test meets the criteria and requirements in § 462.13 after taking into account the advice of the experts described in paragraph (a)(1) of this section.
(2) For tests that contain multiple sub-tests measuring content domains other than those of the NRS educational functioning levels, the Secretary determines the suitability of only those sub-tests covering the domains of the NRS educational functioning levels.
(c) Suitable tests. If the Secretary determines that a test satisfies the criteria and requirements in § 462.13 and, therefore, is suitable for use in the NRS, the Secretary—
(1) Notifies the test publisher of the Secretary's decision; and
(2) Annually publishes in the
(d) Unsuitable tests. (1) If the Secretary determines that a test does not satisfy the criteria and requirements in § 462.13 and, therefore, is not suitable for use in the NRS, the Secretary notifies the test publisher of the Secretary's decision and of the reasons why the test does not meet those criteria and requirements.
(2) The test publisher may resubmit an application to have the suitability of its test determined by the Secretary under this part on October 1 in the year immediately following the year in which the Secretary notifies the publisher.
(i) An analysis of why the information and documentation submitted meet the criteria and requirements in § 462.13, notwithstanding the Secretary's earlier decision to the contrary; and
(ii) Any additional documentation and information that address the Secretary's reasons for determining that the test was unsuitable.
(3) The Secretary reviews the additional information submitted by the test publisher and makes a final determination regarding the suitability of the test for use in the NRS.
(i) If the Secretary's decision is unchanged and the test remains unsuitable for use in the NRS, the Secretary notifies the test publisher, and this action concludes the review process.
(ii) If the Secretary's decision changes and the test is determined to be suitable for use in the NRS, the Secretary follows the procedures in paragraph (c) of this section.
(e) Revocation. (1) The Secretary's determination regarding the suitability of a test may be revoked if the Secretary determines that—
(i) The information the publisher submitted as a basis for the Secretary's review of the test was inaccurate; or
(ii) A test has been substantially revised—for example, by changing its mode of administration, administration procedures, structure, number of items, content specifications, item types, forms or sub-tests, or number of hours between pre- and post-testing.
(2) The Secretary notifies the test publisher of the—
(i) Secretary's decision to revoke the determination that the test is suitable for use in the NRS; and
(ii) Reasons for the Secretary's revocation.
(3) Within 30 days after the Secretary notifies a test publisher of the decision to revoke a determination that a test is suitable for use in the NRS, the test publisher may request that the Secretary reconsider the decision. This request must be accompanied by documentation and information that address the Secretary's reasons for revoking the determination that the test is suitable for use in the NRS.
(4) The Secretary reviews the information submitted by the test publisher and makes a final determination regarding the suitability of the test for use in the NRS.
(5) If the Secretary revokes the determination regarding the suitability of a test, the Secretary publishes in the
In order for the Secretary to consider a test suitable for use in the NRS, the test or the test publisher, if applicable, must meet the following criteria and requirements:
(a) The test must measure the NRS educational functioning levels of members of the adult education population.
(b) The test must sample one or more of the major content domains of the NRS educational functioning levels of ABE, ASE or ESL with sufficient numbers of questions to adequately represent the domain or domains.
(c)(1) The test must meet all applicable and feasible standards for test construction and validity provided in the 1999 edition of the Standards for Educational and Psychological Testing, prepared by the Joint Committee on Standards for Educational and Psychological Testing of the American Educational Research Association, the American Psychological Association, and the National Council on Measurement in Education incorporated by reference in this section. The Director of the Federal Register approves this incorporation by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You may obtain a copy from the American Psychological Association, Inc., 750 First Street, NE., Washington, DC 20002. You may inspect a copy at the Department of Education, room 11159, 550 12th Street, SW., Washington, DC 20202 or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741-6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
(2) If requested by the Secretary, a test publisher must explain why it believes that certain standards in the 1999 edition of the Standards for Educational and Psychological Testing were not applicable or were not feasible to meet.
(d) The test must contain the publisher's guidelines for retesting, including time between test-taking, which are accompanied by appropriate justification.
(e) The test must—
(1) Have two or more secure, parallel, equated forms of the same test—either traditional paper and pencil or computer administered instruments—for which forms are constructed prior to administration to examinees; or
(2) Be an adaptive test that uses computerized algorithms for selecting and administering items in real time; however, for such an instrument, the size of the item pool and the method of item selection must ensure negligible overlap in items across pre- and post-testing. Scores associated with these alternate administrations must be equivalent in meaning.
(f) For a test that has been modified for individuals with disabilities, the test publisher must—
(1) Provide documentation that it followed the guidelines provided in the Testing Individuals With Disabilities section of the 1999 edition of the Standards for Educational and Psychological Testing;
(2) Provide documentation of the appropriateness and feasibility of the modifications relevant to test performance; and
(3)(i) Recommend educational functioning levels based on the information obtained from adult education students who participated in the pilot or field test and who have the disability for which the test has been modified; and
(ii) Provide documentation of the adequacy of the procedures used to translate the performance of adult education students with the disability for whom the test has been modified to an estimate of the examinees' standing with respect to the NRS educational functioning levels.
(a) The Secretary's determination that a test is suitable for use in the NRS is in effect for a period of seven years from the date of the Secretary's written notification to the test publisher, unless otherwise indicated by the Secretary. After that time, if the test publisher wants the test to be used in the NRS, the test must be reviewed again by the Secretary so that the Secretary can determine whether the test continues to be suitable for use in the NRS.
(b) If a test that the Secretary has determined is suitable for use in the NRS is substantially revised—for example, by changing its mode of administration, administration procedures, structure, number of items, content specifications, item types, forms, sub-tests, or number of hours between pre- and post-testing—and the test publisher wants the test to continue to be used in the NRS, the test publisher must submit, as provided in § 462.11(j)(4), the substantially revised test or version of the test to the Secretary for review so that the Secretary can determine whether the test continues to be suitable for use in the NRS.
(a) A State must have a written assessment policy that its local eligible providers must follow in measuring educational gain and reporting data in the NRS.
(b) A State must submit its assessment policy to the Secretary for review and approval at the time it submits its annual statistical report for the NRS.
(c) The State's assessment policy must—
(1) Include a statement requiring that local eligible providers measure the educational gain of all students who receive 12 hours or more of instruction in the State's adult education program with a test that the Secretary has determined is suitable for use in the NRS;
(2) Identify the pre- and post-tests that the State requires eligible providers to use to measure the educational functioning level gain of ABE, ASE, and ESL students;
(3)(i) Indicate when, in calendar days or instructional hours, eligible providers must administer pre- and post-tests to students;
(ii) Ensure that the time for administering the post-test is long enough after the pre-test to allow the test to measure educational functioning level gains according to the test publisher's guidelines; and
(iii) Specify a standard for the percentage of students to be pre- and post-tested.
(4) Specify the score ranges tied to educational functioning levels for placement and for reporting gains for accountability;
(5) Identify the skill areas the State intends to require local eligible providers to assess in order to measure educational gain;
(6) Include the guidance the State provides to local eligible providers on testing and placement of an individual with a disability or an individual who is unable to be tested because of a disability;
(7) Describe the training requirements that staff must meet in order to be qualified to administer and score each test selected by the State to measure the educational gains of students;
(8) Identify the alternate form or forms of each test that local eligible providers must use for post-testing;
(9) Indicate whether local eligible providers must use a locator test for guidance on identifying the appropriate pre-test;
(10) Describe the State's policy for the initial placement of a student at each NRS educational functioning level using test scores;
(11) Describe the State's policy for using the post-test for measuring educational gain and for advancing students across educational functioning levels;
(12) Describe the pre-service and in-service staff training that the State or local eligible providers will provide, including training—
(i) For staff who either administer or score each of the tests used to measure educational gain;
(ii) For teachers and other local staff involved in gathering, analyzing, compiling, and reporting data for the NRS; and
(iii) That includes the following topics:
(A) NRS policy, accountability policies, and the data collection process.
(B) Definitions of measures.
(C) Conducting assessments; and
(13) Identify the State or local agency responsible for providing pre- and in-service training.
(a) General. A local eligible provider must measure the educational gains of students using only tests that the Secretary has determined are suitable for use in the NRS and that the State has identified in its assessment policy.
(b) Pre-test. A local eligible provider must—
(1) Administer a pre-test to measure a student's educational functioning level at intake, or as soon as possible thereafter;
(2) Administer the pre-test to students at a uniform time, according to the State's assessment policy; and
(3) Administer pre-tests to students in the skill areas identified in the State's assessment policy.
(c) Post-test. A local eligible provider must—
(1) Administer a post-test to measure a student's educational functioning level after a set time period or number of instructional hours;
(2) Administer the post-test to students at a uniform time, according to the State's assessment policy;
(3)(i) Administer post-tests with a secure, parallel, equated form of the same test—either traditional paper and pencil or computer-administered instruments—for which forms are constructed prior to administration to examinees to pre-test and determine the initial placement of students; or
(ii) Administer post-tests with an adaptive test that uses computerized algorithms for selecting and administering items in real time; however, for such an instrument, the size of the item pool and the method of item selection must ensure negligible overlap in items across pre- and post-testing; and
(4) Administer post-tests to students in the same skill areas as the pre-test.
(d) Other requirements. (1) A local eligible provider must administer a test using only staff who have been trained to administer the test.
(2) A local eligible provider may use the results of a test in the NRS only if the test was administered in a manner that is consistent with the State's assessment policy and the test publisher's guidelines.
(a) A local eligible provider must use the results of the pre-test described in § 462.41(b) to initially place students at the appropriate NRS educational functioning level.
(b) A local eligible provider must use the results of the post-test described in § 462.41(c)—
(1) To determine whether students have completed one or more educational functioning levels or are progressing within the same level; and
(2) To place students at the appropriate NRS educational functioning level.
(c)(1) States and local eligible providers are not required to use all of the skill areas described in the NRS educational functioning levels to place students.
(2) States and local eligible providers must test and report on the skill areas most relevant to the students' needs and to the programs' curriculum.
(d)(1) If a State's assessment policy requires a local eligible provider to test a student in multiple skill areas and the student will receive instruction in all of the skill areas, the local eligible provider must place the student in an educational functioning level that is equivalent to the student's lowest test score for any of the skill areas tested under § 462.41(b) and (c).
(2) If a State's assessment policy requires a local eligible provider to test a student in multiple skill areas, but the student will receive instruction in fewer than all of the skill areas, the local eligible provider must place the student in an educational functioning level that is equivalent to the student's lowest test score for any of the skill areas—
(i) Tested under § 462.41(b) and (c); and
(ii) In which the student will receive instruction.
The purpose of the Adult Education and Family Literacy Act (AEFLA) is to create a partnership among the Federal Government, States, and localities to provide, on a voluntary basis, adult education and literacy activities, in order to—
(a) Assist adults to become literate and obtain the knowledge and skills necessary for employment and economic self-sufficiency;
(b) Assist adults who are parents or family members to obtain the education and skills that—
(1) Are necessary to becoming full partners in the educational development of their children; and
(2) Lead to sustainable improvements in the economic opportunities for their family;
(c) Assist adults in attaining a secondary school diploma or its recognized equivalent and in the transition to postsecondary education and training, through career pathways; and
(d) Assist immigrants and other individuals who are English language learners in—
(1) Improving their—
(i) Reading, writing, speaking, and comprehension skills in English; and
(ii) Mathematics skills; and
(2) Acquiring an understanding of the American system of Government, individual freedom, and the responsibilities of citizenship.
The following regulations apply to the Adult Education and Family Literacy Act programs:
(a) The following Education Department General Administrative Regulations (EDGAR):
(1) 34 CFR part 75 (Direct Grant Programs), except that 34 CFR 75.720(b), regarding the frequency of certain reports, does not apply.
(2) 34 CFR part 76 (State-Administered Programs), except that 34 CFR 76.101 (The general State application) does not apply.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 81 (General Education Provisions Act—Enforcement).
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 34 CFR part 86 (Drug and Alcohol Prevention).
(8) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(b) The regulations in 34 CFR part 462.
(c) The regulations in 34 CFR part 463.
Definitions in the Workforce Innovation and Opportunity Act. The following terms are defined in Sections 3, 134, 203, and 225 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102, 3174, 3272, and 3305):
Definitions in EDGAR. The following terms are defined in 34 CFR 77.1:
Other Definitions. The following definitions also apply:
Act means the Workforce Innovation and Opportunity Act, Public Law 113-128.
Concurrent enrollment or co-enrollment refers to enrollment by an eligible individual in two or more of the six core programs administered under the Act.
Digital literacy means the skills associated with using technology to enable users to find, evaluate, organize, create, and communicate information.
Peer tutoring means an instructional model that utilizes one institutionalized individual to assist in providing or enhancing learning opportunities for other institutionalized individuals. A peer tutoring program must be structured and overseen by educators who assist with training and supervising tutors, setting educational goals, establishing an individualized plan of instruction, and monitoring progress.
Re-entry and post-release services means services provided to a formerly incarcerated individual upon or shortly after release from a correctional institution that are designed to promote successful adjustment to the community and prevent recidivism. Examples include education, employment services, substance abuse treatment, housing support, mental and physical health care, and family reunification services.
Title means title II of the Workforce Innovation and Opportunity Act, the Adult Education and Family Literacy Act, Public Law 113-128.
(a) From grant funds made available under section 222(a)(1) of the Act, each eligible agency must award competitive multiyear grants or contracts to eligible providers within the State or outlying area to enable the eligible providers to develop, implement, and improve adult education and literacy activities within the State or outlying area.
(b) The eligible agency must require that each eligible provider receiving a grant or contract use the funding to establish or operate programs that provide adult education and literacy activities, including programs that provide such activities concurrently.
(c) In conducting the competitive grant process, the eligible agency must ensure that—
(1) All eligible providers have direct and equitable access to apply and compete for grants or contracts;
(2) The same grant or contract announcement and application processes are used for all eligible providers in the State or outlying area; and
(3) In awarding grants or contracts to eligible providers for adult education and literacy activities, funds shall not be used for the purpose of supporting or providing programs, services, or activities for individuals who are not eligible individuals as defined in the Act, except that such agency may use such funds for such purpose if such programs, services, or activities are related to family literacy activities. Prior to providing family literacy activities for individuals who are not eligible individuals, an eligible provider shall attempt to coordinate with programs and services that do not receive funding under this title.
(d) In awarding grants or contracts for adult education and literacy activities to eligible providers, the eligible agency must consider the following:
(1) The degree to which the eligible provider would be responsive to—
(i) Regional needs as identified in the local workforce development plan; and
(ii) Serving individuals in the community who were identified in such plan as most in need of adult education and literacy activities, including individuals who—
(A) Have low levels of literacy skills; or
(B) Are English language learners;
(2) The ability of the eligible provider to serve eligible individuals with disabilities, including eligible individuals with learning disabilities;
(3) The past effectiveness of the eligible provider in improving the literacy of eligible individuals, especially those individuals who have low levels of literacy, and the degree to which those improvements contribute to the eligible agency meeting its State-adjusted levels of performance for the primary indicators of performance described in § 677.155;
(4) The extent to which the eligible provider demonstrates alignment between proposed activities and services and the strategy and goals of the local plan under section 108 of the Act, as well as the activities and services of the one-stop partners;
(5) Whether the eligible provider's program—
(i) Is of sufficient intensity and quality, and based on the most rigorous research available so that participants achieve substantial learning gains; and
(ii) Uses instructional practices that include the essential components of reading instruction;
(6) Whether the eligible provider's activities, including whether reading, writing, speaking, mathematics, and English language acquisition instruction delivered by the eligible provider, are based on the best practices derived from the most rigorous research available, including scientifically valid research and effective educational practice;
(7) Whether the eligible provider's activities effectively use technology, services and delivery systems, including distance education, in a manner sufficient to increase the amount and quality of learning, and how such technology, services, and systems lead to improved performance;
(8) Whether the eligible provider's activities provide learning in context, including through integrated education and training, so that an individual acquires the skills needed to transition to and complete postsecondary education and training programs, obtain and advance in employment leading to economic self-sufficiency, and to exercise the rights and responsibilities of citizenship;
(9) Whether the eligible provider's activities are delivered by instructors, counselors, and administrators who meet any minimum qualifications established by the State, where applicable, and who have access to high-quality professional development, including through electronic means;
(10) Whether the eligible provider coordinates with other available education, training, and social service resources in the community, such as by establishing strong links with elementary schools and secondary schools, postsecondary educational institutions, institutions of higher education, Local WDBs, one-stop centers, job training programs, and social service agencies, business, industry, labor organizations, community-based organizations, nonprofit organizations, and intermediaries, in the development of career pathways;
(11) Whether the eligible provider's activities offer the flexible schedules and coordination with Federal, State, and local support services (such as child care, transportation, mental health services, and career planning) that are necessary to enable individuals, including individuals with disabilities or other special needs, to attend and complete programs;
(12) Whether the eligible provider maintains a high-quality information management system that has the capacity to report measurable participant outcomes (consistent with section § 666.100) and to monitor program performance; and
(13) Whether the local area in which the eligible provider is located has a demonstrated need for additional English language acquisition programs and civics education programs.
(a) An eligible agency must establish, within its grant or contract competition, a process that provides for the submission of all applications for funds under AEFLA to the appropriate Local Boards.
(b) The process must include—
(1) Submission of the applications to the appropriate Local Board for its review for consistency with the local plan within the appropriate timeframe; and
(2) An opportunity for the local board to make recommendations to the eligible agency to promote alignment with the local plan.
(c) The eligible agency must consider the results of the review by the Local Board in determining the extent to which the application addresses the required considerations in § 463.20.
(a) Each eligible provider seeking a grant or contract must submit an application to the eligible agency containing the information and assurances listed below, as well as any additional information required by the eligible agency, including:
(1) A description of how funds awarded under this title will be spent consistent with the requirements of title II of AEFLA;
(2) A description of any cooperative arrangements the eligible provider has with other agencies, institutions, or organizations for the delivery of adult education and literacy activities;
(3) A description of how the eligible provider will provide services in alignment with the local workforce development plan, including how such provider will promote concurrent enrollment in programs and activities under title I, as appropriate;
(4) A description of how the eligible provider will meet the State-adjusted levels of performance for the primary indicators of performance identified in the State's Unified or Combined State Plan, including how such provider will collect data to report on such performance indicators;
(5) A description of how the eligible provider will fulfill, as appropriate, required one-stop partner responsibilities to—
(i) Provide access through the one-stop delivery system to adult education and literacy activities;
(ii) Use a portion of the funds made available under the Act to maintain the one-stop delivery system, including payment of the infrastructure costs for the one-stop centers, in accordance with the methods agreed upon by the Local Board and described in the memorandum of understanding or the determination of the Governor regarding State one-stop infrastructure funding;
(iii) Enter into a local memorandum of understanding with the Local Board, relating to the operations of the one-stop system;
(iv) Participate in the operation of the one-stop system consistent with the terms of the memorandum of understanding, and the requirements of the Act; and
(v) Provide representation to the State board;
(6) A description of how the eligible provider will provide services in a manner that meets the needs of eligible individuals;
(7) Information that addresses the 13 considerations listed in § 463.20; and
(8) Documentation of the activities required by § 463.21(b).
(b) [Reserved]
An organization that has demonstrated effectiveness in providing adult education and literacy activities is eligible to apply for a grant or contract. These organizations may include, but are not limited to:
(a) A local educational agency;
(b) A community-based organization or faith-based organization;
(c) A volunteer literacy organization;
(d) An institution of higher education;
(e) A public or private nonprofit agency;
(f) A library;
(g) A public housing authority;
(h) A nonprofit institution that is not described in any of paragraphs (a) through (g) of this section and has the ability to provide adult education and literacy activities to eligible individuals;
(i) A consortium or coalition of the agencies, organizations, institutions, libraries, or authorities described in any of paragraphs (a) through (h) of this section; and
(j) A partnership between an employer and an entity described in any of paragraphs (a) through (i) of this section.
(a) For the purposes of this section, an eligible provider must demonstrate past effectiveness by providing performance data on its record of improving the skills of eligible individuals, particularly eligible individuals who have low levels of literacy, in the content domains of reading, writing, mathematics, English language acquisition, and other subject areas relevant to the services contained in the State's application for funds. An eligible provider must also provide information regarding its outcomes for participants related to employment, attainment of secondary school diploma or its recognized equivalent, and transition to postsecondary education and training.
(b) There are two ways in which an eligible provider may meet the requirements in paragraph (a) of this section:
(1) An eligible provider that has been funded under title II of the Act must provide performance data required under section 116 to demonstrate past effectiveness.
(2) An eligible provider that has not been previously funded under title II of the Act must provide performance data to demonstrate its past effectiveness in serving basic skills deficient eligible individuals, including evidence of its success in achieving outcomes listed in paragraph (a) of this section.
Not more than five percent of a local grant to an eligible provider can be expended to administer a grant or contract under title II. In cases where five percent is too restrictive to allow for administrative activities, the eligible agency may increase the amount that can be spent on local administration. In such cases, the eligible provider must negotiate with the eligible agency to determine an adequate level of funds to be used for non-instructional purposes.
An eligible provider receiving a grant or contract under this part may consider costs incurred in connection with the following activities to be administrative costs:
(a) Planning;
(b) Administration, including carrying out performance accountability requirements;
(c) Professional development;
(d) Providing adult education and literacy services in alignment with local workforce plans, including promoting co-enrollment in programs and activities under title I, as appropriate; and
(e) Carrying out the one-stop partner responsibilities described in § 678.420, including contributing to the infrastructure costs of the one-stop delivery system.
The term “adult education and literacy activities” means programs, activities, and services that include:
(a) Adult education,
(b) Literacy,
(c) Workplace adult education and literacy activities,
(d) Family literacy activities,
(e) English language acquisition activities,
(f) Integrated English literacy and civics education,
(g) Workforce preparation activities, or
(h) Integrated education and training.
The term “English language acquisition program” means a program of instruction—
(a) That is designed to help eligible individuals who are English language learners achieve competence in reading, writing, speaking, and comprehension of the English language; and
(b) That leads to—
(1) Attainment of a secondary school diploma or its recognized equivalent; and
(2) Transition to postsecondary education and training; or
(3) Employment.
To meet the requirement in § 463.31(b) a program of instruction must:
(a) Have implemented State adult education content standards that are aligned with State-adopted challenging academic content standards, as adopted under the Elementary and Secondary Education Act of 1965, as amended (ESEA) as described in the State's Unified or Combined State Plan and as evidenced by the use of a State or local curriculum, lesson plans, or instructional materials that are aligned with the State adult education content standards; or
(b) Offer educational and career counseling services that assist an eligible individual to transition to postsecondary education or employment; or
(c) Be part of a career pathway.
(a) Integrated English literacy and civics education services are education services provided to English language learners who are adults, including professionals with degrees or credentials in their native countries, that enable such adults to achieve competency in the English language and acquire the basic and more advanced skills needed to function effectively as parents, workers, and citizens in the United States.
(b) Integrated English literacy and civics education services must include instruction in literacy and English language acquisition and instruction on the rights and responsibilities of citizenship and civic participation and may include workforce training.
Workforce preparation activities include activities, programs, or services designed to help an individual acquire a combination of basic academic skills, critical thinking skills, digital literacy skills, and self-management skills, including competencies in:
(a) Utilizing resources;
(b) Using information;
(c) Working with others;
(d) Understanding systems;
(e) Skills necessary for successful transition into and completion of postsecondary education or training, or employment; and
(f) Other employability skills that increase an individual's preparation for the workforce.
The term “integrated education and training” refers to a service approach that provides adult education and literacy activities concurrently and contextually with workforce preparation activities and workforce training for a specific occupation or occupational cluster for the purpose of educational and career advancement.
An integrated education and training program must include three components:
(a) Adult education and literacy activities as described in § 463.30.
(b) Workforce preparation activities as described in § 463.34.
(c) Workforce training for a specific occupation or occupational cluster which can be any one of the training services defined in section 134(c)(3)(D) of the Act.
In order to meet the requirement that the adult education and literacy activities, workforce preparation activities, and workforce training be integrated, services must be provided concurrently and contextually such that—
(a) Within the overall scope of a particular integrated education and training program, the adult education and literacy activities, workforce preparation activities, and workforce training:
(1) Are each of sufficient intensity and quality, and based on the most rigorous research available, particularly with respect to improving reading, writing, mathematics, and English proficiency of eligible individuals;
(2) Occur simultaneously; and
(3) Use occupationally relevant instructional materials.
(b) The integrated education and training program has a single set of learning objectives that identifies specific adult education content, workforce preparation activities, and workforce training competencies, and the program activities are organized to function cooperatively.
A provider meets the requirement that the integrated education and training program provided is for the purpose of educational and career advancement if:
(a) The adult education component of the program is aligned with the State's content standards for adult education as described in the State's Unified or Combined State Plan; and
(b) The integrated education and training program is part of a career pathway.
(a) Authorized under section 225 of the Act, programs for corrections education and the education of other institutionalized individuals require each eligible agency to carry out corrections education and education for other institutionalized individuals using funds provided under section 222 of the Act.
(b) The funds described in paragraph (a) of this section must be used for the cost of educational programs for criminal offenders in correctional institutions and other institutionalized individuals, including academic programs for—
(1) Adult education and literacy activities;
(2) Special education, as determined by the eligible agency;
(3) Secondary school credit;
(4) Integrated education and training;
(5) Career pathways;
(6) Concurrent enrollment;
(7) Peer tutoring; and
(8) Transition to re-entry initiatives and other post-release-services with the goal of reducing recidivism.
(a) States may award up to 20 percent of the 82.5 percent of the funds made available by the Secretary for local grants and contracts under section 231 of the Act for programs for corrections education and the education of other institutionalized individuals.
(b) The State must make awards to eligible providers in accordance with subpart C.
Each eligible agency using funds provided under Programs for Corrections Education and Education of Other Institutionalized Individuals to carry out a program for criminal offenders within a correctional institution must give priority to programs serving individuals who are likely to leave the correctional institution within five years of participation in the program.
Funds under Programs for Corrections Education and the Education of Other Institutionalized Individuals may be used to support educational programs for transition to re-entry initiatives and other post-release services with the goal of reducing recidivism. Such use of funds may include educational counseling or case work to support incarcerated individuals' transition to re-entry and other post-release services. Examples include assisting incarcerated individuals to develop plans for post-release education program participation, assisting students in identifying and applying for participation in post-release programs, and performing direct outreach to community-based program providers on behalf of re-entering students. Such funds may not be used for costs for participation in post-release programs or services.
(a) The Integrated English Literacy and Civics Education program refers to the use of funds provided under section 243 of the Act for education services for English language learners who are adults, including professionals with degrees and credentials in their native countries.
(b) The Integrated English Literacy and Civics Education program delivers educational services as described in § 463.33.
(c) Such educational services must be delivered in combination with integrated education and training activities as described in § 463.36.
(a) The Secretary awards grants under the Integrated English Literacy and Civics Education program to States that have an approved Unified State Plan in accordance with § 463.90 through § 463.145, or an approved Combined State Plan in accordance with § 463.90 through § 463.145.
(b) The Secretary allocates funds to States following the formula described in section 243(b) of the Act.
(1) Sixty-five percent is allocated on the basis of a State's need for integrated English literacy and civics education, as determined by calculating each State's share of a 10-year average of the data of the Office of Immigration Statistics of the Department of Homeland Security for immigrants admitted for legal permanent residence for the 10 most recent years; and
(2) Thirty-five percent is allocated on the basis of whether the State experienced growth, as measured by the average of the three most recent years for which the data of the Office of Immigration Statistics of the Department of Homeland Security for immigrants admitted for legal permanent residence are available.
(3) No State receives an allotment less than $60,000.
States must award funds for the Integrated English Literacy and Civics Education program to eligible providers in accordance with subpart C.
Eligible providers receiving funds through the Integrated English Literacy and Civics Education program must provide services that—
(a) Include instruction in literacy and English language acquisition and instruction on the rights and responsibilities of citizenship and civic participation; and
(b) Are designed to:
(1) Prepare adults who are English language learners for, and place such adults in, unsubsidized employment in in-demand industries and occupations that lead to economic self-sufficiency; and
(2) Integrate with the local workforce development system and its functions to carry out the activities of the program.
An eligible provider that receives funds through the Integrated English Literacy and Civics Education program may meet the requirement to use funds for integrated English literacy and civics education in combination with integrated education and training activities by:
(a) Co-enrolling participants in integrated education and training as described in subpart D of this part that is provided within the local or regional workforce development area from sources other than section 243 of the Act; or
(b) Using funds provided under section 243 of the Act to support integrated education and training activities as described in subpart D of this part.
Individuals who otherwise meet the definition of “eligible individual” and are English language learners, including professionals with degrees and credentials obtained in their native countries, may receive Integrated English Literacy and Civics Education services.
(a) The Unified and Combined State Plans provide the framework for States to outline a strategic vision of, and goals for, how their workforce development systems will achieve the purposes of the Workforce Innovation and Opportunity Act (WIOA).
(b) The Unified and Combined State Plans serve as 4-year action plans to develop, align, and integrate the State's systems and provide a platform to achieve the State's vision and strategic and operational goals. A Unified or Combined State Plan is intended to:
(1) Align, in strategic coordination, the six core programs required in the Unified State Plan pursuant to § 463.105(b), and additional Combined State Plan partner programs that may be part of the Combined State Plan pursuant to § 463.140;
(2) Direct investments in economic, education, and workforce training programs to focus on providing relevant education and training to ensure that individuals, including youth and individuals with barriers to employment, have the skills to compete in the job market and that employers have a ready supply of skilled workers;
(3) Apply strategies for job-driven training consistently across Federal programs; and
(4) Enable economic, education, and workforce partners to build a skilled workforce through innovation in, and alignment of, employment, training, and education programs.
(a) The Unified State Plan must be submitted in accordance with § 463.130 and WIOA sec. 102(c), as explained in joint planning guidelines issued by the Secretaries of Labor and Education.
(b) The Governor of each State must submit, at a minimum, in accordance with § 463.130, a Unified State Plan to the Secretary of Labor to be eligible to receive funding for the workforce development system's six core programs:
(1) The adult, dislocated worker, and youth programs authorized under subtitle B of title I of WIOA and administered by the U.S. Department of Labor (DOL);
(2) The Adult Education and Family Literacy Act (AEFLA) program authorized under title II of WIOA and administered by the U.S. Department of Education (ED);
(3) The Employment Service program authorized under the Wagner-Peyser Act of 1933, as amended by WIOA title III and administered by DOL; and
(4) The Vocational Rehabilitation program authorized under title I of the Rehabilitation Act of 1973, as amended by title IV of WIOA and administered by ED.
(c) The Unified State Plan must outline the State's 4-year strategy for the core programs described in paragraph (b) of this section and meet the requirements of sec. 102(b) of WIOA, as explained in the joint planning guidelines issued by the Secretaries of Labor and Education.
(d) The Unified State Plan must include strategic and operational planning elements to facilitate the development of an aligned, coordinated, and comprehensive workforce development system. The Unified State Plan must include:
(1) Strategic planning elements that describe the State's strategic vision and goals for preparing an educated and skilled workforce under sec. 102(b)(1) of WIOA. The strategic planning elements must be informed by and include an analysis of the State's economic conditions and employer and workforce needs, including education and skill needs.
(2) Strategies for aligning the core programs and Combined State Plan partner programs as described in § 463.140(d), as well as other resources available to the State, to achieve the strategic vision and goals in accordance with sec. 102(b)(1)(E) of WIOA.
(3) Operational planning elements in accordance with sec. 102(b)(2) of WIOA that support the strategies for aligning the core programs and other resources available to the State to achieve the State's vision and goals and a description of how the State Workforce Development Board (WDB) will implement its functions, in accordance with sec. 101(d) of WIOA. Operational planning elements must include:
(i) A description of how the State strategy will be implemented by each core program's lead State agency;
(ii) State operating systems, including data systems, and policies that will support the implementation of the State's strategy identified in paragraph (d)(1) of this section;
(iii) Program-specific requirements for the core programs required by WIOA sec. 102(b)(2)(D);
(iv) Assurances required by sec. 102(b)(2)(E) of WIOA, including an assurance that the lead State agencies responsible for the administration of the core programs reviewed and commented on the appropriate operational planning of the Unified State Plan and approved the elements as serving the needs of the population served by such programs, and other assurances deemed necessary by the Secretaries of Labor and Education under sec. 102(b)(2)(E)(x) of WIOA;
(v) A description of joint planning and coordination across core programs, required one-stop partner programs, and other programs and activities in the Unified State Plan; and
(vi) Any additional operational planning requirements imposed by the Secretary of Labor or the Secretary of Education under sec. 102(b)(2)(C)(viii) of WIOA.
(e) All of the requirements in this subpart that apply to States also apply to outlying areas.
The program-specific requirements for the adult, dislocated worker, and youth programs that must be included in the Unified State Plan are described in sec. 102(b)(2)(D) of WIOA. Additional planning requirements may be explained in joint planning guidelines issued by the Secretaries of Labor and Education.
The program-specific requirements for the AEFLA program in title II that must be included in the Unified State Plan are described in secs. 102(b)(2)(C) and 102(b)(2)(D)(ii) of WIOA.
(a) With regard to the description required in sec. 102(b)(2)(D)(ii)(I) of WIOA pertaining to content standards, the Unified State Plan must describe how the eligible agency will, by July 1, 2016, align its content standards for adult education with State-adopted challenging academic content standards under the Elementary and Secondary Education Act of 1965, as amended.
(b) With regard to the description required in sec. 102(b)(2)(C)(iv) of WIOA pertaining to the methods and factors the State will use to distribute funds under the core programs, for title II of WIOA, the Unified State Plan must include—
(1) How the eligible agency will award multi-year grants on a competitive basis to eligible providers in the State; and
(2) How the eligible agency will provide direct and equitable access to funds using the same grant or contract announcement and application procedure.
The Employment Service program authorized under the Wagner-Peyser Act of 1933, as amended by WIOA title III, is subject to requirements in sec. 102(b) of WIOA, including any additional requirements imposed by the Secretary of Labor under secs. 102(b)(2)(C)(viii) and 102(b)(2)(D)(iv) of WIOA, as explained in joint planning guidelines issued by the Secretaries of Labor and Education.
The program specific-requirements for the vocational rehabilitation services portion of the Unified or Combined State Plan are set forth in sec. 101(a) of the Rehabilitation Act of 1973, as amended. All submission requirements for the vocational rehabilitation services portion of the Unified or Combined State Plan are in addition to the jointly developed strategic and operational content requirements prescribed by sec. 102(b) of WIOA.
(a) The Unified State Plan described in § 463.105 must be submitted in accordance with WIOA sec. 102(c), as explained in joint planning guidelines issued jointly by the Secretaries of Labor and Education.
(b) A State must submit its Unified State Plan to the Secretary of Labor pursuant to a process identified by the Secretary.
(1) The initial Unified State Plan must be submitted no later than 120 days prior to the commencement of the second full program year of WIOA.
(2) Subsequent Unified State Plans must be submitted no later than 120 days prior to the end of the 4-year period covered by a preceding Unified State Plan.
(3) For purposes of paragraph (b) of this section, “program year” means July 1 through June 30 of any year.
(c) The Unified State Plan must be developed with the assistance of the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d), and must be developed in coordination with administrators with optimum policy-making authority for the core programs and required one-stop partners.
(d) The State must provide an opportunity for public comment on and input into the development of the Unified State Plan prior to its submission.
(1) The opportunity for public comment must include an opportunity for comment by representatives of Local WDBs and chief elected officials, businesses, representatives of labor organizations, community-based organizations, adult education providers, institutions of higher education, other stakeholders with an interest in the services provided by the six core programs, and the general public, including individuals with disabilities.
(2) Consistent with the “Sunshine Provision” of WIOA in sec. 101(g), the State WDB must make information regarding the Unified State Plan available to the public through electronic means and regularly occurring open meetings in accordance with State law. The Unified State Plan must describe the State's process and timeline for ensuring a meaningful opportunity for public comment.
(e) Upon receipt of the Unified State Plan from the State, the Secretary of Labor will ensure that the entire Unified State Plan is submitted to the Secretary of Education pursuant to a process developed by the Secretaries.
(f) The Unified State Plan is subject to the approval of both the Secretary of Labor and the Secretary of Education.
(g) Before the Secretaries of Labor and Education approve the Unified State Plan, the vocational rehabilitation services portion of the Unified State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be approved by the Commissioner of the Rehabilitation Services Administration.
(h) The Secretaries of Labor and Education will review and approve the Unified State Plan within 90 days of receipt by the Secretary of Labor, unless the Secretary of Labor or the Secretary of Education determines in writing within that period that:
(1) The plan is inconsistent with a core program's requirements;
(2) The Unified State Plan is inconsistent with any requirement of sec. 102 of WIOA; or
(3) The plan is incomplete or otherwise insufficient to determine whether it is consistent with a core program's requirements or other requirements of WIOA.
(i) If neither the Secretary of Labor nor the Secretary of Education makes the written determination described in paragraph (h) of this section within 90 days of the receipt by the Secretaries, the Unified State Plan will be considered approved.
(a) In addition to the required modification review set forth in paragraph (b) of this section, a Governor may submit a modification of its Unified State Plan at any time during the 4-year period of the plan.
(b) Modifications are required, at a minimum:
(1) At the end of the first 2-year period of any 4-year State Plan, wherein the State WDB must review the Unified State Plan, and the Governor must submit modifications to the plan to reflect changes in labor market and economic conditions or other factors affecting the implementation of the Unified State Plan;
(2) When changes in Federal or State law or policy substantially affect the strategies, goals, and priorities upon which the Unified State Plan is based;
(3) When there are changes in the statewide vision, strategies, policies, State negotiated levels of performance as described in § 463.170(b), the methodology used to determine local allocation of funds, reorganizations that change the working relationship with system employees, changes in organizational responsibilities, changes to the membership structure of the State WDB or alternative entity, and similar substantial changes to the State's workforce development system.
(c) Modifications to the Unified State Plan are subject to the same public review and comment requirements in § 463.130(d) that apply to the development of the original Unified State Plan.
(d) Unified State Plan modifications must be approved by the Secretaries of Labor and Education, based on the approval standards applicable to the original Unified State Plan under § 463.130. This approval must come after the approval of the Commissioner of the Rehabilitation Services Administration for modification of any portion of the plan described in sec. 102(b)(2)(D)(iii) of WIOA.
(a) A State may choose to develop and submit a 4-year Combined State Plan in lieu of the Unified State Plan described in §§ 463.105 through 463.125.
(b) A State that submits a Combined State Plan covering an activity or program described in paragraph (d) of this section that is, in accordance with WIOA sec. 103(c), approved or deemed complete under the law relating to the program will not be required to submit any other plan or application in order to receive Federal funds to carry out the core programs or the program or activities described under paragraph (d) of this section that are covered by the Combined State Plan.
(c) If a State develops a Combined State Plan, it must be submitted in accordance with the process described in § 463.143.
(d) If a State chooses to submit a Combined State Plan, the plan must include the six core programs and one or more of the Combined State Plan partner programs and activities described in sec. 103(a)(2) of WIOA. The Combined State Plan partner programs and activities that may be included in the Combined State Plan are:
(1) Career and technical education programs authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.);
(2) Temporary Assistance for Needy Families or TANF, authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.);
(3) Employment and training programs authorized under sec. 6(d)(4) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
(4) Work programs authorized under sec. 6(o) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(o));
(5) Trade adjustment assistance activities under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
(6) Services for veterans authorized under chapter 41 of title 38 United States Code;
(7) Programs authorized under State unemployment compensation laws (in accordance with applicable Federal law);
(8) Senior Community Service Employment Programs under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
(9) Employment and training activities carried out by the Department of Housing and Urban Development (HUD);
(10) Employment and training activities carried out under the Community Services Block Grant Act (42 U.S.C. 9901 et seq.); and
(11) Reintegration of offenders programs authorized under sec. 212 of the Second Chance Act of 2007 (42 U.S.C. 17532).
(e) A Combined State Plan must contain:
(1) For the core programs, the information required by sec. 102(b) of WIOA and §§ 463.105 through 463.125, as explained in the joint planning guidelines issued by the Secretaries;
(2) For the Combined State Plan partner programs and activities, except as described in paragraph (h) of this section, the information required by the law authorizing and governing that program to be submitted to the appropriate Secretary, any other applicable legal requirements, and any common planning requirements described in sec. 102(b) of WIOA, as explained in the joint planning guidelines issued by the Secretaries;
(3) A description of the methods used for joint planning and coordination among the core programs, and with the required one-stop partner programs and other programs and activities included in the State Plan; and
(4) An assurance that all of the entities responsible for planning or administering the programs described in the Combined State Plan have had a meaningful opportunity to review and comment on all portions of the plan.
(f) Each Combined State Plan partner program included in the Combined State Plan remains subject to the applicable program-specific requirements of the Federal law and regulations, and any other applicable legal or program requirements, governing the implementation and operation of that program.
(g) For purposes of §§ 463.140 through 463.145 the term “appropriate Secretary” means the head of the Federal agency who exercises either plan or application approval authority for the program or activity under the Federal law authorizing the program or activity or, if there are no planning or application requirements, who exercises administrative authority over the program or activity under that Federal law.
(h) States that include employment and training activities carried out under the Community Services Block Grant (CSBG) Act (42 U.S.C. 9901 et seq.) under a Combined State Plan would submit all other required elements of a complete CSBG State Plan directly to the Federal agency that administers the program, according to the requirements of Federal law and regulations.
(i) States that submit employment and training activities carried out by HUD under a Combined State Plan would submit any other required planning documents for HUD programs directly to HUD, according to the requirements of Federal law and regulations.
(a) For purposes of § 463.140(a), if a State chooses to develop a Combined State Plan it must submit the Combined State Plan in accordance with the requirements described below and sec. 103 of WIOA, as explained in the joint planning guidelines issued by the Secretaries of Labor and Education.
(b) The Combined State Plan must be developed with the assistance of the State WDB, as required by 20 CFR 679.130(a) and WIOA sec. 101(d), and must be developed in coordination with administrators with optimum policy-making authority for the core programs and required one-stop partners.
(c) The State must provide an opportunity for public comment on and input into the development of the Combined State Plan prior to its submission.
(1) The opportunity for public comment for the portions of the Combined State Plan that cover the core programs must include an opportunity for comment by representatives of Local WDBs and chief elected officials, businesses, representatives of labor organizations, community-based organizations, adult education providers, institutions of higher education, other stakeholders with an interest in the services provided by the six core programs, and the general public, including individuals with disabilities.
(2) Consistent with the “Sunshine Provision” of WIOA in sec. 101(g), the State WDB must make information regarding the Combined State Plan available to the public through electronic means and regularly occurring open meetings in accordance with State law. The Combined State Plan must describe the State's process and timeline for ensuring a meaningful opportunity for public comment on the portions of the plan covering core programs.
(3) The portions of the plan that cover the Combined State Plan partner programs are subject to any public comment requirements applicable to those programs.
(d) The State must submit to the Secretaries of Labor and Education and to the Secretary of the agency with responsibility for approving the program's plan or deeming it complete under the law governing the program, as part of its Combined State Plan, any plan, application, form, or any other similar document that is required as a condition for the approval of Federal funding under the applicable program or activity. Such submission must occur in accordance with a process identified by the relevant Secretaries in paragraph (a) of this section.
(e) The Combined State Plan will be approved or disapproved in accordance with the requirements of sec. 103(c) of WIOA.
(1) The portion of the Combined State Plan covering programs administered by the Departments of Labor and Education must be reviewed, and approved or disapproved, by the appropriate Secretary within 90 days beginning on the day the Combined State Plan is received by the appropriate Secretary from the State, consistent with paragraph (f) of this section. Before the Secretaries of Labor and Education approve the Combined State Plan, the vocational rehabilitation services portion of the Combined State Plan described in WIOA sec. 102(b)(2)(D)(iii) must be approved by the Commissioner of the Rehabilitation Services Administration.
(2) If an appropriate Secretary other than the Secretary of Labor or the Secretary of Education has authority to approve or deem complete a portion of the Combined State Plan for a program or activity described in § 463.140(d), that portion of the Combined State Plan must be reviewed, and approved, disapproved, or deemed complete, by the appropriate Secretary within 120 days beginning on the day the Combined State Plan is received by the appropriate Secretary from the State consistent with paragraph (f) of this section.
(f) The appropriate Secretaries will review and approve or deem complete the Combined State Plan within 90 or 120 days, as appropriate, as described in paragraph (e) of this section, unless the Secretaries of Labor and Education or appropriate Secretary have determined in writing within that period that:
(1) The Combined State Plan is inconsistent with the requirements of the six core programs or the Federal laws authorizing or applicable to the program or activity involved, including the criteria for approval of a plan or application, or deeming the plan complete, if any, under such law;
(2) The portion of the Combined State Plan describing the six core programs or the program or activity described in paragraph (a) of this section involved does not satisfy the criteria as provided in sec. 102 or 103 of WIOA, as applicable; or
(3) The Combined State Plan is incomplete, or otherwise insufficient to determine whether it is consistent with a core program's requirements, other requirements of WIOA, or the Federal laws authorizing, or applicable to, the program or activity described in § 463.140(d), including the criteria for approval of a plan or application, if any, under such law.
(g) If the Secretary of Labor, the Secretary of Education, or the appropriate Secretary does not make the written determination described in paragraph (f) of this section within the relevant period of time after submission of the Combined State Plan, that portion of the Combined State Plan over which the Secretary has jurisdiction will be considered approved.
(h) The Secretaries of Labor and Education's written determination of approval or disapproval regarding the portion of the plan for the six core programs may be separate from the written determination of approval, disapproval, or completeness of the program-specific requirements of Combined State Plan partner programs and activities described in § 463.140(d) and included in the Combined State Plan.
(i) Special rule. In paragraphs (f)(1) and (3) of this section, the term “criteria for approval of a plan or application,” with respect to a State or a core program or a program under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.), includes a requirement for agreement between the State and the appropriate Secretaries regarding State performance measures or State performance accountability measures, as the case may be, including levels of performance.
(a) For the core program portions of the Combined State Plan, modifications are required, at a minimum:
(1) By the end of the first 2-year period of any 4-year State Plan. The State WDB must review the Combined State Plan, and the Governor must submit modifications to the Combined State Plan to reflect changes in labor market and economic conditions or other factors affecting the implementation of the Combined State Plan;
(2) When changes in Federal or State law or policy substantially affect the strategies, goals, and priorities upon which the Combined State Plan is based;
(3) When there are changes in the statewide vision, strategies, policies, State negotiated levels of performance as described in § 463.170(b), the methodology used to determine local allocation of funds, reorganizations that change the working relationship with system employees, changes in organizational responsibilities, changes to the membership structure of the State WDB or alternative entity, and similar substantial changes to the State's workforce development system.
(b) In addition to the required modification review described in paragraph (a)(1) of this section, a State may submit a modification of its Combined State Plan at any time during the 4-year period of the plan.
(c) For any Combined State Plan partner programs and activities described in § 463.140(d) that are included in a State's Combined State Plan, the State—
(1) May decide if the modification requirements under WIOA sec. 102(c)(3) that apply to the core programs will apply to the Combined State Plan partner programs, as long as consistent with any other modification requirements for the programs, or may comply with the requirements applicable to only the particular program or activity; and
(2) Must submit, in accordance with the procedure described in § 463.143, any modification, amendment, or revision required by the Federal law authorizing, or applicable to, the Combined State Plan partner program or activity.
(i) If the underlying programmatic requirements change (e.g., the authorizing statute is reauthorized) for Federal laws authorizing such programs, a State must either modify its Combined State Plan or submit a separate plan to the appropriate Federal agency in accordance with the new Federal law authorizing the Combined State Plan partner program or activity and other legal requirements applicable to such program or activity.
(ii) If the modification, amendment, or revision affects the administration of only that particular Combined State Plan partner program and has no impact on the Combined State Plan as a whole or the integration and administration of the core and other Combined State Plan partner programs at the State level, modifications must be submitted for approval to only the appropriate Secretary, based on the approval standards applicable to the original Combined State Plan under § 463.143, if the State elects, or in accordance with the procedures and requirements applicable to the particular Combined State Plan partner program.
(3) A State also may amend its Combined State Plan to add a Combined State Plan partner program or activity described in § 463.140(d).
(d) Modifications of the Combined State Plan are subject to the same public review and comment requirements that apply to the development of the original Combined State Plan as described in § 463.143(c) except that, if the modification, amendment, or revision affects the administration of a particular Combined State Plan partner program and has no impact on the Combined State Plan as a whole or the integration and administration of the core and other Combined State Plan partner programs at the State level, a State may comply instead with the procedures and requirements applicable to the particular Combined State Plan partner program.
(e) Modifications for the core program portions of the Combined State Plan must be approved by the Secretaries of Labor and Education, based on the approval standards applicable to the original Combined State Plan under § 463.143. This approval must come after the approval of the Commissioner of the Rehabilitation Services Administration for modification of any portion of the Combined State Plan described in sec. 102(b)(2)(D)(iii) of WIOA.
(a) Participant. A reportable individual who has received services other than the services described in paragraph (a)(3) of this section, after satisfying all applicable programmatic requirements for the provision of services, such as eligibility determination.
(1) For the Vocational Rehabilitation (VR) program, a participant is a reportable individual who has an approved and signed Individualized Plan for Employment (IPE) and has begun to receive services.
(2) For the Workforce Innovation and Opportunity Act (WIOA) title I youth program, a participant is a reportable individual who has satisfied all applicable program requirements for the provision of services, including eligibility determination, an objective assessment, and development of an individual service strategy, and received 1 of the 14 WIOA youth program elements identified in sec. 129(c)(2) of WIOA.
(3) The following individuals are not participants:
(i) Individuals in an Adult Education and Family Literacy Act (AEFLA) program who have not completed at least 12 contact hours;
(ii) Individuals who only use the self-service system.
(A) Subject to paragraph (a)(3)(ii)(B) of this section, self-service occurs when individuals independently access any workforce development system program's information and activities in either a physical location, such as a one-stop center resource room or partner agency, or remotely via the use of electronic technologies.
(B) Self-service does not uniformly apply to all virtually accessed services. For example, virtually accessed services that provide a level of support beyond independent job or information seeking on the part of an individual would not qualify as self-service.
(iii) Individuals who receive information-only services or activities, which provide readily available information that does not require an assessment by a staff member of the individual's skills, education, or career objectives.
(4) Programs must include participants in their performance calculations.
(b) Reportable individual. An individual who has taken action that demonstrates an intent to use program services and who meets specific reporting criteria of the program, including:
(1) Individuals who provide identifying information;
(2) Individuals who only use the self-service system; or
(3) Individuals who only receive information-only services or activities.
(c) Exit. As defined for the purpose of performance calculations, exit is the point after which a participant who has received services through any program meets the following criteria:
(1) For the adult, dislocated worker, and youth programs authorized under WIOA title I, the AEFLA program authorized under WIOA title II, and the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III, exit date is the last date of service.
(i) The last day of service cannot be determined until at least 90 days have elapsed since the participant last received services; services do not include self-service, information-only services or activities, or follow-up services. This also requires that there are no plans to provide the participant with future services.
(ii) [Reserved].
(2)(i) For the VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV (VR program):
(A) The participant's record of service is closed in accordance with § 463.56 because the participant has achieved an employment outcome; or
(B) The participant's service record is closed because the individual has not achieved an employment outcome or the individual has been determined ineligible after receiving services in accordance with § 463.43.
(ii) Notwithstanding any other provision of this section, a participant will not be considered as meeting the definition of exit from the VR program if the participant's service record is closed because the participant has achieved a supported employment outcome in an integrated setting but not in competitive integrated employment.
(3)(i) A State may implement a common exit policy for all or some of the core programs in WIOA title I and the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III, and any additional required partner program(s) listed in sec. 121(b)(1)(B) of WIOA that is under the authority of the U.S. Department of Labor (DOL).
(ii) If a State chooses to implement a common exit policy, the policy must require that a participant is exited only when all of the criteria in paragraph (c)(1) of this section are met for the WIOA title I core programs and the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III, as well as any additional required partner programs listed in sec. 121(b)(1)(B) of WIOA under the authority of DOL to which the common exit policy applies in which the participant is enrolled.
(d) State. For purposes of this part, other than in regard to sanctions or the statistical adjustment model, all references to “State” include the outlying areas of American Samoa, Guam, Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, and, as applicable, the Republic of Palau.
(a) All States submitting either a Unified or Combined State Plan under §§ 463.130 and 463.143, must propose expected levels of performance for each of the primary indicators of performance for the adult, dislocated worker, and youth programs authorized under WIOA title I; the AEFLA program authorized under WIOA title II; the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III; and the VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV.
(1) Primary indicators of performance. The six primary indicators of performance for the adult and dislocated worker programs, the AEFLA program, and the VR program are:
(i) The percentage of participants who are in unsubsidized employment during the second quarter after exit from the program;
(ii) The percentage of participants who are in unsubsidized employment during the fourth quarter after exit from the program;
(iii) Median earnings of participants who are in unsubsidized employment during the second quarter after exit from the program;
(iv)(A) The percentage of those participants enrolled in an education or training program (excluding those in on-the-job training [OJT] and customized training) who attained a recognized postsecondary credential or a secondary school diploma, or its recognized equivalent, during participation in or within 1 year after exit from the program.
(B) A participant who has attained a secondary school diploma or its recognized equivalent is included in the percentage of participants who have attained a secondary school diploma or recognized equivalent only if the participant also is employed or is enrolled in an education or training program leading to a recognized postsecondary credential within 1 year after exit from the program;
(v) The percentage of participants who, during a program year, are in an education or training program that leads to a recognized postsecondary credential or employment and who are achieving measurable skill gains, defined as documented academic, technical, occupational, or other forms of progress, towards such a credential or employment. Depending upon the type of education or training program, documented progress is defined as one of the following:
(A) Documented achievement of at least one educational functioning level of a participant who is receiving instruction below the postsecondary education level;
(B) Documented attainment of a secondary school diploma or its recognized equivalent;
(C) Secondary or postsecondary transcript or report card for a sufficient number of credit hours that shows a participant is meeting the State unit's academic standards;
(D) Satisfactory or better progress report, towards established milestones, such as completion of OJT or completion of 1 year of an apprenticeship program or similar milestones, from an employer or training provider who is providing training; or
(E) Successful passage of an exam that is required for a particular occupation or progress in attaining technical or occupational skills as evidenced by trade-related benchmarks such as knowledge-based exams.
(vi) The percentage of participants in unsubsidized employment during the second quarter after exit from the program who were employed by the same employer in the second and fourth quarters after exit. For the six core programs, this indicator is a statewide indicator reported by one core program on behalf of all six core programs in the State, as described in guidance.
(2) Participants. For purposes of the primary indicators of performance in paragraph (a)(1) of this section, “participant” will have the meaning given to it in § 463.150(a), except that—
(i) For purposes of determining program performance levels under indicators set forth in paragraphs (a)(1)(i) through (iv) and (vi) of this section, a “participant” does not include a participant who received services under sec. 225 of WIOA and exits such program while still in a correctional institution as defined in sec. 225(e)(1) of WIOA; and
(ii) The Secretaries of Labor and Education may, as needed and consistent with the Paperwork Reduction Act (PRA), make further determinations as to the participants to be included in calculating program performance levels for purposes of any of the performance indicators set forth in paragraph (a)(1) of this section.
(b) The primary indicators in paragraphs (a)(1)(i) through (iii) and (vi) of this section apply to the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III.
(c) For the youth program authorized under WIOA title I, the primary indicators are:
(1) Percentage of participants who are in education or training activities, or in unsubsidized employment, during the second quarter after exit from the program;
(2) Percentage of participants in education or training activities, or in unsubsidized employment, during the fourth quarter after exit from the program;
(3) Median earnings of participants who are in unsubsidized employment during the second quarter after exit from the program;
(4) The percentage of those participants enrolled in an education or training program (excluding those in OJT and customized training) who obtained a recognized postsecondary credential or a secondary school diploma, or its recognized equivalent, during participation in or within 1 year after exit from the program, except that a participant who has attained a secondary school diploma or its recognized equivalent is included as having attained a secondary school diploma or recognized equivalent only if the participant is also employed or is enrolled in an education or training program leading to a recognized postsecondary credential within 1 year from program exit;
(5) The percentage of participants who during a program year, are in an education or training program that leads to a recognized postsecondary credential or employment and who are achieving measurable skill gains, defined as documented academic, technical, occupational or other forms of progress towards such a credential or employment. Depending upon the type of education or training program, documented progress is defined as one of the following:
(i) Documented achievement of at least one educational functioning level of a participant who is receiving instruction below the postsecondary education level;
(ii) Documented attainment of a secondary school diploma or its recognized equivalent;
(iii) Secondary or postsecondary transcript or report card for a sufficient number of credit hours that shows a participant is achieving the State unit's academic standards;
(iv) Satisfactory or better progress report, towards established milestones, such as completion of OJT or completion of 1 year of an apprenticeship program or similar milestones, from an employer or training provider who is providing training; or
(v) Successful passage of an exam that is required for a particular occupation or progress in attaining technical or occupational skills as evidenced by trade-related benchmarks such as knowledge-based exams.
(6) The percentage of participants in unsubsidized employment during the second quarter after exit from the program who were employed by the same employer in the second and fourth quarters after exit. For the six core programs, this indicator is a statewide indicator reported by one core program on behalf of all six core programs in the State, as described in guidance.
(a) The State performance report required by sec. 116(d)(2) of WIOA must be submitted annually using a template the Departments of Labor and Education will disseminate, and must provide, at a minimum, information on the actual performance levels achieved consistent with § 463.175 with respect to:
(1) The total number of participants served, and the total number of participants who exited each of the core programs identified in sec. 116(b)(3)(A)(ii) of WIOA, including disaggregated counts of those who participated in and exited a core program, by:
(i) Individuals with barriers to employment as defined in WIOA sec. 3(24); and
(ii) Co-enrollment in any of the programs in WIOA sec. 116(b)(3)(A)(ii).
(2) Information on the performance levels achieved for the primary indicators of performance for all of the core programs identified in § 463.155 including disaggregated levels for:
(i) Individuals with barriers to employment as defined in WIOA sec. 3(24);
(ii) Age;
(iii) Sex; and
(iv) Race and ethnicity.
(3) The total number of participants who received career services and the total number of participants who exited from career services for the most recent program year and the 3 preceding program years, and the total number of participants who received training services and the total number of participants who exited from training services for the most recent program year and the 3 preceding program years, as applicable to the program;
(4) Information on the performance levels achieved for the primary indicators of performance consistent with § 463.155 for career services and training services for the most recent program year and the 3 preceding program years, as applicable to the program;
(5) The percentage of participants in a program who attained unsubsidized employment related to the training received (often referred to as training-related employment) through WIOA title I, subtitle B programs;
(6) The amount of funds spent on career services and the amount of funds spent on training services for the most recent program year and the 3 preceding program years, as applicable to the program;
(7) The average cost per participant for those participants who received career services and training services, respectively, during the most recent program year and the 3 preceding program years, as applicable to the program;
(8) The percentage of a State's annual allotment under WIOA sec. 132(b) that the State spent on administrative costs; and
(9) Information that facilitates comparisons of programs with programs in other States.
(10) For WIOA title I programs, a State performance narrative, which, for States in which a local area is implementing a pay-for-performance contracting strategy, at a minimum provides:
(i) A description of pay-for-performance contract strategies being used for programs;
(ii) The performance of service providers entering into contracts for such strategies, measured against the levels of performance specified in the contracts for such strategies; and
(iii) An evaluation of the design of the programs and performance strategies and, when available, the satisfaction of employers and participants who received services under such strategies.
(b) The disaggregation of data for the State performance report must be done in compliance with WIOA sec. 116(d)(6)(C).
(c) The State performance reports must include a mechanism of electronic access to the State's local area and eligible training provider (ETP) performance reports.
(d) States must comply with these requirements from sec. 116 of WIOA as explained in joint guidance issued by the Departments of Labor and Education, which may include information on reportable individuals as determined by the Secretaries of Labor and Education.
States may identify additional indicators of performance for the six core programs. If a State does so, these indicators must be included in the Unified or Combined State Plan.
(a) A State must submit in the State Plan expected levels of performance on the primary indicators of performance for each core program as required by sec. 116(b)(3)(A)(iii) of WIOA as explained in joint guidance issued by the Secretaries of Labor and Education.
(1) The initial State Plan submitted under WIOA must contain expected levels of performance for the first 2 years of the State Plan.
(2) States must submit expected levels of performance for the third and fourth year of the State Plan before the third program year consistent with §§ 463.135 and 463.145.
(b) States must reach agreement on levels of performance with the Secretaries of Labor and Education for each indicator for each core program. These are the negotiated levels of performance. The negotiated levels must be based on the following factors:
(1) How the negotiated levels of performance compare with State levels of performance established for other States;
(2) The application of an objective statistical model established by the Secretaries of Labor and Education, subject to paragraph (d) of this section;
(3) How the negotiated levels promote continuous improvement in performance based on the primary indicators and ensure optimal return on investment of Federal funds; and
(4) The extent to which the negotiated levels assist the State in meeting the performance goals established by the Secretaries of Labor and Education for the core programs in accordance with the Government Performance and Results Act of 1993, as amended.
(c) An objective statistical adjustment model will be developed and disseminated by the Secretaries of Labor and Education. The model will be based on:
(1) Differences among States in actual economic conditions, including but not limited to unemployment rates and job losses or gains in particular industries; and
(2) The characteristics of participants, including but not limited to:
(i) Indicators of poor work history;
(ii) Lack of work experience;
(iii) Lack of educational or occupational skills attainment;
(iv) Dislocation from high-wage and high-benefit employment;
(v) Low levels of literacy;
(vi) Low levels of English proficiency;
(vii) Disability status;
(viii) Homelessness;
(ix) Ex-offender status; and
(x) Welfare dependency.
(d) The objective statistical adjustment model developed under paragraph (c) of this section will be:
(1) Applied to the core programs' primary indicators upon availability of data which are necessary to populate the model and apply the model to the local core programs;
(2) Subject to paragraph (d)(1) of this section, used before the beginning of a program year in order to reach agreement on State negotiated levels for the upcoming program year; and
(3) Subject to paragraph (d)(1) of this section, used to revise negotiated levels at the end of a program year based on actual economic conditions and characteristics of participants served, consistent with sec. 116(b)(3)(A)(vii) of WIOA.
(e) The negotiated levels revised at the end of the program year, based on the statistical adjustment model, are the adjusted levels of performance.
(f) States must comply with these requirements from sec. 116 of WIOA as explained in joint guidance issued by the Departments of Labor and Education.
(a)(1) States must, consistent with State laws, use quarterly wage record information in measuring a State's performance on the primary indicators of performance outlined in § 463.155 and a local area's performance on the primary indicators of performance identified in § 463.205.
(2) The use of social security numbers from participants and such other information as is necessary to measure the progress of those participants through quarterly wage record information is authorized.
(3) To the extent that quarterly wage records are not available for a participant, States may use other information as is necessary to measure the progress of those participants through methods other than quarterly wage record information.
(b) “Quarterly wage record information” means intrastate and interstate wages paid to an individual, the social security number (or numbers, if more than one) of the individual, and the name, address, State, and the Federal employer identification number of the employer paying the wages to the individual.
(c) The Governor may designate a State agency (or appropriate State entity) to assist in carrying out the performance reporting requirements for WIOA core programs and ETPs. The Governor or such agency (or appropriate State entity) is responsible for:
(1) Facilitating data matches;
(2) Data quality reliability; and
(3) Protection against disaggregation that would violate applicable privacy standards.
A State will be subject to financial sanction under WIOA sec. 116(f) if it fails to:
(a) Submit the State annual performance report required under WIOA sec. 116(d)(2); or
(b) Meet adjusted levels of performance for the primary indicators of performance in accordance with sec. 116(f) of WIOA.
(a) Sanctions will be applied when a State fails to submit the State annual performance report required under sec. 116(d)(2) of WIOA. A State fails to report if the State either:
(1) Does not submit a State annual performance report by the date for timely submission set in performance reporting guidance; or
(2) Submits a State annual performance report by the date for timely submission, but the report is incomplete.
(b) Sanctions will not be applied if the reporting failure is due to exceptional circumstances outside of the State's control. Exceptional circumstances may include, but are not limited to:
(1) Natural disasters;
(2) Unexpected personnel transitions; and
(3) Unexpected technology related issues.
(c) In the event that a State may not be able to submit a complete and accurate performance report by the deadline for timely reporting:
(1) The State must notify the Secretary of Labor or Secretary of Education as soon as possible, but no later than 30 days prior to the established deadline for submission, of a potential impact on the State's ability to submit its State annual performance report in order to not be considered failing to report.
(2) In circumstances where unexpected events occur less than 30 days before the established deadline for submission of the State annual performance reports, the Secretaries of Labor and Education will review requests for extending the reporting deadline in accordance with the Departments of Labor and Education's procedures that will be established in guidance.
(a) States' negotiated levels of performance will be adjusted through the application of the statistical adjustment model established under § 463.170 to account for actual economic conditions experienced during a program year and characteristics of participants, annually at the close of each program year.
(b) Any State that fails to meet adjusted levels of performance for the primary indicators of performance outlined in § 463.155 for any year will receive technical assistance, including assistance in the development of a performance improvement plan provided by the Secretary of Labor or Secretary of Education.
(c) Whether a State has failed to meet adjusted levels of performance will be determined using the following criteria:
(1) The overall State program score, which is expressed as the percent achieved, compares the actual results achieved by a core program on the primary indicators of performance, except for the effectiveness in serving employers indicator described in § 463.155(a)(1)(vi), to the adjusted levels of performance for that core program. The average of the percentages achieved of the adjusted level of performance for each of the primary indicators, except for the effectiveness in serving employers indicator described in § 463.155(a)(1)(vi), by a core program will constitute the overall State program score.
(2) However, until all indicators for the core program have at least 2 years of complete data, the overall State program score will be based on a comparison of the actual results achieved to the adjusted level of performance for each of the primary indicators that have at least 2 years of complete data for that program.
(3) The overall State indicator score, which is expressed as the percent achieved, compares the actual results achieved on a primary indicator of performance by all core programs in a State to the adjusted levels of performance for that primary indicator.
(i) The average of the percentages achieved of the adjusted level of performance by all of the core programs on that indicator will constitute the overall State indicator score, except for the effectiveness in serving employers indicator described in § 463.155(a)(1)(vi).
(ii) The overall State indicator score for effectiveness in serving employers, as reported by one core program on behalf of all six core programs in the State, as described in guidance, is a statewide indicator that reflects the performance for all core programs. It is calculated as the statewide percentage achieved of the statewide adjusted level of performance.
(4) However, until all indicators for the State have at least 2 years of complete data, the overall State indicator score will be based on a comparison of the actual results achieved to the adjusted level of performance for each of the primary indicators that have at least 2 years of complete data in a State.
(5) The individual indicator score, which is expressed as the percent achieved, compares the actual results achieved by each core program on each of the individual primary indicators to the adjusted levels of performance for each of the program's primary indicators of performance, except for the effectiveness in serving employers indicator described in § 463.155(a)(1)(vi).
(d) A performance failure occurs when:
(1) Any overall State program score or overall State indicator score falls below 90 percent for the program year; or
(2) Any of the States' individual indicator scores fall below 50 percent for the program year.
(e) Sanctions based on performance failure will be applied to States if, for 2 consecutive years, the State fails to meet:
(1) 90 percent of the overall State program score for the same core program;
(2) 90 percent of the overall State indicator score for the same primary indicator; or
(3) 50 percent of the same indicator score for the same program.
(a) The Secretaries of Labor and Education will reduce the Governor's Reserve Allotment by five percent of the maximum available amount for the immediately succeeding program year if:
(1) The State fails to submit the State annual performance reports as required under WIOA sec. 116(d)(2), as defined in § 463.185;
(2) The State fails to meet State adjusted levels of performance for the same primary performance indicator(s) under either § 463.190(d)(1) for the second consecutive year as defined in § 463.190; or
(3) The State's score on the same indicator for the same program falls below 50 percent under § 463.190(d)(2) for the second consecutive year as defined in § 463.190.
(b) If the State fails under paragraphs (a)(1) and either (a)(2) or (3) of this section in the same program year, the Secretaries of Labor and Education will reduce the Governor's Reserve Allotment by 10 percent of the maximum available amount for the immediately succeeding program year.
(c) If a State's Governor's Reserve Allotment is reduced:
(1) The reduced amount will not be returned to the State in the event that the State later improves performance or submits its annual performance report; and
(2) The Governor's Reserve will continue to be set at the reduced level in each subsequent year until the Secretary of Labor or the Secretary of Education, depending on which program is impacted, determines that the State met the State adjusted levels of performance for the applicable primary performance indicators and has submitted all of the required performance reports.
(d) A State may request review of a sanction the Secretary of Labor imposes in accordance with the provisions of 20 CFR 683.800.
(a) In addition to sanctions for failure to report or failure to meet adjusted levels of performance, States will be subject to administrative actions in the case of poor performance.
(b) States' performance achievement on the individual primary indicators will be assessed in addition to the overall State program score and overall State indicator score. Based on this assessment, as clarified and explained in guidance, for performance on any individual primary indicator, the Secretary of Labor or the Secretary of Education will require the State to establish a performance risk plan to address continuous improvement on the individual primary indicator.
(a) Each local area in a State under WIOA title I is subject to the same primary indicators of performance for the core programs for WIOA title I under § 463.155(a)(1) and (c) that apply to the State.
(b) In addition to the indicators described in paragraph (a) of this section, under § 463.165, the Governor may apply additional indicators of performance to local areas in the State.
(c) States must annually make local area performance reports available to the public using a template that the Departments of Labor and Education will disseminate in guidance, including by electronic means. The State must provide electronic access to the public local area performance report in its annual State performance report.
(d) The local area performance report must include:
(1) The actual results achieved under § 463.155 and the information required under § 463.160(a);
(2) The percentage of a local area's allotment under WIOA secs. 128(b) and 133(b) that the local area spent on administrative costs; and
(3) Other information that facilitates comparisons of programs with programs in other local areas (or planning regions if the local area is part of a planning region).
(e) The disaggregation of data for the local area performance report must be done in compliance with WIOA sec. 116(d)(6)(C).
(f) States must comply with any requirements from sec. 116(d)(3) of WIOA as explained in guidance, including the use of the performance reporting template, issued by DOL.
(a) The objective statistical adjustment model required under sec. 116(b)(3)(A)(viii) of WIOA and described in § 463.170(c) must be:
(1) Applied to the core programs' primary indicators upon availability of data which are necessary to populate the model and apply the model to the local core programs;
(2) Used in order to reach agreement on local negotiated levels of performance for the upcoming program year; and
(3) Used to establish adjusted levels of performance at the end of a program year based on actual conditions, consistent with WIOA sec. 116(c)(3).
(b) Until all indicators for the core program in a local area have at least 2 years of complete data, the comparison of the actual results achieved to the adjusted levels of performance for each of the primary indicators only will be applied where there are at least 2 years of complete data for that program.
(c) The Governor, Local Workforce Development Board (WDB), and chief elected official must reach agreement on local negotiated levels of performance based on a negotiations process before the start of a program year with the use of the objective statistical model described in paragraph (a) of this section. The negotiations will include a discussion of circumstances not accounted for in the model and will take into account the extent to which the levels promote continuous improvement. The objective statistical model will be applied at the end of the program year based on actual economic conditions and characteristics of the participants served.
(d) The negotiations process described in paragraph (c) of this section must be developed by the Governor and disseminated to all Local WDBs and chief elected officials.
(e) The Local WDBs may apply performance measures to service providers that differ from the performance indicators that apply to the local area. These performance measures must be established after considering:
(1) The established local negotiated levels;
(2) The services provided by each provider; and
(3) The populations the service providers are intended to serve.
(a) The Governor is not required to award local incentive funds, but is authorized to provide incentive grants to local areas for performance on the primary indicators of performance consistent with WIOA sec. 134(a)(3)(A)(xi).
(b) The Governor may use non-Federal funds to create incentives for the Local WDBs to implement pay-for-performance contract strategies for the delivery of training services described in WIOA sec. 134(c)(3) or activities described in WIOA sec. 129(c)(2) in the local areas served by the Local WDBs. Pay-for-performance contract strategies must be implemented in accordance with 20 CFR part 683, subpart E and § 463.160.
(a) If a local area fails to meet the adjusted levels of performance agreed to under § 463.210 for the primary indicators of performance in the adult, dislocated worker, and youth programs authorized under WIOA title I in any program year, technical assistance must be provided by the Governor or, upon the Governor's request, by the Secretary of Labor.
(1) A State must establish the threshold for failure to meet adjusted levels of performance for a local area before coming to agreement on the negotiated levels of performance for the local area.
(i) A State must establish the adjusted level of performance for a local area, using the statistical adjustment model described in § 463.170(c).
(ii) At least 2 years of complete data on any indicator for any local core program are required in order to establish adjusted levels of performance for a local area.
(2) The technical assistance may include:
(i) Assistance in the development of a performance improvement plan;
(ii) The development of a modified local or regional plan; or
(iii) Other actions designed to assist the local area in improving performance.
(b) If a local area fails to meet the adjusted levels of performance agreed to under § 463.210 for the same primary indicators of performance for the same core program authorized under WIOA title I for a third consecutive program year, the Governor must take corrective actions. The corrective actions must include the development of a reorganization plan under which the Governor:
(1) Requires the appointment and certification of a new Local WDB, consistent with the criteria established under 20 CFR 679.350;
(2) Prohibits the use of eligible providers and one-stop partners that have been identified as achieving poor levels of performance; or
(3) Takes such other significant actions as the Governor determines are appropriate.
(a) The Local WDB and chief elected official for a local area that is subject to a reorganization plan under WIOA sec. 116(g)(2)(A) may appeal to the Governor to rescind or revise the reorganization plan not later than 30 days after receiving notice of the reorganization plan. The Governor must make a final decision within 30 days after receipt of the appeal.
(b) The Local WDB and chief elected official may appeal the final decision of the Governor to the Secretary of Labor not later than 30 days after receiving the decision from the Governor. Any appeal of the Governor's final decision must be:
(1) Appealed jointly by the Local WDB and chief elected official to the Secretary of Labor under 20 CFR 683.650; and
(2) Must be submitted by certified mail, return receipt requested, to the Secretary of Labor, U.S. Department of Labor, 200 Constitution Ave. NW., Washington DC 20210, Attention: ASET. A copy of the appeal must be simultaneously provided to the Governor.
(c) Upon receipt of the joint appeal from the Local WDB and chief elected official, the Secretary of Labor must make a final decision within 30 days. In making this determination the Secretary of Labor may consider any comments submitted by the Governor in response to the appeals.
(d) The decision by the Governor on the appeal becomes effective at the time it is issued and remains effective unless the Secretary of Labor rescinds or revises the reorganization plan under WIOA sec. 116(g)(2)(C).
(a) States are required to make available and publish annually using a template the Departments of Labor and Education will disseminate including through electronic means, the ETP performance reports for ETPs who provide services under sec. 122 of WIOA that are described in 20 CFR 680.400 through 680.530. These reports at a minimum must include, consistent with § 463.175 and with respect to each program of study that is eligible to receive funds under WIOA:
(1) The total number of participants as defined by § 463.150(a) who received training services under the adult and dislocated worker programs authorized under WIOA title I for the most recent year and the 3 preceding program years, including:
(i) The number of participants under the adult and dislocated worker programs disaggregated by barriers to employment;
(ii) The number of participants under the adult and dislocated worker programs disaggregated by race, ethnicity, sex, and age;
(iii) The number of participants under the adult and dislocated worker programs disaggregated by the type of training entity for the most recent program year and the 3 preceding program years;
(2) The total number of participants who exit a program of study or its equivalent, including disaggregate counts by the type of training entity during the most recent program year and the 3 preceding program years;
(3) The average cost-per-participant for participants who received training services for the most recent program year and the 3 preceding program years disaggregated by type of training entity;
(4) The total number of individuals exiting from the program of study (or the equivalent) with respect to all individuals engaging in the program of study (or the equivalent); and
(5) The levels of performance achieved for the primary indicators of performance identified in § 463.155(a)(1)(i) through (iv) with respect to all individuals engaging in a program of study (or the equivalent).
(b) Apprenticeship programs registered under the National Apprenticeship Act are not required to submit ETP performance information. If a registered apprenticeship program voluntarily submits performance information to a State, the State must include this information in the report.
(c) The State must provide a mechanism of electronic access to the public ETP performance report in its annual State performance report.
(d) States must comply with any requirements from sec. 116(d)(4) of WIOA as explained in guidance issued by DOL.
(e) The Governor may designate one or more State agencies such as a State Education Agency or other State Educational Authority to assist in overseeing ETP performance and facilitating the production and dissemination of ETP performance reports. These agencies may be the same agencies that are designated as responsible for administering the ETP list as provided under 20 CFR 680.500. The Governor or such agencies, or authorities, is responsible for:
(1) Facilitating data matches between ETP records and unemployment insurance (UI) wage data in order to produce the report;
(2) The creation and dissemination of the reports as described in paragraphs (a) through (d) of this section;
(3) Coordinating the dissemination of the performance reports with the ETP list and the information required to accompany the list, as provided in 20 CFR 680.500.
(a) On a quarterly basis, each State must submit to the Secretary of Labor or the Secretary of Education, as appropriate, individual records that include demographic information, information on services received, and information on resulting outcomes, as appropriate, for each reportable individual in either of the following programs administered by the Secretary of Labor or Secretary of Education: A WIOA title I core program; the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III; or the VR program authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV.
(b) For individual records submitted to the Secretary of Labor, those records may be required to be integrated across all programs administered by the Secretary of Labor in one single file.
(c) States must comply with the requirements of sec. 116(d)(2) of WIOA as explained in guidance issued by the Departments of Labor and Education.
(a) States must establish procedures, consistent with guidelines issued by the Secretary of Labor or the Secretary of Education, to ensure that they submit complete annual performance reports that contain information that is valid and reliable, as required by WIOA sec. 116(d)(5).
(b) If a State fails to meet standards in paragraph (a) of this section as determined by the Secretary of Labor or the Secretary of Education, the appropriate Secretary will provide technical assistance and may require the State to develop and implement corrective actions, which may require the State to provide training for its subrecipients.
(c) The Secretaries of Labor and Education will provide training and technical assistance to States in order to implement this section. States must comply with the requirements of sec. 116(d)(5) of WIOA as explained in guidance.
(a) The one-stop delivery system brings together workforce development, educational, and other human resource services in a seamless customer-focused service delivery network that enhances access to the programs' services and improves long-term employment outcomes for individuals receiving assistance. One-stop partners administer separately funded programs as a set of integrated streamlined services to customers.
(b) Title I of the Workforce Innovation and Opportunity Act (WIOA) assigns responsibilities at the local, State, and Federal level to ensure the creation and maintenance of a one-stop delivery system that enhances the range and quality of education and workforce development services that employers and individual customers can access.
(c) The system must include at least one comprehensive physical center in each local area as described in § 463.305.
(d) The system may also have additional arrangements to supplement the comprehensive center. These arrangements include:
(1) An affiliated site or a network of affiliated sites, where one or more partners make programs, services, and activities available, as described in § 463.310;
(2) A network of eligible one-stop partners, as described in §§ 463.400 through 463.410, through which each partner provides one or more of the programs, services, and activities that are linked, physically or technologically, to an affiliated site or access point that assures customers are provided information on the availability of career services, as well as other program services and activities, regardless of where they initially enter the public workforce system in the local area; and
(3) Specialized centers that address specific needs, including those of dislocated workers, youth, or key industry sectors, or clusters.
(e) Required one-stop partner programs must provide access to programs, services, and activities through electronic means if applicable and practicable. This is in addition to providing access to services through the mandatory comprehensive physical one-stop center and any affiliated sites or specialized centers. The provision of programs and services by electronic methods such as Web sites, telephones, or other means must improve the efficiency, coordination, and quality of one-stop partner services. Electronic delivery must not replace access to such services at a comprehensive one-stop center or be a substitute to making services available at an affiliated site if the partner is participating in an affiliated site. Electronic delivery systems must be in compliance with the nondiscrimination and equal opportunity provisions of WIOA sec. 188 and its implementing regulations at 29 CFR part 38.
(f) The design of the local area's one-stop delivery system must be described in the Memorandum of Understanding (MOU) executed with the one-stop partners, described in § 463.500.
(a) A comprehensive one-stop center is a physical location where job seeker and employer customers can access the programs, services, and activities of all required one-stop partners. A comprehensive one-stop center must have at least one title I staff person physically present.
(b) The comprehensive one-stop center must provide:
(1) Career services, described in § 463.430;
(2) Access to training services described in 20 CFR 680.200;
(3) Access to any employment and training activities carried out under sec. 134(d) of WIOA;
(4) Access to programs and activities carried out by one-stop partners listed in §§ 463.400 through 463.410, including the Employment Service program authorized under the Wagner-Peyser Act, as amended by WIOA title III (Wagner-Peyser Act Employment Service program); and
(5) Workforce and labor market information.
(c) Customers must have access to these programs, services, and activities during regular business days at a comprehensive one-stop center. The Local Workforce Development Board (WDB) may establish other service hours at other times to accommodate the schedules of individuals who work on regular business days. The State WDB will evaluate the hours of access to service as part of the evaluation of effectiveness in the one-stop certification process described in § 463.800(b).
(d) “Access” to each partner program and its services means:
(1) Having a program staff member physically present at the one-stop center;
(2) Having a staff member from a different partner program physically present at the one-stop center appropriately trained to provide information to customers about the programs, services, and activities available through partner programs; or
(3) Making available a direct linkage through technology to program staff who can provide meaningful information or services.
(i) A “direct linkage” means providing direct connection at the one-stop center, within a reasonable time, by phone or through a real-time Web-based communication to a program staff member who can provide program information or services to the customer.
(ii) A “direct linkage” cannot exclusively be providing a phone number or computer Web site or providing information, pamphlets, or materials.
(e) All comprehensive one-stop centers must be physically and programmatically accessible to individuals with disabilities, as described in 29 CFR part 38, the implementing regulations of WIOA sec. 188.
(a) An affiliated site, or affiliate one-stop center, is a site that makes available to job seeker and employer customers one or more of the one-stop partners' programs, services, and activities. An affiliated site does not need to provide access to every required one-stop partner program. The frequency of program staff's physical presence in the affiliated site will be determined at the local level. Affiliated sites are access points in addition to the comprehensive one-stop center(s) in each local area. If used by local areas as a part of the service delivery strategy, affiliate sites must be implemented in a manner that supplements and enhances customer access to services.
(b) As described in § 463.315, Wagner-Peyser Act employment services cannot be a stand-alone affiliated site.
(c) States, in conjunction with the Local WDBs, must examine lease agreements and property holdings throughout the one-stop delivery system in order to use property in an efficient and effective way. Where necessary and appropriate, States and Local WDBs must take expeditious steps to align lease expiration dates with efforts to consolidate one-stop operations into service points where Wagner-Peyser Act employment services are colocated as soon as reasonably possible. These steps must be included in the State Plan.
(d) All affiliated sites must be physically and programmatically accessible to individuals with disabilities, as described in 29 CFR part 38, the implementing regulations of WIOA sec. 188.
(a) Separate stand-alone Wagner-Peyser Act Employment Service offices are not permitted under WIOA, as also described in 20 CFR 652.202.
(b) If Wagner-Peyser Act employment services are provided at an affiliated site, there must be at least one or more other partners in the affiliated site with a physical presence of combined staff more than 50 percent of the time the center is open. Additionally, the other partner must not be the partner administering local veterans' employment representatives, disabled veterans' outreach program specialists, or unemployment compensation programs. If Wagner-Peyser Act employment services and any of these 3 programs are provided at an affiliated site, an additional partner or partners must have a presence of combined staff in the center more than 50 percent of the time the center is open.
Any network of one-stop partners or specialized centers, as described in § 463.300(d)(3), must be connected to the comprehensive one-stop center and any appropriate affiliate one-stop centers, for example, by having processes in place to make referrals to these centers and the partner programs located in them. Wagner-Peyser Act employment services cannot stand alone in a specialized center. Just as described in § 463.315 for an affiliated site, a specialized center must include other programs besides Wagner-Peyser Act employment services, local veterans' employment representatives, disabled veterans' outreach program specialists, and unemployment compensation.
(a) Section 121(b)(1)(B) of WIOA identifies the entities that are required partners in the local one-stop delivery systems.
(b) The required partners are the entities responsible for administering the following programs and activities in the local area:
(1) Programs authorized under title I of WIOA, including:
(i) Adults;
(ii) Dislocated workers;
(iii) Youth;
(iv) Job Corps;
(v) YouthBuild;
(vi) Native American programs; and
(vii) Migrant and seasonal farmworker programs;
(2) The Wagner-Peyser Act Employment Service program authorized under the Wagner-Peyser Act (29 U.S.C. 49 et seq.), as amended by WIOA title III;
(3) The Adult Education and Family Literacy Act (AEFLA) program authorized under title II of WIOA;
(4) The Vocational Rehabilitation (VR) program authorized under title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.), as amended by WIOA title IV;
(5) The Senior Community Service Employment Program authorized under title V of the Older Americans Act of 1965 (42 U.S.C. 3056 et seq.);
(6) Career and technical education programs at the postsecondary level authorized under the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2301 et seq.);
(7) Trade Adjustment Assistance activities authorized under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.);
(8) Jobs for Veterans State Grants programs authorized under chapter 41 of title 38, U.S.C.;
(9) Employment and training activities carried out under the Community Services Block Grant (42 U.S.C. 9901 et seq.);
(10) Employment and training activities carried out by the Department of Housing and Urban Development;
(11) Programs authorized under State unemployment compensation laws (in accordance with applicable Federal law);
(12) Programs authorized under sec. 212 of the Second Chance Act of 2007 (42 U.S.C. 17532); and
(13) Temporary Assistance for Needy Families (TANF) authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), unless exempted by the Governor under § 463.405(b).
(a) Yes, TANF, authorized under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), is a required partner.
(b) The Governor may determine that TANF will not be a required partner in the State, or within some specific local areas in the State. In this instance, the Governor must notify the Secretaries of the U.S. Departments of Labor and Health and Human Services in writing of this determination.
(c) In States, or local areas within a State, where the Governor has determined that TANF is not required to be a partner, local TANF programs may still work in collaboration or partnership with the local one-stop centers to deliver employment and training services to the TANF population unless inconsistent with the Governor's direction.
(a) Other entities that carry out a workforce development program, including Federal, State, or local programs and programs in the private sector, may serve as additional partners in the one-stop delivery system if the Local WDB and chief elected official(s) approve the entity's participation.
(b) Additional partners may include, but are not limited to:
(1) Employment and training programs administered by the Social Security Administration, including the Ticket to Work and Self-Sufficiency Program established under sec. 1148 of the Social Security Act (42 U.S.C. 1320b-19);
(2) Employment and training programs carried out by the Small Business Administration;
(3) Supplemental Nutrition Assistance Program (SNAP) employment and training programs, authorized under secs. 6(d)(4) and 6(o) of the Food and Nutrition Act of 2008 (7 U.S.C. 2015(d)(4));
(4) Client Assistance Program authorized under sec. 112 of the Rehabilitation Act of 1973 (29 U.S.C. 732);
(5) Programs authorized under the National and Community Service Act of 1990 (42 U.S.C. 12501 et seq.); and
(6) Other appropriate Federal, State or local programs, including, but not limited to, employment, education, and training programs provided by public libraries or in the private sector.
(a) The entity that carries out the program and activities listed in § 463.400 or § 463.410, and therefore serves as the one-stop partner, is the grant recipient, administrative entity, or organization responsible for administering the funds of the specified program in the local area. The term “entity” does not include the service providers that contract with, or are subrecipients of, the local administrative entity. For programs that do not include local administrative entities, the responsible State agency must be the partner. Specific entities for particular programs are identified in paragraphs (b) through (e) of this section. If a program or activity listed in § 463.400 is not carried out in a local area, the requirements relating to a required one-stop partner are not applicable to such program or activity in that local one-stop delivery system.
(b) For title II of WIOA, the entity or agency that carries out the program for the purposes of paragraph (a) of this section is the sole entity or agency in the State or outlying area responsible for administering or supervising policy for adult education and literacy activities in the State or outlying area. The State eligible entity or agency may delegate its responsibilities under paragraph (a) of this section to one or more eligible providers or consortium of eligible providers.
(c) For the VR program, authorized under title I of the Rehabilitation Act of 1973, as amended by WIOA title IV, the entity that carries out the program for the purposes of paragraph (a) of this section is the designated State agencies or designated State units specified under sec. 101(a)(2) of the Rehabilitation Act that is primarily concerned with vocational rehabilitation, or vocational and other rehabilitation, of individuals with disabilities.
(d) Under WIOA title I, the national programs, including Job Corps, the Native American program, YouthBuild, and Migrant and Seasonal Farmworker programs are required one-stop partners. The entity for the Native American program, YouthBuild, and Migrant and Seasonal Farmworker programs is the grantee of those respective programs. The entity for Job Corps is the Job Corps center.
(e) For the Carl D. Perkins Career and Technical Education Act of 2006, the entity that carries out the program for the purposes of paragraph (a) of this section is the eligible recipient or recipients at the postsecondary level, or a consortium of eligible recipients at the postsecondary level in the local area. The eligible recipient at the postsecondary level may also request assistance from the State eligible agency in completing its responsibilities under paragraph (a) of this section.
Each required partner must:
(a) Provide access to its programs or activities through the one-stop delivery system, in addition to any other appropriate locations;
(b) Use a portion of funds made available to the partner's program, to the extent consistent with the Federal law authorizing the partner's program and with Federal cost principles in 2 CFR parts 200 and 3474 (requiring, among other things, that costs are allowable, reasonable, necessary, and allocable), to:
(1) Provide applicable career services; and
(2) Work collaboratively with the State and Local WDBs to establish and maintain the one-stop delivery system. This includes jointly funding the one-stop infrastructure through partner contributions that are based upon:
(i) A reasonable cost allocation methodology by which infrastructure costs are charged to each partner based on proportionate use and relative benefit received;
(ii) Federal cost principles; and
(iii) Any local administrative cost requirements in the Federal law authorizing the partner's program. (This is further described in § 463.700.)
(c) Enter into an MOU with the Local WDB relating to the operation of the one-stop delivery system that meets the requirements of § 463.500(b);
(d) Participate in the operation of the one-stop delivery system consistent with the terms of the MOU, requirements of authorizing laws, the Federal cost principles, and all other applicable legal requirements; and
(e) Provide representation on the State and Local WDBs as required and participate in Board committees as needed.
(a) The applicable career services to be delivered by required one-stop partners are those services listed in § 463.430 that are authorized to be provided under each partner's program.
(b) One-stop centers provide services to individual customers based on individual needs, including the seamless delivery of multiple services to individual customers. There is no required sequence of services.
Career services, as identified in sec. 134(c)(2) of WIOA, consist of three types:
(a) Basic career services must be made available and, at a minimum, must include the following services, as consistent with allowable program activities and Federal cost principles:
(1) Determinations of whether the individual is eligible to receive assistance from the adult, dislocated worker, or youth programs;
(2) Outreach, intake (including worker profiling), and orientation to information and other services available through the one-stop delivery system. For the TANF program, States must provide individuals with the opportunity to initiate an application for TANF assistance and non-assistance benefits and services, which could be implemented through the provision of paper application forms or links to the application Web site;
(3) Initial assessment of skill levels including literacy, numeracy, and English language proficiency, as well as aptitudes, abilities (including skills gaps), and supportive services needs;
(4) Labor exchange services, including—
(i) Job search and placement assistance, and, when needed by an individual, career counseling, including—
(A) Provision of information on in-demand industry sectors and occupations (as defined in sec. 3(23) of WIOA); and
(B) Provision of information on nontraditional employment; and
(ii) Appropriate recruitment and other business services on behalf of employers, including information and referrals to specialized business services other than those traditionally offered through the one-stop delivery system;
(5) Provision of referrals to and coordination of activities with other programs and services, including programs and services within the one-stop delivery system and, when appropriate, other workforce development programs;
(6) Provision of workforce and labor market employment statistics information, including the provision of accurate information relating to local, regional, and national labor market areas, including—
(i) Job vacancy listings in labor market areas;
(ii) Information on job skills necessary to obtain the vacant jobs listed; and
(iii) Information relating to local occupations in demand and the earnings, skill requirements, and opportunities for advancement for those jobs;
(7) Provision of performance information and program cost information on eligible providers of education, training, and workforce services by program and type of providers;
(8) Provision of information, in usable and understandable formats and languages, about how the local area is performing on local performance accountability measures, as well as any additional performance information relating to the area's one-stop delivery system;
(9) Provision of information, in usable and understandable formats and languages, relating to the availability of supportive services or assistance, and appropriate referrals to those services and assistance, including: Child care; child support; medical or child health assistance available through the State's Medicaid program and Children's Health Insurance Program; benefits under SNAP; assistance through the earned income tax credit; and assistance under a State program for TANF, and other supportive services and transportation provided through that program;
(10) Provision of information and meaningful assistance to individuals seeking assistance in filing a claim for unemployment compensation.
(i) “Meaningful assistance” means:
(A) Providing assistance on-site using staff who are well-trained in unemployment compensation claims filing and the rights and responsibilities of claimants; or
(B) Providing assistance by phone or via other technology, as long as the assistance is provided by trained and available staff and within a reasonable time.
(ii) The costs associated in providing this assistance may be paid for by the State's unemployment insurance program, or the WIOA adult or dislocated worker programs, or some combination thereof.
(11) Assistance in establishing eligibility for programs of financial aid assistance for training and education programs not provided under WIOA.
(b) Individualized career services must be made available if determined to be appropriate in order for an individual to obtain or retain employment. These services include the following services, as consistent with program requirements and Federal cost principles:
(1) Comprehensive and specialized assessments of the skill levels and service needs of adults and dislocated workers, which may include—
(i) Diagnostic testing and use of other assessment tools; and
(ii) In-depth interviewing and evaluation to identify employment barriers and appropriate employment goals;
(2) Development of an individual employment plan, to identify the employment goals, appropriate achievement objectives, and appropriate combination of services for the participant to achieve his or her employment goals, including the list of, and information about, the eligible training providers (as described in 20 CFR 680.180);
(3) Group counseling;
(4) Individual counseling;
(5) Career planning;
(6) Short-term pre-vocational services including development of learning skills, communication skills, interviewing skills, punctuality, personal maintenance skills, and professional conduct services to prepare individuals for unsubsidized employment or training;
(7) Internships and work experiences that are linked to careers (as described in 20 CFR 680.170);
(8) Workforce preparation activities;
(9) Financial literacy services as described in sec. 129(b)(2)(D) of WIOA and 20 CFR 681.500;
(10) Out-of-area job search assistance and relocation assistance; and
(11) English language acquisition and integrated education and training programs.
(c) Follow-up services must be provided, as appropriate, including: Counseling regarding the workplace, for participants in adult or dislocated worker workforce investment activities who are placed in unsubsidized employment, for up to 12 months after the first day of employment.
(d) In addition to the requirements in paragraph (a)(2) of this section, TANF agencies must identify employment services and related support being provided by the TANF program (within the local area) that qualify as career services and ensure access to them via the local one-stop delivery system.
(a) Certain career services must be made available to local employers, specifically labor exchange activities and labor market information described in § 463.430(a)(4)(ii) and (a)(6). Local areas must establish and develop relationships and networks with large and small employers and their intermediaries. Local areas also must develop, convene, or implement industry or sector partnerships.
(b) Customized business services may be provided to employers, employer associations, or other such organizations. These services are tailored for specific employers and may include:
(1) Customized screening and referral of qualified participants in training services to employers;
(2) Customized services to employers, employer associations, or other such organizations, on employment-related issues;
(3) Customized recruitment events and related services for employers including targeted job fairs;
(4) Human resource consultation services, including but not limited to assistance with:
(i) Writing/reviewing job descriptions and employee handbooks;
(ii) Developing performance evaluation and personnel policies;
(iii) Creating orientation sessions for new workers;
(iv) Honing job interview techniques for efficiency and compliance;
(v) Analyzing employee turnover;
(vi) Creating job accommodations and using assistive technologies; or
(vii) Explaining labor and employment laws to help employers comply with discrimination, wage/hour, and safety/health regulations;
(5) Customized labor market information for specific employers, sectors, industries or clusters; and
(6) Other similar customized services.
(c) Local areas may also provide other business services and strategies that meet the workforce investment needs of area employers, in accordance with partner programs' statutory requirements and consistent with Federal cost principles. These business services may be provided through effective business intermediaries working in conjunction with the Local WDB, or through the use of economic development, philanthropic, and other public and private resources in a manner determined appropriate by the Local WDB and in cooperation with the State. Allowable activities, consistent with each partner's authorized activities, include, but are not limited to:
(1) Developing and implementing industry sector strategies (including strategies involving industry partnerships, regional skills alliances, industry skill panels, and sectoral skills partnerships);
(2) Customized assistance or referral for assistance in the development of a registered apprenticeship program;
(3) Developing and delivering innovative workforce investment services and strategies for area employers, which may include career pathways, skills upgrading, skill standard development and certification for recognized postsecondary credential or other employer use, and other effective initiatives for meeting the workforce investment needs of area employers and workers;
(4) Assistance to area employers in managing reductions in force in coordination with rapid response activities and with strategies for the aversion of layoffs, which may include strategies such as early identification of firms at risk of layoffs, use of feasibility studies to assess the needs of and options for at-risk firms, and the delivery of employment and training activities to address risk factors;
(5) The marketing of business services to appropriate area employers, including small and mid-sized employers; and
(6) Assisting employers with accessing local, State, and Federal tax credits.
(d) All business services and strategies must be reflected in the local plan, described in 20 CFR 679.560(b)(3).
(a) There is no requirement that a fee-for-service be charged to employers.
(b) No fee may be charged for services provided in § 463.435(a).
(c) A fee may be charged for services provided under § 463.435(b) and (c). Services provided under § 463.435(c) may be provided through effective business intermediaries working in conjunction with the Local WDB and may also be provided on a fee-for-service basis or through the leveraging of economic development, philanthropic, and other public and private resources in a manner determined appropriate by the Local WDB. The Local WDB may examine the services provided compared with the assets and resources available within the local one-stop delivery system and through its partners to determine an appropriate cost structure for services, if any.
(d) Any fees earned are recognized as program income and must be expended by the partner in accordance with the partner program's authorizing statute, implementing regulations, and Federal cost principles identified in Uniform Guidance.
(a) The MOU is the product of local discussion and negotiation, and is an agreement developed and executed between the Local WDB and the one-stop partners, with the agreement of the chief elected official and the one-stop partners, relating to the operation of the one-stop delivery system in the local area. Two or more local areas in a region may develop a single joint MOU, if they are in a region that has submitted a regional plan under sec. 106 of WIOA.
(b) The MOU must include:
(1) A description of services to be provided through the one-stop delivery system, including the manner in which the services will be coordinated and delivered through the system;
(2) Agreement on funding the costs of the services and the operating costs of the system, including:
(i) Funding of infrastructure costs of one-stop centers in accordance with §§ 463.700 through 463.755; and
(ii) Funding of the shared services and operating costs of the one-stop delivery system described in § 463.760;
(3) Methods for referring individuals between the one-stop operators and partners for appropriate services and activities;
(4) Methods to ensure that the needs of workers, youth, and individuals with barriers to employment, including individuals with disabilities, are addressed in providing access to services, including access to technology and materials that are available through the one-stop delivery system;
(5) The duration of the MOU and procedures for amending it; and
(6) Assurances that each MOU will be reviewed, and if substantial changes have occurred, renewed, not less than once every 3-year period to ensure appropriate funding and delivery of services.
(c) The MOU may contain any other provisions agreed to by the parties that are consistent with WIOA title I, the authorizing statutes and regulations of one-stop partner programs, and the WIOA regulations.
(d) When fully executed, the MOU must contain the signatures of the Local WDB, one-stop partners, the chief elected official(s), and the time period in which the agreement is effective. The MOU must be updated not less than every 3 years to reflect any changes in the signatory official of the Board, one-stop partners, and chief elected officials, or one-stop infrastructure funding.
(e) If a one-stop partner appeal to the State regarding infrastructure costs, using the process described in § 463.750, results in a change to the one-stop partner's infrastructure cost contributions, the MOU must be updated to reflect the final one-stop partner infrastructure cost contributions.
(a) A single “umbrella” MOU may be developed that addresses the issues relating to the local one-stop delivery system for the Local WDB, chief elected official and all partners. Alternatively, the Local WDB (with agreement of chief elected official) may enter into separate agreements between each partner or groups of partners.
(b) Under either approach, the requirements described in § 463.500 apply. Since funds are generally appropriated annually, the Local WDB may negotiate financial agreements with each partner annually to update funding of services and operating costs of the system under the MOU.
(a) WIOA emphasizes full and effective partnerships between Local WDBs, chief elected officials, and one-stop partners. Local WDBs and partners must enter into good-faith negotiations. Local WDBs, chief elected officials, and one-stop partners may also request assistance from a State agency responsible for administering the partner program, the Governor, State WDB, or other appropriate parties on other aspects of the MOU.
(b) Local WDBs and one-stop partners must establish, in the MOU, how they will fund the infrastructure costs and other shared costs of the one-stop centers. If agreement regarding infrastructure costs is not reached when other sections of the MOU are ready, an interim infrastructure funding agreement may be included instead, as described in § 463.715(c). Once agreement on infrastructure funding is reached, the Local WDB and one-stop partners must amend the MOU to include the infrastructure funding of the one-stop centers. Infrastructure funding is described in detail in §§ 463.700 through 463.760.
(c) The Local WDB must report to the State WDB, Governor, and relevant State agency when MOU negotiations with one-stop partners have reached an impasse.
(1) The Local WDB and partners must document the negotiations and efforts that have taken place in the MOU. The State WDB, one-stop partner programs, and the Governor may consult with the appropriate Federal agencies to address impasse situations related to issues other than infrastructure funding after attempting to address the impasse. Impasses related to infrastructure cost funding must be resolved using the State infrastructure cost funding mechanism described in § 463.730.
(2) The Local WDB must report failure to execute an MOU with a required partner to the Governor, State WDB, and the State agency responsible for administering the partner's program. Additionally, if the State cannot assist the Local WDB in resolving the impasse, the Governor or the State WDB must report the failure to the Secretary of Labor and to the head of any other Federal agency with responsibility for oversight of a partner's program.
(a) One-stop operators may be a single entity (public, private, or nonprofit) or a consortium of entities. If the consortium of entities is one of one-stop partners, it must include a minimum of three of the one-stop partners described in § 463.400.
(b) The one-stop operator may operate one or more one-stop centers. There may be more than one one-stop operator in a local area.
(c) The types of entities that may be a one-stop operator include:
(1) An institution of higher education;
(2) An Employment Service State agency established under the Wagner-Peyser Act;
(3) A community-based organization, nonprofit organization, or workforce intermediary;
(4) A private for-profit entity;
(5) A government agency;
(6) A Local WDB, with the approval of the chief elected official and the Governor; or
(7) Another interested organization or entity, which is capable of carrying out the duties of the one-stop operator. Examples may include a local chamber of commerce or other business organization, or a labor organization.
(d) Elementary schools and secondary schools are not eligible as one-stop operators, except that a nontraditional public secondary school such as a night school, adult school, or an area career and technical education school may be selected.
(e) The State and Local WDBs must ensure that, in carrying out WIOA programs and activities, one-stop operators:
(1) Disclose any potential conflicts of interest arising from the relationships of the operators with particular training service providers or other service providers (further discussed in 20 CFR 679.430);
(2) Do not establish practices that create disincentives to providing services to individuals with barriers to employment who may require longer-term career and training services; and
(3) Comply with Federal regulations and procurement policies relating to the calculation and use of profits, including those at 20 CFR 683.295, the Uniform Guidance at 2 CFR part 200, and other applicable regulations and policies.
(a) Consistent with paragraphs (b) and (c) of this section, the Local WDB must select the one-stop operator through a competitive process, as required by sec. 121(d)(2)(A) of WIOA, at least once every 4 years. A State may require, or a Local WDB may choose to implement, a competitive selection process more than once every 4 years.
(b) In instances in which a State is conducting the competitive process described in paragraph (a) of this section, the State must follow the same policies and procedures it uses for procurement with non-Federal funds.
(c) All other non-Federal entities, including subrecipients of a State (such as local areas), must use a competitive process based on local procurement policies and procedures and the principles of competitive procurement in the Uniform Guidance set out at 2 CFR 200.318 through 200.326. All references to “noncompetitive proposals” in the Uniform Guidance at 2 CFR 200.320(f) will be read as “sole source procurement” for the purposes of implementing this section.
(d) Entities must prepare written documentation explaining the determination concerning the nature of the competitive process to be followed in selecting a one-stop operator.
(a) States may select a one-stop operator through sole source selection when allowed under the same policies and procedures used for competitive procurement with non-Federal funds, while other non-Federal entities including subrecipients of a State (such as local areas) may select a one-stop operator through sole selection when consistent with local procurement policies and procedures and the Uniform Guidance set out at 2 CFR 200.320.
(b) In the event that sole source procurement is determined necessary and reasonable, in accordance with § 463.605(c), written documentation must be prepared and maintained concerning the entire process of making such a selection.
(c) Such sole source procurement must include appropriate conflict of interest policies and procedures. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
(d) A Local WDB may be selected as a one-stop operator through sole source procurement only with agreement of the chief elected official in the local area and the Governor. The Local WDB must establish sufficient conflict of interest policies and procedures and these policies and procedures must be approved by the Governor.
(a) Local WDBs may compete for and be selected as one-stop operators, as long as appropriate firewalls and conflict of interest policies and procedures are in place. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
(b) State and local agencies may compete for and be selected as one-stop operators by the Local WDB, as long as appropriate firewalls and conflict of interest policies and procedures are in place. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
(c) In the case of single-area States where the State WDB serves as the Local WDB, the State agency is eligible to compete for and be selected as operator as long as appropriate firewalls and conflict of interest policies are in place and followed for the competition. These policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflicts of interest.
(a) At a minimum, the one-stop operator must coordinate the service delivery of required one-stop partners and service providers. Local WDBs may establish additional roles of one-stop operator, including, but not limited to: Coordinating service providers across the one-stop delivery system, being the primary provider of services within the center, providing some of the services within the center, or coordinating service delivery in a multi-center area, which may include affiliated sites. The competition for a one-stop operator must clearly articulate the role of the one-stop operator.
(b)(1) Subject to paragraph (b)(2) of this section, a one-stop operator may not perform the following functions: Convene system stakeholders to assist in the development of the local plan; prepare and submit local plans (as required under sec. 107 of WIOA); be responsible for oversight of itself; manage or significantly participate in the competitive selection process for one-stop operators; select or terminate one-stop operators, career services, and youth providers; negotiate local performance accountability measures; or develop and submit budget for activities of the Local WDB in the local area.
(2) An entity serving as a one-stop operator, that also serves a different role within the one-stop delivery system, may perform some or all of these functions when it is acting in its other role, if it has established sufficient firewalls and conflict of interest policies and procedures. The policies and procedures must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflict of interest.
Yes, but there must be appropriate firewalls in place in regards to the competition, and subsequent oversight, monitoring, and evaluation of performance of the service provider. The operator cannot develop, manage, or conduct the competition of a service provider in which it intends to compete. In cases where an operator is also a service provider, there must be firewalls and internal controls within the operator-service provider entity, as well as specific policies and procedures at the Local WDB level regarding oversight, monitoring, and evaluation of performance of the service provider. The firewalls must conform to the specifications in 20 CFR 679.430 for demonstrating internal controls and preventing conflicts of interest.
Yes. State merit staff can continue to perform functions and activities in the one-stop center. The Local WDB and one-stop operator must establish a system for management of merit staff in accordance with State policies and procedures. Continued use of State merit staff for the provision of Wagner-Peyser Act services or services from other programs with merit staffing requirements must be included in the competition for and final contract with the one-stop operator when Wagner-Peyser Act services or services from other programs with merit staffing requirements are being provided.
(a) No later than July 1, 2017, one-stop operators selected under the competitive process described in this subpart must be in place and operating the one-stop center.
(b) By November 17, 2016, every Local WDB must demonstrate it is taking steps to prepare for competition of its one-stop operator. This demonstration may include, but is not limited to, market research, requests for information, and conducting a cost and price analysis.
(a) Infrastructure costs of one-stop centers are nonpersonnel costs that are necessary for the general operation of the one-stop center, including:
(1) Rental of the facilities;
(2) Utilities and maintenance;
(3) Equipment (including assessment-related products and assistive technology for individuals with disabilities); and
(4) Technology to facilitate access to the one-stop center, including technology used for the center's planning and outreach activities.
(b) Local WDBs may consider common identifier costs as costs of one-stop infrastructure.
(c) Each entity that carries out a program or activities in a local one-stop center, described in §§ 463.400 through 463.410, must use a portion of the funds available for the program and activities to maintain the one-stop delivery system, including payment of the infrastructure costs of one-stop centers. These payments must be in accordance with this subpart; Federal cost principles, which require that all costs must be allowable, reasonable, necessary, and allocable to the program; and all other applicable legal requirements.
(a) The Governor, after consultation with chief elected officials, the State WDB, and Local WDBs, and consistent with guidance and policies provided by the State WDB, must develop and issue guidance for use by local areas, specifically:
(1) Guidelines for State-administered one-stop partner programs for determining such programs' contributions to a one-stop delivery system, based on such programs' proportionate use of such system, and relative benefit received, consistent with Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200, including determining funding for the costs of infrastructure; and
(2) Guidance to assist Local WDBs, chief elected officials, and one-stop partners in local areas in determining equitable and stable methods of funding the costs of infrastructure at one-stop centers based on proportionate use and relative benefit received, and consistent with Federal cost principles contained in the Uniform Guidance at 2 CFR part 200.
(b) The guidance must include:
(1) The appropriate roles of the one-stop partner programs in identifying one-stop infrastructure costs;
(2) Approaches to facilitate equitable and efficient cost allocation that results in a reasonable cost allocation methodology where infrastructure costs are charged to each partner based on its proportionate use of the one-stop centers and relative benefit received, consistent with Federal cost principles at 2 CFR part 200; and
(3) The timelines regarding notification to the Governor for not reaching local agreement and triggering the State funding mechanism described in § 463.730, and timelines for a one-stop partner to submit an appeal in the State funding mechanism.
Infrastructure costs are funded either through the local funding mechanism described in § 463.715 or through the State funding mechanism described in § 463.730.
(a) In the local funding mechanism, the Local WDB, chief elected officials, and one-stop partners agree to amounts and methods of calculating amounts each partner will contribute for one-stop infrastructure funding, include the infrastructure funding terms in the MOU, and sign the MOU. The local funding mechanism must meet all of the following requirements:
(1) The infrastructure costs are funded through cash and fairly evaluated non-cash and third-party in-kind partner contributions and include any funding from philanthropic organizations or other private entities, or through other alternative financing options, to provide a stable and equitable funding stream for ongoing one-stop delivery system operations;
(2) Contributions must be negotiated between one-stop partners, chief elected officials, and the Local WDB and the amount to be contributed must be included in the MOU;
(3) The one-stop partner program's proportionate share of funding must be calculated in accordance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in 2 CFR part 200 based upon a reasonable cost allocation methodology whereby infrastructure costs are charged to each partner in proportion to its use of the one-stop center, relative to benefits received. Such costs must also be allowable, reasonable, necessary, and allocable;
(4) Partner shares must be periodically reviewed and reconciled against actual costs incurred, and adjusted to ensure that actual costs charged to any one-stop partners are proportionate to the use of the one-stop center and relative to the benefit received by the one-stop partners and their respective programs or activities.
(b) In developing the section of the MOU on one-stop infrastructure funding described in § 463.755, the Local WDB and chief elected officials will:
(1) Ensure that the one-stop partners adhere to the guidance identified in § 463.705 on one-stop delivery system infrastructure costs.
(2) Work with one-stop partners to achieve consensus and informally mediate any possible conflicts or disagreements among one-stop partners.
(3) Provide technical assistance to new one-stop partners and local grant recipients to ensure that those entities are informed and knowledgeable of the elements contained in the MOU and the one-stop infrastructure costs arrangement.
(c) The MOU may include an interim infrastructure funding agreement, including as much detail as the Local WDB has negotiated with one-stop partners, if all other parts of the MOU have been negotiated, in order to allow the partner programs to operate in the one-stop centers. The interim infrastructure funding agreement must be finalized within 6 months of when the MOU is signed. If the interim infrastructure funding agreement is not finalized within that timeframe, the Local WDB must notify the Governor, as described in § 463.725.
(a) In the local funding mechanism, one-stop partner programs may determine what funds they will use to pay for infrastructure costs. The use of these funds must be in accordance with the requirements in this subpart, and with the relevant partner's authorizing statutes and regulations, including, for example, prohibitions against supplanting non-Federal resources, statutory limitations on administrative costs, and all other applicable legal requirements. In the case of partners administering programs authorized by title I of WIOA, these infrastructure costs may be considered program costs. In the case of partners administering adult education and literacy programs authorized by title II of WIOA, these funds must include Federal funds made available for the local administration of adult education and literacy programs authorized by title II of WIOA. These funds may also include non-Federal resources that are cash, in-kind or third-party contributions. In the case of partners administering the Carl D. Perkins Career and Technical Education Act of 2006, funds used to pay for infrastructure costs may include funds available for local administrative expenses, non-Federal resources that are cash, in-kind or third-party contributions, and may include other funds made available by the State.
(b) There are no specific caps on the amount or percent of overall funding a one-stop partner may contribute to fund infrastructure costs under the local funding mechanism, except that contributions for administrative costs may not exceed the amount available for administrative costs under the authorizing statute of the partner program. However, amounts contributed for infrastructure costs must be allowable and based on proportionate use of the one-stop centers and relative benefit received by the partner program, taking into account the total cost of the one-stop infrastructure as well as alternate financing options, and must be consistent with 2 CFR part 200, including the Federal cost principles.
(c) Cash, non-cash, and third-party in-kind contributions may be provided by one-stop partners to cover their proportionate share of infrastructure costs.
(1) Cash contributions are cash funds provided to the Local WDB or its designee by one-stop partners, either directly or by an interagency transfer.
(2) Non-cash contributions are comprised of—
(i) Expenditures incurred by one-stop partners on behalf of the one-stop center; and
(ii) Non-cash contributions or goods or services contributed by a partner program and used by the one-stop center.
(3) Non-cash contributions, especially those set forth in paragraph (c)(2)(ii) of this section, must be valued consistent with 2 CFR 200.306 to ensure they are fairly evaluated and meet the partners' proportionate share.
(4) Third-party in-kind contributions are:
(i) Contributions of space, equipment, technology, non-personnel services, or other like items to support the infrastructure costs associated with one-stop operations, by a non-one-stop partner to support the one-stop center in general, not a specific partner; or
(ii) Contributions by a non-one-stop partner of space, equipment, technology, non-personnel services, or other like items to support the infrastructure costs associated with one-stop operations, to a one-stop partner to support its proportionate share of one-stop infrastructure costs.
(iii) In-kind contributions described in paragraphs (c)(4)(i) and (ii) of this section must be valued consistent with 2 CFR 200.306 and reconciled on a regular basis to ensure they are fairly evaluated and meet the proportionate share of the partner.
(5) All partner contributions, regardless of the type, must be reconciled on a regular basis (i.e., monthly or quarterly), comparing actual expenses incurred to relative benefits received, to ensure each partner program is contributing its proportionate share in accordance with the terms of the MOU.
With regard to negotiations for infrastructure funding for Program Year (PY) 2017 and for each subsequent program year thereafter, if the Local WDB, chief elected officials, and one-stop partners do not reach consensus on methods of sufficiently funding local infrastructure through the local funding mechanism in accordance with the Governor's guidance issued under § 463.705 and consistent with the regulations in §§ 463.715 and 463.720, and include that consensus agreement in the signed MOU, then the Local WDB must notify the Governor by the deadline established by the Governor under § 463.705(b)(3). Once notified, the Governor must administer funding through the State funding mechanism, as described in §§ 463.730 through 463.738, for the program year impacted by the local area's failure to reach consensus.
(a) Consistent with sec. 121(h)(1)(A)(i)(II) of WIOA, if the Local WDB, chief elected official, and one-stop partners in a local area do not reach consensus agreement on methods of sufficiently funding the costs of infrastructure of one-stop centers for a program year, the State funding mechanism is applicable to the local area for that program year.
(b) In the State funding mechanism, the Governor, subject to the limitations in paragraph (c) of this section, determines one-stop partner contributions after consultation with the chief elected officials, Local WDBs, and the State WDB. This determination involves:
(1) The application of a budget for one-stop infrastructure costs as described in § 463.735, based on either agreement reached in the local area negotiations or the State WDB formula outlined in § 463.745;
(2) The determination of each local one-stop partner program's proportionate use of the one-stop delivery system and relative benefit received, consistent with the Uniform Guidance at 2 CFR part 200, including the Federal cost principles, the partner programs' authorizing laws and regulations, and other applicable legal requirements described in § 463.736; and
(3) The calculation of required statewide program caps on contributions to infrastructure costs from one-stop partner programs in areas operating under the State funding mechanism as described in § 463.738.
(c) In certain situations, the Governor does not determine the infrastructure cost contributions for some one-stop partner programs under the State funding mechanism.
(1) The Governor will not determine the contribution amounts for infrastructure funds for Native American program grantees described in 20 CFR part 684. The appropriate portion of funds to be provided by Native American program grantees to pay for one-stop infrastructure must be determined as part of the development of the MOU described in § 463.500 and specified in that MOU.
(2) In States in which the policy-making authority is placed in an entity or official that is independent of the authority of the Governor with respect to the funds provided for adult education and literacy activities authorized under title II of WIOA, postsecondary career and technical education activities authorized under the Carl D. Perkins Career and Technical Education Act of 2006, or VR services authorized under title I of the Rehabilitation Act of 1973 (other than sec. 112 or part C), as amended by WIOA title IV, the determination of the amount each of the applicable partners must contribute to assist in paying the infrastructure costs of one-stop centers must be made by the official or chief officer of the entity with such authority, in consultation with the Governor.
(d) Any duty, ability, choice, responsibility, or other action otherwise related to the determination of infrastructure costs contributions that is assigned to the Governor in §§ 463.730 through 463.745 also applies to this decision-making process performed by the official or chief officer described in paragraph (c)(2) of this section.
(a) To initiate the State funding mechanism, a Local WDB that has not reached consensus on methods of sufficiently funding local infrastructure through the local funding mechanism as provided in § 463.725 must notify the Governor by the deadline established by the Governor under § 463.705(b)(3).
(b) Once a Local WDB has informed the Governor that no consensus has been reached:
(1) The Local WDB must provide the Governor with local negotiation materials in accordance with § 463.735(a).
(2) The Governor must determine the one-stop center budget by either:
(i) Accepting a budget previously agreed upon by partner programs in the local negotiations, in accordance with § 463.735(b)(1); or
(ii) Creating a budget for the one-stop center using the State WDB formula (described in § 463.745) in accordance with § 463.735(b)(3).
(3) The Governor then must establish a cost allocation methodology to determine the one-stop partner programs' proportionate shares of infrastructure costs, in accordance with § 463.736.
(4)(i) Using the methodology established under paragraph (b)(2)(ii) of this section, and taking into consideration the factors concerning individual partner programs listed in § 463.737(b)(2), the Governor must determine each partner's proportionate share of the infrastructure costs, in accordance with § 463.737(b)(1), and
(ii) In accordance with § 463.730(c), in some instances, the Governor does not determine a partner program's proportionate share of infrastructure funding costs, in which case it must be determined by the entities named in § 463.730(c)(1) and (2).
(5) The Governor must then calculate the statewide caps on the amounts that partner programs may be required to contribute toward infrastructure funding, according to the steps found at § 463.738(a)(1) through (4).
(6) The Governor must ensure that the aggregate total of the infrastructure contributions according to proportionate share required of all local partner programs in local areas under the State funding mechanism do not exceed the cap for that particular program, in accordance with § 463.738(b)(1). If the total does not exceed the cap, the Governor must direct each one-stop partner program to pay the amount determined under § 463.737(a) toward the infrastructure funding costs of the one-stop center. If the total does exceed the cap, then to determine the amount to direct each one-stop program to pay, the Governor may:
(i) Ascertain, in accordance with § 463.738(b)(2)(i), whether the local partner or partners whose proportionate shares are calculated above the individual program caps are willing to voluntarily contribute above the capped amount to equal that program's proportionate share; or
(ii) Choose from the options provided in § 463.738(b)(2)(ii), including having the local area re-enter negotiations to reassess each one-stop partner's proportionate share and make adjustments or identify alternate sources of funding to make up the difference between the capped amount and the proportionate share of infrastructure funding of the one-stop partner.
(7) If none of the solutions given in paragraphs (b)(6)(i) and (ii) of this section prove to be viable, the Governor must reassess the proportionate shares of each one-stop partner so that the aggregate amount attributable to the local partners for each program is less than that program's cap amount. Upon such reassessment, the Governor must direct each one-stop partner program to pay the reassessed amount toward the infrastructure funding costs of the one-stop center.
(a) Local WDBs must provide to the Governor appropriate and relevant materials and documents used in the negotiations under the local funding mechanism, including but not limited to: The local WIOA plan, the cost allocation method or methods proposed by the partners to be used in determining proportionate share, the proposed amounts or budget to fund infrastructure, the amount of total partner funds included, the type of funds or non-cash contributions, proposed one-stop center budgets, and any agreed upon or proposed MOUs.
(b)(1) If a local area has reached agreement as to the infrastructure budget for the one-stop centers in the local area, it must provide this budget to the Governor as required by paragraph (a) of this section. If, as a result of the agreed upon infrastructure budget, only the individual programmatic contributions to infrastructure funding based upon proportionate use of the one-stop centers and relative benefit received are at issue, the Governor may accept the budget, from which the Governor must calculate each partner's contribution consistent with the cost allocation methodologies contained in the Uniform Guidance found in 2 CFR part 200, as described in § 463.736.
(2) The Governor may also take into consideration the extent to which the partners in the local area have agreed in determining the proportionate shares, including any agreements reached at the local level by one or more partners, as well as any other element or product of the negotiating process provided to the Governor as required by paragraph (a) of this section.
(3) If a local area has not reached agreement as to the infrastructure budget for the one-stop centers in the local area, or if the Governor determines that the agreed upon budget does not adequately meet the needs of the local area or does not reasonably work within the confines of the local area's resources in accordance with the Governor's one-stop budget guidance (which is required to be issued by WIOA sec. 121(h)(1)(B) and under § 463.705), then, in accordance with § 463.745, the Governor must use the formula developed by the State WDB based on at least the factors required under § 463.745, and any associated weights to determine the local area budget.
Once the appropriate budget is determined for a local area through either method described in § 463.735 (by acceptance of a budget agreed upon in local negotiation or by the Governor applying the formula detailed in § 463.745), the Governor must determine the appropriate cost allocation methodology to be applied to the one-stop partners in such local area, consistent with the Federal cost principles permitted under 2 CFR part 200, to fund the infrastructure budget.
(a) The Governor must direct the one-stop partners in each local area that have not reached agreement under the local funding mechanism to pay what the Governor determines is each partner program's proportionate share of infrastructure funds for that area, subject to the application of the caps described in § 463.738.
(b)(1) The Governor must use the cost allocation methodology—as determined under § 463.736—to determine each partner's proportionate share of the infrastructure costs under the State funding mechanism, subject to considering the factors described in paragraph (b)(2) of this section.
(2) In determining each partner program's proportionate share of infrastructure costs, the Governor must take into account the costs of administration of the one-stop delivery system for purposes not related to one-stop centers for each partner (such as costs associated with maintaining the Local WDB or information technology systems), as well as the statutory requirements for each partner program, the partner program's ability to fulfill such requirements, and all other applicable legal requirements. The Governor may also take into consideration the extent to which the partners in the local area have agreed in determining the proportionate shares, including any agreements reached at the local level by one or more partners, as well as any other materials or documents of the negotiating process, which must be provided to the Governor by the Local WDB and described in § 463.735(a).
(a) The Governor must calculate the statewide cap on the contributions for one-stop infrastructure funding required to be provided by each one-stop partner program for those local areas that have not reached agreement. The cap is the amount determined under paragraph (a)(4) of this section, which the Governor derives by:
(1) First, determining the amount resulting from applying the percentage for the corresponding one-stop partner program provided in paragraph (d) of this section to the amount of Federal funds provided to carry out the one-stop partner program in the State for the applicable fiscal year;
(2) Second, selecting a factor (or factors) that reasonably indicates the use of one-stop centers in the State, applying such factor(s) to all local areas in the State, and determining the percentage of such factor(s) applicable to the local areas that reached agreement under the local funding mechanism in the State;
(3) Third, determining the amount resulting from applying the percentage determined in paragraph (a)(2) of this section to the amount determined under paragraph (a)(1) of this section for the one-stop partner program; and
(4) Fourth, determining the amount that results from subtracting the amount determined under paragraph (a)(3) of this section from the amount determined under paragraph (a)(1) of this section. The outcome of this final calculation results in the partner program's cap.
(b)(1) The Governor must ensure that the funds required to be contributed by each partner program in the local areas in the State under the State funding mechanism, in aggregate, do not exceed the statewide cap for each program as determined under paragraph (a) of this section.
(2) If the contributions initially determined under § 463.737 would exceed the applicable cap determined under paragraph (a) of this section, the Governor may:
(i) Ascertain if the one-stop partner whose contribution would otherwise exceed the cap determined under paragraph (a) of this section will voluntarily contribute above the capped amount, so that the total contributions equal that partner's proportionate share. The one-stop partner's contribution must still be consistent with the program's authorizing laws and regulations, the Federal cost principles in 2 CFR part 200, and other applicable legal requirements; or
(ii) Direct or allow the Local WDB, chief elected officials, and one-stop partners to: Re-enter negotiations, as necessary; reduce the infrastructure costs to reflect the amount of funds that are available for such costs without exceeding the cap levels; reassess the proportionate share of each one-stop partner; or identify alternative sources of financing for one-stop infrastructure funding, consistent with the requirement that each one-stop partner pay an amount that is consistent with the proportionate use of the one-stop center and relative benefit received by the partner, the program's authorizing laws and regulations, the Federal cost principles in 2 CFR part 200, and other applicable legal requirements.
(3) If applicable under paragraph (b)(2)(ii) of this section, the Local WDB, chief elected officials, and one-stop partners, after renegotiation, may come to agreement, sign an MOU, and proceed under the local funding mechanism. Such actions do not require the redetermination of the applicable caps under paragraph (a) of this section.
(4) If, after renegotiation, agreement among partners still cannot be reached or alternate financing cannot be identified, the Governor may adjust the specified allocation, in accordance with the amounts available and the limitations described in paragraph (d) of this section. In determining these adjustments, the Governor may take into account information relating to the renegotiation as well as the information described in § 463.735(a).
(c) Limitations. Subject to paragraph (a) of this section and in accordance with WIOA sec. 121(h)(2)(D), the following limitations apply to the Governor's calculations of the amount that one-stop partners in local areas that have not reached agreement under the local funding mechanism may be required under § 463.736 to contribute to one-stop infrastructure funding:
(1) WIOA formula programs and Wagner-Peyser Act Employment Service. The portion of funds required to be contributed under the WIOA youth, adult, or dislocated worker programs, or under the Wagner-Peyser Act (29 U.S.C. 49 et seq.) must not exceed three percent of the amount of the program in the State for a program year.
(2) Other one-stop partners. For required one-stop partners other than those specified in paragraphs (c)(1), (3), (5), and (6) of this section, the portion of funds required to be contributed must not exceed 1.5 percent of the amount of Federal funds provided to carry out that program in the State for a fiscal year. For purposes of the Carl D. Perkins Career and Technical Education Act of 2006, the cap on contributions is determined based on the funds made available by the State for postsecondary level programs and activities under sec. 132 of the Carl D. Perkins Career and Technical Education Act and the amount of funds used by the State under sec. 112(a)(3) of the Perkins Act during the prior year to administer postsecondary level programs and activities, as applicable.
(3) Vocational Rehabilitation
(i) Within a State, for the entity or entities administering the programs described in WIOA sec. 121(b)(1)(B)(iv) and § 463.400, the allotment is based on the one State Federal fiscal year allotment, even in instances where that allotment is shared between two State agencies, and the cumulative portion of funds required to be contributed must not exceed—
(A) 0.75 percent of the amount of Federal funds provided to carry out such program in the State for Fiscal Year 2016 for purposes of applicability of the State funding mechanism for PY 2017;
(B) 1.0 percent of the amount provided to carry out such program in the State for Fiscal Year 2017 for purposes of applicability of the State funding mechanism for PY 2018;
(C) 1.25 percent of the amount provided to carry out such program in the State for Fiscal Year 2018 for purposes of applicability of the State funding mechanism for PY 2019;
(D) 1.5 percent of the amount provided to carry out such program in the State for Fiscal Year 2019 and following years for purposes of applicability of the State funding mechanism for PY 2020 and subsequent years.
(ii) The limitations set forth in paragraph (d)(3)(i) of this section for any given fiscal year must be based on the final VR allotment to the State in the applicable Federal fiscal year.
(4) Federal direct spending programs. For local areas that have not reached a one-stop infrastructure funding agreement by consensus, an entity administering a program funded with direct Federal spending, as defined in sec. 250(c)(8) of the Balanced Budget and Emergency Deficit Control Act of 1985, as in effect on February 15, 2014 (2 U.S.C. 900(c)(8)), must not be required to provide more for infrastructure costs than the amount that the Governor determined (as described in § 463.737).
(5) TANF programs. For purposes of TANF, the cap on contributions is determined based on the total Federal TANF funds expended by the State for work, education, and training activities during the prior Federal fiscal year (as reported to the Department of Health and Human Services (HHS) on the quarterly TANF Financial Report form), plus any additional amount of Federal TANF funds that the State TANF agency reasonably determines was expended for administrative costs in connection with these activities but that was separately reported to HHS as an administrative cost. The State's contribution to the one-stop infrastructure must not exceed 1.5 percent of these combined expenditures.
(6) Community Services Block Grant (CSBG) programs. For purposes of CSBG, the cap on contributions will be based on the total amount of CSBG funds determined by the State to have been expended by local CSBG-eligible entities for the provision of employment and training activities during the prior Federal fiscal year for which information is available (as reported to HHS on the CSBG Annual Report) and any additional amount that the State CSBG agency reasonably determines was expended for administrative purposes in connection with these activities and was separately reported to HHS as an administrative cost. The State's contribution must not exceed 1.5 percent of these combined expenditures.
(d) For programs for which it is not otherwise feasible to determine the amount of Federal funding used by the program until the end of that program's operational year—because, for example, the funding available for education, employment, and training activities is included within funding for the program that may also be used for other unrelated activities—the determination of the Federal funds provided to carry out the program for a fiscal year under paragraph (a)(1) of this section may be determined by:
(1) The percentage of Federal funds available to the one-stop partner program that were used by the one-stop partner program for education, employment, and training activities in the previous fiscal year for which data are available; and
(2) Applying the percentage determined under paragraph (d)(1) of this section to the total amount of Federal funds available to the one-stop partner program for the fiscal year for which the determination under paragraph (a)(1) of this section applies.
(a) In the State funding mechanism, infrastructure costs for WIOA title I programs, including Native American Programs described in 20 CFR part 684, may be paid using program funds, administrative funds, or both. Infrastructure costs for the Senior Community Service Employment Program under title V of the Older Americans Act (42 U.S.C. 3056 et seq.) may also be paid using program funds, administrative funds, or both.
(b) In the State funding mechanism, infrastructure costs for other required one-stop partner programs (listed in §§ 463.400 through 463.410) are limited to the program's administrative funds, as appropriate.
(c) In the State funding mechanism, infrastructure costs for the adult education program authorized by title II of WIOA must be paid from the funds that are available for local administration and may be paid from funds made available by the State or non-Federal resources that are cash, in-kind, or third-party contributions.
(d) In the State funding mechanism, infrastructure costs for the Carl D. Perkins Career and Technical Education Act of 2006 must be paid from funds available for local administration of postsecondary level programs and activities to eligible recipients or consortia of eligible recipients and may be paid from funds made available by the State or non-Federal resources that are cash, in-kind, or third-party contributions.
The State WDB must develop a formula, as described in WIOA sec. 121(h)(3)(B), to be used by the Governor under § 463.735(b)(3) in determining the appropriate budget for the infrastructure costs of one-stop centers in the local areas that do not reach agreement under the local funding mechanism and are, therefore, subject to the State funding mechanism. The formula identifies the factors and corresponding weights for each factor that the Governor must use, which must include: the number of one-stop centers in a local area; the population served by such centers; the services provided by such centers; and any factors relating to the operations of such centers in the local area that the State WDB determines are appropriate. As indicated in § 463.735(b)(1), if the local area has agreed on such a budget, the Governor may accept that budget in lieu of applying the formula factors.
(a) The Governor must establish a process, described under sec. 121(h)(2)(E) of WIOA, for a one-stop partner administering a program described in §§ 463.400 through 463.410 to appeal the Governor's determination regarding the one-stop partner's portion of funds to be provided for one-stop infrastructure costs. This appeal process must be described in the Unified State Plan.
(b) The appeal may be made on the ground that the Governor's determination is inconsistent with proportionate share requirements in § 463.735(a), the cost contribution limitations in § 463.735(b), the cost contribution caps in § 463.738, consistent with the process described in the State Plan.
(c) The process must ensure prompt resolution of the appeal in order to ensure the funds are distributed in a timely manner, consistent with the requirements of 20 CFR 683.630.
(d) The one-stop partner must submit an appeal in accordance with State's deadlines for appeals specified in the guidance issued under § 463.705(b)(3), or if the State has not set a deadline, within 21 days from the Governor's determination.
The MOU, fully described in § 463.500, must contain the following information whether the local areas use either the local one-stop or the State funding method:
(a) The period of time in which this infrastructure funding agreement is effective. This may be a different time period than the duration of the MOU.
(b) Identification of an infrastructure and shared services budget that will be periodically reconciled against actual costs incurred and adjusted accordingly to ensure that it reflects a cost allocation methodology that demonstrates how infrastructure costs are charged to each partner in proportion to its use of the one-stop center and relative benefit received, and that complies with 2 CFR part 200 (or any corresponding similar regulation or ruling).
(c) Identification of all one-stop partners, chief elected officials, and Local WDB participating in the infrastructure funding arrangement.
(d) Steps the Local WDB, chief elected officials, and one-stop partners used to reach consensus or an assurance that the local area followed the guidance for the State funding process.
(e) Description of the process to be used among partners to resolve issues during the MOU duration period when consensus cannot be reached.
(f) Description of the periodic modification and review process to ensure equitable benefit among one-stop partners.
(a) In addition to jointly funding infrastructure costs, one-stop partners listed in §§ 463.400 through 463.410 must use a portion of funds made available under their programs' authorizing Federal law (or fairly evaluated in-kind contributions) to pay the additional costs relating to the operation of the one-stop delivery system. These other costs must include applicable career services and may include other costs, including shared services.
(b) For the purposes of paragraph (a) of this section, shared services' costs may include the costs of shared services that are authorized for and may be commonly provided through the one-stop partner programs to any individual, such as initial intake, assessment of needs, appraisal of basic skills, identification of appropriate services to meet such needs, referrals to other one-stop partners, and business services. Shared operating costs may also include shared costs of the Local WDB's functions.
(c) Contributions to the additional costs related to operation of the one-stop delivery system may be cash, non-cash, or third-party in-kind contributions, consistent with how these are described in § 463.720(c).
(d) The shared costs described in paragraph (a) of this section must be allocated according to the proportion of benefit received by each of the partners, consistent with the Federal law authorizing the partner's program, and consistent with all other applicable legal requirements, including Federal cost principles in 2 CFR part 200 (or any corresponding similar regulation or ruling) requiring that costs are allowable, reasonable, necessary, and allocable.
(e) Any shared costs agreed upon by the one-stop partners must be included in the MOU.
(a) The State WDB, in consultation with chief elected officials and Local WDBs, must establish objective criteria and procedures for Local WDBs to use when certifying one-stop centers.
(1) The State WDB, in consultation with chief elected officials and Local WDBs, must review and update the criteria every 2 years as part of the review and modification of State Plans pursuant to § 463.135.
(2) The criteria must be consistent with the Governor's and State WDB's guidelines, guidance, and policies on infrastructure funding decisions, described in § 463.705. The criteria must evaluate the one-stop centers and one-stop delivery system for effectiveness, including customer satisfaction, physical and programmatic accessibility, and continuous improvement.
(3) When the Local WDB is the one-stop operator as described in 20 CFR 679.410, the State WDB must certify the one-stop center.
(b) Evaluations of effectiveness must include how well the one-stop center integrates available services for participants and businesses, meets the workforce development needs of participants and the employment needs of local employers, operates in a cost-efficient manner, coordinates services among the one-stop partner programs, and provides access to partner program services to the maximum extent practicable, including providing services outside of regular business hours where there is a workforce need, as identified by the Local WDB. These evaluations must take into account feedback from one-stop customers. They must also include evaluations of how well the one-stop center ensures equal opportunity for individuals with disabilities to participate in or benefit from one-stop center services. These evaluations must include criteria evaluating how well the centers and delivery systems take actions to comply with the disability-related regulations implementing WIOA sec. 188, set forth at 29 CFR part 38. Such actions include, but are not limited to:
(1) Providing reasonable accommodations for individuals with disabilities;
(2) Making reasonable modifications to policies, practices, and procedures where necessary to avoid discrimination against persons with disabilities;
(3) Administering programs in the most integrated setting appropriate;
(4) Communicating with persons with disabilities as effectively as with others;
(5) Providing appropriate auxiliary aids and services, including assistive technology devices and services, where necessary to afford individuals with disabilities an equal opportunity to participate in, and enjoy the benefits of, the program or activity; and
(6) Providing for the physical accessibility of the one-stop center to individuals with disabilities.
(c) Evaluations of continuous improvement must include how well the one-stop center supports the achievement of the negotiated local levels of performance for the indicators of performance for the local area described in sec. 116(b)(2) of WIOA and part 463. Other continuous improvement factors may include a regular process for identifying and responding to technical assistance needs, a regular system of continuing professional staff development, and having systems in place to capture and respond to specific customer feedback.
(d) Local WDBs must assess at least once every 3 years the effectiveness, physical and programmatic accessibility, and continuous improvement of one-stop centers and the one-stop delivery systems using the criteria and procedures developed by the State WDB. The Local WDB may establish additional criteria, or set higher standards for service coordination, than those set by the State criteria. Local WDBs must review and update the criteria every 2 years as part of the Local Plan update process described in § 463.580. Local WDBs must certify one-stop centers in order to be eligible to use infrastructure funds in the State funding mechanism described in § 463.730.
(e) All one-stop centers must comply with applicable physical and programmatic accessibility requirements, as set forth in 29 CFR part 38, the implementing regulations of WIOA sec. 188.
(a) The common one-stop delivery system identifier is “American Job Center.”
(b) As of November 17, 2016, each one-stop delivery system must include the “American Job Center” identifier or “a proud partner of the American Job Center network” on all primary electronic resources used by the one-stop delivery system, and on any newly printed, purchased, or created materials.
(c) As of July 1, 2017, each one-stop delivery system must include the “American Job Center” identifier or “a proud partner of the American Job Center network” on all products, programs, activities, services, electronic resources, facilities, and related property and new materials used in the one-stop delivery system.
(d) One-stop partners, States, or local areas may use additional identifiers on their products, programs, activities, services, facilities, and related property and materials.
This part establishes the rules and procedures that the Secretary uses to determine whether an educational institution qualifies in whole or in part as an eligible institution of higher education under the Higher Education Act of 1965, as amended (HEA). An eligible institution of higher education may apply to participate in programs authorized by the HEA (HEA programs).
The following definitions apply to terms used in this part:
Academic engagement: Active participation by a student in an instructional activity related to the student's course of study that—
(1) Is defined by the institution in accordance with any applicable requirements of its State or accrediting agency;
(2) Includes, but is not limited to—
(i) Attending a synchronous class, lecture, recitation, or field or laboratory activity, physically or online, where there is an opportunity for interaction between the instructor and students;
(ii) Submitting an academic assignment;
(iii) Taking an assessment or an exam;
(iv) Participating in an interactive tutorial, webinar, or other interactive computer-assisted instruction;
(v) Participating in a study group, group project, or an online discussion that is assigned by the institution; or
(vi) Interacting with an instructor about academic matters; and
(3) Does not include, for example—
(i) Living in institutional housing;
(ii) Participating in the institution's meal plan;
(iii) Logging into an online class or tutorial without any further participation; or
(iv) Participating in academic counseling or advisement.
Accredited: The status of public recognition that a nationally recognized accrediting agency grants to an institution or educational program that meets the agency's established requirements.
Additional location: (1) A physical facility that is geographically separate from the main campus of the institution and within the same ownership structure of the institution, at which the institution offers at least 50 percent of an educational program. An additional location participates in the title IV, HEA programs only through the certification of the main campus.
(2) A Federal, State, or local penitentiary, prison, jail, reformatory, work farm, juvenile justice facility, or other similar correctional institution is considered to be an additional location even if a student receives instruction primarily through distance education or correspondence courses at that location.
Award year: The period of time from July 1 of one year through June 30 of the following year.
Branch campus: A physical facility that is geographically separate from the main campus of the institution and within the same ownership structure of the institution, and that also—
(1) Is approved by the Secretary as a branch campus; and
(2) Is independent from the main campus, meaning the location—
(i) Is permanent in nature;
(ii) Offers courses in educational programs leading to a degree, certificate, or other recognized education credential;
(iii) Has its own faculty and administrative or supervisory organization; and
(iv) Has its own budgetary and hiring authority.
Clock hour: (1) A period of time consisting of—
(i) A 50- to 60-minute class, lecture, or recitation in a 60-minute period;
(ii) A 50- to 60-minute faculty-supervised laboratory, shop training, or internship in a 60-minute period;
(iii) Sixty minutes of preparation in a correspondence course; or
(iv) In distance education, 50 to 60 minutes in a 60-minute period of attendance in—
(A) A synchronous or asynchronous class, lecture, or recitation where there is opportunity for direct interaction between the instructor and students; or
(B) An asynchronous learning activity involving academic engagement in which the student interacts with technology that can monitor and document the amount of time that the student participates in the activity.
(2) A clock hour in a distance education program does not meet the requirements of this definition if it does not meet all accrediting agency and State requirements or if it exceeds an agency's or State's restrictions on the number of clock hours in a program that may be offered through distance education.
(3) An institution must be capable of monitoring a student's attendance in 50 out of 60 minutes for each clock hour under this definition.
Confined or incarcerated individual: An individual who is serving a criminal sentence in a Federal, State, or local penitentiary, prison, jail, reformatory, work farm, juvenile justice facility, or other similar correctional institution. An individual is not considered incarcerated if that individual is subject to or serving an involuntary civil commitment, in a half-way house or home detention, or is sentenced to serve only weekends.
Correspondence course: (1) A course provided by an institution under which the institution provides instructional materials, by mail or electronic transmission, including examinations on the materials, to students who are separated from the instructors. Interaction between instructors and students in a correspondence course is limited, is not regular and substantive, and is primarily initiated by the student.
(2) If a course is part correspondence and part residential training, the Secretary considers the course to be a correspondence course.
(3) A correspondence course is not distance education.
Credit hour: Except as provided in 34 CFR 668.8(k) and (l), a credit hour is an amount of student work defined by an institution, as approved by the institution's accrediting agency or State approval agency, that is consistent with commonly accepted practice in postsecondary education and that—
(1) Reasonably approximates not less than—
(i) One hour of classroom or direct faculty instruction and a minimum of two hours of out-of-class student work each week for approximately fifteen weeks for one semester or trimester hour of credit, or ten to twelve weeks for one quarter hour of credit, or the equivalent amount of work over a different period of time; or
(ii) At least an equivalent amount of work as required in paragraph (1)(i) of this definition for other academic activities as established by the institution, including laboratory work, internships, practica, studio work, and other academic work leading to the award of credit hours; and
(2) Permits an institution, in determining the amount of work associated with a credit hour, to take into account a variety of delivery methods, measurements of student work, academic calendars, disciplines, and degree levels.
Distance education: (1) Education that uses one or more of the technologies listed in paragraphs (2)(i) through (iv) of this definition to deliver instruction to students who are separated from the instructor or instructors and to support regular and substantive interaction between the students and the instructor or instructors, either synchronously or asynchronously.
(2) The technologies that may be used to offer distance education include—
(i) The internet;
(ii) One-way and two-way transmissions through open broadcast, closed circuit, cable, microwave, broadband lines, fiber optics, satellite, or wireless communications devices;
(iii) Audio conference; or
(iv) Other media used in a course in conjunction with any of the technologies listed in paragraphs (2)(i) through (iii) of this definition.
(3) For purposes of this definition, an instructor is an individual responsible for delivering course content and who meets the qualifications for instruction established by an institution's accrediting agency.
(4) For purposes of this definition, substantive interaction is engaging students in teaching, learning, and assessment, consistent with the content under discussion, and also includes at least two of the following—
(i) Providing direct instruction;
(ii) Assessing or providing feedback on a student's coursework;
(iii) Providing information or responding to questions about the content of a course or competency;
(iv) Facilitating a group discussion regarding the content of a course or competency; or
(v) Other instructional activities approved by the institution's or program's accrediting agency.
(5) An institution ensures regular interaction between a student and an instructor or instructors by, prior to the student's completion of a course or competency—
(i) Providing the opportunity for substantive interactions with the student on a predictable and scheduled basis commensurate with the length of time and the amount of content in the course or competency; and
(ii) Monitoring the student's academic engagement and success and ensuring that an instructor is responsible for promptly and proactively engaging in substantive interaction with the student when needed on the basis of such monitoring, or upon request by the student.
Educational program: (1) A legally authorized postsecondary program of organized instruction or study that:
(i) Leads to an academic, professional, or vocational degree, or certificate, or other recognized educational credential, or is a comprehensive transition and postsecondary program, as described in 34 CFR part 668, subpart O; and
(ii) May, in lieu of credit hours or clock hours as a measure of student learning, utilize direct assessment of student learning, or recognize the direct assessment of student learning by others, if such assessment is consistent with the accreditation of the institution or program utilizing the results of the assessment and with the provisions of § 668.10.
(2) The Secretary does not consider that an institution provides an educational program if the institution does not provide instruction itself (including a course of independent study) but merely gives credit for one or more of the following: Instruction provided by other institutions or schools; examinations or direct assessments provided by agencies or organizations; or other accomplishments such as “life experience.”
Eligible institution: An institution that—
(1) Qualifies as—
(i) An institution of higher education, as defined in § 600.4;
(ii) A proprietary institution of higher education, as defined in § 600.5; or
(iii) A postsecondary vocational institution, as defined in § 600.6; and
(2) Meets all the other applicable provisions of this part.
Federal Family Education Loan (FFEL) Programs: The loan programs (formerly called the Guaranteed Student Loan (GSL) programs) authorized by title IV-B of the HEA, including the Federal Stafford Loan, Federal PLUS, Federal Supplemental Loans for Students (Federal SLS), and Federal Consolidation Loan programs, in which lenders use their own funds to make loans to enable students or their parents to pay the costs of the students' attendance at eligible institutions. The Federal Stafford Loan, Federal PLUS, Federal SLS, and Federal Consolidation Loan programs are defined in 34 CFR part 668.
Juvenile justice facility: A public or private residential facility that is operated primarily for the care and rehabilitation of youth who, under State juvenile justice laws—
(1) Are accused of committing a delinquent act;
(2) Have been adjudicated delinquent; or
(3) Are determined to be in need of supervision.
Main campus: The primary physical facility at which the institution offers eligible programs, within the same ownership structure of the institution, and certified as the main campus by the Department and the institution's accrediting agency.
Nationally recognized accrediting agency: An agency or association that the Secretary recognizes as a reliable authority to determine the quality of education or training offered by an institution or a program offered by an institution. The Secretary recognizes these agencies and associations under the provisions of 34 CFR part 602 and publishes a list of the recognized agencies in the
Nonprofit institution: (1) A nonprofit institution is a domestic public or private institution or foreign institution as to which the Secretary determines that no part of the net earnings of the institution benefits any private entity or natural person and that meets the requirements of paragraphs (2) through (4) of this definition, as applicable.
(2) When making the determination under paragraph (1) of this definition, the Secretary considers the entirety of the relationship between the institution, the entities in its ownership structure, and other parties. For example, a nonprofit institution is generally not an institution that—
(i) Is an obligor (either directly or through any entity in its ownership chain) on a debt owed to a former owner of the institution or a natural person or entity related to or affiliated with the former owner of the institution;
(ii) Either directly or through any entity in its ownership chain, enters into or maintains a revenue-sharing agreement, unless the Secretary determines that the payments and the terms under the revenue-sharing agreement are reasonable, based on the market price and terms for such services or materials, and the price bears a reasonable relationship to the cost of the services or materials provided, with—
(A) A former owner or current or former employee of the institution or member of its board; or
(B) A natural person or entity related to or affiliated with the former owner or current or former employee of the institution or member of its board;
(iii) Is a party (either directly or indirectly) to any other agreements (including lease agreements) under which the institution is obligated to make any payments, unless the Secretary determines that the payments and terms under the agreement are comparable to payments in an arm's-length transaction at fair market value, with—
(A) A former owner or current or former employee of the institution or member of its board; or
(B) A natural person or entity related to or affiliated with the former owner or current or former employee of the institution or member of its board; or
(iv) Engages in an excess benefit transaction with any natural person or entity.
(3) A private institution is a “nonprofit institution” only if it meets the requirements in paragraph (1) of this definition and is—
(i) Owned and operated by one or more nonprofit corporations or associations;
(ii) Legally authorized to operate as a nonprofit organization by each State in which it is physically located; and
(iii) Determined by the U.S. Internal Revenue Service to be an organization described in section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)).
(4) A foreign institution is a “nonprofit institution” only if it meets the requirements in paragraph (1) of this definition and is—
(i) An institution that is owned and operated only by one or more nonprofit corporations or associations; and
(ii)(A) If a recognized tax authority of the institution's home country is recognized by the Secretary for purposes of making determinations of an institution's nonprofit status for title IV purposes, is determined by that tax authority to be a nonprofit educational institution; or
(B) If no recognized tax authority of the institution's home country is recognized by the Secretary for purposes of making determinations of an institution's nonprofit status for title IV purposes, the foreign institution demonstrates to the satisfaction of the Secretary that it is a nonprofit educational institution.
One-academic-year training program: An educational program that is at least one academic year as defined under 34 CFR 668.2.
Preaccreditation: The status of accreditation and public recognition that a nationally recognized accrediting agency grants to an institution or program for a limited period of time that signifies the agency has determined that the institution or program is progressing toward full accreditation and is likely to attain full accreditation before the expiration of that limited period of time (sometimes referred to as “candidacy”).
Recognized equivalent of a high school diploma: The following are the equivalent of a high school diploma—
(1) A General Education Development Certificate (GED);
(2) A State certificate received by a student after the student has passed a State-authorized examination that the State recognizes as the equivalent of a high school diploma;
(3) An academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or
(4) For a person who is seeking enrollment in an educational program that leads to at least an associate degree or its equivalent and who has not completed high school but who excelled academically in high school, documentation that the student excelled academically in high school and has met the formalized, written policies of the institution for admitting such students.
Recognized occupation: An occupation that is—
(1) Identified by a Standard Occupational Classification (SOC) code established by the Office of Management and Budget (OMB) or an Occupational Information Network O*Net-SOC code established by the Department of Labor, which is available at www.onetonline.org or its successor site; or
(2) Determined by the Secretary in consultation with the Secretary of Labor to be a recognized occupation.
Regular student: A person who is enrolled or accepted for enrollment at an institution for the purpose of obtaining a degree, certificate, or other recognized educational credential offered by that institution.
Religious mission: A published institutional mission that is approved by the governing body of an institution of postsecondary education and that includes, refers to, or is predicated upon religious tenets, beliefs, or teachings.
Secretary: The Secretary of the Department of Education or an official or employee of the Department of Education acting for the Secretary under a delegation of authority.
State: A State of the Union, American Samoa, the Commonwealth of Puerto Rico, the District of Columbia, Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. The latter three are also known as the Freely Associated States.
State authorization reciprocity agreement: An agreement between two or more States that authorizes an institution located and legally authorized in a State covered by the agreement to provide postsecondary education through distance education or correspondence courses to students located in other States covered by the agreement and cannot prohibit any member State of the agreement from enforcing its own general-purpose State laws and regulations outside of the State authorization of distance education.
Teach-out: A process during which a program, institution, or institutional location that provides 100 percent of at least one program engages in an orderly closure or when, following the closure of an institution or campus, another institution provides an opportunity for the students of the closed school to complete their program, regardless of their academic progress at the time of closure.
Teach-out agreement: A written agreement between institutions that provides for the equitable treatment of students and a reasonable opportunity for students to complete their program of study if an institution, or an institutional location that provides 100 percent of at least one program offered, ceases to operate or plans to cease operations before all enrolled students have completed their program of study.
Teach-out plan: A written plan developed by an institution that provides for the equitable treatment of students if an institution, or an institutional location that provides 100 percent of at least one program, ceases to operate or plans to cease operations before all enrolled students have completed their program of study.
Title IV, HEA program: Any of the student financial assistance programs listed in 34 CFR 668.1(c).
(a) An institution of higher education is a public or other nonprofit educational institution that—
(1) Is in a State, or for purposes of the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, and Federal TRIO programs may also be located in the Federated States of Micronesia or the Marshall Islands;
(2) Admits as regular students only persons who—
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the State in which the institution is physically located;
(3) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located in accordance with § 600.9;
(4)(i) Provides an educational program—
(A) For which it awards an associate, baccalaureate, graduate, or professional degree;
(B) That is at least a two-academic-year program acceptable for full credit toward a baccalaureate degree; or
(C) That is at least a one academic year training program that leads to a certificate, or other nondegree recognized credential, and prepares students for gainful employment in a recognized occupation; and
(ii) May provide a comprehensive transition and postsecondary program, as described in 34 CFR part 668, subpart O; and
(5) Is—
(i) Accredited or preaccredited; or
(ii) Approved by a State agency listed in the
(b) An institution is physically located in a State if it has a campus or other instructional site in that State.
(c) The Secretary does not recognize the accreditation or preaccreditation of an institution unless the institution agrees to submit any dispute involving an adverse action, such as the final denial, withdrawal, or termination of accreditation, to arbitration before initiating any other legal action.
(a) A proprietary institution of higher education is an educational institution that—
(1) Is not a public or private nonprofit educational institution;
(2) Is in a State;
(3) Admits as regular students only persons who—
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the State in which the institution is physically located;
(4) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located in accordance with § 600.9;
(5)(i)(A) Provides an eligible program of training, as defined in 34 CFR 668.8, to prepare students for gainful employment in a recognized occupation; or
(B)(1) Has provided a program leading to a baccalaureate degree in liberal arts, as defined in paragraph (e) of this section, continuously since January 1, 2009; and
(2) Is accredited by a recognized regional accrediting agency or association, and has continuously held such accreditation since October 1, 2007, or earlier; and
(ii) May provide a comprehensive transition and postsecondary program for students with intellectual disabilities, as provided in 34 CFR part 668, subpart O;
(6) Is accredited; and
(7) Has been in existence for at least two years.
(b)(1) The Secretary considers an institution to have been in existence for two years only if—
(i) The institution has been legally authorized to provide, and has provided, a continuous educational program to prepare students for gainful employment in a recognized occupation during the 24 months preceding the date of its eligibility application; and
(ii) The educational program that the institution provides on the date of its eligibility application is substantially the same in length and subject matter as the program that the institution provided during the 24 months preceding the date of its eligibility application.
(2)(i) The Secretary considers an institution to have provided a continuous educational program during the 24 months preceding the date of its eligibility application even if the institution did not provide that program during normal vacation periods, or periods when the institution temporarily closed due to a natural disaster that directly affected the institution or the institution's students.
(ii) The Secretary considers an institution to have satisfied the provisions of paragraph (b)(1)(ii) of this section if the institution substantially changed the subject matter of the educational program it provided during that 24-month period because of new technology or the requirements of other Federal agencies.
(3) In determining whether an applicant institution satisfies the requirement contained in paragraph (b)(1) of this section, the Secretary—
(i) Counts any period during which the applicant institution has been certified as a branch campus; and
(ii) Except as provided in paragraph (b)(3)(i) of this section, does not count any period during which the applicant institution was a part of another eligible proprietary institution of higher education, postsecondary vocational institution, or vocational school.
(c) An institution is physically located in a State if it has a campus or other instructional site in that State.
(d) The Secretary does not recognize the accreditation of an institution unless the institution agrees to submit any dispute involving an adverse action, such as the final denial, withdrawal, or termination of accreditation, to arbitration before initiating any other legal action.
(e) For purposes of this section, a “program leading to a baccalaureate degree in liberal arts” is a program that is a general instructional program falling within one or more of the following generally accepted instructional categories comprising such programs, but including only instruction in regular programs, and excluding independently designed programs, individualized programs, and unstructured studies:
(1) A program that is a structured combination of the arts, biological and physical sciences, social sciences, and humanities, emphasizing breadth of study.
(2) An undifferentiated program that includes instruction in the general arts or general science.
(3) A program that focuses on combined studies and research in humanities subjects as distinguished from the social and physical sciences, emphasizing languages, literature, art, music, philosophy, and religion.
(4) Any single instructional program in liberal arts and sciences, general studies, and humanities not listed in paragraphs (e)(1) through (3) of this section.
(a) A postsecondary vocational institution is a public or private nonprofit educational institution that—
(1) Is in a State;
(2) Admits as regular students only persons who—
(i) Have a high school diploma;
(ii) Have the recognized equivalent of a high school diploma; or
(iii) Are beyond the age of compulsory school attendance in the State in which the institution is physically located;
(3) Is legally authorized to provide an educational program beyond secondary education in the State in which the institution is physically located in accordance with § 600.9;
(4)(i) Provides an eligible program of training, as defined in 34 CFR 668.8, to prepare students for gainful employment in a recognized occupation; and
(ii) May provide a comprehensive transition and postsecondary program for students with intellectual disabilities, as provided in 34 CFR part 668, subpart O;
(5) Is—
(i) Accredited or preaccredited; or
(ii) Approved by a State agency listed in the
(6) Has been in existence for at least two years.
(b)(1) The Secretary considers an institution to have been in existence for two years only if—
(i) The institution has been legally authorized to provide, and has provided, a continuous education or training program to prepare students for gainful employment in a recognized occupation during the 24 months preceding the date of its eligibility application; and
(ii) The education or training program it provides on the date of its eligibility application is substantially the same in length and subject matter as the program it provided during the 24 months preceding the date of its eligibility application.
(2)(i) The Secretary considers an institution to have provided a continuous education or training program during the 24 months preceding the date of its eligibility application even if the institution did not provide that program during normal vacation periods, or periods when the institution temporarily closed due to a natural disaster that affected the institution or the institution's students.
(ii) The Secretary considers an institution to have satisfied the provisions of paragraph (b)(1)(ii) of this section if the institution substantially changed the subject matter of the educational program it provided during that 24-month period because of new technology or the requirements of other Federal agencies.
(3) In determining whether an applicant institution satisfies the requirement contained in paragraph (b)(1) of this section, the Secretary—
(i) Counts any period during which the applicant institution qualified as an eligible institution of higher education;
(ii) Counts any period during which the applicant institution was part of another eligible institution of higher education, provided that the applicant institution continues to be part of an eligible institution of higher education;
(iii) Counts any period during which the applicant institution has been certified as a branch campus; and
(iv) Except as provided in paragraph (b)(3)(iii) of this section, does not count any period during which the applicant institution was a part of another eligible proprietary institution of higher education or postsecondary vocational institution.
(c) An institution is physically located in a State or other instructional site if it has a campus or instructional site in that State.
(d) The Secretary does not recognize the accreditation or preaccreditation of an institution unless the institution agrees to submit any dispute involving an adverse action, such as the final denial, withdrawal, or termination of accreditation, to arbitration before initiating any other legal action.
(a) General rule. For purposes of title IV of the HEA, an educational institution that otherwise satisfies the requirements contained in §§ 600.4, 600.5, or 600.6 nevertheless does not qualify as an eligible institution under this part if—
(1) For its latest complete award year—
(i) More than 50 percent of the institution's courses were correspondence courses as calculated under paragraph (b) of this section;
(ii) Fifty percent or more of the institution's regular enrolled students were enrolled in correspondence courses;
(iii) More than twenty-five percent of the institution's regular enrolled students were incarcerated;
(iv) More than fifty percent of its regular enrolled students had neither a high school diploma nor the recognized equivalent of a high school diploma, and the institution does not provide a four-year or two-year educational program for which it awards a bachelor's degree or an associate degree, respectively;
(2) The institution, or an affiliate of the institution that has the power, by contract or ownership interest, to direct or cause the direction of the management of policies of the institution—
(A) Files for relief in bankruptcy, or
(B) Has entered against it an order for relief in bankruptcy; or
(3) The institution, its owner, or its chief executive officer—
(i) Has pled guilty to, has pled nolo contendere to, or is found guilty of, a crime involving the acquisition, use, or expenditure of title IV, HEA program funds; or
(ii) Has been judicially determined to have committed fraud involving title IV, HEA program funds.
(b) Special provisions regarding correspondence courses and students—(1) Calculating the number of correspondence courses. For purposes of paragraphs (a)(1) (i) and (ii) of this section—
(i) A correspondence course may be a complete educational program offered by correspondence, or one course provided by correspondence in an on-campus (residential) educational program;
(ii) A course must be considered as being offered once during an award year regardless of the number of times it is offered during that year; and
(iii) A course that is offered both on campus and by correspondence must be considered two courses for the purpose of determining the total number of courses the institution provided during an award year.
(2) Calculating the number of correspondence students. For purposes of paragraph (a)(1)(ii) of this section, a student is considered “enrolled in correspondence courses” if the student's enrollment in correspondence courses constituted more than 50 percent of the courses in which the student enrolled during an award year.
(3) Exceptions. (i) The provisions contained in paragraphs (a)(1) (i) and (ii) of this section do not apply to an institution that qualifies as a “technical institute or vocational school used exclusively or principally for the provision of vocational education to individuals who have completed or left high school and who are available for study in preparation for entering the labor market” under section 3(3)(C) of the Carl D. Perkins Vocational and Applied Technology Education Act of 1995.
(ii) The Secretary waives the limitation contained in paragraph (a)(1)(ii) of this section for an institution that offers a 2-year associate-degree or a 4-year bachelor's-degree program if the students enrolled in the institution's correspondence courses receive no more than 5 percent of the title IV, HEA program funds received by students at that institution.
(c) Special provisions regarding confined or incarcerated individuals. (1)(i) The Secretary may waive the prohibition contained in paragraph (a)(1)(iii) of this section, upon the application of an institution, if the institution is a nonprofit institution that provides four-year or two-year educational programs for which it awards a bachelor's degree, an associate degree, or a postsecondary diploma and has continuously provided an eligible prison education program approved by the Department under subpart P of 34 CFR part 668 for at least two years.
(ii) The Secretary does not grant the waiver of the prohibition contained in paragraph (a)(1)(iii) of this section if—
(A) For a program described under paragraph (c)(3)(ii) of this section, the program does not maintain a completion rate of 50 percent or greater; or
(B) For an institution described under paragraph (c)(2) or (3) of this section—
(1) The institution provides one or more eligible prison education programs that is not compliant with the requirements of 34 CFR part 668, subpart P; or
(2) The institution is not administratively capable under 34 CFR 668.16 or financially responsible under 34 CFR part 668, subpart L.
(2) If the nonprofit institution that applies for a waiver consists solely of four-year or two-year educational programs for which it awards a bachelor's degree, an associate degree, or a postsecondary diploma, the Secretary may waive the prohibition contained in paragraph (a)(1)(iii) of this section for the entire institution.
(3) If the nonprofit institution that applies for a waiver does not consist solely of four-year or two-year educational programs for which it awards a bachelor's degree, an associate degree, or a postsecondary diploma, the Secretary may waive the prohibition contained in paragraph (a)(1)(iii) of this section on a program-by-program basis—
(i) For the four-year and two-year programs for which the institution awards a bachelor's degree, an associate degree, or a postsecondary diploma; and
(ii) For the other programs the institution provides, if the confined or incarcerated individuals who are regular students enrolled in those other programs have a completion rate of 50 percent or greater.
(4)(i)(A) For five years after the Secretary grants the waiver, no more than 50 percent of the institution's regular enrolled students may be confined or incarcerated individuals; and
(B) Following the period described in paragraph (c)(4)(i)(A) of this section, no more than 75 percent of the institution's regular enrolled students may be confined or incarcerated individuals.
(ii) The limitations in paragraph (c)(4)(i) of this section do not apply if the institution is a public institution chartered for the explicit purpose of educating confined or incarcerated individuals, as determined by the Secretary, and all students enrolled in the institution's prison education program are located in the State where the institution is chartered.
(5) The Secretary limits or terminates the waiver described in this section if the Secretary determines the institution no longer meets the requirements established under paragraph (c)(1) of this section.
(6) If the Secretary limits or terminates an institution's waiver under paragraph (c) of this section, the institution ceases to be eligible for the title IV, HEA programs at the end of the award year that begins after the Secretary's action unless the institution, by that time—
(i) Demonstrates to the satisfaction of the Secretary that it meets the requirements under paragraph (c)(1) of this section; and
(ii) The institution does not enroll any additional confined or incarcerated individuals upon the limitation or termination of the waiver and reduces its enrollment of confined or incarcerated individuals to no more than 25 percent of its regular enrolled students.
(d) Special provision for a nonprofit institution if more than 50 percent of its enrollment consists of students who do not have a high school diploma or its equivalent. (1) Subject to the provisions contained in paragraphs (d)(2) and (d)(3) of this section, the Secretary waives the limitation contained in paragraph (a)(1)(iv) of this section for a nonprofit institution if that institution demonstrates to the Secretary's satisfaction that it exceeds that limitation because it serves, through contracts with Federal, State, or local government agencies, significant numbers of students who do not have a high school diploma or its recognized equivalent.
(2) Number of critical students. The Secretary grants a waiver under paragraph (d)(1) of this section only if no more than 40 percent of the institution's enrollment of regular students consists of students who—
(i) Do not have a high school diploma or its equivalent; and
(ii) Are not served through contracts described in paragraph (d)(3) of this section.
(3) Contracts with Federal, State, or local government agencies. For purposes of granting a waiver under paragraph (d)(1) of this section, the contracts referred to must be with Federal, State, or local government agencies for the purpose of providing job training to low-income individuals who are in need of that training. An example of such a contract is a job training contract under the Job Training Partnership Act (JPTA).
(e) Special provisions. (1) For purposes of paragraph (a)(1)of this section, when counting regular students, the institution shall—
(i) Count each regular student without regard to the full-time or part-time nature of the student's attendance (i.e., “head count” rather than “full-time equivalent”);
(ii) Count a regular student once regardless of the number of times the student enrolls during an award year; and
(iii) Determine the number of regular students who enrolled in the institution during the relevant award year by—
(A) Calculating the number of regular students who enrolled during that award year; and
(B) Excluding from the number of students in paragraph (e)(1)(iii)(A) of this section, the number of regular students who enrolled but subsequently withdrew or were expelled from the institution and were entitled to receive a 100 percent refund of their tuition and fees less any administrative fee that the institution is permitted to keep under its fair and equitable refund policy.
(2) For the purpose of calculating a completion rate under paragraph (c)(3)(ii) of this section, the institution shall—
(i) Determine the number of regular incarcerated students who enrolled in the other programs during the last completed award year;
(ii) Exclude from the number of regular incarcerated students determined in paragraph (e)(2)(i) of this section, the number of those students who enrolled but subsequently withdrew or were expelled from the institution and were entitled to receive a 100 percent refund of their tuition and fees, less any administrative fee the institution is permitted to keep under the institution's fair and equitable refund policy;
(iii) Exclude from the total obtained in paragraph (e)(2)(ii) of this section, the number of those regular incarcerated students who remained enrolled in the programs at the end of the applicable award year;
(iv) From the total obtained in paragraph (e)(2)(iii) of this section, determine the number of regular incarcerated students who received a degree, certificate, or other recognized educational credential awarded for successfully completing the program during the applicable award year; and
(v) Divide the total obtained in paragraph (e)(2)(iv) of this section by the total obtained in paragraph (e)(2)(iii) of this section and multiply by 100.
(f)(1) If the Secretary grants a waiver to an institution under this section, the waiver extends indefinitely provided that the institution satisfies the waiver requirements in each award year.
(2) If an institution fails to satisfy the waiver requirements for an award year, the institution becomes ineligible on June 30 of that award year.
(g)(1) For purposes of paragraph (a)(1) of this section, and any applicable waiver or exception under this section, the institution shall substantiate the required calculations by having the certified public accountant who prepares its audited financial statement under 34 CFR 668.15 or its title IV, HEA program compliance audit under 34 CFR 668.23 report on the accuracy of those determinations.
(2) The certified public accountant's report must be based on performing an “attestation engagement” in accordance with the American Institute of Certified Public Accountants (AICPA's) Statement on Standards for Attestation Engagements. The certified public accountant shall include that attestation report with or as part of the audit report referenced in paragraph (g)(1) of this section.
(3) The certified public accountant's attestation report must indicate whether the institution's determinations regarding paragraph (a)(1) of this section and any relevant waiver or exception under paragraphs (b), (c), and (d) of this section are accurate; i.e., fairly presented in all material respects.
(h) Notice to the Secretary. An institution shall notify the Secretary—
(1) By July 31 following the end of an award year if it falls within one of the prohibitions contained in paragraph (a)(1)of this section, or fails to continue to satisfy a waiver or exception granted under this section; or
(2) Within 10 days if it falls within one of the prohibitions contained in paragraphs (a)(2) or (a)(3) of this section.
(i) Regaining eligibility. (1) If an institution loses its eligibility because of one of the prohibitions contained in paragraph (a)(1) of this section, to regain its eligibility, it must demonstrate—
(i) Compliance with all eligibility requirements;
(ii) That it did not fall within any of the prohibitions contained in paragraph (a)(1) of this section for at least one award year; and
(iii) That it changed its administrative policies and practices to ensure that it will not fall within any of the prohibitions contained in paragraph (a)(1) of this section.
(2) If an institution loses its eligibility because of one of the prohibitions contained in paragraphs (a)(2) and (a)(3) of this section, this loss is permanent. The institution's eligibility cannot be reinstated.
A branch campus of an eligible proprietary institution of higher education or a postsecondary vocational institution must be in existence for at least two years as a branch campus after the branch is certified as a branch campus before seeking to be designated as a main campus or a free-standing institution.
(a)(1) An institution described under §§ 600.4, 600.5, and 600.6 is legally authorized by a State if the State has a process to review and appropriately act on complaints concerning the institution including enforcing applicable State laws, and the institution meets the provisions of paragraphs (a)(1)(i), (a)(1)(ii), or (b) of this section.
(i)(A) The institution is established by name as an educational institution by a State through a charter, statute, constitutional provision, or other action issued by an appropriate State agency or State entity and is authorized to operate educational programs beyond secondary education, including programs leading to a degree or certificate.
(B) The institution complies with any applicable State approval or licensure requirements, except that the State may exempt the institution from any State approval or licensure requirements based on the institution's accreditation by one or more accrediting agencies recognized by the Secretary or based upon the institution being in operation for at least 20 years.
(ii) If an institution is established by a State on the basis of an authorization to conduct business in the State or to operate as a nonprofit charitable organization, but not established by name as an educational institution under paragraph (a)(1)(i) of this section, the institution—
(A) By name, must be approved or licensed by the State to offer programs beyond secondary education, including programs leading to a degree or certificate; and
(B) May not be exempt from the State's approval or licensure requirements based on accreditation, years in operation, or other comparable exemption.
(2) The Secretary considers an institution to meet the provisions of paragraph (a)(1) of this section if the institution is authorized by name to offer educational programs beyond secondary education by—
(i) The Federal Government; or
(ii) As defined in 25 U.S.C. 1802(2), an Indian tribe, provided that the institution is located on tribal lands and the tribal government has a process to review and appropriately act on complaints concerning an institution and enforces applicable tribal requirements or laws.
(b) An institution is considered to be legally authorized to operate educational programs beyond secondary education if it is exempt as a religious institution from State authorization under the State constitution or by State law.
(c)(1)(i) If an institution that meets the requirements under paragraph (a)(1) or (b) of this section offers postsecondary education through distance education or correspondence courses to students located in a State in which the institution is not physically located or in which the institution is otherwise subject to that State's jurisdiction as determined by that State, except as provided in paragraph (c)(1)(ii) of this section, the institution must meet any of that State's requirements for it to be legally offering postsecondary distance education or correspondence courses in that State. The institution must, upon request, document the State's approval to the Secretary; or
(ii) If an institution that meets the requirements under paragraph (a)(1) or (b) of this section offers postsecondary education through distance education or correspondence courses in a State that participates in a State authorization reciprocity agreement, and the institution is covered by such agreement, the institution is considered to meet State requirements for it to be legally offering postsecondary distance education or correspondence courses in that State, subject to any limitations in that agreement and to any additional requirements of that State not relating to State authorization of distance education. The institution must, upon request, document its coverage under such an agreement to the Secretary.
(2)(i) For purposes of this section, an institution must make a determination, in accordance with the institution's policies or procedures, regarding the State in which a student is located, which must be applied consistently to all students.
(ii) The institution must, upon request, provide the Secretary with written documentation of its determination of a student's location, including the basis for such determination.
(iii) An institution must make a determination regarding the State in which a student is located at the time of the student's initial enrollment in an educational program and, if applicable, upon formal receipt of information from the student, in accordance with the institution's procedures, that the student's location has changed to another State.
(d) An additional location or branch campus of an institution that meets the requirements under paragraph (a)(1) of this section and that is located in a foreign country, i.e., not in a State, must comply with §§ 600.8, 600.10, 600.20, and 600.32, and the following requirements:
(1) For any additional location at which 50 percent or more of an educational program (as defined in § 600.2) is offered, or will be offered, or at a branch campus—
(i) The additional location or branch campus must be legally authorized by an appropriate government authority to operate in the country where the additional location or branch campus is physically located, unless the additional location or branch campus is physically located on a U.S. military base, facility, or area that the foreign country has granted the U.S. military to use and the institution can demonstrate that it is exempt from obtaining such authorization from the foreign country;
(ii) The institution must provide to the Secretary, upon request, documentation of such legal authorization to operate in the foreign country, demonstrating that the foreign governmental authority is aware that the additional location or branch campus provides postsecondary education and that the government authority does not object to those activities;
(iii) The additional location or branch campus must be approved by the institution's recognized accrediting agency in accordance with § 602.22(a)(2)(ix) and (c).
(iv) The additional location or branch campus must meet any additional requirements for legal authorization in that foreign country as the foreign country may establish;
(v) The institution must report to the State in which the main campus of the institution is located at least annually, or more frequently if required by the State, the establishment or operation of each foreign additional location or branch campus; and
(vi) The institution must comply with any limitations the State places on the establishment or operation of the foreign additional location or branch campus.
(2) An additional location at which less than 50 percent of an educational program (as defined in § 600.2) is offered or will be offered must meet the requirements for legal authorization in that foreign country as the foreign country may establish.
(3) In accordance with the requirements of 34 CFR 668.41, the institution must disclose to enrolled and prospective students at foreign additional locations and foreign branch campuses the information regarding the student complaint process described in 34 CFR 668.43(b), of the State in which the main campus of the institution is located.
(4) If the State in which the main campus of the institution is located limits the authorization of the institution to exclude the foreign additional location or branch campus, the foreign additional location or branch campus is not considered to be legally authorized by the State.
(a) Date of eligibility. (1) If the Secretary determines that an applicant institution satisfies all the statutory and regulatory eligibility requirements, the Secretary considers the institution to be an eligible institution as of the date—
(i) The Secretary signs the institution's program participation agreement described in 34 CFR part 668, subpart B, for purposes of participating in any title IV, HEA program; and
(ii) The Secretary receives all the information necessary to make that determination for purposes other than participating in any title IV, HEA program.
(2) [Reserved]
(b) Extent of eligibility. (1) If the Secretary determines that the entire applicant institution, including all its locations and all its educational programs, satisfies the applicable requirements of this part, the Secretary extends eligibility to all educational programs and locations identified on the institution's application for eligibility.
(2) If the Secretary determines that only certain educational programs or certain locations of an applicant institution satisfy the applicable requirements of this part, the Secretary extends eligibility only to those educational programs and locations that meet those requirements and identifies the eligible educational programs and locations in the eligibility notice sent to the institution under § 600.21.
(3) Eligibility does not extend to any location that an institution establishes after it receives its eligibility designation if the institution provides at least 50 percent of an educational program at that location, unless—
(i) The Secretary approves that location under § 600.20(e)(4); or
(ii) The location is licensed and accredited, the institution does not have to apply to the Secretary for approval of that location under § 600.20(c), and the institution has reported to the Secretary that location under § 600.21.
(c) Educational programs. (1) An eligible institution that seeks to establish the eligibility of an educational program must obtain the Secretary's approval—
(i) Pursuant to a requirement regarding additional programs included in the institution's Program Participation Agreement (PPA) under 34 CFR 668.14;
(ii) For the first direct assessment program under 34 CFR 668.10, the first direct assessment program offered at each credential level, and for a comprehensive transition and postsecondary program under 34 CFR 668.232;
(iii) For an undergraduate program that is at least 300 clock hours but less than 600 clock hours and does not admit as regular students only persons who have completed the equivalent of an associate degree under 34 CFR 668.8(d)(3); and
(iv) For the first eligible prison education program under subpart P of 34 CFR part 668 offered at the first two additional locations as defined under § 600.2 at a Federal, State, or local penitentiary, prison, jail, reformatory, work farm, juvenile justice facility, or other similar correctional institution.
(2) Except as provided under § 600.20(c), an eligible institution does not have to obtain the Secretary's approval to establish the eligibility of any program that is not described in paragraph (c)(1) of this section.
(3) For a gainful employment program under 34 CFR part 668, subpart S, subject to any restrictions in 34 CFR 668.603 on establishing or reestablishing the eligibility of the program, an eligible institution must update its application under § 600.21.
(4) An institution must repay to the Secretary all HEA program funds received by the institution for an educational program, and all the title IV, HEA program funds received by or on behalf of students who enrolled in that program if the institution—
(i) Fails to comply with the requirements in paragraph (c)(1) of this section; or
(ii) Incorrectly determines that an educational program that is not subject to approval under paragraph (c)(1) of this section is an eligible program for title IV, HEA program purposes.
(d) Duration of eligibility. (1) If an institution participates in the title IV, HEA programs, the Secretary's designation of the institution as an eligible institution under the title IV, HEA programs expires when the institution's program participation agreement, as described in 34 CFR part 668, subpart B, expires.
(2) If an institution participates in an HEA program other than a title IV, HEA program, the Secretary's designation of the institution as an eligible institution, for purposes of that non-title IV, HEA program, does not expire as long as the institution continues to satisfy the statutory and regulatory requirements governing its eligibility.
(e) Consequence of eligibility. (1) If, as a part of its institutional eligibility application, an institution indicates that it wishes to participate in a title IV, HEA program and the Secretary determines that the institution satisfies the applicable statutory and regulatory requirements governing institutional eligibility, the Secretary will determine whether the institution satisfies the standards of administrative capability and financial responsibility contained in 34 CFR part 668, subpart B.
(2) If, as part of its institutional eligibility application, an institution indicates that it does not wish to participate in any title IV, HEA program and the Secretary determines that the institution satisfies the applicable statutory and regulatory requirements governing institutional eligibility, the institution is eligible to apply to participate in any HEA program listed by the Secretary in the eligibility notice it receives under § 600.21. However, the institution is not eligible to participate in those programs, or receive funds under those programs, merely by virtue of its designation as an eligible institution under this part.
(a) Change of accrediting agencies. (1) For purposes of §§ 600.4(a)(5)(i), 600.5(a)(6), and 600.6(a)(5)(i), the Secretary does not recognize the accreditation or preaccreditation of an otherwise eligible institution if that institution is in the process of changing its accrediting agency, unless the institution provides the following to the Secretary and receives approval:
(i) All materials related to its prior accreditation or preaccreditation.
(ii) Materials demonstrating reasonable cause for changing its accrediting agency. The Secretary will not determine such cause to be reasonable if the institution—
(A) Has had its accreditation withdrawn, revoked, or otherwise terminated for cause during the preceding 24 months, unless such withdrawal, revocation, or termination has been rescinded by the same accrediting agency; or
(B) Has been subject to a probation or equivalent, show cause order, or suspension order during the preceding 24 months.
(2) Notwithstanding paragraph (a)(1)(ii) of this section, the Secretary may determine the institution's cause for changing its accrediting agency to be reasonable if the agency did not provide the institution its due process rights as defined in § 602.25, the agency applied its standards and criteria inconsistently, or if the adverse action or show cause or suspension order was the result of an agency's failure to respect an institution's stated mission, including religious mission.
(b) Multiple accreditation. The Secretary does not recognize the accreditation or preaccreditation of an otherwise eligible institution if that institution is accredited or preaccredited as an institution by more than one accrediting agency, unless the institution—
(1) Provides to each such accrediting agency and the Secretary the reasons for that multiple accreditation or preaccreditation;
(2) Demonstrates to the Secretary reasonable cause for that multiple accreditation or preaccreditation.
(i) The Secretary determines the institution's cause for multiple accreditation to be reasonable unless the institution—
(A) Has had its accreditation withdrawn, revoked, or otherwise terminated for cause during the preceding 24 months, unless such withdrawal, revocation, or termination has been rescinded by the same accrediting agency; or
(B) Has been subject to a probation or equivalent, show cause order, or suspension order during the preceding 24 months.
(ii) Notwithstanding paragraphs (b)(2)(i)(A) and (B) of this section, the Secretary may determine the institution's cause for seeking multiple accreditation or preaccreditation to be reasonable if the institution's primary interest in seeking multiple accreditation is based on that agency's geographic area, program-area focus, or mission; and
(3) Designates to the Secretary which agency's accreditation or preaccreditation the institution uses to establish its eligibility under this part.
(c) Loss of accreditation or preaccreditation. (1) An institution may not be considered eligible for 24 months after it has had its accreditation or preaccreditation withdrawn, revoked, or otherwise terminated for cause, unless the accrediting agency that took that action rescinds that action.
(2) An institution may not be considered eligible for 24 months after it has withdrawn voluntarily from its accreditation or preaccreditation status under a show-cause or suspension order issued by an accrediting agency, unless that agency rescinds its order.
(d) Religious exception. (1) If an otherwise eligible institution loses its accreditation or preaccreditation, the Secretary considers the institution to be accredited or preaccredited for purposes of complying with the provisions of §§ 600.4, 600.5, and 600.6 if the Secretary determines that its loss of accreditation or preaccreditation—
(i) Is related to the religious mission or affiliation of the institution; and
(ii) Is not related to its failure to satisfy the accrediting agency's standards.
(2) If the Secretary considers an unaccredited institution to be accredited or preaccredited under the provisions of paragraph (d)(1) of this section, the Secretary will consider that unaccredited institution to be accredited or preaccredited for a period sufficient to allow the institution to obtain alternative accreditation or preaccreditation, except that period may not exceed 18 months.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) Initial eligibility application. (1) An institution that wishes to establish its eligibility to participate in any HEA program must submit an application to the Secretary for a determination that it qualifies as an eligible institution under this part. The Secretary must ensure prompt action is taken by the Department on any materially complete application required under this section.
(2) If the institution also wishes to be certified to participate in the title IV, HEA programs, it must indicate that intent on the application, and submit all the documentation indicated on the application to enable the Secretary to determine that it satisfies the relevant certification requirements contained in 34 CFR part 668, subparts B and L.
(3) A freestanding foreign graduate medical school, or a foreign institution that includes a foreign graduate medical school, must include in its application to participate—
(i)(A) A list of all medical school educational sites and where they are located, including all sites at which its students receive clinical training, except those clinical training sites that are not used regularly, but instead are chosen by individual students who take no more than two electives at the location for no more than a total of eight weeks; and
(B) The type of clinical training (core, required clinical rotation, not required clinical rotation) offered at each site listed on the application in accordance with paragraph (a)(3)(i)(A) of this section; and
(ii) Whether the school offers—
(A) Only post-baccalaureate/equivalent medical programs, as defined in § 600.52;
(B) Other types of programs that lead to employment as a doctor of osteopathic medicine or doctor of medicine; or
(C) Both; and
(iii) Copies of the formal affiliation agreements with hospitals or clinics providing all or a portion of a clinical training program required under § 600.55(e)(1).
(b) Reapplication. (1) A currently designated eligible institution that is not participating in the title IV, HEA programs must apply to the Secretary for a determination that the institution continues to meet the requirements in this part if the Secretary requests the institution to reapply. If the institution chooses to be certified to participate in the title IV, HEA programs, it must submit an application to the Secretary and must submit all the supporting documentation indicated on the application to enable the Secretary to determine that it satisfies the relevant certification requirements contained in subparts B and L of 34 CFR part 668.
(2)(i) A currently designated eligible institution that participates in the title IV, HEA programs must apply to the Secretary for a determination that the institution continues to meet the requirements in this part and in 34 CFR part 668 if the institution chooses to—
(A) Continue to participate in the title IV, HEA programs beyond the scheduled expiration of the institution's current eligibility and certification designation;
(B) Reestablish eligibility and certification as a private nonprofit, private for-profit, or public institution following a change in ownership that results in a change in control as described in § 600.31; or
(C) Reestablish eligibility and certification after the institution changes its status as a proprietary, nonprofit, or public institution.
(ii) The Secretary must ensure prompt action is taken by the Department on any materially complete application required under paragraph (a)(2)(i) of this section.
(3) A freestanding foreign graduate medical school, or a foreign institution that includes a foreign graduate medical school, must include in its reapplication to participate—
(i)(A) A list of all of the foreign graduate medical school's educational sites and where they are located, including all sites at which its students receive clinical training, except those clinical training sites that are not used regularly, but instead are chosen by individual students who take no more than two electives at the location for no more than a total of eight weeks; and
(B) The type of clinical training (core, required clinical rotation, not required clinical rotation) offered at each site listed on the application in accordance with paragraph (b)(3)(i)(A) of this section; and
(ii) Whether the school offers—
(A) Only post-baccalaureate/equivalent medical programs, as defined in § 600.52;
(B) Other types of programs that lead to employment as a doctor of osteopathic medicine or doctor of medicine; or
(C) Both; and
(iii) Copies of the formal affiliation agreements with hospitals or clinics providing all or a portion of a clinical training program required under § 600.55(e)(1).
(c) Application to expand eligibility. A currently designated eligible institution that wishes to expand the scope of its eligibility and certification and disburse title IV, HEA Program funds to students enrolled in that expanded scope must apply to the Secretary and wait for approval to—
(1) Add an educational program or a location at which the institution offers or will offer 50 percent or more of an educational program if one of the following conditions applies, otherwise it must report to the Secretary under § 600.21:
(i) The institution participates in the title IV, HEA programs under a provisional certification, as provided in 34 CFR 668.13.
(ii) The institution receives title IV, HEA program funds under the reimbursement or cash monitoring payment method, as provided in 34 CFR part 668, subpart K.
(iii) The institution acquires the assets of another institution that provided educational programs at that location during the preceding year and participated in the title IV, HEA programs during that year.
(iv) The institution would be subject to a loss of eligibility under 34 CFR 668.188 if it adds that location.
(v) The Secretary notifies, or has notified, the institution that it must apply for approval of an additional educational program or a location under § 600.10(c).
(2) Increase its level of program offering (e.g., adding graduate degree programs when it previously offered only baccalaureate degree programs);
(3) Add an educational program if the institution is required to apply to the Secretary for approval under § 600.10(c);
(4) Add a branch campus at a location that is not currently included in the institution's eligibility and certification designation;
(5) For a freestanding foreign graduate medical school, or a foreign institution that includes a foreign graduate medical school, add a location that offers all or a portion of the foreign graduate medical school's core clinical training or required clinical rotations, except for those locations that are included in the accreditation of a medical program accredited by the Liaison Committee on Medical Education (LCME) or the American Osteopathic Association (AOA); or
(6) Convert an eligible location to a branch campus.
(d) Notice and application—(1) Notice and application procedures. (i) To satisfy the requirements of paragraphs (a), (b), and (c) of this section, an institution must notify the Secretary of its intent to offer an additional educational program, or provide an application to expand its eligibility, in a format prescribed by the Secretary and provide all the information and documentation requested by the Secretary to make a determination of its eligibility and certification.
(ii)(A) An institution that notifies the Secretary of its intent to offer an educational program under paragraph (c)(3) of this section must ensure that the Secretary receives the notice described in paragraph (d)(2) of this section at least 90 days before the first day of class of the educational program.
(B) If an institution does not provide timely notice in accordance with paragraph (d)(1)(ii)(A) of this section, the institution must obtain approval of the additional educational program from the Secretary for title IV, HEA program purposes.
(C) If an additional educational program is required to be approved by the Secretary for title IV, HEA program purposes under paragraph (d)(1)(ii)(B) of this section, the Secretary may grant approval, or request further information prior to making a determination of whether to approve or deny the additional educational program.
(D) When reviewing an application under paragraph (d)(1)(ii)(C) of this section, the Secretary will take into consideration the following:
(1) The institution's demonstrated financial responsibility and administrative capability in operating its existing programs.
(2) Whether the additional educational program is one of several new programs that will replace similar programs currently provided by the institution, as opposed to supplementing or expanding the current programs provided by the institution.
(3) Whether the number of additional educational programs being added is inconsistent with the institution's historic program offerings, growth, and operations.
(4) Whether the process and determination by the institution to offer an additional educational program that leads to gainful employment in a recognized occupation is sufficient.
(E)(1) If the Secretary denies an application from an institution to offer an additional educational program, the denial will be based on the factors described in paragraphs (d)(1)(ii)(D)(2) and (3) of this section, and the Secretary will explain in the denial how the institution failed to demonstrate that the program is likely to lead to gainful employment in a recognized occupation.
(2) If the Secretary denies the institution's application to add an additional educational program, the Secretary will permit the institution to respond to the reasons for the denial and request reconsideration of the denial.
(2) Notice format. An institution that notifies the Secretary of its intent to offer an additional educational program under paragraph (c)(3) of this section must at a minimum—
(i) Describe in the notice how the institution determined the need for the program and how the program was designed to meet local market needs, or for an online program, regional or national market needs. This description must contain any wage analysis the institution may have performed, including any consideration of Bureau of Labor Statistics data related to the program;
(ii) Describe in the notice how the program was reviewed or approved by, or developed in conjunction with, business advisory committees, program integrity boards, public or private oversight or regulatory agencies, and businesses that would likely employ graduates of the program;
(iii) Submit documentation that the program has been approved by its accrediting agency or is otherwise included in the institution's accreditation by its accrediting agency, or comparable documentation if the institution is a public postsecondary vocational institution approved by a recognized State agency for the approval of public postsecondary vocational education in lieu of accreditation; and
(iv) Provide the date of the first day of class of the new program.
(e) Secretary's response to applications. (1) If the Secretary receives an application under paragraph (a) or (b)(1) of this section, the Secretary notifies the institution—
(i) Whether the applicant institution qualifies in whole or in part as an eligible institution under the appropriate provisions in §§ 600.4 through 600.7; and
(ii) Of the locations and educational programs that qualify as the eligible institution if only a portion of the applicant qualifies as an eligible institution.
(2) If the Secretary receives an application under paragraph (a) or (b) of this section and that institution applies to participate in the title IV, HEA programs, the Secretary notifies the institution—
(i) Whether the institution is certified to participate in those programs;
(ii) Of the title IV, HEA programs in which it is eligible to participate;
(iii) Of the title IV, HEA programs in which it is eligible to apply for funds;
(iv) Of the effective date of its eligibility to participate in those programs; and
(v) Of the conditions under which it may participate in those programs.
(3) If the Secretary receives an application under paragraph (b)(2) of this section, the Secretary notifies the institution whether it continues to be certified, or whether it reestablished its eligibility and certification to participate in the title IV, HEA programs and the scope of such approval.
(4) If the Secretary receives an application under paragraph (c)(1) of this section for an additional location, the Secretary notifies the institution whether the location is eligible or ineligible to participate in the title IV, HEA programs, and the date of eligibility if the location is determined eligible.
(5) If the Secretary receives an application under paragraph (c)(2) of this section for an increase in the level of program offering, or for an additional educational program under paragraph (c)(3) of this section, the Secretary notifies the institution whether the program qualifies as an eligible program, and if the program qualifies, the date of eligibility.
(6) If the Secretary receives an application under paragraph (c)(4) or (5) of this section to have a branch campus certified to participate in the title IV, HEA programs as a branch campus, the Secretary notifies the institution whether that branch campus is certified to participate and the date that the branch campus is eligible to begin participation.
(f) Disbursement rules related to applications. (1)(i) Except as provided under paragraph (f)(1)(ii) of this section and 34 CFR 668.26, if an institution submits an application under paragraph (b)(2)(i) of this section because its participation period is scheduled to expire, after that expiration date the institution may not disburse title IV, HEA program funds to students attending that institution until the institution receives the Secretary's notification that the institution is again eligible to participate in those programs.
(ii) An institution described in paragraph (f)(1)(i) of this section may disburse title IV, HEA program funds to its students if the institution submits to the Secretary a materially complete renewal application in accordance with the provisions of 34 CFR 668.13(b)(2), and has not received a final decision from the Department on that application.
(2)(i) Except as provided under paragraph (f)(2)(ii) of this section and 34 CFR 668.26, if a private nonprofit, private for-profit, or public institution submits an application under paragraph (b)(2)(ii) or (iii) of this section because it has undergone or will undergo a change in ownership that results in a change of control or a change in status, the institution may not disburse title IV, HEA program funds to students attending that institution after the change of ownership or status until the institution receives the Secretary's notification that the institution is eligible to participate in those programs.
(ii) An institution described in paragraph (f)(2)(i) of this section may disburse title IV, HEA program funds to its students if the Secretary issues a provisional extension of certification under paragraph (g) of this section.
(3) If an institution must apply to the Secretary under paragraphs (c)(1) through (4) of this section, the institution may not disburse title IV, HEA program funds to students attending the subject location, program, or branch until the institution receives the Secretary's notification that the location, program, or branch is eligible to participate in the title IV, HEA programs.
(4) If an institution applies to the Secretary under paragraph (c)(5) of this section to convert an eligible location to a branch campus, the institution may continue to disburse title IV, HEA program funds to students attending that eligible location.
(5) If an institution does not apply to the Secretary to obtain the Secretary's approval of a new location, program, increased level of program offering, or branch, and the location, program, or branch does not qualify as an eligible location, program, or branch of that institution under this part and 34 CFR part 668, the institution is liable for all title IV, HEA program funds it disburses to students enrolled at that location or branch or in that program.
(g) Application for provisional extension of certification. (1) If a private nonprofit institution, a private for-profit institution, or a public institution participating in the title IV, HEA programs undergoes a change in ownership that results in a change of control as described in § 600.31, the Secretary may continue the institution's participation in those programs on a provisional basis if—
(i) No later than 90 days prior to the change in ownership, the institution provides the Secretary notice of the proposed change on a fully completed form designated by the Secretary and supported by the State authorization and accrediting documents identified in paragraphs (g)(3)(i) and (ii) of this section, and supported by copies of the financial statements identified in paragraphs (g)(3)(iii) and (iv) of this section;
(ii) The institution promptly reports to the Secretary any changes to the proposed ownership structure identified under paragraph (g)(1)(i) of this section, provided that the change in ownership cannot occur earlier than 90 days following the date the change is reported to the Secretary; and
(iii) The institution under the new ownership submits a “materially complete application” that is received by the Secretary no later than 10 business days after the day the change occurs.
(2) Notwithstanding the submission of the items under paragraph (g)(1) of this section, the Secretary may determine that the participation of the institution should not be continued following the change in ownership.
(3) For purposes of this section, a private nonprofit institution, a private for-profit institution, or a public institution submits a materially complete application if it submits a fully completed application form designated by the Secretary supported by—
(i) A copy of the institution's State license or equivalent document that authorized or will authorize the institution to provide a program of postsecondary education in the State in which it is physically located, supplemented with documentation that, as of the day before the change in ownership, the State license remained in effect;
(ii) A copy of the document from the institution's accrediting agency that granted or will grant the institution accreditation status, including approval of any non-degree programs it offers, supplemented with documentation that, as of the day before the change in ownership, the accreditation remained in effect;
(iii) Audited financial statements for the institution's two most recently completed fiscal years that are prepared and audited in accordance with the requirements of 34 CFR 668.23;
(iv)(A) Audited financial statements for the institution's new owner's two most recently completed fiscal years that are prepared and audited in accordance with the requirements of 34 CFR 668.23, or equivalent financial statements for that owner that are acceptable to the Secretary; or
(B) If such financial statements are not available, financial protection in the amount of—
(1) At least 25 percent of the institution's prior year volume of title IV aid if the institution's new owner does not have two years of acceptable audited financial statements; or
(2) At least 10 percent of the institution's prior year volume of title IV aid if the institution's new owner has only one year of acceptable audited financial statements; and
(v) If deemed necessary by the Secretary, financial protection in the amount of an additional 10 percent of the institution's prior year volume of title IV aid, or a larger amount as determined by the Secretary. If any entity in the new ownership structure holds a 50 percent or greater direct or indirect voting or equity interest in another institution or institutions, the financial protection may also include the prior year volume of title IV aid, or a larger amount as determined by the Secretary, for all institutions under such common ownership.
(4) The institution must notify enrolled and prospective students of the proposed change in ownership, and submit evidence that such disclosure was made, no later than 90 days prior to the change.
(h) Terms of the extension. (1) If the Secretary approves the institution's materially complete application, the Secretary provides the institution with a temporary provisional Program Participation Agreement (TPPPA).
(2) The TPPPA expires on the earlier of—
(i) The last day of the month following the month in which the change of ownership occurred, unless the provisions of paragraph (h)(3) of this section apply;
(ii) The date on which the Secretary notifies the institution that its application is denied; or
(iii) The date on which the Secretary co-signs a new provisional program participation agreement (PPPA).
(3) If the TPPPA will expire under the provisions of paragraph (h)(2)(i) of this section, the Secretary extends the provisional TPPPA on a month-to-month basis after the expiration date described in paragraph (h)(2)(i) of this section if, prior to that expiration date, the institution provides the Secretary with—
(i) An audited “same-day” balance sheet for a proprietary institution or an audited statement of financial position for a nonprofit institution;
(ii) If not already provided, approval of the change of ownership from each State in which the institution is physically located or for an institution that offers only distance education, from the agency that authorizes the institution to legally provide postsecondary education in that State;
(iii) If not already provided, approval of the change of ownership from the institution's accrediting agency; and
(iv) A default management plan unless the institution is exempt from providing that plan under 34 CFR 668.14(b)(15).
(a) Reporting requirements. Except as provided in paragraph (b) of this section, an eligible institution must report to the Secretary, in a manner prescribed by the Secretary and no later than 10 days after the change occurs, any change in the following:
(1) Its name, the name of a branch, or the name of a previously reported location.
(2) Its address, the address of a branch, or the address of a previously reported location.
(3) Its establishment of an accredited and licensed additional location at which it offers or will offer 50 percent or more of an educational program if the institution wants to disburse title IV, HEA program funds to students enrolled at that location, under the provisions in paragraph (d) of this section.
(4) Except as provided in 34 CFR 668.10, the way it measures program length (e.g., from clock hours to credit hours, or from semester hours to quarter hours).
(5) A decrease in the level of program offering (e.g. the institution drops its graduate programs).
(6)(i) Changes in ownership. (A) Any change in the ownership of the institution, whereby a natural person or entity acquires at least a 5 percent ownership interest (direct or indirect) of the institution but that does not result in a change of control as described in § 600.31.
(B) Changes representing at least 5 percent but under 25 percent (either on a single or combined basis) must be reported quarterly (instead of within 10 days) based on the institution's fiscal year. However, when an institution plans to undergo a change in ownership, all unreported ownership changes of 5 percent or more in the existing ownership must be reported prior to submission of the 90-day notice required by § 600.20. Thereafter, any changes of 5 percent or more in the existing ownership must be reported within the 10-day deadline, up through the date of the change in ownership.
(ii) Changes in control. A natural person or legal entity's ability to affect substantially the actions of the institution if that natural person or legal entity did not previously have this ability. The Secretary considers a natural person or legal entity to have this ability if—
(A) The natural person acquires, alone or together with another member or members of their family, at least a 25 percent ownership interest (as defined in § 600.31(b)) in the institution;
(B) The entity acquires, alone or together with an affiliated natural person or entity, at least a 25 percent ownership interest (as defined in § 600.31(b)) in the institution;
(C) The natural person or entity acquires, alone or together with another natural person or entity, under a voting trust, power of attorney, proxy, or similar agreement, at least a 25 percent ownership interest (as defined in § 600.31(b)) in the institution;
(D) The natural person becomes a general partner, managing member, chief executive officer, trustee or co-trustee of a trust, chief financial officer, director, or other officer of the institution or of an entity that has at least a 25 percent ownership interest (as defined in § 600.31(b)) in the institution; or
(E) The entity becomes a general partner or managing member of an entity that has at least a 25 percent ownership interest (as defined in § 600.31(b)) in the institution.
(7) The individual the institution designates under 34 CFR 668.16(b)(1) as its title IV, HEA Program administrator.
(8) The closure of a branch campus or additional location that the institution was required to report to the Secretary.
(9) The governance of a public institution.
(10) For a freestanding foreign graduate medical school, or a foreign institution that includes a foreign graduate medical school, the school adds a location that offers all or a portion of the school's clinical rotations that are not required, except for those that are included in the accreditation of a medical program accredited by the Liaison Committee on Medical Education (LCME) or the American Osteopathic Association (AOA), or that are not used regularly, but instead are chosen by individual students who take no more than two electives at the location for no more than a total of eight weeks.
(11) For any program that is required to provide training that prepares a student for gainful employment in a recognized occupation—
(i) Establishing the eligibility or reestablishing the eligibility of the program;
(ii) Discontinuing the program's eligibility;
(iii) Ceasing to provide the program for at least 12 consecutive months;
(iv) Losing program eligibility under § 600.40;
(v) Changing the program's name, classification of instructional program (CIP) code, or credential level; or
(vi) Updating the certification pursuant to 34 CFR 668.604(b).
(12) Its addition of a second or subsequent direct assessment program.
(13) Its establishment of a written arrangement for an ineligible institution or organization to provide more than 25 percent of a program pursuant to 34 CFR 668.5(c).
(14) Its establishment or addition of an eligible prison education program at an additional location as defined under § 600.2 at a Federal, State, or local penitentiary, prison, jail, reformatory, work farm, juvenile justice facility, or other similar correctional institution that was not previously included in the institution's application for approval as described under § 600.10.
(15) Any change in the ownership of the institution that does not result in a change of control as described in § 600.31 and is not addressed under paragraph (a)(6) of this section, including the addition or elimination of any entities in the ownership structure, a change of entity from one type of business structure to another, and any excluded transactions under § 600.31(e).
(b) Additional reporting from institutions owned by publicly traded corporations. An institution that is owned by a publicly traded corporation must report to the Secretary any change in the information described in paragraph (a)(6) or (15) of this section when it notifies its accrediting agency, but no later than 10 days after the institution learns of the change.
(c) Secretary's response to reporting. The Secretary notifies an institution if any reported changes affects the institution's eligibility, and the effective date of that change.
(d) Disbursement rules related to additional locations. When an institution must report to the Secretary about an additional location under paragraph (a)(3) of this section, the institution may not disburse title IV, HEA funds to students at that location before it reports to the Secretary about that location. Unless it is an institution that must apply to the Secretary under § 600.20(c)(1), once it reports to the Secretary about that location, the institution may disburse those funds to those students if that location is licensed and accredited.
(e) Consequence of failure to report. An institution's failure to inform the Secretary of a change described in paragraph (a) of this section within the time period stated in that paragraph may result in adverse action against the institution.
(f) Definition. A family member includes a person's—
(1) Parent or stepparent, sibling or step-sibling, spouse, child or stepchild, or grandchild or step-grandchild;
(2) Spouse's parent or stepparent, sibling or step-sibling, child or stepchild, or grandchild or step-grandchild;
(3) Child's spouse; and
(4) Sibling's spouse.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a)(1) Except as provided in paragraph (a)(2) of this section, a private nonprofit, private for-profit, or public institution that undergoes a change in ownership that results in a change in control ceases to qualify as an eligible institution upon the change in ownership and control. A change of ownership that results in a change in control includes any change by which a person who has or thereby acquires an ownership interest in the entity that owns the institution or the parent of that entity, acquires or loses the ability to control the institution.
(2) If a private nonprofit, private for-profit, or public institution has undergone a change in ownership that results in a change in control, the Secretary may, under the provisions of § 600.20(g) and (h), continue the institution's participation in the title IV, HEA programs on a provisional basis, provided that the institution submits, under the provisions of § 600.20(g), a materially complete application—
(i) No later than 10 business days after the change occurs; or
(ii) For an institution owned by a publicly-traded corporation, no later than 10 business days after the institution knew, or should have known of the change based upon SEC filings, that the change occurred.
(3) In order to reestablish eligibility and to resume participation in the title IV, HEA programs, the institution must demonstrate to the Secretary that after the change in ownership and control—
(i) The institution satisfies all the applicable requirements contained in §§ 600.4, 600.5, and 600.6, except that if the institution is a proprietary institution of higher education or postsecondary vocational institution, it need not have been in existence for two years before seeking eligibility; and
(ii) The institution qualifies to be certified to participate under 34 CFR part 668, subpart B.
(b) Definitions. The following definitions apply to terms used in this section:
Closely-held corporation. Closely-held corporation (including the term “close corporation”) means—
(i) A corporation that qualifies under the law of the State of its incorporation or organization as a statutory close corporation; or
(ii) If the State of incorporation or organization has no statutory close corporation provision, a corporation the stock of which—
(A) Is held by no more than 30 persons; and
(B) Has not been and is not planned to be publicly offered.
Control. Control (including the terms controlling, controlled by and under common control with) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
Ownership or ownership interest. (i) Ownership or ownership interest means a direct or indirect legal or beneficial interest in an institution or legal entity, which may include a voting interest or a right to share in profits.
(ii) For the purpose of determining whether a change in ownership has occurred, changes in the ownership of the following are not included:
(A) A mutual fund that is regularly and publicly traded.
(B) A U.S. institutional investor, as defined in 17 CFR 240.15a-6(b)(7).
(C) A profit-sharing plan of the institution or its corporate parent, provided that all full-time permanent employees of the institution or its corporate parent are included in the plan.
(D) An employee stock ownership plan (ESOP).
Parent. The legal entity that controls the institution or a legal entity directly or indirectly through one or more intermediate entities.
Person. Person includes a natural person or a legal entity, including a trust.
Wholly-owned subsidiary. A wholly-owned subsidiary is one substantially all of whose outstanding voting securities are owned by its parent together with the parent's other wholly-owned subsidiaries.
(c) Standards for identifying changes of ownership and control—(1) Closely-held corporation. A change in ownership and control occurs when—
(i) A person acquires more than 50 percent of the total outstanding voting stock of the corporation;
(ii) A person who holds an ownership interest in the corporation acquires control of more than 50 percent of the outstanding voting stock of the corporation; or
(iii) A person who holds or controls 50 percent or more of the total outstanding stock of the corporation ceases to hold or control that proportion of the stock of the corporation.
(2) Publicly traded corporations required to be registered with the Securities and Exchange Commission (SEC). A change in ownership and control occurs when—
(i) A person acquires such ownership and control of the corporation so that the corporation is required to file a Form 8K with the SEC notifying that agency of the change in control; or
(ii) (A) A person who is a controlling shareholder of the corporation ceases to be a controlling shareholder. A controlling shareholder is a shareholder who holds or controls through agreement both 25 percent or more of the total outstanding voting stock of the corporation and more shares of voting stock than any other shareholder. A controlling shareholder for this purpose does not include a shareholder whose sole stock ownership is held as a U.S. institutional investor, as defined in 17 CFR 240.15a-6(b)(7), held in mutual funds, held through a profit-sharing plan, or held in an Employee Stock Ownership Plan (ESOP).
(B) When a change of ownership occurs as a result of paragraph (c)(2)(ii)(A) of this section, the institution may submit its most recent quarterly financial statement as filed with the SEC, along with copies of all other SEC filings made after the close of the fiscal year for which a compliance audit has been submitted to the Department of Education, instead of the “same day” balance sheet.
(C) If a publicly-traded institution is provisionally certified due to a change in ownership under paragraph (c)(2)(ii) of this section, and that institution experiences another change of ownership under paragraph (c)(2)(ii) of this section, an approval of the subsequent change in ownership does not extend the original expiration date for the provisional certification provided that any current controlling shareholder was listed on the change of ownership application for which the original provisional approval was granted.
(3) Other entities. (i) The term “other entities” means any entity that is not closely held nor required to be registered with the SEC, and includes limited liability companies, limited liability partnerships, limited partnerships, and similar types of legal entities.
(ii) The Secretary deems the following changes to constitute a change in ownership resulting in a change of control of such an entity:
(A) A person (or combination of persons) acquires at least 50 percent of the total outstanding voting interests in the entity, or otherwise acquires 50 percent control.
(B) A person (or combination of persons) who holds less than a 50 percent voting interest in an entity acquires at least 50 percent of the outstanding voting interests in the entity, or otherwise acquires 50 percent control.
(C) A person (or combination of persons) who holds at least 50 percent of the voting interests in the entity ceases to hold at least 50 percent voting interest in the entity, or otherwise ceases to hold 50 percent control.
(D) A partner in a general partnership acquires or ceases to own at least 50 percent of the voting interests in the general partnership, or otherwise acquires or ceases to hold 50 percent control.
(E) Any change of a general partner of a limited partnership (or similar entity) if that general partner also holds an equity interest.
(F) Any change in a managing member of a limited liability company (or similar entity) if that managing member also holds an equity interest.
(G) Notwithstanding its voting interests, a person becomes the sole member or shareholder of a limited liability company or other entity that has a 100 percent or equivalent direct or indirect interest in the institution.
(H) An entity that has a member or members ceases to have any members.
(I) An entity that has no members becomes an entity with a member or members.
(J) A person is replaced as the sole member or shareholder of a limited liability company or other entity that has a 100 percent or equivalent direct or indirect interest in the institution.
(K) The addition or removal of any entity that provides or will provide the audited financial statements to meet any of the requirements in § 600.20(g) or (h) or 34 CFR part 668, subpart L.
(L) Except as provided in paragraph (e) of this section, the transfer by an owner of 50 percent or more of the voting interests in the institution or an entity to an irrevocable trust.
(M) Except as provided in paragraph (e) of this section, upon the death of an owner who previously transferred 50 percent or more of the voting interests in an institution or an entity to a revocable trust.
(iii) The Secretary deems the following interests to satisfy the 50 percent thresholds described in paragraph (c)(3)(ii) of this section:
(A) A combination of persons, each of whom holds less than 50 percent ownership interest in an entity, holds a combined ownership interest of at least 50 percent as a result of proxy agreements, voting agreements, or other agreements (whether or not the agreement is set forth in a written document), or by operation of State law.
(B) A combination of persons, each of whom holds less than 50 percent ownership interest in an entity, holds a combined ownership interest of at least 50 percent as a result of common ownership, management, or control of that entity, either directly or indirectly.
(C) A combination of individuals who are family members as defined in § 600.21, each of whom holds less than 50 percent ownership interest in an entity, holds a combined ownership interest of at least 50 percent.
(iv) Notwithstanding paragraphs (c)(3)(ii) and (iii) of this section—
(A) If a person who alone or in combination with other persons holds less than a 50 percent ownership interest in an entity, the Secretary may determine that the person, either alone or in combination with other persons, has actual control over that entity and is subject to the requirements of this section; and
(B) Any person who alone or in combination with other persons has the right to appoint a majority of any class of board members of an entity or an institution is deemed to have control.
(4) Wholly owned subsidiary. An entity that is a wholly owned subsidiary changes ownership and control when its parent entity changes ownership and control as described in this section.
(5) Nonprofit institution. A nonprofit institution changes ownership and control when a change takes place that is described in paragraphs (c)(3) and (d) of this section.
(6) Public institution. The Secretary does not consider that a public institution undergoes a change in ownership that results in a change of control if there is a change in governance and the institution after the change remains a public institution, provided—
(i) The new governing authority is in the same State as included in the institution's program participation agreement; and
(ii) The new governing authority has acknowledged the public institution's continued responsibilities under its program participation agreement.
(d) Covered transactions. For the purposes of this section, a change in ownership of an institution that results in a change of control may include, but is not limited to—
(1) The sale of the institution;
(2) The transfer of the controlling interest of stock of the institution or its parent corporation;
(3) The merger of two or more eligible institutions;
(4) The division of one institution into two or more institutions;
(5) The transfer of the liabilities of an institution to its parent corporation;
(6) A transfer of assets that comprise a substantial portion of the educational business of the institution, except where the transfer consists exclusively in the granting of a security interest in those assets;
(7) A change whereby the institution's ownership changes from an entity that is for-profit, nonprofit, or public to another one of those statuses. However, when an institution's ownership changes from a for-profit entity to a nonprofit entity or becomes affiliated with a public system, the institution remains a proprietary institution until the Department approves the change of status for the institution; or
(8) The acquisition of an institution to become an additional location of another institution unless the acquired institution closed or ceased to provide educational instruction.
(e) Excluded transactions. A change in ownership and control timely reported under § 600.21 and otherwise subject to this section does not include a transfer of ownership and control of all or part of an owner's equity or partnership interest in an institution, the institution's parent corporation, or other legal entity that has signed the institution's PPA—
(1) From an owner to a “family member” of that owner as defined in § 600.21(f);
(2) As a result of a transfer of an owner's interest in the institution or an entity to an irrevocable trust, so long as the trustees only include the owner and/or a family member as defined in § 600.21(f). Upon the appointment of any non-family member as trustee for an irrevocable trust (or successor trust), the transaction is no longer excluded and is subject to the requirements of § 600.20(g) and (h);
(3) Upon the death of a former owner who previously transferred an interest in the institution or an entity to a revocable trust, so long as the trustees include only family members (as defined in § 600.21(f)) of that former owner. Upon the appointment of any non-family member as trustee for the trust (or a successor trust) following the death of the former owner, the transaction is no longer excluded and is subject to the requirements of § 600.20(g) and (h); or
(4) A transfer to an individual owner with a direct or indirect ownership interest in the institution who has been involved in the management of the institution for at least two years preceding the transfer and who has established and retained the ownership interest for at least two years prior to the transfer, either upon the death of another owner or by transfer from another individual owner who has been involved in the management of the institution for at least two years preceding the transfer and who has established and retained the ownership interest for at least two years prior to the transfer, upon the resignation of that owner from the management of the institution.
(a) Except as provided in paragraphs (b), (c), and (d) of this section, to qualify as an eligible location, an additional location of an eligible institution must satisfy the applicable requirements of this section and §§ 600.4, 600.5, 600.6, 600.8, and 600.10.
(b) To qualify as an eligible location, an additional location is not required to satisfy the two-year requirement of §§ 600.5(a)(7) or 600.6(a)(6), unless—
(1) The location was a facility of another institution that has closed or ceased to provide educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students;
(2) The applicant institution acquired, either directly from the institution that closed or ceased to provide educational programs, or through an intermediary, the assets at the location; and
(3) The institution from which the applicant institution acquired the assets of the location—
(i) Owes a liability for a violation of an HEA program requirement; and
(ii) Is not making payments in accordance with an agreement to repay that liability.
(c) Notwithstanding paragraph (b) of this section, an additional location is not required to satisfy the two-year requirement of § 600.5(a)(7) or § 600.6(a)(6) if the applicant institution and the original institution are not related parties and there is no commonality of ownership, control, or management between the institutions, as described in 34 CFR 668.188(b) and 34 CFR 668.207(b) and the applicant institution agrees—
(1) To be liable for all improperly expended or unspent title IV, HEA program funds received during the current academic year and up to one academic year prior by the institution that has closed or ceased to provide educational programs;
(2) To be liable for all unpaid refunds owed to students who received title IV, HEA program funds during the current academic year and up to one academic year prior; and
(3) To abide by the policy of the institution that has closed or ceased to provide educational programs regarding refunds of institutional charges to students in effect before the date of the acquisition of the assets of the additional location for the students who were enrolled before that date.
(d)(1) An institution that conducts a teach-out at a site of a closed institution or an institution engaged in a teach-out plan approved by the institution's agency may apply to have that site approved as an additional location if—
(i) The closed institution ceased operations, or the closing institution is engaged in an orderly teach-out plan and the Secretary has evaluated and approved that plan; and
(ii) The teach-out plan required under 34 CFR 668.14(b)(31) is approved by the closed or closing institution's accrediting agency.
(2)(i) An institution that conducts a teach-out and is approved to add an additional location described in paragraph (d)(1) of this section—
(A) Does not have to meet the requirement of § 600.5(a)(7) or § 600.6(a)(6) for the additional location described in paragraph (d)(1) of this section;
(B) Is not responsible for any liabilities of the closed or closing institution as provided under paragraph (c)(1) and (c)(2) of this section if the institutions are not related parties and there is no commonality of ownership or management between the institutions, as described in 34 CFR 668.188(b) and 34 CFR 668.207(b); and
(C) Will not have the default rate of the closed institution included in the calculation of its default rate, as would otherwise be required under 34 CFR 668.184 and 34 CFR 668.203, if the institutions are not related parties and there is no commonality of ownership or management between the institutions, as described in 34 CFR 668.188(b) and 34 CFR 668.207(b).
(ii) As a condition for approving an additional location under paragraph (d)(1) of this section, the Secretary may require that payments from the institution conducting the teach-out to the owners or related parties of the closed institution, are used to satisfy any liabilities owed by the closed institution.
(e) For purposes of this section, an “additional location” is a location of an institution that was not designated as an eligible location in the eligibility notification provided to an institution under § 600.21.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a)(1) Except as provided in paragraphs (a) (2) and (3) of this section, an institution, or a location or educational program of an institution, loses its eligibility on the date that—
(i) The institution, location, or educational program fails to meet any of the eligibility requirements of this part;
(ii) The institution or location permanently closes;
(iii) The institution or location ceases to provide educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution, particular location, or the students of the institution or location; or
(iv) For purposes of the title IV, HEA programs—
(A) The institution's period of participation as specified under 34 CFR 668.13 expires; or
(B) The institution's provisional certification is revoked under 34 CFR 668.13.
(2) If an institution loses its eligibility because it violated the requirements of § 600.5(a)(8), as evidenced by the determination under provisions contained in § 600.5(d), it loses its eligibility on the last day of the fiscal year used in § 600.5(d), except that if an institution's latest fiscal year was described in § 600.7(h)(1), it loses its eligibility as of June 30, 1994.
(3) If an institution loses its eligibility under the provisions of § 600.7(a)(1), it loses its eligibility on the last day of the award year being evaluated under that provision.
(b) If the Secretary undertakes to terminate the eligibility of an institution because it violated the provisions of § 600.5(a)(8) or § 600.7(a), and the institution requests a hearing, the presiding official must terminate the institution's eligibility if it violated those provisions, notwithstanding its status at the time of the hearing.
(c)(1) If the Secretary designates an institution or any of its educational programs or locations as eligible on the basis of inaccurate information or documentation, the Secretary's designation is void from the date the Secretary made the designation, and the institution or program or location, as applicable, never qualified as eligible.
(2) If an institution closes its main campus or stops providing any educational programs on its main campus, it loses its eligibility as an institution, and that loss of eligibility includes all its locations and all its programs. Its loss of eligibility is effective on the date it closes that campus or stops providing any educational program at that campus.
(d) Except as otherwise provided in this part, if an institution ceases to satisfy any of the requirements for eligibility under this part—
(1) It must notify the Secretary within 30 days of the date that it ceases to satisfy that requirement; and
(2) It becomes ineligible to continue to participate in any HEA program as of the date it ceases to satisfy any of the requirements.
(a) If the Secretary believes that a previously designated eligible institution as a whole, or at one or more of its locations, does not satisfy the statutory or regulatory requirements that define that institution as an eligible institution, the Secretary may—
(1) Terminate the institution's eligibility designation in whole or as to a particular location—
(i) Under the procedural provisions applicable to terminations contained in 34 CFR 668.81, 668.83, 668.86, 668.88, 668.89, 668.90(a)(1) and (4) and (c) through (f), and 668.91; or
(ii) Under a show-cause hearing, if the institution's loss of eligibility results from—
(A) Its previously qualifying as an eligible vocational school;
(B) Its loss of accreditation or preaccreditation;
(C) Its loss of legal authority to provide postsecondary education in the State in which it is physically located;
(D) Its violations of the provisions contained in § 600.5(a)(8) or § 600.7(a);
(E) Its permanently closing; or
(F) Its ceasing to provide educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution, a particular location, or the students of the institution or location;
(2) Limit, under the provisions of 34 CFR 668.86, the authority of the institution to disburse, deliver, or cause the disbursement or delivery of funds under one or more title IV, HEA programs as otherwise provided under 34 CFR 668.26 for the benefit of students enrolled at the ineligible institution or location prior to the loss of eligibility of that institution or location; and
(3) Initiate an emergency action under the provisions contained in 34 CFR 668.83 with regard to the institution's participation in one or more title IV, HEA programs.
(b) If the Secretary believes that an educational program offered by an institution that was previously designated by the Secretary as an eligible institution under the HEA does not satisfy relevant statutory or regulatory requirements that define that educational program as part of an eligible institution, the Secretary may in accordance with the procedural provisions described in paragraph (a) of this section—
(1) Undertake to terminate that educational program's eligibility under one or more of the title IV, HEA programs under the procedural provisions applicable to terminations described in paragraph (a) of this section;
(2) Limit the institution's authority to deliver, disburse, or cause the delivery or disbursement of funds provided under that title IV, HEA program to students enrolled in that educational program, as otherwise provided in 34 CFR 668.26; and
(3) Initiate an emergency action under the provisions contained in 34 CFR 668.83 with regard to the institution's participation in one or more title IV, HEA programs with respect to students enrolled in that educational program.
(c)(1) An action to terminate and limit the eligibility of an institution as a whole or as to any of its locations or educational programs is initiated in accordance with 34 CFR 668.86(b) and becomes final 20 days after the Secretary notifies the institution of the proposed action, unless the designated department official receives by that date a request for a hearing or written material that demonstrates that the termination and limitation should not take place.
(2) Once a termination under this section becomes final, the termination is effective with respect to any commitment, delivery, or disbursement of funds provided under an applicable title IV, HEA program by the institution—
(i) Made to students enrolled in the ineligible institution, location, or educational program; and
(ii) Made on or after the date of the act or omission that caused the loss of eligibility as to the institution, location, or educational program.
(3) Once a limitation under this section becomes final, the limitation is effective with regard to any commitment, delivery, or disbursement of funds under the applicable title IV, HEA program by the institution—
(i) Made after the date on which the limitation became final; and
(ii) Made to students enrolled in the ineligible institution, location, or educational program.
(d) After a termination under this section of the eligibility of an institution as a whole or as to a location or educational program becomes final, the institution may not originate applications for, make awards of or commitments for, deliver, or disburse funds under the applicable title IV, HEA program, except—
(1) In accordance with the requirements of 34 CFR 668.26(c) with respect to students enrolled in the ineligible institution, location, or educational program; and
(2) After satisfaction of any additional requirements, imposed pursuant to a limitation under paragraph (a)(2) of this section, which may include the following:
(i) Completion of the actions required by 34 CFR 668.26(a) and (b).
(ii) Demonstration that the institution has made satisfactory arrangements for the completion of actions required by 34 CFR 668.26(a) and (b).
(iii) Securing the confirmation of a third party selected by the Secretary that the proposed disbursements or delivery of title IV, HEA program funds meet the requirements of the applicable program.
(iv) Using institutional funds to make disbursements permitted under this paragraph and seeking reimbursement from the Secretary for those disbursements.
(e) If the Secretary undertakes to terminate the eligibility of an institution, location, or program under paragraphs (a) and (b) of this section:
(1) If the basis for the loss of eligibility is the loss of accreditation or preaccreditation, the sole issue is whether the institution, location, or program has the requisite accreditation or preaccreditation. The presiding official has no authority to consider challenges to the action of the accrediting agency.
(2) If the basis for the loss of eligibility is the loss of legal authorization, the sole issue is whether the institution, location, or program has the requisite legal authorization. The presiding official has no authority to consider challenges to the action of a State agency in removing the legal authorization.
(3) If the basis for the loss of eligibility of a foreign graduate medical school is one or more annual pass rates on the U.S. Medical Licensing Examination below the threshold required in § 600.55(f)(1)(ii), the sole issue is whether one or more of the foreign medical school's pass rate or rates for the preceding calendar year fell below that threshold. For a foreign graduate medical school that opted to have the Educational Commission for Foreign Medical Graduates (ECFMG) calculate and provide the pass rates directly to the Secretary for the preceding calendar year as permitted under § 600.55(d)(2) in lieu of the foreign graduate medical school providing pass rate data to the Secretary under § 600.55(d)(1)(iii), the ECFMG's calculations of the school's rates are conclusive; and the presiding official has no authority to consider challenges to the computation of the rate or rates by the ECFMG.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) A foreign institution is eligible to apply to participate in the Federal Family Education Loan (FFEL) programs if it is comparable to an eligible institution of higher education located in the United States and has been approved by the Secretary in accordance with the provisions of this subpart.
(b) This subpart E contains the procedures and criteria under which a foreign institution may be deemed eligible to apply to participate in the FFEL programs.
(c) Applicability of other title IV, HEA program regulations.
(1) A foreign institution must comply with all requirements for eligible and participating institutions except when made inapplicable by the HEA or when the Secretary, through publication in the
(2)(i) A public or nonprofit foreign institution that meets the requirements of this subpart, and that also meets the requirements of this part except as provided in §§ 600.51(c)(1) and 600.54(a), is considered an “institution of higher education” for purposes of the title IV, HEA program regulations; and
(ii) A for-profit foreign institution that meets the requirements of this subpart, and that also meets the requirements of this Part, except as provided in §§ 600.51(c)(1) and 600.54(a), is considered a “proprietary institution” for purposes of title IV, HEA program regulations.
(d)(1) A program offered by a foreign school through any use of a telecommunications course, correspondence course, or direct assessment program is not an eligible program;
(2) Correspondence course has the meaning given in § 600.2;
(3) Direct assessment program has the meaning given in § 668.10(a)(1) of this chapter;
(4) Telecommunications course is a course offered through any one or a combination of the technologies listed in the definition of telecommunications course in § 600.2, except that telecommunications technologies may be used to supplement and support instruction that is offered in a classroom located in the foreign country where the students and instructor are physically present.
The following definitions apply to this subpart E:
Associate degree school of nursing: A school that provides primarily or exclusively a two-year program of postsecondary education in professional nursing leading to a degree equivalent to an associate degree in the United States.
Clinical training: The portion of a graduate medical education program that counts as a clinical clerkship for purposes of medical licensure comprising core, required clinical rotation, and not required clinical rotation.
Collegiate school of nursing: A school that provides primarily or exclusively a minimum of a two-year program of postsecondary education in professional nursing leading to a degree equivalent to a bachelor of arts, bachelor of science, or bachelor of nursing in the United States, or to a degree equivalent to a graduate degree in nursing in the United States, and including advanced training related to the program of education provided by the school.
Diploma school of nursing: A school affiliated with a hospital or university, or an independent school, which provides primarily or exclusively a two-year program of postsecondary education in professional nursing leading to the equivalent of a diploma in the United States or to equivalent indicia that the program has been satisfactorily completed.
Foreign graduate medical school: A foreign institution (or, for a foreign institution that is a university, a component of that foreign institution) having as its sole mission providing an educational program that leads to a degree of medical doctor, doctor of osteopathic medicine, or the equivalent. A reference in these regulations to a foreign graduate medical school as “freestanding” pertains solely to those schools that qualify by themselves as foreign institutions and not to schools that are components of universities that qualify as foreign institutions.
Foreign institution: (1) For the purposes of students who receive title IV aid, an institution that—
(i) Is not located in the United States;
(ii) Except as provided with respect to clinical training offered under § 600.55(h)(1), § 600.56(b), or § 600.57(a)(2)—
(A) Has no U.S. location;
(B) Has no written arrangements, within the meaning of 34 CFR 668.5, with institutions or organizations located in the United States for those institutions or organizations to provide a portion of an eligible program, as defined under 34 CFR 668.8, except for written arrangements for no more than 25 percent of the courses required by the program to be provided by eligible institutions located in the United States; and
(C) Does not permit students to complete an eligible program by enrolling in courses offered in the United States, except that it may permit students to complete up to 25 percent of the program by—
(1) Enrolling in the coursework, research, work, or special studies offered by an eligible institution in the United States; or
(2) Participating in an internship or externship provided by an ineligible organization as described in 34 CFR 668.5(h)(2);
(iii) Is legally authorized by the education ministry, council, or equivalent agency of the country in which the institution is located to provide an educational program beyond the secondary education level; and
(iv) Awards degrees, certificates, or other recognized educational credentials in accordance with § 600.54(e) that are officially recognized by the country in which the institution is located.
(2) Notwithstanding paragraph (1)(ii)(C) of this definition, independent research done by an individual student in the United States for not more than one academic year is permitted, if it is conducted during the dissertation phase of a doctoral program under the guidance of faculty, and the research is performed only in a facility in the United States.
(3) If the educational enterprise enrolls students both within the United States and outside the United States, and the number of students who would be eligible to receive title IV, HEA program funds attending locations outside the United States is at least twice the number of students enrolled within the United States, the locations outside the United States must apply to participate as one or more foreign institutions and must meet all requirements of paragraph (1) of this definition, and the other requirements of this part. For the purposes of this paragraph (3), an educational enterprise consists of two or more locations offering all or part of an educational program that are directly or indirectly under common ownership.
Foreign nursing school: A foreign institution (or, for a foreign institution that is a university, a component of that foreign institution) that is an associate degree school of nursing, a collegiate school of nursing, or a diploma school of nursing. A reference in these regulations to a foreign nursing school as “freestanding” pertains solely to those schools that qualify by themselves as foreign institutions and not to schools that are components of universities that qualify as foreign institutions.
Foreign veterinary school: A foreign institution (or, for a foreign institution that is a university, a component of that foreign institution) having as its sole mission providing an educational program that leads to the degree of doctor of veterinary medicine, or the equivalent. A reference in these regulations to a foreign veterinary school as “freestanding” pertains solely to those schools that qualify by themselves as foreign institutions and not to schools that are components of universities that qualify as foreign institutions.
National Committee on Foreign Medical Education and Accreditation (NCFMEA): The operational committee of medical experts established by the Secretary to determine whether the medical school accrediting standards used in other countries are comparable to those applied to medical schools in the United States, for purposes of evaluating the eligibility of accredited foreign graduate medical schools to participate in the title IV, HEA programs.
Passing score: The minimum passing score as defined by the Educational Commission for Foreign Medical Graduates (ECFMG), or on the National Council Licensure Examination for Registered Nurses (NCLEX-RN), as applicable.
Post-baccalaureate/equivalent medical program: A program offered by a foreign graduate medical school that requires, as a condition of admission, that its students have already completed their non-medical undergraduate studies and that consists solely of courses and training leading to employment as a doctor of medicine or doctor of osteopathic medicine.
Secondary school: A school that provides secondary education as determined under the laws of the country in which the school is located.
(a) To be designated as eligible to apply to participate in the FFEL programs or to continue to be eligible beyond the scheduled expiration of the institution's current period of eligibility, a foreign institution must—
(1) Apply on the form prescribed by the Secretary; and
(2) Provide all the information and documentation requested by the Secretary to make a determination of that eligibility.
(b) If a foreign institution fails to provide, release, or authorize release to the Secretary of information that is required in this subpart E, the institution is ineligible to apply to participate in the FFEL programs.
The Secretary considers a foreign institution to be comparable to an eligible institution of higher education in the United States and eligible to apply to participate in the Direct Loan Program if the foreign institution meets the following requirements:
(a)(1) Except for a freestanding foreign graduate medical school, foreign veterinary school, or foreign nursing school, the foreign institution is a public or private nonprofit educational institution.
(2) For a public or private nonprofit foreign institution, the institution meets the requirements of § 600.4, except § 600.4(a)(1), (a)(2), (a)(3), (a)(4)(ii), (a)(5), (b), (c), and any requirements the HEA or the Secretary has designated as inapplicable in accordance with § 600.51(c)(1).
(3) For a for-profit foreign medical, veterinary, or nursing school, the school meets the requirements of § 600.5, except § 600.5(a)(2), (a)(3), (a)(4), (a)(5)(i)(B), (a)(5)(ii), (a)(6), (c), (d), (e) and any requirements the HEA or the Secretary has designated as inapplicable in accordance with § 600.51(c)(1).
(b) The foreign institution admits as regular students only persons who—
(1) Have a secondary school completion credential; or
(2) Have the recognized equivalent of a secondary school completion credential.
(c)(1) Notwithstanding 34 CFR 668.5, written arrangements between an eligible foreign institution and an ineligible entity are limited to those under which—
(i) The ineligible entity is an institution that meets the requirements in paragraphs (1)(iii) and (iv) of the definition of “foreign institution” in § 600.52; and
(ii) The ineligible foreign institution provides 25 percent or less of the educational program.
(2) For the purpose of this paragraph (c), written arrangements do not include affiliation agreements for the provision of clinical training for foreign medical, veterinary, and nursing schools.
(d) An additional location of a foreign institution must separately meet the definition of a foreign institution in § 600.52 if the additional location is—
(1) Located outside of the country in which the main campus is located, except as provided in § 600.55(h)(1), § 600.56(b), § 600.57(a)(2), § 600.55(h)(3), and the definition of foreign institution found in § 600.52; or
(2) Located within the same country as the main campus, but is not covered by the legal authorization of the main campus.
(e) The foreign institution provides an eligible education program—
(1) For which the institution is legally authorized to award a degree that is equivalent to an associate, baccalaureate, graduate, or professional degree awarded in the United States;
(2) That is at least a two-academic-year program acceptable for full credit toward the equivalent of a baccalaureate degree awarded in the United States; or
(3)(i) That is equivalent to at least a one-academic-year training program in the United States that leads to a certificate, degree, or other recognized educational credential and prepares students for gainful employment in a recognized occupation within the meaning of the gainful employment provisions.
(ii) An institution must demonstrate to the satisfaction of the Secretary that the amount of academic work required by a program in paragraph (e)(3)(i) of this section is equivalent to at least the definition of an academic year in § 668.3.
(f) For a for-profit foreign medical, veterinary, or nursing school—
(1) No portion of an eligible medical or veterinary program offered may be at what would be an undergraduate level in the United States; and
(2) The title IV, HEA program eligibility does not extend to any joint degree program.
(g) Proof that a foreign institution meets the requirements of paragraph (1)(iii) of the definition of a foreign institution in § 600.52 may be provided to the Secretary by a legal authorization from the appropriate education ministry, council, or equivalent agency—
(1) For all eligible foreign institutions in the country;
(2) For all eligible foreign institutions in a jurisdiction within the country; or
(3) For each separate eligible foreign institution in the country.
(a) General. (1) The Secretary considers a foreign graduate medical school to be eligible to apply to participate in the title IV, HEA programs if, in addition to satisfying the criteria of this part (except the criterion in § 600.54 that the institution be public or private nonprofit), the school satisfies the criteria of this section.
(2) A foreign graduate medical school must provide, and in the normal course require its students to complete, a program of clinical training and classroom medical instruction of not less than 32 months in length, that is supervised closely by members of the school's faculty and that—
(i) Is provided in facilities adequately equipped and staffed to afford students comprehensive clinical training and classroom medical instruction;
(ii) Is approved by all medical licensing boards and evaluating bodies whose views are considered relevant by the Secretary; and
(iii) As part of its clinical training, does not offer more than two electives consisting of no more than eight weeks per student at a site located in a foreign country other than the country in which the main campus is located or in the United States, unless that location is included in the accreditation of a medical program accredited by the Liaison Committee on Medical Education (LCME) or the American Osteopathic Association (AOA).
(3) A foreign graduate medical school must appoint for the program described in paragraph (a)(2) of this section only those faculty members whose academic credentials are the equivalent of credentials required of faculty members teaching the same or similar courses at medical schools in the United States.
(4) A foreign graduate medical school must have graduated classes during each of the two twelve-month periods immediately preceding the date the Secretary receives the school's request for an eligibility determination.
(b) Accreditation. A foreign graduate medical school must—
(1) Be approved by an accrediting body—
(i) That is legally authorized to evaluate the quality of graduate medical school educational programs and facilities in the country where the school is located; and
(ii) Whose standards of accreditation of graduate medical schools have been evaluated by the NCFMEA or its successor committee of medical experts and have been determined to be comparable to standards of accreditation applied to medical schools in the United States; or
(2) Be a public or private nonprofit educational institution that satisfies the requirements in § 600.4(a)(5)(i).
(c) Admission criteria. (1) A foreign graduate medical school having a post-baccalaureate/equivalent medical program must require students accepted for admission who are U.S. citizens, nationals, or permanent residents to have taken the Medical College Admission Test (MCAT) and to have reported their scores to the foreign graduate medical school; and
(2) A foreign graduate medical school must determine the consent requirements for, and require the necessary consents of, all students accepted for admission for whom the school must report to enable the school to comply with the collection and submission requirements of paragraph (d) of this section.
(d) Collection and submission of data. (1) A foreign graduate medical school must obtain, at its own expense, and submit, by the date required by paragraph (d)(3) of this section—
(i) To its accrediting authority and, on request, to the Secretary, the scores on the MCAT or successor examination, of all students admitted during the preceding calendar year who are U.S. citizens, nationals, or eligible permanent residents, together with a statement of the number of times each student took the examination;
(ii) To its accrediting authority and, on request, to the Secretary, the percentage of students graduating during the preceding calendar year (including at least all graduates who are U.S. citizens, nationals, or eligible permanent residents) who obtain placement in an accredited U.S. medical residency program;
(iii) To the Secretary, except as provided for in paragraph (d)(2) of this section, all scores, disaggregated by step/test—i.e., Step 1, Step 2—Clinical Skills (Step 2-CS), and Step 2—Clinical Knowledge (Step 2-CK), or the successor examinations—and attempt, earned during the preceding calendar year by each student and graduate, on Step 1, Step 2-CS, and Step 2-CK, or the successor examinations, of the U.S. Medical Licensing Examination (USMLE), together with the dates the student has taken each test, including any failed tests;
(iv) To the Secretary, a statement of its citizenship rate for the preceding calendar year for a school that is subject to paragraph (f)(1)(i)(A) of this section, together with a description of the methodology used in deriving the rate that is acceptable to the Secretary.
(2) In lieu of submitting the information required in paragraph (d)(1)(iii) of this section to the Secretary, a foreign graduate medical school that is not subject to paragraph (f)(4) of this section may agree to allow the Educational Commission for Foreign Medical Graduates (ECFMG) or other responsible third party to calculate the rate described in paragraph (f)(1)(ii) and (f)(3) of this section for the preceding calendar year and provide the rate directly to the Secretary on the school's behalf with a copy to the foreign graduate medical school, provided—
(i) The foreign graduate medical school has provided by April 30 to the Secretary written consent acceptable to the Secretary to reliance by the Secretary on the pass rate as calculated by the ECFMG or other responsible third party for purposes of determining compliance with paragraph (f)(1)(ii) and (f)(3) of this section for the preceding calendar year; and
(ii) The foreign graduate medical school agrees in its written consent that for the preceding calendar year the rate as calculated by the ECFMG or other designated third party will be conclusive for purposes of determining compliance with paragraph (f)(1)(ii) and (f)(3) of this section.
(3) A foreign graduate medical school must submit the data it collects in accordance with paragraph (d)(1) of this section no later than April 30 of each year, unless the Secretary specifies a different date through a notice in the
(e) Requirements for clinical training. (1)(i) A foreign graduate medical school must have—
(A) A formal affiliation agreement with any hospital or clinic at which all or a portion of the school's core clinical training or required clinical rotations are provided; and
(B) Either a formal affiliation agreement or other written arrangements with any hospital or clinic at which all or a portion of its clinical rotations that are not required are provided, except for those locations that are not used regularly, but instead are chosen by individual students who take no more than two electives at the location for no more than a total of eight weeks.
(ii) The agreements described in paragraph (e)(1)(i) of this section must state how the following will be addressed at each site—
(A) Maintenance of the school's standards;
(B) Appointment of faculty to the medical school staff;
(C) Design of the curriculum;
(D) Supervision of students;
(E) Evaluation of student performance; and
(F) Provision of liability insurance.
(2) A foreign graduate medical school must notify its accrediting body within one year of any material changes in—
(i) The educational programs, including changes in clinical training programs; and
(ii) The overseeing bodies and in the formal affiliation agreements with hospitals and clinics described in paragraph (e)(1)(i) of this section.
(f) Citizenship and USMLE pass rate percentages. (1)(i)(A) During the calendar year preceding the year for which any of the school's students seeks an title IV, HEA program loan, at least 60 percent of those enrolled as full-time regular students in the school and at least 60 percent of the school's most recent graduating class must have been persons who did not meet the citizenship and residency criteria contained in section 484(a)(5) of the HEA, 20 U.S.C. 1091(a)(5); or
(B) The school must have had a clinical training program approved by a State prior to January 1, 2008, and must continue to operate a clinical training program in at least one State that approves the program; and
(ii) Except as provided in paragraph (f)(4) of this section, for a foreign graduate medical school outside of Canada, for Step 1, Step 2-CS, and Step 2-CK, or the successor examinations, of the USMLE administered by the ECFMG, at least 75 percent of the school's students and graduates who took that step/test of the examination in the year preceding the year for which any of the school's students seeks a title IV, HEA program loan must have received a passing score on that step/test and are taking the step/test for the first time; or
(2)(i) The school must have had a clinical training program approved by a State as of January 1, 1992; and
(ii) The school must continue to operate a clinical training program in at least one State that approves the program.
(3) In performing the calculation required in paragraph (f)(1)(ii) of this section, a foreign graduate medical school shall—
(i) Include as a graduate each student who graduated from the school during the three years preceding the year for which the calculation is performed and who took that step/test for the first time in that year; and
(ii) Include students and graduates who take more than one step/test of the USMLE examination for the first time in the same year in the denominator for each of those steps/tests;
(4)(i) If the calculation described in paragraph (f)(1)(ii) of this section would result in any step/test pass rate based on fewer than eight students, a single pass rate for the school is determined instead based on the performance of the school's students and graduates on Step 1, Step 2-CS, and Step 2-CK combined;
(ii) If combining the results on all three step/tests as permitted in paragraph (f)(4)(i) of this section would result in a pass rate based on fewer than eight step/test results, the school is deemed to have no pass rate for that year and the results for the year are combined with each subsequent year until a pass rate based on at least eight step/test results is derived.
(g) Other criteria. (1) As part of establishing, publishing, and applying reasonable satisfactory academic progress standards, a foreign graduate medical school must include as a quantitative component a maximum timeframe in which a student must complete his or her educational program that must—
(i) Be no longer than 150 percent of the published length of the educational program measured in academic years, terms, credit hours attempted, clock hours completed, etc., as appropriate; and
(ii) Meet the requirements of § 668.16(e)(2)(ii)(B), (C) and (D).
(2) A foreign graduate medical school must document the educational remediation it provides to assist students in making satisfactory academic progress.
(3) A foreign graduate medical school must publish all the languages in which instruction is offered.
(h) Location of a program. (1) Except as provided in paragraph (h)(3)(ii) of this section, all portions of a graduate medical education program offered to U.S. students must be located in a country whose medical school accrediting standards are comparable to standards used in the United States, as determined by the NCFMEA, except for clinical training sites located in the United States.
(2) No portion of the graduate medical educational program offered to U.S. students, other than the clinical training portion of the program, may be located outside of the country in which the main campus of the foreign graduate medical school is located.
(3)(i) Except as provided in paragraph (h)(3)(ii) of this section, for any part of the clinical training portion of the educational program located in a foreign country other than the country in which the main campus is located or in the United States, in order for students attending the site to be eligible to borrow title IV, HEA program funds—
(A) The site must be located in an NCFMEA approved comparable foreign country;
(B) The institution's medical accrediting agency must have conducted an on-site evaluation and specifically approved the clinical training site; and
(C) Clinical instruction must be offered in conjunction with medical educational programs offered to students enrolled in accredited medical schools located in that approved foreign country.
(ii) A clinical training site located in a foreign country other than the country in which the main campus is located or in the United States is not required to meet the requirements of paragraph (h)(3)(i) of this section in order for students attending that site to be eligible to borrow title IV, HEA program funds if—
(A) The location is included in the accreditation of a medical program accredited by the Liaison Committee on Medical Education (LCME) or the American Osteopathic Association (AOA); or
(B) No individual student takes more than two electives at the location and the combined length of the electives does not exceed eight weeks.
(a) The Secretary considers a foreign veterinary school to be eligible to apply to participate in the Direct Loan Program if, in addition to satisfying the criteria in this part (except the criterion in § 600.54 that the institution be public or private nonprofit), the school satisfies all of the following criteria:
(1) The school provides, and in the normal course requires its students to complete, a program of clinical and classroom veterinary instruction that is supervised closely by members of the school's faculty, and that is provided in facilities adequately equipped and staffed to afford students comprehensive clinical and classroom veterinary instruction through a training program for foreign veterinary students that has been approved by all veterinary licensing boards and evaluating bodies whose views are considered relevant by the Secretary.
(2) The school has graduated classes during each of the two twelve-month periods immediately preceding the date the Secretary receives the school's request for an eligibility determination.
(3) The school employs for the program described in paragraph (a)(1) of this section only those faculty members whose academic credentials are the equivalent of credentials required of faculty members teaching the same or similar courses at veterinary schools in the United States.
(4) Effective July 1, 2015, the school is accredited or provisionally accredited by an organization acceptable to the Secretary for the purpose of evaluating veterinary programs.
(b)(1) No portion of the foreign veterinary educational program offered to U.S. students, other than the clinical training portion of the program as provided for in paragraph (b)(2) of this section, may be located outside of the country in which the main campus of the foreign veterinary school is located;
(2)(i) For a veterinary school that is neither public nor private nonprofit, the school's students must complete their clinical training at an approved veterinary school located in the United States;
(ii) For a veterinary school that is public or private nonprofit, the school's students may complete their clinical training at an approved veterinary school located—
(A) In the United States;
(B) In the home country; or
(C) Outside of the United States or the home country, if—
(1) The location is included in the accreditation of a veterinary program accredited by the American Veterinary Medical Association (AVMA); or
(2) No individual student takes more than two electives at the location and the combined length of the elective does not exceed eight weeks.
(a) Effective July 1, 2012 for a foreign nursing school that was participating in any title IV, HEA program on August 13, 2008, and effective July 1, 2011 for all other foreign nursing schools, the Secretary considers the foreign nursing school to be eligible to apply to participate in the Direct Loan Program if, in addition to satisfying the criteria in this part (except the criterion in § 600.54 that the institution be public or private nonprofit), the nursing school satisfies all of the following criteria:
(1) The nursing school is an associate degree school of nursing, a collegiate school of nursing, or a diploma school of nursing.
(2) The nursing school has an agreement with a hospital located in the United States or an accredited school of nursing located in the United States that requires students of the nursing school to complete the student's clinical training at the hospital or accredited school of nursing.
(3) The nursing school has an agreement with an accredited school of nursing located in the United States providing that students graduating from the nursing school located outside of the United States also receive a degree from the accredited school of nursing located in the United States.
(4) The nursing school certifies only Federal Stafford Loan program loans or Federal PLUS program loans, as those terms are defined in § 668.2, for students attending the nursing school.
(5) The nursing school reimburses the Secretary for the cost of any loan defaults for current and former students included in the calculation of the institution's cohort default rate during the previous fiscal year.
(6)(i) The nursing school determines the consent requirements for and requires the necessary consents of all students accepted for admission who are U.S. citizens, nationals, or eligible permanent residents to enable the school to comply with the collection and submission requirements of paragraph (a)(6)(ii) of this section.
(ii) The nursing school annually either—
(A) Obtains, at its own expense, all results achieved by students and graduates who are U.S. citizens, nationals, or eligible permanent residents on the National Council Licensure Examination for Registered Nurses (NCLEX-RN), together with the dates the student has taken the examination, including any failed examinations, and provides such results to the Secretary; or
(B) Obtains a report or reports from the National Council of State Boards of Nursing (NCSB), or an NCSB affiliate or NCSB contractor, reflecting the percentage of the school's students and graduates taking the NCLEX-RN in the preceding year who passed the examination, or the data from which the percentage could be derived, and provides the report to the Secretary.
(7) Not less than 75 percent of the school's students and graduates who are U.S. citizens, nationals, or eligible permanent residents who took the NCLEX-RN in the year preceding the year for which the institution is certifying a Federal Stafford Loan or a Federal Plus Loan, passed the examination.
(8) The school provides, including under the agreements described in paragraphs (a)(2) and (a)(3) of this section, and in the normal course requires its students to complete, a program of clinical and classroom nursing instruction that is supervised closely by members of the school's faculty that is provided in facilities adequately equipped and staffed to afford students comprehensive clinical and classroom nursing instruction, through a training program for foreign nursing students that has been approved by all nurse licensing boards and evaluating bodies whose views are considered relevant by the Secretary.
(9) The school has graduated classes during each of the two twelve-month periods immediately preceding the date the Secretary receives the school's request for an eligibility determination.
(10) The school employs only those faculty members whose academic credentials are the equivalent of credentials required of faculty members teaching the same or similar courses at nursing schools in the United States.
(b) For purposes of paragraph (a)(5) of this section, the cost of a loan default is the estimated future cost of collections on the defaulted loan.
(c) The Department continues to collect on the Direct Loan after a school reimburses the Secretary for the amount specified in paragraph (b) of this section until the loan is paid in full or otherwise satisfied, or the loan account is closed out.
(d) No portion of the foreign nursing program offered to U.S. students may be located outside of the country in which the main campus of the foreign nursing school is located, except for clinical sites located in the United States.
(a) The eligibility of a foreign institution under this subpart expires six years after the date of the Secretary's determination that the institution is eligible to apply for participation, except that the Secretary may specify a shorter period of eligibility. In the case of a foreign graduate medical school, continued eligibility is dependent upon annual submission of the data and information required under § 600.55(a)(5)(i), subject to the terms described in § 600.53(b).
(b) A foreign institution that has been determined eligible loses its eligibility on the date that the institution no longer meets any of the criteria in this subpart E.
(c) Notwithstanding the provisions of 34 CFR 668.26, if a foreign institution loses its eligibility under this subpart E, an otherwise eligible student, continuously enrolled at the institution before the loss of eligibility, may receive an FFEL program loan for attendance at that institution for the academic year succeeding the academic year in which that institution lost its eligibility, if the student actually received an FFEL program loan for attendance at the institution for a period during which the institution was eligible under this subpart E.
This part establishes disclosure and reporting requirements for covered institutions, institution-affiliated organizations, and lenders that provide, issue, recommend, promote, endorse, or provide information relating to education loans. Education loans include loans authorized by the Higher Education Act of 1965, as amended (HEA) and private education loans.
(a) The definitions of the following terms used in this part are set forth in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
Federal Family Education Loan (FFEL) Program
Secretary
Title IV, HEA program
(b) The following definitions also apply to this part:
Agent: An officer or employee of a covered institution or an institution-affiliated organization.
Covered institution: Any institution of higher education, proprietary institution of higher education, postsecondary vocational institution, or institution outside the United States, as these terms are defined in 34 CFR part 600, that receives any Federal funding or assistance.
Education loan: Except when used as part of the term “private education loan”,
(1) Any loan made, insured, or guaranteed under the Federal Family Education Loan (FFEL) Program;
(2) Any loan made under the William D. Ford Federal Direct Loan Program; or
(3) A private education loan.
Institution-affiliated organization: (1) Any organization that—
(i) Is directly or indirectly related to a covered institution; and
(ii) Is engaged in the practice of recommending, promoting, or endorsing education loans for students attending such covered institution or the families of such students.
(2) An institution-affiliated organization—
(i) May include an alumni organization, athletic organization, foundation, or social, academic, or professional organization, of a covered institution; and
(ii) Does not include any lender with respect to any education loan secured, made, or extended by such lender.
Lender: (1) An eligible lender in the Federal Family Education Loan (FFEL) Program, as defined in 34 CFR 682.200(b);
(2) The Department in the Direct Loan program;
(3) In the case of a private educational loan, a private education lender as defined in section 140 of the Truth in Lending Act; and
(4) Any other person engaged in the business of securing, making, or extending education loans on behalf of the lender.
Officer: A director or trustee of a covered institution or institution-affiliated organization, if such individual is treated as an employee of such covered institution or institution-affiliated organization, respectively.
Preferred lender arrangement: (1) An arrangement or agreement between a lender and a covered institution or an institution-affiliated organization of such covered institution—
(i) Under which a lender provides or otherwise issues education loans to the students attending such covered institution or the families of such students; and
(ii) That relates to such covered institution or such institution-affiliated organization recommending, promoting, or endorsing the education loan products of the lender.
(2) A preferred lender arrangement does not include—
(i) Arrangements or agreements with respect to loans made under the William D. Ford Federal Direct Loan Program; or
(ii) Arrangements or agreements with respect to loans that originate through the PLUS Loan auction pilot program under section 499(b) of the HEA.
(3) For purpose of this definition, an arrangement or agreement does not exist if the private education loan provided or issued to a student attending a covered institution is made by the covered institution or by an institution-affiliated organization of the covered institution, and the private education loan is—
(i) Funded by the covered institution's or institution-affiliated organization's own funds;
(ii) Funded by donor-directed contributions;
(iii) Made under title VII or title VIII of the Public Service Health Act; or
(iv) Made under a State-funded financial aid program, if the terms and conditions of the loan include a loan forgiveness option for public service.
Private education loan: As the term is defined in 12 CFR 226.46(b)(5), a loan provided by a private educational lender that is not a title IV loan and that is issued expressly for postsecondary education expenses to a borrower, regardless of whether the loan is provided through the educational institution that the student attends or directly to the borrower from the private educational lender. A private education loan does not include—
(1) An extension of credit under an open end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling; or
(2) An extension of credit in which the educational institution is the lender if—
(i) The term of the extension of credit is 90 days or less; or
(ii) An interest rate will not be applied to the credit balance and the term of the extension of credit is one year or less, even if the credit is payable in more than four installments.
(a) A covered institution, or an institution-affiliated organization of such covered institution, that participates in a preferred lender arrangement must disclose—
(1) On such covered institution's or institution-affiliated organization's Web site and in all informational materials described in paragraph (b) of this section that describe or discuss education loans—
(i) The maximum amount of Federal grant and loan aid under title IV of the HEA available to students, in an easy to understand format;
(ii) The information identified on a model disclosure form developed by the Secretary pursuant to section 153(a)(2)(B) of the HEA, for each type of education loan that is offered pursuant to a preferred lender arrangement of the institution or institution-affiliated organization to students of the institution or the families of such students; and
(iii) A statement that such institution is required to process the documents required to obtain a loan under the Federal Family Education Loan (FFEL) Program from any eligible lender the student selects; and
(2) On such covered institution's or institution-affiliated organization's Web site and in all informational materials described in paragraph (b) of this section that describe or discuss private education loans—
(i) In the case of a covered institution, the information that the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(11) of the Truth in Lending Act (15 U.S.C. 1638(e)(11)), for each type of private education loan offered pursuant to a preferred lender arrangement of the institution to students of the institution or the families of such students; and
(ii) In the case of an institution-affiliated organization of a covered institution, the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(1) of the Truth in Lending Act (15 U.S.C. 1638(e)(1)), for each type of private education loan offered pursuant to a preferred lender arrangement of the organization to students of such institution or the families of such students.
(b) The informational materials described in paragraphs (a)(1) and (a)(2) of this section are publications, mailings, or electronic messages or materials that—
(1) Are distributed to prospective or current students of a covered institution and families of such students; and
(2) Describe or discuss the financial aid opportunities available to students at an institution of higher education.
(c)(1) Each covered institution and each institution-affiliated organization that participates in a preferred lender arrangement must provide the information described in paragraph (a)(1)(ii) of this section, and the information described in paragraphs (a)(2)(i) and (a)(2)(ii) of this section, respectively, for each type of education loan offered pursuant to the preferred lender arrangement.
(2) The information identified in paragraph (c)(1) of this section must be provided to students attending the covered institution, or the families of such students, as applicable, annually and must be provided in a manner that allows for the students or their families to take such information into account before selecting a lender or applying for an education loan.
(d) If a covered institution compiles, maintains, and makes available a preferred lender list as required under § 668.14(b)(28), the institution must—
(1) Clearly and fully disclose on such preferred lender list—
(i) Not less than the information required to be disclosed under section 153(a)(2)(A) of the HEA;
(ii) Why the institution participates in a preferred lender arrangement with each lender on the preferred lender list, particularly with respect to terms and conditions or provisions favorable to the borrower; and
(iii) That the students attending the institution, or the families of such students, do not have to borrow from a lender on the preferred lender list;
(2) Ensure, through the use of the list of lender affiliates provided by the Secretary under section 487(h)(2) of the HEA, that—
(i) There are not less than three FFEL lenders that are not affiliates of each other included on the preferred lender list and, if the institution recommends, promotes, or endorses private education loans, there are not less than two lenders of private education loans that are not affiliates of each other included on the preferred lender list; and
(ii) The preferred lender list under paragraph (d) of this section—
(A) Specifically indicates, for each listed lender, whether the lender is or is not an affiliate of each other lender on the preferred lender list; and
(B) If a lender is an affiliate of another lender on the preferred lender list, describes the details of such affiliation;
(3) Prominently disclose the method and criteria used by the institution in selecting lenders with which to participate in preferred lender arrangements to ensure that such lenders are selected on the basis of the best interests of the borrowers, including—
(i) Payment of origination or other fees on behalf of the borrower;
(ii) Highly competitive interest rates, or other terms and conditions or provisions of Title IV, HEA program loans or private education loans;
(iii) High-quality servicing for such loans; or
(iv) Additional benefits beyond the standard terms and conditions or provisions for such loans;
(4) Exercise a duty of care and a duty of loyalty to compile the preferred lender list under paragraph (d) of this section without prejudice and for the sole benefit of the students attending the institution, or the families of such students; and
(5) Not deny or otherwise impede the borrower's choice of a lender or cause unnecessary delay in loan certification under title IV of the HEA for those borrowers who choose a lender that is not included on the preferred lender list.
(a) A covered institution, or an institution-affiliated organization of such covered institution, that provides information regarding a private education loan from a lender to a prospective borrower must provide private education loan disclosures to the prospective borrower, regardless of whether the covered institution or institution-affiliated organization participates in a preferred lender arrangement.
(b) The private education loan disclosures must—
(1) Provide the prospective borrower with the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(1) of the Truth in Lending Act (15 U.S.C. 1638(e)(1)) for such loan;
(2) Inform the prospective borrower that—
(i) The prospective borrower may qualify for loans or other assistance under title IV of the HEA; and
(ii) The terms and conditions of Title IV, HEA program loans may be more favorable than the provisions of private education loans.
(c) The covered institution or institution-affiliated organization must ensure that information regarding private education loans is presented in such a manner as to be distinct from information regarding Title IV, HEA program loans.
(d) Upon an enrolled or admitted student applicant's request for a private education loan self-certification form, an institution must provide to the applicant, in written or electronic form—
(1) The self-certification form for private education loans developed by the Secretary in consultation with the Board of Governors of the Federal Reserve System, to satisfy the requirements of section 128(e)(3) of the Truth in Lending Act (15 U.S.C. 1638(e)(3)); and
(2) The information required to complete the form, to the extent the institution possesses such information as specified in 34 CFR 668.14(b)(29).
A covered institution, or an institution-affiliated organization of such covered institution, that participates in a preferred lender arrangement with a lender regarding private education loans must—
(a) Not agree to the lender's use of the name, emblem, mascot, or logo of such institution or organization, or other words, pictures, or symbols readily identified with such institution or organization, in the marketing of private education loans to students attending such institution in any way that implies that the loan is offered or made by such institution or organization instead of the lender; and
(b) Ensure that the name of the lender is displayed in all information and documentation related to the private education loans described in this section.
Each covered institution, and each institution-affiliated organization of such covered institution, that participates in a preferred lender arrangement, must—
(a) Prepare and submit to the Secretary an annual report, by a date determined by the Secretary, that includes, for each lender that participates in a preferred lender arrangement with such covered institution or organization—
(1) The information described in § 601.10(c); and
(2) A detailed explanation of why such covered institution or institution-affiliated organization participates in a preferred lender arrangement with the lender, including why the terms, conditions, and provisions of each type of education loan provided pursuant to the preferred lender arrangement are beneficial for students attending such institution, or the families of such students, as applicable; and
(b) Ensure that the report required under this section is made available to the public and provided to students attending or planning to attend such covered institution and the families of such students.
(a)(1) A covered institution that participates in a preferred lender arrangement must comply with the code of conduct requirements described in this section.
(2) The covered institution must—
(i) Develop a code of conduct with respect to FFEL Program loans and private education loans with which the institution's agents must comply. The code of conduct must—
(A) Prohibit a conflict of interest with the responsibilities of an agent of an institution with respect to FFEL Program loans and private education loans; and
(B) At a minimum, include the provisions specified in paragraph (c) of this section;
(ii) Publish such code of conduct prominently on the institution's Web site; and
(iii) Administer and enforce such code by, at a minimum, requiring that all of the institution's agents with responsibilities with respect to FFEL Program loans or private education loans be annually informed of the provisions of the code of conduct.
(b) Any institution-affiliated organization of a covered institution that participates in a preferred lender arrangement must—
(1) Comply with the code of conduct developed and published by such covered institution under paragraph (a)(1) of this section;
(2) If such institution-affiliated organization has a Web site, publish such code of conduct prominently on the Web site; and
(3) Administer and enforce such code of conduct by, at a minimum, requiring that all of such institution-affiliated organization's agents with responsibilities with respect to FFEL Program loans or private education loans be annually informed of the provisions of such code of conduct.
(c) A covered institution's code of conduct must prohibit—
(1) Revenue-sharing arrangements with any lender.The institution must not enter into any revenue-sharing arrangement with any lender. For purposes of this paragraph, the term revenue-sharing arrangement means an arrangement between a covered institution and a lender under which—
(i) A lender provides or issues a FFEL Program loan or private education loan to students attending the institution or to the families of such students; and
(ii) The institution recommends the lender or the loan products of the lender and in exchange, the lender pays a fee or provides other material benefits, including revenue or profit sharing, to the institution, an agent;
(2)(i) Employees of the financial aid office receiving gifts from a lender, a guarantor, or a loan servicer. Agents who are employed in the financial aid office of the institution or who otherwise have responsibilities with respect to FFEL Program loans or private education loans, must not solicit or accept any gift from a lender, guarantor, or servicer of FFEL Program loans or private education loans;
(ii) For purposes of paragraph (c) of this section, the term gift means any gratuity, favor, discount, entertainment, hospitality, loan, or other item having a monetary value of more than a de minimus amount. The term includes a gift of services, transportation, lodging, or meals, whether provided in kind, by purchase of a ticket, payment in advance, or reimbursement after the expense has been incurred;
(iii) The term gift does not include any of the following:
(A) Standard material, activities, or programs on issues related to a loan, default aversion, default prevention, or financial literacy, such as a brochure, a workshop, or training.
(B) Food, refreshments, training, or informational material furnished to an agent as an integral part of a training session that is designed to improve the service of a lender, guarantor, or servicer of FFEL Program loans or private education loans to the institution, if such training contributes to the professional development of the agent.
(C) Favorable terms, conditions, and borrower benefits on a FFEL Program loan or private education loan provided to a student employed by the institution if such terms, conditions, or benefits are comparable to those provided to all students of the institution.
(D) Entrance and exit counseling services provided to borrowers to meet the institution's responsibilities for entrance and exit counseling as required by §§ 682.604(f) and 682.604(g), as long as the institution's staff are in control of the counseling (whether in person or via electronic capabilities) and such counseling does not promote the products or services of any specific lender.
(E) Philanthropic contributions to an institution from a lender, servicer, or guarantor of FFEL Program loans or private education loans that are unrelated to FFEL Program loans or private education loans or any contribution from any lender, servicer, or guarantor, that is not made in exchange for any advantage related to FFEL Program loans or private education loans.
(F) State education grants, scholarships, or financial aid funds administered by or on behalf of a State; and
(iv) For purposes of paragraph (c) of this section, a gift to a family member of an agent, or to any other individual based on that individual's relationship with the agent, is considered a gift to the agent if—
(A) The gift is given with the knowledge and acquiescence of the agent; and
(B) The agent has reason to believe the gift was given because of the official position of the agent;
(3) Consulting or other contracting arrangements. An agent who is employed in the financial aid office of the institution or who otherwise has responsibilities with respect to FFEL Program loans or private education loans must not accept from any lender or affiliate of any lender any fee, payment, or other financial benefit (including the opportunity to purchase stock) as compensation for any type of consulting arrangement or other contract to provide services to a lender or on behalf of a lender relating to FFEL Program loans or private education loans. Nothing in paragraph (c)(3) of this section will be construed as prohibiting—
(i) An agent who is not employed in the institution's financial aid office and who does not otherwise have responsibilities with respect to FFEL Program loans or private education loans from performing paid or unpaid service on a board of directors of a lender, guarantor, or servicer of education loans;
(ii) An agent who is not employed in the institution's financial aid office but who has responsibility with respect to FFEL Program loans or private education loans from performing paid or unpaid service on a board of directors of a lender, guarantor, or servicer of FFEL Program loans or private education loans, if the institution has a written conflict of interest policy that clearly sets forth that agents must recuse themselves from participating in any decision of the board regarding FFEL Program loans or private education loans at the institution; or
(iii) An officer, employee, or contractor of a lender, guarantor, or servicer of FFEL Program loans or private education loans from serving on a board of directors, or serving as a trustee, of an institution, if the institution has a written conflict of interest policy that the board member or trustee must recuse themselves from any decision regarding FFEL Program loans or private education loans at the institution;
(4) Directing borrowers to particular lenders or delaying loan certifications. The institution must not—
(i) For any first-time borrower, assign, through award packaging or other methods, the borrower's loan to a particular lender; or
(ii) Refuse to certify, or delay certification of, any loan based on the borrower's selection of a particular lender or guaranty agency;
(5)(i) Offers of funds for private loans. The institution must not request or accept from any lender any offer of funds to be used for private education loans, including funds for an opportunity pool loan, to students in exchange for the institution providing concessions or promises regarding providing the lender with—
(A) A specified number of FFEL Program loans or private education loans;
(B) A specified loan volume of such loans; or
(C) A preferred lender arrangement for such loans.
(ii) For purposes of paragraph (c) of this section, the term opportunity pool loan means a private education loan made by a lender to a student attending the institution or the family member of such a student that involves a payment, directly or indirectly, by such institution of points, premiums, additional interest, or financial support to such lender for the purpose of such lender extending credit to the student or the family;
(6) Staffing assistance. The institution must not request or accept from any lender any assistance with call center staffing or financial aid office staffing, except that nothing in this paragraph will be construed to prohibit the institution from requesting or accepting assistance from a lender related to—
(i) Professional development training for financial aid administrators;
(ii) Providing educational counseling materials, financial literacy materials, or debt management materials to borrowers, provided that such materials disclose to borrowers the identification of any lender that assisted in preparing or providing such materials; or
(iii) Staffing services on a short-term, nonrecurring basis to assist the institution with financial aid-related functions during emergencies, including State-declared or Federally declared natural disasters, Federally declared national disasters, and other localized disasters and emergencies identified by the Secretary; and
(7) Advisory board compensation. Any employee who is employed in the financial aid office of the institution, or who otherwise has responsibilities with respect to FFEL Program loans or private education loans or other student financial aid of the institution, and who serves on an advisory board, commission, or group established by a lender, guarantor, or group of lenders or guarantors, must not receive anything of value from the lender, guarantor, or group of lenders or guarantors, except that the employee may be reimbursed for reasonable expenses, as that term is defined in § 668.16(d)(2)(ii), incurred in serving on such advisory board, commission, or group.
(a) Each covered institution participating in the William D. Ford Direct Loan Program under part D of title IV of the HEA must—
(1) Make the information identified in a model disclosure form developed by the Secretary pursuant to section 154(a) of the HEA available to students attending or planning to attend the institution, or the families of such students, as applicable; and
(2) If the institution provides information regarding a private education loan to a prospective borrower, concurrently provide such borrower with the information identified on the model disclosure form that the Secretary provides to the institution under section 154(a) of the HEA.
(b) In providing the information required under paragraph (a) of this section, a covered institution may use a comparable form designed by the institution instead of the model disclosure form.
(a) Disclosures to borrowers. (1) A lender must, at or prior to disbursement of a FFEL loan, provide the borrower, in writing (including through electronic means), in clear and understandable terms, the disclosures required in § 682.205(a) and (b).
(2) A lender must, for each of its private education loans, comply with the disclosure requirements under section 128(e) of the Truth in Lending Act (15 U.S.C. 1638(e)).
(b) Reports to the Secretary. Each FFEL lender must report annually to the Secretary—
(1) Any reasonable expenses paid or provided to any agent of a covered institution who is employed in the financial aid office or has other responsibilities with respect to education loans or other student financial aid of the institution for service on a lender advisory board, commission or group established by a lender or group of lenders; or
(2) Any similar expenses paid or provided to any agent of an institution-affiliated organization who is involved in recommending, promoting, or endorsing education loans.
(3) The report required by this paragraph must include—
(i) The amount of expenses paid or provided for each specific instance in which the lender provided expenses;
(ii) The name of any agent described in paragraph (b)(1) of this section to whom the expenses were paid or provided;
(iii) The dates of the activity for which the expenses were paid or provided; and
(iv) A brief description of the activity for which the expenses were paid or provided.
(c) Lender certification of compliance. (1) Any FFEL lender participating in one or more preferred lender arrangements must annually certify to the Secretary its compliance with the Higher Education Act of 1965, as amended; and
(2) If the lender is required to submit an audit under 34 CFR 682.305(c), the lender's compliance with the requirements under this section must be reported on and attested to annually by the lender's auditor.
(3) A lender may comply with the certification requirements of this section if the certifications are provided as part of the annual audit required by 34 CFR 682.305(c).
(4) A lender who is not required to submit an audit must submit the required certification at such time and in such manner as directed by the Secretary.
(d) Annual lender report to covered institutions. A FFEL lender with a preferred lender arrangement with a covered institution or an institution-affiliated organization relating to FFEL loans must annually, on a date prescribed by the Secretary, provide to the covered institution or the institution-affiliated organization and to the Secretary, such information required by the Secretary in relation to the FFEL loans the lender plans to offer pursuant to that preferred lender arrangement for the next award year.
(a) The Secretary recognizes accrediting agencies to ensure that these agencies are, for the purposes of the Higher Education Act of 1965, as amended (HEA), or for other Federal purposes, reliable authorities regarding the quality of education or training offered by the institutions or programs they accredit.
(b) The Secretary lists an agency as a nationally recognized accrediting agency if the agency meets the criteria for recognition listed in subpart B of this part.
(a) Periodically, the Secretary publishes a list of recognized agencies in the
(b) If the Secretary denies continued recognition to a previously recognized agency, or if the Secretary limits, suspends, or terminates the agency's recognition before the end of its recognition period, the Secretary publishes a notice of that action in the
(a) The following definitions are contained in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(b) The following definitions apply to this part:
Accreditation means the status of public recognition that an accrediting agency grants to an educational institution or program that meets the agency's standards and requirements.
Accrediting agency or agency means a legal entity, or that part of a legal entity, that conducts accrediting activities through voluntary, non-Federal peer review and makes decisions concerning the accreditation or preaccreditation status of institutions, programs, or both.
Act means the Higher Education Act of 1965, as amended.
Adverse accrediting action or adverse action means the denial, withdrawal, suspension, revocation, or termination of accreditation or preaccreditation, or any comparable accrediting action an agency may take against an institution or program.
Advisory Committee means the National Advisory Committee on Institutional Quality and Integrity.
Compliance report means a written report that the Department requires an agency to file when the agency is found to be out of compliance to demonstrate that the agency has corrected deficiencies specified in the decision letter from the senior Department official or the Secretary. Compliance reports must be reviewed by Department staff and the Advisory Committee and approved by the senior Department official or, in the event of an appeal, by the Secretary.
Designated Federal Official means the Federal officer designated under section 10(f) of the Federal Advisory Committee Act, 5 U.S.C. Appdx. 1.
Final accrediting action means a final determination by an accrediting agency regarding the accreditation or preaccreditation status of an institution or program. A final accrediting action is a decision made by the agency, at the conclusion of any appeals process available to the institution or program under the agency's due process policies and procedures.
Institutional accrediting agency means an agency that accredits institutions of higher education.
Monitoring report means a report that an agency is required to submit to Department staff when it is found to be substantially compliant. The report contains documentation to demonstrate that—
(i) The agency is implementing its current or corrected policies; or
(ii) The agency, which is compliant in practice, has updated its policies to align with those compliant practices.
Program means a postsecondary educational program offered by an institution of higher education that leads to an academic or professional degree, certificate, or other recognized educational credential.
Programmatic accrediting agency means an agency that accredits specific educational programs, including those that prepare students in specific academic disciplines or for entry into a profession, occupation, or vocation.
Recognition means an unappealed determination by the senior Department official under § 602.36, or a determination by the Secretary on appeal under § 602.37, that an accrediting agency complies with the criteria for recognition listed in subpart B of this part and that the agency is effective in its application of those criteria. A grant of recognition to an agency as a reliable authority regarding the quality of education or training offered by institutions or programs it accredits remains in effect for the term granted except upon a determination made in accordance with subpart C of this part that the agency no longer complies with the subpart B criteria or that it has become ineffective in its application of those criteria.
Representative of the public means a person who is not—
(1) An employee, member of the governing board, owner, or shareholder of, or consultant to, an institution or program that either is accredited or preaccredited by the agency or has applied for accreditation or preaccreditation;
(2) A member of any trade association or membership organization related to, affiliated with, or associated with the agency; or
(3) A spouse, parent, child, or sibling of an individual identified in paragraph (1) or (2) of this definition.
Scope of recognition or scope means the range of accrediting activities for which the Secretary recognizes an agency. The Secretary may place a limitation on the scope of an agency's recognition for title IV, HEA purposes. The Secretary's designation of scope defines the recognition granted according to—
(i) Types of degrees and certificates covered;
(ii) Types of institutions and programs covered;
(iii) Types of preaccreditation status covered, if any; and
(iv) Coverage of accrediting activities related to distance education or correspondence courses.
Senior Department official means the official in the U.S. Department of Education designated by the Secretary who has, in the judgment of the Secretary, appropriate seniority and relevant subject matter knowledge to make independent decisions on accrediting agency recognition.
Substantial compliance means the agency demonstrated to the Department that it has the necessary policies, practices, and standards in place and generally adheres with fidelity to those policies, practices, and standards; or the agency has policies, practices, and standards in place that need minor modifications to reflect its generally compliant practice.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
The agency must demonstrate that—
(a) If the agency accredits institutions of higher education, its accreditation is a required element in enabling at least one of those institutions to establish eligibility to participate in HEA programs. If, pursuant to 34 CFR 600.11(b), an agency accredits one or more institutions that participate in HEA programs and that could designate the agency as its link to HEA programs, the agency satisfies this requirement, even if the institution currently designates another institutional accrediting agency as its Federal link; or
(b) If the agency accredits institutions of higher education or higher education programs, or both, its accreditation is a required element in enabling at least one of those entities to establish eligibility to participate in non-HEA Federal programs.
The agency must demonstrate that it conducts accrediting activities within—
(a) A State, if the agency is part of a State government;
(b) A region or group of States chosen by the agency in which an agency provides accreditation to a main campus, a branch campus, or an additional location of an institution. An agency whose geographic area includes a State in which a branch campus or additional location is located is not required to also accredit a main campus in that State. An agency whose geographic area includes a State in which only a branch campus or additional location is located is not required to accept an application for accreditation from other institutions in such State; or
(c) The United States.
(a) An agency seeking initial recognition must demonstrate that it has—
(1) Granted accreditation or preaccreditation prior to submitting an application for recognition—
(i) To one or more institutions if it is requesting recognition as an institutional accrediting agency and to one or more programs if it is requesting recognition as a programmatic accrediting agency;
(ii) That covers the range of the specific degrees, certificates, institutions, and programs for which it seeks recognition; and
(iii) In the geographic area for which it seeks recognition; and
(2) Conducted accrediting activities, including deciding whether to grant or deny accreditation or preaccreditation, for at least two years prior to seeking recognition, unless the agency seeking initial recognition is affiliated with, or is a division of, an already recognized agency.
(b)(1) A recognized agency seeking an expansion of its scope of recognition must follow the requirements of §§ 602.31 and 602.32 and demonstrate that it has accreditation or preaccreditation policies in place that meet all the criteria for recognition covering the range of the specific degrees, certificates, institutions, and programs for which it seeks the expansion of scope and has engaged and can show support from relevant constituencies for the expansion. A change to an agency's geographic area of accrediting activities does not constitute an expansion of the agency's scope of recognition, but the agency must notify the Department of, and publicly disclose on the agency's website, any such change.
(2) An agency that cannot demonstrate experience in making accreditation or preaccreditation decisions under the expanded scope at the time of its application or review for an expansion of scope may—
(i) If it is an institutional accrediting agency, be limited in the number of institutions to which it may grant accreditation under the expanded scope for a designated period of time; or
(ii) If it is a programmatic accrediting agency, be limited in the number of programs to which it may grant accreditation under that expanded scope for a certain period of time; and
(iii) Be required to submit a monitoring report regarding accreditation decisions made under the expanded scope.
(a) The Secretary recognizes only the following four categories of accrediting agencies:
(1) A State agency that—
(i) Has as a principal purpose the accrediting of institutions of higher education, higher education programs, or both; and
(ii) Has been listed by the Secretary as a nationally recognized accrediting agency on or before October 1, 1991.
(2) An accrediting agency that—
(i) Has a voluntary membership of institutions of higher education;
(ii) Has as a principal purpose the accrediting of institutions of higher education and that accreditation is used to provide a link to Federal HEA programs in accordance with § 602.10; and
(iii) Satisfies the “separate and independent” requirements in paragraph (b) of this section.
(3) An accrediting agency that—
(i) Has a voluntary membership; and
(ii) Has as its principal purpose the accrediting of institutions of higher education or programs, and the accreditation it offers is used to provide a link to non-HEA Federal programs in accordance with § 602.10.
(4) An accrediting agency that, for purposes of determining eligibility for title IV, HEA programs—
(i)(A) Has a voluntary membership of individuals participating in a profession; or
(B) Has as its principal purpose the accrediting of programs within institutions that are accredited by another nationally recognized accrediting agency; and
(ii) Satisfies the “separate and independent” requirements in paragraph (b) of this section or obtains a waiver of those requirements under paragraph (d) of this section.
(b) For purposes of this section, “separate and independent” means that—
(1) The members of the agency's decision-making body, who decide the accreditation or preaccreditation status of institutions or programs, establish the agency's accreditation policies, or both, are not elected or selected by the board or chief executive officer of any related, associated, or affiliated trade association, professional organization, or membership organization and are not staff of the related, associated, or affiliated trade association, professional organization, or membership organization;
(2) At least one member of the agency's decision-making body is a representative of the public, and at least one-seventh of the body consists of representatives of the public;
(3) The agency has established and implemented guidelines for each member of the decision-making body including guidelines on avoiding conflicts of interest in making decisions;
(4) The agency's dues are paid separately from any dues paid to any related, associated, or affiliated trade association or membership organization; and
(5) The agency develops and determines its own budget, with no review by or consultation with any other entity or organization.
(c) The Secretary considers that any joint use of personnel, services, equipment, or facilities by an agency and a related, associated, or affiliated trade association or membership organization does not violate the “separate and independent” requirements in paragraph (b) of this section if—
(1) The agency pays the fair market value for its proportionate share of the joint use; and
(2) The joint use does not compromise the independence and confidentiality of the accreditation process.
(d) For purposes of paragraph (a)(4) of this section, the Secretary may waive the “separate and independent” requirements in paragraph (b) of this section if the agency demonstrates that—
(1) The Secretary listed the agency as a nationally recognized agency on or before October 1, 1991, and has recognized it continuously since that date;
(2) The related, associated, or affiliated trade association or membership organization plays no role in making or ratifying either the accrediting or policy decisions of the agency;
(3) The agency has sufficient budgetary and administrative autonomy to carry out its accrediting functions independently;
(4) The agency provides to the related, associated, or affiliated trade association or membership organization only information it makes available to the public.
(e) An agency seeking a waiver of the “separate and independent” requirements under paragraph (d) of this section must apply for the waiver each time the agency seeks recognition or continued recognition.
The agency must have the administrative and fiscal capability to carry out its accreditation activities in light of its requested scope of recognition. The agency meets this requirement if the agency demonstrates that—
(a) The agency has—
(1) Adequate administrative staff and financial resources to carry out its accrediting responsibilities;
(2) Competent and knowledgeable individuals, qualified by education or experience in their own right and trained by the agency on their responsibilities, as appropriate for their roles, regarding the agency's standards, policies, and procedures, to conduct its on-site evaluations, apply or establish its policies, and make its accrediting and preaccrediting decisions, including, if applicable to the agency's scope, their responsibilities regarding distance education and correspondence courses;
(3) Academic and administrative personnel on its evaluation, policy, and decision-making bodies, if the agency accredits institutions;
(4) Educators, practitioners, and/or employers on its evaluation, policy, and decision-making bodies, if the agency accredits programs or single-purpose institutions that prepare students for a specific profession;
(5) Representatives of the public, which may include students, on all decision-making bodies; and
(6) Clear and effective controls, including guidelines, to prevent or resolve conflicts of interest, or the appearance of conflicts of interest, by the agency's—
(i) Board members;
(ii) Commissioners;
(iii) Evaluation team members;
(iv) Consultants;
(v) Administrative staff; and
(vi) Other agency representatives; and
(b) The agency maintains complete and accurate records of—
(1) Its last full accreditation or preaccreditation review of each institution or program, including on-site evaluation team reports, the institution's or program's responses to on-site reports, periodic review reports, any reports of special reviews conducted by the agency between regular reviews, and a copy of the institution's or program's most recent self-study; and
(2) All decision letters issued by the agency regarding the accreditation and preaccreditation of any institution or program and any substantive changes.
(a) The agency must demonstrate that it has standards for accreditation, and preaccreditation, if offered, that are sufficiently rigorous to ensure that the agency is a reliable authority regarding the quality of the education or training provided by the institutions or programs it accredits. The agency meets this requirement if the following conditions are met:
(1) The agency's accreditation standards must set forth clear expectations for the institutions or programs it accredits in the following areas:
(i) Success with respect to student achievement in relation to the institution's mission, which may include different standards for different institutions or programs, as established by the institution, including, as appropriate, consideration of State licensing examinations, course completion, and job placement rates.
(ii) Curricula.
(iii) Faculty.
(iv) Facilities, equipment, and supplies.
(v) Fiscal and administrative capacity as appropriate to the specified scale of operations.
(vi) Student support services.
(vii) Recruiting and admissions practices, academic calendars, catalogs, publications, grading, and advertising.
(viii) Measures of program length and the objectives of the degrees or credentials offered.
(ix) Record of student complaints received by, or available to, the agency.
(x) Record of compliance with the institution's program responsibilities under title IV of the Act, based on the most recent student loan default rate data provided by the Secretary, the results of financial or compliance audits, program reviews, and any other information that the Secretary may provide to the agency; and
(2) The agency's preaccreditation standards, if offered, must—
(i) Be appropriately related to the agency's accreditation standards; and
(ii) Not permit the institution or program to hold preaccreditation status for more than five years before a final accrediting action is made.
(b) Agencies are not required to apply the standards described in paragraph (a)(1)(x) of this section to institutions that do not participate in title IV, HEA programs. Under such circumstance, the agency's grant of accreditation or preaccreditation must specify that the grant, by request of the institution, does not include participation by the institution in title IV, HEA programs.
(c) If the agency only accredits programs and does not serve as an institutional accrediting agency for any of those programs, its accreditation standards must address the areas in paragraph (a)(1) of this section in terms of the type and level of the program rather than in terms of the institution.
(d)(1) If the agency has or seeks to include within its scope of recognition the evaluation of the quality of institutions or programs offering distance education, correspondence courses, or direct assessment education, the agency's standards must effectively address the quality of an institution's distance education, correspondence courses, or direct assessment education in the areas identified in paragraph (a)(1) of this section.
(2) The agency is not required to have separate standards, procedures, or policies for the evaluation of distance education or correspondence courses.
(e) If none of the institutions an agency accredits participates in any title IV, HEA program, or if the agency only accredits programs within institutions that are accredited by a nationally recognized institutional accrediting agency, the agency is not required to have the accreditation standards described in paragraphs (a)(1)(viii) and (a)(1)(x) of this section.
(f) An agency that has established and applies the standards in paragraph (a) of this section may establish any additional accreditation standards it deems appropriate.
(g) Nothing in paragraph (a) of this section restricts—
(1) An accrediting agency from setting, with the involvement of its members, and applying accreditation standards for or to institutions or programs that seek review by the agency;
(2) An institution from developing and using institutional standards to show its success with respect to student achievement, which achievement may be considered as part of any accreditation review; or
(3) Agencies from having separate standards regarding an institution's or a program's process for approving curriculum to enable programs to more effectively meet the recommendations of—
(i) Industry advisory boards that include employers who hire program graduates;
(ii) Widely recognized industry standards and organizations;
(iii) Credentialing or other occupational registration or licensure; or
(iv) Employers in a given field or occupation, in making hiring decisions.
(4) Agencies from having separate faculty standards for instructors teaching courses within a dual or concurrent enrollment program, as defined in 20 U.S.C. 7801, or career and technical education courses, as long as the instructors, in the agency's judgment, are qualified by education or work experience for that role.
The agency must have effective mechanisms for evaluating an institution's or program's compliance with the agency's standards before reaching a decision to accredit or preaccredit the institution or program. The agency meets this requirement if the agency demonstrates that it—
(a) Evaluates whether an institution or program—
(1) Maintains clearly specified educational objectives that are consistent with its mission and appropriate in light of the degrees or certificates awarded;
(2) Is successful in achieving its stated objectives at both the institutional and program levels; and
(3) Maintains requirements that at least conform to commonly accepted academic standards, or the equivalent, including pilot programs in § 602.18(b);
(b) Requires the institution or program to engage in a self-study process that assesses the institution's or program's education quality and success in meeting its mission and objectives, highlights opportunities for improvement, and includes a plan for making those improvements;
(c) Conducts at least one on-site review of the institution or program during which it obtains sufficient information to determine if the institution or program complies with the agency's standards;
(d) Allows the institution or program the opportunity to respond in writing to the report of the on-site review;
(e) Conducts its own analysis of the self-study and supporting documentation furnished by the institution or program, the report of the on-site review, the institution's or program's response to the report, and any other information substantiated by the agency from other sources to determine whether the institution or program complies with the agency's standards;
(f) Provides the institution or program with a detailed written report that assesses the institution's or program's compliance with the agency's standards, including areas needing improvement, and the institution's or program's performance with respect to student achievement;
(g) Requires institutions to have processes in place through which the institution establishes that a student who registers in any course offered via distance education or correspondence is the same student who academically engages in the course or program; and
(h) Makes clear in writing that institutions must use processes that protect student privacy and notify students of any projected additional student charges associated with the verification of student identity at the time of registration or enrollment.
(a) The agency must consistently apply and enforce standards that respect the stated mission of the institution, including religious mission, and that ensure that the education or training offered by an institution or program, including any offered through distance education, correspondence courses, or direct assessment education is of sufficient quality to achieve its stated objective for the duration of any accreditation or preaccreditation period.
(b) The agency meets the requirement in paragraph (a) of this section if the agency—
(1) Has written specification of the requirements for accreditation and preaccreditation that include clear standards for an institution or program to be accredited or preaccredited;
(2) Has effective controls against the inconsistent application of the agency's standards;
(3) Bases decisions regarding accreditation and preaccreditation on the agency's published standards and does not use as a negative factor the institution's religious mission-based policies, decisions, and practices in the areas covered by § 602.16(a)(1)(ii), (iii), (iv), (vi), and (vii) provided, however, that the agency may require that the institution's or program's curricula include all core components required by the agency;
(4) Has a reasonable basis for determining that the information the agency relies on for making accrediting decisions is accurate;
(5) Provides the institution or program with a detailed written report that clearly identifies any deficiencies in the institution's or program's compliance with the agency's standards; and
(6) Publishes any policies for retroactive application of an accreditation decision, which must not provide for an effective date that predates either—
(i) An earlier denial by the agency of accreditation or preaccreditation to the institution or program; or
(ii) The agency's formal approval of the institution or program for consideration in the agency's accreditation or preaccreditation process.
(c) Nothing in this part prohibits an agency, when special circumstances exist, to include innovative program delivery approaches or, when an undue hardship on students occurs, from applying equivalent written standards, policies, and procedures that provide alternative means of satisfying one or more of the requirements set forth in 34 CFR 602.16, 602.17, 602.19, 602.20, 602.22, and 602.24, as compared with written standards, policies, and procedures the agency ordinarily applies, if—
(1) The alternative standards, policies, and procedures, and the selection of institutions or programs to which they will be applied, are approved by the agency's decision-making body and otherwise meet the intent of the agency's expectations and requirements;
(2) The agency sets and applies equivalent goals and metrics for assessing the performance of institutions or programs;
(3) The agency's process for establishing and applying the alternative standards, policies, and procedures is set forth in its published accreditation manuals; and
(4) The agency requires institutions or programs seeking the application of alternative standards to demonstrate the need for an alternative assessment approach, that students will receive equivalent benefit, and that students will not be harmed through such application.
(d) Nothing in this part prohibits an agency from permitting the institution or program to be out of compliance with one or more of its standards, policies, and procedures adopted in satisfaction of §§ 602.16, 602.17, 602.19, 602.20, 602.22, and 602.24 for a period of time, as determined by the agency annually, not to exceed three years unless the agency determines there is good cause to extend the period of time, and if—
(1) The agency and the institution or program can show that the circumstances requiring the period of noncompliance are beyond the institution's or program's control, such as—
(i) A natural disaster or other catastrophic event significantly impacting an institution's or program's operations;
(ii) Accepting students from another institution that is implementing a teach-out or closing;
(iii) Significant and documented local or national economic changes, such as an economic recession or closure of a large local employer;
(iv) Changes relating to State licensure requirements;
(v) The normal application of the agency's standards creates an undue hardship on students; or
(vi) Instructors who do not meet the agency's typical faculty standards, but who are otherwise qualified by education or work experience, to teach courses within a dual or concurrent enrollment program, as defined in 20 U.S.C. 7801, or career and technical education courses;
(2) The grant of the period of noncompliance is approved by the agency's decision-making body;
(3) The agency projects that the institution or program has the resources necessary to achieve compliance with the standard, policy, or procedure postponed within the time allotted; and
(4) The institution or program demonstrates to the satisfaction of the agency that the period of noncompliance will not—
(i) Contribute to the cost of the program to the student without the student's consent;
(ii) Create any undue hardship on, or harm to, students; or
(iii) Compromise the program's academic quality.
(a) The agency must reevaluate, at regularly established intervals, the institutions or programs it has accredited or preaccredited.
(b) The agency must demonstrate it has, and effectively applies, monitoring and evaluation approaches that enable the agency to identify problems with an institution's or program's continued compliance with agency standards and that take into account institutional or program strengths and stability. These approaches must include periodic reports, and collection and analysis of key data and indicators, identified by the agency, including, but not limited to, fiscal information and measures of student achievement, consistent with the provisions of § 602.16(g). This provision does not require institutions or programs to provide annual reports on each specific accreditation criterion.
(c) Each agency must monitor overall growth of the institutions or programs it accredits and, at least annually, collect head-count enrollment data from those institutions or programs.
(d) Institutional accrediting agencies must monitor the growth of programs at institutions experiencing significant enrollment growth, as reasonably defined by the agency.
(e) Any agency that has notified the Secretary of a change in its scope in accordance with § 602.27(a) must monitor the headcount enrollment of each institution it has accredited that offers distance education or correspondence courses. The Secretary will require a review, at the next meeting of the National Advisory Committee on Institutional Quality and Integrity, of any change in scope undertaken by an agency if the enrollment of an institution that offers distance education or correspondence courses that is accredited by such agency increases by 50 percent or more within any one institutional fiscal year. If any such institution has experienced an increase in head-count enrollment of 50 percent or more within one institutional fiscal year, the agency must report that information to the Secretary within 30 days of acquiring such data.
(a) If the agency's review of an institution or program under any standard indicates that the institution or program is not in compliance with that standard, the agency must—
(1) Follow its written policy for notifying the institution or program of the finding of noncompliance;
(2) Provide the institution or program with a written timeline for coming into compliance that is reasonable, as determined by the agency's decision-making body, based on the nature of the finding, the stated mission, and educational objectives of the institution or program. The timeline may include intermediate checkpoints on the way to full compliance and must not exceed the lesser of four years or 150 percent of the—
(i) Length of the program in the case of a programmatic accrediting agency; or
(ii) Length of the longest program at the institution in the case of an institutional accrediting agency;
(3) Follow its written policies and procedures for granting a good cause extension that may exceed the standard timeframe described in paragraph (a)(2) of this section when such an extension is determined by the agency to be warranted; and
(4) Have a written policy to evaluate and approve or disapprove monitoring or compliance reports it requires, provide ongoing monitoring, if warranted, and evaluate an institution's or program's progress in resolving the finding of noncompliance.
(b) Notwithstanding paragraph (a) of this section, the agency must have a policy for taking an immediate adverse action, and take such action, when the agency has determined that such action is warranted.
(c) If the institution or program does not bring itself into compliance within the period specified in paragraph (a) of this section, the agency must take adverse action against the institution or program, but may maintain the institution's or program's accreditation or preaccreditation until the institution or program has had reasonable time to complete the activities in its teach-out plan or to fulfill the obligations of any teach-out agreement to assist students in transferring or completing their programs.
(d) An agency that accredits institutions may limit the adverse or other action to particular programs that are offered by the institution or to particular additional locations of an institution, without necessarily taking action against the entire institution and all of its programs, provided the noncompliance was limited to that particular program or location.
(e) All adverse actions taken under this subpart are subject to the arbitration requirements in 20 U.S.C. 1099b(e).
(f) An agency is not responsible for enforcing requirements in 34 CFR 668.14, 668.15, 668.16, 668.41, or 668.46, but if, in the course of an agency's work, it identifies instances or potential instances of noncompliance with any of these requirements, it must notify the Department.
(g) The Secretary may not require an agency to take action against an institution or program that does not participate in any title IV, HEA or other Federal program as a result of a requirement specified in this part.
(a) The agency must maintain a comprehensive systematic program of review that involves all relevant constituencies and that demonstrates that its standards are adequate to evaluate the quality of the education or training provided by the institutions and programs it accredits and relevant to the educational or training needs of students.
(b) The agency determines the specific procedures it follows in evaluating its standards, but the agency must ensure that its program of review—
(1) Is comprehensive;
(2) Occurs at regular, yet reasonable, intervals or on an ongoing basis;
(3) Examines each of the agency's standards and the standards as a whole; and
(4) Involves all of the agency's relevant constituencies in the review and affords them a meaningful opportunity to provide input into the review.
(c) If the agency determines, at any point during its systematic program of review, that it needs to make changes to its standards, the agency must initiate action within 12 months to make the changes and must complete that action within a reasonable period of time.
(d) Before finalizing any changes to its standards, the agency must—
(1) Provide notice to all of the agency's relevant constituencies, and other parties who have made their interest known to the agency, of the changes the agency proposes to make;
(2) Give the constituencies and other interested parties adequate opportunity to comment on the proposed changes; and
(3) Take into account and be responsive to any comments on the proposed changes submitted timely by the relevant constituencies and other interested parties.
(a)(1) If the agency accredits institutions, it must maintain adequate substantive change policies that ensure that any substantive change, as defined in this section, after the agency has accredited or preaccredited the institution does not adversely affect the capacity of the institution to continue to meet the agency's standards. The agency meets this requirement if—
(i) The agency requires the institution to obtain the agency's approval of the substantive change before the agency includes the change in the scope of accreditation or preaccreditation it previously granted to the institution; and
(ii) The agency's definition of substantive change covers high-impact, high-risk changes, including at least the following:
(A) Any substantial change in the established mission or objectives of the institution or its programs.
(B) Any change in the legal status, form of control, or ownership of the institution.
(C) The addition of programs that represent a significant departure from the existing offerings or educational programs, or method of delivery, from those that were offered or used when the agency last evaluated the institution.
(D) The addition of graduate programs by an institution that previously offered only undergraduate programs or certificates.
(E) A change in the way an institution measures student progress, including whether the institution measures progress in clock hours or credit-hours, semesters, trimesters, or quarters, or uses time-based or non-time-based methods.
(F) A substantial increase in the number of clock hours or credit hours awarded, or an increase in the level of credential awarded, for successful completion of one or more programs.
(G) The acquisition of any other institution or any program or location of another institution.
(H) The addition of a permanent location at a site at which the institution is conducting a teach-out for students of another institution that has ceased operating before all students have completed their program of study.
(I) The addition of a new location or branch campus, except as provided in paragraph (c) of this section. The agency's review must include assessment of the institution's fiscal and administrative capability to operate the location or branch campus, the regular evaluation of locations, and verification of the following:
(1) Academic control is clearly identified by the institution.
(2) The institution has adequate faculty, facilities, resources, and academic and student support systems in place.
(3) The institution is financially stable.
(4) The institution had engaged in long-range planning for expansion.
(J) Entering into a written arrangement under 34 CFR 668.5 under which an institution or organization not certified to participate in the title IV, HEA programs offers more than 25 percent but less than 50 percent of one or more of the accredited institution's educational programs.
(K) Addition of each direct assessment program.
(2)(i) For substantive changes under only paragraph (a)(1)(ii)(C), (E), (F), (H), or (J) of this section, the agency's decision-making body may designate agency senior staff to approve or disapprove the request in a timely, fair, and equitable manner; and
(ii) In the case of a request under paragraph (a)(1)(ii)(J) of this section, the agency must make a final decision within 90 days of receipt of a materially complete request, unless the agency or its staff determine significant circumstances related to the substantive change require a review by the agency's decision-making body to occur within 180 days.
(b) Institutions that have been placed on probation or equivalent status, have been subject to negative action by the agency over the prior three academic years, or are under a provisional certification, as provided in 34 CFR 668.13, must receive prior approval for the following additional changes (all other institutions must report these changes within 30 days to their accrediting agency):
(1) A change in an existing program's method of delivery.
(2) An aggregate change of 25 percent or more of the clock hours, credit hours, or content of a program since the agency's most recent accreditation review.
(3) The development of customized pathways or abbreviated or modified courses or programs to—
(i) Accommodate and recognize a student's existing knowledge, such as knowledge attained through employment or military service; and
(ii) Close competency gaps between demonstrated prior knowledge or competency and the full requirements of a particular course or program.
(4) Entering into a written arrangement under 34 CFR 668.5 under which an institution or organization not certified to participate in the title IV, HEA programs offers up to 25 percent of one or more of the accredited institution's educational programs.
(c) Institutions that have successfully completed at least one cycle of accreditation and have received agency approval for the addition of at least two additional locations as provided in paragraph (a)(1)(ii)(I) of this section, and that have not been placed on probation or equivalent status or been subject to a negative action by the agency over the prior three academic years, and that are not under a provisional certification, as provided in 34 CFR 668.13, need not apply for agency approval of subsequent additions of locations, and must report these changes to the accrediting agency within 30 days, if the institution has met criteria established by the agency indicating sufficient capacity to add additional locations without individual prior approvals, including, at a minimum, satisfactory evidence of a system to ensure quality across a distributed enterprise that includes—
(1) Clearly identified academic control;
(2) Regular evaluation of the locations;
(3) Adequate faculty, facilities, resources, and academic and student support systems;
(4) Financial stability; and
(5) Long-range planning for expansion.
(d) The agency must have an effective mechanism for conducting, at reasonable intervals, visits to a representative sample of additional locations approved under paragraphs (a)(1)(ii)(H) and (I) of this section.
(e) The agency may determine the procedures it uses to grant prior approval of the substantive change. However, these procedures must specify an effective date, on which the change is included in the program's or institution's grant of accreditation or preaccreditation. The date of prior approval must not pre-date either an earlier agency denial of the substantive change, or the agency's formal acceptance of the application for the substantive change for inclusion in the program's or institution's grant of accreditation or preaccreditation. An agency may designate the date of a change in ownership as the effective date of its approval of that substantive change if the accreditation decision is made within 30 days of the change in ownership. Except as provided in paragraphs (d) and (f) of this section, an agency may require a visit before granting such an approval.
(f) Except as provided in paragraph (c) of this section, if the agency's accreditation of an institution enables the institution to seek eligibility to participate in title IV, HEA programs, the agency's procedures for the approval of an additional location that is not a branch campus where at least 50 percent of an educational program is offered must include—
(1) A visit, within six months, to each additional location the institution establishes, if the institution—
(i) Has a total of three or fewer additional locations;
(ii) Has not demonstrated, to the agency's satisfaction, that the additional location is meeting all of the agency's standards that apply to that additional location; or
(iii) Has been placed on warning, probation, or show cause by the agency or is subject to some limitation by the agency on its accreditation or preaccreditation status;
(2) A mechanism for conducting, at reasonable intervals, visits to a representative sample of additional locations of institutions that operate more than three additional locations; and
(3) A mechanism, which may, at the agency's discretion, include visits to additional locations, for ensuring that accredited and preaccredited institutions that experience rapid growth in the number of additional locations maintain education quality.
(g) The purpose of the visits described in paragraph (f) of this section is to verify that the additional location has the personnel, facilities, and resources the institution claimed it had in its application to the agency for approval of the additional location.
(h) The agency's substantive change policy must define when the changes made or proposed by an institution are or would be sufficiently extensive to require the agency to conduct a new comprehensive evaluation of that institution.
(a) The agency must maintain and make available to the public written materials describing—
(1) Each type of accreditation and preaccreditation it grants;
(2) The procedures that institutions or programs must follow in applying for accreditation, preaccreditation, or substantive changes and the sequencing of those steps relative to any applications or decisions required by States or the Department relative to the agency's preaccreditation, accreditation, or substantive change decisions;
(3) The standards and procedures it uses to determine whether to grant, reaffirm, reinstate, restrict, deny, revoke, terminate, or take any other action related to each type of accreditation and preaccreditation that the agency grants;
(4) The institutions and programs that the agency currently accredits or preaccredits and, for each institution and program, the year the agency will next review or reconsider it for accreditation or preaccreditation; and
(5) A list of the names, academic and professional qualifications, and relevant employment and organizational affiliations of—
(i) The members of the agency's policy and decision-making bodies; and
(ii) The agency's principal administrative staff.
(b) In providing public notice that an institution or program subject to its jurisdiction is being considered for accreditation or preaccreditation, the agency must provide an opportunity for third-party comment concerning the institution's or program's qualifications for accreditation or preaccreditation. At the agency's discretion, third-party comment may be received either in writing or at a public hearing, or both.
(c) The accrediting agency must—
(1) Review in a timely, fair, and equitable manner any complaint it receives against an accredited institution or program that is related to the agency's standards or procedures. The agency may not complete its review and make a decision regarding a complaint unless, in accordance with published procedures, it ensures that the institution or program has sufficient opportunity to provide a response to the complaint;
(2) Take follow-up action, as necessary, including enforcement action, if necessary, based on the results of its review; and
(3) Review in a timely, fair, and equitable manner, and apply unbiased judgment to, any complaints against itself and take follow-up action, as appropriate, based on the results of its review.
(d) If an institution or program elects to make a public disclosure of its accreditation or preaccreditation status, the agency must ensure that the institution or program discloses that status accurately, including the specific academic or instructional programs covered by that status and the name and contact information for the agency.
(e) The accrediting agency must provide for the public correction of incorrect or misleading information an accredited or preaccredited institution or program releases about—
(1) The accreditation or preaccreditation status of the institution or program;
(2) The contents of reports of on-site reviews; and
(3) The agency's accrediting or preaccrediting actions with respect to the institution or program.
(f)(1) If preaccreditation is offered—
(i) The agency's preaccreditation policies must limit the status to institutions or programs that the agency has determined are likely to succeed in obtaining accreditation;
(ii) The agency must require all preaccredited institutions to have a teach-out plan, which must ensure students completing the teach-out would meet curricular requirements for professional licensure or certification, if any, and which must include a list of academic programs offered by the institution and the names of other institutions that offer similar programs and that could potentially enter into a teach-out agreement with the institution;
(iii) An agency that denies accreditation to an institution it has preaccredited may maintain the institution's preaccreditation for currently enrolled students until the institution has had a reasonable time to complete the activities in its teach-out plan to assist students in transferring or completing their programs, but for no more than 120 days unless approved by the agency for good cause; and
(iv) The agency may not move an accredited institution or program from accredited to preaccredited status unless, following the loss of accreditation, the institution or program applies for initial accreditation and is awarded preaccreditation status under the new application. Institutions that participated in the title IV, HEA programs before the loss of accreditation are subject to the requirements of 34 CFR 600.11(c).
(2) All credits and degrees earned and issued by an institution or program holding preaccreditation from a nationally recognized agency are considered by the Secretary to be from an accredited institution or program.
(g) The agency may establish any additional operating procedures it deems appropriate. At the agency's discretion, these may include unannounced inspections.
If the agency is an institutional accrediting agency and its accreditation or preaccreditation enables those institutions to obtain eligibility to participate in title IV, HEA programs, the agency must demonstrate that it has established and uses all of the following procedures:
(a) Branch campus. The agency must require the institution to notify the agency if it plans to establish a branch campus and to submit a business plan for the branch campus that describes—
(1) The educational program to be offered at the branch campus; and
(2) The projected revenues and expenditures and cash flow at the branch campus.
(b) Site visits. The agency must undertake a site visit to a new branch campus or following a change of ownership or control as soon as practicable, but no later than six months, after the establishment of that campus or the change of ownership or control.
(c) Teach-out plans and agreements. (1) The agency must require an institution it accredits to submit a teach-out plan as defined in 34 CFR 600.2 to the agency for approval upon the occurrence of any of the following events:
(i) For a nonprofit or proprietary institution, the Secretary notifies the agency of a determination by the institution's independent auditor expressing doubt about the institution's ability to operate as a going concern or indicating an adverse opinion or a finding of material weakness related to financial stability.
(ii) The agency acts to place the institution on probation or equivalent status.
(iii) The Secretary notifies the agency that the institution is participating in title IV, HEA programs under a provisional program participation agreement and the Secretary has required a teach-out plan as a condition of participation.
(2) The agency must require an institution it accredits or preaccredits to submit a teach-out plan and, if practicable, teach-out agreements (as defined in 34 CFR 600.2) to the agency for approval upon the occurrence of any of the following events:
(i) The Secretary notifies the agency that it has placed the institution on the reimbursement payment method under 34 CFR 668.162(c) or the heightened cash monitoring payment method requiring the Secretary's review of the institution's supporting documentation under 34 CFR 668.162(d)(2).
(ii) The Secretary notifies the agency that the Secretary has initiated an emergency action against an institution, in accordance with section 487(c)(1)(G) of the HEA, or an action to limit, suspend, or terminate an institution participating in any title IV, HEA program, in accordance with section 487(c)(1)(F) of the HEA.
(iii) The agency acts to withdraw, terminate, or suspend the accreditation or preaccreditation of the institution.
(iv) The institution notifies the agency that it intends to cease operations entirely or close a location that provides one hundred percent of at least one program, including if the location is being moved and is considered by the Secretary to be a closed school.
(v) A State licensing or authorizing agency notifies the agency that an institution's license or legal authorization to provide an educational program has been or will be revoked.
(3) The agency must evaluate the teach-out plan to ensure it includes a list of currently enrolled students, academic programs offered by the institution, and the names of other institutions that offer similar programs and that could potentially enter into a teach-out agreement with the institution.
(4) If the agency approves a teach-out plan that includes a program or institution that is accredited by another recognized accrediting agency, it must notify that accrediting agency of its approval.
(5) The agency may require an institution it accredits or preaccredits to enter into a teach-out agreement as part of its teach-out plan.
(6) The agency must require a closing institution to include in its teach-out agreement—
(i) A complete list of students currently enrolled in each program at the institution and the program requirements each student has completed;
(ii) A plan to provide all potentially eligible students with information about how to obtain a closed school discharge and, if applicable, information on State refund policies;
(iii) A record retention plan to be provided to all enrolled students that delineates the final disposition of teach-out records (e.g., student transcripts, billing, financial aid records);
(iv) Information on the number and types of credits the teach-out institution is willing to accept prior to the student's enrollment; and
(v) A clear statement to students of the tuition and fees of the educational program and the number and types of credits that will be accepted by the teach-out institution.
(7) The agency must require an institution it accredits or preaccredits that enters into a teach-out agreement, either on its own or at the request of the agency, to submit that teach-out agreement for approval. The agency may approve the teach-out agreement only if the agreement meets the requirements of 34 CFR 600.2 and this section, is consistent with applicable standards and regulations, and provides for the equitable treatment of students being served by ensuring that the teach-out institution—
(i) Has the necessary experience, resources, and support services to provide an educational program that is of acceptable quality and reasonably similar in content, delivery modality, and scheduling to that provided by the institution that is ceasing operations either entirely or at one of its locations; however, while an option via an alternate method of delivery may be made available to students, such an option is not sufficient unless an option via the same method of delivery as the original educational program is also provided;
(ii) Has the capacity to carry out its mission and meet all obligations to existing students; and
(iii) Demonstrates that it—
(A) Can provide students access to the program and services without requiring them to move or travel for substantial distances or durations; and
(B) Will provide students with information about additional charges, if any.
(8) Irrespective of any teach-out plan or signed teach-out agreement, the agency must not permit an institution to serve as a teach-out institution under the following conditions:
(i) The institution is subject to the conditions in paragraph (c)(1) or (2) of this section.
(ii) The institution is under investigation, subject to an action, or being prosecuted for an issue related to academic quality, misrepresentation, fraud, or other severe matters by a law enforcement agency.
(9) The agency is permitted to waive requirements regarding the percentage of credits that must be earned by a student at the institution awarding the educational credential if the student is completing his or her program through a written teach-out agreement or transfer.
(10) The agency must require the institution to provide copies of all notifications from the institution related to the institution's closure or to teach-out options to ensure the information accurately represents students' ability to transfer credits and may require corrections.
(d) Closed institution. If an institution the agency accredits or preaccredits closes without a teach-out plan or agreement, the agency must work with the Department and the appropriate State agency, to the extent feasible, to assist students in finding reasonable opportunities to complete their education without additional charges.
(e) Transfer of credit policies. The accrediting agency must confirm, as part of its review for initial accreditation or preaccreditation, or renewal of accreditation, that the institution has transfer of credit policies that—
(1) Are publicly disclosed in accordance with § 668.43(a)(11); and
(2) Include a statement of the criteria established by the institution regarding the transfer of credit earned at another institution of higher education.
(f) Agency designations. In its accrediting practice, the agency must—
(1) Adopt and apply the definitions of “branch campus” and “additional location” in 34 CFR 600.2;
(2) On the Secretary's request, conform its designations of an institution's branch campuses and additional locations with the Secretary's if it learns its designations diverge; and
(3) Ensure that it does not accredit or preaccredit an institution comprising fewer than all of the programs, branch campuses, and locations of an institution as certified for title IV participation by the Secretary, except with notice to and permission from the Secretary.
The agency must demonstrate that the procedures it uses throughout the accrediting process satisfy due process. The agency meets this requirement if the agency does the following:
(a) Provides adequate written specification of its requirements, including clear standards, for an institution or program to be accredited or preaccredited.
(b) Uses procedures that afford an institution or program a reasonable period of time to comply with the agency's requests for information and documents.
(c) Provides written specification of any deficiencies identified at the institution or program examined.
(d) Provides sufficient opportunity for a written response by an institution or program regarding any deficiencies identified by the agency, to be considered by the agency within a timeframe determined by the agency, and before any adverse action is taken.
(e) Notifies the institution or program in writing of any adverse accrediting action or an action to place the institution or program on probation or show cause. The notice describes the basis for the action.
(f) Provides an opportunity, upon written request of an institution or program, for the institution or program to appeal any adverse action prior to the action becoming final.
(1) The appeal must take place at a hearing before an appeals panel that—
(i) May not include current members of the agency's decision-making body that took the initial adverse action;
(ii) Is subject to a conflict of interest policy;
(iii) Does not serve only an advisory or procedural role, and has and uses the authority to make the following decisions: To affirm, amend, or remand adverse actions of the original decision-making body; and
(iv) Affirms, amends, or remands the adverse action. A decision to affirm or amend the adverse action is implemented by the appeals panel or by the original decision-making body, at the agency's option; however, in the event of a decision by the appeals panel to remand the adverse action to the original decision-making body for further consideration, the appeals panel must explain the basis for a decision that differs from that of the original decision-making body and the original decision-making body in a remand must act in a manner consistent with the appeals panel's decisions or instructions.
(2) The agency must recognize the right of the institution or program to employ counsel to represent the institution or program during its appeal, including to make any presentation that the agency permits the institution or program to make on its own during the appeal.
(g) The agency notifies the institution or program in writing of the result of its appeal and the basis for that result.
(h)(1) The agency must provide for a process, in accordance with written procedures, through which an institution or program may, before the agency reaches a final adverse action decision, seek review of new financial information if all of the following conditions are met:
(i) The financial information was unavailable to the institution or program until after the decision subject to appeal was made.
(ii) The financial information is significant and bears materially on the financial deficiencies identified by the agency. The criteria of significance and materiality are determined by the agency.
(iii) The only remaining deficiency cited by the agency in support of a final adverse action decision is the institution's or program's failure to meet an agency standard pertaining to finances.
(2) An institution or program may seek the review of new financial information described in paragraph (h)(1) of this section only once and any determination by the agency made with respect to that review does not provide a basis for an appeal.
The agency must demonstrate that it has established and follows written procedures requiring it to provide written notice of its accrediting decisions to the Secretary, the appropriate State licensing or authorizing agency, the appropriate accrediting agencies, and the public. The agency meets this requirement if the agency, following its written procedures—
(a) Provides written notice of the following types of decisions to the Secretary, the appropriate State licensing or authorizing agency, the appropriate accrediting agencies, and the public no later than 30 days after it makes the decision:
(1) A decision to award initial accreditation or preaccreditation to an institution or program.
(2) A decision to renew an institution's or program's accreditation or preaccreditation;
(b) Provides written notice of a final decision of a probation or equivalent status or an initiated adverse action to the Secretary, the appropriate State licensing or authorizing agency, and the appropriate accrediting agencies at the same time it notifies the institution or program of the decision and requires the institution or program to disclose such an action within seven business days of receipt to all current and prospective students;
(c) Provides written notice of the following types of decisions to the Secretary, the appropriate State licensing or authorizing agency, and the appropriate accrediting agencies at the same time it notifies the institution or program of the decision, but no later than 30 days after it reaches the decision:
(1) A final decision to deny, withdraw, suspend, revoke, or terminate the accreditation or preaccreditation of an institution or program.
(2) A final decision to take any other adverse action, as defined by the agency, not listed in paragraph (c)(1) of this section;
(d) Provides written notice to the public of the decisions listed in paragraphs (b) and (c) of this section within one business day of its notice to the institution or program;
(e) For any decision listed in paragraph (c) of this section, requires the institution or program to disclose the decision to current and prospective students within seven business days of receipt and makes available to the Secretary, the appropriate State licensing or authorizing agency, and the public, no later than 60 days after the decision, a brief statement summarizing the reasons for the agency's decision and the official comments that the affected institution or program may wish to make with regard to that decision, or evidence that the affected institution has been offered the opportunity to provide official comment;
(f) Notifies the Secretary, the appropriate State licensing or authorizing agency, the appropriate accrediting agencies, and, upon request, the public if an accredited or preaccredited institution or program—
(1) Decides to withdraw voluntarily from accreditation or preaccreditation, within 10 business days of receiving notification from the institution or program that it is withdrawing voluntarily from accreditation or preaccreditation; or
(2) Lets its accreditation or preaccreditation lapse, within 10 business days of the date on which accreditation or preaccreditation lapses.
(a) The agency must submit to the Department—
(1) A list, updated annually, of its accredited and preaccredited institutions and programs, which may be provided electronically;
(2) A summary of the agency's major accrediting activities during the previous year (an annual data summary), if requested by the Secretary to carry out the Secretary's responsibilities related to this part;
(3) Any proposed change in the agency's policies, procedures, or accreditation or preaccreditation standards that might alter its—
(i) Scope of recognition, except as provided in paragraph (a)(4) of this section; or
(ii) Compliance with the criteria for recognition;
(4) Notification that the agency has expanded its scope of recognition to include distance education or correspondence courses as provided in section 496(a)(4)(B)(i)(I) of the HEA. Such an expansion of scope is effective on the date the Department receives the notification;
(5) The name of any institution or program it accredits that the agency has reason to believe is failing to meet its title IV, HEA program responsibilities or is engaged in fraud or abuse, along with the agency's reasons for concern about the institution or program; and
(6) If the Secretary requests, information that may bear upon an accredited or preaccredited institution's compliance with its title IV, HEA program responsibilities, including the eligibility of the institution or program to participate in title IV, HEA programs.
(b) If an agency has a policy regarding notification to an institution or program of contact with the Department in accordance with paragraph (a)(5) or (6) of this section, it must provide for a case-by-case review of the circumstances surrounding the contact, and the need for the confidentiality of that contact. When the Department determines a compelling need for confidentiality, the agency must consider that contact confidential upon specific request of the Department.
(a) If the agency is an institutional accrediting agency, it may not accredit or preaccredit institutions that lack legal authorization under applicable State law to provide a program of education beyond the secondary level.
(b) Except as provided in paragraph (c) of this section, the agency may not grant initial or renewed accreditation or preaccreditation to an institution, or a program offered by an institution, if the agency knows, or has reasonable cause to know, that the institution is the subject of—
(1) A pending or final action brought by a State agency to suspend, revoke, withdraw, or terminate the institution's legal authority to provide postsecondary education in the State;
(2) A decision by a recognized agency to deny accreditation or preaccreditation;
(3) A pending or final action brought by a recognized accrediting agency to suspend, revoke, withdraw, or terminate the institution's accreditation or preaccreditation; or
(4) Probation or an equivalent status imposed by a recognized agency.
(c) The agency may grant accreditation or preaccreditation to an institution or program described in paragraph (b) of this section only if it provides to the Secretary, within 30 days of its action, a thorough and reasonable explanation, consistent with its standards, why the action of the other body does not preclude the agency's grant of accreditation or preaccreditation.
(d) If the agency learns that an institution it accredits or preaccredits, or an institution that offers a program it accredits or preaccredits, is the subject of an adverse action by another recognized accrediting agency or has been placed on probation or an equivalent status by another recognized agency, the agency must promptly review its accreditation or preaccreditation of the institution or program to determine if it should also take adverse action or place the institution or program on probation or show cause.
(e) The agency must, upon request, share with other appropriate recognized accrediting agencies and recognized State approval agencies information about the accreditation or preaccreditation status of an institution or program and any adverse actions it has taken against an accredited or preaccredited institution or program.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) Applications for recognition or renewal of recognition. An accrediting agency seeking initial or continued recognition must submit a written application to the Secretary. Each accrediting agency must submit an application for continued recognition at least once every five years, or within a shorter time period specified in the final recognition decision, and, for an agency seeking renewal of recognition, 24 months prior to the date on which the current recognition expires. The application, to be submitted concurrently with information required by § 602.32(a) and, if applicable, § 602.32(b), must consist of—
(1) A statement of the agency's requested scope of recognition;
(2) Documentation that the agency complies with the criteria for recognition listed in subpart B of this part, including a copy of its policies and procedures manual and its accreditation standards; and
(3) Documentation of how an agency that includes or seeks to include distance education or correspondence courses in its scope of recognition applies its standards in evaluating programs and institutions it accredits that offer distance education or correspondence courses.
(b) Applications for expansions of scope. An agency seeking an expansion of scope by application must submit a written application to the Secretary. The application must—
(1) Specify the scope requested;
(2) Provide copies of any relevant standards, policies, or procedures developed and applied by the agency for its use in accrediting activities conducted within the expansion of scope proposed and documentation of the application of these standards, policies, or procedures; and
(3) Provide the materials required by § 602.32(j) and, if applicable, § 602.32(l).
(c) Compliance or monitoring reports. If an agency is required to submit a compliance or monitoring report, it must do so within 30 days following the end of the period for achieving compliance as specified in the decision of the senior Department official or Secretary, as applicable.
(d) Review following an increase in headcount enrollment. If an agency that has notified the Secretary in writing of its change in scope to include distance education or correspondence courses in accordance with § 602.27(a)(4) reports an increase in headcount enrollment in accordance with § 602.19(e) for an institution it accredits, or if the Department notifies the agency of such an increase at one of the agency's accredited institutions, the agency must, within 45 days of reporting the increase or receiving notice of the increase from the Department, as applicable, submit a report explaining—
(1) How the agency evaluates the capacity of the institutions or programs it accredits to accommodate significant growth in enrollment and to maintain education quality;
(2) The specific circumstances regarding the growth at the institution or program that triggered the review and the results of any evaluation conducted by the agency; and
(3) Any other information that the agency deems appropriate to demonstrate the effective application of the criteria for recognition or that the Department may require.
(e) Consent to sharing of information. By submitting an application for recognition, the agency authorizes Department staff throughout the application process and during any period of recognition—
(1) To observe its site visits to one or more of the institutions or programs it accredits or preaccredits, on an announced or unannounced basis;
(2) To visit locations where agency activities such as training, review and evaluation panel meetings, and decision meetings take place, on an announced or unannounced basis;
(3) To obtain copies of all documents the staff deems necessary to complete its review of the agency; and
(4) To gain access to agency records, personnel, and facilities.
(f) Public availability of agency records obtained by the Department.
(1) The Secretary's processing and decision-making on requests for public disclosure of agency materials reviewed under this part are governed by the Freedom of Information Act, 5 U.S.C. 552; the Trade Secrets Act, 18 U.S.C. 1905; the Privacy Act of 1974, as amended, 5 U.S.C. 552a; the Federal Advisory Committee Act, 5 U.S.C. Appdx. 1; and all other applicable laws. In recognition proceedings, agencies must, before submission to the Department—
(i) Redact the names and any other personally identifiable information about individual students and any other individuals who are not agents of the agency or of an institution or program the agency is reviewing;
(ii) Redact the personal addresses, personal telephone numbers, personal email addresses, Social Security numbers, and any other personally identifiable information regarding individuals who are acting as agents of the agency or of an institution or program under review;
(iii) Designate all business information within agency submissions that the agency believes would be exempt from disclosure under exemption 4 of the Freedom of Information Act (FOIA), 5 U.S.C. 552(b)(4). A blanket designation of all information contained within a submission, or of a category of documents, as meeting this exemption will not be considered a good faith effort and will be disregarded; and
(iv) Ensure documents submitted are only those required for Department review or as requested by Department officials.
(2) The agency may, but is not required to, redact the identities of institutions or programs that it believes are not essential to the Department's review of the agency and may identify any other material the agency believes would be exempt from public disclosure under FOIA, the factual basis for the request, and any legal basis the agency has identified for withholding the document from public disclosure.
(3) The Secretary processes FOIA requests in accordance with 34 CFR part 5 and makes all documents provided to the Advisory Committee available to the public.
(4) Upon request by Department staff, the agency must disclose to Department staff any specific material the agency has redacted that Department staff believes is needed to conduct the staff review. Department staff will make any arrangements needed to ensure that the materials are not made public if prohibited by law.
(g) Length of submissions. The Secretary may publish reasonable, uniform limits on the length of submissions described in this section.
(a) An agency preparing for renewing recognition will submit, 24 months prior to the date on which the current recognition expires, and in conjunction with the materials required by § 602.31(a), a list of all institutions or programs that the agency plans to consider for an award of initial or renewed accreditation over the next year or, if none, over the succeeding year, as well as any institutions or programs currently subject to compliance report review or reporting requirements. An agency that does not anticipate a review of any institution or program for an initial award of accreditation or renewed accreditation in the 24 months prior to the date of recognition expiration may submit a list of institutions or programs it has reviewed for an initial award of accreditation or renewal of accreditation at any time since the prior award of recognition or leading up to the application for an initial award of recognition.
(b) An agency seeking initial recognition must follow the policies and procedures outlined in paragraph (a) of this section, but in addition must also submit—
(1) Letters of support for the agency from at least three accredited institutions or programs, three educators, and, if appropriate, three employers or practitioners, explaining the role for such an agency and the reasons for their support; and
(2) Letters from at least one program or institution that will rely on the agency as its link to a Federal program upon recognition of the agency or intends to seek multiple accreditation which will allow it in the future to designate the agency as its Federal link.
(c) Department staff publishes a notice of the agency's submission of an application in the
(d) The Department staff analyzes the agency's application for initial or renewal of recognition, to determine whether the agency satisfies the criteria for recognition, taking into account all available relevant information concerning the compliance of the agency with those criteria and the agency's consistency in applying the criteria. The analysis of an application may include and, after January 1, 2021, will include—
(1)(i) Observations from site visits, on an announced or unannounced basis, to the agency or to a location where the agency conducts activities such as training, review and evaluation panel meetings, or decision meetings;
(ii) Observations from site visits, on an announced or unannounced basis, to one or more of the institutions or programs the agency accredits or preaccredits;
(iii) A file review at the agency of documents, at which time Department staff may retain copies of documents needed for inclusion in the administrative record;
(iv) Review of the public comments and other third-party information Department staff receives by the established deadline, the agency's responses to the third-party comments, as appropriate, and any other information Department staff obtains for purposes of evaluating the agency under this part; and
(v) Review of complaints or legal actions involving the agency; and
(2) Review of complaints or legal actions against an institution or program accredited or preaccredited by the agency, which may be considered but are not necessarily determinative of compliance.
(e) The Department may view as a negative factor when considering an application for initial, or expansion of scope of, recognition as proposed by an agency, among other factors, any evidence that the agency was part of a concerted effort to unnecessarily restrict the qualifications necessary for a student to sit for a licensure or certification examination or otherwise be eligible for entry into a profession.
(f) Department staff's evaluation of an agency may also include a review of information directly related to institutions or programs accredited or preaccredited by the agency relative to their compliance with the agency's standards, the effectiveness of the standards, and the agency's application of those standards, but must make all materials relied upon in the evaluation available to the agency for review and comment.
(g) If, at any point in its evaluation of an agency seeking initial recognition, Department staff determines that the agency fails to demonstrate compliance with the basic eligibility requirements in §§ 602.10 through 602.15, the staff—
(1) Returns the agency's application and provides the agency with an explanation of the deficiencies that caused staff to take that action; and
(2) Requires that the agency withdraw its application and instructs the agency that it may reapply when the agency is able to demonstrate compliance.
(h) Except with respect to an application that has been returned and is withdrawn under paragraph (g) of this section, when Department staff completes its evaluation of the agency, the staff may and, after July 1, 2021, will—
(1) Prepare a written draft analysis of the agency's application;
(2) Send to the agency the draft analysis including any identified areas of potential noncompliance and all third-party comments and complaints, if applicable, and any other materials the Department received by the established deadline or is including in its review;
(3) Invite the agency to provide a written response to the draft analysis and third-party comments or other material included in the review, specifying a deadline that provides at least 180 days for the agency's response;
(4) Review the response to the draft analysis the agency submits, if any, and prepares the written final analysis—
(i) Indicating that the agency is in full compliance, substantial compliance, or noncompliance with each of the criteria for recognition; and
(ii) Recommending that the senior Department official approve, continue recognition with a compliance report-to be submitted to the Department within 12 months, continue recognition with a compliance report to be submitted to the Department with a deadline in excess of 12 months based on a finding of good cause and extraordinary circumstances, approve with monitoring or other reporting requirements, or deny, limit, suspend, or terminate recognition; and
(5) Provide to the agency, no later than 30 days before the Advisory Committee meeting, the final staff analysis and any other available information provided to the Advisory Committee under § 602.34(c).
(i) The agency may request that the Advisory Committee defer acting on an application at that Advisory Committee meeting if Department staff fails to provide the agency with the materials described, and within the timeframes provided, in paragraphs (g)(3) and (5) of this section. If the Department staff's failure to send the materials in accordance with the timeframe described in paragraph (g)(3) or (5) of this section is due to the failure of the agency to, by the deadline established by the Secretary, submit reports to the Department, other information the Secretary requested, or its response to the draft analysis, the agency forfeits its right to request a deferral of its application.
(j) An agency seeking an expansion of scope, either as part of the regular renewal of recognition process or during a period of recognition, must submit an application to the Secretary, separately or as part of the policies and procedures outlined in paragraph (a) of this section, that satisfies the requirements of §§ 602.12(b) and 602.31(b) and—
(1) States the reason for the expansion of scope request;
(2) Includes letters from at least three institutions or programs that would seek accreditation under one or more of the elements of the expansion of scope; and
(3) Explains how the agency must expand capacity to support the expansion of scope, if applicable, and, if necessary, how it will do so and how its budget will support that expansion of capacity.
(k) The Department may view as a negative factor when considering an application for initial or expansion of scope of recognition as proposed by an agency, among other factors, any evidence that the agency was part of a concerted effort to unnecessarily restrict the qualifications necessary for a student to sit for a licensure or certification examination or otherwise be eligible for entry into a profession.
(l) Department staff's evaluation of a compliance report includes review of public comments solicited by Department staff in the
(m) The Department will process an application for an expansion of scope, compliance report, or increase in enrollment report in accordance with paragraphs with paragraphs (c) through (h) of this section.
(a) Department staff may review the compliance of a recognized agency with the criteria for recognition at any time—
(1) Based on the submission of a monitoring report as directed by a decision by the senior Department official or Secretary; or
(2) Based on any information that, as determined by Department staff, appears credible and raises concerns relevant to the criteria for recognition.
(b) The review may include, but need not be limited to, any of the activities described in § 602.32(d) and (f).
(c) If, in the course of the review, and after providing the agency the documentation concerning the inquiry and consulting with the agency, Department staff notes that one or more deficiencies may exist in the agency's compliance with the criteria for recognition or in the agency's effective application of those criteria, Department staff—
(1) Prepares a written draft analysis of the agency's compliance with the criteria of concern;
(2) Sends to the agency the draft analysis including any identified areas of noncompliance and all supporting documentation;
(3) Invites the agency to provide a written response to the draft analysis within 90 days; and
(4) Reviews any response provided by the agency, including any monitoring report submitted, and either—
(i) Concludes the review;
(ii) Continues monitoring of the agency's areas of deficiencies; or
(iii)(A) Notifies the agency, in the event that the agency's response or monitoring report does not satisfy the staff, that the draft analysis will be finalized for presentation to the Advisory Committee;
(B) Publishes a notice in the
(C) Provides the agency with a copy of all public comments received and invites a written response from the agency;
(D) Finalizes the staff analysis as necessary to reflect its review of any agency response and any public comment received;
(E) Provides to the agency, no later than 30 days before the Advisory Committee meeting, the final staff analysis and a recognition recommendation and any other information provided to the Advisory Committee under § 602.34(c); and
(F) Submits the matter for review by the Advisory Committee in accordance with § 602.34.
(a) Department staff submits a proposed schedule to the Chairperson of the Advisory Committee based on anticipated completion of staff analyses.
(b) The Chairperson of the Advisory Committee establishes an agenda for the next meeting and, in accordance with the Federal Advisory Committee Act, presents it to the Designated Federal Official for approval.
(c) Before the Advisory Committee meeting, Department staff provides the Advisory Committee with—
(1) The agency's application for recognition, renewal of recognition, or expansion of scope when Advisory Committee review is required, or the agency's compliance report and supporting documentation submitted by the agency;
(2) The final Department staff analysis of the agency developed in accordance with § 602.32 or § 602.33, and any supporting documentation;
(3) The agency's response to the draft analysis;
(4) Any written third-party comments the Department received about the agency on or before the established deadline;
(5) Any agency response to third-party comments; and
(6) Any other information Department staff relied upon in developing its analysis.
(d) At least 30 days before the Advisory Committee meeting, the Department publishes a notice of the meeting in the
(e) The Advisory Committee considers the materials provided under paragraph (c) of this section in a public meeting and invites Department staff, the agency, and other interested parties to make oral presentations during the meeting. A transcript is made of all Advisory Committee meetings.
(f) The written motion adopted by the Advisory Committee regarding each agency's recognition will be made available during the Advisory Committee meeting. The Department will provide each agency, upon request, with a copy of the motion on recognition at the meeting. Each agency that was reviewed will be sent an electronic copy of the motion relative to that agency as soon as practicable after the meeting.
(g) After each meeting of the Advisory Committee, the Advisory Committee forwards to the senior Department official its recommendation with respect to each agency, which may include, but is not limited to—
(1)(i) For an agency that is fully compliant, approve initial or renewed recognition;
(ii) Continue recognition with a required compliance report to be submitted to the Department within 12 months from the decision of the senior Department official;
(iii) In conjunction with a finding of exceptional circumstances and good cause, continue recognition for a specified period in excess of 12 months pending submission of a compliance report;
(iv) In the case of substantial compliance, grant initial recognition or renewed recognition and recommend a monitoring report with a set deadline to be reviewed by Department staff to ensure that corrective action is taken, and full compliance is achieved or maintained (or for action by staff under § 602.33 if it is not); or
(v) Deny, limit, suspend, or terminate recognition;
(2) Grant or deny a request for expansion of scope; or
(3) Revise or affirm the scope of the agency.
(a) Within ten business days following the Advisory Committee meeting, the agency and Department staff may submit written comments to the senior Department official on the Advisory Committee's recommendation. The agency must simultaneously submit a copy of its written comments, if any, to Department staff. Department staff must simultaneously submit a copy of its written comments, if any, to the agency.
(b) Comments must be limited to—
(1) Any Advisory Committee recommendation that the agency or Department staff believes is not supported by the record;
(2) Any incomplete Advisory Committee recommendation based on the agency's application; and
(3) The inclusion of any recommendation or draft proposed decision for the senior Department official's consideration.
(c)(1) Neither the Department staff nor the agency may submit additional documentationwith its comments unless the Advisory Committee's recognition recommendation proposes finding the agency noncompliant with, or ineffective in its application of, a criterion or criteria for recognition not identified in the final Department staff analysis provided to the Advisory Committee.
(2) Within ten business days of receipt by the Department staff of an agency's comments or new evidence, if applicable, or of receipt by the agency of the Department staff's comments, Department staff, the agency, or both, as applicable, may submit a response to the senior Department official. Simultaneously with submission, the agency must provide a copy of any response to the Department staff. Simultaneously with submission, Department staff must provide a copy of any response to the agency. No additional comments or new documentation may be submitted after the responses described in this paragraph are submitted.
(a) The senior Department official makes a decision regarding recognition of an agency based on the record compiled under §§ 602.32, 602.33, 602.34, and 602.35 including, as applicable, the following:
(1) The materials provided to the Advisory Committee under § 602.34(c).
(2) The transcript of the Advisory Committee meeting.
(3) The recommendation of the Advisory Committee.
(4) Written comments and responses submitted under § 602.35.
(5) New documentation submitted in accordance with § 602.35(c)(1).
(6) A communication from the Secretary referring an issue to the senior Department official's consideration under § 602.37(e).
(b) In the event that statutory authority or appropriations for the Advisory Committee ends, or there are fewer duly appointed Advisory Committee members than needed to constitute a quorum, and under extraordinary circumstances when there are serious concerns about an agency's compliance with subpart B of this part that require prompt attention, the senior Department official may make a decision on an application for renewal of recognition or compliance report on the record compiled under § 602.32 or § 602.33 after providing the agency with an opportunity to respond to the final staff analysis. Any decision made by the senior Department official under this paragraph from the Advisory Committee may be appealed to the Secretary as provided in § 602.37.
(c) Following consideration of an agency's recognition under this section, the senior Department official issues a recognition decision.
(d) Except with respect to decisions made under paragraph (f) or (g) of this section and matters referred to the senior Department official under § 602.37(e) or (f), the senior Department official notifies the agency in writing of the senior Department official's decision regarding the agency's recognition within 90 days of the Advisory Committee meeting or conclusion of the review under paragraph (b) of this section.
(e) The senior Department official's decision may include, but is not limited to, approving for recognition; approving with a monitoring report; denying, limiting, suspending, or terminating recognition following the procedures in paragraph (g) of this section; granting or denying an application for an expansion of scope; revising or affirming the scope of the agency; or continuing recognition pending submission and review of a compliance report under §§ 602.32 and 602.34 and review of the report by the senior Department official under this section.
(1)(i) The senior Department official approves recognition if the agency has demonstrated compliance or substantial compliance with the criteria for recognition listed in subpart B of this part. The senior Department official may determine that the agency has demonstrated compliance or substantial compliance with the criteria for recognition if the agency has a compliant policy or procedure in place but has not had the opportunity to apply such policy or procedure.
(ii) If the senior Department official approves recognition, the recognition decision defines the scope of recognition and the recognition period. The recognition period does not exceed five years, including any time during which recognition was continued to permit submission and review of a compliance report.
(iii) If the scope of recognition is less than that requested by the agency, the senior Department official explains the reasons for continuing or approving a lesser scope.
(2)(i) Except as provided in paragraph (e)(3) of this section, if the agency fails to comply with the criteria for recognition listed in subpart B of this part, the senior Department official denies, limits, suspends, or terminates recognition.
(ii) If the senior Department official denies, limits, suspends, or terminates recognition, the senior Department official specifies the reasons for this decision, including all criteria the agency fails to meet and all criteria the agency has failed to apply effectively.
(3)(i) If the senior Department official concludes an agency is noncompliant, the senior Department official may continue the agency's recognition, pending submission of a compliance report that will be subject to review in the recognition process, provided that—
(A) The senior Department official concludes that the agency will demonstrate compliance with, and effective application of, the criteria for recognition within 12 months from the date of the senior Department official's decision; or
(B) The senior Department official identifies a deadline more than 12 months from the date of the decision by which the senior Department official concludes the agency will demonstrate full compliance with, and effective application of, the criteria for recognition, and also identifies exceptional circumstances and good cause for allowing the agency more than 12 months to achieve compliance and effective application.
(ii) In the case of a compliance report ordered under paragraph (e)(3)(i) of this section, the senior Department official specifies the criteria the compliance report must address, and the time period for achieving compliance and effective application of the criteria. The compliance report documenting compliance and effective application of criteria is due not later than 30 days after the end of the period specified in the senior Department official's decision.
(iii) If the record includes a compliance report required under paragraph (e)(3)(i) of this section, and the senior Department official determines that an agency has not complied with the criteria for recognition, or has not effectively applied those criteria, during the time period specified by the senior Department official in accordance with paragraph (e)(3)(i) of this section, the senior Department official denies, limits, suspends, or terminates recognition, except, in extraordinary circumstances, upon a showing of good cause for an extension of time as determined by the senior Department official and detailed in the senior Department official's decision. If the senior Department official determines good cause for an extension has been shown, the senior Department official specifies the length of the extension and what the agency must do during it to merit a renewal of recognition.
(f) If the senior Department official determines that the agency is substantially compliant, or is fully compliant but has concerns about the agency maintaining compliance, the senior Department official may approve the agency's recognition or renewal of recognition and require periodic monitoring reports that are to be reviewed and approved by Department staff.
(g) If the senior Department official determines, based on the record, that a decision to deny, limit, suspend, or terminate an agency's recognition may be warranted based on a finding that the agency is noncompliant with one or more criteria for recognition, or if the agency does not hold institutions or programs accountable for complying with one or more of the agency's standards or criteria for accreditation that were not identified earlier in the proceedings as an area of noncompliance, the senior Department official provides—
(1) The agency with an opportunity to submit a written response addressing the finding; and
(2) The staff with an opportunity to present its analysis in writing.
(h) If relevant and material information pertaining to an agency's compliance with recognition criteria, but not contained in the record, comes to the senior Department official's attention while a decision regarding the agency's recognition is pending before the senior Department official, and if the senior Department official concludes the recognition decision should not be made without consideration of the information, the senior Department official either—
(1)(i) Does not make a decision regarding recognition of the agency; and
(ii) Refers the matter to Department staff for review and analysis under § 602.32 or § 602.33, as appropriate, and consideration by the Advisory Committee under § 602.34; or
(2)(i) Provides the information to the agency and Department staff;
(ii) Permits the agency to respond to the senior Department official and the Department staff in writing, and to include additional documentation relevant to the issue, and specifies a deadline;
(iii) Provides Department staff with an opportunity to respond in writing to the agency's submission under paragraph (h)(2)(ii) of this section, specifying a deadline; and
(iv) Issues a recognition decision based on the record described in paragraph (a) of this section, as supplemented by the information provided under this paragraph (h).
(i) No agency may submit information to the senior Department official, or ask others to submit information on its behalf, for purposes of invoking paragraph (h) of this section. Before invoking paragraph (h) of this section, the senior Department official will take into account whether the information, if submitted by a third party, could have been submitted in accordance with § 602.32(a) or § 602.33(e)(2).
(j) If the senior Department official does not reach a final decision to approve, deny, limit, suspend, or terminate an agency's recognition before the expiration of its recognition period, the senior Department official automatically extends the recognition period until a final decision is reached.
(k) Unless appealed in accordance with § 602.37, the senior Department official's decision is the final decision of the Secretary.
(a) The agency may appeal the senior Department official's decision to the Secretary. Such appeal stays the decision of the senior Department official until final disposition of the appeal. If an agency wishes to appeal, the agency must—
(1) Notify the Secretary and the senior Department official in writing of its intent to appeal the decision of the senior Department official, no later than 10 business days after receipt of the decision;
(2) Submit its appeal to the Secretary in writing no later than 30 days after receipt of the decision; and
(3) Provide the senior Department official with a copy of the appeal at the same time it submits the appeal to the Secretary.
(b) The senior Department official may file a written response to the appeal. To do so, the senior Department official must—
(1) Submit a response to the Secretary no later than 30 days after receipt of a copy of the appeal; and
(2) Provide the agency with a copy of the senior Department official's response at the same time it is submitted to the Secretary.
(c) Once the agency's appeal and the senior Department official's response, if any, have been provided, no additional written comments may be submitted by either party.
(d) Neither the agency nor the senior Department official may include in its submission any new documentation it did not submit previously in the proceeding.
(e) On appeal, the Secretary makes a recognition decision, as described in § 602.36(e). If the decision requires a compliance report, the report is due within 30 days after the end of the period specified in the Secretary's decision. The Secretary renders a final decision after taking into account the senior Department official's decision, the agency's written submissions on appeal, the senior Department official's response to the appeal, if any, and the entire record before the senior Department official. The Secretary notifies the agency in writing of the Secretary's decision regarding the agency's recognition.
(f) The Secretary may determine, based on the record, that a decision to deny, limit, suspend, or terminate an agency's recognition may be warranted based on a finding that the agency is noncompliant with, or ineffective in its application with respect to, a criterion or criteria for recognition not identified as an area of noncompliance earlier in the proceedings. In that case, the Secretary, without further consideration of the appeal, refers the matter to the senior Department official for consideration of the issue under § 602.36(g). After the senior Department official makes a decision, the agency may, if desired, appeal that decision to the Secretary.
(g) If relevant and material information pertaining to an agency's compliance with recognition criteria, but not contained in the record, comes to the Secretary's attention while a decision regarding the agency's recognition is pending before the Secretary, and if the Secretary concludes the recognition decision should not be made without consideration of the information, the Secretary either—
(1)(i) Does not make a decision regarding recognition of the agency; and
(ii) Refers the matter to Department staff for review and analysis under § 602.32 or § 602.33, as appropriate; review by the Advisory Committee under § 602.34; and consideration by the senior Department official under § 602.36; or
(2)(i) Provides the information to the agency and the senior Department official;
(ii) Permits the agency to respond to the Secretary and the senior Department official in writing, and to include additional documentation relevant to the issue, and specifies a deadline;
(iii) Provides the senior Department official with an opportunity to respond in writing to the agency's submission under paragraph (g)(2)(ii) of this section, specifying a deadline; and
(iv) Issues a recognition decision based on all the materials described in paragraphs (e) and (g) of this section.
(h) No agency may submit information to the Secretary, or ask others to submit information on its behalf, for purposes of invoking paragraph (g) of this section. Before invoking paragraph (g) of this section, the Secretary will take into account whether the information, if submitted by a third party, could have been submitted in accordance with § 602.32(a) or § 602.33(c).
(i) If the Secretary does not reach a final decision on appeal to approve, deny, limit, suspend, or terminate an agency's recognition before the expiration of its recognition period, the Secretary automatically extends the recognition period until a final decision is reached.
An agency may contest the Secretary's decision under this part in the Federal courts as a final decision in accordance with applicable Federal law. Unless otherwise directed by the court, a decision of the Secretary to deny, limit, suspend, or terminate the agency's recognition is not stayed during an appeal in the Federal courts.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) If the Department takes an action against an institution or program accredited by the agency, it notifies the agency no later than 10 days after taking that action.
(b) If another Federal agency or a State agency notifies the Department that it has taken an action against an institution or program accredited by the agency, the Department notifies the agency as soon as possible but no later than 10 days after receiving the written notice from the other Government agency.
(a) Pursuant to section 438(b) of the Higher Education Act of 1965 as amended by Pub. L. 92-318, the Secretary is required to publish a list of State agencies which he determines to be reliable authorities as to the quality of public postsecondary vocational education in their respective States for the purpose of determining eligibility for Federal student assistance programs administered by the Department.
(b) Approval by a State agency included on the list will provide an alternative means of satisfying statutory standards as to the quality of public postsecondary vocational education to be undertaken by students receiving assistance under such programs.
Periodically the Secretary will publish a list in the
Any State agency which desires to be listed by the Secretary as meeting the criteria set forth in § 603.24 should apply in writing to the Director, Division of Eligibility and Agency Evaluation, Office of Postsecondary Education, Department of Education, Washington, DC 20202.
For initial recognition and for renewal of recognition, the State agency will furnish information establishing its compliance with the criteria set forth in § 603.24. This information may be supplemented by personal interviews or by review of the agency's facilities, records, personnel qualifications, and administrative management. Each agency listed will be reevaluated by the Secretary at his discretion, but at least once every four years. No adverse decision will become final without affording an opportunity for a hearing.
The following are the criteria which the Secretary will utilize in designating a State agency as a reliable authority to assess the quality of public postsecondary vocational education in its respective State.
(a) Functional aspects. The functional aspects of the State agency must be shown by:
(1) Its scope of operations. The agency:
(i) Is statewide in the scope of its operations and is legally authorized to approve public postsecondary vocational institutions or programs;
(ii) Clearly sets forth the scope of its objectives and activities, both as to kinds and levels of public postsecondary vocational institutions or programs covered, and the kinds of operations performed;
(iii) Delineates the process by which it differentiates among and approves programs of varying levels.
(2) Its organization. The State agency:
(i) Employs qualified personnel and uses sound procedures to carry out its operations in a timely and effective manner;
(ii) Receives adequate and timely financial support, as shown by its appropriations, to carry out its operations;
(iii) Selects competent and knowledgeable persons, qualified by experience and training, and selects such persons in accordance with nondiscriminatory practices, (A) to participate on visiting teams, (B) to engage in consultative services for the evaluation and approval process, and (C) to serve on decision-making bodies.
(3) Its procedures. The State agency:
(i) Maintains clear definitions of approval status and has developed written procedures for granting, reaffirming, revoking, denying, and reinstating approval status;
(ii) Requires, as an integral part of the approval and reapproval process, institutional or program self-analysis and onsite reviews by visiting teams, and provides written and consultative guidance to institutions or programs and visiting teams.
(A) Self-analysis shall be a qualitative assessment of the strengths and limitations of the instructional program, including the achievement of institutional or program objectives, and should involve a representative portion of the institution's administrative staff, teaching faculty, students, governing body, and other appropriate constituencies.
(B) The visiting team, which includes qualified examiners other than agency staff, reviews instructional content, methods and resources, administrative management, student services, and facilities. It prepares written reports and recommendations for use by the State agency.
(iii) Reevaluates at reasonable and regularly scheduled intervals institutions or programs which it has approved.
(b) Responsibility and reliability. The responsibility and reliability of the State agency will be demonstrated by:
(1) Its responsiveness to the public interest. The State agency:
(i) Has an advisory body which provides for representation from public employment services and employers, employees, postsecondary vocational educators, students, and the general public, including minority groups. Among its functions, this structure provides counsel to the State agency relating to the development of standards, operating procedures and policy, and interprets the educational needs and manpower projections of the State's public postsecondary vocational education system;
(ii) Demonstrates that the advisory body makes a real and meaningful contribution to the approval process;
(iii) Provides advance public notice of proposed or revised standards or regulations through its regular channels of communications, supplemented, if necessary, with direct communication to inform interested members of the affected community. In addition, it provides such persons the opportunity to comment on the standards or regulations prior to their adoption;
(iv) Secures sufficient qualitative information regarding the applicant institution or program to enable the institution or program to demonstrate that it has an ongoing program of evaluation of outputs consistent with its educational goals;
(v) Encourages experimental and innovative programs to the extent that these are conceived and implemented in a manner which ensures the quality and integrity of the institution or program;
(vi) Demonstrates that it approves only those institutions or programs which meet its published standards; that its standards, policies, and procedures are fairly applied; and that its evaluations are conducted and decisions are rendered under conditions that assure an impartial and objective judgment;
(vii) Regularly reviews its standards, policies and procedures in order that the evaluative process shall support constructive analysis, emphasize factors of critical importance, and reflect the educational and training needs of the student;
(viii) Performs no function that would be inconsistent with the formation of an independent judgment of the quality of an educational institution or program;
(ix) Has written procedures for the review of complaints pertaining to institutional or program quality as these relate to the agency's standards, and demonstrates that such procedures are adequate to provide timely treatment of such complaints in a manner fair and equitable to the complainant and to the institution or program;
(x) Annually makes available to the public (A) its policies for approval, (B) reports of its operations, and (C) list of institutions or programs which it has approved;
(xi) Requires each approved school or program to report on changes instituted to determine continued compliance with standards or regulations;
(xii) Confers regularly with counterpart agencies that have similar responsibilities in other and neighboring States about methods and techniques that may be used to meet those responsibilities.
(2) Its assurances that due process is accorded to institutions or programs seeking approval. The State agency:
(i) Provides for adequate discussion during the on-site visit between the visiting team and the faculty, administrative staff, students, and other appropriate persons;
(ii) Furnishes as a result of the evaluation visit, a written report to the institution or program commenting on areas of strength, areas needing improvement, and, when appropriate, suggesting means of improvement and including specific areas, if any, where the institution or program may not be in compliance with the agency's standards;
(iii) Provides the chief executive officer of the institution or program with opportunity to comment upon the written report and to file supplemental materials pertinent to the facts and conclusions in the written report of the visiting team before the agency takes action on the report;
(iv) Provides the chief executive officer of the institution with a specific statement of reasons for any adverse action, and notice of the right to appeal such action before an appeal body designated for that purpose;
(v) Publishes rules of procedure regarding appeals;
(vi) Continues the approval status of the institution or program pending disposition of an appeal;
(vii) Furnishes the chief executive officer of the institution or program with a written decision of the appeal body, including a statement of its reasons therefor.
(c) Capacity to foster ethical practices. The State agency must demonstrate its capability and willingness to foster ethical practices by showing that it:
(i) Promotes a well-defined set of ethical standards governing institutional or programmatic practices, including recruitment, advertising, transcripts, fair and equitable student tuition refunds, and student placement services;
(ii) Maintains appropriate review in relation to the ethical practices of each approved institution or program.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
The purpose of the Developing Hispanic-Serving Institutions Program is to provide grants to eligible institutions of higher education to—
(a) Expand educational opportunities for, and improve the academic attainment of, Hispanic students; and
(b) Expand and enhance the academic offerings, program quality, and institutional stability of colleges and universities that are educating the majority of Hispanic college students and helping large numbers of Hispanic students and other low-income individuals complete postsecondary degrees.
(a) An institution of higher education is eligible to receive a grant under this part if—
(1) At the time of application, it has an enrollment of undergraduate full-time equivalent students that is at least 25 percent Hispanic students;
(2) It provides assurances that not less than 50 percent of its Hispanic students are low-income individuals;
(3) It has an enrollment of needy students as described in § 606.3(a), unless the Secretary waives this requirement under § 606.3(b);
(4) It has low average educational and general expenditures per full-time equivalent undergraduate student as described in § 606.4(a), unless the Secretary waives this requirement under § 606.4(c);
(5) It is legally authorized by the State in which it is located to be a junior college or to provide an educational program for which it awards a bachelor's degree; and
(6) It is accredited or preaccredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered.
(b) A branch campus of a Hispanic-Serving institution is eligible to receive a grant under this part if—
(1) The institution as a whole meets the requirements of paragraphs (a)(3) through (a)(6) of this section; and
(2) The branch campus satisfies the requirements of paragraphs (a)(1) through (a)(4) of this section.
(c)(1) An institution that receives a grant under the Strengthening Institutions Program (34 CFR part 607) or the Strengthening Historically Black Colleges and Universities Program (34 CFR part 608) for a particular fiscal year is not eligible to receive a grant under this part for that same fiscal year, and may not relinquish its grant under those programs to secure a grant under this part.
(2) A Hispanic-Serving institution under this part may not concurrently receive grant funds under the Strengthening Institutions Program, Strengthening Historically Black Colleges and Universities Program, or Strengthening Historically Black Graduate Institutions Program.
(a) Except as provided in paragraph (b) of this section, for the purpose of § 606.2(a)(3), an applicant institution has an enrollment of needy students if in the base year—
(1) At least 50 percent of its degree students received student financial assistance under one or more of the following programs: Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, and Federal Perkins Loan; or
(2) The percentage of its undergraduate degree students who were enrolled on at least a half-time basis and received Federal Pell Grants exceeded the median percentage of undergraduate degree students who were enrolled on at least a half-time basis and received Federal Pell Grants at comparable institutions that offer similar instruction.
(b) The Secretary may waive the requirement contained in paragraph (a) of this section if the institution demonstrates that—
(1) The State provides more than 30 percent of the institution's budget and the institution charges not more than $99.00 for tuition and fees for an academic year;
(2) At least 30 percent of the students served by the institution in the base year were students from low-income families;
(3) The institution substantially increases the higher education opportunities for low-income students who are also educationally disadvantaged, underrepresented in postsecondary education, or minority students;
(4) The institution substantially increases the higher education opportunities for individuals who reside in an area that is not included in a “metropolitan statistical area” as defined by the Office of Management and Budget and who are unserved by other postsecondary institutions; or
(5) The institution will, if granted the waiver, substantially increase the higher education opportunities for Hispanic Americans.
(c) For the purpose of paragraph (b) of this section, the Secretary considers “low-income” to be an amount which does not exceed 150 percent of the amount equal to the poverty level as established by the United States Bureau of the Census.
(d) Each year, the Secretary notifies prospective applicants of the low-income figures through a notice published in the
(a)(1) Except as provided in paragraph (b) of this section, for the purpose of § 606.2(a)(2), an applicant institution's average educational and general expenditures per full-time equivalent undergraduate student in the base year must be less than the average educational and general expenditures per full-time equivalent undergraduate student in that year of comparable institutions that offer similar instruction.
(2) For the purpose of paragraph (a)(1) of this section, the Secretary determines the average educational and general expenditure per full-time equivalent undergraduate student for institutions with graduate students that do not differentiate between graduate and undergraduate educational and general expenditures by discounting the graduate enrollment using a factor of 2.5 times the number of graduate students.
(b) Each year, the Secretary notifies prospective applicants through a notice in the
(c) The Secretary may waive the requirement contained in paragraph (a) of this section, if the Secretary determines, based upon persuasive evidence provided by the institution, that—
(1) The institution's failure to satisfy the criteria in paragraph (a) of this section was due to factors which, if used in determining compliance with those criteria, distorted that determination; and
(2) The institution's designation as an eligible institution under this part is otherwise consistent with the purposes of this part.
(d) For the purpose of paragraph (c)(1) of this section, the Secretary considers that the following factors may distort an institution's educational and general expenditures per full-time equivalent undergraduate student—
(1) Low student enrollment;
(2) Location of the institution in an unusually high cost-of-living area;
(3) High energy costs;
(4) An increase in State funding that was part of a desegregation plan for higher education; or
(5) Operation of high cost professional schools such as medical or dental schools.
(a) An institution applies to the Secretary to be designated an eligible institution under this part by first submitting an application to the Secretary in the form, manner, and time established by the Secretary. The application must contain—
(1) The information necessary for the Secretary to determine whether the institution satisfies the requirements of §§ 606.2, 606.3(a), and 606.4(a);
(2) Any waiver request under §§ 606.3(b) and 606.4(c); and
(3) Information or explanations justifying any requested waiver.
(b) An institution that wishes to receive a grant under this part must submit, as part of its application for that grant, an assurance that when it submits its application—
(1) Its enrollment of undergraduate full-time equivalent students is at least 25 percent Hispanic students; and
(2) Not less than 50 percent of its Hispanic students are low-income individuals.
The following regulations apply to the Developing Hispanic-Serving Institutions Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 75.128(a)(2) and 75.129(a) in the case of applications for cooperative arrangements.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) [Reserved]
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 606.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) Definitions in EDGAR. The terms used in this part are defined in 34 CFR 77.1:
(b) The following definitions also apply to this part:
Accredited means the status of public recognition which a nationally recognized accrediting agency or association grants to an institution which meets certain established qualifications and educational standards.
Activity means an action that is incorporated into an implementation plan designed to meet one or more objectives. An activity is a part of a project and has its own budget that is approved to carry out the objectives of that subpart.
Base year means the second fiscal year preceding the fiscal year for which an institution seeks a grant under this part.
Branch campus means a unit of a college or university that is geographically apart from the main campus of the college or university and independent of that main campus. The Secretary considers a unit of a college or university to be independent of the main campus if the unit—
(1) Is permanent in nature;
(2) Offers courses for credit and programs leading to an associate or bachelor's degree; and
(3) Is autonomous to the extent that it has—
(i) Its own faculty and administrative or supervisory organization; and
(ii) Its own budgetary and hiring authority.
Comparable institutions that offer similar instruction means institutions that are being compared with an applicant institution and that fall within one of the following four categories—
(1) Public junior or community colleges;
(2) Private nonprofit junior or community colleges;
(3) Public institutions that offer an educational program for which they offer a bachelor's degree; or
(4) Private nonprofit institutions that offer an educational program for which they offer a bachelor's degree.
Cooperative arrangement means an arrangement to carry out allowable grant activities between an institution eligible to receive a grant under this part and another eligible or ineligible institution of higher education, under which the resources of the cooperating institutions are combined and shared to better achieve the purposes of this part and avoid costly duplication of effort.
Degree student means a student who enrolls at an institution for the purpose of obtaining the degree, certificate, or other recognized educational credential offered by that institution.
Developmental program and services means new or improved programs and services, beyond those regularly budgeted, specifically designed to improve the self sufficiency of the school.
Educational and general expenditures means the total amount expended by an institution of higher education for instruction, research, public service, academic support (including library expenditures), student services, institutional support, scholarships and fellowships, operation and maintenance expenditures for the physical plant, and any mandatory transfers which the institution is required to pay by law.
Educationally disadvantaged means a college student who requires special services and assistance to enable them to succeed in higher education. The phrase includes, but is not limited to, students who come from—
(1) Economically disadvantaged families;
(2) Limited English proficiency families;
(3) Migrant worker families; or
(4) Families in which one or both of their parents have dropped out of secondary school.
Federal Pell Grant Program means the grant program authorized by title IV-A-1 of the HEA.
Federal Perkins Loan Program, formerly called the National Direct Student Loan Program, means the loan program authorized by title IV-E of the HEA.
Federal Supplemental Education Opportunity Grant Program means the grant program authorized by title IV-A-3 of the HEA.
Federal Work-Study Program means the part-time employment program authorized under title IV-C of the HEA.
Full-time equivalent students means the sum of the number of students enrolled full-time at an institution, plus the full-time equivalent of the number of students enrolled part time (determined on the basis of the quotient of the sum of the credit hours of all part-time students divided by 12) at such institution.
HEA means the Higher Education Act of 1965, as amended.
Hispanic student means a person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.
Institution of higher education means an educational institution defined in section 101 of the HEA.
Junior or community college means an institution of higher education—
(1) That admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution;
(2) That does not provide an educational program for which it awards a bachelor's degree (or an equivalent degree); and
(3) That—
(i) Provides an educational program of not less than 2 years that is acceptable for full credit toward such a degree; or
(ii) Offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to prepare a student to work as a technician or at the semiprofessional level in engineering, scientific, or other technological fields requiring the understanding and application of basic engineering, scientific, or mathematical principles of knowledge.
Low-income individual means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty established by the Bureau of the Census.
Minority student means a student who is an Alaska Native, American Indian, Asian-American, Black (African-American), Hispanic American, Native Hawaiian, or Pacific Islander.
Nationally recognized accrediting agency or association means an accrediting agency or association that the Secretary has recognized to accredit or preaccredit a particular category of institution in accordance with the provisions contained in 34 CFR part 603. The Secretary periodically publishes a list of those nationally recognized accrediting agencies and associations in the
Operational programs and services means the regular, ongoing budgeted programs and services at an institution.
Preaccredited means a status that a nationally recognized accrediting agency or association, recognized by the Secretary to grant that status, has accorded an unaccredited institution that is progressing toward accreditation within a reasonable period of time.
Project means all the funded activities under a grant.
Self-sufficiency means the point at which an institution is able to survive without continued funding under the Developing Hispanic-Serving Institutions Program.
Underrepresented means proportionate representation as measured by degree recipients, that is less than the proportionate representation in the general population—
(1) As indicated by—
(i) The most current edition of the Department's Digest of Educational Statistics;
(ii) The National Research Council's Doctorate Recipients from United States Universities; or
(iii) Other standard statistical references, as announced annually in the
(2) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(a) A comprehensive development plan is an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Academic programs;
(2) Institutional management; and
(3) Fiscal stability.
(b) The comprehensive development plan must include the following:
(1) An analysis of the strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability.
(2) A delineation of the institution's goals for its academic programs, institutional management, and fiscal stability, based on the outcomes of the analysis described in paragraph (b)(1) of this section.
(3) Measurable objectives related to reaching each goal and timeframes for achieving the objectives.
(4) Methods and resources that will be used to institutionalize practices and improvements developed under the proposed project.
(5) Its five year plan to improve its services to Hispanic and other low-income students.
(a)(1) Under this part, the Secretary may award planning grants and two types of development grants, individual development grants and cooperative arrangement development grants.
(2) Planning grants may be awarded for a period not to exceed one year.
(3) Either type of development grant may be awarded for a period of five years.
(b)(1) An institution that received an individual development grant of five years may not subsequently receive another individual development grant for a period of two years from the date on which the five-year grant terminates.
(2) A cooperative arrangement grant is not considered to be an individual development grant under paragraph (b)(1) of this section.
(a) Planning grants. Under a planning grant, a grantee shall formulate—
(1) A comprehensive development plan described in § 606.8; and
(2) An application for a development grant.
(b) Development grants—allowable activities. Under a development grant, except as provided in paragraph (c) of this section, a grantee shall carry out activities that implement its comprehensive development plan and hold promise for strengthening the institution. Activities that may be carried out include, but are not limited to—
(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes.
(2) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities.
(3) Support of faculty exchanges, faculty development, curriculum development, academic instruction, and faculty fellowships to assist in attaining advanced degrees in the fellow's field of instruction.
(4) Purchase of library books, periodicals, and other educational materials, including telecommunications program material.
(5) Tutoring, counseling, and student service programs designed to improve academic success.
(6) Funds management, administrative management, and acquisition of equipment for use in strengthening funds management.
(7) Joint use of facilities, such as laboratories and libraries.
(8) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector.
(9) Establishing or improving an endowment fund, provided the grantee uses no more than 20 percent of its grant funds for this purpose and at least matches those grant funds with non-Federal funds.
(10) Creating or improving facilities for Internet or other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology equipment or services.
(11) Establishing or enhancing a program of teacher education designed to qualify students to teach in public elementary or secondary schools.
(12) Establishing community outreach programs that will encourage elementary school and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(13) Expanding the number of Hispanic and other underrepresented graduate and professional students that can be served by the institution by expanding courses and institutional resources.
(14) Other activities that contribute to carrying out the purposes of this program.
(c) Development grants—unallowable activities. A grantee may not carry out the following activities or pay the following costs under a development grant:
(1) Activities that are not included in the grantee's approved application.
(2) Activities that are inconsistent with any State plan for higher education that is applicable to the institution, including, but not limited to, a State plan for desegregation of higher education.
(3) Activities or services that constitute religious instruction, religious worship, or proselytization.
(4) Activities provided by a school or department of divinity. For the purpose of this provision, a “school or department of divinity” means an institution, or a department of an institution, whose program is solely to prepare students to become ministers of religion or to enter into some other religious vocation.
(5) Developing or improving non-degree or non-credit courses other than basic skills development courses.
(6) Developing or improving community-based or community services programs, unless the program provides academic-related experiences or academic credit toward a degree for degree students, or, unless it is a program or services to encourage elementary and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(7) Purchase of standard office equipment, such as furniture, file cabinets, bookcases, typewriters, or word processors.
(8) Payment of any portion of the salary of a president, vice president, or equivalent officer who has college-wide administrative authority and responsibility at an institution to fill a position under the grant such as project coordinator or activity director.
(9) Costs of organized fund-raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions.
(10) Costs of student recruitment such as advertisements, literature, and college fairs.
(11) Services to high school students, unless they are services to encourage such students to develop the skills and the interest to pursue postsecondary education.
(12) Instruction in the institution's standard courses as indicated in the institution's catalog.
(13) Costs for health and fitness programs, transportation, and day care services.
(14) Student activities such as entertainment, cultural, or social enrichment programs, publications, social clubs, or associations.
(15) Activities that are operational in nature rather than developmental in nature.
(d) Endowment funds. If a grantee uses part of its grant funds to establish or increase an endowment fund, it must comply with the provisions of §§ 628.3, 628.6, 628.10, and 628.41 through 628.47 of this chapter with regard to the use of those funds, except—
(1) The definition of the term “endowment fund income” in § 628.6 of this chapter does not apply. For the purposes of this paragraph (d), “endowment fund income” means an amount equal to the total value of the fund, including fund appreciation and retained interest and dividends, minus the endowment fund corpus;
(2) Instead of the requirement in § 628.10(a) of this chapter, the grantee institution must match each dollar of Federal grant funds used to establish or increase an endowment fund with one dollar of non-Federal funds; and
(3) Instead of the requirements in § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 628.41(b)(2) and (b)(3) of this chapter, if a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
In addition to the information needed by the Secretary to determine whether the institution should be awarded a grant under the funding criteria contained in subpart C, an application for a development grant must include—
(a) The institution's comprehensive development plan;
(b) A description of the relationship of each activity for which grant funds are requested to the relevant goals and objectives of its plan;
(c) A description of any activities that were funded under previous development grants awarded under the Developing Hispanic-Serving Institutions Program that expired within five years of when the development grant will begin and the institution's justification for not completing the activities under the previous grant, if applicable;
(d) If the applicant is applying to carry out more than one activity—
(1) A description of those activities that would be a sound investment of Federal funds if funded separately;
(2) A description of those activities that would be a sound investment of Federal funds only if funded with the other activities; and
(3) A ranking of the activities in preferred funding order.
(a)(1) Institutions applying for a cooperative arrangement grant shall submit only one application for that grant regardless of the number of institutions participating in the cooperative arrangement.
(2) The application must include the names of each participating institution, the role of each institution, and the rationale for each eligible participating institution's decision to request grant funds as part of a cooperative arrangement rather than as an individual grantee.
(b) If the application is for a development grant, the application must contain—
(1) Each participating institution's comprehensive development plan;
(2) The information required under § 606.11; and
(3) An explanation from each eligible participating institution of why participation in a cooperative arrangement grant rather than performance under an individual grant will better enable it to meet the goals and objectives of its comprehensive development plan at a lower cost.
(4) The name of the applicant for the group that is legally responsible for—
(i) The use of all grant funds; and
(ii) Ensuring that the project is carried out by the group in accordance with Federal requirements.
In any fiscal year, an institution of higher education may—
(a) Submit an application for an individual development grant; and
(b) Be part of a cooperative arrangement application.
(a) The Secretary evaluates an application on the basis of the criteria in—
(1) Sections 606.21 and 606.23 for a planning grant; and
(2) Sections 606.22, 606.23, 600.24, and 606.25 for a development grant.
(b) The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(c)(1) The Secretary considers funding an application for a planning grant that meets the requirements under § 606.21.
(2) The Secretary considers funding an application for a development grant that—
(i) Is submitted with a comprehensive development plan that satisfies all the elements required of such a plan under § 606.8; and
(ii) In the case of an application for a cooperative arrangement grant, demonstrates that the grant will enable each eligible participant to meet the goals and objectives of its comprehensive development plan better and at a lower cost than if each eligible participant were funded individually.
The Secretary evaluates an application for a planning grant on the basis of the criteria in this section.
(a) Design of the planning process. The Secretary reviews each application to determine the quality of the planning process that the applicant will use to develop a comprehensive development plan and an application for a development grant based on the extent to which—
(1) The planning process is clearly and comprehensively described and based on sound planning practice;
(2) The president or chief executive officer, administrators and other institutional personnel, students, and governing board members systematically and consistently will be involved in the planning process;
(3) The applicant will use its own resources to help implement the project; and
(4) The planning process is likely to achieve its intended results.
(b) Key personnel. The Secretary reviews each application to determine the quality of key personnel to be involved in the project based on the extent to which—
(1) The past experience and training of key personnel such as the project coordinator and persons who have key roles in the planning process are suitable to the tasks to be performed; and
(2) The time commitments of key personnel are adequate.
(c) Project Management. The Secretary reviews each application to determine the quality of the plan to manage the project effectively based on the extent to which—
(1) The procedures for managing the project are likely to ensure effective and efficient project implementation; and
(2) The project coordinator has sufficient authority, including access to the president or chief executive officer, to conduct the project effectively.
(d) Budget. The Secretary reviews each application to determine the extent to which the proposed project costs are necessary and reasonable.
The Secretary evaluates an application for a development grant on the basis of the criteria in this section.
(a) Quality of the applicant's comprehensive development plan. The extent to which—
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution;
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis;
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution; and
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how operational costs for personnel, maintenance, and upgrades of equipment will be paid with institutional resources.
(b) Quality of activity objectives. The extent to which the objectives for each activity are—
(1) Realistic and defined in terms of measurable results; and
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan.
(c) Quality of implementation strategy. The extent to which—
(1) The implementation strategy for each activity is comprehensive;
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects; and
(3) The timetable for each activity is realistic and likely to be attained.
(d) Quality of key personnel. The extent to which—
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives; and
(2) The time commitment of key personnel is realistic.
(e) Quality of project management plan. The extent to which—
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation; and
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer.
(f) Quality of evaluation plan. The extent to which—
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the attainment of activity objectives and to measure the success of the project in achieving the goals of the comprehensive development plan; and
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan.
(g) Budget. The extent to which the proposed costs are necessary and reasonable in relation to the project's objectives and scope.
(a) If funds are available to fund only one additional planning grant and each of the next fundable applications has received the same number of points under § 606.20 or 606.21, the Secretary awards additional points, as provided in the application package or in a notice published in the
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at similar type institutions; or
(2) Has expenditures for library materials per full-time equivalent enrolled student which are less than the average expenditure for library materials per full-time equivalent enrolled student at similar type institutions.
(b) If funds are available to fund only one additional development grant and each of the next fundable applications has received the same number of points under § 606.20 or 606.22, the Secretary awards additional points, as provided in the application package or in a notice published in the
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at comparable institutions that offer similar instruction;
(2) Has expenditures for library materials per full-time equivalent enrolled student that are less than the average expenditures for library materials per full-time equivalent enrolled student at comparable institutions that offer similar instruction; or
(3) Propose to carry out one or more of the following activities—
(i) Faculty development;
(ii) Funds and administrative management;
(iii) Development and improvement of academic programs;
(iv) Acquisition of equipment for use in strengthening management and academic programs;
(v) Joint use of facilities; and
(vi) Student services.
(c) As used in this section, an “endowment fund” does not include any fund established or supported under 34 CFR part 628.
(d) Each year, the Secretary provides prospective applicants with the average market value of endowment funds and the average expenditure of library materials per full-time equivalent student.
(e) The Secretary gives priority to each application that contains satisfactory evidence that the applicant has entered into or will enter into a collaborative arrangement with at least one local educational agency or community-based organization to provide that agency or organization with assistance (from funds other than funds provided under this part) in—
(1) Reducing the dropout rates of Hispanic students;
(2) Improving rates of academic achievement of Hispanic students; and
(3) Increasing the rates at which Hispanic high school graduates enroll in higher education.
(a)(1) In addition to evaluating an application under the selection criteria in § 606.22, the Secretary evaluates an applicant's performance under any previous development grant awarded under the Developing Hispanic-Serving Institutions Program that expired within five years of the year when the development grant will begin.
(2) The Secretary evaluates whether the applicant fulfilled, or is making substantial progress toward fulfilling, the goals and objectives of the previous grant, including, but not limited to, the applicant's success in institutionalizing practices developed and improvements made under the grant.
(3) The Secretary bases the evaluation of the applicant's performance on information contained in—
(i) Performance and evaluation reports submitted by the applicant;
(ii) Audit reports submitted on behalf of the applicant; and
(iii) Other information obtained by the Secretary, including reports prepared by the Department.
(b) If the Secretary initially determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary affords the applicant the opportunity to respond to that initial determination.
(c) If the Secretary determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary may—
(1) Decide not to fund the applicant; or
(2) Fund the applicant but impose special grant terms and conditions, such as specific reporting and monitoring requirements.
Among applications for cooperative arrangement grants, the Secretary gives priority to proposed cooperative arrangements that are geographically and economically sound, or will benefit the institutions applying for the grant.
(a) Allowable costs. Except as provided in paragraphs (b) and (c) of this section, a grantee may expend grant funds for activities that are related to carrying out the allowable activities included in its approved application.
(b) Supplement and not supplant. Grant funds shall be used so that they supplement and, to the extent practical, increase the funds that would otherwise be available for the activities to be carried out under the grant and in no case supplant those funds.
(c) Limitations on allowable costs. A grantee may not use an indirect cost rate to determine allowable costs under its grant.
(a) A grantee shall maintain its eligibility under the requirements in § 606.2, except for § 606.2(a)(3) and (4), for the duration of the grant period.
(b) The Secretary reviews an institution's application for a continuation award to ensure that—
(1) The institution continues to meet the eligibility requirements described in paragraph (a) of this section; and
(2) The institution is making substantial progress toward achieving the objectives described in its grant application including, if applicable, the institution's success in institutionalizing practices and improvements developed under the grant.
The purpose of the Strengthening Institutions Program is to provide grants to eligible institutions of higher education to improve their academic programs, institutional management, and fiscal stability in order to increase their self-sufficiency and strengthen their capacity to make a substantial contribution to the higher education resources of the Nation.
(a) Except as provided in paragraphs (b) and (c) of this section, an institution of higher education is eligible to receive a grant under the Strengthening Institutions Program if—
(1) It has an enrollment of needy students as described in § 607.3(a), unless the Secretary waives this requirement under § 607.3(b);
(2) It has low average educational and general expenditures per full-time equivalent undergraduate student as described in § 607.4(a), unless the Secretary waives this requirement under § 607.4(c).
(3) It is legally authorized by the State in which it is located to be a junior college or to provide an educational program for which it awards a bachelor's degree; and
(4) It is accredited or preaccredited by a nationally recognized accrediting agency or association that the Secretary has determined to be a reliable authority as to the quality of education or training offered.
(b) A branch campus of an institution of higher education, if the institution as a whole meets the requirements of paragraphs (a)(1) through (4) of this section, is eligible to receive a grant under the Strengthening Institutions Program even if, by itself, it does not satisfy the requirements of paragraphs (a)(3) and (a)(4) of this section, although the branch must meet the requirements of paragraphs (a)(1) and (a)(2) of this section.
(c) For the purpose of paragraphs (e)(2) and (f)(2) of this section, an institution's enrollment consists of a head count of its entire student body.
(d) A tribal college or university may receive a grant authorized under section 316 of the HEA if—
(1) It satisfies the requirements of paragraph (a) of this section, other than § 607.2(a)(3), and
(2)(i) It meets the definition of the term “tribally controlled college or university” in section 2 of the Tribally Controlled College or University Assistance Act of 1978; or
(ii) It is listed in the Equity in Educational Land Grant Status Act of 1994.
(e) An Alaska Native-serving institution may receive a grant under section 317 of the HEA if—
(1) It satisfies the requirements of paragraph (a) of this section; and
(2) It has, at the time of application, an enrollment of undergraduate students that is at least 20 percent Alaska Native students.
(f) A Native Hawaiian-serving institution may receive a grant authorized under section 317 of the HEA if—
(1) It satisfies the requirements of paragraph (a) of this section; and
(2) It has, at the time of application, an enrollment of undergraduate students that is at least 10 percent Native Hawaiian students.
(g)(1) An institution that qualifies for a grant under the Strengthening Historically Black Colleges and Universities Program (34 CFR part 608) or the Developing Hispanic-Serving Institutions Program (34 CFR part 606) and receives a grant under either of these programs for a particular fiscal year is not eligible to receive a grant under this part for the same fiscal year.
(2) A tribal college or university that receives a grant under section 316 of the HEA or an Alaska Native or Native Hawaiian-serving institution that receives a grant under section 317 of the HEA may not concurrently receive other grant funds under the Strengthening Institutions Program, Strengthening Historically Black Colleges and Universities Program, or Strengthening Historically Black Graduate Institutions Program.
(a) Except as provided in paragraph (b) of this section, for the purpose of § 607.2(a)(1), an applicant institution has an enrollment of needy students if in the base year—
(1) At least 50 percent of its degree students received student financial assistance under one or more of the following programs: Pell Grant, Supplemental Educational Opportunity Grant, College Work-Study, and Perkins Loan; or
(2) The percentage of its undergraduate degree students who were enrolled on at least a half-time basis and received Pell Grants exceeded the median percentage of undergraduate degree students who were enrolled on at least a half-time basis and received Pell Grants at comparable institutions that offer similar instruction.
(b) The Secretary may waive the requirement contained in paragraph (a) of this section if the institution demonstrates that—
(1) The State provides more than 30 percent of the institution's budget and the institution charges not more than $99.00 for tuition and fees for an academic year;
(2) At least 30 percent of the students served by the institution in the base year were students from low-income families;
(3) The institution substantially increases the higher education opportunities for low-income students who are also educationally disadvantaged, underrepresented in postsecondary education, or minority students;
(4) The institution substantially increases the higher education opportunities for individuals who reside in an area that is not included in a “metropolitan statistical area” as defined by the Office of Management and Budget and who are unserved by other postsecondary institutions;
(5) The institution is located on or within 50 miles of an Indian reservation, or a substantial population of Indians and the institution will, if granted the waiver, substantially increase higher education opportunities for American Indians;
(6) It is a tribal college or university; or
(7) The institution will, if granted the waiver, substantially increase the higher education opportunities for Black Americans, Hispanic Americans, Native Americans, Asian Americans or Pacific Islanders, including Native Hawaiians.
(c) For the purpose of paragraph (b) of this section, the Secretary considers “low-income” to be an amount which does not exceed 150 percent of the amount equal to the poverty level as established by the United States Bureau of the Census.
(d) Each year, the Secretary notifies prospective applicants through a notice in the
(a)(1) Except as provided in paragraph (b) of this section, for the purpose of § 6072(a)(2), an applicant institution's average educational and general expenditures per full-time equivalent undergraduate student in the base year must be less than the average educational and general expenditures per full-time equivalent undergraduate student of comparable institutions that offer similar institution in that year.
(2) For the purpose of paragraph (a)(1) of this section, the Secretary determines the average educational and general expenditure per FTE undergraduate student for institutions with graduate students that do not differentiate between graduate and undergraduate E&G expenditures by discounting the graduate enrollment using a factor of 2.5 times the number of graduate students.
(b) Each year, the Secretary notifies prospective applicants through a notice in the
(c) The Secretary may waive the requirement contained in paragraph (a) of this section, if the Secretary determines, based upon persuasive evidence provided by the institution, that—
(1) The institution's failure to satisfy the criteria in paragraph (a) of this section was due to factors which, if used in determining compliance with those criteria, distorted that determination; and
(2) The institution's designation as an eligible institution under this part is otherwise consistent with the purposes of this part.
(d) For the purpose of paragraph (c)(1) of this section, the Secretary considers that the following factors may distort an institution's educational and general expenditures per full-time equivalent undergraduate student—
(1) Low student enrollment;
(2) Location of the institution in an unusually high cost-of-living area;
(3) High energy costs;
(4) An increase in State funding that was part of a desegregation plan for higher education; or
(5) Operation of high cost professional schools such as medical or dental schools.
An institution shall apply to the Secretary to be designated an eligible institution under the Strengthening Institutions Program by submitting an application to the Secretary in the form, manner and time established by the Secretary. The application must contain—
(a) The information necessary for the Secretary to determine whether the institution satisfies the requirements of §§ 607.2, 607.3(a) and 607.4(a);
(b) Any waiver request under §§ 607.3(b) and 607.4(c); and
(c) Information or explanations justifying any requested waiver.
The following regulations apply to the Strengthening Institutions Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs), except 34 CFR 75.128(a)(2) and 75.129(a) in the case of applications for cooperative arrangements.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) [Reserved]
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 607.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) Definitions in EDGAR. The following terms that apply to the Institutional Aid Programs are defined in 34 CFR 77.1:
(b) The following term used in this part is defined in section 312 of the HEA:
(c) The following terms used in this part are defined in section 316 of the HEA:
(d) The following terms used in this part are defined in section 317 of the HEA:
(e) The following definitions also apply to this part:
Accredited means the status of public recognition which a nationally recognized accrediting agency or association grants to an institution which meets certain established qualifications and educational standards.
Activity means an action that is incorporated into an implementation plan designed to meet one or more objectives. An activity is a part of a project and has its own budget that is approved to carry out the objectives of that subpart.
Base year means the second fiscal year preceding the fiscal year for which an institution seeks a grant under this part.
Branch campus means a unit of a college or university that is geographically apart from the main campus of the college or university and independent of that main campus. The Secretary considers a unit of a college or university to be independent of the main campus if the unit—
(1) Is permanent in nature;
(2) Offers courses for credit and programs leading to an associate or bachelor's degree; and
(3) Is autonomous to the extent that it has—
(i) Its own faculty and administrative or supervisory organization; and
(ii) Its own budgetary and hiring authority.
Comparable institutions that offer similar instruction means institutions that are being compared with an applicant institution and that fall within one of the following four categories—
(1) Public junior or community colleges;
(2) Private nonprofit junior or community colleges;
(3) Public institutions that offer an educational program for which they offer a bachelor's degree; or
(4) Private nonprofit institutions that offer an educational program for which they offer a bachelor's degree.
Cooperative arrangement means an arrangement to carry out allowable grant activities between an institution eligible to receive a grant under this part and another eligible or ineligible institution of higher education, under which the resources of the cooperating institutions are combined and shared to better achieve the purposes of this part and avoid costly duplication of effort.
Degree student means a student who enrolls at an institution for the purpose of obtaining the degree, certificate, or other recognized educational credential offered by that institution.
Developmental program and services means new or improved programs and services, beyond those regularly budgeted, specifically designed to improve the self sufficiency of the school.
Educational and general expenditures means the total amount expended by an institution of higher education for instruction, research, public service, academic support (including library expenditures), student services, institutional support, scholarships and fellowships, operation and maintenance expenditures for the physical plant, and any mandatory transfers which the institution is required to pay by law.
Educationally disadvantaged means a college student who requires special services and assistance to enable them to succeed in higher education. The phrase includes, but is not limited to, students who come from—
(1) Economically disadvantaged families;
(2) Limited English proficiency families;
(3) Migrant worker families; or
(4) Families in which one or both of their parents have dropped out of secondary school.
Federal Pell Grant Program means the grant program authorized by title IV-A-1 of the HEA.
Federal Perkins Loan Program, formerly called the National Direct Student Loan Program, means the loan program authorized by title IV-E of the HEA.
Federal Supplemental Education Opportunity Grant Program means the grant program authorized by title IV-A-3 of the HEA.
Federal Work-Study Program means the part-time employment program authorized under title IV-C of the HEA.
Full-time equivalent students means the sum of the number of students enrolled full-time at an institution, plus the full-time equivalent of the number of students enrolled part time (determined on the basis of the quotient of the sum of the credit hours of all part-time students divided by 12) at such institution.
HEA means the Higher Education Act of 1965, as amended.
Hispanic student means a person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.
Institution of higher education means an educational institution defined in section 101 of the HEA.
Junior or community college means an institution of higher education—
(1) That admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution;
(2) That does not provide an educational program for which it awards a bachelor's degree (or an equivalent degree); and
(3) That—
(i) Provides an educational program of not less than 2 years that is acceptable for full credit toward such a degree, or
(ii) Offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to prepare a student to work as a technician or at the semiprofessional level in engineering, scientific, or other technological fields requiring the understanding and application of basic engineering, scientific, or mathematical principles of knowledge.
Low-income individual means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty established by the Bureau of Census.
Minority student means a student who is Alaskan Native, American Indian, Asian-American, Black (African-American), Hispanic American, Native Hawaiian, or Pacific Islander.
Nationally recognized accrediting agency or association means an accrediting agency or association that the Secretary has recognized to accredit or preaccredit a particular category of institution in accordance with the provisions contained in 34 CFR part 603. The Secretary periodically publishes a list of those nationally recognized accrediting agencies and associations in the
Operational programs and services means the regular, ongoing budgeted programs and services at an institution.
Preaccredited means a status that a nationally recognized accrediting agency or association, recognized by the Secretary to grant that status, has accorded an unaccredited institution that is progressing toward accreditation within a reasonable period of time.
Project means all the funded activities under a grant.
Self-sufficiency means the point at which an institution is able to survive without continued funding under the Strengthening Institutions Program.
Underrepresented means proportionate representation as measured by degree recipients, that is less than the proportionate representation in the general population—
(1) As indicated by—
(i) The most current edition of the Department's Digest of Educational Statistics;
(ii) The National Research Council's Doctorate Recipients from United States Universities; or
(iii) Other standard statistical references, as announced annually in the
(2) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(a) A comprehensive development plan is an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Academic programs;
(2) Institutional management; and
(3) Fiscal stability.
(b) The comprehensive development plan must include the following:
(1) An analysis of the strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability.
(2) A delineation of the institution's goals for its academic programs, institutional management, and fiscal stability, based on the outcomes of the analysis described in paragraph (b)(1) of this section.
(3) Measurable objectives related to reaching each goal and timeframes for achieving the objectives.
(4) Methods and resources that will be used to institutionalize practices and improvements developed under the proposed project.
(5) For a grant under section 316 of the HEA to a tribal college or university, its five-year plan for improving its services to Indian students, increasing the rates at which Indian secondary school students enroll in higher education, and increasing overall postsecondary retention rates for Indian students.
(6) For a grant under section 317 of the HEA to an Alaska Native-serving institution or to a Native Hawaiian-serving institution, its five-year plan for improving its services to Alaska Native or Native Hawaiian students, respectively.
(a)(1) Under this part, the Secretary may award planning grants and two types of development grants, individual development grants and cooperative arrangement development grants.
(2) Planning grants may be awarded for a period not to exceed one year.
(3) Either type of development grant may be awarded for a period of five years.
(b)(1) An institution that received an individual development grant of five years may not subsequently receive another individual development grant for a period of two years from the date on which the five-year grant period terminates.
(2) A cooperative arrangement grant is not considered to be an individual development grant under paragraph (b)(1) of this section.
(a) Planning grants. Under a planning grant, a grantee shall formulate—
(1) A comprehensive development plan described in § 607.8; and
(2) An application for a development grant.
(b) Development grants—allowable activities. Under a development grant, except as provided in paragraph (c) of this section, a grantee shall carry out activities that implement its comprehensive development plan and hold promise for strengthening the institution. Activities that may be carried out include, but are not limited to—
(1) Faculty exchanges, faculty fellowships, and faculty development that provide faculty with the skills and knowledge needed to—
(i) Develop academic support services, including advising and mentoring students;
(ii) Develop academic programs or methodology, including computer-assisted instruction, that strengthen the academic quality of the institution; or
(iii) Acquire terminal degrees that are required to obtain or retain accreditation of an academic program or department;
(2) Funds and administrative management that will improve the institution's ability to—
(i) Manage financial resources in an efficient and effective manner; and
(ii) Collect, access, and use information about the institution's operations for improved decisionmaking;
(3) Developing and improving academic programs that enable the institution to—
(i) Develop new academic programs or new program options that show promise for increased student enrollment;
(ii) Provide new technology or methodology to increase student success and retention or to retain accreditation; or
(iii) Improve curriculum or methodology for existing academic programs to stabilize or increase student enrollment;
(4) Acquiring equipment for use in strengthening management and academic programs to achieve objectives such as those described in paragraphs (b)(2) and (b)(3) of this section;
(5) Establishing or increasing the joint use of facilities such as libraries and laboratories to—
(i) Eliminate the distance and high cost associated with providing academic programs and academic support; or
(ii) Provide clinical experience that is part of an approved academic program at off-campus locations;
(6) Developing or improving student services to provide—
(i) New or improved methods to deliver student services, including counseling, tutoring, and instruction in basic skills; or
(ii) Improved strategies to train student services personnel;
(7) Payment of any portion of the salary of a dean, with proper justification, to fill a position under the project such as project coordinator or activity director. For purposes of this paragraph, proper justification includes evidence that the position entitled “Dean” is not one that has college-wide administrative authority and responsibility;
(8) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes;
(9) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities, including the integration of computer technology into institutional facilities to create smart buildings;
(10) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector;
(11) Establishing or improving an endowment fund, provided a grantee uses no more than 20 percent of its grant funds for this purpose and at least matches those grant funds with non-Federal funds;
(12) Creating or improving facilities for Internet or other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology equipment or services;
(13) For grants authorized under section 316 of the HEA to tribal colleges or universities—
(i) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes;
(ii) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services;
(iii) Support of faculty exchanges, faculty development, and faculty fellowships to assist in attaining advanced degrees in their field of instruction;
(iv) Curriculum development and academic instruction;
(v) Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials;
(vi) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(vii) Joint use of facilities such as laboratories and libraries; and
(viii) Academic tutoring and counseling programs and student support services designed to improve academic services;
(ix) Academic instruction in disciplines in which Indians are underrepresented;
(x) Establishing or improving a development office to strengthen or improve contributions from the alumni and the private sector;
(xi) Establishing or enhancing a program of teacher education designed to qualify students to teach in elementary schools or secondary schools, with a particular emphasis on teaching Indian children and youth, that shall include, as part of such program, preparation for teacher certification;
(xii) Establishing community outreach programs that encourage Indian elementary school and secondary school students to develop the academic skills and the interest to pursue postsecondary education; and
(xiii) Establishing or improving an endowment fund, provided a grantee uses no more than 20 percent of its grant funds for this purpose and at least matches those grant funds with non-Federal funds; or
(14) For grants authorized under section 317 of the HEA to Alaska Native-serving institutions and Native Hawaiian-serving institutions—
(i) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes;
(ii) Renovation and improvement in classroom, library, laboratory, and other instructional facilities;
(iii) Support of faculty exchanges, faculty development, and faculty fellowships to assist in attaining advanced degrees in the faculty's field of instruction;
(iv) Curriculum development and academic instruction;
(v) Purchase of library books, periodicals, microfilm, and other educational materials;
(vi) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(vii) Joint use of facilities such as laboratories and libraries;
(viii) Academic tutoring and counseling programs and student support services.
(c) Development grants—unallowable activities. A grantee may not carry out the following activities or pay the following costs under a development grant:
(1) Activities that are not included in the grantee's approved application.
(2) Activities that are inconsistent with any State plan for higher education that is applicable to the institution, including, but not limited to, a State plan for desegregation of higher education.
(3) Activities or services that constitute religious instruction, religious worship, or proselytization.
(4) Activities provided by a school or department of divinity. For the purpose of this provision, a “school or department of divinity” means an institution, or a department of an institution, whose program is solely to prepare students to become ministers of religion or to enter into some other religious vocation.
(5) Developing or improving non-degree or non-credit courses other than basic skills development courses.
(6) Developing or improving community-based or community services programs, unless the program provides academic-related experiences or academic credit toward a degree for degree students, or unless it is an outreach program that encourages Indian elementary school and secondary school students to develop the academic skills and the interest to pursue postsecondary education.
(7) Purchase of standard office equipment, such as furniture, file cabinets, bookcases, typewriters, or word processors.
(8) Payment of any portion of the salary of a president, vice president, or equivalent officer who has college-wide administrative authority and responsibility at an institution to fill a position under the grant such as project coordinator or activity director.
(9) Costs of organized fund-raising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expenses incurred solely to raise capital or obtain contributions.
(10) Costs of student recruitment such as advertisements, literature, and college fairs.
(11) Services to high school students, unless they are part of a program to encourage Indian students to develop the academic skills and the interest to pursue postsecondary education.
(12) Instruction in the institution's standard courses as indicated in the institution's catalog.
(13) Costs for health and fitness programs, transportation, and day care services.
(14) Student activities such as entertainment, cultural, or social enrichment programs, publications, social clubs, or associations.
(15) Activities that are operational in nature rather than developmental in nature.
(d) Endowment funds. If a grantee uses part of its grant funds to establish or increase an endowment fund under paragraphs (b)(11) or (b)(13)(xiii) of this section, it must comply with the provisions of §§ 628.3, 628.6, 628.10 and 628.41 through 628.47 of this chapter with regard to the use of those funds, except—
(1) The definition of the term “endowment fund income” in § 628.6 of this chapter does not apply. For the purposes of this paragraph (d), “endowment fund income” means an amount equal to the total value of the fund, including fund appreciation and retained interest and dividends, minus the endowment fund corpus.
(2) Instead of the requirement in § 628.10(a) of this chapter, the grantee institution must match each dollar of Federal grant funds used to establish or increase an endowment fund with one dollar of non-Federal funds; and
(3) Instead of the requirements in § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 628.41(b)(2) and (b)(3) of this chapter, if a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
In addition to the information needed by the Secretary to determine whether the institution should be awarded a grant under the funding criteria contained in subpart C, an application for a development grant must include—
(a) The institution's comprehensive development plan;
(b) A description of the relationship of each activity for which grant funds are requested to the relevant goals and objectives of its plan;
(c) A description of any activities that were funded under previous development grants awarded under the Strengthening Institutions Program that expired within five years of when the development grant will begin and the institution's justification for not completing the activities under the previous grant, if applicable; and
(d) If the applicant is applying to carry out more than one activity—
(1) A description of those activities that would be a sound investment of Federal funds if funded separately;
(2) A description of those activities that would be a sound investment of Federal funds only if funded with the other activities; and
(3) A ranking of the activities in preferred funding order.
(a)(1) Institutions applying for a cooperative arrangement grant shall submit only one application for that grant regardless of the number of institutions participating in the cooperative arrangement.
(2) The application must include the names of each participating institution, the role of each institution, and the rationale for each eligible participating institution's decision to request grant funds as part of a cooperative arrangement rather than as an individual grantee.
(b) If the application is for a development grant, the application must contain—
(1) Each participating institution's comprehensive development plan;
(2) The information required under § 607.11; and
(3) An explanation from each eligible participating institution of why participation in a cooperative arrangement grant rather than performance under an individual grant will better enable it to meet the goals and objectives of its comprehensive development plan at a lower cost.
(4) The name of the applicant for the group that is legally responsible for—
(i) The use of all grant funds; and
(ii) Ensuring that the project is carried out by the group in accordance with Federal requirements.
In any fiscal year, an institution of higher education that meets the eligibility requirements under sections 311, 316, and 317 of the HEA may—
(a) Submit an application for a development grant authorized under sections 311, 316, and 317 of the HEA; and
(b) Be part of a cooperative arrangement application.
(a) The Secretary evaluates an application on the basis of the criteria in—
(1) Sections 607.21 and 607.23 for a planning grant; and
(2) Sections 607.22, 607.23, 607.24, and 607.25 for a development grant.
(b) The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(c)(1) With regard to applicants that satisfy the requirements of paragraph (d) of this section, for each fiscal year, the Secretary awards individual development grants to applicants that are not individual development grantees under this part, before the Secretary awards an individual development grant to any applicant that is an individual grantee under this part.
(2) For purposes of paragraph (c)(1) of this section, an institution that is a recipient of a cooperative arrangement grant is not an individual grantee under this part.
(d) The Secretary considers funding an application for a development grant that—
(1) Is submitted with a comprehensive development plan that satisfies all the elements required of such a plan under § 607.8; and
(2) In the case of an application for a cooperative arrangement grant, demonstrates that the grant will enable each eligible participant to meet the goals and objectives of its comprehensive development plan better and at a lower cost than if each eligible participant were funded individually.
The Secretary evaluates an application for a planning grant on the basis of the criteria in this section.
(a) Design of the planning process. The Secretary reviews each application to determine the quality of the planning process that the applicant will use to develop a comprehensive development plan and an application for a development grant based on the extent to which—
(1) The planning process is clearly and comprehensively described and based on sound planning practice;
(2) The president or chief executive officer, administrators and other institutional personnel, students, and governing board members systematically and consistently will be involved in the planning process;
(3) The applicant will use its own resources to help implement the project; and
(4) The planning process is likely to achieve its intended results.
(b) Key personnel. The Secretary reviews each application to determine the quality of key personnel to be involved in the project based on the extent to which—
(1) The past experience and training of key personnel such as the project coordinator and persons who have key roles in the planning process are suitable to the tasks to be performed; and
(2) The time commitments of key personnel are adequate.
(c) Project Management. The Secretary reviews each application to determine the quality of the plan to manage the project effectively based on the extent to which—
(1) The procedures for managing the project are likely to ensure effective and efficient project implementation; and
(2) The project coordinator has sufficient authority, including access to the president or chief executive officer, to conduct the project effectively.
(d) Budget. The Secretary reviews each application to determine the extent to which the proposed project costs are necessary and reasonable.
The Secretary evaluates an application for a development grant on the basis of the criteria in this section.
(a) Quality of the applicant's comprehensive development plan. The extent to which—
(1) The strengths, weaknesses, and significant problems of the institution's academic programs, institutional management, and fiscal stability are clearly and comprehensively analyzed and result from a process that involved major constituencies of the institution;
(2) The goals for the institution's academic programs, institutional management, and fiscal stability are realistic and based on comprehensive analysis;
(3) The objectives stated in the plan are measurable, related to institutional goals, and, if achieved, will contribute to the growth and self-sufficiency of the institution; and
(4) The plan clearly and comprehensively describes the methods and resources the institution will use to institutionalize practice and improvements developed under the proposed project, including, in particular, how operational costs for personnel, maintenance, and upgrades of equipment will be paid with institutional resources.
(b) Quality of activity objectives. The extent to which the objectives for each activity are—
(1) Realistic and defined in terms of measurable results; and
(2) Directly related to the problems to be solved and to the goals of the comprehensive development plan.
(c) Quality of implementation strategy. The extent to which—
(1) The implementation strategy for each activity is comprehensive;
(2) The rationale for the implementation strategy for each activity is clearly described and is supported by the results of relevant studies or projects; and
(3) The timetable for each activity is realistic and likely to be attained.
(d) Quality of key personnel. The extent to which—
(1) The past experience and training of key professional personnel are directly related to the stated activity objectives; and
(2) The time commitment of key personnel is realistic.
(e) Quality of project management plan. The extent to which—
(1) Procedures for managing the project are likely to ensure efficient and effective project implementation; and
(2) The project coordinator and activity directors have sufficient authority to conduct the project effectively, including access to the president or chief executive officer.
(f) Quality of evaluation plan. The extent to which—
(1) The data elements and the data collection procedures are clearly described and appropriate to measure the attainment of activity objectives and to measure the success of the project in achieving the goals of the comprehensive development plan; and
(2) The data analysis procedures are clearly described and are likely to produce formative and summative results on attaining activity objectives and measuring the success of the project on achieving the goals of the comprehensive development plan.
(g) Budget. The extent to which the proposed costs are necessary and reasonable in relation to the project's objectives and scope.
(a) If funds are available to fund only one additional planning grant and each of the next fundable applications has received the same number of points under § 607.20 or 607.21, the Secretary awards additional points, as provided in the application package or in a notice published in the
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at similar type institutions; or
(2) Has expenditures for library materials per full-time equivalent enrolled student which is less than the average expenditure for library materials per full-time equivalent enrolled student at similar type institutions.
(b) If funds are available to fund only one additional development grant and each of the next fundable applications has received the same number of points under § 607.20 or 607.22, the Secretary awards additional points, as provided in the application package or in a notice published in the
(1) Has an endowment fund of which the current market value, per full-time equivalent enrolled student, is less than the average current market value of the endowment funds, per full-time equivalent enrolled student, at comparable institutions that offer similar instruction;
(2) Has expenditures for library materials per full-time equivalent enrolled student which are less than the average expenditures for library materials per full-time equivalent enrolled student at comparable institutions that offer similar instruction; or
(3) Propose to carry out one or more of the following activities—
(i) Faculty development;
(ii) Funds and administrative management;
(iii) Development and improvement of academic programs;
(iv) Acquisition of equipment for use in strengthening management and academic programs;
(v) Joint use of facilities; and
(vi) Student services.
(c) As used in this section, an endowment fund does not include any fund established or supported under 34 CFR part 628.
(d) Each year, the Secretary provides prospective applicants with the average expenditure of endowment funds and library materials per full-time equivalent student.
(a)(1) In addition to evaluating an application under the selection criteria in § 607.22, the Secretary evaluates an applicant's performance under any previous development grant awarded under the Strengthening Institutions Program that expired within five years of the year when the development grant will begin.
(2) The Secretary evaluates whether the applicant fulfilled, or is making substantial progress toward fulfilling, the goals and objectives of the previous grant, including, but not limited to, the applicant's success in institutionalizing practices developed and improvements made under the grant.
(3) The Secretary bases the evaluation of the applicant's performance on information contained in—
(i) Performance and evaluation reports submitted by the applicant;
(ii) Audit reports submitted on behalf of the applicant; and
(iii) Other information obtained by the Secretary, including reports prepared by the Department.
(b) If the Secretary initially determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary affords the applicant the opportunity to respond to that initial determination.
(c) If the Secretary determines that the applicant did not fulfill the goals and objectives of a previous grant or is not making substantial progress towards fulfilling those goals and objectives, the Secretary may—
(1) Decide not to fund the applicant; or
(2) Fund the applicant but impose special grant terms and conditions, such as specific reporting and monitoring requirements.
Among applications for cooperative arrangement grants, the Secretary gives priority to proposed cooperative arrangements that are geographically and economically sound, or will benefit the institutions applying for the grant.
(a) Allowable costs. Except as provided in paragraphs (b) and (c) of this section, a grantee may expend grant funds for activities that are related to carrying out the allowable activities included in its approved application.
(b) Supplement and not supplant. Grant funds shall be used so that they supplement and, to the extent practical, increase the funds that would otherwise be available for the activities to be carried out under the grant and in no case supplant those funds.
(c) Limitations on allowable costs. A grantee may not use an indirect cost rate to determine allowable costs under its grant.
(a) A grantee shall maintain its eligibility under the requirements in § 607.2, except for § 607.2(a) (1) and (2), for the duration of the grant period.
(b) The Secretary reviews an institution's application for a continuation award to ensure that—
(1) The institution continues to meet the eligibility requirements described in paragraph (a) of this section; and
(2) The institution is making substantial progress toward achieving the objectives set forth in its grant application including, if applicable, the institution's success in institutionalizing practices and improvements developed under the grant.
The Strengthening Historically Black Colleges and Universities Program, hereafter called the HBCU Program, provides grants to Historically Black Colleges and Universities (HBCUs) to assist these institutions in establishing and strengthening their physical plants, academic resources and student services so that they may continue to participate in fulfilling the goal of equality of educational opportunity.
(a) To be eligible to receive a grant under this part, an institution must—
(1) Satisfy section 322(2) of the Higher Education Act of 1965, as amended (HEA);
(2) Be legally authorized by the State in which it is located—
(i) To be a junior or community college; or
(ii) To provide an educational program for which it awards a bachelor's degree; and
(3) Be accredited or preaccredited by a nationally recognized accrediting agency or association.
(b) The Secretary has determined that the following institutions satisfy section 322(2) of the HEA.
(c) If an institution identified in paragraph (b) of this section has merged with another institution, and, as a result of the merger, would not otherwise qualify to receive a grant under this part, that institution may nevertheless qualify to receive a grant under this part if—
(1) The institution would have qualified to receive a grant before the merger; and
(2) The institution was eligible to receive a grant under the Special Needs Program in any fiscal year prior to fiscal year 1986. (The Special Needs Program was authorized under Title III, Part B, of the HEA before 1986.)
(d) For the purpose of paragraph (a)(3) of this section, the Secretary publishes a list in the
(e) Notwithstanding any other provision of this section, for each fiscal year—
(1) The University of the District of Columbia is eligible to receive a grant under this part only if the amount of the grant it is scheduled to receive under § 608.31 exceeds the amount it is scheduled to receive in the same fiscal year under the District of Columbia Self-Government and Governmental Reorganization Act; and
(2) Howard University is eligible to receive a grant under this part only if the amount of the grant it is scheduled to receive under § 608.31 exceeds the amount it is scheduled to receive in the same fiscal year under the Act of March 2, 1867, 20 U.S.C. 123.
The following regulations apply to this part:
(a) The Department of Education General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) The following sections of 34 CFR part 75 (Direct Grant Programs): §§ 75.1-75.104, 75.125-75.129, 75.190-75.192, 75.230-75.261, 75.500, 75.510-75.519, 75.524-75.534, 75.580-75.903, and 75.910;
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) [Reserved]
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 608.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) Other definitions. The following definitions also apply to this part:
Accredited means the status of public recognition which a nationally recognized accrediting agency or association grants to an institution which meets certain established qualifications and educational standards.
Graduate means a student who has attended an institution for at least three semesters and fulfilled academic requirements for undergraduate studies in not more than five consecutive school years.
Junior or community college means an institution of higher education that—
(i) Admits as regular students persons who are beyond the age of compulsory school attendance in the State in which the institution is located and who have the ability to benefit from the training offered by the institution;
(ii) Does not provide an educational program for which it awards a bachelor's degree or an equivalent degree; and
(iii) Provides an educational program of not less than 2 years that is acceptable for full credit toward such a degree; or offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to prepare a student to work as a technician or at the semiprofessional level in engineering, scientific, or other technological fields requiring the understanding and application of basic engineering, scientific, or mathematical principles of knowledge.
Pell Grant means the grant program authorized by Title IV-A-1 of the Higher Education Act of 1965, as amended.
Preaccredited means a status, also called candidacy status, that a nationally recognized accrediting agency or association, recognized by the Secretary to grant that status, has accorded an unaccredited institution that is making reasonable progress toward accreditation.
School year means the period of time from July 1 of one calendar year through June 30 of the subsequent calendar year. (A “school year” is equivalent to an “award year” under the Pell Grant Program.)
(a) Allowable activities. Except as provided in paragraph (b) of this section, a grantee may carry out the following activities under this part—
(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional or research purposes;
(2) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services;
(3) Support of faculty exchanges, faculty development and faculty fellowships to assist these faculty members in attaining advanced degrees in their fields of instruction;
(4) Academic instruction in disciplines in which Black Americans are underrepresented;
(5) Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials;
(6) Tutoring, counseling, and student service programs designed to improve academic success;
(7) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(8) Joint use of facilities, such as laboratories and libraries;
(9) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector;
(10) Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school in the State that shall include, as part of the program, preparation for teacher certification;
(11) Establishing community outreach programs that will encourage elementary and secondary students to develop the academic skills and the interest to pursue postsecondary education; and
(12) Other activities that it proposes in its application that contribute to carrying out the purpose of this part and are approved by the Secretary as part of the review and acceptance of the application.
(b) Unallowable activities. A grantee may not carry out the following activities under this part—
(1) Activities that are not included in the grantee's approved application;
(2) Activities described in paragraph (a)(12) of this section that are not approved by the Secretary;
(3) Activities that are inconsistent with any State plan of higher education that is applicable to the institution;
(4) Activities that are inconsistent with a State plan for desegregation of higher education that is applicable to the institution;
(5) Activities or services that constitute religious instruction, religious worship, or proselytization.
(6) Activities provided by a school or department of divinity. For the purpose of this provision, a “school or department of divinity” means an institution, or a department of an institution, whose program is solely to prepare students to become ministers of religion or to enter into some other religious vocation.
(c) No award under this part may be used for telecommunications technology equipment, facilities or services, if such equipment, facilities or services are available pursuant to section 396(k) of the Communications Act of 1934.
(d) Endowment funds. If a grantee uses part of its grant funds to establish or increase an endowment fund, it is subject to the provisions of §§ 628.3, 628.6, 628.10 and 628.41 through 628.47 of this chapter with regard to the use of those funds, except—
(1) The definition of the term “endowment fund income” in § 628.6 of this chapter does not apply. For the purposes of this paragraph (d), “endowment fund income” means an amount equal to the total value of the fund, including fund appreciation and retained interest and dividends, minus the endowment fund corpus;
(2) Instead of the requirement in § 628.10(a) of this chapter, the grantee institution must match each dollar of Federal grant funds used to establish or increase an endowment fund with one dollar of non-Federal funds; and
(3) Instead of the requirements in § 628.41(a)(3) through (a)(5) and the introductory text in § 628.41(b) and § 628.41(b)(2) and (b)(3) of this chapter, if a grantee institution decides to use any of its grant funds for endowment purposes, it must match those grant funds immediately with non-Federal funds when it places those funds into its endowment fund.
The Secretary may award a grant under this part for a period of up to five academic years.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
In order to receive a grant under this part, an institution must submit an application to the Secretary at such time and in such manner as the Secretary may prescribe. The application must contain—
(a) A description of the activities to be carried out with grant funds;
(b) A description of how the grant funds will be used so that they will supplement and, to the extent practical, increase the funds that would otherwise be made available for the activities to be carried out under the grant and in no case supplant those funds;
(c) (1) A comprehensive development plan as described in § 608.21; or
(2) If an applicant has already submitted a comprehensive development plan as described in § 608.21, a description of the progress the applicant has made in carrying out the goals of its plan;
(d) An assurance that the institution will provide the Secretary with an annual report on the activities carried out under the grant;
(e) An assurance that the institution will provide for, and submit to the Secretary, the compliance and financial audit described in § 608.41;
(f) An assurance that the proposed activities in the application are in accordance with any State plan that is applicable to the institution;
(g) The number of graduates of the applicant institution during the school year immediately preceding the fiscal year for which grant funds are requested; and
(h) The number of graduates of the applicant institution—
(1) Who, within five years of graduating with baccalaureate degrees, attended graduate or professional schools and enrolled in degree programs in disciplines in which Blacks are underrepresented during the school year immediately preceding the fiscal year for which funds are requested; and
(2) Who graduated with baccalaureate degrees during any one of the five school years immediately preceding the school year described in paragraph (h)(1) of this section.
(a) A comprehensive development plan must describe an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Financial management;
(2) Academic programs; and
(b) The comprehensive development plan must include the following:
(1) An assessment of the strengths and weaknesses of the institution's financial management and academic programs.
(2) A delineation of the institution's goals for its financial management and academic programs, based on the outcomes of the assessment described in paragraph (b)(1) of this section.
(3) A listing of measurable objectives designed to assist the institution to reach each goal with accompanying timeframes for achieving the objectives.
(4) A description of methods, processes, and procedures that will be used by the college or university to institutionalize financial management and academic program practices and improvements developed under the proposed funded activities.
The Secretary—
(a) Approves any application that satisfies the requirements of § 608.10 and § 608.20; and
(b) Does not disapprove any application, or any modification of an application, without affording the applicant reasonable notice and opportunity for a hearing.
(a) Except as provided in paragraph (c) of this section, for each fiscal year, the Secretary determines the amount of a grant under this part by-
(1) Multiplying fifty percent of the amount appropriated for the HBCU Program by the following fraction:
(2) Multiplying twenty-five percent of the amount appropriated for the HBCU Program by the following fraction:
(3) Multiplying twenty-five percent of the amount appropriated for the HBCU Program by the following fraction:
(4) Adding the amounts obtained in paragraphs (a)(1), (a)(2), and (a)(3) of this section.
(b)(1) For each fiscal year, the numerator in paragraph (a)(3) of this section is calculated by—
(i) Determining the number of graduates of an applicant institution who, within five years of graduating with baccalaureate degrees, attended graduate or professional schools and enrolled in degree programs in disciplines in which Blacks are underrepresented during the school year immediately preceding that fiscal year; and
(ii) Dividing the number obtained in paragraph (b)(1)(i) of this section by the number of graduates of an applicant institution who graduated with baccalaureate degrees during the five school years immediately preceding the school year described in paragraph (b)(1)(i) of this section.
(2) For purposes of this section, the Secretary—
(i) Considers that Blacks are underrepresented in a professional or academic discipline if the percentage of Blacks in that discipline is less than the percentage of Blacks in the general population of the United States; and
(ii) Notifies applicants of the disciplines in which Blacks are underrepresented through a notice in the
(c) Notwithstanding the formula in paragraph (a) of this section—
(1) For each fiscal year, each eligible institution with an approved application must receive at least $500,000; and
(2) If the amount appropriated for a fiscal year for the HBCU Program is insufficient to provide $500,000 to each eligible institution with an approved application, each grant is ratably reduced. If additional funds become available for the HBCU Program during a fiscal year, each grant is increased on the same basis as it was decreased until the grant amount reaches $500,000.
(d) The amount of any grant that the Secretary determines will not be required by a grantee for the period for which the grant was made is available for reallotment by the Secretary during that period to other eligible institutions under the formula contained in paragraph (a) of this section.
(a) Allowable costs. Except as provided in paragraphs (b) and (c) of this section, a grantee may expend grant funds for activities that are related to carrying out the allowable activities included in its approved application.
(b) Supplement and not supplant. Grant funds shall be used so that they supplement, and to the extent practical, increase the funds that would otherwise be available for the activities to be carried out under the grant, and in no case supplant those funds.
(c) Limitations on allowable costs. A grantee may not—
(1) Spend more than fifty percent of its grant award in each fiscal year for costs relating to constructing or maintaining a classroom, library, laboratory, or other instructional facility; or
(2) Use an indirect cost rate to determine allowable costs under its grant.
(a) (1) A grantee shall provide for the conduct of a compliance and financial audit of any funds it receives under this part of a qualified, independent organization or person in accordance with the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, 1981 revision, established by the Comptroller General of the United States. This publication is available from the Superintendent of Documents, U.S. Government Printing Office.
(2) The grantee shall have an audit conducted at least once every two years, covering the period since the previous audit, and the grantee shall submit the audit to the Secretary.
(3) If a grantee is audited under Chapter 75 of Title 31 of the United States Code, the Secretary considers that audit to satisfy the requirements of paragraph (a)(1) of this section.
(b) An institution awarded a grant under this part must submit to the Department of Education Inspector General three copies of the audit required in paragraph (a) of this section within six months after completion of the audit.
(c) Any individual or firm conducting an audit described in this section shall give the Department of Education's Inspector General access to records or other documents necessary to review the results of the audit.
(d) A grantee shall repay to the Treasury of the United States any grant funds it received that it did not expend or use to carry out the allowable activities included in its approved application within ten years following the date of the initial grant it received under this part.
The Secretary terminates any grant under which funds were not expended if an institution loses—
(a) Its accredited status; or
(b) Its legal authority in the State in which it is located—
(1) To be a junior or community college; or
(2) To provide an educational program for which it awards a bachelor's degree.
The Strengthening Historically Black Graduate Institutions Program provides grants to the institutions listed in § 609.2 to assist these institutions in establishing and strengthening their physical plants, development offices, endowment funds, academic resources and student services so that they may continue to participate in fulfilling the goal of equality of educational opportunity in graduate education.
(a) An institution or an institution's qualified graduate program listed in paragraph (b) of this section is eligible to receive a grant under this part if the Secretary determines that the institution is making a substantial contribution to legal, medical, dental, veterinary or other graduate education opportunities for Black Americans.
(b) The institutions and programs referred to in paragraph (a) of this section are—
(1) Morehouse School of Medicine;
(2) Meharry Medical School;
(3) Charles R. Drew Postgraduate Medical School;
(4) Clark Atlanta University;
(5) Tuskegee Institute School of Veterinary Medicine;
(6) Xavier University School of Pharmacy;
(7) Southern University School of Law;
(8) Texas Southern University School of Law and School of Pharmacy;
(9) Florida A&M University School of Pharmaceutical Sciences;
(10) North Carolina Central University School of Law;
(11) Morgan State University's qualified graduate program;
(12) Hampton University's qualified graduate program;
(13) Alabama A&M's qualified graduate program;
(14) North Carolina A&T State University's qualified graduate program;
(15) University of Maryland Eastern Shore's qualified graduate program; and
(16) Jackson State University's qualified graduate program.
(c) An institution that was awarded a grant prior to October 1, 1992 may continue to receive grant payments, regardless of the eligibility of the graduate institutions described in paragraphs (b)(6) through (16) of this section, until the institution's grant period has expired or September 30, 1993, whichever is later.
(d) No institution of higher education or university system may receive more than one grant under this section in any fiscal year.
The following regulations apply to this part:
(a) The Department of Education General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) The following sections of 34 CFR part 75 (Direct Grant Programs): §§ 75.1-75.104, 75.125-75.129, 75.190-75.192, 75.230-75.261, 75.500, 75.510-75.519, 75.524-75.534, 75.580-75.903, and 75.901;
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) [Reserved]
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 609.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) The following definition applies to a term used in this part:
Qualified graduate program means a graduate or professional program that—
(i) Provides a program of instruction in the physical or natural sciences, engineering, mathematics, or other scientific disciplines in which African Americans are underrepresented;
(ii) Has been accredited or approved by a nationally recognized accrediting agency or association. (The Secretary publishes a list in the
(iii) Has students enrolled in that program when the institution offering the program applies for a grant under this part.
(a) Allowable activities. Except as provided in paragraph (b) of this section, a grantee may carry out the following activities under this part—
(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional or research purposes;
(2) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services;
(3) Support of faculty exchanges, faculty development and faculty fellowships to assist these faculty members in attaining advanced degrees in their fields of instruction;
(4) Academic instruction in disciplines in which Black Americans are underrepresented;
(5) Purchase of library books, periodicals, microfilm, and other educational materials, including telecommunications program materials;
(6) Tutoring, counseling, and student service programs designed to improve academic success;
(7) Funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(8) Joint use of facilities, such as laboratories and libraries;
(9) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector;
(10) Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school in the State that shall include, as part of such program preparation for teacher certification;
(11) Establishing community outreach programs that will encourage elementary and secondary students to develop the academic skills and the interest to pursue postsecondary education;
(12) Other activities that it proposes in its application that contribute to carrying out the purpose of this part and are approved by the Secretary;
(13) Establishing or improving a development office to strengthen and increase contributions from alumni and the private sector; and
(14) Establishing and maintaining an institutional endowment under 34 CFR part 628 to facilitate financial independence.
(b) Unallowable activities. A grantee may not carry out the following activities under this part—
(1) Activities that are not included in the grantee's approved application;
(2) Activities described in paragraph (a)(12) of this section that are not approved by the Secretary;
(3) Activities that are inconsistent with any State plan of higher education that is applicable to the institution;
(4) Activities that are inconsistent with a State plan for desegregation of higher education that is applicable to the institution;
(5) Activities or services that constitute religious instruction, religious worship, or proselytization.
(6) Activities provided by a school or department of divinity. For the purpose of this provision, a “school or department of divinity” means an institution, or a department of an institution, whose program is solely to prepare students to become ministers of religion or to enter into some other religious vocation.
(c) No award under this part may be used for telecommunications technology equipment, facilities or services, if such equipment, facilities or services are available pursuant to section 396(k) of the Communications Act of 1934.
The Secretary may award a grant under this part for a period of up to five academic years.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
In order to receive a grant under this part, an institution must submit an application to the Secretary at such time and in such manner as the Secretary may prescribe. The application must contain—
(a) A description of the activities to be carried out with grant funds and how those activities will improve graduate educational opportunities for Black and low-income students and lead to greater financial independence for the applicant;
(b) A description of how the applicant is making a substantial contribution to the legal, medical, dental, veterinary or other graduate education opportunities for Black Americans;
(c) An assurance from each applicant requesting in excess of $500,000 that 50 percent of the costs of all the activities to be carried out under the grant will come from non-Federal sources;
(d) A description of how the grant funds will be used so that they will supplement, and to the extent practical, increase the funds that would otherwise be made available for the activities to be carried out under the grant and in no case supplant those funds, for the activities described in § 609.10(a)(1) through § 609.10(a)(14);
(e) An assurance that the proposed activities in the application are in accordance with any State plan that is applicable to the institution; and
(f)(1) A comprehensive development plan as described in § 609.21; or
(2) If an applicant has already submitted a comprehensive development plan as described in § 609.21, a description of the progress the applicant has made in carrying out the goals of its plan.
(a) A comprehensive development plan must describe an institution's strategy for achieving growth and self-sufficiency by strengthening its—
(1) Financial management;
(2) Academic programs; and
(b) The comprehensive development plan must include the following:
(1) An assessment of the strengths and weaknesses of the institution's financial management and academic programs.
(2) A delineation of the institution's goals for its financial management and academic programs, based on the outcomes of the assessment described in paragraph (b)(1) of this section.
(3) A listing of measurable objectives designed to assist the institution to reach each goal with accompanying timeframes for achieving the objectives.
(4) A description of methods, processes and procedures that will be used by the college or university to institutionalize financial management and academic program practices and improvements developed under the proposed funded activities.
The Secretary approves any application that satisfies the requirements of §§ 609.10 and 609.20.
Of the amount appropriated for any fiscal year—
(a)(1) The first $12,000,000 (or any lesser amount appropriated) shall be available only for the purpose of making grants to institutions or programs described in § 609.2(b)(1) through § 609.2(b)(5);
(2) If the sum of the approved applications does not exceed the amount appropriated, the Secretary awards grants in the amounts requested and approved;
(3) If the sum of the approved requests exceeds the sum appropriated, and Morehouse School of Medicine submits an approved request for at least $3,000,000, and the amount appropriated exceeds $3,000,000, the Secretary awards no less than $3,000,000 to Morehouse School of Medicine and reduces the grants to the institutions described in § 609.2(b)(1) through § 609.2(b)(5) as the Secretary considers appropriate, so that the sum of the approved grants equals the amount appropriated; and
(4) If Morehouse School of Medicine submits an approved request for at least $3,000,000 and the amount appropriated does not exceed $3,000,000, Morehouse School of Medicine receives all the appropriated funds; and
(b)(1) Any amount appropriated in excess of $12,000,000 shall be available for the purpose of making grants, in equal amounts not to exceed $500,000, to institutions or programs described in § 609.2(b)(6) through § 609.2(b)(16); and
(2) If any funds remain, the Secretary makes grants to institutions or programs described in § 609.2(b)(1) through § 609.2(b)(16).
If an institution receives a grant in excess of $500,000, it must spend non-Federal funds to meet the cost of at least 50 percent of the activities approved in its application.
(a) Allowable costs. Except as provided in paragraphs (b) and (c) of this section, a grantee may expend grant funds for activities that are reasonably related to carrying out the allowable activities included in its approved application.
(b) Supplement and not supplant. A grantee shall use grant funds so that they supplement, and to the extent practical, increase the funds that would otherwise be available for the activities to be carried out under the grant, and in no case supplant those funds.
(c) Limitations on allowable costs. A grantee may not—
(1) Spend more than fifty percent of its grant award in each fiscal year for costs relating to constructing or maintaining a classroom, library, laboratory, or other instructional facility; and
(2) Use an indirect cost rate to determine allowable costs under its grant.
(a)(1) A grantee shall provide for the conduct of a compliance and financial audit of any funds it receives under this part by a qualified, independent organization or person in accordance with the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, 1981 revision, established by the Comptroller General of the United States. This publication is available from the Superintendent of Documents, U.S. Government Printing Office.
(2) The grantee shall have an audit conducted at least once every two years, covering the period since the previous audit, and the grantee shall submit the audit to the Secretary.
(3) If a grantee is audited under chapter 75 of title 31 of the United States Code, the Secretary considers that audit to satisfy the requirements of paragraph (a)(1) of this section.
(b) An institution awarded a grant under this part must submit to the Department of Education Inspector General three copies of the audit required in paragraph (a) of this section within six months after completion of the audit.
(c) Any individual or firm conducting an audit described in this section shall give the Department of Education's Inspector General access to records or other documents necessary to review the results of the audit.
(d) A grantee shall repay to the Treasury of the United States any grant funds it received that it did not expend or use to carry out the allowable activities included in its approved application within ten years following the date of the initial grant it received under this part.
The Secretary terminates any grant under which funds were not expended if an institution loses—
(a) Its accredited status; or
(b) Its legal authority in the State in which it is located.
The Endowment Challenge Grant Program provides endowment challenge grants, which must be matched, to eligible institutions to—
(a) Establish or increase endowment challenge funds;
(b) Provide additional incentives to promote fund-raising activities; and
(c) Foster increased independence and self-sufficiency at those institutions.
An institution is eligible to apply for an endowment challenge grant if—
(a) It qualifies as an eligible institution for the Strengthening Institutions Program under 34 CFR 607.2;
(b) It qualifies as an eligible institution for the Strengthening Historically Black Colleges and Universities Program under 34 CFR 608.2;
(c) It would have qualified as an eligible institution for the Strengthening Institutions Program if 34 CFR 607.2(a)(3) referred to a postgraduate degree rather than a bachelor's degree;
(d) It would have qualified as an eligible institution for the Strengthening Historically Black Colleges and Universities Program if 34 CFR 608.2(a)(4)(i) referred to a postgraduate degree rather than a bachelor's degree; or
(e) It qualifies as an institution that makes a substantial contribution to graduate or postgraduate medical educational opportunities for minorities and the economically disadvantaged.
An eligible institution may designate a foundation, which was established for the purpose of raising money for that institution, as the recipient of an endowment challenge grant if—
(a) The institution assures the Secretary in its application that the foundation is legally authorized to receive the endowment fund corpus and to administer the endowment fund in accordance with the regulations in this part;
(b) The foundation agrees to administer the endowment fund in accordance with the regulations in this part; and
(c) The institution agrees to be liable for any violation by the foundation of any applicable regulation, including any violation resulting in monetary liability.
(a) Except as provided in paragraphs (b) and (c) of this section, an institution that has received a grant under this part may apply for another grant under this part only after 10 fiscal years have elapsed following the fiscal year appropriation from which the institution's grant was awarded (base fiscal year).
(b) An institution that has received a grant under this part may apply for another grant under this part after five fiscal years have elapsed following the base fiscal year if the appropriation for this part exceeds $20 million in any of those five fiscal years.
(c) If an institution has received a grant under this part and the appropriation for this part exceeds $20 million in any of the sixth through tenth fiscal years following the base fiscal year, the institution may apply for another grant under this part in the fiscal year in which the appropriation exceeds $20 million, or any subsequent fiscal year.
(a) The following regulations apply to the Endowment Challenge Grant Program:
(1) The regulations in this part 628.
(2)-(3) [Reserved]
(b)(1) The Education Department General Administrative Regulations (EDGAR) as follows:
(i)-(ii) [Reserved]
(iii) The regulations in 34 CFR 75.100 through 75.102, and 75.217.
(iv) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(v) 34 CFR part 82 (New Restrictions on Lobbying).
(vi) 34 CFR part 84 (Governmentwide Requirements For Drug-Free Workplace (Financial Assistance)).
(vii) 34 CFR part 86 (Drug and Alcohol Abuse Prevention).
(2) Except as specifically indicated in paragraph (b)(1) and (c) of this section, the Education Department General Administrative Regulations and the regulations in 2 CFR part 200 do not apply.
(c) The following regulations in title 2 of the CFR apply to the Endowment Challenge Grant Program:
(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485.
(2) 2 CFR 200.328 (Monitoring and reporting program performance), as adopted at 2 CFR part 3474.
(3) 2 CFR part 200, subpart F (Audit Requirements), as adopted by ED at 2 CFR part 3474.
The following definitions apply to the regulations in this part:
Endowment fund means a fund which excludes real estate and which is established by State law, by an institution, or by a foundation that is exempt from taxation and is maintained for the purpose of generating income for the support of the institution. The principal or corpus of the fund may not be spent. “Endowment fund” includes “quasi-endowment fund”.
Endowment fund corpus means an amount equal to the endowment challenge grant or grants awarded under this part plus matching funds provided by the institution.
Endowment fund income means an amount equal to the total value of the endowment fund established under the grant minus the endowment fund corpus.
Quasi-endowment fund means a fund which the governing board of an institution or foundation establishes to function as an endowment in that the principal is to be retained and invested. However, the entire principal and income may be spent at any time at the discretion of the governing board.
Each endowment challenge grant awarded by the Secretary under this part—
(a) Must be matched by the institution receiving the grant with one dollar of non-Federal funds for every two dollars of Federal grant funds;
(b) Must be invested by the institution; and
(c) Must have a duration of 20 years.
An applicant shall include in its application the amount of the endowment challenge grant it is requesting, a description of its short-term plan and long-term plan for raising and using endowment challenge grant funds, and information sufficient for the Secretary to—
(a) Evaluate the application under the selection criteria set forth in § 628.31 and the priorities set forth in § 628.32; and
(b) Determine whether the applicant will administer the endowment challenge grant in accordance with the regulations in this part.
(a) In evaluating an application for an endowment challenge grant, the Secretary—
(1) Judges the application using the selection criteria in § 628.31 and the priorities in § 628.32;
(2) Gives, for each criterion and priority, a score up to the maximum possible points in parentheses following the description of that criterion or priority; and
(3) Gives up to 130 total points, 90 points maximum for the criteria in § 628.31, and 40 points maximum for the priorities in § 628.32.
(b) In selecting recipients for grants, the Secretary follows the procedures in 34 CFR 75.217(d) and (e) of the Education Department General Administrative Regulations.
In evaluating an application for an endowment challenge grant, the Secretary uses the following three criteria:
(a) The Secretary measures the applicant's past efforts to build or maintain its existing endowment and quasi-endowment funds by the dollar and relative increase in market value to the applicant's existing endowment and quasi-endowment funds over the applicant's four fiscal years preceding the year of application using the formulas set forth in paragraphs (a)(1) through (a)(5) of this section.
(1) In measuring an applicant's dollar increase in its endowment and quasi-endowment funds, the Secretary—
(i) Subtracts from an amount equal to the market value of the applicant's endowment and quasi-endowment funds at the end of the four-year period described in paragraph (a) of this section an amount equal to the market value of the applicant's endowment and quasi-endowment funds at the beginning of that four-year period; and
(ii) Divides the result obtained in paragraph (a)(1)(i) of this section by the applicant's full-time equivalent enrollment at the end of the four-year period.
(2) The Secretary awards points on a sliding scale giving 10 points to applicants with the highest dollar increase as calculated in paragraph (a)(1) of this section and no points to applicants with the lowest dollar increase.
(3) In measuring an applicant's relative increase in market value of its endowment and quasi-endowment funds, the Secretary—
(i) Divides an amount equal to the market value of the applicant's endowment and quasi-endowment funds at the beginning of the four-year period described in paragraph (a) of this section by the applicant's full-time equivalent enrollment at the end of the four-year period.
(ii) Adds $50 to the amount obtained in paragraph (a)(3)(i) of this section.
(iii) Divides the result obtained in paragraph (a)(1)(ii) of this section by the amount obtained in paragraph (a)(3)(ii) of this section.
(4)(i) If the amount of endowment per full-time equivalent student under paragraph (a)(3)(i) of this section is $50 or more, the Secretary awards points on a sliding scale giving 15 points to applicants with a relative increase of 100 percent or more and no points to applicants that have had a relative decrease of more than 20 percent.
(ii) If the amount of endowment per full-time equivalent student under paragraph (a)(3)(i) of this section is less than $50, the Secretary awards points on a sliding scale giving 15 points to applicants with a relative increase of 100 percent or more and no points to applicants that have had no relative increase.
(5) In measuring the applicant's past effort, the Secretary—
(i) Excludes real estate from being considered as part of the applicant's existing endowment or quasi-endowment fund; and
(ii) Includes an endowment or quasi-endowment fund operated by a foundation if the foundation is tax-exempt and was established for the purpose of raising money for the institution.
(b) The Secretary considers the degree of proposed nongovernmental matching funds. (Total: 15 points maximum for the highest proposed percentage)
(1) The Secretary measures the degree to which an applicant proposes to match the grant with funds from sources other than a State or local government—giving up to 15 points to applicants proposing to obtain the largest percentage of matching funds from those nongovernmental sources.
(2) If an applicant is applying for an endowment challenge grant for the first time, the Secretary multiplies the maximum number of points (i.e., 15 points) on this criterion times the following fraction:
(3) If an applicant has previously received an endowment challenge grant, the Secretary uses the following formula in awarding points under this criterion:
(c) The Secretary considers the need for an endowment challenge grant as measured by the applicant's lack of resources.
(1) The Secretary gives up to 50 points to applicants with the least resources as measured, at the end of the applicant's fiscal year preceding the year it applies for an endowment challenge grant, by revenue per full-time equivalent student it receives from the sum of the following—
(i) Federal, State and local government appropriations;
(ii) Unrestricted Federal, State and local government grants and contracts;
(iii) Eighty percent of tuition and fees; and
(iv) Unrestricted and restricted “endowment income”.
(2) In measuring the applicant's resources, the Secretary—
(i) Defines the factors in paragraphs (c)(1)(i) through (iv) as they are defined in the Education Department Higher Education General Information Survey of Financial Statistics.
(ii) Excludes real estate from being considered as part of the applicant's existing endowment or quasi-endowment fund.
In evaluating an endowment challenge grant application, the Secretary uses the following two priorities:
(a) Recipient or former recipient of a grant under the Strengthening Institutions, Special Needs, Hispanic-Serving Institutions, Strengthening Historically Black Colleges and Universities, or Strengthening Historically Black Graduate Institutions Program. (Total: 20 points) The Secretary gives 20 points to each applicant who on October 1 of the fiscal year in which the applicant is applying for an endowment challenge grant is a current recipient of a planning or development grant, or was a recipient of a planning or development grant within the five preceding fiscal years, under the Strengthening Institutions, Special Needs, Hispanic-Serving Institutions, Strengthening Historically Black Colleges and Universities, or Strengthening Historically Black Graduate Institutions Program.
(b) Need for an endowment challenge grant as measured by the lack of endowment funds. (Total: 20 points)
(1) The Secretary gives up to 20 total points to an applicant with the greatest need for an endowment challenge grant under this part, as measured by the applicant's lack of endowment funds.
(2) The Secretary gives up to 20 points to the applicant with the lowest market value, at the end of the applicant's fiscal year preceding the year it applies for an endowment challenge grant, of its existing endowment and quasi-endowment fund in relation to the number of full-time equivalent students enrolled at the institution in the fall of the year preceding the year it applies for an endowment challenge grant.
(3) In measuring the applicant's need for an endowment challenge grant, the Secretary excludes real estate from being considered as part of the applicant's existing endowment or quasi-endowment fund.
(a) To receive an endowment challenge grant, an institution must raise at least $25,000 in matching funds and qualify for at least a $50,000 grant under paragraph (c) of this section.
(b) If an institution obtains at least $25,000 in matching funds and raises all the nongovernmental funds it proposed to raise in its application, the institution may receive a grant equal to twice the amount of matching funds it raises up to—
(1) $500,000 in any fiscal year in which the amount appropriated for the Endowment Challenge Grant Program is less than $15,000,000;
(2) $1,000,000 in any fiscal year in which the amount appropriated for the Endowment Challenge Grant Program equals or exceeds $15,000,000 but is less than $25,000,000; or
(3) $1,500,000 in any fiscal year in which the amount appropriated for the Endowment Challenge Grant Program equals or exceeds $25,000,000.
(c) If an institution does not raise all the nongovernmental funds it proposes to raise in its application, the Secretary reduces the institution's grant by multiplying the grant amount requested by the following fraction:
(a) An institution that the Secretary selects to receive an endowment challenge grant shall—
(1) Enter into an agreement with the Secretary to administer the endowment challenge grant;
(2) Establish an endowment fund independent of any other endowment fund established by or for that institution;
(3) Deposit its matching funds in the endowment fund established under this part;
(4) Upon receipt, immediately deposit the grant funds into the endowment fund established under this part; and
(5) Within fifteen working days after receiving the grant funds, invest the endowment fund corpus.
(b) Before the Secretary disburses grant funds and not later than a date established by the Secretary through a notice in the
(1) Match, with cash or low-risk securities, the endowment challenge grant funds to be received under this part;
(2) Certify to the Secretary—
(i) The source, kind and amount of the eligible matching funds;
(ii) That the matching funds are eligible under paragraph (b)(1) of this section and § 628.42; and
(3) Have a certified public accountant or other licensed public accountant, who is not an employee of the institution, certify that the data contained in the application is accurate.
(c)(1) For the purpose of paragraph (b)(1) of this section, “cash” may include cash on hand, certificates of deposit and money market funds; and
(2) A negotiable security, to be considered as part of the institution's match—
(i) Must be low-risk as required in § 628.43; and
(ii) Must be assessed at its market value as of the end of the trading day on the date the institution deposits the security into the endowment fund established under this part.
To match an endowment challenge grant, a grantee may not use—
(a) A pledge of funds or securities;
(b) Deferred gifts such as a charitable remainder annuity trust or unitrust;
(c) Any Federal funds;
(d) Any borrowed funds; or
(e) The corpus or income of an endowment fund or quasi-endowment fund existing at the closing date established by the Secretary for submission of eligibility requests under the Endowment Challenge Grant Program. This includes the corpus or income of an endowment or quasi-endowment fund established by a foundation if the foundation is tax-exempt and was established for the purpose of raising money for the institution.
(a) A grantee shall invest, for the duration of the grant period, the endowment fund established under this part in savings accounts or in low-risk securities in which a regulated insurance company may invest under the law of the State in which the institution is located.
(b) When investing the endowment fund, the grantee shall exercise the judgment and care, under the circumstances, that a person of prudence, discretion and intelligence would exercise in the management of his or her own financial affairs.
(c) An institution may invest its endowment fund in savings accounts permitted under paragraph (a) of this section such as—
(1) A federally insured bank savings account;
(2) A comparable interest bearing account offered by a bank; or
(3) A money market fund.
(d) An institution may invest its endowment fund in low-risk securities permitted under paragraph (a) of this section such as—
(1) Certificates of deposit;
(2) Mutual funds;
(3) Stocks; or
(4) Bonds.
(e) An institution may not invest its endowment fund in real estate.
(a)(1) During the grant period, a grantee may not withdraw or spend any part of the endowment fund corpus.
(2) If, during the grant period, a grantee withdraws or spends all or part of the endowment fund corpus, it must repay to the Secretary an amount equal of 50 percent of the amount withdrawn or spent plus the income earned on that amount.
(b) At the end of the grant period, the institution may use the endowment fund corpus for any educational purpose.
(a) During the endowment challenge grant period, a grantee—
(1) May withdraw and spend up to 50 percent of the total aggregate endowment fund income earned prior to the date of expenditure;
(2) May spend the endowment fund income for—
(i) Costs necessary to operate the institution, including general operating and maintenance costs;
(ii) Costs to administer and manage the endowment fund; and
(iii) Costs associated with buying and selling securities, such as stockbroker commissions and fees to “load” mutual funds;
(3) May not use endowment fund income for—
(i) A school or department of divinity or any religious worship or sectarian activity;
(ii) An activity that is inconsistent with a State plan for desegregation applicable to the grantee; or
(iii) An activity that is inconsistent with a State plan applicable to the grantee; and
(4) May not withdraw or spend the remaining 50 percent of the endowment fund income.
(b) Notwithstanding paragraph (a)(1) of this section, the Secretary may permit a grantee that requests to spend more than 50 percent of the total aggregate endowment fund income to do so if the grantee demonstrates that the expenditure is necessary because of—
(1) A financial emergency such as a pending insolvency or temporary liquidity problem;
(2) A situation threatening the existence of the institution such as destruction due to a natural disaster or arson; or
(3) Another unusual occurrence or demanding circumstance, such as a judgment against the institution for which the institution would be liable.
(c) If, during the grant period, a grantee spends more endowment fund income or uses it for purposes other than permitted under paragraphs (a) or (b) of this section, it shall repay to the Secretary an amount equal to 50 percent of the amount improperly spent.
(d) At the end of the grant period, the institution may use all of the endowment fund income for any educational purpose.
A grantee shall calculate the amount of endowment fund income that it may withdraw and spend at a particular time as follows:
(a) On each date that the grantee plans a withdrawal of income, it must—
(1) Determine the value of endowment fund income by subtracting the endowment fund corpus from the current total value of the endowment fund on that date; and
(2) Calculate the amount of endowment fund income previously withdrawn from the endowment fund.
(b) If the value of endowment fund income in the endowment fund exceeds the aggregate amount of previously withdrawn endowment fund income, the grantee may withdraw and spend up to 50 percent of that excess fund income.
A grantee shall—
(a) Keep records of—
(1) The source, kind and amount of matching funds;
(2) The type and amount of investments of the endowment fund;
(3) The amount of endowment fund income; and
(4) The amount and purpose of expenditures of endowment fund income;
(b) Retain each year's records for a minimum of five years after the grant period ends;
(c) Allow the Secretary access to information that the Secretary judges necessary to audit or examine the records required in paragraph (a) of this section;
(d) Carry out the audit required in 2 CFR part 200, subpart F;
(e) Comply with the reporting requirements in 2 CFR 200.512; and
(f) Submit reports on a timely basis that are requested by the Secretary.
(a) The Secretary may, after giving the grantee notice and an opportunity for a hearing, terminate an endowment challenge grant if the grantee—
(1) Withdraws or spends any part of the endowment fund corpus in violation of § 628.44(a)(1);
(2) Spends any portion of the endowment fund income not permitted to be spent in § 628.45;
(3) Fails to invest the endowment fund in accordance with the investment standards set forth in § 628.43; or
(4) Fails to meet the requirements in § 628.41.
(b) If the Secretary terminates a grant under paragraph (a) of this section, the grantee must return to the Secretary an amount equal to the sum of the original endowment challenge grant or grants plus the income earned on that sum.
The Minority Science and Engineering Improvement Program (MSEIP) is designed to effect long-range improvement in science and engineering education at predominantly minority institutions, and to increase the flow of underrepresented ethnic minorities, particularly minority women, into scientific and technological careers.
The following are eligible to receive a grant under this part:
(a) Public and private nonprofit institutions of higher education that—
(1) Award baccalaureate degrees; and
(2) Qualify as minority institutions as defined in § 637.4.
(b) Public or private nonprofit institutions of higher education that—
(1) Award associate degrees;
(2) Qualify as minority institutions as defined in § 637.4;
(3) Have a curriculum that includes science or engineering subjects; and
(4) Enter into a partnership with public or private nonprofit institutions of higher education that award baccalaureate degrees in science and engineering.
(c) Nonprofit science-oriented organizations, professional scientific societies, and institutions of higher education that award baccalaureate degrees that—
(1) Provide a needed service to a group of minority institutions; or
(2) Provide in-service training to project directors, scientists, and engineers from minority institutions; or
(d) A consortia of organizations, that provide needed services to one or more minority institutions. The consortia membership may include—
(1) Institutions of higher education which have a curriculum in science or engineering;
(2) Institutions of higher education that have a graduate or professional program in science or engineering;
(3) Research laboratories of, or under the contract with, the Department of Energy;
(4) Private organizations that have science or engineering facilities; or
(5) Quasi-governmental entities that have a significant scientific or engineering mission.
The following regulations apply to the Minority Science and Engineering Improvement Program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1)[Reserved]
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) [Reserved]
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part 637.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) Definitions in EDGAR. The following terms used in this part are defined in 34 CFR part 77.
(b) Definitions that apply to this part:
Accredited means currently certified by a nationally recognized accrediting agency or making satisfactory progress toward achieving accreditation.
Act means the Higher Education Act of 1965, as amended.
Minority means American Indian, Alaskan Native, black (not of Hispanic origin), Hispanic (including persons of Mexican, Puerto Rican, Cuban, and Central or South American origin), Pacific Islander or other ethnic group underrepresented in science and engineering.
Minority institution means an accredited college or university whose enrollment of a single minority group or a combination of minority groups as defined in this section exceeds fifty percent of the total enrollment. The Secretary verifies this information from the data on enrollments (Higher Education General Information Surveys HEGIS XIII) furnished by the institution to the Office for Civil Rights, Department of Education.
Science means, for the purposes of this program, the biological, engineering, mathematical, physical, behavorial and social sciences, and the history and philosophy of science; also included are interdisciplinary fields which are comprised of overlapping areas among two or more sciences.
Underrepresented in science and engineering means a minority group whose number of scientists and engineers per 10,000 population of that group is substantially below the comparable figure for scientists and engineers who are white and not of Hispanic origin.
The Secretary awards grants under this program for all or some of the following categories of projects:
(a) Institutional projects for implementing a comprehensive science improvement plan as described in § 637.12.
(b) Design projects for developing a long-range science improvement plan as described in § 637.13.
(c) Special projects to support activities as described in § 637.14.
(d) Cooperative projects to share facilities and personnel and disseminate information as described in § 637.15.
(a) Institutional project grants support the implementation of a comprehensive science improvement plan, which may include any combination of activities for improving the preparation of minority students, particularly minority women, for careers in science.
(b) Activities that the Secretary may assist under an institutional project include, but are not limited to, the following:
(1) Faculty development programs; or
(2) Development of curriculum materials.
(a) Design project grants assist minority institutions that do not have their own appropriate resources or personnel to plan and develop long-range science improvement programs.
(b) Activities that the Secretary may assist under a design project include, but are not limited to, the following:
(1) Development of planning, management, and evaluation systems; and
(2) Improvement of institutional research or development offices.
There are two types of special projects grants—
(a) Special project grants for which minority institutions are eligible which support activities that—
(1) Improve quality training in science and engineering at minority institutions; or
(2) Enhance the minority institutions' general scientific research capabilities.
(b) Special project grants for which all applicants are eligible which support activities that—
(1) Provide a needed service to a group of eligible minority institutions; or
(2) Provide in-service training for project directors, scientists, and engineers from eligible minority institutions.
(c) Activities that the Secretary may assist under a special project include, but are not limited to, the following:
(1) Advanced science seminars;
(2) Science faculty workshops and conferences;
(3) Faculty training to develop specific science research or education skills;
(4) Research in science education;
(5) Programs for visiting scientists;
(6) Preparation of films or audio-visual materials in science;
(7) Development of learning experiences in science beyond those normally available to minority undergraduate students, particularly minority women;
(8) Development of pre-college enrichment activities in science; and
(9) Any other activities designed to address specific barriers to the entry of minorities, particularly minority women, into science.
(d) Minority institutions are eligible to apply for special projects of the type listed in paragraph (a) of this section. All applicants eligible for assistance under this program may apply for special projects of the type listed in paragraphs (b) and (c) of this section.
(a) Cooperative project grants assist groups of nonprofit accredited colleges and universities to work together to conduct a science improvement project.
(b) Activities that the Secretary may fund under cooperative projects include, but are not limited to, the following:
(1) Assisting institutions in sharing facilities and personnel;
(2) Disseminating information about established programs in science and engineering;
(3) Supporting cooperative efforts to strengthen the institutions' science and engineering programs; and
(4) Carrying out a combination of any of the activities in paragraphs (c)(1)-(3) of this section.
(c) Eligible applicants for cooperative projects are groups of nonprofit accredited colleges and universities whose primary fiscal agent is an eligible minority institution as defined in § 637.4(b).
One applies for a grant under the procedures of EDGAR §§ 75.100 through 75.129.
(a) The Secretary evaluates an application on the basis of the criteria in § 637.32.
(b) The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(c) The Secretary gives priority to applicants which have not previously received funding from the program and to previous grantees with a proven record of success, as well as to applications that contribute to achieving balance among funded projects with respect to:
(1) Geographic region;
(2) Academic discipline; and
(3) Project type.
The Secretary evaluates applications on the basis of the criteria in this section.
(a) Plan of operation. (1) The Secretary reviews each application for information that shows the quality of the plan of operation for the project.
(2) The Secretary looks for information that shows—
(i) Higher quality in the design of the project;
(ii) An effective plan of management that insures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) Methods of coordination. (See 34 CFR 75.580)
(b) Quality of key personnel. (1) The Secretary reviews each application for information that shows the quality of the key personnel the applicant plans to use on the project.
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director (if one is to be used);
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (b)(2) (i) and (ii) of this section plans to commit to the project.
(iv) The extent to which the applicant, as part of its nondiscriminatory emloyment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as members of a racial or ethnic minority group, women, handicapped persons, and the elderly.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training, in fields related to the objectives of the project, as well as other information that the applicant provides.
(c) Budget and cost effectiveness. (1) The Secretary reviews each application for information that shows that the project has an adequate budget and is cost effective.
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objective of the project.
(d) Evaluation plan. (1) The Secretary reviews each application for information that shows the quality of the evaluation plan for the project. (See 34 CFR 75.590)
(2) The Secretary looks for information that shows methods of evaluation that are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e) Adequacy of resources. (1) The Secretary reviews each application for information that shows that the applicant plans to devote adequate resources to the project.
(2) The Secretary looks for information that shows—
(i) The facilities that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
(f) Identification of need for the project. (1) The Secretary reviews each application for information that shows the identification of need for the project.
(2) The Secretary looks for information that shows—
(i) An adequate needs assessment;
(ii) An identification of specific needs in science; and
(iii) Involvement of appropriate individuals, especially science faculty, in identifying the institutional needs.
(g) Potential institutional impact of the project. (1) The Secretary reviews each application to determine the extent to which the proposed project gives evidence of potential for enhancing the institution's capacity for improving and maintaining quality science education for its minority students, particularly minority women.
(2) The Secretary looks for information that shows—
(i) For an institutional or cooperative project, the extent to which both the established science education program(s) and the proposed project will expand or strengthen the established program(s) in relation to the identified needs; or
(ii) For a design project, the extent to which realistic long-range science education improvement plans will be developed with the technical assistance provided under the project; or
(iii) For a special project, the extent to which it addresses needs that have not been adequately addressed by an existing institutional science program or takes a particularly new and exemplary approach that has not been taken by any existing institutional science program.
(h) Institutional commitment to the project. (1) The Secretary reviews each application for information that shows that the applicant plans to continue the project activities when funding ceases.
(2) The Secretary looks for information that shows—
(i) Adequate institutional commitment to absorb any after-the-grant burden initiated by the project;
(ii) Adequate plans for continuation of project activities when funding ceases;
(iii) Clear evidence of past institutional commitment to the provision of quality science programs for its minority students; and
(iv) A local review statement signed by the chief executive officer of the institution endorsing the project and indicating how the project will accelerate the attainment of the institutional goals in science.
(i) Expected outcomes. (1) The Secretary reviews each application to determine the extent to which minority students, particularly minority women, will benefit from the project.
(2) The Secretary looks for information that shows—
(i) Expected outcomes likely to result in the accomplishment of the program goal;
(ii) Educational value for science students; and
(iii) Possibility of long-term benefits to minority students, faculty, or the institution.
(j) Scientific and educational value of the proposed project. (1) The Secretary reviews each application for information that shows its potential for contributions to science education.
(2) The Secretary looks for information that shows—
(i) The relationship of the proposed project to the present state of science education;
(ii) The use or development of effective techniques and approaches in science education; and
(iii) Potential use of some aspects of the project at other institutions.
For design project grants funds may not be used to pay more than fifty percent of the academic year salaries of faculty members involved in the project.
The Training Program for Federal TRIO programs, referred to in these regulations as the Training program, provides Federal financial assistance to train the leadership personnel and staff employed in, or preparing for employment in, Federal TRIO program projects.
The following are eligible to apply for a grant to carry out a Training Program project:
(a) Institutions of higher education.
(b) Public and private nonprofit agencies and organizations.
The following are eligible for training under this program:
(a) Leadership personnel and full and part-time staff members of projects funded under the Federal TRIO Programs.
(b) Individuals preparing for employment as leadership personnel or staff in projects funded under the Federal TRIO Programs.
A project period under the Training program is two years.
The following regulations apply to the Training Program:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 75 (except for §§ 75.215 through 75.221), 77, 79, 82, 84, 86, 97, 98, and 99.
(b) The regulations in this part 642.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) Definitions that apply to this part.
Act means the Higher Education Act of 1965, as amended.
Federal TRIO programs means those programs authorized under section 402A of the Act: the Upward Bound, Talent Search, Student Support Services, Educational Opportunity Centers, and Ronald E. McNair Postbaccalaureate Achievement programs.
Foster care youth means youth who are in foster care or who are aging out of the foster care system.
Homeless children and youth means persons defined in section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a).
Individual with a disability means a person who has a disability, as that term is defined in section 12102 of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
Institution of higher education means an educational institution as defined in sections 101 and 102 of the Act.
Leadership personnel means project directors, coordinators, and other individuals involved with the supervision and direction of projects funded under the Federal TRIO programs.
Veteran means a person who—
(1) Served on active duty as a member of the Armed Forces of the United States for a period of more than 180 days and was discharged or released under conditions other than dishonorable;
(2) Served on active duty as a member of the Armed Forces of the United States and was discharged or released because of a service connected disability;
(3) Was a member of a reserve component of the Armed Forces of the United States and was called to active duty for a period of more than 30 days; or
(4) Was a member of a reserve component of the Armed Forces of the United States who served on active duty in support of a contingency operation (as that term is defined in section 101(a)(13) of title 10, United States Code) on or after September 11, 2001.
An applicant may submit more than one application for Training grants as long as each application describes a project that addresses a different absolute priority from § 642.24 that is designated in the
The Secretary assists projects that train the leadership personnel and staff of projects funded under the Federal TRIO Programs to enable them to operate those projects more effectively.
(a) Each year, one or more Training Program projects must provide training for new project directors.
(b) Each year, one or more Training Program projects must offer training covering the following topics:
(1) The legislative and regulatory requirements for operating projects funded under the Federal TRIO programs.
(2) Assisting students to receive adequate financial aid from programs assisted under title IV of the Act and from other programs.
(3) The design and operation of model programs for projects funded under the Federal TRIO programs.
(4) The use of appropriate educational technology in the operation of projects funded under the Federal TRIO programs.
(5) Strategies for recruiting and serving hard-to-reach populations, including students who are limited English proficient, students from groups that are traditionally underrepresented in postsecondary education, students who are individuals with disabilities, students who are homeless children and youths, students who are foster care youth, or other disconnected students.
A Training program project may include on-site training, on-line training, conferences, internships, seminars, workshops, and the publication of manuals designed to improve the operations of Federal TRIO program projects.
(a) The Secretary evaluates an application on the basis of the criteria in § 642.21.
(1) The Secretary awards up to 75 points for these criteria.
(2) The maximum possible score for each complete criterion is indicated in the parentheses next to the heading of that criterion.
(b) In addition, for an applicant who is conducting a Training program in the fiscal year immediately prior to the fiscal year for which the applicant is applying, the Secretary evaluates the applicant's prior experience (PE) of high quality service delivery, as provided in § 642.22, based on the applicant's performance during the first project year of that expiring Training program grant.
(c) The Secretary selects applications for funding within each specific absolute priority established for the competition in rank order on the basis of the score received by the application in the peer review process.
(d) Within each specific absolute priority, if there are insufficient funds to fund all applications at the next peer review score, the Secretary adds the PE points awarded under § 642.22 to the peer review score to determine an adjusted total score for those applications. The Secretary makes awards at the next peer review score to the applications that have the highest total adjusted score.
(e) In the event a tie score still exists, the Secretary will select for funding the applicant that has the greatest capacity to provide training to eligible participants in all regions of the Nation, consistent with § 642.23.
The Secretary uses the criteria in paragraphs (a) through (f) of this section to evaluate applications:
(a) Plan of operation. (20 points) (1) The Secretary reviews each application for information that shows the quality of the plan of operation for the project.
(2) The Secretary looks for information that shows—
(i) High quality in the design of the project;
(ii) An effective plan of management that insures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) A clear description of how the applicant will provide equal access and treatment for eligible project participants who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women;
(C) Individuals with disabilities; and
(D) The elderly.
(b) Quality of key personnel. (20 points) (1) The Secretary reviews each application for information that shows the qualifications of the key personnel the applicant plans to use on the project.
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (b)(2)(i) and (ii) of this section plans to commit to the project; and
(iv) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women;
(C) Individuals with disabilities; and
(D) The elderly.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training, in fields related to the objectives of the project, as well as other information that the applicant provides.
(c) Budget and cost effectiveness. (10 points) (1) The Secretary reviews each application for information that shows that the project has an adequate budget and is cost effective.
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objectives of the project.
(d) Evaluation plan. (10 points) (1) The Secretary reviews each application for information that shows the quality of the evaluation plan for the project.
(2) The Secretary looks for information that shows methods of evaluation that are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e) Adequacy of resources. (15 points)
(1) The Secretary reviews each application for information that shows that the applicant plans to devote adequate resources to the project.
(2) The Secretary looks for information that shows—
(i) The facilities that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
(a) In the case of an application described in § 642.20(b), the Secretary—
(1) Evaluates the applicant's performance under its expiring Training program grant;
(2) To determine the number of PE points to be awarded, uses the approved project objectives for the applicant's expiring Training program grant and the information the applicant submitted in its annual performance report (APR); and
(3) May adjust a calculated PE score or decide not to award PE points if other information such as audit reports, site visit reports, and project evaluation reports indicate the APR data used to calculate PE are incorrect.
(b)(1) The Secretary may add from 1 to 15 points to the point score obtained on the basis of the selection criteria in § 642.21, based on the applicant's success in meeting the administrative requirements and programmatic objectives of paragraph (e) of this section.
(2) The maximum possible score for each criterion is indicated in the parentheses preceding the criterion.
(c) The Secretary awards no PE points for a given year to an applicant that does not serve at least 90 percent of the approved number of participants. For purposes of this section, the approved number of participants is the total number of participants the project would serve as agreed upon by the grantee and the Secretary.
(d) For the criterion specified in paragraph (e)(1) of this section (Number of participants), the Secretary awards no PE points if the applicant did not serve at least the approved number of participants.
(e) The Secretary evaluates the applicant's PE on the basis of the following criteria:
(1) (4 points) Number of participants. Whether the applicant provided training to no less than the approved number of participants.
(2) Training objectives. Whether the applicant met or exceeded its objectives for:
(i) (4 points) Assisting the participants in developing increased qualifications and skills to meet the needs of disadvantaged students.
(ii) (4 points) Providing the participants with an increased knowledge and understanding of the Federal TRIO programs.
(3) (3 points) Administrative requirements. Whether the applicant met all the administrative requirements under the terms of the expiring grant, including recordkeeping, reporting, and financial accountability.
The Secretary, to the greatest extent possible, awards grants for Training Program projects that will be carried out in all of the regions of the Nation in order to assure accessibility to prospective training participants.
(a) The Secretary, after consultation with regional and State professional associations of persons having special knowledge with respect to the training of Special Programs personnel, may select one or more of the following subjects as training priorities:
(1) Basic skills instruction in reading, mathematics, written and oral communication, and study skills.
(2) Counseling.
(3) Assessment of student needs.
(4) Academic tests and testing.
(5) College and university admissions policies and procedures.
(6) Cultural enrichment programs.
(7) Career planning.
(8) Tutorial programs.
(9) Retention and graduation strategies.
(10) Strategies for preparing students for doctoral studies.
(11) Project evaluation.
(12) Budget management.
(13) Personnel management.
(14) Reporting student and project performance.
(15) Coordinating project activities with other available resources and activities.
(16) General project management for new directors.
(17) Statutory and regulatory requirements for the operation of projects funded under the Federal TRIO programs.
(18) Assisting students in receiving adequate financial aid from programs assisted under title IV of the Act and from other programs.
(19) The design and operation of model programs for projects funded under the Federal TRIO programs.
(20) The use of appropriate educational technology in the operation of projects funded under the Federal TRIO programs.
(21) Strategies for recruiting and serving hard to reach populations, including students who are limited English proficient, students from groups that are traditionally underrepresented in postsecondary education, students who are individuals with disabilities, students who are homeless children and youths, students who are foster care youth, or other disconnected students.
(b) The Secretary annually funds training on the subjects listed in paragraphs (a)(17), (a)(18), (a)(19), (a)(20), and (a)(21) of this section.
(c) The Secretary designates one or more of the training priorities from paragraph (a) of this section in the
(a) Technical or administrative error for applications not reviewed. (1) An applicant whose grant application was not evaluated during the competition may request that the Secretary review the application if—
(i) The applicant has met all of the application submission requirements included in the
(ii) The applicant provides evidence demonstrating that the Department or an agent of the Department made a technical or administrative error in the processing of the submitted application.
(2) A technical or administrative error in the processing of an application includes—
(i) A problem with the system for the electronic submission of applications that was not addressed in accordance with the procedures included in the
(ii) An error in determining an applicant's eligibility for funding consideration, which may include, but is not limited to—
(A) An incorrect conclusion that the application was submitted by an ineligible applicant;
(B) An incorrect conclusion that the application exceeded the published page limit;
(C) An incorrect conclusion that the applicant requested funding greater than the published maximum award; or
(D) An incorrect conclusion that the application was missing critical sections of the application; and
(iii) Any other mishandling of the application that resulted in an otherwise eligible application not being reviewed during the competition.
(3)(i) If the Secretary determines that the Department or the Department's agent made a technical or administrative error, the Secretary has the application evaluated and scored.
(ii) If the total score assigned the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c) of this section.
(b) Administrative or scoring error for applications that were reviewed. (1) An applicant that was not selected for funding during a competition may request that the Secretary conduct a second review of the application if—
(i) The applicant provides evidence demonstrating that the Department, an agent of the Department, or a peer reviewer made an administrative or scoring error in the review of its application; and
(ii) The final score assigned to the application is within the funding band described in paragraph (d) of this section.
(2) An administrative error relates to either the PE points or the scores assigned to the application by the peer reviewers.
(i) For PE points, an administrative error includes mathematical errors made by the Department or the Department's agent in the calculation of the PE points or a failure to correctly add the earned PE points to the peer reviewer score.
(ii) For the peer review score, an administrative error is applying the wrong peer reviewer scores to an application.
(3)(i) A scoring error relates only to the peer review process and includes errors caused by a reviewer who, in assigning points—
(A) Uses criteria not required by the applicable law or program regulations, the
(B) Does not consider relevant information included in the appropriate section of the application.
(ii) The term “scoring error” does not include—
(A) A peer reviewer's appropriate use of his or her professional judgment in evaluating and scoring an application;
(B) Any situation in which the applicant did not include information needed to evaluate its response to a specific selection criterion in the appropriate section of the application as stipulated in the
(C) Any error by the applicant.
(c) Procedures for the second review. (1) To ensure the timely awarding of grants under the competition, the Secretary sets aside a percentage of the funds allotted for the competition to be awarded after the second review is completed.
(2) After the competition, the Secretary makes new awards in rank order as described in § 642.20 based on the available funds for the competition minus the funds set aside for the second review.
(3) After the Secretary issues a notification of grant award to successful applicants, the Secretary notifies each unsuccessful applicant in writing as to the status of its application and the funding band for the second review and provides copies of the peer reviewers' evaluations of the applicant's application and the applicant's PE score, if applicable.
(4) An applicant that was not selected for funding following the competition as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section, may request a second review if the applicant demonstrates that the Department, the Department's agent, or a peer reviewer made an administrative or scoring error as provided in paragraph (b) of this section.
(5) An applicant whose application was not funded after the first review as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section has at least 15 calendar days after receiving notification that its application was not funded in which to submit a written request for a second review in accordance with the instructions and due date provided in the Secretary's written notification.
(6) An applicant's written request for a second review must be received by the Department or submitted electronically to a designated e-mail or Web address by the due date and time established by the Secretary.
(7) If the Secretary determines that the Department or the Department's agent made an administrative error that relates to the PE points awarded, as described in paragraph (b)(2)(i) of this section, the Secretary adjusts the applicant's PE score to reflect the correct number of PE points. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(8) If the Secretary determines that the Department, the Department's agent or the peer reviewer made an administrative error that relates to the peer reviewers' score(s), as described in paragraph (b)(2)(ii) of this section, the Secretary adjusts the applicant's peer reviewers' score(s) to correct the error. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(9) If the Secretary determines that a peer reviewer made a scoring error, as described in paragraph (b)(3) of this section, the Secretary convenes a second panel of peer reviewers in accordance with the requirements in section 402A(c)(8)(C)(iv)(III) of the HEA.
(10) The average of the peer reviewers' scores from the second peer review are used in the second ranking of applications. The average score obtained from the second peer review panel is the final peer reviewer score for the application and will be used even if the second review results in a lower score for the application than that obtained in the initial review.
(11) For applications in the funding band, the Secretary funds these applications in rank order based on adjusted scores and the available funds that have been set aside for the second review of applications.
(d) Process for establishing a funding band. (1) For each competition, the Secretary establishes a funding band for the second review of applications.
(2) The Secretary establishes the funding band for each competition based on the amount of funds the Secretary has set aside for the second review of applications.
(3) The funding band is composed of those applications—
(i) With a rank-order score before the second review that is below the lowest score of applications funded after the first review; and
(ii) That would be funded if the Secretary had 150 percent of the funds that were set aside for the second review of applications for the competition.
(e) Final decision. (1) The Secretary's determination of whether the applicant has met the requirements for a second review and the Secretary's decision on re-scoring of an application are final and not subject to further appeal or challenge.
(2) An application that scored below the established funding band for the competition is not eligible for a second review.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for a new grant; and
(2) 34 CFR 75.253, for the second year of a project period.
(b) The Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) 170,000; or
(2) The amount requested by the applicant.
Allowable project costs may include the following costs reasonably related to carrying out a Training Program project:
(a) Rental of space, if space is not available at a sponsoring institution and if the space is not owned by a sponsoring institution.
(b) Printing.
(c) Postage.
(d) Purchase or rental of equipment.
(e) Consumable supplies.
(f) Transportation costs for participants and training staff.
(g) Lodging and subsistence costs for participants and training staff.
(h) Transportation costs, lodging and subsistence costs and fees for consultants, if any.
(i) Honorariums for speakers who are not members of the staff or consultants to the project.
(j) Other costs that are specifically approved in advance and in writing by the Secretary.
Costs that may not be charged against a grant under this program include the following:
(a) Research not directly related to the evaluation or improvement of the project.
(b) Construction, renovation, or remodeling of any facilities.
(c) Stipends, tuition fees, and other direct financial assistance to trainees other than those participating in internships.
The Talent Search program provides grants for projects designed to—
(a) Identify qualified youths with potential for education at the postsecondary level and encourage them to complete secondary school and undertake a program of postsecondary education;
(b) Publicize the availability of, and facilitate the application for, student financial assistance for persons who seek to pursue postsecondary education; and
(c) Encourage persons who have not completed education programs at the secondary or postsecondary level to enter or reenter and complete these programs.
The following entities are eligible for a grant to carry out a Talent Search project:
(a) An institution of higher education.
(b) A public or private agency or organization, including a community-based organization with experience in serving disadvantaged youth.
(c) A secondary school.
(d) A combination of the types of institutions, agencies, and organizations described in paragraphs (a), (b), and (c) of this section.
(a) An individual is eligible to participate in a Talent Search project if the individual meets all the following requirements:
(1)(i) Is a citizen or national of the United States;
(ii) Is a permanent resident of the United States;
(iii) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident;
(iv) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands (Palau); or
(v) Is a resident of the Freely Associated States—the Federated States of Micronesia or the Republic of the Marshall Islands.
(2)(i) Has completed five years of elementary education or is at least 11 years of age but not more than 27 years of age.
(ii) However, an individual who is more than 27 years of age may participate in a Talent Search project if the individual cannot be appropriately served by an Educational Opportunity Center project under 34 CFR part 644 and if the individual's participation would not dilute the Talent Search project's services to individuals described in paragraph (a)(2)(i) of this section.
(3)(i) Is enrolled in or has dropped out of any grade from six through 12, or has graduated from secondary school, ; or
(ii) Has undertaken, but is not presently enrolled in, a program of postsecondary education,
(b) A veteran as defined in § 643.6(b), regardless of age, is eligible to participate in a Talent Search project if he or she satisfies the eligibility requirements in paragraph (a) of this section other than the age requirement in paragraph (a)(2).
(a) A Talent Search project must provide the following services:
(1) Connections for participants to high quality academic tutoring services to enable the participants to complete secondary or postsecondary courses.
(2) Advice and assistance in secondary school course selection and, if applicable, initial postsecondary course selection.
(3) Assistance in preparing for college entrance examinations and completing college admission applications.
(4)(i) Information on the full range of Federal student financial aid programs and benefits (including Federal Pell Grant awards and loan forgiveness) and on resources for locating public and private scholarships; and
(ii) Assistance in completing financial aid applications, including the Free Application for Federal Student Aid (FAFSA).
(5) Guidance on and assistance in—
(i) Secondary school reentry;
(ii) Alternative education programs for secondary school dropouts that lead to the receipt of a regular secondary school diploma;
(iii) Entry into general educational development (GED) programs; or
(iv) Entry into postsecondary education.
(6) Connections for participants to education or counseling services designed to improve the financial and economic literacy of the participants or the participants' parents, including financial planning for postsecondary education.
(b) A Talent Search project may provide services such as the following:
(1) Academic tutoring, which may include instruction in reading, writing, study skills, mathematics, science, and other subjects.
(2) Personal and career counseling or activities.
(3) Information and activities designed to acquaint youth with the range of career options available to the youth.
(4) Exposure to the campuses of institutions of higher education, as well as to cultural events, academic programs, and other sites or activities not usually available to disadvantaged youth.
(5) Workshops and counseling for families of participants served.
(6) Mentoring programs involving elementary or secondary school teachers or counselors, faculty members at institutions of higher education, students, or any combination of these persons.
(7) Programs and activities as described in this section that are specially designed for participants who are limited English proficient, from groups that are traditionally underrepresented in postsecondary education, individuals with disabilities, homeless children and youths, foster care youth, or other disconnected participants.
(8) Other activities designed to meet the purposes of the Talent Search Program in § 643.1.
A project period under the Talent Search program is five years.
The following regulations apply to the Talent Search program:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 75 (except for §§ 75.215 through 75.221), 77, 79, 82, 84, 86, 97, 98, and 99.
(b) The regulations in this part 643.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or in 34 CFR 77.1:
(b) Other definitions. The following definitions also apply to this part:
Different population means a group of individuals that an eligible entity desires to serve through an application for a grant under the Talent Search program and that—
(1) Is separate and distinct from any other population that the entity has applied for a grant to serve; or
(2) While sharing some of the same needs as another population that the eligible entity has applied for a grant to serve, has distinct needs for specialized services.
Financial and economic literacy means knowledge about personal financial decision-making, which may include but is not limited to knowledge about—
(1) Personal and family budget planning;
(2) Understanding credit building principles to meet long-term and short-term goals (e.g., loan to debt ratio, credit scoring, negative impacts on credit scores);
(3) Cost planning for postsecondary or postbaccalaureate education (e.g., spending, saving, personal budgeting);
(4) College cost of attendance (e.g., public vs. private, tuition vs. fees, personal costs);
(5) Financial assistance (e.g., searches, application processes, and differences between private and government loans, assistanceships); and
(6) Assistance in completing the Free Application for Federal Student Aid (FAFSA).
Foster care youth means youth who are in foster care or are aging out of the foster care system.
HEA means the Higher Education Act of 1965, as amended.
Homeless children and youth means persons defined in section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a).
Individual with a disability means a person who has a disability, as that term is defined in section 12102 of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
Institution of higher education means an educational institution as defined in sections 101 and 102 of the HEA.
Low-income individual means an individual whose family's taxable income did not exceed 150 percent of the poverty level amount in the calendar year preceding the year in which the individual initially participated in the project. The poverty level amount is determined by using criteria of poverty established by the Bureau of the Census of the U.S. Department of Commerce.
Participant means an individual who—
(1) Is determined to be eligible to participate in the project under § 643.3; and
(2) Receives project services designed for his or her age or grade level.
Postsecondary education means education beyond the secondary school level.
Potential first-generation college student means—
(1) An individual neither of whose natural or adoptive parents received a baccalaureate degree;
(2) An individual who, prior to the age of 18, regularly resided with and received support from only one parent and whose supporting parent did not receive a baccalaureate degree; or
(3) An individual who, prior to the age of 18, did not regularly reside with or receive support from a natural or an adoptive parent.
Regular secondary school diploma means a level attained by individuals who meet or exceed the coursework and performance standards for high school completion established by the individual's State.
Rigorous secondary school program of study means a program of study that is—
(1) Established by a state educational agency (SEA) or local educational agency (LEA) and recognized as a rigorous secondary school program of study by the Secretary through the process described in 34 CFR 691.16(a) through 691.16(c) for the Academic Competitiveness Grant (ACG) Program;
(2) An advanced or honors secondary school program established by States and in existence for the 2004-2005 school year or later school years;
(3) Any secondary school program in which a student successfully completes at a minimum the following courses:
(i) Four years of English.
(ii) Three years of mathematics, including algebra I and a higher-level class such as algebra II, geometry, or data analysis and statistics.
(iii) Three years of science, including one year each of at least two of the following courses: Biology, chemistry, and physics.
(iv) Three years of social studies.
(v) One year of a language other than English;
(4) A secondary school program identified by a State-level partnership that is recognized by the State Scholars Initiative of the Western Interstate Commission for Higher Education (WICHE), Boulder, Colorado;
(5) Any secondary school program for a student who completes at least two courses from an International Baccalaureate Diploma Program sponsored by the International Baccalaureate Organization, Geneva, Switzerland, and receives a score of a “4” or higher on the examinations for at least two of those courses; or
(6) Any secondary school program for a student who completes at least two Advanced Placement courses and receives a score of “3” or higher on the College Board's Advanced Placement Program Exams for at least two of those courses.
Secondary school means a school that provides secondary education as determined under State law, except that it does not include education beyond grade 12.
Target area means a geographic area served by a Talent Search project.
Target school means a school designated by the applicant as a focus of project services.
Veteran means a person who—
(1) Served on active duty as a member of the Armed Forces of the United States for a period of more than 180 days and was discharged or released under conditions other than dishonorable;
(2) Served on active duty as a member of the Armed Forces of the United States and was discharged or released because of a service connected disability;
(3) Was a member of a reserve component of the Armed Forces of the United States and was called to active duty for a period of more than 30 days; or
(4) Was a member of a reserve component of the Armed Forces of the United States who served on active duty in support of a contingency operation (as that term is defined in section 101(a)(13) of title 10, United States Code) on or after September 11, 2001.
(a) An applicant may submit more than one application for Talent Search grants as long as each application describes a project that serves a different target area or target schools, or another designated different population.
(b) For each grant competition, the Secretary designates, in the
An applicant must submit, as part of its application, assurances that—
(a) At least two-thirds of the individuals it serves under its proposed Talent Search project will be low-income individuals who are potential first-generation college students;
(b) The project will collaborate with other Federal TRIO projects, GEAR UP projects, or programs serving similar populations that are serving the same target schools or target area in order to minimize the duplication of services and promote collaborations so that more students can be served.
(c) The project will be located in a setting or settings accessible to the individuals proposed to be served by the project; and
(d) If the applicant is an institution of higher education, it will not use the project as a part of its recruitment program.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 643.21.
(ii) The maximum score for all the criteria in § 643.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) For an application for a new grant to continue to serve substantially the same populations and campuses that the applicant is serving under an expiring project, the Secretary evaluates the applicant's prior experience of high quality service delivery under the expiring project on the basis of the outcome criteria in § 643.22.
(ii) The maximum total score for all the criteria in § 643.22 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(iii) The Secretary evaluates the PE of an applicant for each of the three project years that the Secretary designates in the
(iv) An applicant may earn up to 15 PE points for each of the designated project years for which annual performance report data are available.
(v) The final PE score is the average of the scores for the three project years assessed.
(b) The Secretary makes new grants in rank order on the basis of the applications' total scores under paragraphs (a)(1) and (a)(2) of this section.
(c) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-ranked applications, the Secretary uses the remaining funds to serve geographic areas and eligible populations that have been underserved by the Talent Search program.
(d) The Secretary does not make a new grant to an applicant if the applicant's prior project involved the fraudulent use of program funds.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a) Need for the project (24 points). The Secretary evaluates the need for a Talent Search project in the proposed target area on the basis of the extent to which the application contains clear evidence of the following:
(1) (4 points) A high number or high percentage of the following—
(i) Low-income families residing in the target area; or
(ii) Students attending the target schools who are eligible for free or reduced priced lunch as described in sections 9(b)(1) and 17(c)(4) of the Richard B. Russell National School Lunch Act.
(2) (2 points) Low rates of high school persistence among individuals in the target schools as evidenced by the annual student persistence rates in the proposed target schools for the most recent year for which data are available.
(3) (4 points) Low rates of students in the target school or schools who graduate high school with a regular secondary school diploma in the standard number of years for the most recent year for which data are available.
(4) (6 points) Low postsecondary enrollment and completion rates among individuals in the target area and schools as evidenced by—
(i) Low rates of enrollment in programs of postsecondary education by graduates of the target schools in the most recent year for which data are available; and
(ii) A high number or high percentage of individuals residing in the target area with education completion levels below the baccalaureate degree level.
(5) (2 points) The extent to which the target secondary schools do not offer their students the courses or academic support to complete a rigorous secondary school program of study or have low participation or low success by low-income or first generation students in such courses.
(6) (6 points) Other indicators of need for a TS project, including low academic achievement and low standardized test scores of students enrolled in the target schools, a high ratio of students to school counselors in the target schools, and the presence of unaddressed academic or socio-economic problems of eligible individuals, including foster care youth and homeless children and youth in the target schools or the target area.
(b) Objectives (8 points). The Secretary evaluates the quality of the applicant's objectives and proposed targets (percentages) in the following areas on the basis of the extent to which they are both ambitious, as related to the need data provided under paragraph (a) of this section, and attainable, given the project's plan of operation, budget, and other resources:
(1) (2 points) Secondary school persistence.
(2) (2 points) Secondary school graduation (regular secondary school diploma).
(3) (1 point) Secondary school graduation (rigorous secondary school program of study).
(4) (2 points) Postsecondary education enrollment.
(5) (1 point) Postsecondary degree attainment.
(c) Plan of operation (30 points). The Secretary evaluates the quality of the applicant's plan of operation on the basis of the following:
(1) (3 points) The plan to inform the residents, schools, and community organizations in the target area of the purpose, objectives, and services of the project and the eligibility requirements for participation in the project.
(2) (3 points) The plan to identify and select eligible project participants.
(3) (10 points) The plan for providing the services delineated in § 643.4 as appropriate based on the project's assessment of each participant's need for services.
(4) (6 points) The plan to work in a coordinated, collaborative, and cost-effective manner as part of an overarching college access strategy with the target schools or school system and other programs for disadvantaged students to provide participants with access to and assistance in completing a rigorous secondary school program of study.
(5) (6 points) The plan, including timelines, personnel, and other resources, to ensure the proper and efficient administration of the project, including the project's organizational structure; the time commitment of key project staff; and financial, personnel, and records management.
(6) (2 points) The plan to follow former participants as they enter, continue in, and complete postsecondary education.
(d) Applicant and community support (16 points). The Secretary evaluates the applicant and community support for the proposed project on the basis of the extent to which the applicant has made provision for resources to supplement the grant and enhance the project's services, including—
(1) (8 points) Facilities, equipment, supplies, personnel, and other resources committed by the applicant; and
(2) (8 points) Resources secured through written commitments from community partners.
(i) An applicant that is an institution of higher education must include in its application commitments from the target schools and community organizations;
(ii) An applicant that is a secondary school must include in its commitments from institutions of higher education, community organizations, and, as appropriate, other secondary schools and the school district; and
(iii) An applicant that is a community organization must include in its application commitments from the target schools and institutions of higher education.
(e) Quality of personnel (9 points). (1) The Secretary evaluates the quality of the personnel the applicant plans to use in the project on the basis of the following:
(i) The qualifications required of the project director.
(ii) The qualifications required of each of the other personnel to be used in the project.
(iii) The plan to employ personnel who have succeeded in overcoming the disadvantages of circumstances like those of the population of the target area.
(2) In evaluating the qualifications of a person, the Secretary considers his or her experience and training in fields related to the objectives of the project.
(f) Budget (5 points). The Secretary evaluates the extent to which the project budget is reasonable, cost-effective, and adequate to support the project.
(g) Evaluation plan (8 points). The Secretary evaluates the quality of the evaluation plan for the project on the basis of the extent to which the applicant's methods of evaluation—
(1) Are appropriate to the project's objectives;
(2) Provide for the applicant to determine, using specific and quantifiable measures, the success of the project in—
(i) Making progress toward achieving its objectives (a formative evaluation); and
(ii) Achieving its objectives at the end of the project period (a summative evaluation); and
(3) Provide for the disclosure of unanticipated project outcomes, using quantifiable measures if appropriate.
(a) In the case of an application described in § 643.20(a)(2)(i), the Secretary—
(1) Evaluates the applicant's performance under its expiring Talent Search project;
(2) Uses the approved project objectives for the applicant's expiring Talent Search grant and the information the applicant submitted in its annual performance reports (APRs) to determine the number of PE points; and
(3) May adjust a calculated PE score or decide not to award PE points if other information such as audit reports, site visit reports, and project evaluation reports indicates the APR data used to calculate PE are incorrect.
(b) The Secretary does not award PE points for a given year to an applicant that does not serve at least 90 percent of the approved number of participants. For purposes of this section, the approved number of participants is the total number of participants the project would serve as agreed upon by the grantee and the Secretary.
(c) The Secretary does not award any PE points for the criterion specified in paragraph (d)(1) of this section (Number of participants) if the applicant did not serve at least the approved number of participants.
(d) For purposes of the evaluation of grants awarded after January 1, 2009, the Secretary evaluates the applicant's PE on the basis of the following outcome criteria:
(1) (3 points) Number of participants. Whether the applicant provided services to no less than the approved number of participants.
(2) (3 points) Secondary school persistence. Whether the applicant met or exceeded its objective regarding the continued secondary school enrollment of participants.
(3) (3 points) Secondary school graduation (regular secondary school diploma). Whether the applicant met or exceeded its objective regarding the graduation of participants served during the project year from secondary school with a regular secondary school diploma in the standard number of years.
(4) (1.5 points) Secondary school graduation (rigorous secondary school program of study). Whether the applicant met or exceeded its objective regarding the graduation of participants served during the project year who completed a rigorous secondary school program of study.
(5) (3 points) Postsecondary enrollment. Whether the applicant met or exceeded its objective regarding the participants expected to graduate from high school in the school year who enrolled in an institution of higher education within the time period specified in the approved objective.
(6) (1.5 points) Postsecondary completion. Whether the applicant met or exceeded its objective regarding project participants who enrolled in and completed a program of postsecondary education within the number of years specified in the approved objective. The applicant may determine success in meeting the objective by using a randomly selected sample of participants in accordance with the parameters established by the Secretary in the
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) $200,000; or
(2) The amount requested by the applicant.
(a) Technical or administrative error for applications not reviewed. (1) An applicant whose grant application was not evaluated during the competition may request that the Secretary review the application if—
(i) The applicant has met all application submission requirements included in the
(ii) The applicant provides evidence demonstrating that the Department or an agent of the Department made a technical or administrative error in the processing of the submitted application.
(2) A technical or administrative error in the processing of an application includes—
(i) A problem with the system for the electronic submission of applications that was not addressed in accordance with the procedures included in the
(ii) An error in determining an applicant's eligibility for funding consideration, which may include, but is not limited to—
(A) An incorrect conclusion that the application was submitted by an ineligible applicant;
(B) An incorrect conclusion that the application exceeded the published page limit;
(C) An incorrect conclusion that the applicant requested funding greater than the published maximum award; or
(D) An incorrect conclusion that the application was missing critical sections of the application; and
(iii) Any other mishandling of the application that resulted in an otherwise eligible application not being reviewed during the competition.
(3)(i) If the Secretary determines that the Department or the Department's agent made a technical or administrative error, the Secretary has the application evaluated and scored.
(ii) If the total score assigned the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c) of this section.
(b) Administrative or scoring error for applications that were reviewed. (1) An applicant that was not selected for funding during a competition may request that the Secretary conduct a second review of the application if—
(i) The applicant provides evidence demonstrating that the Department, an agent of the Department, or a peer reviewer made an administrative or scoring error in the review of its application; and
(ii) The final score assigned to the application is within the funding band described in paragraph (d) of this section.
(2) An administrative error relates to either the PE points or the scores assigned to the application by the peer reviewers.
(i) For PE points, an administrative error includes mathematical errors made by the Department or the Department's agent in the calculation of the PE points or a failure to correctly add the earned PE points to the peer reviewer score.
(ii) For the peer review score, an administrative error is applying the wrong peer reviewer scores to an application.
(3)(i) A scoring error relates only to the peer review process and includes errors caused by a reviewer who, in assigning points—
(A) Uses criteria not required by the applicable law or program regulations, the
(B) Does not consider relevant information included in the appropriate section of the application.
(ii) The term “scoring error” does not include—
(A) A peer reviewer's appropriate use of his or her professional judgment in evaluating and scoring an application;
(B) Any situation in which the applicant did not include information needed to evaluate its response to a specific selection criterion in the appropriate section of the application as stipulated in the
(C) Any error by the applicant.
(c) Procedures for the second review. (1) To ensure the timely awarding of grants under the competition, the Secretary sets aside a percentage of the funds allotted for the competition to be awarded after the second review is completed.
(2) After the competition, the Secretary makes new awards in rank order as described in § 643.20 based on the available funds for the competition minus the funds set aside for the second review.
(3) After the Secretary issues a notification of grant award to successful applicants, the Secretary notifies each unsuccessful applicant in writing as to the status of its application and the funding band for the second review and provides copies of the peer reviewers' evaluations of the applicant's application and the applicant's PE score, if applicable.
(4) An applicant that was not selected for funding following the competition as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section, may request a second review if the applicant demonstrates that the Department, the Department's agent, or a peer reviewer made an administrative or scoring error as provided in paragraph (b) of this section.
(5) An applicant whose application was not funded after the first review as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section has at least 15 calendar days after receiving notification that its application was not funded in which to submit a written request for a second review in accordance with the instructions and due date provided in the Secretary's written notification.
(6) An applicant's written request for a second review must be received by the Department or submitted electronically to the designated e-mail or Web address by the due date and time established by the Secretary.
(7) If the Secretary determines that the Department or the Department's agent made an administrative error that relates to the PE points awarded, as described in paragraph (b)(2)(i) of this section, the Secretary adjusts the applicant's PE score to reflect the correct number of PE points. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(8) If the Secretary determines that the Department, the Department's agent or the peer reviewer made an administrative error that relates to the peer reviewers' score(s), as described in paragraph (b)(2)(ii) of this section, the Secretary adjusts the applicant's peer reviewers' score(s) to correct the error. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(9) If the Secretary determines that a peer reviewer made a scoring error, as described in paragraph (b)(3) of this section, the Secretary convenes a second panel of peer reviewers in accordance with the requirements in section 402A(c)(8)(C)(iv)(III) of the HEA.
(10) The average of the peer reviewers' scores from the second peer review are used in the second ranking of applications. The average score obtained from the second peer review panel is the final peer reviewer score for the application and will be used even if the second review results in a lower score for the application than that obtained in the initial review.
(11) For applications in the funding band, the Secretary funds these applications in rank order based on adjusted scores and the available funds that have been set aside for the second review of applications.
(d) Process for establishing a funding band. (1) For each competition, the Secretary establishes a funding band for the second review of applications.
(2) The Secretary establishes the funding band for each competition based on the amount of funds the Secretary has set aside for the second review of applications.
(3) The funding band is composed of those applications—
(i) With a rank-order score before the second review that is below the lowest score of applications funded after the first review; and
(ii) That would be funded if the Secretary had 150 percent of the funds that were set aside for the second review of applications for the competition.
(e) Final decision. (1) The Secretary's determination of whether the applicant has met the requirements for a second review and the Secretary's decision on re-scoring of an application are final and not subject to further appeal or challenge.
(2) An application that scored below the established funding band for the competition is not eligible for a second review.
The cost principles that apply to the Talent Search program are in 2 CFR part 200, subpart E. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) Transportation, meals, and, if necessary, lodging for participants and project staff for—
(1) Visits to postsecondary educational institutions;
(2) Participation in “College Day” activities;
(3) Field trips for participants to observe and meet with persons who are employed in various career fields and who can act as role models for participants; and
(4) Transportation to institutions of higher education, secondary schools not attended by the participants, or other locations at which the participant receives instruction that is part of a rigorous secondary school program of study.
(b) Purchase of testing materials and test preparation programs for participants.
(c) Fees required for admission applications for postsecondary education, college entrance examinations, or alternative education examinations if—
(1) A waiver of the fee is unavailable; and
(2) The fee is paid by the grantee to a third party on behalf of a participant.
(d) In-service training of project staff.
(e) Rental of space if—
(1) Space is not available at the site of the grantee; and
(2) The rented space is not owned by the grantee.
(f) Purchase, lease, or rental of computer hardware, software, and other equipment, service agreements for such equipment, and supplies that support the delivery of services to participants, including technology used by participants in a rigorous secondary school program of study.
(g) Purchase, lease, service agreement, or rental of computer equipment and software needed for project administration and recordkeeping.
(h) Tuition costs for a course that is part of a rigorous secondary school program of study if—
(1) The course or a similar course is not offered at the secondary school that the participant attends or at another school within the school district;
(2) The grantee demonstrates to the Secretary's satisfaction that using grant funds is the most cost-effective way to deliver the course or courses necessary for the completion of a rigorous secondary school program of study for program participants;
(3) The course is taken through an accredited institution of higher education;
(4) The course is comparable in content and rigor to courses that are part of a rigorous secondary school program of study as defined in § 643.7(b);
(5) The secondary school accepts the course as meeting one or more of the course requirements for obtaining a regular secondary school diploma;
(6) A waiver of the tuition costs is unavailable;
(7) The tuition is paid with Talent Search grant funds to an institution of higher education on behalf of a participant; and
(8) The Talent Search project pays for no more than the equivalent of two courses for a participant each school year.
Costs that are unallowable under the Talent Search program include, but are not limited to, the following:
(a) Stipends and other forms of direct financial support for participants.
(b) Application fees for financial aid.
(c) Research not directly related to the evaluation or improvement of the project.
(d) Construction, renovation, and remodeling of any facilities.
(a) Eligibility of participants. (1) A grantee shall determine the eligibility of each participant in the project at the time that the individual is selected to participate.
(2) A grantee shall determine the status of a low-income individual on the basis of the documentation described in section 402A(e) of the HEA.
(b) Number of Participants. For each year of the project period, a grantee must serve at least the number of participants that the Secretary identifies in the
(c) Recordkeeping. For each participant, a grantee must maintain a record of—
(1) The basis for the grantee's determination that the participant is eligible to participate in the project under § 643.3;
(2) The grantee's needs assessment for the participant;
(3) The services that are provided to the participant;
(4) The specific educational progress made by the participant as a result of the services; and
(5) To the extent practicable, any services the TS participant receives during the project year from another Federal TRIO program or another federally funded program that serves populations similar to those served under the TS program.
(d) Project director. (1) A grantee must employ a full-time project director unless—
(i) The director is also administering one or two additional programs for disadvantaged students operated by the sponsoring institution or agency; or
(ii) The Secretary grants a waiver of this requirement.
(2) The grantee must give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirements in paragraph (d)(1) of this section if the applicant demonstrates that the project director will be able to effectively administer more than three programs and that this arrangement would promote effective coordination between the TS program and other Federal TRIO Programs (sections 402B through 402F of the HEA) or similar programs funded through other sources.
The Educational Opportunity Centers program provides grants for projects designed—
(a) To provide information regarding financial and academic assistance available to individuals who desire to pursue a program of postsecondary education;
(b) To provide assistance to individuals in applying to admission to institutions that offer programs of postsecondary education, including assistance in preparing necessary applications for use by admissions and financial aid officers; and
(c) To improve the financial and economic literacy of participants on topics such as—
(1) Basic personal income, household money management, and financial planning skills; and
(2) Basic economic decision-making skills.
The following entities are eligible for a grant to carry out an Educational Opportunity Centers project:
(a) An institution of higher education.
(b) A public or private agency or organization, including a community-based organization with experience in serving disadvantaged youth.
(c) A secondary school.
(d) A combination of the types of institutions, agencies, and organizations described in paragraphs (a), (b), and (c) of this section.
(a) An individual is eligible to participate in an Educational Opportunity Centers project if the individual meets all of the following requirements:
(1)(i) Is a citizen or national of the United States;
(ii) Is a permanent resident of the United States;
(iii) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident;
(iv) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands (Palau); or
(v) Is a resident of the Freely Associated States—the Federated States of Micronesia or the Republic of the Marshall Islands.
(2)(i) Is at least 19 years of age; or
(ii) Is less than 19 years of age, and the individual cannot be appropriately served by a Talent Search project under 34 CFR part 643, and the individual's participation would not dilute the Educational Opportunity Centers project's services to individuals described in paragraph (a)(2)(i) of this section.
(3) Expresses a desire to enroll, or is enrolled, in a program of postsecondary education, and requests information or assistance in applying for admission to, or financial aid for, such a program.
(b) A veteran as defined in § 644.7(b), regardless of age, is eligible to participate in an Educational Opportunity Centers project if he or she satisfies the eligibility requirements in paragraph (a) of this section other than the age requirement in paragraph (a)(2) of this section.
An Educational Opportunity Centers project may provide the following services:
(a) Public information campaigns designed to inform the community about opportunities for postsecondary education and training.
(b) Academic advice and assistance in course selection.
(c) Assistance in completing college admission and financial aid applications.
(d) Assistance in preparing for college entrance examinations.
(e) Education or counseling services designed to improve the financial and economic literacy of participants.
(f) Guidance on secondary school reentry or entry to a General Educational Development (GED) program or other alternative education program for secondary school dropouts.
(g) Individualized personal, career, and academic counseling.
(h) Tutorial services.
(i) Career workshops and counseling.
(j) Mentoring programs involving elementary or secondary school teachers, faculty members at institutions of higher education, students, or any combination of these persons.
(k) Programs and activities described in this section that are specially designed for participants who are limited English proficient, participants from groups that are traditionally underrepresented in postsecondary education, participants who are individuals with disabilities, participants who are homeless children and youth, participants who are foster care youth, or other disconnected participants.
(l) Other activities designed to meet the purposes of the Educational Opportunity Centers program stated in § 644.1.
A project period under the Educational Opportunity Centers program is five years.
The following regulations apply to the Educational Opportunity Centers program:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 75 (except for §§ 75.215 through 75.221), 77, 79, 82, 84, 86, 97, 98, and 99.
(b) The regulations in this part 644.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or in 34 CFR 77.1:
(b) Other definitions. The following definitions also apply to this part:
Different population means a group of individuals that an eligible entity desires to serve through an application for a grant under the Educational Opportunity Centers program and that—
(i) Is separate and distinct from any other population that the entity has applied for a grant under this chapter to serve; or
(ii) While sharing some of the same needs as another population that the eligible entity has applied for a grant to serve, has distinct needs for specialized services.
Financial and economic literacy means knowledge about personal financial decision-making, which may include but is not limited to knowledge about—
(i) Personal and family budget planning;
(ii) Understanding credit building principles to meet long-term and short-term goals (e.g., loan to debt ratio, credit scoring, negative impacts on credit scores);
(iii) Cost planning for postsecondary or postbaccalaureate education (e.g., spending, saving, personal budgeting);
(iv) College cost of attendance (e.g., public vs. private, tuition vs. fees, personal costs);
(v) Financial assistance (e.g., searches, application processes, and differences between private and government loans, assistanceships); and
(vi) Assistance in completing the Free Application for Federal Student Aid (FAFSA).
Foster care youth means youth who are in foster care or are aging out of the foster care system.
HEA means the Higher Education Act of 1965, as amended.
Homeless children and youth means those persons defined in section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a).
Individual with a disability means a person who has a disability, as that term is defined in section 12102 of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
Institution of higher education means an educational institution as defined in sections 101 and 102 of the HEA.
Low-income individual means an individual whose family's taxable income did not exceed 150 percent of the poverty level amount in the calendar year preceding the year in which the individual initially participated in the project. The poverty level amount is determined by using criteria of poverty established by the Bureau of the Census of the U.S. Department of Commerce.
Participant means an individual who—
(i) Is determined to be eligible to participate in the project under § 644.3; and
(ii) Receives project services.
Postsecondary education means education beyond the secondary school level.
Potential first-generation college student means—
(i) An individual neither of whose parents received a baccalaureate degree; or
(ii) An individual who regularly resided with and received support from only one parent and whose supporting parent did not receive a baccalaureate degree.
Secondary school means a school that provides secondary education as determined under State law, except that it does not include education beyond grade 12.
Target area means a geographic area served by an Educational Opportunity Centers project.
Veteran means a person who—
(i) Served on active duty as a member of the Armed Forces of the United States for a period of more than 180 days and was discharged or released under conditions other than dishonorable;
(ii) Served on active duty as a member of the Armed Forces of the United States and was discharged or released because of a service connected disability;
(iii) Was a member of a reserve component of the Armed Forces of the United States and was called to active duty for a period of more than 30 days; or
(iv) Was a member of a reserve component of the Armed Forces of the United States who served on active duty in support of a contingency operation (as that term is defined in section 101(a)(13) of title 10, United States Code) on or after September 11, 2001.
(a) An applicant may submit more than one application for Educational Opportunity Centers grants as long as each application describes a project that serves a different target area or another designated different population.
(b) For each grant competition, the Secretary designates, in the
An applicant must submit, as part of its application, assurances that—
(a) At least two-thirds of the individuals it serves under its proposed Educational Opportunity Centers project will be low-income individuals who are potential first-generation college students;
(b) The project will collaborate with other Federal TRIO projects, GEAR UP projects, or programs serving similar populations that are serving the same target schools or target area in order to minimize the duplication of services and promote collaborations so that more students can be served.
(c) The project will be located in a setting or settings accessible to the individuals proposed to be served by the project; and
(d) If the applicant is an institution of higher education, it will not use the project as a part of its recruitment program.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 644.21.
(ii) The maximum score for all the criteria in § 644.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) For an application for a new grant to continue to serve substantially the same populations and campuses that the applicant is serving under an expiring project, the Secretary evaluates the applicant's prior experience of high quality service delivery under the expiring project on the basis of the outcome criteria in § 644.22.
(ii) The maximum total score for all the criteria in § 644.22 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(iii) The Secretary evaluates the PE of an applicant for each of the three project years that the Secretary designates in the
(iv) An applicant may earn up to 15 PE points for each of the designated project years for which annual performance report data are available.
(v) The final PE score is the average of the scores for the three project years assessed.
(b) The Secretary makes new grants in rank order on the basis of the applications' total scores under paragraph (a) of this section.
(c) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-ranked applications, the Secretary uses the remaining funds to serve geographic areas and eligible populations that have been underserved by the Educational Opportunity Centers program.
(d) The Secretary does not make a new grant to an applicant if the applicant's prior project involved the fraudulent use of program funds.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a) Need for the project (24 points). The Secretary evaluates the need for an Educational Opportunity Centers project in the proposed target area on the basis of the extent to which the application contains clear evidence of—
(1) A high number or percentage, or both, of low-income families residing in the target area;
(2) A high number or percentage, or both, of individuals residing in the target area with education completion levels below the baccalaureate level;
(3) A high need on the part of residents of the target area for further education and training from programs of postsecondary education in order to meet changing employment trends; and
(4) Other indicators of need for an Educational Opportunity Centers project, including the presence of unaddressed educational or socioeconomic problems of adult residents in the target area.
(b) Objectives (8 points). The Secretary evaluates the quality of the applicant's objectives and proposed targets (percentages) in the following areas on the basis of the extent to which they are both ambitious, as related to the need data provided under paragraph (a) of this section, and attainable, given the project's plan of operation, budget, and other resources:
(1) (2 points) Secondary school diploma or equivalent.
(2) (3 points) Postsecondary enrollment.
(3) (1.5 points) Financial aid applications.
(4) (1.5 points) College admission applications.
(c) Plan of operation (30 points). The Secretary evaluates the quality of the applicant's plan of operation on the basis of the following:
(1) (4 points) The plan to inform the residents, schools, and community organizations in the target area of the goals, objectives, and services of the project and the eligibility requirements for participation in the project;
(2) (4 points) The plan to identify and select eligible participants and ensure their participation without regard to race, color, national origin, gender, or disability;
(3) (2 points) The plan to assess each participant's need for services provided by the project;
(4) (12 points) The plan to provide services that meet participants' needs and achieve the objectives of the project; and
(5) (8 points) The management plan to ensure the proper and efficient administration of the project including, but not limited to, the project's organizational structure, the time committed to the project by the project director and other personnel, and, where appropriate, its coordination with other projects for disadvantaged students.
(d) Applicant and community support (16 points). The Secretary evaluates the applicant and community support for the proposed project on the basis of the extent to which the applicant has made provision for resources to supplement the grant and enhance the project's services, including—
(1) (8 points) Facilities, equipment, supplies, personnel, and other resources committed by the applicant; and
(2) (8 points) Resources secured through written commitments from schools, community organizations, and others.
(e) Quality of personnel (9 points). (1) The Secretary evaluates the quality of the personnel the applicant plans to use in the project on the basis of the following:
(i) The qualifications required of the project director.
(ii) The qualifications required of each of the other personnel to be used in the project.
(iii) The plan to employ personnel who have succeeded in overcoming the disadvantages or circumstances like those of the population of the target area.
(2) In evaluating the qualifications of a person, the Secretary considers his or her experience and training in fields related to the objectives of the project.
(f) Budget (5 points). The Secretary evaluates the extent to which the project budget is reasonable, cost-effective, and adequate to support the project.
(g) Evaluation plan (8 points). The Secretary evaluates the quality of the evaluation plan for the project on the basis of the extent to which the applicant's methods of evaluation—
(1) Are appropriate to the project's objectives;
(2) Provide for the applicant to determine, using specific and quantifiable measures, the success of the project in—
(i) Making progress toward achieving its objectives (a formative evaluation); and
(ii) Achieving its objectives at the end of the project period (a summative evaluation); and
(3) Provide for the disclosure of unanticipated project outcomes, using quantifiable measures if appropriate.
(a) In the case of an application described in § 644.20(a)(2)(i), the Secretary—
(1) Evaluates the applicant's performance under its expiring Educational Opportunity Centers project;
(2) Uses the approved project objectives for the applicant's expiring Educational Opportunity Centers grant and the information the applicant submitted in its annual performance reports (APRs) to determine the number of PE points; and
(3) May adjust a calculated PE score or decide not to award PE points if other information such as audit reports, site visit reports, and project evaluation reports indicates the APR data used to calculate PE points are incorrect.
(b) The Secretary does not award PE points for a given year to an applicant that does not serve at least 90 percent of the approved number of participants. For purposes of this section, the approved number of participants is the total number of participants the project would serve as agreed upon by the grantee and the Secretary.
(c) The Secretary does not award PE points for the criterion specified in paragraph (d)(1) of this section (Number of participants) if the applicant did not serve at least the approved number of participants.
(d) For purposes of the PE evaluation of grants awarded after January 1, 2009, the Secretary evaluates the applicant's PE on the basis of the following outcome criteria:
(1) (3 points) Number of participants. Whether the applicant provided services to no less than the approved number of participants.
(2) (3 points) Secondary school diploma. Whether the applicant met or exceeded its approved objective with regard to participants served during the project year who do not have a secondary school diploma or its equivalent who receive a secondary school diploma or its equivalent within the time period specified in the approved objective.
(3) (5 points) Postsecondary enrollment. Whether the applicant met or exceeded its approved objective with regard to the secondary school graduates served during the project year who enroll in programs of postsecondary education within the time period specified in the approved objective.
(4) (2 points) Financial aid applications. Whether the applicant met or exceeded its objective regarding participants applying for financial aid.
(5) (2 points) College admission applications. Whether the applicant met or exceeded its objective regarding participants applying for college admission.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) $200,000; or
(2) The amount requested by the applicant.
(a) Technical or administrative error for applications not reviewed. (1) An applicant whose grant application was not evaluated during the competition may request that the Secretary review the application if—
(i) The applicant has met all of the application submission requirements included in the
(ii) The applicant provides evidence demonstrating that the Department or an agent of the Department made a technical or administrative error in the processing of the submitted application.
(2) A technical or administrative error in the processing of an application includes—
(i) A problem with the system for the electronic submission of applications that was not addressed in accordance with the procedures included in the
(ii) An error in determining an applicant's eligibility for funding consideration, which may include, but is not limited to—
(A) An incorrect conclusion that the application was submitted by an ineligible applicant;
(B) An incorrect conclusion that the application exceeded the published page limit;
(C) An incorrect conclusion that the applicant requested funding greater than the published maximum award; or
(D) An incorrect conclusion that the application was missing critical sections of the application; and
(iii) Any other mishandling of the application that resulted in an otherwise eligible application not being reviewed during the competition.
(3)(i) If the Secretary determines that the Department or the Department's agent made a technical or administrative error, the Secretary has the application evaluated and scored.
(ii) If the total score assigned the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c) of this section.
(b) Administrative or scoring error for applications that were reviewed. (1) An applicant that was not selected for funding during a competition may request that the Secretary conduct a second review of the application if—
(i) The applicant provides evidence demonstrating that the Department, an agent of the Department, or a peer reviewer made an administrative or scoring error in the review of its application; and
(ii) The final score assigned to the application is within the funding band described in paragraph (d) of this section.
(2) An administrative error relates to either the PE points or the scores assigned to the application by the peer reviewers.
(i) For PE points, an administrative error includes mathematical errors made by the Department or the Department's agent in the calculation of the PE points or a failure to correctly add the earned PE points to the peer reviewer score.
(ii) For the peer review score, an administrative error is applying the wrong peer reviewer scores to an application.
(3)(i) A scoring error relates only to the peer review process and includes errors caused by a reviewer who, in assigning points—
(A) Uses criteria not required by the applicable law or program regulations, the
(B) Does not consider relevant information included in the appropriate section of the application.
(ii) The term “scoring error” does not include—
(A) A peer reviewer's appropriate use of his or her professional judgment in evaluating and scoring an application;
(B) Any situation in which the applicant did not include information needed to evaluate its response to a specific selection criterion in the appropriate section of the application as stipulated in the
(C) Any error by the applicant.
(c) Procedures for the second review. (1) To ensure the timely awarding of grants under the competition, the Secretary sets aside a percentage of the funds allotted for the competition to be awarded after the second review is completed.
(2) After the competition, the Secretary makes new awards in rank order as described in § 644.20 based on the available funds for the competition minus the funds set aside for the second review.
(3) After the Secretary issues a notification of grant award to successful applicants, the Secretary notifies each unsuccessful applicant in writing as to the status of its application and the funding band for the second review and provides copies of the peer reviewers' evaluations of the applicant's application and the applicant's PE score, if applicable.
(4) An applicant that was not selected for funding following the competition as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section, may request a second review if the applicant demonstrates that the Department, the Department's agent, or a peer reviewer made an administrative or scoring error as provided in paragraph (b) of this section.
(5) An applicant whose application was not funded after the first review as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section has at least 15 calendar days after receiving notification that its application was not funded in which to submit a written request for a second review in accordance with the instructions and due date provided in the Secretary's written notification.
(6) An applicant's written request for a second review must be received by the Department or submitted electronically to the designated e-mail or Web address by the due date and time established by the Secretary.
(7) If the Secretary determines that the Department or the Department's agent made an administrative error that relates to the PE points awarded, as described in paragraph (b)(2)(i) of this section, the Secretary adjusts the applicant's PE score to reflect the correct number of PE points. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(8) If the Secretary determines that the Department, the Department's agent or the peer reviewer made an administrative error that relates to the peer reviewers' score(s), as described in paragraph (b)(2)(ii) of this section, the Secretary adjusts the applicant's peer reviewers' score(s) to correct the error. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(9) If the Secretary determines that a peer reviewer made a scoring error, as described in paragraph (b)(3) of this section, the Secretary convenes a second panel of peer reviewers in accordance with the requirements in section 402A(c)(8)(C)(iv)(III) of the HEA.
(10) The average of the peer reviewers' scores from the second peer review are used in the second ranking of applications. The average score obtained from the second peer review panel is the final peer reviewer score for the application and will be used even if the second review results in a lower score for the application than that obtained in the initial review.
(11) For applications in the funding band, the Secretary funds these applications in rank order based on adjusted scores and the available funds that have been set aside for the second review of applications.
(d) Process for establishing a funding band. (1) For each competition, the Secretary establishes a funding band for the second review of applications.
(2) The Secretary establishes the funding band for each competition based on the amount of funds the Secretary has set aside for the second review of applications.
(3) The funding band is composed of those applications—
(i) With a rank-order score before the second review that is below the lowest score of applications funded after the first review; and
(ii) That would be funded if the Secretary had 150 percent of the funds that were set aside for the second review of applications for the competition.
(e) Final decision. (1) The Secretary's determination of whether the applicant has met the requirements for a second review and the Secretary's decision on re-scoring of an application are final and not subject to further appeal or challenge.
(2) An application that scored below the established funding band for the competition is not eligible for a second review.
The cost principles that apply to the Educational Opportunity Centers program are in 2 CFR part 200, subpart E. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) Transportation, meals, and, with specific prior approval of the Secretary, lodging for participants and project staff for—
(1) Visits to postsecondary educational institutions;
(2) Participation in “College Day” activities; and
(3) Field trips for participants to observe and meet with persons who are employed in various career fields and can act as role models for participants.
(b) Purchase of testing materials and test preparation programs for participants.
(c) Fees required for admission applications for postsecondary education, college entrance examinations, or alternative education examinations if—
(1) A waiver is unavailable; and
(2) The fee is paid by the grantee to a third party on behalf of a participant.
(d) In-service training of project staff.
(e) Rental of space if—
(1) Space is not available at the site of the grantee; and
(2) The rented space is not owned by the grantee.
(f) Purchase, lease, or rental of computer hardware, software, and other equipment, service agreements for such equipment, and supplies for participant development, project administration, or project recordkeeping.
Costs that are unallowable under the Educational Opportunity Centers program include, but are not limited to, the following:
(a) Tuition, fees, stipends, and other forms of direct financial support for participants.
(b) Research not directly related to the evaluation or improvement of the project.
(c) Construction, renovation, and remodeling of any facilities.
(a) Eligibility of participants. (1) A grantee shall determine the eligibility of each participant in the project at the time that the individual is selected to participate.
(2) A grantee shall determine the status of a low-income individual on the basis of the documentation described in section 402A(e) of the HEA.
(b) Number of Participants. For each year of the project period, a grantee must serve at least the number of participants that the Secretary identifies in the
(c) Recordkeeping. For each participant, a grantee must maintain a record of—
(1) The basis for the grantee's determination that the participant is eligible to participate in the project under § 644.3;
(2) The services that are provided to the participant;
(3) The specific educational benefits received by the participant; and
(4) To the extent practicable, any services the participant receives during the project year from another Federal TRIO program or another federally funded program that serves populations similar to those served under the EOC program.
(d) Project director. (1) A grantee must employ a full-time project director unless—
(i) The director is also administering one or two additional programs for disadvantaged students operated by the sponsoring institution or agency; or
(ii) The Secretary grants a waiver of this requirement.
(2) The grantee must give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirements in paragraph (d)(1) of this section if the applicant demonstrates that that the project director will be able to effectively administer more than three programs and that this arrangement would promote effective coordination between the program and other Federal TRIO programs (sections 402B through 402F of the HEA) and similar programs funded through other sources.
(a) The Upward Bound Program provides Federal grants to projects designed to generate in program participants the skills and motivation necessary to complete a program of secondary education and to enter and succeed in a program of postsecondary education.
(b) The Upward Bound Program provides Federal grants for the following three types of projects:
(1) Regular Upward Bound projects.
(2) Upward Bound Math and Science Centers.
(3) Veterans Upward Bound projects.
The following entities are eligible to apply for a grant to carry out an Upward Bound project:
(a) An institution of higher education.
(b) A public or private agency or organization, including a community-based organization with experience in serving disadvantaged youth.
(c) A secondary school.
(d) A combination of the types of institutions, agencies, and organizations described in paragraphs (a), (b), and (c) of this section.
An individual is eligible to participate in a Regular, Veterans, or a Math and Science Upward Bound project if the individual meets all of the following requirements:
(a)(1) Is a citizen or national of the United States.
(2) Is a permanent resident of the United States.
(3) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident.
(4) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands.
(5) Is a resident of the Freely Associated States—the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau.
(b) Is—
(1) A potential first-generation college student;
(2) A low-income individual; or
(3) An individual who has a high risk for academic failure.
(c) Has a need for academic support, as determined by the grantee, in order to pursue successfully a program of education beyond high school.
(d) At the time of initial selection, has completed the eighth grade and is at least 13 years old but not older than 19, although the Secretary may waive the age requirement if the applicant demonstrates that the limitation would defeat the purposes of the Upward Bound program. However, a veteran as defined in § 645.6, regardless of age, is eligible to participate in an Upward Bound project if he or she satisfies the eligibility requirements in paragraphs (a), (b), and (c) of this section.
(a) For purposes of documenting a participant's low-income status the following applies:
(1) In the case of a student who is not an independent student, an institution shall document that the student is a low-income individual by obtaining and maintaining—
(i) A signed statement from the student's parent or legal guardian regarding family income;
(ii) Verification of family income from another governmental source;
(iii) A signed financial aid application; or
(iv) A signed United States or Puerto Rican income tax return.
(2) In the case of a student who is an independent student, an institution shall document that the student is a low-income individual by obtaining and maintaining—
(i) A signed statement from the student regarding family income;
(ii) Verification of family income from another governmental source;
(iii) A signed financial aid application; or
(iv) A signed United States or Puerto Rican income tax return.
(b) For purposes of documenting potential first generation college student status, documentation consists of a signed statement from a dependent participant's parent, or a signed statement from an independent participant.
(c) A grantee does not have to revalidate a participant's eligibility after the participant's initial selection.
The following regulations apply to the Upward Bound Program:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 75 (except for §§ 75.215 through 75.221), 77, 79, 80, 82, 84, 85, 86, 97, 98, and 99.
(b) The regulations in this part 645.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) Other Definitions. The following definitions also apply to this part:
Different population means a group of individuals that an eligible entity desires to serve through an application for a grant under the Upward Bound program and that—
(1) Is separate and distinct from any other population that the entity has applied for a grant to serve; or
(2) While sharing some of the same needs as another population that the eligible entity has applied for a grant to serve, has distinct needs for specialized services.
Family taxable income means—
(1) With regard to a dependent student, the taxable income of the individual's parents;
(2) With regard to a dependent student who is an orphan or ward of the court, no taxable income;
(3) With regard to an independent student, the taxable income of the student and his or her spouse.
Financial and economic literacy means knowledge about personal financial decision-making, which may include but is not limited to knowledge about—
(1) Personal and family budget planning;
(2) Understanding credit building principles to meet long-term and short-term goals (e.g., loan to debt ratio, credit scoring, negative impacts on credit scores);
(3) Cost planning for postsecondary or postbaccalaureate education (e.g., spending, saving, personal budgeting);
(4) College cost of attendance (e.g., public vs. private, tuition vs. fees, personal costs);
(5) Financial assistance (e.g., searches, application processes, and differences between private and government loans, assistanceships); and
(6) Assistance in completing the Free Application for Federal Student Aid (FAFSA).
Foster care youth means youth who are in foster care or are aging out of the foster care system.
HEA means the Higher Education Act of 1965, as amended.
Homeless children and youth means persons defined in section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a).
Independent student means a student who—
(1) Is an orphan or ward of the court;
(2) Is a veteran of the Armed Forces of the United States (as defined in this section);
(3) Is a married individual; or
(4) Has legal dependents other than a spouse.
Individual who has a high risk for academic failure (regular Upward Bound participant) means an individual who—
(1) Has not achieved at the proficient level on State assessments in reading or language arts;
(2) Has not achieved at the proficient level on State assessments in math;
(3) Has not successfully completed pre-algebra or algebra by the beginning of the tenth grade; or
(4) Has a grade point average of 2.5 or less (on a 4.0 scale) for the most recent school year for which grade point averages are available.
Individual with a disability means a person who has a disability, as that term is defined in section 12102 of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
Institution of higher education means an educational institution as defined in sections 101 and 102 of the HEA.
Limited English proficiency with reference to an individual, means an individual whose native language is other than English and who has sufficient difficulty speaking, reading, writing, or understanding the English language to deny that individual the opportunity to learn successfully in classrooms in which English is the language of instruction.
Low-income individual means an individual whose family taxable income did not exceed 150 percent of the poverty level amount in the calendar year preceding the year in which the individual initially participates in the project. The poverty level amount is determined by using criteria of poverty established by the Bureau of the Census of the U.S. Department of Commerce.
Organization/Agency means an entity that is legally authorized to operate programs such as Upward Bound in the State where it is located.
Participant means an individual who—
(1) Is determined to be eligible to participate in the project under § 645.3;
(2) Resides in the target area, or is enrolled in a target school at the time of acceptance into the project; and
(3) Has been determined by the project director to be committed to the project, as evidenced by being allowed to continue in the project for at least—
(i) Ten days in a summer component if the individual first enrolled in an Upward Bound project's summer component; or
(ii) Sixty days if the individual first enrolled in an Upward Bound project's academic year component.
Potential first-generation college student means—
(1) An individual neither of whose natural or adoptive parents received a baccalaureate degree; or
(2) A student who, prior to the age of 18, regularly resided with and received support from only one natural or adoptive parent and whose supporting parent did not receive a baccalaureate degree.
Regular secondary school diploma means a diploma attained by individuals who meet or exceed the coursework and performance standards for high school completion established by the individual's State.
Rigorous secondary school program of study means a program of study that is—
(1) Established by a State educational agency (SEA) or local educational agency (LEA) and recognized as a rigorous secondary school program of study by the Secretary through the process described in 34 CFR 691.16(a) through (c) for the Academic Competitiveness Grant (ACG) Program;
(2) An advanced or honors secondary school program established by States and in existence for the 2004-2005 school year or later school years;
(3) Any secondary school program in which a student successfully completes at a minimum the following courses:
(i) Four years of English.
(ii) Three years of mathematics, including algebra I and a higher-level class such as algebra II, geometry, or data analysis and statistics.
(iii) Three years of science, including one year each of at least two of the following courses: biology, chemistry, and physics.
(iv) Three years of social studies.
(v) One year of a language other than English;
(4) A secondary school program identified by a State-level partnership that is recognized by the State Scholars Initiative of the Western Interstate Commission for Higher Education (WICHE), Boulder, Colorado;
(5) Any secondary school program for a student who completes at least two courses from an International Baccalaureate Diploma Program sponsored by the International Baccalaureate Organization, Geneva, Switzerland, and receives a score of a “4” or higher on the examinations for at least two of those courses; or
(6) Any secondary school program for a student who completes at least two Advanced Placement courses and receives a score of “3” or higher on the College Board's Advanced Placement Program Exams for at least two of those courses.
Secondary school means a school that provides secondary education as determined under State law.
Target area means a discrete local or regional geographical area designated by the applicant as the area to be served by an Upward Bound project.
Target school means a school designated by the applicant as a focus of project services.
Veteran means a person who—
(1) Served on active duty as a member of the Armed Forces of the United States for a period of more than 180 days and was discharged or released under conditions other than dishonorable;
(2) Served on active duty as a member of the Armed Forces of the United States and was discharged or released because of a service connected disability;
(3) Was a member of a reserve component of the Armed Forces of the United States and was called to active duty for a period of more than 30 days; or
(4) Was a member of a reserve component of the Armed Forces of the United States who served on active duty in support of a contingency operation (as that term is defined in section 101(a)(13) of title 10, United States Code) on or after September 11, 2001.
Veteran who has a high risk for academic failure means a veteran who—
(1) Has been out of high school or dropped out of a program of postsecondary education for five or more years;
(2) Has scored on standardized tests below the level that demonstrates a likelihood of success in a program of postsecondary education; or
(3) Meets the definition of an individual with a disability as defined in § 645.6(b).
The Secretary provides grants to the following three types of Upward Bound projects:
(a) Regular Upward Bound projects designed to prepare high school students for programs of postsecondary education.
(b) Upward Bound Math and Science Centers designed to prepare high school students for postsecondary education programs that lead to careers in the fields of math and science.
(c) Veterans Upward Bound projects designed to assist veterans to prepare for a program of postsecondary education.
(a) Any project assisted under this part must provide—
(1) Academic tutoring to enable students to complete secondary or postsecondary courses, which may include instruction in reading, writing, study skills, mathematics, science, and other subjects;
(2) Advice and assistance in secondary and postsecondary course selection;
(3) Assistance in preparing for college entrance examinations and completing college admission applications;
(4)(i) Information on the full range of Federal student financial aid programs and benefits (including Federal Pell Grant awards and loan forgiveness) and resources for locating public and private scholarships; and
(ii) Assistance in completing financial aid applications, including the Free Application for Federal Student Aid;
(5) Guidance on and assistance in—
(i) Secondary school reentry;
(ii) Alternative education programs for secondary school dropouts that lead to the receipt of a regular secondary school diploma;
(iii) Entry into general educational development (GED) programs; or
(iv) Entry into postsecondary education; and
(6) Education or counseling services designed to improve the financial and economic literacy of students or the students' parents, including financial planning for postsecondary education.
(b) Any project that has received funds under this part for at least two years must include as part of its core curriculum in the next and succeeding years, instruction in—
(1) Mathematics through pre-calculus;
(2) Laboratory science;
(3) Foreign language;
(4) Composition; and
(5) Literature.
Any project assisted under this part may provide such services as—
(a) Exposure to cultural events, academic programs, and other activities not usually available to disadvantaged youth;
(b) Information, activities, and instruction designed to acquaint youth participating in the project with the range of career options available to the youth;
(c) On-campus residential programs;
(d) Mentoring programs involving elementary school or secondary school teachers or counselors, faculty members at institutions of higher education, students, or any combination of these persons;
(e) Work-study positions where youth participating in the project are exposed to careers requiring a postsecondary degree;
(f) Programs and activities as described in § 645.11 that are specially designed for participants who are limited English proficient, participants from groups that are traditionally underrepresented in postsecondary education, participants who are individuals with disabilities, participants who are homeless children and youths, participants in or who are aging out of foster care, or other disconnected participants; and
(g) Other activities designed to meet the purposes of the Upward Bound program in § 645.1.
(a) Regular Upward Bound projects—
(1) Must provide participants with a summer instructional component that is designed to simulate a college-going experience for participants, and an academic year component; and
(2) May provide a summer bridge component to those Upward Bound participants who have graduated from secondary school and intend to enroll in an institution of higher education in the following fall term. A summer bridge component provides participants with services and activities, including college courses, that aid in the transition from secondary education to postsecondary education.
(b) A summer instructional component shall—
(1) Be six weeks in length unless the grantee can demonstrate to the Secretary that a shorter period will not hinder the effectiveness of the project nor prevent the project from achieving its goals and objectives, and the Secretary approves that shorter period; and
(2) Provide participants with one or more of the services described in § 645.11 at least five days per week.
(c)(1) Except as provided in paragraph (c)(2) of this section, an academic year component shall provide program participants with one or more of the services described in § 645.11 on a weekly basis throughout the academic year and, to the extent possible, shall not prevent participants from fully participating in academic and nonacademic activities at the participants' secondary school.
(2) If an Upward Bound project's location or the project's staff are not readily accessible to participants because of distance or lack of transportation, the grantee may, with the Secretary's permission, provide project services to participants every two weeks during the academic year.
(a) In addition to the services that must be provided under § 645.11(a) and may be provided under § 645.11(b), an Upward Bound Math and Science Center must provide—
(1) Intensive instruction in mathematics and science, including hands-on experience in laboratories, in computer facilities, and at field-sites;
(2) Activities that will provide participants with opportunities to learn from mathematicians and scientists who are engaged in research and teaching at the applicant institution, or who are engaged in research or applied science at hospitals, governmental laboratories, or other public and private agencies;
(3) Activities that will involve participants with graduate and undergraduate science and mathematics majors who may serve as tutors and counselors for participants; and
(4) A summer instructional component that is designed to simulate a college-going experience that is at least six weeks in length and includes daily coursework and other activities as described in this section as well as in § 645.11.
(b) Math Science Upward Bound Centers may also include—
(1) A summer bridge component consisting of math and science related coursework for those participants who have completed high school and intend on enrolling in an institution of higher education in the following fall term; and
(2) An academic year component designed by the applicant to enhance achievement of project objectives in the most cost-effective way taking into account the distances involved in reaching participants in the project's target area.
In addition to the services that must be provided under § 645.11, a Veterans Upward Bound project must—
(a) Provide intensive basic skills development in those academic subjects required for successful completion of a high school equivalency program and for admission to postsecondary education programs;
(b) Provide short-term remedial or refresher courses for veterans who are high school graduates but who have delayed pursuing postsecondary education. If the grantee is an institution of higher education, these courses shall not duplicate courses otherwise available to veterans at the institution;
(c) Assist veterans in securing support services from other locally available resources such as the Veterans Administration, State veterans agencies, veterans associations, and other State and local agencies that serve veterans; and
(d) Provide special services, including mathematics and science preparation, to enable veterans to make the transition to postsecondary education.
(a) An applicant may submit more than one application as long as each application describes a project that serves a different target area or target school, or another designated different population.
(b) For each grant competition, the Secretary designates, in the
(a) An applicant for a Regular Upward Bound award must assure the Secretary that—
(1) Not less than two-thirds of the project's participants will be low-income individuals who are potential first-generation college students;
(2) The remaining participants will be low-income individuals, potential first-generation college students, or individuals who have a high risk for academic failure;
(3) No student will be denied participation in a project because the student would enter the project after the 9th grade; and
(4) The project will collaborate with other Federal TRIO projects, GEAR UP projects, or programs serving similar populations that are serving the same target schools or target area in order to minimize the duplication of services and promote collaborations so that more students can be served.
(b) An applicant for an Upward Bound Math and Science Centers award must assure the Secretary that—
(1) Not less than two-thirds of the project's participants will be low-income individuals who are potential first-generation college students;
(2) The remaining participants will be either low-income individuals or potential first-generation college students;
(3) No student will be denied participation in a project because the student would enter the project after the 9th grade; and
(4) The project will collaborate with other Federal TRIO projects, GEAR UP projects, or programs serving similar populations that are serving the same target schools or target area in order to minimize the duplication of services and promote collaborations so that more students can be served.
(c) An applicant for a Veterans Upward Bound award must assure the Secretary that—
(1) Not less than two-thirds of the project's participants will be low-income individuals who are potential first-generation college students;
(2) The remaining participants will be low-income individuals, potential first-generation college students, or veterans who have a high risk for academic failure; and
(3) The project will collaborate with other Federal TRIO projects or programs serving similar populations in the target area in order to minimize the duplication of services and promote collaborations so that more students can be served.
(a) The Secretary evaluates an application for a grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 645.31.
(ii) The maximum score for all the criteria in § 645.31 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) If an applicant for a new grant proposes to continue to serve substantially the same target population and schools that the applicant is serving under an expiring project, the Secretary evaluates the applicant's prior experience of high quality service delivery under the expiring Upward Bound project on the basis of the outcome criteria in § 645.32.
(ii) The maximum total score for all the criteria in § 645.32 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(iii) The Secretary evaluates the PE of an applicant for each of the three project years that the Secretary designates in the
(iv) An applicant may earn up to 15 PE points for each of the designated project years for which annual performance report data are available.
(v) The final PE score is the average of the scores for the three project years assessed.
(b) The Secretary makes grants in rank order on the basis of the application's total scores under paragraphs (a)(1) and (a)(2) of this section.
(c) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-ranked applications, the Secretary uses whatever remaining funds are available to serve geographic areas that have been underserved by the Upward Bound Program.
(d) The Secretary does not make a new grant to an applicant if the applicant's prior project involved the fraudulent use of program funds.
The Secretary uses the following criteria to evaluate an application for a grant:
(a) Need for the project (24 points). In determining need for an Upward Bound project, the Secretary reviews each type of project (Regular, Math and Science, or Veterans) using different need criteria. The criteria for each type of project contain the same maximum score of 24 points and read as follows:
(1) The Secretary evaluates the need for a Regular Upward Bound project in the proposed target area on the basis of information contained in the application which clearly demonstrates that—
(i) The income level of families in the target area is low;
(ii) The education attainment level of adults in the target area is low;
(iii) Target high school dropout rates are high;
(iv) College-going rates in target high schools are low;
(v) Student/counselor ratios in the target high schools are high; and
(vi) Unaddressed academic, social and economic conditions in the target area pose serious problems for low-income, potentially first-generation college students.
(2) The Secretary evaluates the need for an Upward Bound Math and Science Center in the proposed target area on the basis of—
(i) The extent to which student performance on standardized achievement and assessment tests in mathematics and science in the target area is lower than State or national norms.
(ii) The extent to which potential participants attend schools in the target area that lack the resources and coursework that would help prepare persons for entry into postsecondary programs in mathematics, science, or engineering;
(iii) The extent to which such indicators as attendance data, dropout rates, college-going rates and student/counselor ratios in the target area indicate the importance of having additional educational opportunities available to low-income, first-generation students; and
(iv) The extent to which there are eligible students in the target area who have demonstrated interest and capacity to pursue academic programs and careers in mathematics and science, and who could benefit from an Upward Bound Math and Science program.
(3) The Secretary evaluates the need for a Veterans Upward Bound project in the proposed target area on the basis of clear evidence that shows—
(i) The proposed target area lacks the services for eligible veterans that the applicant proposes to provide;
(ii) A large number of veterans who reside in the target area are low income and potential first generation college students;
(iii) A large number of veterans who reside in the target area who have not completed high school or, have completed high school but have not enrolled in a program of postsecondary education; and
(iv) Other indicators of need for a Veterans Upward Bound project, including the presence of unaddressed academic or socio-economic problems of veterans in the area.
(b) Objectives (9 points). The Secretary evaluates the quality of the applicant's objectives and proposed targets (percentages) in the following areas on the basis of the extent to which they are both ambitious, as related to the need data provided under paragraph (a) of this section, and attainable, given the project's plan of operation, budget, and other resources:
(1) For Regular Upward Bound and Upward Bound Math and Science Centers—
(i) (1 point) Academic performance (GPA);
(ii) (1 point) Academic performance (standardized test scores);
(iii) (2 points) Secondary school retention and graduation (with regular secondary school diploma);
(iv) (1 point) Completion of rigorous secondary school program of study;
(v) (3 points) Postsecondary enrollment; and
(vi) (1 point) Postsecondary completion.
(2) For Veterans Upward Bound—
(i) (2 points) Academic performance (standardized test scores);
(ii) (3 points) Education program retention and completion;
(iii) (3 points) Postsecondary enrollment; and
(iv) (1 point) Postsecondary completion.
(c) Plan of operation (30 points). The Secretary determines the quality of the applicant's plan of operation by assessing the quality of—
(1) The plan to inform the faculty and staff at the applicant institution or agency and the interested individuals and organizations throughout the target area of the goals and objectives of the project;
(2) The plan for identifying, recruiting, and selecting participants to be served by the project;
(3) The plan for assessing individual participant needs and for monitoring the academic progress of participants while they are in Upward Bound;
(4) The plan for locating the project within the applicant's organizational structure;
(5) The curriculum, services and activities that are planned for participants in both the academic year and summer components;
(6) The planned timelines for accomplishing critical elements of the project;
(7) The plan to ensure effective and efficient administration of the project, including, but not limited to, financial management, student records management, and personnel management;
(8) The applicant's plan to use its resources and personnel to achieve project objectives and to coordinate the Upward Bound project with other projects for disadvantaged students;
(9) The plan to work cooperatively with parents and key administrative, teaching, and counseling personnel at the target schools to achieve project objectives; and
(10) A follow-up plan for tracking graduates of Upward Bound as they enter and continue in postsecondary education.
(d) Applicant and community support (16 points). The Secretary evaluates the applicant and community support for the proposed project on the basis of the extent to which—
(1) The applicant is committed to supplementing the project with resources that enhance the project such as: space, furniture and equipment, supplies, and the time and effort of personnel other than those employed in the project.
(2) Resources secured through written commitments from community partners.
(i) An applicant that is an institution of higher education must include in its application commitments from the target schools and community organizations;
(ii) An applicant that is a secondary school must include in its commitments from institutions of higher education, community organizations, and, as appropriate, other secondary schools and the school district;
(iii) An applicant that is a community organization must include in its application commitments from the target schools and institutions of higher education.
(e) Quality of personnel (8 points). To determine the quality of personnel the applicant plans to use, the Secretary looks for information that shows—
(1) The qualifications required of the project director, including formal training or work experience in fields related to the objectives of the project and experience in designing, managing, or implementing similar projects;
(2) The qualifications required of each of the other personnel to be used in the project, including formal training or work experience in fields related to the objectives of the project;
(3) The quality of the applicant's plan for employing personnel who have succeeded in overcoming barriers similar to those confronting the project's target population.
(f) Budget and cost effectiveness (5 points). The Secretary reviews each application to determine the extent to which—
(1) The budget for the project is adequate to support planned project services and activities; and
(2) Costs are reasonable in relation to the objectives and scope of the project.
(g) Evaluation plan (8 points). The Secretary evaluates the quality of the evaluation plan for the project on the basis of the extent to which the applicant's methods of evaluation—
(1) Are appropriate to the project and include both quantitative and qualitative evaluation measures; and
(2) Examine in specific and measurable ways the success of the project in making progress toward achieving its process and outcomes objectives.
(a) In the case of an application described in § 645.30(a)(2)(i), the Secretary—
(1) Evaluates the applicant's performance under its expiring Upward Bound project;
(2) Uses the approved project objectives for the applicant's expiring Upward Bound grant and the information the applicant submitted in its annual performance reports (APRs) to determine the number of PE points; and
(3) May adjust a calculated PE score or decide not to award any PE points if other information such as audit reports, site visit reports, and project evaluation reports indicates the APR data used to calculate PE points are incorrect.
(b) The Secretary does not award PE points for a given year to an applicant that does not serve at least 90 percent of the approved number of participants. For purposes of this section, the approved number of participants is the total number of participants the project would serve as agreed upon by the grantee and the Secretary.
(c) The Secretary does not award PE points for the criteria specified in paragraphs (e)(1)(i) and (e)(2)(i) of this section (Number of participants) if the applicant did not serve at least the approved number of participants.
(d) The Secretary uses the approved number of participants, or the actual number of participants served in a given year if greater than the approved number of participants, as the denominator for calculating whether the applicant has met its approved objectives related to the following PE criteria:
(1) Regular Upward Bound and Upward Bound Math and Science Centers PE criteria in paragraph (e)(1)(ii) of this section (Academic performance) and paragraph (e)(1)(iii) of this section (Secondary school retention and graduation).
(2) Veterans Upward Bound PE criteria in paragraph (e)(2)(iii) of this section (Education program retention and completion).
(e) For purposes of the PE evaluation of grants awarded after January 1, 2009, the Secretary evaluates the applicant's PE on the basis of the following outcome criteria:
(1) Regular Upward Bound and Upward Bound Math and Science Centers.
(i) (3 points) Number of participants. Whether the applicant provided services to no less than the approved number of participants.
(ii) Academic Performance. (A) (1.5 points) Whether the applicant met or exceeded its approved objective with regard to participants served during the project year who had a cumulative GPA at the end of the school year that was not less than the GPA specified in the approved objective.
(B) (1.5 points) Whether the applicant met or exceeded its approved objective with regard to participants served during the project period who met the academic performance levels on standardized tests as specified in the approved objectives.
(iii) (3 points) Secondary school retention and graduation. Whether the applicant met or exceeded its approved objective with regard to participants served during the project year who returned the next school year or graduated from secondary school with a regular secondary school diploma.
(iv) (1.5 points) Rigorous secondary school program of study. Whether the applicant met or exceeded its approved objective with regard to current and prior participants with an expected high school graduation date in the school year who completed a rigorous secondary school program of study.
(v) (3 points) Postsecondary enrollment. Whether the applicant met or exceeded its approved objective with regard current and prior participants with an expected high school graduation date in the school year who enrolled in a program of postsecondary education within the time period specified in the approved objective.
(vi) (1.5 points) Postsecondary completion. Whether the applicant met or exceeded its approved objective with regard to participants who enrolled in a program of postsecondary education and attained a postsecondary degree within the number of years specified in the approved objective.
(2) Veterans Upward Bound.
(i) (3 points) Number of participants. Whether the applicant provided services to no less than the approved number of participants.
(ii) (3 points) Academic improvement on standardized test. Whether the applicant met or exceeded its approved objective with regard to participants who completed their Veterans Upward Bound educational program during the project year and who improved their academic performance as measured by a standardized test taken by participants before and after receiving services from the project.
(iii) (3 points) Education program retention and completion. Whether the applicant met or exceeded its approved objective with regard to participants served during the project year who remained in or completed their Veterans Upward Bound educational program.
(iv) (3 points) Postsecondary enrollment. Whether the applicant met or exceeded its approved objective with regard to participants who completed their Veterans Upward Bound educational program and enrolled in an institution of higher education within the time period specified in the approved objective.
(v) (3 points) Postsecondary completion. Whether the applicant met or exceeded its approved objective with regard to participants who enrolled in and completed a program of postsecondary education within the number of years specified in the approved objective.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) $200,000; or
(2) The amount requested by the applicant.
A project period under the Upward Bound program is five years.
(a) Technical or administrative error for applications not reviewed. (1) An applicant whose grant application was not evaluated during the competition may request that the Secretary review the application if—
(i) The applicant has met all of the application submission requirements included in the
(ii) The applicant provides evidence demonstrating that the Department or an agent of the Department made a technical or administrative error in the processing of the submitted application.
(2) A technical or administrative error in the processing of an application includes—
(i) A problem with the system for the electronic submission of applications that was not addressed in accordance with the procedures included in the
(ii) An error in determining an applicant's eligibility for funding consideration, which may include, but is not limited to—
(A) An incorrect conclusion that the application was submitted by an ineligible applicant;
(B) An incorrect conclusion that the application exceeded the published page limit;
(C) An incorrect conclusion that the applicant requested funding greater than the published maximum award; or
(D) An incorrect conclusion that the application was missing critical sections of the application; and
(iii) Any other mishandling of the application that resulted in an otherwise eligible application not being reviewed during the competition.
(3)(i) If the Secretary determines that the Department or the Department's agent made a technical or administrative error, the Secretary has the application evaluated and scored.
(ii) If the total score assigned the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c) of this section.
(b) Administrative or scoring error for applications that were reviewed. (1) An applicant that was not selected for funding during a competition may request that the Secretary conduct a second review of the application if—
(i) The applicant provides evidence demonstrating that the Department, an agent of the Department, or a peer reviewer made an administrative or scoring error in the review of its application; and
(ii) The final score assigned to the application is within the funding band described in paragraph (d) of this section.
(2) An administrative error relates to either the PE points or the scores assigned to the application by the peer reviewers.
(i) For PE points, an administrative error includes mathematical errors made by the Department or the Department's agent in the calculation of the PE points or a failure to correctly add the earned PE points to the peer reviewer score.
(ii) For the peer review score, an administrative error is applying the wrong peer reviewer scores to an application.
(3)(i) A scoring error relates only to the peer review process and includes errors caused by a reviewer who, in assigning points—
(A) Uses criteria not required by the applicable law or program regulations, the
(B) Does not consider relevant information included in the appropriate section of the application.
(ii) The term “scoring error” does not include—
(A) A peer reviewer's appropriate use of his or her professional judgment in evaluating and scoring an application;
(B) Any situation in which the applicant did not include information needed to evaluate its response to a specific selection criterion in the appropriate section of the application as stipulated in the
(C) Any error by the applicant.
(c) Procedures for the second review. (1) To ensure the timely awarding of grants under the competition, the Secretary sets aside a percentage of the funds allotted for the competition to be awarded after the second review is completed.
(2) After the competition, the Secretary makes new awards in rank order as described in § 645.30 based on the available funds for the competition minus the funds set aside for the second review.
(3) After the Secretary issues a notification of grant award to successful applicants, the Secretary notifies each unsuccessful applicant in writing as to the status of its application and the funding band for the second review and provides copies of the peer reviewers' evaluations of the applicant's application and the applicant's PE score, if applicable.
(4) An applicant that was not selected for funding following the competition as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section, may request a second review if the applicant demonstrates that the Department, the Department's agent, or a peer reviewer made an administrative or scoring error as provided in paragraph (b) of this section.
(5) An applicant whose application was not funded after the first review as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section has at least 15 calendar days after receiving notification that its application was not funded in which to submit a written request for a second review in accordance with the instructions and due date provided in the Secretary's written notification.
(6) An applicant's written request for a second review must be received by the Department or submitted electronically to the designated e-mail or Web address by the due date and time established by the Secretary.
(7) If the Secretary determines that the Department or the Department's agent made an administrative error that relates to the PE points awarded, as described in paragraph (b)(2)(i) of this section, the Secretary adjusts the applicant's PE score to reflect the correct number of PE points. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(8) If the Secretary determines that the Department, the Department's agent or the peer reviewer made an administrative error that relates to the peer reviewers' score(s), as described in paragraph (b)(2)(ii) of this section, the Secretary adjusts the applicant's peer reviewers' score(s) to correct the error. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(9) If the Secretary determines that a peer reviewer made a scoring error, as described in paragraph (b)(3) of this section, the Secretary convenes a second panel of peer reviewers in accordance with the requirements in section 402A(c)(8)(C)(iv)(III) of the HEA.
(10) The average of the peer reviewers' scores from the second peer review are used in the second ranking of applications. The average score obtained from the second peer review panel is the final peer reviewer score for the application and will be used even if the second review results in a lower score for the application than that obtained in the initial review.
(11) For applications in the funding band, the Secretary funds these applications in rank order based on adjusted scores and the available funds that have been set aside for the second review of applications.
(d) Process for establishing a funding band. (1) For each competition, the Secretary establishes a funding band for the second review of applications.
(2) The Secretary establishes the funding band for each competition based on the amount of funds the Secretary has set aside for the second review of applications.
(3) The funding band is composed of those applications—
(i) With a rank-order score before the second review that is below the lowest score of applications funded after the first review; and
(ii) That would be funded if the Secretary had 150 percent of the funds that were set aside for the second review of applications for the competition.
(e) Final decision. (1) The Secretary's determination of whether the applicant has met the requirements for a second review and the Secretary's decision on re-scoring of an application are final and not subject to further appeal or challenge.
(2) An application that scored below the established funding band for the competition is not eligible for a second review.
The cost principles that apply to the Upward Bound Program are in 2 CFR part 200, subpart E. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) In-service training of project staff.
(b) Rental of space if space is not available at the host institution and the space rented is not owned by the host institution.
(c) For participants in an Upward Bound residential summer component, room and board—computed on a weekly basis—not to exceed the weekly rate the host institution charges regularly enrolled students at the institution.
(d) Room and board for those persons responsible for dormitory supervision of participants during a residential summer component.
(e) Educational pamphlets and similar materials for distribution at workshops for the parents of participants.
(f) Student activity fees for Upward Bound participants.
(g) Admissions fees, transportation, Upward Bound T-shirts, and other costs necessary to participate in field trips, attend educational activities, visit museums, and attend other events that have as their purpose the intellectual, social, and cultural development of participants.
(h) Costs for one project-sponsored banquet or ceremony.
(i) Tuition costs for postsecondary credit courses at the host institution for participants in the summer bridge component.
(j)(1) Accident insurance to cover any injuries to a project participant while participating in a project activity; and
(2) Medical insurance and health service fees for the project participants while participating full-time in the summer component.
(k) Courses in English language instruction for project participants with limited proficiency in English and for whom English language proficiency is necessary to succeed in postsecondary education.
(l) Transportation costs of participants for regularly scheduled project activities.
(m) Transportation, meals, and overnight accommodations for staff members when they are required to accompany participants in project activities such as field trips.
(n) Purchase, lease, or rental of computer hardware, software, and other equipment, service agreements for such equipment, and supplies that support the delivery of services to participants, including technology used by participants in a rigorous secondary school program of study.
(o) Purchase, lease, or rental of computer equipment and software, service agreements for such equipment, and supplies needed for project administration and recordkeeping.
(p) Fees required for college admissions applications or entrance examinations if—
(1) A waiver of the fee is unavailable;
(2) The fee is paid by the grantee to a third party on behalf of a participant.
(q) Tuition costs for a course that is part of a rigorous secondary school program of study if—
(1) The course or a similar course is not offered at the secondary school that the participant attends or at another school within the school district;
(2) The grantee demonstrates to the Secretary's satisfaction that using grant funds is the most cost-effective way to deliver the course or courses necessary for the completion of a rigorous secondary school program of study for program participants;
(3) The course is taken through an accredited institution of higher education;
(4) The course is comparable in content and rigor to courses that are part of a rigorous secondary school program of study as defined in § 645.6(b);
(5) The secondary school accepts the course as meeting one or more of the course requirements for obtaining a regular secondary school diploma;
(6) A waiver of the tuition costs is unavailable;
(7) The tuition is paid with Upward Bound grant funds to an institution of higher education on behalf of a participant; and
(8) The Upward Bound project pays for no more than the equivalent of two courses for a participant each school year.
Costs that may not be charged against a grant under this program include the following:
(a) Research not directly related to the evaluation or improvement of the project.
(b) Meals for staff except as provided in § 645.40 (d) and (m) and in paragraph (c) of this section.
(c) Room and board for administrative and instructional staff personnel who do not have responsibility for dormitory supervision of project participants during a residential summer component unless these costs are approved by the Secretary.
(d) Room and board for participants in Veterans Upward Bound projects.
(e) Construction, renovation or remodeling of any facilities.
(f) Tuition, stipends, or any other form of student financial aid for project staff beyond that provided to employees of the grantee as part of its regular fringe benefit package.
(a) An Upward Bound project may provide stipends for all participants who participate on a full-time basis.
(b) In order to receive the stipend, the participant must show evidence of satisfactory participation in activities of the project including—
(1) Regular attendance; and
(2) Performance in accordance with standards established by the grantee and described in the application.
(c) The grantee may prorate the amount of the stipend according to the number of scheduled sessions in which the student participated.
(d) The following rules govern the amounts of stipends a grantee is permitted to provide:
(1) For Regular Upward Bound projects and Upward Bound Math and Science Centers—
(i) For the academic year component, the stipend may not exceed $40 per month; and
(ii) The stipend may not exceed $60 per month for the summer school recess for a period not to exceed three months, except that youth participating in a work-study position may be paid $300 per month during the summer school recess.
(2) For Veterans Upward Bound projects, the stipend may not exceed $40 per month.
(a) Number of Participants. For each year of the project period, a grantee must serve at least the number of participants that the Secretary identifies in the
(b) Project director. (1) A grantee must employ a full-time project director unless—
(i) The director is also administering one or two additional programs for disadvantaged students operated by the sponsoring institution or agency; or
(ii) The Secretary grants a waiver of this requirement.
(2) The grantee must give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirements in paragraph (b)(1) of this section if the applicant demonstrates that the project director will be able to effectively administer more than three programs and that this arrangement would promote effective coordination between the program and other Federal TRIO programs (sections 402B through 402F of the HEA) and similar programs funded through other sources.
(c) Recordkeeping. For each participant, a grantee must maintain a record of—
(1) The basis for the grantee's determination that the participant is eligible to participate in the project under § 645.3;
(2) The basis for the grantee's determination that the participant has a need for academic support in order to pursue successfully a program of education beyond secondary school;
(3) The services that are provided to the participant;
(4) The educational progress of the participant during high school and, to the degree possible, during the participant's pursuit of a postsecondary education program; and
(5) To the extent practicable, any services the participant receives during the project year from another Federal TRIO program or another federally funded program that serves populations similar to those served under the UB program.
The Student Support Services Program provides grants for projects designed to—
(a) Increase the college retention and graduation rates of eligible students;
(b) Increase the transfer rate of eligible students from two-year to four-year institutions; and
(c) Foster an institutional climate supportive of the success of students who are limited English proficient, students from groups that are traditionally underrepresented in postsecondary education, individuals with disabilities, homeless children and youth, foster care youth, or other disconnected students; and
(d) Improve the financial and economic literacy of students in areas such as—
(1) Basic personal income, household money management, and financial planning skills; and
(2) Basic economic decision-making skills.
An institution of higher education or a combination of institutions of higher education is eligible to receive a grant to carry out a Student Support Services project.
A student is eligible to participate in a Student Support Services project if the student meets all of the following requirements:
(a) Is a citizen or national of the United States or meets the residency requirements for Federal student financial assistance.
(b) Is enrolled at the grantee institution or accepted for enrollment in the next academic term at that institution.
(c) Has a need for academic support, as determined by the grantee, in order to pursue successfully a postsecondary educational program.
(d) Is—
(1) A low-income individual;
(2) A first generation college student; or
(3) An individual with disabilities.
(a) A Student Support Services project must provide the following services:
(1) Academic tutoring, directly or through other services provided by the institution, to enable students to complete postsecondary courses, which may include instruction in reading, writing, study skills, mathematics, science, and other subjects.
(2) Advice and assistance in postsecondary course selection.
(3)(i) Information on both the full range of Federal student financial aid programs and benefits (including Federal Pell Grant awards and loan forgiveness) and resources for locating public and private scholarships; and
(ii) Assistance in completing financial aid applications, including the Free Application for Federal Student Aid.
(4) Education or counseling services designed to improve the financial and economic literacy of students, including financial planning for postsecondary education.
(5) Activities designed to assist participants enrolled in four-year institutions of higher education in applying for admission to, and obtaining financial assistance for enrollment in, graduate and professional programs.
(6) Activities designed to assist students enrolled in two-year institutions of higher education in applying for admission to, and obtaining financial assistance for enrollment in, a four-year program of postsecondary education.
(b) A Student Support Services project may provide the following services:
(1) Individualized counseling for personal, career, and academic matters provided by assigned counselors.
(2) Information, activities, and instruction designed to acquaint students participating in the project with the range of career options available to the students.
(3) Exposure to cultural events and academic programs not usually available to disadvantaged students.
(4) Mentoring programs involving faculty or upper class students, or a combination thereof.
(5) Securing temporary housing during breaks in the academic year for—
(i) Students who are homeless children and youths or were formerly homeless children and youths; and
(ii) Foster care youths.
(6) Programs and activities as described in paragraph (a) of this section or paragraphs (b)(1) through (b)(4) of this section that are specially designed for students who are limited English proficient, students from groups that are traditionally underrepresented in postsecondary education, students who are individuals with disabilities, students who are homeless children and youths, students who are foster care youth, or other disconnected students.
(7) Other activities designed to meet the purposes of the Student Support Services Program in § 646.1.
A project period under the Student Support Services program is five years.
The following regulations apply to the Student Support Services Program:
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 75 (except for §§ 75.215 through 75.221), 77, 79, 82, 84, 86, 97, 98, and 99.
(b) The regulations in this part 646.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) Other definitions. The following definitions also apply to this part:
Academic need with reference to a student means a student whom the grantee determines needs one or more of the services stated under § 646.4 to succeed in a postsecondary educational program.
Combination of institutions of higher education means two or more institutions of higher education that have entered into a cooperative agreement for the purpose of carrying out a common objective, or an entity designated or created by a group of institutions of higher education for the purpose of carrying out a common objective on their behalf.
Different campus means a site of an institution of higher education that—
(1) Is geographically apart from the main campus of the institution;
(2) Is permanent in nature; and
(3) Offers courses in educational programs leading to a degree, certificate, or other recognized educational credential.
Different population means a group of individuals that an eligible entity desires to serve through an application for a grant under the Student Support Services program and that—
(1) Is separate and distinct from any other population that the entity has applied for a grant to serve; or
(2) While sharing some of the same needs as another population that the eligible entity has applied for a grant to serve, has distinct needs for specialized services.
Financial and economic literacy means knowledge about personal financial decision-making, which may include but is not limited to knowledge about—
(1) Personal and family budget planning;
(2) Understanding credit building principles to meet long-term and short-term goals (e.g., loan to debt ratio, credit scoring, negative impacts on credit scores);
(3) Cost planning for postsecondary or postbaccalaureate education (e.g., spending, saving, personal budgeting);
(4) College cost of attendance (e.g., public vs. private, tuition vs. fees, personal costs);
(5) Financial assistance (e.g., searches, application processes, differences between private and government loans, assistanceships); and
(6) Assistance in completing the Free Application for Federal Student Aid (FAFSA).
First generation college student means—
(1) A student neither of whose natural or adoptive parents received a baccalaureate degree;
(2) A student who, prior to the age of 18, regularly resided with and received support from only one parent and whose supporting parent did not receive a baccalaureate degree; or
(3) An individual who, prior to the age of 18, did not regularly reside with or receive support from a natural or an adoptive parent.
Foster care youth means youth who are in foster care or are aging out of the foster care system.
Homeless children and youth means persons defined in section 725 of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 1143a).
Individual with a disability means a person who has a disability, as that term is defined in section 12102 of the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
Institution of higher education means an educational institution as defined in sections 101 and 102 of the Act.
Limited English proficiency with reference to an individual, means a person whose native language is other than English and who has sufficient difficulty speaking, reading, writing, or understanding the English language to deny that individual the opportunity to learn successfully in classrooms in which English is the language of instruction.
Low-income individual means an individual whose family's taxable income did not exceed 150 percent of the poverty level amount in the calendar year preceding the year in which the individual initially participated in the project. The poverty level amount is determined by using criteria of poverty established by the Bureau of the Census of the U.S. Department of Commerce.
Participant means an individual who—
(1) Is determined to be eligible to participate in the project under § 646.3; and
(2) Receives project services that the grantee has determined to be sufficient to increase the individual's chances for success in a postsecondary educational program.
Sufficient financial assistance means the amount of financial aid offered a Student Support Services student, inclusive of Federal, State, local, private, and institutional aid which, together with parent or student contributions, is equal to the cost of attendance as determined by a financial aid officer at the institution.
(a) An eligible applicant may submit more than one application as long as each application describes a project that serves a different campus or a designated different population.
(b) For each grant competition, the Secretary designates, in the
(a) An applicant must assure the Secretary in the application that—
(1) Not less than two-thirds of the project participants will be—
(i) Low-income individuals who are first generation college students; or
(ii) Individuals with disabilities;
(2) The remaining project participants will be low-income individuals, first generation college students, or individuals with disabilities; and
(3) Not less than one-third of the individuals with disabilities served also will be low-income individuals.
(b) The applicant must describe in the application its efforts, and where applicable, past history, in—
(1) Providing sufficient financial assistance to meet the full financial need of each student in the project; and
(2) Maintaining the loan burden of each student in the project at a manageable level.
(c) The applicant must assure the Secretary in the application that a student will not be served by more than one SSS project at any one time and that the SSS project will collaborate with other SSS and McNair projects and other State and institutional programs at the grantee-institution so that more students can be served.
(d) The applicant must assure the Secretary in the application that the institution's financial aid office will consult with the SSS project with respect to which SSS participants should receive grant aid and the amount of the grant aid awards.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates the application on the basis of the selection criteria in § 646.21.
(ii) The maximum score for all the criteria in § 646.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) If an application for a new grant proposes to continue to serve substantially the same population and campus that the applicant is serving under an expiring grant, the Secretary evaluates the applicant's prior experience of high quality service delivery under the expiring grant on the basis of the outcome criteria in § 646.22.
(ii) The maximum total score for all the criteria in § 646.22 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(iii) The Secretary evaluates the PE of an applicant for each of the three project years that the Secretary designates in the
(iv) An applicant may earn up to 15 PE points for each of the designated project years for which annual performance report data are available.
(v) The final PE score is the average of the scores for the three project years assessed.
(b) The Secretary makes new grants in rank order on the basis of the applications' total scores under paragraphs (a)(1) and (a)(2) of this section.
(c) If the total scores of two or more applications are the same and there is insufficient money available to fully fund them both after funding the higher-ranked applications, the Secretary chooses among the tied applications so as to serve geographic areas that have been underserved by the Student Support Services Program.
(d) The Secretary does not make a new grant to an applicant if the applicant's prior project involved the fraudulent use of program funds.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a) Need for the project (24 points). The Secretary evaluates the need for a Student Support Services project proposed at the applicant institution on the basis of the extent to which the application contains clear evidence of—
(1) (8 points) A high number or percentage, or both, of students enrolled or accepted for enrollment at the applicant institution who meet the eligibility requirements of § 646.3;
(2) (8 points) The academic and other problems that eligible students encounter at the applicant institution; and
(3) (8 points) The differences between eligible Student Support Services students compared to an appropriate group, based on the following indicators:
(i) Retention and graduation rates.
(ii) Grade point averages.
(iii) Graduate and professional school enrollment rates (four-year colleges only).
(iv) Transfer rates from two-year to four-year institutions (two-year colleges only).
(b) Objectives (8 points). The Secretary evaluates the quality of the applicant's proposed objectives in the following areas on the basis of the extent to which they are both ambitious, as related to the need data provided under paragraph (a) of this section, and attainable, given the project's plan of operation, budget, and other resources.
(1) (3 points) Retention in postsecondary education.
(2) (2 points) In good academic standing at grantee institution.
(3) Two-year institutions only. (i) (1 point) Certificate or degree completion; and
(ii) (2 points) Certificate or degree completion and transfer to a four-year institution.
(4) Four-year institutions only. (3 points) Completion of a baccalaureate degree.
(c) Plan of operation (30 points). The Secretary evaluates the quality of the applicant's plan of operation on the basis of the following:
(1) (3 points) The plan to inform the institutional community (students, faculty, and staff) of the goals, objectives, and services of the project and the eligibility requirements for participation in the project.
(2) (3 points) The plan to identify, select, and retain project participants with academic need.
(3) (4 points) The plan for assessing each individual participant's need for specific services and monitoring his or her academic progress at the institution to ensure satisfactory academic progress.
(4) (10 points) The plan to provide services that address the goals and objectives of the project.
(5) (10 points) The applicant's plan to ensure proper and efficient administration of the project, including the organizational placement of the project; the time commitment of key project staff; the specific plans for financial management, student records management, and personnel management; and, where appropriate, its plan for coordination with other programs for disadvantaged students.
(d) Institutional commitment (16 points). The Secretary evaluates the institutional commitment to the proposed project on the basis of the extent to which the applicant has—
(1) (6 points) Committed facilities, equipment, supplies, personnel, and other resources to supplement the grant and enhance project services;
(2) (6 points) Established administrative and academic policies that enhance participants' retention at the institution and improve their chances of graduating from the institution;
(3) (2 points) Demonstrated a commitment to minimize the dependence on student loans in developing financial aid packages for project participants by committing institutional resources to the extent possible; and
(4) (2 points) Assured the full cooperation and support of the Admissions, Student Aid, Registrar and data collection and analysis components of the institution.
(e) Quality of personnel (9 points). To determine the quality of personnel the applicant plans to use, the Secretary looks for information that shows—
(1) (3 points) The qualifications required of the project director, including formal education and training in fields related to the objectives of the project, and experience in designing, managing, or implementing Student Support Services or similar projects;
(2) (3 points) The qualifications required of other personnel to be used in the project, including formal education, training, and work experience in fields related to the objectives of the project; and
(3) (3 points) The quality of the applicant's plan for employing personnel who have succeeded in overcoming barriers similar to those confronting the project's target population.
(f) Budget (5 points). The Secretary evaluates the extent to which the project budget is reasonable, cost-effective, and adequate to support the project.
(g) Evaluation plan (8 points). The Secretary evaluates the quality of the evaluation plan for the project on the basis of the extent to which—
(1) The applicant's methods for evaluation—
(i) (2 points) Are appropriate to the project and include both quantitative and qualitative evaluation measures; and
(ii) (2 points) Examine in specific and measurable ways, using appropriate baseline data, the success of the project in improving academic achievement, retention and graduation of project participants; and
(2) (4 points) The applicant intends to use the results of an evaluation to make programmatic changes based upon the results of project evaluation.
(a) In the case of an application described in § 646.20(a)(2)(i), the Secretary—
(1) Evaluates the applicant's performance under its expiring Student Support Services project;
(2) Uses the approved project objectives for the applicant's expiring Student Support Services grant and the information the applicant submitted in its annual performance reports (APRs) to determine the number of prior PE points; and
(3) May adjust a calculated PE score or decide not to award PE points if other information such as audit reports, site visit reports, and project evaluation reports indicates the APR data used to calculate PE points are incorrect.
(b) The Secretary does not award PE points for a given year to an applicant that does not serve at least 90 percent of the approved number of participants. For purposes of this section, the approved number of participants is the total number of participants the project would serve as agreed upon by the grantee and the Secretary.
(c) The Secretary does not award PE points for the criterion specified in paragraph (e)(1) of this section (Number of participants) if the applicant did not serve at least the approved number of participants.
(d) The Secretary uses the approved number of participants, or the actual number of participants served in a given year if greater than the approved number of participants, as the denominator for calculating whether the applicant has met its approved objectives related to paragraph (e)(2) of this section (Postsecondary retention) and paragraph (e)(3) of this section (Good academic standing).
(e) For purposes of the PE evaluation of grants awarded after January 1, 2009, the Secretary evaluates the applicant's PE on the basis of the following outcome criteria:
(1) (3 points) Number of participants. Whether the applicant provided services to no less than the approved number of participants.
(2) (4 points) Postsecondary retention. Whether the applicant met or exceeded its objective regarding the participants served during the project year who continue to be enrolled in a program of postsecondary education from one academic year to the beginning of the next academic year or who complete a program of postsecondary education at the grantee institution during the academic year or transfer from a two-year institution to a four-year institution during the academic year.
(3) (4 points) Good academic standing. Whether the applicant met or exceeded its objective regarding the participants served during the project year who are in good academic standing at the grantee institution.
(4) (4 points) Degree completion (for an applicant institution of higher education offering primarily a baccalaureate or higher degree). Whether the applicant met or exceeded its objective regarding the current and prior participants receiving a baccalaureate degree at the grantee institution within the specified number of years.
(5) Degree completion and transfer (for an applicant institution of higher education offering primarily an associate degree). Whether the applicant met or exceeded its objectives regarding the current and prior participants at the grantee institution who—
(i) (2 points) Complete a degree or certificate within the number of years specified in the approved objective; and
(ii) (2 points) Transfer within the number of years specified in the approved objective to institutions of higher education that offer baccalaureate degrees.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233, for new grants; and
(2) 34 CFR 75.253, for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) $200,000; or
(2) The amount requested by the applicant.
(a) Technical or administrative error for applications not reviewed. (1) An applicant whose grant application was not evaluated during the competition may request that the Secretary review the application if—
(i) The applicant has met all of the application submission requirements included in the
(ii) The applicant provides evidence demonstrating that the Department or an agent of the Department made a technical or administrative error in the processing of the submitted application.
(2) A technical or administrative error in the processing of an application includes—
(i) A problem with the system for the electronic submission of applications that was not addressed in accordance with the procedures included in the
(ii) An error in determining an applicant's eligibility for funding consideration, which may include, but is not limited to—
(A) An incorrect conclusion that the application was submitted by an ineligible applicant;
(B) An incorrect conclusion that the application exceeded the published page limit;
(C) An incorrect conclusion that the applicant requested funding greater than the published maximum award; or
(D) An incorrect conclusion that the application was missing critical sections of the application; and
(iii) Any other mishandling of the application that resulted in an otherwise eligible application not being reviewed during the competition.
(3)(i) If the Secretary determines that the Department or the Department's agent made a technical or administrative error, the Secretary has the application evaluated and scored.
(ii) If the total score assigned the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c) of this section.
(b) Administrative or scoring error for applications that were reviewed. (1) An applicant that was not selected for funding during a competition may request that the Secretary conduct a second review of the application if—
(i) The applicant provides evidence demonstrating that the Department, an agent of the Department, or a peer reviewer made an administrative or scoring error in the review of its application; and
(ii) The final score assigned to the application is within the funding band described in paragraph (d) of this section.
(2) An administrative error relates to either the PE points or the scores assigned to the application by the peer reviewers.
(i) For PE points, an administrative error includes mathematical errors made by the Department or the Department's agent in the calculation of the PE points or a failure to correctly add the earned PE points to the peer reviewer score.
(ii) For the peer review score, an administrative error is applying the wrong peer reviewer scores to an application.
(3)(i) A scoring error relates only to the peer review process and includes errors caused by a reviewer who, in assigning points—
(A) Uses criteria not required by the applicable law or program regulations, the
(B) Does not consider relevant information included in the appropriate section of the application.
(ii) The term “scoring error” does not include—
(A) A peer reviewer's appropriate use of his or her professional judgment in evaluating and scoring an application;
(B) Any situation in which the applicant did not include information needed to evaluate its response to a specific selection criterion in the appropriate section of the application as stipulated in the
(C) Any error by the applicant.
(c) Procedures for the second review. (1) To ensure the timely awarding of grants under the competition, the Secretary sets aside a percentage of the funds allotted for the competition to be awarded after the second review is completed.
(2) After the competition, the Secretary makes new awards in rank order as described in § 646.20 based on the available funds for the competition minus the funds set aside for the second review.
(3) After the Secretary issues a notification of grant award to successful applicants, the Secretary notifies each unsuccessful applicant in writing as to the status of its application and the funding band for the second review and provides copies of the peer reviewers' evaluations of the applicant's application and the applicant's PE score, if applicable.
(4) An applicant that was not selected for funding following the competition as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section, may request a second review if the applicant demonstrates that the Department, the Department's agent, or a peer reviewer made an administrative or scoring error as provided in paragraph (b) of this section.
(5) An applicant whose application was not funded after the first review as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section has at least 15 calendar days after receiving notification that its application was not funded in which to submit a written request for a second review in accordance with the instructions and due date provided in the Secretary's written notification.
(6) An applicant's written request for a second review must be received by the Department or submitted electronically to the designated e-mail or Web address by the due date and time established by the Secretary.
(7) If the Secretary determines that the Department or the Department's agent made an administrative error that relates to the PE points awarded, as described in paragraph (b)(2)(i) of this section, the Secretary adjusts the applicant's PE score to reflect the correct number of PE points. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(8) If the Secretary determines that the Department, the Department's agent or the peer reviewer made an administrative error that relates to the peer reviewers' score(s), as described in paragraph (b)(2)(ii) of this section, the Secretary adjusts the applicant's peer reviewers' score(s) to correct the error. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(9) If the Secretary determines that a peer reviewer made a scoring error, as described in paragraph (b)(3) of this section, the Secretary convenes a second panel of peer reviewers in accordance with the requirements in section 402A(c)(8)(C)(iv)(III) of the HEA.
(10) The average of the peer reviewers' scores from the second peer review are used in the second ranking of applications. The average score obtained from the second peer review panel is the final peer reviewer score for the application and will be used even if the second review results in a lower score for the application than that obtained in the initial review.
(11) For applications in the funding band, the Secretary funds these applications in rank order based on adjusted scores and the available funds that have been set aside for the second review of applications.
(d) Process for establishing a funding band. (1) For each competition, the Secretary establishes a funding band for the second review of applications.
(2) The Secretary establishes the funding band for each competition based on the amount of funds the Secretary has set aside for the second review of applications.
(3) The funding band is composed of those applications—
(i) With a rank-order score before the second review that is below the lowest score of applications funded after the first review; and
(ii) That would be funded if the Secretary had 150 percent of the funds that were set aside for the second review of applications for the competition.
(e) Final decision. (1) The Secretary's determination of whether the applicant has met the requirements for a second review and the Secretary's decision on re-scoring of an application are final and not subject to further appeal or challenge.
(2) An application that scored below the established funding band for the competition is not eligible for a second review.
The cost principles that apply to the Student Support Services Program are in 2 CFR part 200, subpart E. Allowable costs include the following if they are reasonably related to the objectives of the project:
(a) Cost of remedial and special classes if—
(1) These classes are not otherwise available at the grantee institution;
(2) Are limited to eligible project participants; and
(3) Project participants are not charged tuition for classes paid for by the project.
(b) Courses in English language instruction for students of limited English proficiency if these classes are limited to eligible project participants and not otherwise available at the grantee institution.
(c) In-service training of project staff.
(d) Activities of an academic or cultural nature, such as field trips, special lectures, and symposiums, that have as their purpose the improvement of the participants' academic progress and personal development.
(e) Transportation and, with the prior approval of the Secretary, meals and lodging for participants and staff during approved educational and cultural activities sponsored by the project.
(f) Purchase, lease, or rental of computer hardware, software, and other equipment, service agreements for such equipment, and supplies for participant development, project administration, or project recordkeeping.
(g) Professional development travel for staff if directly related to the project's overall purpose and activities, except that these costs may not exceed four percent of total project salaries. The Secretary may adjust this percentage if the applicant demonstrates to the Secretary's satisfaction that a higher percentage is necessary and reasonable.
(h) Project evaluation that is directly related to assessing the project's impact on student achievement and improving the delivery of services.
(i) Grant aid to eligible students who—
(1) Are in their first two years of postsecondary education and who are receiving Federal Pell Grants under subpart 1 of part A of title IV of the Act; or
(2) Have completed their first two years of postsecondary education and who are receiving Federal Pell Grants under subpart 1 of part A of title IV of the Act if the institution demonstrates to the satisfaction of the Secretary that—
(i) These students are at high risk of dropping out; and
(ii) It will first meet the needs of all its eligible first- and second-year students for services under this paragraph.
(j) Temporary housing during breaks in the academic year for—
(1) Students who are homeless children and youths or were formerly homeless children and youths; and
(2) Students who are foster care youth.
Costs that may not be charged against a grant under the Student Support Services Program include, but are not limited to, the following:
(a) Costs involved in recruiting students for enrollment at the institution.
(b) Tuition, fees, stipends, and other forms of direct financial support, except for Grant aid under § 646.30(i) for staff or participants.
(c) Research not directly related to the evaluation or improvement of the project.
(d) Construction, renovation, or remodeling of any facilities.
(a) Number of Participants. For each year of the project period, a grantee must serve at least the number of participants that the Secretary identifies in the
(b) Eligibility of participants. (1) A grantee shall determine the eligibility of each participant in the project when the individual is selected to participate. The grantee does not have to revalidate a participant's eligibility after the participant's initial selection.
(2) A grantee shall determine the low-income status of an individual on the basis of the documentation described in section 402A(e) of the Act.
(c) Recordkeeping. A grantee must maintain participant records that show—
(1) The basis for the grantee's determination that each participant is eligible to participate in the project under § 646.3;
(2) The grantee's basis for determining the academic need for each participant;
(3) The services that are provided to each participant;
(4) The performance and progress of each participant by cohort for the duration of the participant's attendance at the grantee institution; and
(5) To the extent practicable, any services the participant receives during the project year from another Federal TRIO program or another federally funded program that serves populations similar to those served under the SSS program.
(d) Project director. (1) A grantee must employ a full-time project director unless—
(i) The director is also administering one or two additional programs for disadvantaged students operated by the sponsoring institution or agency; or
(ii) The Secretary grants a waiver of this requirement.
(2) The grantee must give the project director sufficient authority to administer the project effectively.
(3) The Secretary waives the requirements in paragraph (d)(1) of this section if the applicant demonstrates that the project director will be able to effectively administer more than three programs and that this arrangement would promote effective coordination between the program and other Federal TRIO programs (sections 402B through 402F of the HEA) or similar programs funded through other sources.
(e) Project coordination. (1) The Secretary encourages grantees to coordinate project services with other programs for disadvantaged students operated by the grantee institution provided the Student Support Services grant funds are not used to support activities reasonably available to the general student population.
(2) To the extent practical, the grantee may share staff with programs serving similar populations provided the grantee maintains appropriate records of staff time and effort and does not commingle grant funds.
(3) Costs for special classes and events that would benefit Student Support Services students and participants in other programs for disadvantaged students must be proportionately divided among the benefiting projects.
(a) Except for grantees described in paragraph (b) of this section, a grantee that uses Student Support Services program funds for grant aid to eligible students described in § 646.30(i) must—
(1) Match the Federal funds used for grant aid, in cash, from non-Federal funds, in an amount that is not less than 33 percent of the total amount of Federal grant funds used for Grant aid; and
(2) Use no more than 20 percent of the Federal program funds awarded the grantee each year for grant aid.
(b) A grant recipient that is an institution of higher education eligible to receive funds under part A or B of title III or title V of the HEA, as amended, is not required to match the Federal funds used for grant aid.
The Ronald E. McNair Postbaccalaureate Achievement Program—referred to in these regulations as the McNair program—awards grants to institutions of higher education for projects designed to provide disadvantaged college students with effective preparation for doctoral study.
Institutions of higher education and combinations of those institutions are eligible for grants to carry out McNair projects.
A student is eligible to participate in a McNair project if the student meets all the following requirements:
(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States; or
(3) Is in the United States for other than a temporary purpose and provides evidence from the Immigration and Naturalization Service of his or her intent to become a permanent resident; or
(4) Is a permanent resident of Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands; or
(5) Is a resident of one of the Freely Associated States.
(b) Is currently enrolled in a degree program at an institution of higher education that participates in the student financial assistance programs authorized under Title IV of the HEA.
(c) Is—
(1) A low-income individual who is a first-generation college student;
(2) A member of a group that is underrepresented in graduate education; or
(3) A member of a group that is not listed in § 647.7 if the group is underrepresented in certain academic disciplines as documented by standard statistical references or other national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(d) Has not enrolled in doctoral level study at an institution of higher education.
(a) A McNair project must provide the following services and activities:
(1) Opportunities for research or other scholarly activities at the grantee institution or at graduate centers that are designed to provide students with effective preparation for doctoral study.
(2) Summer internships.
(3) Seminars and other educational activities designed to prepare students for doctoral study.
(4) Tutoring.
(5) Academic counseling.
(6) Assistance to students in securing admission to, and financial assistance for, enrollment in graduate programs.
(b) A McNair project may provide the following services and activities:
(1) Education or counseling services designed to improve the financial and economic literacy of students, including financial planning for postsecondary education.
(2) Mentoring programs involving faculty members at institutions of higher education, students, or a combination of faculty members and students.
(3) Exposure to cultural events and academic programs not usually available to disadvantaged students.
(4) Other activities designed to meet the purpose of the McNair Program in § 647.1.
A project period under the McNair program is five years.
(a) The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 75 (except for §§ 75.215 through 75.221), 77, 79, 82, 84, 86, 97, 98, and 99.
(b) The regulations in this part 647.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) Other definitions. The following definitions also apply to this part:
Different campus means a site of an institution of higher education that—
(1) Is geographically apart from the main campus of the institution;
(2) Is permanent in nature; and
(3) Offers courses in educational programs leading to a degree, certificate, or other recognized educational credential.
Different population means a group of individuals that an eligible entity desires to serve through an application for a grant under the McNair TRIO program and that—
(1) Is separate and distinct from any other population that the entity has applied for a grant to serve; or
(2) While sharing some of the same needs as another population that the eligible entity has applied for a grant to serve, has distinct needs for specialized services.
Financial and economic literacy means knowledge about personal financial decision-making, which may include but is not limited to knowledge about—
(1) Personal and family budget planning;
(2) Understanding credit-building principles to meet long-term and short-term goals (e.g., loan to debt ratio, credit scoring, negative impacts on credit scores);
(3) Cost planning for postsecondary or postbaccalaureate education (e.g., spending, saving, personal budgeting);
(4) College cost of attendance (e.g., public vs. private, tuition vs. fees, personal costs);
(5) Financial assistance (e.g., searches, application processes, and differences between private and government loans, assistanceships); and
(6) Assistance in completing the Free Application for Federal Student Aid (FAFSA).
First-generation college student means—
(1) A student neither of whose natural or adoptive parents received a baccalaureate degree; or
(2) A student who, prior to the age of 18, regularly resided with and received support from only one parent, and whose supporting parent did not receive a baccalaureate degree.
(3) An individual who, prior to the age of 18, did not regularly reside with or receive support from a natural or an adoptive parent.
Graduate center means an institution of higher education as defined in sections 101 and 102 of the HEA; and that—
(1) Provides instruction in one or more programs leading to a doctoral degree;
(2) Maintains specialized library collections;
(3) Employs scholars engaged in research that relates to the subject areas of the center; and
(4) Provides outreach and consultative services on a national, regional or local basis.
Graduate education means studies beyond the bachelor's degree leading to a postbaccalaureate degree.
Groups underrepresented in graduate education. The following ethnic and racial groups are considered underrepresented in graduate education: Black (non-Hispanic), Hispanic, American Indian, Alaskan Native (as defined in section 7306 of the Elementary and Secondary Education Act of 1965, as amended (ESEA)), Native Hawaiians (as defined in section 7207 of the ESEA), and Native American Pacific Islanders (as defined in section 320 of the HEA).
HEA means the Higher Education Act of 1965, as amended.
Institution of higher education means an educational institution as defined in sections 101 and 102 of the HEA.
Low-income individual means an individual whose family's taxable income did not exceed 150 percent of the poverty level in the calendar year preceding the year in which the individual participates in the project. Poverty level income is determined by using criteria of poverty established by the Bureau of the Census of the U.S. Department of Commerce.
Research or scholarly activity means an educational activity that is more rigorous than is typically available to undergraduates in a classroom setting, that is definitive in its start and end dates, contains appropriate benchmarks for completion of various components, and is conducted under the guidance of an appropriate faculty member with experience in the relevant discipline.
Target population means the universe from which McNair participants will be selected. The universe may be expressed in terms of geography, type of institution, academic discipline, type of disadvantage, type of underrepresentation, or any other qualifying descriptor that would enable an applicant to more precisely identify the kinds of eligible project participants they wish to serve.
(a) An applicant may submit more than one application for McNair grants as long as each application describes a project that serves a different campus or a designated different population.
(b) For each grant competition, the Secretary designates, in the
An applicant must submit as part of its application, assurances that—
(a) Each participant enrolled in the project will be enrolled in a degree program at an institution of higher education that participates in one or more of the student financial assistance programs authorized under Title IV of the HEA;
(b) Each participant given a summer research internship will have completed his or her sophomore year of study; and
(c)(1) At least two thirds of the students to be served will be low-income individuals who are first-generation college students; and
(2) The remaining students to be served will be members of groups underrepresented in graduate education.
(d) A student will not be served by more than one McNair project at any one time and that the McNair project will collaborate with other McNair and SSS projects and other State and institutional programs at the grantee-institution, including those supporting undergraduate research, so that more students can be served.
(a) The Secretary evaluates an application for a new grant as follows:
(1)(i) The Secretary evaluates an application on the basis of the selection criteria in § 647.21.
(ii) The maximum score for all the criteria in § 647.21 is 100 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(2)(i) For an application from an applicant who has carried out a McNair project in the fiscal year immediately preceding the fiscal year for which the applicant is applying, the Secretary evaluates the applicant's prior experience of high quality service delivery on the basis of the outcome criteria in § 647.22.
(ii) The maximum total score for all the criteria in § 647.22 is 15 points. The maximum score for each criterion is indicated in parentheses with the criterion.
(iii) If an applicant described in paragraph (a)(2)(i) of this section applies for more than one new grant in the same fiscal year, the Secretary applies the criteria in § 647.22 to a project that seeks to continue support for an existing McNair project on that campus.
(iv) The Secretary evaluates the PE of an applicant for each of the three project years that the Secretary designates in the
(v) An applicant may earn up to 15 PE points for each of the designated project years for which annual performance report data are available.
(vi) The final PE score is the average of the scores for the three project years assessed.
(b) The Secretary makes new grants in rank order on the basis of the total scores received by applications under paragraphs (a)(1) through (a)(3) of this section.
(c)(1) If the total scores of two or more applications are the same and there are insufficient funds for these applications after the approval of higher-ranked applications, the Secretary uses the remaining funds to achieve an equitable geographic distribution of all new projects.
(2) In making an equitable geographic distribution of new projects, the Secretary considers only the locations of new projects.
(d) The Secretary does not make a new grant to an applicant if the applicant's prior project involved the fraudulent use of program funds.
The Secretary uses the following criteria to evaluate an application for a new grant:
(a) Need (16 Points). The Secretary reviews each application to determine the extent to which the applicant can clearly and definitively demonstrate the need for a McNair project to serve the target population. In particular, the Secretary looks for information that clearly defines the target population; describes the academic, financial and other problems that prevent potentially eligible project participants in the target population from completing baccalaureate programs and continuing to postbaccalaureate programs; and demonstrates that the project's target population is underrepresented in graduate education, doctorate degrees conferred and careers where a doctorate is a prerequisite.
(b) Objectives (9 points). The Secretary evaluates the quality of the applicant's objectives and proposed targets (percentages) in the following areas on the basis of the extent to which they are both ambitious, as related to the need data provided under paragraph (a) of this section, and attainable, given the project's plan of operation, budget, and other resources:
(1) (2 points) Research or scholarly activity.
(2) (3 points) Enrollment in a graduate program.
(3) (2 points) Continued enrollment in graduate study.
(4) (2 points) Doctoral degree attainment.
(c) Plan of Operation (44 points). The Secretary reviews each application to determine the quality of the applicant's plans of operation, including—
(1) (4 points) The plan for identifying, recruiting and selecting participants to be served by the project, including students enrolled in the Student Support Services program;
(2) (4 points) The plan for assessing individual participant needs and for monitoring the academic growth of participants during the period in which the student is a McNair participant;
(3) (5 points) The plan for providing high quality research and scholarly activities in which participants will be involved;
(4) (5 points) The plan for involving faculty members in the design of research activities in which students will be involved;
(5) (5 points) The plan for providing internships, seminars, and other educational activities designed to prepare undergraduate students for doctoral study;
(6) (5 points) The plan for providing individual or group services designed to enhance a student's successful entry into postbaccalaureate education;
(7) (3 points) The plan to inform the institutional community of the goals and objectives of the project;
(8) (8 points) The plan to ensure proper and efficient administration of the project, including, but not limited to matters such as financial management, student records management, personnel management, the organizational structure, and the plan for coordinating the McNair project with other programs for disadvantaged students; and
(9) (5 points) The follow-up plan that will be used to track the academic and career accomplishments of participants after they are no longer participating in the McNair project.
(d) Quality of key personnel (9 points). The Secretary evaluates the quality of key personnel the applicant plans to use on the project on the basis of the following:
(1)(i) The job qualifications of the project director.
(ii) The job qualifications of each of the project's other key personnel.
(iii) The quality of the project's plan for employing highly qualified persons, including the procedures to be used to employ members of groups underrepresented in higher education, including Blacks, Hispanics, American Indians, Alaska Natives, Asian Americans and Pacific Islanders (including Native Hawaiians).
(2) In evaluating the qualifications of a person, the Secretary considers his or her experience and training in fields related to the objectives of the project.
(e) Adequacy of the resources and budget (15 points). The Secretary evaluates the extent to which—
(1) The applicant's proposed allocation of resources in the budget is clearly related to the objectives of the project;
(2) Project costs and resources, including facilities, equipment, and supplies, are reasonable in relation to the objectives and scope of the project; and
(3) The applicant's proposed commitment of institutional resources to the McNair participants, as for example, the commitment of time from institutional research faculty and the waiver of tuition and fees for McNair participants engaged in summer research projects.
(f) Evaluation plan (7 points). The Secretary evaluates the quality of the evaluation plan for the project on the basis of the extent to which the applicant's methods of evaluation—
(1) Are appropriate to the project's objectives;
(2) Provide for the applicant to determine, in specific and measurable ways, the success of the project in—
(i) Making progress toward achieving its objectives (a formative evaluation); and
(ii) Achieving its objectives at the end of the project period (a summative evaluation); and
(3) Provide for a description of other project outcomes, including the use of quantifiable measures, if appropriate.
(a) In the case of an applicant described in § 647.20(a)(2)(i), the Secretary—
(1) Evaluates an applicant's performance under its expiring McNair project;
(2) Uses the approved project objectives for the applicant's expiring McNair grant and the information the applicant submitted in its annual performance reports (APRs) to determine the number of PE points; and
(3) May adjust a calculated PE score or decide not to award PE points if other information such as audit reports, site visit reports, and project evaluation reports indicates the APR data used to calculate PE are incorrect.
(b) The Secretary does not award PE points for a given year to an applicant that does not serve at least 90 percent of the approved number of participants. For purposes of this section, the approved number of participants is the total number of participants the project would serve as agreed upon by the grantee and the Secretary.
(c) The Secretary does not award any PE points for the criteria specified in paragraph (e)(1) of this section (Number of participants) if the applicant did not serve at least the approved number of participants.
(d) The Secretary uses the approved number of participants, or the actual number of participants served in a given year if greater than the approved number of participants, as the denominator for calculating whether the applicant has met its approved objective related to paragraph (e)(2) of this section (Research and scholarly activities).
(e) For purposes of the PE evaluation of grants awarded after January 1, 2009, the Secretary evaluates the applicant's PE on the basis of the following outcome criteria:
(1) (3 points) Number of participants. Whether the applicant provided services to no less than the approved number of participants.
(2) (3 points) Research or scholarly activities. Whether the applicant met or exceeded its objective for providing participants served during the project year with appropriate research and scholarly activities each academic year.
(3) (3 points) Graduate school enrollment. Whether the applicant met or exceeded its objective with regard to the acceptance and enrollment in graduate programs of participants served during the project year who complete the baccalaureate program during the academic year.
(4) (4 points) Continued enrollment in graduate school. Whether the applicant met or exceeded its objective with regard to the continued enrollment in graduate school of prior participants.
(5) (2 points) Doctoral degree attainment. Whether the applicant met or exceeded its objective with regard to the attainment of doctoral level degrees of prior participants in the specified number of years.
(a) The Secretary sets the amount of a grant on the basis of—
(1) 34 CFR 75.232 and 75.233 for new grants; and
(2) 34 CFR 75.253 for the second and subsequent years of a project period.
(b) If the circumstances described in section 402A(b)(3) of the HEA exist, the Secretary uses the available funds to set the amount of the grant at the lesser of—
(1) $200,000; or
(2) The amount requested by the applicant.
(a) Technical or administrative error for applications not reviewed. (1) An applicant whose grant application was not evaluated during the competition may request that the Secretary review the application if—
(i) The applicant has met all of the application submission requirements included in the
(ii) The applicant provides evidence demonstrating that the Department or an agent of the Department made a technical or administrative error in the processing of the submitted application.
(2) A technical or administrative error in the processing of an application includes—
(i) A problem with the system for the electronic submission of applications that was not addressed in accordance with the procedures included in the
(ii) An error in determining an applicant's eligibility for funding consideration, which may include, but is not limited to—
(A) An incorrect conclusion that the application was submitted by an ineligible applicant;
(B) An incorrect conclusion that the application exceeded the published page limit;
(C) An incorrect conclusion that the applicant requested funding greater than the published maximum award; or
(D) An incorrect conclusion that the application was missing critical sections of the application; and
(iii) Any other mishandling of the application that resulted in an otherwise eligible application not being reviewed during the competition.
(3)(i) If the Secretary determines that the Department or the Department's agent made a technical or administrative error, the Secretary has the application evaluated and scored.
(ii) If the total score assigned the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c) of this section.
(b) Administrative or scoring error for applications that were reviewed. (1) An applicant that was not selected for funding during a competition may request that the Secretary conduct a second review of the application if—
(i) The applicant provides evidence demonstrating that the Department, an agent of the Department, or a peer reviewer made an administrative or scoring error in the review of its application; and
(ii) The final score assigned to the application is within the funding band described in paragraph (d) of this section.
(2) An administrative error relates to either the PE points or the scores assigned to the application by the peer reviewers.
(i) For PE points, an administrative error includes mathematical errors made by the Department or the Department's agent in the calculation of the PE points or a failure to correctly add the earned PE points to the peer reviewer score.
(ii) For the peer review score, an administrative error is applying the wrong peer reviewer scores to an application.
(3)(i) A scoring error relates only to the peer review process and includes errors caused by a reviewer who, in assigning points—
(A) Uses criteria not required by the applicable law or program regulations, the
(B) Does not consider relevant information included in the appropriate section of the application.
(ii) The term “scoring error” does not include—
(A) A peer reviewer's appropriate use of his or her professional judgment in evaluating and scoring an application;
(B) Any situation in which the applicant did not include information needed to evaluate its response to a specific selection criterion in the appropriate section of the application as stipulated in the
(C) Any error by the applicant.
(c) Procedures for the second review. (1) To ensure the timely awarding of grants under the competition, the Secretary sets aside a percentage of the funds allotted for the competition to be awarded after the second review is completed.
(2) After the competition, the Secretary makes new awards in rank order as described in § 647.20 based on the available funds for the competition minus the funds set aside for the second review.
(3) After the Secretary issues a notification of grant award to successful applicants, the Secretary notifies each unsuccessful applicant in writing as to the status of its application and the funding band for the second review and provides copies of the peer reviewers' evaluations of the applicant's application and the applicant's PE score, if applicable.
(4) An applicant that was not selected for funding following the competition as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section, may request a second review if the applicant demonstrates that the Department, the Department's agent, or a peer reviewer made an administrative or scoring error as provided in paragraph (b) of this section.
(5) An applicant whose application was not funded after the first review as described in paragraph (c)(2) of this section and whose application received a score within the funding band as described in paragraph (d) of this section has at least 15 calendar days after receiving notification that its application was not funded in which to submit a written request for a second review in accordance with the instructions and due date provided in the Secretary's written notification.
(6) An applicant's written request for a second review must be received by the Department or submitted electronically to a designated e-mail or Web address by the due date and time established by the Secretary.
(7) If the Secretary determines that the Department or the Department's agent made an administrative error that relates to the PE points awarded, as described in paragraph (b)(2)(i) of this section, the Secretary adjusts the applicant's PE score to reflect the correct number of PE points. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(8) If the Secretary determines that the Department, the Department's agent or the peer reviewer made an administrative error that relates to the peer reviewers' score(s), as described in paragraph (b)(2)(ii) of this section, the Secretary adjusts the applicant's peer reviewers' score(s) to correct the error. If the adjusted score assigned to the application would have resulted in funding of the application during the competition and the program has funds available, the Secretary funds the application prior to the re-ranking of applications based on the second peer review of applications described in paragraph (c)(9) of this section.
(9) If the Secretary determines that a peer reviewer made a scoring error, as described in paragraph (b)(3) of this section, the Secretary convenes a second panel of peer reviewers in accordance with the requirements in section 402A(c)(8)(C)(iv)(III) of the HEA.
(10) The average of the peer reviewers' scores from the second peer review are used in the second ranking of applications. The average score obtained from the second peer review panel is the final peer reviewer score for the application and will be used even if the second review results in a lower score for the application than that obtained in the initial review.
(11) For applications in the funding band, the Secretary funds these applications in rank order based on adjusted scores and the available funds that have been set aside for the second review of applications.
(d) Process for establishing a funding band. (1) For each competition, the Secretary establishes a funding band for the second review of applications.
(2) The Secretary establishes the funding band for each competition based on the amount of funds the Secretary has set aside for the second review of applications.
(3) The funding band is composed of those applications—
(i) With a rank-order score before the second review that is below the lowest score of applications funded after the first review; and
(ii) That would be funded if the Secretary had 150 percent of the funds that were set aside for the second review of applications for the competition.
(e) Final decision. (1) The Secretary's determination of whether the applicant has met the requirements for a second review and the Secretary's decision on re-scoring of an application are final and not subject to further appeal or challenge.
(2) An application that scored below the established funding band for the competition is not eligible for a second review.
The cost principles in 2 CFR part 200, subpart E, may include the following costs reasonably related to carrying out a McNair project:
(a) Activities of an academic or scholarly nature, such as trips to institutions of higher education offering doctoral programs, and special lectures, symposia, and professional conferences, which have as their purpose the encouragement and preparation of project participants for doctoral studies.
(b) Stipends of up to $2,800 per year for students engaged in research internships, provided that the student has completed the sophomore year of study at an eligible institution before the internship begins.
(c) Necessary tuition, room and board, and transportation for students engaged in research internships during the summer.
(d) Purchase, lease, or rental of computer hardware, software, and other equipment, service agreements for such equipment, and supplies for participant development, project administration, or project recordkeeping.
Costs that may not be charged against a grant under this program include the following:
(a) Payment of tuition, stipends, test preparation and fees or any other form of student financial support to staff or participants not expressly allowed under § 647.30.
(b) Construction, renovation, and remodeling of any facilities.
(a) Number of Participants. For each year of the project period, a grantee must serve at least the number of participants that the Secretary identifies in the
(b) Eligibility of participants. (1) A grantee shall determine the eligibility of each student before the student is selected to participate. A grantee does not have to redetermine a student's eligibility once the student has been determined eligible in accordance with the provisions of § 647.3; and
(2) A grantee shall determine the status of a low-income individual on the basis of the documentation described in section 402A(e) of the HEA.
(c) Recordkeeping. For each student, a grantee shall maintain a record of—
(1) The basis for the grantee's determination that the student is eligible to participate in the project under § 647.3;
(2) The individual needs assessment;
(3) The services provided to the participant; and
(4) The specific educational progress made by the student during and after participation in the project.
(5) To the extent practicable, any services the participant receives during the project year from another Federal TRIO program or another federally funded program that serves populations similar to those served under the McNair program.
(d) Other reporting requirements. A grantee shall submit to the Secretary reports and other information as requested in order to demonstrate program effectiveness.
(e) Project director. A grantee shall designate a project director who has—
(1) Authority to conduct the project effectively; and
(2) Appropriate professional qualifications, experience and administrative skills to effectively fulfill the objectives of the project.
The Graduate Assistance in Areas of National Need program provides fellowships through academic departments of institutions of higher education to assist graduate students of superior ability who demonstrate financial need.
(a) The Secretary awards grants to the following:
(1) Any academic department of an institution of higher education that provides a course of study that—
(i) Leads to a graduate degree in an area of national need; and
(ii) Has been in existence for at least four years at the time of an application for a grant under this part.
(2) An academic department of an institution of higher education that—
(i) Satisfies the requirements of paragraph (a)(1) of this section; and
(ii) Submits a joint application with one or more eligible nondegree-granting institutions that have formal arrangements for the support of doctoral dissertation research with one or more degree-granting institutions.
(b) A formal arrangement under paragraph (a)(2)(ii) of this section is a written agreement between a degree-granting institution and an eligible nondegree-granting institution whereby the degree-granting institution accepts students from the eligible nondegree-granting institution as doctoral degree candidates with the intention of awarding these students doctorates in an area of national need.
(c) The Secretary does not award a grant under this part for study at a school or department of divinity.
(a) The Secretary awards grants to institutions of higher education to fund fellowships in one or more areas of national need.
(b)(1) For the purposes of this part, the Secretary designates areas of national need from the academic areas listed in the appendix to this part or from the resulting inter-disciplines.
(2) The Secretary announces these areas of national need in a notice published in the
Each grant awarded by the Secretary consists of the following:
(a) The stipends paid by the Secretary through the institution of higher education to fellows. The stipend provides an allowance to a fellow for the fellow's (and his or her dependents') subsistence and other expenses.
(b) The institutional payments paid by the Secretary to the institution of higher education to be applied against each fellow's tuition, fees, and the costs listed in § 648.62(b).
(a) The amount of a grant to an academic department may not be less than $100,000 and may not be more than $750,000 in a fiscal year.
(b) In any fiscal year, no academic department may receive more than $750,000 as an aggregate total of new and continuing grants.
The duration of a grant awarded under this part is a maximum of three annual budget periods during a three-year (36-month) project period.
An institution shall provide, from non-Federal funds, an institutional matching contribution equal to at least 25 percent of the amount of the grant received under this part, for the uses indicated in § 648.63.
The following regulations apply to this program:
(a) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs).
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) 34 CFR part 82 (New Restrictions on Lobbying).
(6) [Reserved]
(7) 34 CFR part 86 (Drug-Free Schools and Campuses).
(b) The regulations in this part.
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) Other definitions. The following definitions also apply to this part:
Academic department means any department, program, unit, orany other administrative subdivision of an institution of higher education that—
(i) Directly administers or supervises post-baccalaureate instruction in a specific discipline; and
(ii) Has the authority to award academic course credit acceptable to meet degree requirements at an institution of higher education.
Academic field means an area of study in an academic department within an institution of higher education other than a school or department of divinity.
Academic year means the 12-month period commencing with the fall instructional term of the institution.
Application period means the period in which the Secretary solicits applications for this program.
Discipline means a branch of instruction or learning.
Eligible non-degree granting institution means any institution that—
(i) Conducts post-baccalaureate academic programs of study but does not award doctoral degrees in an area of national need;
(ii) Is described in section 501(c)(3) of the Internal Revenue Code of 1986 and is exempt from tax under section 501(a) of the Code;
(iii) Is organized and operated substantially to conduct scientific and cultural research and graduate training programs;
(iv) Is not a private foundation;
(v) Has academic personnel for instruction and counseling who meet the standards of the institution of higher education in which the students are enrolled; and
(vi) Has necessary research resources not otherwise readily available in the institutions in which students are enrolled.
Fees mean non-refundable charges paid by a graduate student for services, materials, and supplies that are not included within the tuition charged by the institution in which the student is enrolled.
Fellow means a recipient of a fellowship under this part.
Fellowship means an award made by an institution of higher education to an individual for graduate study under this part at the institution of higher education.
Financial need means the fellow's financial need as determined under title IV, part F, of the HEA for the period of the fellow's enrollment in the approved academic field of study for which the fellowship was awarded.
General operational overhead means non-instructional expenses incurred by an academic department in the normal administration and conduct of its academic program, including the costs of supervision, recruitment, capital outlay, debt service, indirect costs, or any other costs not included in the determination of tuition and non-refundable fee charges.
Graduate student means an individual enrolled in a program of post-baccalaureate study at an institution of higher education.
Graduate study means any program of postbaccalaureate study at an institution of higher education.
HEA means the Higher Education Act of 1965, as amended.
Highest possible degree available means a doctorate in an academic field or a master's degree, professional degree, or other post-baccalaureate degree if a doctorate is not available in that academic field.
Institution of higher education (Institution) means an institution of higher education, other than a school or department of divinity, as defined in section 1201(a) of the HEA.
Inter-discipline means a course of study that involves academic fields in two or more disciplines.
Minority means Alaskan Native, American Indian, Asian-American, Black (African-American), Hispanic American, Native Hawaiian, or Pacific Islander.
Multi-disciplinary application means an application that requests fellowships for more than a single academic department in areas of national need designated as priorities by the Secretary under this part.
Project means the activities necessary to assist, whether from grant funds or institutional resources, fellows in the successful completion of their designated educational programs.
Satisfactory progress means that a fellow meets or exceeds the institution's criteria and standards established for a graduate student's continued status as an applicant for the graduate degree in the academic field for which the fellowship was awarded.
School or department of divinity means an institution, or an academic department of an institution, whose program is specifically for the education of students to prepare them to become ministers of religion or to enter into some other religious vocation or to prepare them to teach theological subjects.
Students from traditionally underrepresented backgrounds mean women and minorities who traditionally are underrepresented in areas of national need as designated by the Secretary.
Supervised training means training provided to fellows under the guidance and direction of faculty in the academic department.
Tuition means the charge for instruction by the institution of higher education in which the fellow is enrolled.
Underrepresented in areas of national need means proportionate representation as measured by degree recipients, that is less than the proportionate representation in the general population, as indicated by—
(i) The most current edition of the Department's Digest of Educational Statistics;
(ii) The National Research Council's Doctorate Recipients from United States Universities;
(iii) Other standard statistical references, as announced annually in the
(iv) As documented by national survey data submitted to and accepted by the Secretary on a case-by-case basis.
(a) To apply for a grant under this part, an institution of higher education shall submit an application that responds to the appropriate selection criteria in § 648.31.
(b) In addition, an application for a grant must—
(1) Describe the current academic program for which the grant is sought;
(2) Request a specific number of fellowships to be awarded on a full-time basis for the academic year covered under the grant in each academic field included in the application;
(3) Set forth policies and procedures to ensure that in making fellowship awards under this part the institution will seek talented students from traditionally underrepresented backgrounds;
(4) Set forth policies and procedures to assure that in making fellowship awards under this part the institution will make awards to individuals who satisfy the requirements of § 648.40;
(5) Set forth policies and procedures to ensure that Federal funds made available under this part for any fiscal year will be used to supplement and, to the extent practical, increase the funds that otherwise would be made available for the purposes of this part and, in no case, to supplant those funds;
(6) Provide assurances that the institution will provide the institutional matching contribution described in § 648.7;
(7) Provide assurances that, in the event that funds made available to the academic department under this part are insufficient to provide the assistance due a student under the commitment entered into between the academic department and the student, the academic department will, from any funds available to it, fulfill the commitment to the student;
(8) Provide that the institution will comply with the requirements in subpart F; and
(9) Provide assurances that the academic department will provide at least one year of supervised training in instruction to students receiving fellowships under this program.
(c) In any application period, an academic department may not submit more than one application for new awards.
(a) The Secretary evaluates an application on the basis of the criteria in § 648.31.
(b) The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
The Secretary evaluates an application on the basis of the criteria in this section.
(a) Meeting the purposes of the program. The Secretary reviews each application to determine how well the project will meet the purposes of the program, including the extent to which—
(1) The applicant's general and specific objectives for the project are realistic and measurable;
(2) The applicant's objectives for the project seek to sustain and enhance the capacity for teaching and research at the institution and at State, regional, or national levels;
(3) The applicant's objectives seek to institute policies and procedures to ensure the enrollment of talented graduate students from traditionally underrepresented backgrounds; and
(4) The applicant's objectives seek to institute policies and procedures to ensure that it will award fellowships to individuals who satisfy the requirements of § 648.40.
(b) Extent of need for the project. The Secretary considers the extent to which a grant under the program is needed by the academic department by considering—
(1) How the applicant identified the problems that form the specific needs of the project;
(2) The specific problems to be resolved by successful realization of the goals and objectives of the project; and
(3) How increasing the number of fellowships will meet the specific and general objectives of the project.
(c) Quality of the graduate academic program. The Secretary reviews each application to determine the quality of the current graduate academic program for which project funding is sought, including—
(1) The course offerings and academic requirements for the graduate program;
(2) The qualifications of the faculty, including education, research interest, publications, teaching ability, and accessibility to graduate students;
(3) The focus and capacity for research; and
(4) Any other evidence the applicant deems appropriate to demonstrate the quality of its academic program.
(d) Quality of the supervised teaching experience. The Secretary reviews each application to determine the quality of the teaching experience the applicant plans to provide fellows under this program, including the extent to which the project—
(1) Provides each fellow with the required supervised training in instruction;
(2) Provides adequate instruction on effective teaching techniques;
(3) Provides extensive supervision of each fellow's teaching performance; and
(4) Provides adequate and appropriate evaluation of the fellow's teaching performance.
(e) Recruitment plan. The Secretary reviews each application to determine the quality of the applicant's recruitment plan, including—
(1) How the applicant plans to identify, recruit, and retain students from traditionally underrepresented backgrounds in the academic program for which fellowships are sought;
(2) How the applicant plans to identify eligible students for fellowships;
(3) The past success of the academic department in enrolling talented graduate students from traditionally underrepresented backgrounds; and
(4) The past success of the academic department in enrolling talented graduate students for its academic program.
(f) Project administration. The Secretary reviews the quality of the proposed project administration, including—
(1) How the applicant will select fellows, including how the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, religion, gender, age, or disabling condition;
(2) How the applicant proposes to monitor whether a fellow is making satisfactory progress toward the degree for which the fellowship has been awarded;
(3) How the applicant proposes to identify and meet the academic needs of fellows;
(4) How the applicant proposes to maintain enrollment of graduate students from traditionally underrepresented backgrounds; and
(5) The extent to which the policies and procedures the applicant proposes to institute for administering the project are likely to ensure efficient and effective project implementation, including assistance to and oversight of the project director.
(g) Institutional commitment. The Secretary reviews each application for evidence that—
(1) The applicant will provide, from any funds available to it, sufficient funds to support the financial needs of the fellows if the funds made available under the program are insufficient;
(2) The institution's social and academic environment is supportive of the academic success of students from traditionally underrepresented backgrounds on the applicant's campus;
(3) Students receiving fellowships under this program will receive stipend support for the time necessary to complete their courses of study, but in no case longer than 5 years; and
(4) The applicant demonstrates a financial commitment, including the nature and amount of the institutional matching contribution, and other institutional commitments that are likely to ensure the continuation of project activities for a significant period of time following the period in which the project receives Federal financial assistance.
(h) Quality of key personnel. The Secretary reviews each application to determine the quality of key personnel the applicant plans to use on the project, including—
(1) The qualifications of the project director;
(2) The qualifications of other key personnel to be used in the project;
(3) The time commitment of key personnel, including the project director, to the project; and
(4) How the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected without regard to race, color, national origin, religion, gender, age, or disabling condition, except pursuant to a lawful affirmative action plan.
(i) Budget. The Secretary reviews each application to determine the extent to which—
(1) The applicant shows a clear understanding of the acceptable uses of program funds; and
(2) The costs of the project are reasonable in relation to the objectives of the project.
(j) Evaluation plan. The Secretary reviews each application to determine the quality of the evaluation plan for the project, including the extent to which the applicant's methods of evaluation—
(1) Relate to the specific goals and measurable objectives of the project;
(2) Assess the effect of the project on the students receiving fellowships under this program, including the effect on persons of different racial and ethnic backgrounds, genders, and ages, and on persons with disabilities who are served by the project;
(3) List both process and product evaluation questions for each project activity and outcome, including those of the management plan;
(4) Describe both the process and product evaluation measures for each project activity and outcome;
(5) Describe the data collection procedures, instruments, and schedules for effective data collection;
(6) Describe how the applicant will analyze and report the data so that it can make adjustments and improvements on a regular basis; and
(7) Include a time-line chart that relates key evaluation processes and benchmarks to other project component processes and benchmarks.
(k) Adequacy of resources. The Secretary reviews each application to determine the adequacy of the resources that the applicant makes available to graduate students receiving fellowships under this program, including facilities, equipment, and supplies.
(a) Continuation awards. (1) Before funding new applications, the Secretary gives preference to grantees requesting their second or third year of funding.
(2) If appropriations for this program are insufficient to fund all continuation grantees for the second and third years at the approved funding level, the Secretary prorates the available funds, if any, among the continuation grantees and, if necessary, awards continuation grants of less than $100,000.
(b) Equitable distribution. In awarding grants, the Secretary will, consistent with an allocation of awards based on the quality of competing applications, ensure the following:
(1) An equitable geographic distribution of grants to eligible applicant institutions of higher education.
(2) An equitable distribution of grants to eligible applicant public and eligible applicant private institutions of higher education.
(a) For each application period, the Secretary establishes as an area of national need and gives absolute preference to one or more of the general disciplines and sub-disciplines listed as priorities in the appendix to this part or the resulting interdisciplines.
(b) The Secretary announces the absolute preferences in a notice published in the
(a) In selecting individuals to receive fellowships, an academic department shall consider only individuals who—
(1) Are currently enrolled as graduate students, have been accepted at the grantee institution, or are enrolled or accepted as graduate students at an eligible nondegree-granting institution;
(2) Are of superior ability;
(3) Have an excellent academic record;
(4) Have financial need;
(5) Are planning to pursue the highest possible degree available in their course of study;
(6) Are planning a career in teaching or research;
(7) Are not ineligible to receive assistance under 34 CFR 75.60; and
(8)(i) Are United States citizens or nationals;
(ii) Are permanent residents of the United States;
(iii) Provide evidence from the Immigration and Naturalization Service that they are in the United States for other than a temporary purpose with the intention of becoming permanent residents; or
(iv) Are citizens of any one of the Freely Associated States.
(b) An individual who satisfies the eligibility criteria in paragraph (a) of this section, but who attends an institution that does not offer the highest possible degree available in the individual's course of study, is eligible for a fellowship if the individual plans to attend subsequently an institution that offers this degree.
An individual shall apply directly to an academic department of an institution of higher education that has received a grant.
(a) The Secretary awards to the institution of higher education a stipend and an institutional payment for each individual awarded a fellowship under this part.
(b) If an academic department of an institution of higher education is unable to use all of the amounts available to it under this part, the Secretary reallots the amounts not used to academic departments of other institutions of higher education for use in the academic year following the date of the reallotment.
(a) For a fellowship initially awarded for an academic year prior to the academic year 1993-94, the institution shall pay the fellow a stipend in an amount that equals the fellow's financial need or $10,000, whichever is less.
(b) For a fellowship initially awarded for the academic year 1993-94, or any succeeding academic year, the institution shall pay the fellow a stipend at a level of support equal to that provided by the National Science Foundation graduate fellowships, except that this amount must be adjusted as necessary so as not to exceed the fellow's demonstrated level of financial need as determined under part F of title IV of the HEA. The Secretary announces the amount of the stipend in a notice published in the
(a) For academic year 1998-1999, the amount of the institutional payment received by an institution of higher education for each student awarded a fellowship at the institution is $10,222. Thereafter, the Secretary adjusts the amount of the institutional payment annually in accordance with inflation as determined by the United States Department of Labor's Consumer Price Index for the previous calendar year. The Secretary announces the amount of the institutional payment in a notice published in the
(b) The institutional allowance paid under paragraph (a) of this section is reduced by the amount the institution charges and collects from a fellowship recipient for tuition and other expenses as part of the recipient's instructional program.
(a) An academic department makes a commitment to a fellow at any point in his or her graduate study for the length of time necessary for the fellow to complete the course of graduate study, but in no case longer than five years.
(b) An academic department shall not make a commitment under paragraph (a) of this section to provide stipend support unless the academic department has determined that adequate funds are available to fulfill the commitment either from funds received or anticipated under this part or from institutional funds.
The institution shall provide to fellows at least one academic year of supervised training in instruction at the graduate or undergraduate level at the schedule of at least one-half-time teaching assistant.
(a) The institutional payment must be first applied against a fellow's tuition and fees.
(b) After payment of a fellow's tuition and fees, the institutional payment may be applied against educational expenses of the fellow that are not covered by tuition and fees and are related to the academic program in which the fellow is enrolled. These expenses include the following:
(1) Costs for rental or purchase of any books, materials, or supplies required of students in the same course of study.
(2) Costs of computer hardware, project specific software, and other equipment prorated by the length of the student's fellowship over the reasonable life of the equipment.
(3) Membership fees of professional associations.
(4) Travel and per diem to professional association meetings and registration fees.
(5) International travel, per diem, and registration fees to participate in educational activities.
(6) Expenses incurred in research.
(7) Costs of reproducing and binding of educational products.
(c) The institutional payment must supplement and, to the extent practical, increase the funds that would otherwise be made available for the purpose of the program and, in no case, to supplant institutional funds currently available for fellowships.
(a) The institutional matching contribution may be used to—
(1) Provide additional fellowships to graduate students who are not already receiving fellowships under this part and who satisfy the requirements of § 648.40;
(2) Pay for tuition, fees, and the costs listed in § 648.62(b);
(3) Pay for costs of providing a fellow's instruction that are not included in the tuition or fees paid to the institution in which the fellow is enrolled; and
(4) Supplement the stipend received by a fellow under § 648.51 in an amount not to exceed a fellow's financial need.
(b) An institution may not use its institutional matching contribution to fund fellowships that were funded by the institution prior to the award of the grant.
Neither grant funds nor the institutional matching funds may be used to pay for general operational overhead costs of the academic department.
(a) An institution that receives a grant shall disburse a stipend to a fellow in accordance with its regular payment schedule, but shall not make less than one payment per academic term.
(b) If a fellow withdraws from an institution before completion of an academic term, the institution may award the fellowship to another individual who satisfies the requirements in § 648.40.
(c) If a fellowship is vacated or discontinued for any period of time, the institution shall return a prorated portion of the institutional payment and unexpended stipend funds to the Secretary, unless the Secretary authorizes the use of those funds for a subsequent project period. The institution shall return the prorated portion of the institutional payment and unexpended stipend funds at a time and in a manner determined by the Secretary.
(d) If a fellow withdraws from an institution before the completion of the academic term for which he or she received a stipend installment, the fellow shall return a prorated portion of the stipend installment to the institution at a time and in a manner determined by the Secretary.
(a) An institution of higher education that receives a grant shall provide to the Secretary, prior to the receipt of grant funds for disbursement to a fellow, a certification that the fellow is enrolled in, is making satisfactory progress in, and is devoting essentially full time to study in the academic field for which the grant was made.
(b) An institution of higher education that receives a grant shall keep records necessary to establish—
(1) That each student receiving a fellowship satisfies the eligibility requirements in § 648.40;
(2) The time and amount of all disbursements and return of stipend payments;
(3) The appropriate use of the institutional payment; and
(4) That assurances, policies, and procedures provided in its application have been satisfied.
To continue to be eligible for a fellowship, a fellow must—
(a) Maintain satisfactory progress in the program for which the fellowship was awarded;
(b) Devote essentially full time to study or research in the academic field in which the fellowship was awarded; and
(c) Not engage in gainful employment, except on a part-time basis in teaching, research, or similar activities determined by the academic department to be in support of the fellow's progress toward a degree.
The Secretary may give an absolute preference to any of the academic areas listed as disciplines or subdisciplines below, or the resulting inter-disciplines. The list was derived from the Classification of Instructional Programs (CIP) developed by the Office of Educational Research and Improvement of the U.S. Department of Education and includes the instructional programs that may constitute courses of studies toward graduate degrees. The code number to the left of each discipline and subdiscipline is the Department's identification code for that particular type of instructional program.
(a) Under the Jacob K. Javits Fellowship Program the Secretary awards fellowships to students of superior ability selected on the basis of demonstrated achievement, financial need, and exceptional promise, for study at the doctoral level in selected fields of the arts, humanities, and social sciences.
(b) Students awarded fellowships under this program are called Jacob K. Javits Fellows.
An individual is eligible to receive a fellowship if the individual—
(a) Is enrolled at an institution of higher education in the program of study leading to a doctoral degree, and is not studying for a religious vocation, in the academic field for which the fellowship is awarded;
(b) Meets the eligibility requirements established by the Fellowship Board;
(c) Is not ineligible to receive assistance under 34 CFR 75.60, as added on July 8, 1992 (57 FR 30328, 30337); and
(d)(1) Is pursuing a doctoral degree that will not lead to an academic career and is—
(i) A citizen or national of the United States;
(ii) A permanent resident of the United States;
(iii) In the United States for other than a temporary purpose and intends to become a permanent resident; or
(iv) A citizen of any one of the Freely Associated States; or
(2) Is pursuing a doctoral degree that will lead to an academic career and is a citizen of the United States.
The following regulations apply to this program:
(a) The regulations in this part 650.
(b) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) [Reserved]
(2) 34 CFR part 75 (Direct Grant Programs), except for the following:
(i) Subpart C (How to Apply for a Grant);
(ii) Subpart D (How Grants Are Made); and
(iii) Sections 75.580 through 75.592 of subpart E.
(3) 34 CFR part 77 (Definitions that Apply to Department Regulations), except for the terms “grantee” and “recipient.”
(4) 34 CFR part 82 (New Restrictions on Lobbying).
(5) [Reserved]
(6) 34 CFR part 86 (Drug-Free Schools and Campuses).
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
The following definitions apply to terms used in this part:
Academic year means the 12-month period beginning with the fall instructional term of the institution of higher education.
Act means the Higher Education Act of 1965, as amended.
Department means any program, unit or any other administrative subdivision of an institution of higher education that—
(1) Directly administers or supervises post-baccalaureate instruction in a specific discipline; and
(2) Has the authority to award academic course credit acceptable to meet degree requirements at an institution of higher education.
Fellow means a recipient of a Jacob K. Javits fellowship under this part.
Fellowship means an award made to a person for graduate study under this part.
Fellowship Board means the Jacob K. Javits Fellowship Program Fellowship Board, composed of individual representatives of both public and private institutions of higher education who are appointed by the Secretary to establish general policies for the program and oversee its operation.
Financial need means the fellow's financial need as determined under part F of title IV of the HEA, for the period of the fellow's enrollment in the approved academic field of study for which the fellowship was awarded.
Grantee means an institution of higher education that administers a fellowship award under this part.
HEA means the Higher Education Act of 1965, as amended.
Institution means an institution of higher education.
Institution of higher education means an institution of higher education as defined in section 1201(a) of the HEA.
Institutional payment means the amount paid by the Secretary to the institution of higher education in which the fellow is enrolled to be applied against the tuition and fees required of the fellow by the institution as part of the fellow's instructional program.
Knows or has reason to know means that a person with respect to a statement—
(1) Has actual knowledge that the statement is false or fictitious;
(2) Acts in deliberate ignorance of the truth or falsity of the statement; or
(3) Acts in reckless disregard of the truth or falsity of the statement.
Recipient means an institution of higher education that administers a fellowship award under this part.
Satisfactory progress means that the fellow meets or exceeds the institution's criteria and standards established for all doctoral students' continued status as applicants for the doctoral degree in the academic field of study for which the fellowship was awarded.
Secretary means Secretary of the Department of Education or an official or employee of the Department acting for the Secretary under a delegation of authority.
Stipend means the amount paid to an individual awarded a fellowship, including an allowance for subsistence and other expenses for the individual and his or her dependents.
The Secretary awards fellowships consisting of the following:
(a) A stipend paid to the fellow, based upon an annual determination of the fellow's financial need, as described in § 650.42.
(b) An annual payment made to the institution in which the fellow is enrolled as described in § 650.41.
An individual shall apply to the Secretary for a fellowship award in response to an application notice published by the Secretary in the
(a) The Fellowship Board establishes criteria for the selection of fellows.
(b) Each year the Fellowship Board selects specific fields of study, and the number of fellows in each field (within the humanities, arts and social sciences), for which fellowships will be awarded.
(c) The Fellowship Board, or in the event the Secretary contracts with a non-governmental entity to administer the program, that non-governmental entity, appoints panels of distinguished individuals in each field to evaluate applications.
(d) The Secretary may make awards of the fellowships each year in two or more stages, taking into account at each stage the amount of funds remaining after the level of funding for awards previously made has been established or adjusted.
A fellow may use the fellowship only for enrollment in a doctoral program at an institution of higher education accredited by an accrediting agency or association recognized by the Secretary, which accepts the fellow for graduate study, and which has agreed to comply with the provisions of this part applicable to institutions.
(a) An individual notified by the Secretary of selection as a fellow shall inform the Secretary of the individual's acceptance in the manner and time prescribed by the Secretary in the notification.
(b) If an individual fails to comply with the provisions of paragraph (a) of this section, the Secretary treats the individual's failure to comply as a refusal of the fellowship.
(a) The Secretary withdraws an offer of a fellowship to an individual only if the Secretary determines that the individual submitted fraudulent information on the application.
(b) The Secretary considers the application to contain fraudulent information if the application contains a statement that—
(1) The applicant knows or has reason to know—
(i) Asserts a material fact that is false or fictitious; or
(ii) Is false or fictitious because it omits a material fact that the person making the statement has a duty to include in the statement; and
(2) Contains or is accompanied by an express certification or affirmation of the truthfulness and accuracy of the contents of the statement.
(a) An individual may receive a fellowship for a doctoral degree program of study for a total of 48 months or the time required for receiving the doctoral degree, whichever is less.
(b)(1) An individual may receive a fellowship for no more than 24 months for dissertation work, without the prior approval of the Secretary.
(2) A fellow may apply to the Secretary for an additional period of fellowship support for dissertation work. The fellow's application must include—
(i) The specific facts detailing the reasons why the additional period of dissertation work support is necessary;
(ii) A certification by the institution that it is aware of the fellow's application and that the fellow has attained satisfactory progress in the fellow's academic studies; and
(iii) A recommendation from the institution that the additional period of fellowship support for dissertation work is necessary.
(c) A fellow who maintains satisfactory progress in the program of study for which the fellowship was awarded may have the fellowship renewed annually for the total length of time described in paragraph (a) of this section.
In order to continue to receive payments under a fellowship, a fellow shall—
(a) Maintain satisfactory progress in the program for which the fellowship was awarded as determined by the institution of higher education;
(b) Devote essentially full time to study or research in the field in which the fellowship was awarded, as determined by the institution of higher education;
(c) Not engage in gainful employment during the period of the fellowship except on a part-time basis, for the institution of higher education at which the fellowship was awarded, in teaching, research, or similar activities approved by the Secretary; and
(d) Begin study under the fellowship in the academic year specified in the fellowship award.
(a) An institution of higher education may allow a fellow to interrupt study for a period not to exceed 12 months, but only if the interruption of study is—
(1) For the purpose of work, travel, or independent study, if the independent study is away from the institution and supportive of the fellow's academic program; and
(2) Approved by the institution of higher education.
(b) A fellow may continue to receive payments during the period of interruption only if the fellow's interruption of study is for the purpose of travel or independent study that is supportive of the fellow's academic program.
(c) A fellow may not receive payments during the period of interruption if the fellow's interruption of study is for the purpose of travel that is not supportive of the fellow's academic program, or work, whether supportive of the fellow's academic program or not.
(d) The Secretary makes a pro rata institutional payment to the institution of higher education in which the fellow is enrolled during the period the fellow receives payments as described in paragraph (b) of this section.
After an award is made, a fellow may not make any change in the field of study or institution attended without the prior approval of the Secretary.
Each individual who is awarded a fellowship shall keep such records and submit such reports as are required by the Secretary.
Students enrolled in an otherwise eligible institution of higher education may receive fellowships only if the institution enters into an agreement with the Secretary to comply with the provisions of this part.
(a) With respect to the awards made for the academic year 1998-1999, the Secretary makes a payment of $10,222 to the institution of higher education for each individual awarded a fellowship for pursuing a course of study at the institution. The Secretary adjusts the amount of the institutional payment annually thereafter in accordance with inflation as determined by the U.S. Department of Labor's Consumer Price Index for the previous calendar year.
(b) If the institution of higher education charges and collects amounts from a fellow for tuition or other expenses required by the institution as part of the fellow's instructional program, the Secretary deducts that amount from the institutional payment.
(c) If the fellow is enrolled for less than a full academic year, the Secretary pays the institution a pro rata share of the allowance.
(a) The institution annually shall calculate the amount of a fellow's financial need in the same manner as that in which the institution calculates its students' financial need under part F of title IV of the HEA.
(b) For a fellowship initially awarded for an academic year prior to the academic year 1993-1994, the institution shall pay the fellow a stipend in the amount of the fellow's financial need or $10,000, whichever is less.
(c) For a fellowship initially awarded for the academic year 1993-1994 or any succeeding academic year, the institution shall pay the fellow a stipend at a level of support equal to that provided by the National Science Foundation graduate fellowships, except that the amount must be adjusted as necessary so as not to exceed the fellow's demonstrated level of financial need.
(a) An institution shall disburse a stipend to a fellow no less frequently than once per academic term. If the fellowship is vacated or discontinued, the institution shall return any unexpended funds to the Secretary at such time and in such manner as the Secretary may require.
(b) If a fellow withdraws from an institution before completion of an academic term, the institution shall refund to the Secretary a prorated portion of the institutional payment that it received with respect to that fellow. The institution shall return those funds to the Secretary at such time and in such manner as the Secretary may require.
(c) A fellow who withdraws from an institution before completion of an academic term for which the fellow received a stipend installment shall return a prorated portion of the stipend installment to the institution at such time and in such manner as the Secretary may require.
(a) An institution shall provide to the Secretary, prior to receiving funds for disbursement to a fellow, a certification from an appropriate official at the institution stating whether that fellow is making satisfactory progress in, and is devoting essentially full time to the program for which the fellowship was awarded.
(b) An institution shall keep such records as are necessary to establish the timing and amount of all disbursements of stipends.
The regulations in this part govern the administration of the following programs in international education:
(a) The National Resource Centers Program for Foreign Language and Area Studies and the Foreign Language and Area Studies Fellowships Program (section 602 of the Higher Education Act of 1965, as amended);
(b) The Language Resource Centers Program (section 603);
(c) The Undergraduate International Studies and Foreign Language Program (section 604);
(d) The International Research and Studies Program (section 605); and
(e) The Business and International Education Program (section 613).
The following regulations apply to the International Education Programs:
(a) The regulations in this part 655; and
(b) As appropriate, the regulations in—
(1) 34 CFR part 656 (National Resource Centers Program for Foreign Language and Area Studies or Foreign Language and International Studies);
(2) 34 CFR part 657 (Foreign Language and Area Studies Fellowships Program);
(3) 34 CFR part 658 (Undergraduate International Studies and Foreign Language Program);
(4) 34 CFR part 660 (International Research and Studies Program);
(5) 34 CFR part 661 (Business and International Education Program); and
(6) 34 CFR part 669 (Language Resource Centers Program).
(a) The following terms used in this part and 34 CFR parts 656, 657, 658, 660, 661, and 669 are defined in 2 CFR part 200, subpart A, 34 CFR 77.1, 34 CFR 600.2, or 34 CFR 668.2:
(1) Academic engagement.
(2) Acquisition.
(3) Applicant.
(4) Application.
(5) Award.
(6) Budget.
(7) Clock hour.
(8) Contract.
(9) Correspondence course.
(10) Credit hour.
(11) Distance education.
(12) Educational program.
(13) EDGAR.
(14) Enrolled.
(15) Equipment.
(16) Facilities.
(17) Fiscal year.
(18) Full-time student.
(19) Graduate or professional student.
(20) Grant.
(21) Grantee.
(22) Grant period.
(23) Half-time student.
(24) Local educational agency.
(25) National level.
(26) Nonprofit.
(27) Project.
(28) Project period.
(29) Private.
(30) Public.
(31) Regular student.
(32) Secretary.
(33) State educational agency.
(34) Supplies.
(35) Undergraduate student.
(b) The following definitions apply to International Education Programs:
Area studies means a program of comprehensive study of the aspects of a world area's society or societies, including study of history, culture, economy, politics, international relations, and languages.
Areas of national need means the various needs in the government, education, business, and nonprofit sectors for expertise in foreign language, area, and international studies identified by the Secretary as significant for maintaining or improving the security, stability, and economic vitality of the United States.
Consortium of institutions of higher education means a group of institutions of higher education that have entered into a cooperative arrangement for the purpose of carrying out a common objective, or a public or private nonprofit agency, organization, or institution designated or created by a group of institutions of higher education for the purpose of carrying out a common objective on their behalf.
Consultation on areas of national need means the process that allows the head officials of a wide range of Federal agencies to consult with the Secretary and provide recommendations regarding national needs for expertise in foreign languages and world areas that the Secretary may take into account when identifying areas of national need.
Diverse perspectives means a variety of viewpoints relevant to understanding global or international issues in context, especially those derived from scholarly research or sustained professional activities and community engagement abroad, and relevant to building multifaceted knowledge and expertise in area studies, international studies, and the international aspects of professional studies, including issues related to world regions, foreign languages, and international affairs, among stakeholders.
Educational program abroad means a program of study, internship, or service learning outside the United States that is part of a foreign language or other international curriculum at the undergraduate or graduate education level.
Institution of higher education means an institution that meets the definition in section 101(a) of the Higher Education Act of 1965, as amended, as well as an institution that meets the requirements of section 101(a) except that—
(1) It is not located in the United States; and
(2) It applies for assistance under title VI of the Higher Education Act of 1965, as amended, in consortia with institutions that meet the definition in section 101(a).
Intensive language instruction means instruction of at least five clock hours per week during the academic year or the equivalent of a full academic year of language instruction during the summer.
(a) Each of the programs authorized by part A of title VI of the Higher Education Act of 1965, as amended, contributes to at least one, but not necessarily all, of the following purposes:
(1) Provision of support for centers, programs, and fellowships in institutions of higher education in the United States for producing increased numbers of trained personnel and research in foreign languages, area studies, and other international studies.
(2) Development of a pool of international experts to meet national needs.
(3) Development and validation of specialized materials and techniques for foreign language acquisition and fluency, emphasizing (but not limited to) the less commonly taught languages.
(4) Promotion of access to research and training overseas, including through linkages with overseas institutions.
(5) Advancement of the internationalization of a variety of disciplines throughout undergraduate and graduate education.
(6) Support for cooperative efforts promoting access to and the dissemination of international and foreign language knowledge, teaching materials, and research, throughout education, government, business, civic, and nonprofit sectors in the United States, through the use of advanced technologies.
(b) The regulations in this part govern the following programs that are authorized by part A of title VI of the Higher Education Act of 1965, as amended:
(1) The National Resource Centers Program for Foreign Language and Area Studies and the Foreign Language and Area Studies Fellowships Program.
(2) The Language Resource Centers Program.
(3) The Undergraduate International Studies and Foreign Language Program.
(4) The International Research and Studies Program.
(c) The following activities authorized by part A of title VI of the Higher Education Act of 1965, as amended, contribute to the coordination of the programs of the Federal Government in the areas of foreign language, area studies, and other international studies, including professional international affairs education and research:
(1) The consultation on areas of national need.
(2) The periodic survey of fellows who have participated in the Foreign Language and Area Studies Fellowships Program to determine postgraduate employment, education, or training.
(d) Each of the programs authorized by part B of title VI of the Higher Education Act of 1965, as amended, contributes to at least one, but not necessarily all, of the following purposes:
(1) Increase and promotion of the Nation's capacity for international understanding and economic enterprise through the provision of suitable international education and training for business personnel in various stages of professional development; and develop a pool of international experts to meet national needs.
(2) Promotion of institutional and noninstitutional educational and training activities that will contribute to the ability of United States business to prosper in an international economy.
(e) The regulations in this part govern the following programs that are authorized by part B of title VI of the Higher Education Act of 1965, as amended: The Business and International Education Program.
Subpart A of 34 CFR parts 656, 657, and 669 and subpart B of 34 CFR parts 658, 660, 661 describe the kinds of projects that the Secretary assists under the International Education Programs.
The Secretary evaluates applications for International Education Programs using the criteria described in one or more of the following:
(a) The general criteria in § 655.31.
(b) The specific criteria, as applicable, in subpart C of 34 CFR parts 656 and 657, or subpart D of 34 CFR parts 658, 660, 661, and 669.
(a) Plan of operation. (1) The Secretary reviews each application for information that shows the quality of the plan of operation for the project.
(2) The Secretary looks for information that shows—
(i) High quality in the design of the project;
(ii) An effective plan of management that ensures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) A clear description of how the applicant will provide equal access and treatment for eligible project participants who are members of groups that have been traditionally underrepresented, such as—
(A) Members of racial or ethnic minority groups;
(B) Women; and
(C) Handicapped persons.
(b) Quality of key personnel. (1) The Secretary reviews each application for information that shows the quality of the key personnel the applicant plans to use on the project.
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director (if one is to be used);
(ii) The qualifications of each of the other key personnel to be used in the project. In the case of faculty, the qualifications of the faculty and the degree to which that faculty is directly involved in the actual teaching and supervision of students; and
(iii) The time that each person referred to in paragraphs (b)(2) (i) and (ii) of this section plans to commit to the project; and
(iv) The extent to which the applicant, as part of its nondiscriminatory employment practices, encourages applications for employment from persons who are members of groups that have been traditionally underrepresented, such as members of racial or ethnic minority groups, women, handicapped persons, and the elderly.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training, in fields related to the objectives of the project, as well as other information that the applicant provides.
(c) Budget and cost effectiveness. (1) The Secretary reviews each application for information that shows that the project has an adequate budget and is cost effective.
(2) The Secretary looks for information that shows—
(i) Facilities (including but not limited to language laboratories, museums, and libraries) that the applicant plans to use are adequate; and
(ii) Costs are reasonable in relation to the objectives of the project.
(d) Evaluation plan. (1) The Secretary reviews each application for information that shows the quality of the evaluation plan for the project.
(2) The Secretary looks for information that shows methods of evaluation that are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e) Adequacy of resources. (1) The Secretary reviews each application for information that shows that the applicant plans to devote adequate resources to the project.
(2) The Secretary looks for information that shows—
(i) Facilities (including but not limited to language laboratories, museums, and libraries) that the applicant plans to use are adequate; and
(ii) The equipment and supplies that the applicant plans to use are adequate.
Except for 34 CFR parts 656, 657, and 661, to the extent practicable and consistent with the criterion of excellence, the Secretary seeks to achieve an equitable distribution of funds throughout the Nation.
(a) Under the National Resource Centers Program for Foreign Language and Areas Studies (National Resource Centers Program), the Secretary awards grants to institutions of higher education and consortia of institutions to establish, strengthen, and operate comprehensive and undergraduate Centers that act cooperatively as national resources for—
(1) Teaching of modern foreign languages, especially less commonly taught languages;
(2) Instruction in fields of study needed to provide full understanding of areas, regions, or countries in which such languages are commonly used;
(3) Research and training in international studies and the international and foreign language aspects of professional and other fields of study; and
(4) Instruction and research on issues in world affairs that concern one or more countries.
(b) Through the activities described in paragraph (a) of this section, the National Resource Centers Program contributes to the purposes of the programs authorized by part A of title VI of the Higher Education Act of 1965, as amended, listed in § 655.5(a).
(a) An institution of higher education or a consortium of institutions of higher education is eligible to receive a grant under this part as either a comprehensive Center or undergraduate Center.
(b) An institution of higher education or a consortium of institutions of higher education that is a current recipient of a grant under this part as either a comprehensive Center or undergraduate Center is eligible to receive an additional grant under this part for special purposes related to library collections, outreach, and summer institutes, as described in § 656.4.
(a) A Center's area of focus for research, teaching, training, instruction, and project activities must be aligned with both of the following requirements:
(1) The area of focus must be a geographic world area or a geographically designated region that spans multiple world areas.
(2) Research, teaching, training, and instruction in specific languages, countries, regions, societies, or other units of analysis related to the area of focus described in this paragraph (1) must be conducted at the institution.
(b) A comprehensive Center is an administrative unit of an eligible institution of higher education that independently or through collaboration with other administrative units—
(1) Provides intensive modern foreign language training, especially for less commonly taught languages, in the Center's area of focus;
(2) Contributes significantly to the national interest in advanced research and scholarship in the Center's area of focus;
(3) Employs a critical mass of scholars in diverse disciplines related to the Center's area of focus;
(4) Maintains important library collections related to the Center's area of focus;
(5) Makes training available in language and area studies in the Center's area of focus, to graduate, postgraduate, and undergraduate students;
(6) Addresses national needs for modern foreign language and area studies expertise and knowledge, including through, but not limited to, the placement of students into postgraduate employment, education, or training in areas of need; and
(7) Disseminates information about the Center's area of focus to audiences in the United States.
(c) An undergraduate Center independently or through collaboration with other administrative units—
(1) Teaches modern foreign languages, especially less commonly taught languages, related to the Center's area of focus;
(2) Prepares undergraduate students to matriculate into advanced modern foreign language and area studies programs and professional school programs;
(3) Incorporates substantial content related to the Center's area of focus into baccalaureate degree programs;
(4) Engages in research and curriculum development designed to broaden knowledge and expertise related to the Center's area of focus;
(5) Employs faculty with strong language, area, and international studies credentials related to the Center's area of focus;
(6) Maintains library holdings sufficient to support high-quality training and instruction in the Center's area of focus for undergraduate students;
(7) Makes training related to the Center's area of focus available predominantly to undergraduate students in support of the objectives of a undergraduate education;
(8) Addresses national needs for language and area studies expertise and knowledge, including through, but not limited to, the placement of undergraduate students into postgraduate employment, education, or training in areas of need; and
(9) Disseminates information about the Center's area of focus to audiences in the United States.
The Secretary may make additional special purpose grants to Centers for one or more of the following purposes:
(a) Linkage or outreach between foreign language, area studies, and other international fields and professional schools and colleges.
(b) Linkage or outreach with 2- and 4-year colleges and universities.
(c) Linkage or outreach between or among—
(1) Postsecondary programs or departments in foreign language, area studies, or other international fields; and
(2) State educational agencies or local educational agencies.
(d) Partnerships or programs of linkage and outreach with departments or agencies of Federal and State governments, including Federal or State scholarship programs for students in related areas.
(e) Linkage or outreach with the news media, business, professional, or trade associations.
(f) Summer institutes in area studies, foreign language, or other international fields designed to carry out the activities in paragraphs (a), (b), (d), and (e) of this section.
(g) Maintenance of important library collections.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 656.
The following definitions apply to this part:
(a) The definitions in 34 CFR part 655.
(b) The following definitions, unless otherwise specified:
Critical mass of scholars means a concentration of modern foreign language and area studies faculty, researchers, and other similar personnel associated with a Center who collectively make significant contributions in a field of area studies because of their expertise and are distinguished by their training in many different academic disciplines in addition to their active engagement in interdisciplinary initiatives related to the Center's area of focus. The following are examples of other factors that may be considered in determining whether there is a critical mass of scholars:
(i) Whether instruction in many foreign languages is offered.
(ii) Whether specialized area studies or language instruction is regularly offered.
(iii) The number of graduate student research projects (dissertations, theses, or equivalents) supervised.
(iv) The degree of collaboration with international partners.
(v) Participation in professional activities or consultations with partners outside academia.
(vi) Professional awards and honors.
(vii) Roles in professional associations.
(viii) Activities funded by external grants.
(ix) The number of scholars relative to all similarly qualified individuals in the United States.
Institution means an institution of higher education, as defined in 34 CFR part 655. References to an institution include all institutions of higher education that operate as a consortium under this part.
National Resource Center (Center) means an administrative unit within an institution of higher education that is a grantee under this part that coordinates educational initiatives related to an area of focus as described in § 656.3(a) at that institution or for a consortium of institutions through direct access to faculty, staff, administrators, students, library collections and other research collections, and other educational resources that support research, training, and instruction in various academic disciplines, professional fields, and languages.
If any provision of this part or its application to any person, act, or practice is held invalid, the remainder of the part or the application of its provisions to any other person, act, or practice will not be affected thereby.
The application notice published in the
(a) Each institution of higher education, including each member of a consortium, applying for a grant under this part must provide all of the following:
(1) An explanation of how the activities funded by the grant will reflect diverse perspectives, as defined in part 655, and a wide range of views and generate debate on world regions and international affairs.
(2) A description of how the applicant will encourage government service in areas of national need, as identified by the Secretary, as well as in areas of need in the education, business, and nonprofit sectors.
(b) An applicant must submit an Applicant Profile Form, as described in the application package.
(c) An applicant must submit a description of the applicant's policy regarding non-discriminatory hiring practices.
(d) An applicant must submit a description of the applicant's travel policies, if such policies exist, or a statement that such policies do not exist.
(e) Each consortium applying for an award under this part must submit a group agreement (consortium agreement) that addresses the required elements of 34 CFR 75.128 and describes a rationale for the formation of the consortium.
(a) The Secretary evaluates an application for a comprehensive Center under the criteria contained in § 656.21, and for an undergraduate Center under the criteria contained in § 656.22. The Secretary evaluates applications for additional special purpose grants to Centers under the criteria contained in § 656.23.
(b) The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(c) The Secretary makes grant awards using a peer review process. Applications that share the same or similar area of focus, as declared by each applicant under § 656.3(a), are grouped together for purposes of review. Each application is reviewed for excellence based on the applicable criteria referenced in paragraph (a) of this section. Applications are then ranked within each group that shares the same or similar area of focus.
(d) The Secretary may determine a minimum total score required to demonstrate a sufficient degree of excellence to qualify for a grant under this part.
(e) If insufficient money is available to fund all applications demonstrating a sufficient degree of excellence as determined under paragraphs (a), (c), and (d) of this section, the Secretary considers the degree to which priorities derived from the consultation on areas of national need or established under the provisions of § 656.24 and relating to specific countries, world areas, or languages are served when selecting applications for funding and determining the amount of a grant.
The Secretary evaluates an application for a comprehensive Center on the basis of the criteria in this section.
(a) Center scope, personnel, and operations. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the proposed Center's area of focus meets the requirements in § 656.3(a).
(2) The extent to which the project director and other individuals, including relevant staff and faculty, are qualified to administer the proposed Center and oversee the implementation of project activities, including the degree to which they engage in ongoing professional development activities relevant to their roles at the proposed Center.
(3) The adequacy of governance and oversight arrangements for the proposed Center, including the extent to which faculty from a variety of academic units participate in administration and oversee outreach activities, and, for a consortium, the extent to which the consortium agreement demonstrates commitment to a common objective.
(4) The extent to which the institution provides or will provide financial, administrative, and other support for the operation of the proposed Center at a level sufficient to enable the administration of the proposed project and coordination of educational initiatives in the proposed Center's area of focus.
(b) Quality of existing academic programs. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the institution makes high-quality training, especially integrated interdisciplinary training in modern foreign languages and area studies, appropriate to the applicant's area of focus, available in the curricula for graduate, professional, and undergraduate students in a wide variety of educational programs.
(2) The extent to which the institution routinely provides language instruction, including intensive language instruction, relevant to the applicant's area of focus at multiple levels, as well as the degree to which these offerings represent distinctive commitments to depth or breadth.
(3) The extent to which qualified experts at the institution provide modern foreign language instruction in the applicant's area of focus, as well as the degree to which this instruction utilizes stated performance goals for functional foreign language use and the degree to which stated performance goals are met or are likely to be met by students.
(4) The extent to which the institution employs a critical mass of scholars in the applicant's area of focus, including the degree to which the institution employs enough qualified tenured and tenure-track faculty with teaching and advising responsibilities to enable the applicant to carry out interdisciplinary instructional and training programs supported by sufficient depth and breadth of course offerings in the applicant's area of focus.
(c) Impact of existing activities and resources. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the applicant, affiliated faculty, and institutional partners contribute significantly to the national interest in advanced research and scholarship related to the applicant's area of focus.
(2) The extent to which the institution's library holdings (print and non-print, physical and digital, English and foreign language) and other research collections are important library collections in the applicant's area of focus that support advanced training and research, including the degree to which holdings are made available to researchers throughout the United States, the degree to which collections include unique or rare resources, and the degree to which the collections are managed by experts in the applicant's area of focus with appropriate professional training.
(3) The extent to which the applicant, including affiliated faculty and institutional partners, generates information about the applicant's area of focus, disseminates this information to various audiences in the United States, and effectively engages those audiences through sustained outreach activities at the regional and national levels that respond to the diverse needs of, for example, elementary and secondary schools, State educational agencies, postsecondary institutions, nonprofit organizations, businesses, the media, and Federal agencies.
(4) The extent to which the applicant's activities address national needs related to language and area studies expertise and knowledge, including, but not limited to, the applicant's record in placing students into post-graduate employment, education, or training in areas of national need related to language and area studies knowledge.
(d) Project design and rationale. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the intended outcomes of the proposed project are clearly specified, are possible to achieve within the project period, and address specific gaps or weaknesses in services, infrastructure, or opportunities related to the Center's area of focus, the purpose of the National Resource Centers Program described in § 656.1, and the comprehensive type of Center described in § 656.3(b).
(2) The extent to which the proposed project is likely to contribute to meeting national needs related to language and area studies expertise and knowledge, including, but not limited to, by the proposed project's intended outcomes and other stated efforts related to increasing the number of students that go into post-graduate employment, education, or training in areas of national need.
(3) The extent to which the proposed project is designed to build academic and/or institutional capacity in the Center's area of focus and sustain results beyond the project period.
(4) The extent to which the proposed project will reflect diverse perspectives, as defined in part 655, and a wide range of views and generate debate on world regions and international affairs.
(e) Project planning and budget. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which all proposed activities are adequately described relative to their contribution to the proposed project's intended outcomes.
(2) The extent to which all proposed activities are of high quality, including the degree to which they align with the purpose of the National Resource Centers program described in § 656.1, the comprehensive type of Center described in § 656.3(b), and the proposed project's intended outcomes.
(3) The extent to which the proposed timeline of activities and other application materials, such as letters of support, demonstrate the feasibility of completing proposed activities during the project period.
(4) The extent to which all costs are itemized in the budget narrative and the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project.
(f) Quality of project evaluation. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the proposed project.
(2) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving the proposed project's intended outcomes.
(3) The qualifications, including relevant training, experience, and independence, of the evaluator(s).
The Secretary evaluates an application for an undergraduate Center on the basis of the criteria in this section.
(a) Center scope, personnel, and operations. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the proposed Center's area of focus meets the requirements in § 656.3(a).
(2) The extent to which the project director and other individuals, including relevant staff and faculty, are qualified to administer the proposed Center and oversee the implementation of project activities, including the degree to which they engage in ongoing professional development activities relevant to their roles at the proposed Center.
(3) The adequacy of governance and oversight arrangements for the proposed Center, including the extent to which faculty from a variety of academic units participate in administration and oversee outreach activities, and, for a consortium, the extent to which the consortium agreement demonstrates commitment to a common objective.
(4) The extent to which the institution provides or will provide financial, administrative, and other support for the operation of the proposed Center at a level sufficient to enable the administration of the proposed project and coordination of educational initiatives in the proposed Center's area of focus.
(b) Quality of existing academic programs. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the institution makes high-quality training, especially integrated interdisciplinary training in modern foreign language and area or international studies, appropriate to the applicant's area of focus, available in educational programs for undergraduate students.
(2) The extent to which the institution routinely provides language instruction relevant to the applicant's area of focus, as well as the degree to which these offerings represent distinctive commitments to depth or breadth of coverage.
(3) The extent to which qualified experts at the institution provide modern foreign language instruction in the applicant's area of focus, as well as the degree to which this instruction utilizes stated performance goals for functional foreign language use and the degree to which stated performance goals are met or are likely to be met by undergraduate students.
(4) The extent to which the institution employs faculty with strong language, area, and international studies credentials related to the applicant's area of focus, including the degree to which the institution employs enough qualified tenured and tenure-track faculty with teaching and advising responsibilities, to enable the applicant to carry out instructional and training programs supported by sufficient depth and breadth of course offerings for undergraduate students in the applicant's area of focus.
(c) Impact of existing activities and resources. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the applicant would contribute to the formation of a diverse network of undergraduate Centers through the training of undergraduate students who matriculate into advanced language and area studies programs and professional school programs related to the applicant's area of focus, especially through, but not limited to, innovative curriculum design, linkages with other institutions of higher education or organizations, requirements for student research or study abroad, support for relevant internship or other co-curricular opportunities, or specialized advising.
(2) The extent to which the institution's library holdings (print and non-print, physical and digital, English and foreign language), other research collections, and staffing support high-quality undergraduate training in the applicant's area of focus through the provision of basic reference works, journals, and works in translation but do not constitute an important library collection in the applicant's area of focus.
(3) The extent to which the applicant, including affiliated faculty and institutional partners, generates information about the applicant's area of focus, disseminates this information to various audiences in the United States, and effectively engages those audiences through sustained outreach activities at the regional and national levels that respond to the diverse needs of, for example, elementary and secondary schools, State educational agencies, postsecondary institutions, nonprofit organizations, businesses, the media, and Federal agencies.
(4) The extent to which the applicant's activities address national needs related to language and area studies expertise and knowledge, including, but not limited to, the applicant's record in placing undergraduate students into post-graduate employment, education, or training in areas of national need related to language and area studies knowledge, including into education and training at a variety of other institutions.
(d) Project design and rationale. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the intended outcomes of the proposed project are clearly specified, possible to achieve within the project period, and address specific gaps or weaknesses in services, infrastructure, or opportunities related to the Center's area of focus, the purpose of the National Resource Centers program described in § 656.1, and the undergraduate type of Center described in § 656.3(c).
(2) The extent to which the proposed project is likely to contribute to meeting national needs related to language and area studies expertise and knowledge, including, but not limited to, by the proposed project's intended outcomes and other stated efforts related to increasing the number of undergraduate students that go into post-graduate employment, education, or training in areas of national need.
(3) The extent to which the proposed project is designed to build academic and/or institutional capacity in the Center's area of focus and sustain results beyond the project period.
(4) The extent to which the proposed project will reflect diverse perspectives, as defined in part 655, and a wide range of views and generate debate on world regions and international affairs.
(e) Project planning and budget. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which all proposed activities are adequately described relative to their contribution to the proposed project's intended outcomes.
(2) The extent to which all proposed activities are of high quality, including the degree to which they align with the purpose of the National Resource Centers program as described in § 656.1, the undergraduate type of Center described in § 656.3(c), and the proposed project's intended outcomes.
(3) The extent to which the proposed timeline of activities and other application materials, such as letters of support, demonstrate the feasibility of completing proposed activities during the project period.
(4) The extent to which all costs are itemized in the budget narrative and the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project.
(f) Quality of project evaluation. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the proposed project.
(2) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving the proposed project's intended outcomes.
(3) The qualifications, including relevant training, experience, and independence, of the evaluator(s).
The Secretary evaluates an application for an additional special purpose grant for a Center on the basis of one or more of the criteria in this section.
(a) Project design and rationale. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the project aligns with the Center's approved area of focus under § 656.3(a) and proposes at least one type of activity described in § 656.4(a)-(g).
(2) The extent to which the intended outcomes of the proposed project are clearly specified, possible to achieve within the project period, and address specific gaps or weaknesses in services, infrastructure, or opportunities related to the Center's area of focus, the purpose of the National Resource Centers program described in § 656.1, and the appropriate type of Center described in § 656.3(b)-(c).
(3) The extent to which the project is likely to contribute to meeting national needs related to language and area studies knowledge or expertise.
(4) The extent to which the proposed project is designed to build academic and/or institutional capacity and sustain results beyond the project period.
(b) Project planning and budget. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which all proposed activities are adequately described relative to their contribution to the proposed project's intended outcomes.
(2) The extent to which all proposed activities are of high quality, including the degree to which they align with the purpose of the National Resource Centers program as described in § 656.1, the appropriate type of Center described in § 656.3(b)-(c), and the proposed project's intended outcomes.
(3) The extent to which the proposed timeline of activities and other application materials, such as letters of support, demonstrate the feasibility of completing proposed activities during the project period.
(4) The extent to which all costs are itemized in the budget narrative and the costs are reasonable in relation to the objectives, design, and potential significance of the proposed project.
(c) Key personnel and project operations. The Secretary reviews each application to determine one or both of the following:
(1) The extent to which project personnel are qualified to oversee and carry out the proposed project.
(2) The adequacy of staffing, governance, and oversight arrangements, and, for a consortium, the extent to which the consortium agreement demonstrates commitment to a common objective.
(d) Quality of project evaluation. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the proposed project.
(2) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving the proposed project's intended outcomes.
(3) The qualifications, including relevant training, experience, and independence, of the evaluator(s).
(a) The Secretary may select one or more of the following funding priorities:
(1) Specific world areas, countries, or societies.
(2) Instruction of specific modern foreign languages.
(3) Modern foreign language instruction at a specific level or degree of intensity, such as intermediate or advanced language instruction or instruction at an intensity of 10 clock hours or more per week.
(4) Specific areas of national need for expertise in foreign languages and world areas derived from the consultation with Federal agencies on areas of national need.
(5) Specific area of focus, such as a world area or a portion of a world area (e.g., a single country or society) in addition to a specific topic (e.g., economic cooperation, cybersecurity, energy, climate change, translation, genocide prevention, or migration).
(b) The Secretary may select one or more of the activities listed in § 656.4 or § 656.30(a) as a funding priority.
(c) The Secretary announces any priorities in the application notice published in the
(a) Allowable activities and costs. Except as provided under paragraph (b) of this section, a grant awarded under this part may be used to pay all or part of the cost of establishing, strengthening, or operating a comprehensive or undergraduate Center including, but not limited to, the cost of the following:
(1) Supporting instructors of the less commonly taught languages related to the Center's area of focus.
(2) Creating, expanding, or improving opportunities for the formal study of the less commonly taught languages related to the Center's area of focus.
(3) Creating or operating summer institutes in the United States or abroad designed to provide modern foreign language and area training in the Center's area of focus.
(4) Cooperating with other Centers to conduct projects that address issues of world, regional, cross-regional, international, or global importance.
(5) Bringing visiting scholars and faculty to the Center to teach, conduct research, or participate in conferences or workshops.
(6) Disseminating information about the Center's area of focus to various audiences in the United States through domestic outreach activities involving, for example, elementary and secondary schools, postsecondary institutions, businesses, and the media.
(7) Funding library acquisitions, the maintenance of library collections, or efforts to enhance access to library collections related to the Center's area of focus.
(8) Establishing and maintaining linkages with overseas institutions of higher education, alumni, and other organizations that may contribute to the teaching and research of the Center's area of focus.
(9) Creating, obtaining, modifying, or improving access to teaching and research materials related to the Center's area of focus.
(10) Creating, expanding, or improving activities or teaching materials that are intended to increase modern foreign language proficiency related to the Center's area of focus among students in the science, technology, engineering, and mathematics fields.
(11) Conducting projects that encourage and prepare students to seek employment relevant to the Center's area of focus in areas of national need.
(12) Planning or developing curriculum related to the Center's area of focus.
(13) Engaging in professional development of the Center's faculty and staff.
(14) Funding salaries and travel for faculty and staff related to the Center's area of focus.
(b) Limitations. The following are limitations on allowable activities and costs:
(1) Equipment costs exceeding 10 percent of the grant are not allowable.
(2) Undergraduate student travel is only allowable if grantees have received prior approval by the Secretary for the associated costs and the travel is made in conjunction with a formal program of supervised study in the Center's area of focus.
(3) Grant funds may not be used to supplant funds normally used by grantees for purposes of this part.
(4) The following limitations on compensation paid to personnel apply to each award under this part:
(i) Project director. (A) Personnel costs and other related costs, including the cost of fringe benefits, associated with compensation for the project director are not allowable if such compensation only reflects the administrative tasks ordinarily associated with the role.
(B) Personnel costs and other related costs, including the cost of fringe benefits, associated with compensation for the project director are allowable with the Secretary's prior approval if such compensation is directly tied to the implementation of an approved project activity that requires the project director's expertise.
(ii) Instructors of less commonly taught languages. Personnel costs and other costs, including the cost of fringe benefits, related to the compensation of individuals directly engaged in the instruction of a less commonly taught language are allowable up to 100 percent of the actual costs associated with approved project activities.
(iii) Other project personnel. Personnel costs and other costs, including the costs of fringe benefits, related to the compensation of project personnel who are not described in paragraph (b)(4)(i) or (ii) of this section are allowable up to 50 percent of the costs for a full-time equivalent position.
(5) Costs for international travel are only allowable if a Center has obtained prior approval from the Secretary.
(6) Activities must be relevant to the Center's area of focus and the type of Center (comprehensive or undergraduate).
(7) An undergraduate Center's project and related activities must predominantly benefit the instruction and training of undergraduate students.
(a) Under the Foreign Language and Area Studies Fellowships Program, the Secretary provides allocations of fellowships to Centers and other administrative units at eligible institutions of higher education that award the fellowships on a competitive basis to undergraduate or graduate students who are undergoing advanced training in modern foreign languages and area studies.
(b) The Foreign Language and Area Studies Fellowships Program contributes to the purposes of the programs authorized by part A of title VI of the Higher Education Act of 1965, as amended, listed in § 655.5(a), especially the development of a pool of international experts to meet national needs.
The Secretary awards an allocation of fellowships (grant) to an institution of higher education or to a consortium of institutions of higher education.
(a) An allocation of fellowships must support area studies and language instruction that aligns with all of the following requirements:
(1) A geographic world area or a geographically designated region that spans multiple world areas and serves as the focus of research, teaching, training, and instruction.
(2) Languages specific to the geographic area of focus.
(3) Existing programs or proposed instructional programs that will be developed and implemented during the grant period.
(b) An allocation of fellowships must be administered according to the institution's written plan for distributing fellowships and allowances to eligible fellows for training and instruction during the academic year or summer, provided that—
(1) The fellowship types are described in the budget narrative of an application selected for funding under this part; or
(2) The Secretary has approved any proposed changes to an approved Center's or Program's plan.
A student must satisfy the criteria in paragraphs (a) through (e) of this section during the fellowship period to be eligible to receive a fellowship from an approved Center or Program, and a student receiving an academic year fellowship must additionally satisfy the criteria in paragraph (f) of this section to be eligible:
(a) The student is a—
(1) Citizen or national of the United States; or
(2) Permanent resident of the United States.
(b) The student is accepted for enrollment, is enrolled, or will continue to be enrolled in the institution receiving an allocation of fellowships.
(c) The student demonstrates—
(1) Commitment to the study of a world area relevant to the allocation of fellowships; and
(2) Potential for high academic achievement based on grade point average, class ranking, or similar measures that the institution may determine.
(d) The student is engaged in modern foreign language training or instruction in a language—
(1) That is relevant to the student's educational program, as described in paragraph (c), as well as the allocation of fellowships; and
(2) For which the institution or program has developed or is developing performance goals for foreign language use, and in the case of summer programs has received approval from the Secretary.
(e) The student must engage in the type of training appropriate to their degree status:
(1) Undergraduate students must engage in the study of a less commonly taught language at the intermediate or advanced level.
(2) Non-dissertation or predissertation level graduate students must engage in the study of a modern foreign language at the—
(i) Intermediate or advanced level; or
(ii) Beginning level, provided they demonstrate advanced proficiency in another modern foreign language relevant to their field of study or obtain the permission of the Secretary.
(3) Dissertation level graduate students must—
(i) Engage in dissertation research abroad or dissertation writing in the United States;
(ii) Demonstrate advanced proficiency in a modern foreign language relevant to the dissertation project and the allocation of fellowships; and
(iii) Use modern foreign language(s) relevant to the allocation of fellowships in their dissertation research or writing.
(f) The student meets the criteria related to educational programs described in this paragraph (f)(1) or (2):
(1) The student is pursuing an educational program (including any major fields of study, general education requirements, certificates, concentrations, specializations, or minor fields of study, or other established components of an institution's curriculum) that requires or ordinarily includes—
(i) Instruction in at least one modern foreign language related to the allocation of fellowships or a demonstration of proficiency in at least one modern foreign language related to the allocation of fellowships; and
(ii) Instruction or, for graduate students, supervised research related to the allocation of fellowships in—
(A) Area studies; or
(B) The international aspects of professional fields and other fields of study, including but not limited to science, technology, engineering, and mathematics fields.
(2) The student is pursuing an educational program that includes all of the following:
(i) A requirement for substantial instruction in a professional field or in one or more science, technology, engineering, and mathematics fields.
(ii) The option to incorporate international aspects of fields of study through instruction in area studies and at least one modern foreign language.
(iii) Courses that meet fellowship duration and purpose requirements described in § 657.30(b) and are selected under the guidance of an individual or committee who possesses area studies and modern foreign language qualifications relevant to the allocation of fellowships as well as knowledge of requirements for the student's educational program.
(a) Each fellowship consists of an institutional payment, a stipend, and any additional allowances permitted under this part.
(1) A fellowship may include additional allowances payable to a fellow in addition to the stipend, as determined by the Secretary and as allocated by an approved Center or Program.
(2) If the institutional payment determined by the Secretary is greater than the tuition and fees charged by the institution, the institutional payment portion of the fellowship is limited to actual costs.
(b) The Secretary announces the following in a notice published in the
(1) The amounts of the stipend and institutional payment for each type of fellow during an academic year.
(2) The amounts of the stipend and institutional payment for each type of fellow during a summer session.
(3) Whether travel allowances of any type will be permitted.
(4) Whether dependent allowances of any type will be permitted.
(5) The amounts of any permitted allowances.
(6) Any limitation on the applicability of the amounts or allowances addressed in this paragraph (b).
(c) Allowances are only permissible if the Secretary announces such allowances are permitted.
(d) If the Secretary limits the applicability of fellowship amounts or the permissibility of allowances by reference to time, including the performance period of one or more awards, in a notice published in the
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 657.
The following definitions apply to this part:
(a) The definitions in 34 CFR 655.4.
(b) The following definitions, unless otherwise specified:
Approved Center means an administrative unit of an institution of higher education that has both received an allocation of fellowships under this part and a grant to operate a Center under 34 CFR part 656.
Approved Program means a concentration of educational resources and activities in modern foreign language training and area studies with the administrative capacity to administer an allocation of fellowships under this part.
Fellow means a person who receives a fellowship under this part.
Fellowship means the payment a fellow receives under this part.
Institutional payment means the portion of the fellowship used to pay the tuition associated with a fellow's training or instruction and any associated student fees that are required of such a large proportion of all students pursuing degrees at the same degree level as the fellow at the institution receiving an allocation of fellowships or at an approved language program during the fellowship period that the student who does not pay the charge is an exception.
Stipend means the portion of the fellowship paid by the grantee to a fellow in support of living expenses and the costs associated with advanced training in a modern foreign language and area studies.
Travel allowance means the portion of the fellowship used to pay for reasonable costs associated with a fellow's travel to or from a site for language instruction or training during the fellowship term, such as transportation costs or visa fees, and other reasonable costs that directly support the safety and security of fellows during the fellowship term while outside of the United States, such as overseas medical insurance or evacuation insurance.
If any provision of this part or its application to any person, act, or practice is held invalid, the remainder of the part or the application of its provisions to any other person, act, or practice will not be affected thereby.
The application notice published in the
(a) Each eligible institution of higher education, including each member of a consortium of institutions of higher education, applying for an allocation of fellowships under this part must provide all of the following:
(1) An explanation of how the activities funded by the grant will reflect diverse perspectives, as defined in part 655, and a wide range of views and generate debate on world regions and international affairs.
(2) A description of how the applicant will encourage government service in areas of national need, as identified by the Secretary, as well as in areas of need in the education, business, and nonprofit sectors.
(3) An estimated number of the students at the applicant institution who currently meet the fellowship eligibility requirements.
(b) Each applicant institution must submit the Applicant Profile Form provided in the FLAS Fellowships Program application package.
(c) Each applicant institution must submit a description of the applicant's policy regarding non-discriminatory hiring practices.
(d) Each applicant institution must submit a description of the applicant's travel policy, if one exists, and if one does not exist, a statement to that effect.
(e) Each consortium of institutions of higher education applying for an award under this part must submit a group agreement (consortium agreement) that addresses the required elements in 34 CFR 75.128 and describes a rationale for the formation of the consortium.
(a) A student must apply for a fellowship directly to an approved Center or Program at an institution of higher education that has received an allocation of fellowships according to the application procedures established by that approved Center or Program.
(b) Individual applicants must provide sufficient information to enable the approved Center or Program at the institution to determine the applicant's eligibility to receive a fellowship and whether the student should be selected according to the selection process established by the approved Center or Program.
(a) The Secretary evaluates an institutional application for an allocation of fellowships on the basis of the quality of the applicant's Center or program in modern foreign language and area studies training. The applicant's Center or program is evaluated and approved under the criteria in § 657.21.
(b) The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(c) The Secretary makes grant awards using a peer review process. Applications that share the same or similar area of focus, as declared by each applicant under § 657.3(a), are grouped together for purposes of review. Each application is reviewed for excellence based on the applicable criteria referenced in paragraph (a) of this section. Applications are then ranked within each group that shares the same or similar area of focus.
(d) The Secretary may determine a minimum total score required to demonstrate a sufficient degree of excellence to qualify for a grant under this part.
(e) If insufficient money is available to fund all applications demonstrating a sufficient degree of excellence as determined under paragraphs (a), (c), and (d) of this section, the Secretary considers the degree to which priorities derived from the consultation on areas of national need or established under the provisions of § 657.22 and relating to specific countries, world areas, or languages are served when selecting applications for funding and determining the amount of a grant.
The Secretary evaluates an institutional application for an allocation of fellowships on the basis of the criteria in this section.
(a) Scope, personnel, and operations. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the proposed allocation of fellowships meets the requirements in § 657.3(a).
(2) The extent to which the project director and other staff are qualified to administer the proposed allocation of fellowships, including the degree to which they engage in ongoing professional development activities relevant to their roles.
(3) The adequacy of governance and oversight arrangements for the proposed allocation of fellowships, and, for a consortium, the extent to which the consortium agreement demonstrates commitment to a common objective.
(4) The extent to which the institution provides or will provide financial, administrative, and other support for the administration of the proposed allocation of fellowships.
(b) Quality of curriculum and instruction. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the applicant's curriculum provides training options for students from a variety of disciplines and professional fields, and the extent to which the curriculum and associated requirements (including language requirements) are appropriate for the applicant's area of focus and result in educational programs of high quality for students who will be served by the proposed allocation of fellowships.
(2) The extent to which the levels of instruction offered for the modern foreign languages relevant to the proposed allocation of fellowships, including intensive language instruction, and the frequency with which the courses are offered, is appropriate for advanced training in those languages.
(3) The extent to which the institution's instruction in modern foreign languages relevant to the proposed allocation of fellowships is using or developing stated performance goals for functional foreign language use, as well as the degree to which stated performance goals are met or are likely to be met by students.
(4) The extent to which instruction in modern foreign languages is integrated with area studies courses, for example, area studies courses taught in modern foreign languages.
(c) Quality of faculty and academic resources. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the institution employs faculty with strong language, area, and international studies credentials related to the proposed allocation of fellowships, including enough qualified tenured and tenure-track faculty with teaching and advising responsibilities to enable the applicant to carry out the instructional and training programs in the applicant's area of focus.
(2) The extent to which the applicant provides or will provide students who will be served by the proposed allocation of fellowships with substantive academic and other relevant advising services that address compliance with fellowship requirements, the potential uses of their foreign language and area studies knowledge and training, and, as appropriate, safety while studying outside the United States.
(3) The extent to which the institution's library holdings (print and non-print, physical and digital, English and foreign language), other research collections, and relevant staff support students who will be served by the proposed allocation of fellowships.
(4) The extent to which the applicant has established formal arrangements for students to conduct research or study abroad relevant to the proposed allocation of fellowships and the extent to which these arrangements are used.
(d) Project design and rationale. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the proposed allocation of fellowships aligns with the applicant's educational programs, instructional resources, and language and area studies course offerings; and the ease of access to relevant instruction and training opportunities, including training from external providers.
(2) The applicant's record of placing students into post-graduate employment, education, or training in areas of national need and the applicant's efforts to increase the number of such students that go into such placement.
(3) The extent to which the allocation of fellowships will contribute to meeting national needs related to language and area studies expertise and support the generation of information for and dissemination of information to the public.
(4) The extent to which the proposed project will reflect diverse perspectives, as defined in part 655, and a wide range of views and generate debate on world regions and international affairs.
(e) Project planning and budget. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the process for selecting fellows is thoroughly described and of high quality, including the institution-wide fellowship recruitment and advertisement process, the student application process, the FLAS Fellowships Program selection criteria and priorities, any supplemental institutional requirements consistent with the FLAS Fellowships Program requirements, the composition of the institution's selection committee, and the timeline for selecting and notifying students.
(2) The extent to which the institution requesting an allocation of fellowships identifies barriers, if any, to equitable access to and participation in the FLAS Fellowships Program and how the institution proposes to address these barriers.
(3) The extent to which the requested amount and proposed distribution of the allocation of fellowships is reasonable relative to the potential pool of eligible students with a demonstrated interest in relevant modern foreign language and area studies training and instruction.
(f) Quality of project evaluation. The Secretary reviews each application to determine one or more of the following:
(1) The extent to which the methods of evaluation are thorough, feasible, and appropriate to the proposed project.
(2) The extent to which the methods of evaluation will provide performance feedback and permit periodic assessment of progress toward achieving the proposed project's intended outcomes.
(3) The qualifications, including relevant training, experience, and independence, of the evaluator(s).
(a) The Secretary may establish one or more of the following priorities for the allocation of fellowships:
(1) Instruction, training, or research in specific languages or all languages related to specific world areas.
(2) Programs of language instruction with stated performance goals for functional foreign language use or that are developing such performance goals.
(3) Instruction, training, or research related to specific world areas.
(4) Academic terms, such as academic year or summer.
(5) Levels of language offerings.
(6) Academic disciplines, such as linguistics or sociology.
(7) Professional studies, such as business, law, or education.
(8) Instruction, training, or research in particular subjects, such as population growth and planning or international trade and business.
(9) Specific areas of national need for expertise in foreign languages and world areas derived from the consultation with Federal agencies on areas of national need.
(10) A combination of any of these categories.
(b) The Secretary announces any priorities in the application notice published in the
(a) Distance or online education. Fellows may satisfy course requirements through instruction offered in person or, with the Secretary's prior approval, via distance education or hybrid formats. Correspondence courses do not satisfy program course requirements.
(b) Duration and purpose. An approved Center or Program may award a fellowship for any of the following combinations of duration and purpose:
(1) One academic year, provided that the fellow enrolls in one language course per term and at least two area studies courses per year.
(2) One academic year for dissertation research abroad, provided that the fellow is a doctoral candidate, uses advanced training in at least one modern foreign language in the research, and has a work plan approved by the Secretary.
(3) One academic year for dissertation writing, provided that the fellow is a doctoral candidate, uses advanced training in at least one modern foreign language for the dissertation, and has a work plan approved by the Secretary.
(4) One summer session if the summer session provides the fellow with the equivalent of one academic year of instruction in a modern foreign language.
(5) Other durations approved by the Secretary to accommodate exceptional circumstances that would enable a fellow to complete an appropriate amount of coursework, dissertation writing, or dissertation research.
(c) Internships. The Secretary may approve the use of a fellowship to support an internship for an eligible fellow.
(d) Program administration costs. This program does not allow administrative costs.
(e) Selection of fellowship recipients. Approved Centers or Programs must select students to receive fellowships using the selection process described in the grant application submitted to the Department or using any subsequent modifications to the selection process that have been approved by the Secretary.
(f) Study outside the United States. Before awarding a fellowship for use outside the United States, an institution must obtain the approval of the Secretary. The Secretary may approve the use of a fellowship outside the United States if the student is—
(1) Enrolled in an educational program abroad, approved by the institution at which the student is enrolled in the United States, for study of a foreign language at an intermediate or advanced level or at the beginning level if appropriate equivalent instruction is not available in the United States; or
(2) Engaged during the academic year in research that cannot be done effectively in the United States and is affiliated with an institution of higher education or other appropriate organization in the host country.
(g) Support from other Federal agencies. Recipients of fellowships under this part may accept concurrent awards from other Federal agencies, such as Boren Fellowships and Critical Language Scholarships, provided that the other Federal awards are not used to pay for the same activity or cost allocated to the recipient's fellowship. Any fellow who accepts concurrent awards from other Federal agencies that may pay for the same activity or cost must disclose the receipt of such other Federal funding to the approved Center or Program that administers the allocation of fellowships at their institution.
(h) Transfer of funds. Institutions may not transfer funds from their allocation of fellowships to any outside entity, including other approved Centers or Programs, unless the funds are transferred directly to an instructional program provider to cover the costs for the institution's own fellows to attend training programs carried out by the instructional program provider during the academic year or a summer session. The transfer of funds to any instructional program providers located outside the United Stated must be pre-approved by the Secretary.
(i) Undergraduate travel. No funds may be expended under this part for undergraduate travel except in accordance with rules prescribed by the Secretary setting forth policies and procedures to ensure that Federal funds made available for such travel are expended as part of a formal program of supervised study.
(j) Vacancies. If a fellow vacates a fellowship before the end of an award period, the institution receiving the allocation of fellowships may award the balance of the fellowship to another student if—
(1) The student meets the eligibility requirements in § 657.4 and was selected in accordance with paragraph (e) of this section;
(2) The remaining fellowship period comprises at least one full academic quarter, semester, trimester, or summer session; and
(3) The amount of available funds is sufficient to award a full fellowship for the duration described in paragraph (j)(2) of this section.
(a) An institution must award a stipend to fellowship recipients.
(b) An institution must pay the stipend and any other allowances to the fellow in installments during the term of the academic year fellowship.
(c) An institution may make a payment only to a fellow who is in good academic standing and is making satisfactory progress.
(d) The institution must make appropriate adjustments of any overpayment or underpayment to a fellow.
(e) Any payments made for less than the full duration of a fellowship must be prorated to reflect the actual duration of the fellowship.
An institution must terminate a fellowship if—
(a) The fellow is not making satisfactory progress, is no longer enrolled, or is no longer in good standing at the institution; or
(b) The fellow fails to follow the plan of study in modern foreign language and area studies, for which the fellow applied, unless a revised plan of study is otherwise approved by the Secretary under this part.
Each institution of higher education, each member in a consortium of institutions of higher education, and each individual fellowship recipient under this program must submit performance reports, in such form and at such time as required by the Secretary.
(a) An institution to which the Secretary awards a grant under this part is responsible for administering the grant in accordance with the regulations described in § 657.6.
(b) The institution is responsible for processing individual applications for fellowships in accordance with procedures described in §§ 657.12 and 657.30.
(c) The institution is responsible for disbursing funds in accordance with procedures described in § 657.31.
(d) The institution is responsible for terminating a fellowship in accordance with the procedures described in § 657.32.
The Undergraduate International Studies and Foreign Language Program is designed to provide assistance to institutions of higher education, consortia of those institutions, or partnerships between nonprofit educational organizations and institutions of higher education, to assist those institutions, consortia, or partnerships in planning, developing, and carrying out programs to improve undergraduate instruction in international studies and foreign languages.
The following are eligible to apply for assistance under this part:
(a) Institutions of higher education.
(b) Consortia of institutions of higher education.
(c) Partnerships between nonprofit educational organizations and institutions of higher education.
(d) Public and private nonprofit agencies and organizations, including professional and scholarly associations.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 658.
The definitions in 34 CFR 655.4 apply to this program.
(a) The Secretary may provide assistance to an institution of higher education, a consortium of institutions of higher education, or a partnership between a nonprofit educational organization and an institution of higher education to plan, develop, and carry out a program to improve undergraduate instruction in international studies and foreign languages. Those grants must be awarded to institutions, consortia, or partnerships seeking to create new programs or to strengthen existing programs in foreign languages, area studies, and other international fields.
(b) The Secretary gives consideration to an applicant that proposes a program that—
(1) Initiates new or revised courses in international or area studies;
(2) Makes instruction in foreign languages available to students in the program; and
(3) Takes place primarily in the United States.
(c) The program shall focus on—
(1) International or global studies;
(2) One or more world areas and their languages; or
(3) Issues or topics, such as international environmental studies or international health.
The Secretary awards grants under this part to assist in carrying out projects and activities that are an integral part of a program to improve undergraduate instruction in international studies and foreign languages. These include projects such as—
(a) Planning for the development and expansion of undergraduate programs in international studies and foreign languages;
(b) Teaching, research, curriculum development, faculty training in the United States or abroad, and other related activities, including—
(1) Expanding library and teaching resources;
(2) Conducting faculty workshops, conferences, and special lectures;
(3) Developing and testing new curricular materials, including self-instructional materials in foreign languages, or specialized language materials dealing with a particular subject (such as health or the environment);
(4) Initiating new and revised courses in international studies or area studies and foreign languages; and
(5) Conducting pre-service teacher training and in-service teacher professional development;
(c) Expanding the opportunities for learning foreign languages, including less commonly taught languages;
(d) Providing opportunities for which foreign faculty and scholars may visit institutions as visiting faculty;
(e) Placing U.S. faculty members in internships with international associations or with governmental or nongovernmental organizations in the U.S. or abroad to improve their understanding of international affairs;
(f) Developing international education programs designed to develop or enhance linkages between 2-and 4-year institutions of higher education, or baccalaureate and post-baccalaureate programs or institutions;
(g) Developing undergraduate educational programs—
(1) In locations abroad where those opportunities are not otherwise available or that serve students for whom those opportunities are not otherwise available; and
(2) That provide courses that are closely related to on-campus foreign language and international curricula;
(h) Integrating new and continuing education abroad opportunities for undergraduate students into curricula of specific degree programs;
(i) Developing model programs to enrich or enhance the effectiveness of educational programs abroad, including pre-departure and post-return programs, and integrating educational programs abroad into the curriculum of the home institution;
(j) Providing grants for educational programs abroad that—
(1) Are closely linked to the program's overall goals; and
(2) Have the purpose of promoting foreign language fluency and knowledge of world regions;
(k) Developing programs designed to integrate professional and technical education with foreign languages, area studies, and other international fields;
(l) Establishing linkages overseas with institutions of higher education and organizations that contribute to the educational programs assisted under this part;
(m) Developing partnerships between—
(1) Institutions of higher education; and
(2) The private sector, government, or elementary and secondary education institutions in order to enhance international knowledge and skills; and
(n) Using innovative technology to increase access to international education programs.
The Secretary may award grants under this part to public and private nonprofit agencies and organizations including scholarly associations, that propose projects that will make an especially significant contribution to strengthening and improving undergraduate instruction in international studies and foreign languages at institutions of higher education.
(a) The Secretary evaluates an application from an institution of higher education or a consortium of such institutions on the basis of the criteria in §§ 658.31 and 658.32. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(b) The Secretary evaluates an application from an agency or organization or professional or scholarly association on the basis of the criteria in §§ 658.31 and 658.33. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
The Secretary evaluates an application for a project under this program on the basis of the criteria in this section.
(a) Plan of operation. (See 34 CFR 655. 31(a))
(b) Quality of key personnel. (See 34 CFR 655.31(b))
(c) Budget and cost effectiveness. (See 34 CFR 655.31(c))
(d) Evaluation plan. (See 34 CFR 655.31(d))
(e) Adequacy of resources. (See 34 CFR 655.31(e))
In addition to the criteria referred to in § 658.31, the Secretary evaluates an application submitted by an institution of higher education or a consortium of such institutions on the basis of the criteria in this section.
(a) Commitment to international studies. (1) The Secretary reviews each application for information that shows the applicant's commitment to the international studies program.
(2) The Secretary looks for information that shows—
(i) The institution's current strength as measured by the number of international studies courses offered;
(ii) The extent to which planning for the implementation of the proposed program has involved the applicant's faculty, as well as administrators;
(iii) The institutional commitment to the establishment, operation, and continuation of the program as demonstrated by optimal use of available personnel and other resources; and
(iv) The institutional commitment to the program as demonstrated by the use of institutional funds in support of the program's objectives.
(b) Elements of the proposed international studies program. (1) The Secretary reviews each application for information that shows the nature of the applicant's proposed international studies program.
(2) The Secretary looks for information that shows—
(i) The extent to which the proposed activities will contribute to the implementation of a program in international studies and foreign languages at the applicant institution;
(ii) The interdisciplinary aspects of the program;
(iii) The number of new and revised courses with an international perspective that will be added to the institution's programs; and
(iv) The applicant's plans to improve or expand language instruction.
(c) Need for and prospective results of the proposed program. (1) The Secretary reviews each application for information that shows the need for and the prospective results of the applicant's proposed program.
(2) The Secretary looks for information that shows—
(i) The extent to which the proposed activities are needed at the applicant institution;
(ii) The extent to which the proposed use of Federal funds will result in the implementation of a program in international studies and foreign languages at the applicant institution;
(iii) The likelihood that the activities initiated with Federal funds will be continued after Federal assistance is terminated; and
(iv) The adequacy of the provisions for sharing the materials and results of the program with other institutions of higher education.
In addition to the criteria referred to in § 658.31, the Secretary evaluates an application submitted by an organization or association on the basis of the criterion in this section.
(a) Need for and potential impact of the proposed project in improving international studies and the study of modern foreign language at the undergraduate level.
(b) The Secretary reviews each application for information that shows the need for and the potential impact of the applicant's proposed projects in improving international studies and the study of modern foreign language at the undergraduate level.
(1) The Secretary looks for information that shows—
(i) The extent to which the applicant's proposed apportionment of Federal funds among the various budget categories for the proposed project will contribute to achieving results;
(ii) The international nature and contemporary relevance of the proposed project;
(iii) The extent to which the proposed project will make an especially significant contribution to the improvement of the teaching of international studies or modern foreign languages at the undergraduate level; and
(iv) The adequacy of the applicant's provisions for sharing the materials and results of the proposed project with the higher education community.
(2) [Reserved]
In addition to applying the selection criteria in, as appropriate §§ 658.31, 658.32, and 658.33, the Secretary, to the extent practicable and consistent with the criterion of excellence, seeks to encourage diversity by ensuring that a variety of types of projects and institutions receive funding.
(a) The Secretary gives priority to applications from institutions of higher education or consortia of these institutions that require entering students to have successfully completed at least two years of secondary school foreign language instruction or that require each graduating student to earn two years of postsecondary credit in a foreign language (or have demonstrated equivalent competence in the foreign language) or, in the case of a 2-year degree granting institution, offer two years of postsecondary credit in a foreign language.
(b) The Secretary announces the number of points to be awarded under this priority in the application notice published in the
(a) Equipment costs may not exceed five percent of the grant amount; and
(b) No more than ten percent of the total amount of grant funds awarded to a grantee under this part may be used for the activity described in § 658.11(j).
(a) The grantee's share may be derived from cash contributions from private sector corporations or foundations in the amount of one-third of the total cost of the project.
(b) The grantee's share may be derived from cash or in-kind contributions from institutional and noninstitutional funds, including State and private sector corporation or foundation contributions, equal to one-half of the total cost of the project.
(c) In-kind contributions means property or services that benefit a grant-supported project or program and that are contributed by non-Federal third parties without charge to the grantee.
(d) The Secretary may waive or reduce the required non-Federal share for institutions that—
(1) Are eligible to receive assistance under part A or B of title III or under title V of the Higher Education Act of 1965, as amended; and
(2) Have submitted a grant application under this part that demonstrates a need for a waiver or reduction.
The Secretary may, directly or through grants or contracts, conduct research and studies which contribute to the purposes of the International Education Program authorized by part A of title VI of the Higher Education Act of 1965, as amended (HEA). The research and studies may include, but are not limited to—
(a) Studies and surveys to determine needs for increased or improved instruction in modern foreign languages, area studies, or other international fields, including the demand for foreign language, area, and other international specialists in government, education, and the private sector;
(b) Research on more effective methods of providing instruction and achieving competency in foreign languages, area studies, or other international fields;
(c) Research on applying performance tests and standards across all areas of foreign language instruction and classroom use;
(d) Developing and publishing specialized materials for use in foreign language, area studies, and other international fields or for training foreign language, area, and other international specialists;
(e) Studies and surveys to assess the use of graduates of programs supported under title VI of the HEA by governmental, educational, and private-sector organizations and other studies assessing the outcomes and effectiveness of supported programs;
(f) Comparative studies of the effectiveness of strategies to provide international capabilities at institutions of higher education;
(g) Evaluations of the extent to which programs assisted under title VI of the HEA that address national needs would not otherwise be offered;
(h) Studies and surveys of the use of technologies in foreign language, area studies, and international studies programs;
(i) Studies and evaluations of effective practices in the dissemination of international information, materials, research, teaching strategies, and testing techniques throughout the educational community, including elementary and secondary schools;
(j) Evaluations of the extent to which programs assisted under title VI of the HEA reflect diverse perspectives and a wide range of views and generate debate on world regions and international affairs, as described in the grantee's application;
(k) Systematic collection, analysis, and dissemination of data that contribute to achieving the purposes of title VI, part A of the HEA; and
(l) Support for programs or activities to make data collected, analyzed, or disseminated under this part publicly available and easy to understand.
Public and private agencies, organizations, and institutions, and individuals are eligible to apply for grants under this part.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 660.
The definitions in 34 CFR 655.4 apply to this program.
An applicant may apply for funds to carry out any of the following types of activities:
(a) Studies and surveys to determine the need for increased or improved instruction in—
(1) Modern foreign languages; and
(2) Area studies and other international fields needed to provide full understanding of the places in which those languages are commonly used.
(b) Research and studies—
(1) On more effective methods of instruction and achieving competency in modern foreign languages, area studies, or other international fields;
(2) To evaluate competency in those foreign languages, area studies, or other international fields; or
(3) On the application of performance tests and standards across all areas of foreign language instruction and classroom use.
(c) The development and publication of specialized materials—
(1) For use by students and teachers of modern foreign languages, area studies, and other international fields; and
(2) For use in—
(i) Providing such instruction and evaluation; or
(ii) Training individuals to provide such instruction and evaluation.
(d) Research, surveys, studies, or the development of instructional materials that serve to enhance international understanding.
(e) Other research or material development projects that further the purposes of the International Education Program authorized by part A of title VI of the HEA.
(f) Studies and surveys to assess the use of graduates of programs supported under title VI of the HEA by governmental, educational, and private-sector organizations, and other studies assessing the outcomes and effectiveness of supported programs.
(g) Comparative studies of the effectiveness of strategies to provide international capabilities at institutions of higher education.
(h) Evaluations of the extent to which programs assisted under title VI of the HEA that address national needs would not otherwise be offered.
(i) Studies and surveys of the uses of technology in foreign language, area studies, and international studies programs.
(j) Studies and evaluations of effective practices in the dissemination of international information, materials, research, teaching strategies, and testing techniques through the education community, including elementary and secondary schools.
(k) Evaluations of the extent to which programs assisted under title VI of the HEA reflect diverse perspectives and a wide range of views and generate debate on world regions and international affairs, as described in the grantee's application.
(l) Systematic collection, analysis, and dissemination of data that contribute to achieving the purposes of title VI, part A of the HEA.
(m) Support for programs or activities to make data collected, analyzed, or disseminated under this part publicly available and easy to understand.
(a) The Secretary evaluates an application for a research project, a study, or a survey on the basis of the criteria in §§ 660.31 and 660.32. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(b) The Secretary evaluates an application for the development of specialized instructional materials on the basis of the criteria in §§ 660.31 and 660.33. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
The Secretary evaluates an application for a project under this program on the basis of the criteria in this section. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(a) Plan of operation. (See 34 CFR 655.31(a))
(b) Quality of key personnel. (See 34 CFR 655.31(b))
(c) Budget and cost effectiveness. (See 34 CFR 655.31(c))
(d) Evaluation plan. (See 34 CFR 655.31(d))
(e) Adequacy of resources. (See 34 CFR 655.31(e))
In addition to the criteria referred to in § 660.31, the Secretary evaluates an application for a research project, study, or survey on the basis of the criteria in this section.
(a) Need for the project. The Secretary reviews each application for information that shows—
(1) A need for the proposed project in the field of study on which the project focuses; and
(2) That the proposed project will provide information about the present and future needs of the United States for study in foreign language and other international fields.
(b) Usefulness of expected results. The Secretary reviews each application for information that shows the extent to which the results of the proposed project are likely to be used by other research projects or programs with similar objectives.
(c) Development of new knowledge. The Secretary reviews each application for information that shows that the extent to which the proposed project is likely to develop new knowledge that will contribute to the purposes of the International Education Program authorized by part A of title VI of the HEA.
(d) Formulation of problems and knowledge of related research. The Secretary reviews each application for information that shows that problems, questions, or hypotheses to be dealt with by the applicant—
(1) Are well formulated; and
(2) Reflect adequate knowledge of related research.
(e) Specificity of statement of procedures. The Secretary reviews each application for the specificity and completeness of the statement of procedures to be followed, including a discussion of such components as sampling techniques, controls, data to be gathered, and statistical and other analyses to be undertaken.
(f) Adequacy of methodology and scope of project. The Secretary reviews each application for information that shows—
(1) The adequacy of the proposed teaching, testing, and research methodology; and
(2) The size, scope, and duration of the proposed project.
In addition to the criteria referred to in § 660.31, the Secretary evaluates an application to develop specialized instructional materials on the basis of the criteria in this section.
(a) Need for the project. The Secretary reviews each application for information that shows that—
(1) The proposed materials are needed in the educational field of study on which the project focuses; and
(2) The language or languages, the area, region, or country, or the issues or studies for which the materials are to be developed, are of sufficient priority and significance to the national interest to warrant financial support by the Federal Government.
(b) Potential for the use of materials in other programs. The Secretary reviews each application for information that shows the extent to which the proposed materials may be used elsewhere in the United States.
(c) Account of related materials. The Secretary reviews each application for information that shows that—
(1) All existing related or similar materials have been accounted for and the critical commentary on their adequacy is appropriate and accurate; and
(2) The proposed materials will not duplicate any existing adequate materials.
(d) Likelihood of achieving results. The Secretary reviews each application for information that shows that the outlined methods and procedures for preparing the materials are practicable and can be expected to produce the anticipated results.
(e) Expected contribution to other programs. The Secretary reviews each application for information that shows the extent to which the proposed work may contribute significantly to strengthening, expanding, or improving programs of foreign language studies, area studies, or international studies in the United States.
(f) Description of final form of materials. The Secretary reviews each application for information that shows a high degree of specificity in the description of the contents and final form of the proposed materials.
(g) Provisions for pretesting and revision. The Secretary reviews each application for information that shows that adequate provision has been made for—
(1) Pretesting the proposed materials; and
(2) If necessary, revising the proposed materials before publication.
(a) The Secretary may each year select for funding from among the following priorities:
(1) Categories of eligible projects described in § 660.10.
(2) Specific languages or regions for study or materials development; for example, the Near or Middle East, South Asia, Southeast Asia, Eastern Europe, Inner Asia, the Far East, Africa or Latin America, or the languages of those regions.
(3) Topics of research and studies; for example, language acquisition processes, methodology of foreign language instruction, foreign language performance testing, or assessments of resources and needs.
(4) Levels of education; for example, elementary, secondary, postsecondary or university-level education, or teacher education.
(b) The Secretary announces any priorities in the application notice published in the
Funds awarded under this part may not be used for the training of students and teachers.
The Business and International Education Program is designed to promote linkages between institutions of higher education and American businesses engaged in international economic activities. The purpose of each project assisted under this part is both to enhance the international academic programs of institutions of higher education, and to provide appropriate services to the business community that will enable it to expand its capacity to sell its goods and services outside the United States.
Under this program the Secretary considers applications from institutions of higher education that have entered into agreements with business enterprises, trade organizations or associations engaged in international economic activity—or a combination or consortium of these enterprises, organizations or associations—for the purposes of pursuing the activities authorized under this program.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 661.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR 77.1:
(b) Definitions in 34 CFR part 655. The following terms used in this part are defined in 34 CFR part 655.4(b):
The activities that the Secretary may assist institutions of higher education to conduct under this program, include but are not limited to—
(a) Innovation and improvement of international education curricula to serve the needs of the business community, including the development of new programs for nontraditional, mid-career, or part-time students;
(b) Development of programs to inform the public of increasing international economic interdependence and the role of American business within the international economic system;
(c) Internationalization of curricula at junior and community colleges, and at undergraduate and graduate schools of business;
(d) Development of area studies programs and interdisciplinary international programs;
(e) Establishment of export education programs through cooperative arrangements with regional and world trade centers and councils, and with bilateral and multilateral trade associations;
(f) Research for and development of teaching materials relating to international education, including language materials, and facilities appropriate to business-oriented students;
(g) Establishment of student and faculty fellowships and internships for training and education in international business activities;
(h) Development of opportunities for business and other professional school junior faculty to acquire or strengthen international skills and perspectives;
(i) Development of research programs on issues of common interest to institutions of higher education and private sector organizations and associations engaged in or promoting international economic activity;
(j) The establishment of internships overseas to enable foreign language students to develop their foreign language skills and their knowledge of foreign cultures and societies;
(k) Establishing linkages overseas with institutions of higher education and organizations that contribute to the educational objectives of this program; and
(l) Summer institutes in international business, foreign area, and other international studies designed to carry out the purposes of this program.
An institution that applies for a grant under this program shall include the following in its application:
(a)(1) A copy of the agreement between the applicant and the other party or parties described in § 661.2 for the purpose of carrying out the activities for which the applicant seeks assistance.
(2) The agreement must be signed by all parties and it must describe the manner in which the business enterprise, trade association, or organization will assist in carrying out the activities proposed in the application.
(b) An assurance that the applicant will use the funds to supplement and not to supplant activities conducted by the applicant.
(c) An assurance that, where applicable, the activities funded by the grant will reflect diverse perspectives and a wide range of views on world regions and international affairs.
The Secretary evaluates an application for a grant under this program on the basis of the criteria in § 661.31. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
The Secretary evaluates an application for a grant under this program on the basis of the criteria in this section.
(a) Plan of operation. (See 34 CFR 655.31(a).)
(b) Qualifications of the key personnel. (See 34 CFR 655.31(b).)
(c) Budget and cost effectiveness. (See 34 CFR 655.31(c).)
(d) Evaluation plan. (See 34 CFR 655.31(d).)
(e) Adequacy of resources. (See 34 CFR 655.31(e).)
(f) Need for the project.
(a) The Secretary may each year establish priorities for funding from the activities described in § 661.10.
(b) The Secretary announces any priorities in the application notice published in the
A grantee shall pay a minimum of 50 percent of the cost of the project for each fiscal year.
(a) The Fulbright-Hays Doctoral Dissertation Research Abroad Fellowship Program is designed to contribute to the development and improvement of the study of modern foreign languages and area studies in the United States by providing opportunities for scholars to conduct research abroad.
(b) Under the program, the Secretary awards fellowships, through institutions of higher education, to doctoral candidates who propose to conduct dissertation research abroad in modern foreign languages and area studies.
An institution of higher education is eligible to receive an institutional grant.
An individual is eligible to receive a fellowship if the individual—
(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States;
(b)(1) Is a graduate student in good standing at an institution of higher education; and
(2) When the fellowship period begins, is admitted to candidacy in a doctoral degree program in modern foreign languages and area studies at that institution;
(c) Is planning a teaching career in the United States upon completion of his or her doctoral program; and
(d) Possesses sufficient foreign language skills to carry out the dissertation research project.
(a) The Secretary pays—
(1) Travel expenses to and from the residence of the fellow and the country or countries of research;
(2) A maintenance stipend for the fellow and his or her dependents related to cost of living in the host country or countries;
(3) An allowance for research-related expenses overseas, such as books, copying, tuition and affiliation fees, local travel, and other incidental expenses; and
(4) Health and accident insurance premiums.
(b) In addition, the Secretary may pay—
(1) Emergency medical expenses not covered by health and accident insurance; and
(2) The costs of preparing and transporting the remains of a fellow or dependent who dies during the term of the fellowship to his or her former home.
(c) The Secretary announces the amount of benefits expected to be available in an application notice published in the
(a) A fellowship is for a period of not fewer than six nor more than twelve months.
(b) A fellowship may not be renewed.
The following regulations apply to this program:
(a) The regulations in this part 662; and
(b) The Education Department General Administrative Regulations (EDGAR) (34 CFR parts 75, 77, 81, 82, and 86).
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) Definitions of the following terms as used in this part are contained in 2 CFR part 200, subpart A, or 34 CFR part 77:
(b) The definition of institution of higher education as used in this part is contained in 34 CFR 600.4.
(c) The following definitions of other terms used in this part apply to this program:
Area studies means a program of comprehensive study of the aspects of a society or societies, including the study of their geography, history, culture, economy, politics, international relations, and languages.
Binational commission means an educational and cultural commission established, through an agreement between the United States and either a foreign government or an international organization, to carry out functions in connection with the program covered by this part.
Dependent means any of the following individuals who accompany the recipient of a fellowship under this program to his or her training site for the entire fellowship period if the individual receives more than 50 percent of his or her support from the recipient during the fellowship period:
(1) The recipient's spouse.
(2) The recipient's or spouse's children who are unmarried and under age 21.
J. William Fulbright Foreign Scholarship Board means the presidentially-appointed board that is responsible for supervision of the program covered by this part.
If any provision of this part or its application to any person, act, or practice is held invalid, the remainder of the part or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) An individual applies for a fellowship by submitting an application to the Secretary through the institution of higher education in which the individual is enrolled.
(b) The applicant shall provide sufficient information concerning his or her personal and academic background and proposed research project to enable the Secretary to determine whether the applicant—
(1) Is eligible to receive a fellowship under § 662.3; and
(2) Should be selected to receive a fellowship under subparts C and D of this part.
An institution of higher education that participates in this program is responsible for—
(a) Making fellowship application materials available to its students;
(b) Accepting and screening applications in accordance with its own technical and academic criteria; and
(c) Forwarding screened applications to the Secretary and requesting an institutional grant.
(a) The Secretary considers applications for fellowships under this program that have been screened and submitted by eligible institutions. The Secretary evaluates these applications on the basis of the criteria in § 662.21.
(b) The Secretary does not consider applications to carry out research in a country in which the United States has no diplomatic representation.
(c) In evaluating applications, the Secretary obtains the advice of panels of United States academic specialists in modern foreign languages and area studies.
(d) The Secretary gives preference to applicants who have served in the armed services of the United States if their applications are equivalent to those of other applicants on the basis of the criteria in § 662.21.
(e) The Secretary considers information on budget, political sensitivity, and feasibility from binational commissions or United States diplomatic missions, or both, in the proposed country or countries of research.
(f) The Secretary presents recommendations for recipients of fellowships to the J. William Fulbright Foreign Scholarship Board, which reviews the recommendations and approves recipients.
(a) General. The Secretary evaluates an application for a fellowship on the basis of the criteria in this section. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(b) Quality of proposed project. The Secretary reviews each application to determine the quality of the research project proposed by the applicant. The Secretary considers—
(1) The statement of the major hypotheses to be tested or questions to be examined, and the description and justification of the research methods to be used;
(2) The relationship of the research to the literature on the topic and to major theoretical issues in the field, and the project's originality and importance in terms of the concerns of the discipline;
(3) The preliminary research already completed in the United States and overseas or plans for such research prior to going overseas, and the kinds, quality and availability of data for the research in the host country or countries;
(4) The justification for overseas field research and preparations to establish appropriate and sufficient research contacts and affiliations abroad;
(5) The applicant's plans to share the results of the research in progress and a copy of the dissertation with scholars and officials of the host country or countries; and
(6) The guidance and supervision of the dissertation advisor or committee at all stages of the project, including guidance in developing the project, understanding research conditions abroad, and acquainting the applicant with research in the field.
(c) Qualifications of the applicant. The Secretary reviews each application to determine the qualifications of the applicant. In coordination with any priorities established under paragraph (d) of this section, the Secretary considers one or more of the following—
(1) The overall strength of the applicant's graduate academic record;
(2) The extent to which the applicant's academic record demonstrates strength in area studies relevant to the proposed project;
(3) The applicant's proficiency in one or more of the languages (other than English) of the host country or countries of research;
(4) The extent to which the applicant's academic record demonstrates steps taken to further improve advanced language proficiency to overcome any anticipated language barriers relative to the proposed research project;
(5) The applicant's ability to conduct research in a foreign cultural context, as evidenced by the applicant's references or previous overseas experience, or both.
(d) Priorities. (1) The Secretary determines the extent to which the application responds to any priority that the Secretary establishes for the selection of fellows in any fiscal year. The Secretary announces any priorities in an application notice published in the
(2) Priorities may relate to certain world areas, countries, academic disciplines, languages, topics, or combinations of any of these categories. For example, the Secretary may establish a priority for—
(i) A specific geographic area or country, such as the Caribbean or Poland;
(ii) An academic discipline, such as economics or political science;
(iii) A language, such as Tajik or Indonesian; or
(iv) A topic, such as public health issues or the environment.
(a) The J. William Fulbright Foreign Scholarship Board selects fellows on the basis of the Secretary's recommendations and the information described in § 662.20(e) from binational commissions or United States diplomatic missions.
(b) No applicant for a fellowship may be awarded more than one graduate fellowship under the Fulbright-Hays Act from appropriations for a given fiscal year.
(a) An institution to which the Secretary awards a grant under this part is responsible for administering the grant in accordance with the regulations described in § 662.6.
(b) The institution is responsible for processing individual applications for fellowships in accordance with procedures described in § 662.11.
(c) The institution is responsible for disbursing funds in accordance with procedures described in § 662.4.
(d) The Secretary awards the institution an administrative allowance of $100 for each fellowship listed in the grant award document.
As a condition of retaining a fellowship, a fellow shall—
(a) Maintain satisfactory progress in the conduct of his or her research;
(b) Devote full time to research on the approved topic;
(c) Not engage in unauthorized income-producing activities during the period of the fellowship; and
(d) Remain a student in good standing with the grantee institution during the period of the fellowship.
(a) The fellowship may be revoked only by the J. William Fulbright Foreign Scholarship Board upon the recommendation of the Secretary.
(b) The Secretary may recommend a revocation of a fellowship on the basis of—
(1) The fellow's failure to meet any of the conditions in § 662.41; or
(2) Any violation of the standards of conduct adopted by the J. William Fulbright Foreign Scholarship Board.
(a) The Fulbright-Hays Faculty Research Abroad Program is designed to contribute to the development and improvement of modern foreign language and area studies in the United States by providing opportunities for scholars to conduct research abroad.
(b) Under the program, the Secretary awards fellowships, through institutions of higher education, to faculty members who propose to conduct research abroad in modern foreign languages and area studies to improve their skill in languages and knowledge of the culture of the people of these countries.
An institution of higher education is eligible to receive an institutional grant.
An individual is eligible to receive a fellowship if the individual—
(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States;
(b) Is employed by an institution of higher education;
(c) Has been engaged in teaching relevant to his or her foreign language or area studies specialization for the two years immediately preceding the date of the award;
(d) Proposes research relevant to his or her modern foreign language or area specialization which is not dissertation research for a doctoral degree; and
(e) Possesses sufficient foreign language skills to carry out the research project.
(a) The Secretary pays—
(1) Travel expenses to and from the residence of the fellow and the country or countries of research;
(2) A maintenance stipend for the fellow related to his or her academic year salary; and
(3) An allowance for research-related expenses overseas, such as books, copying, tuition and affiliation fees, local travel, and other incidental expenses.
(b) The Secretary may pay—
(1) Emergency medical expenses not covered by the faculty member's health and accident insurance; and
(2) The costs of preparing and transporting the remains of a fellow or dependent who dies during the term of the fellowship to his or her former home.
(c) The Secretary announces the amount of benefits expected to be available in an application notice published in the
(a) A fellowship is for a period of not fewer than three nor more than twelve months.
(b) A fellowship may not be renewed.
The following regulations apply to this program:
(a) The regulations in this part 663; and
(b) The Education Department General Administrative Regulations (EDGAR) (34 CFR parts 75, 77, 81, 82, and 86).
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) Definitions of the following terms as used in this part are contained in 2 CFR part 200, subpart A, or 34 CFR part 77:
(b) The definition of institution of higher education as used in this part is contained in 34 CFR 600.4.
(c) The following definitions of other terms used in this part apply to this program:
Area studies means a program of comprehensive study of the aspects of a society or societies, including the study of their geography, history, culture, economy, politics, international relations, and languages.
Binational commission means an educational and cultural commission established, through an agreement between the United States and either a foreign government or an international organization, to carry out functions in connection with the program covered by this part.
Dependent means any of the following individuals who accompany the recipient of a fellowship under this program to his or her training site for the entire fellowship period if the individual receives more than 50 percent of his or her support from the recipient during the fellowship period:
(1) The recipient's spouse.
(2) The recipient's or spouse's children who are unmarried and under age 21.
J. William Fulbright Foreign Scholarship Board means the presidentially-appointed board that is responsible for supervision of the program covered by this part.
If any provision of this part or its application to any person, act, or practice is held invalid, the remainder of the part or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) An individual applies for a fellowship by submitting an application to the Secretary through the institution of higher education at which the individual is employed.
(b) The applicant shall provide sufficient information concerning his or her personal and academic background and proposed research project to enable the Secretary to determine whether the applicant—
(1) Is eligible to receive a fellowship under § 663.3; and
(2) Should be selected to receive a fellowship under subparts C and D of this part.
An institution of higher education that participates in this program is responsible for—
(a) Making fellowship application materials available to its faculty;
(b) Accepting and screening applications in accordance with its own technical and academic criteria; and
(c) Forwarding screened applications to the Secretary through a request for an institutional grant.
(a) The Secretary considers applications for fellowships under this program that have been screened and submitted by eligible institutions. The Secretary evaluates these applications on the basis of the criteria in § 663.21.
(b) The Secretary does not consider applications to carry out research in a country in which the United States has no diplomatic representation.
(c) In evaluating applications, the Secretary obtains the advice of panels of United States academic specialists in modern foreign languages and area studies.
(d) The Secretary gives preference to applicants who have served in the armed services of the United States if their applications are equivalent to those of other applicants on the basis of the criteria in § 663.21.
(e) The Secretary considers information on budget, political sensitivity, and feasibility from binational commissions or United States diplomatic missions, or both, in the proposed country or countries of research.
(f) The Secretary presents recommendations for recipients of fellowships to the J. William Fulbright Foreign Scholarship Board, which reviews the recommendations and approves recipients.
(a) General. The Secretary evaluates an application for a fellowship on the basis of the criteria in this section. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(b) Quality of proposed project. The Secretary reviews each application to determine the quality of the research project proposed by the applicant. The Secretary considers—
(1) The statement of the major hypotheses to be tested or questions to be examined, and the description and justification of the research methods to be used;
(2) The relationship of the research to the literature on the topic and to major theoretical issues in the field, and the project's importance in terms of the concerns of the discipline;
(3) The preliminary research already completed or plans for research prior to going overseas, and the kinds, quality and availability of data for the research in the host country or countries;
(4) The justification for overseas field research, and preparations to establish appropriate and sufficient research contacts and affiliations abroad;
(5) The applicant's plans to share the results of the research in progress with scholars and officials of the host country or countries and the American scholarly community; and
(6) The objectives of the project regarding the sponsoring institution's plans for developing or strengthening, or both, curricula in modern foreign languages and area studies.
(c) Qualifications of the applicant. The Secretary reviews each application to determine the qualifications of the applicant. In coordination with any priorities established under paragraph (d) of this section, the Secretary considers one or more of the following—
(1) The overall strength of applicant's academic record (teaching, research, contributions, professional association activities);
(2) The applicant's excellence as a teacher or researcher, or both, in his or her area or areas of specialization;
(3) The applicant's proficiency in one or more of the languages (other than English) of the host country or countries of research;
(4) The extent to which the applicant's academic record demonstrates steps taken to further improve advanced language proficiency to overcome any anticipated language barriers relative to the proposed research project;
(5) The applicant's ability to conduct research in a foreign cultural context, as evidenced by the applicant's previous overseas experience, or documentation provided by the sponsoring institution, or both.
(d) Priorities. (1) The Secretary determines the extent to which the application responds to any priority that the Secretary establishes for the selection of fellows in any fiscal year. The Secretary announces any priorities in an application notice published in the
(2) Priorities may relate to certain world areas, countries, academic disciplines, languages, topics, or combinations of any of these categories. For example, the Secretary may establish a priority for—
(i) A specific geographic area or country, such as East Asia or Latvia;
(ii) An academic discipline, such as history or political science;
(iii) A language, such as Hausa or Telegu; or
(iv) A topic, such as religious fundamentalism or migration.
The J. William Fulbright Foreign Scholarship Board selects fellows on the basis of the Secretary's recommendations and the information described in § 663.20(e) from binational commissions or United States diplomatic missions.
(a) An institution to which the Secretary awards a grant under this part is responsible for administering the grant in accordance with the regulations described in § 663.6.
(b) The institution is responsible for processing individual applications for fellowships in accordance with procedures described in § 663.11.
(c) The institution is responsible for disbursing funds in accordance with procedures described in § 663.4.
(d) The Secretary awards the institution an administrative allowance of $100 for each fellowship listed in the grant award document.
As a condition of retaining a fellowship, a fellow shall—
(a) Maintain satisfactory progress in the conduct of his or her research;
(b) Devote full time to research on the approved topic;
(c) Not engage in unauthorized income-producing activities during the period of the fellowship; and
(d) Remain employed by the grantee institution during the period of the fellowship.
(a) The fellowship may be revoked only by the J. William Fulbright Foreign Scholarship Board upon the recommendation of the Secretary.
(b) The Secretary may recommend a revocation of a fellowship on the basis of—
(1) The fellow's failure to meet any of the conditions in § 663.41; or
(2) Any violation of the standards of conduct adopted by the J. William Fulbright Foreign Scholarship Board.
(a) The Fulbright-Hays Group Projects Abroad Program is designed to contribute to the development and improvement of the study of modern foreign languages and area studies in the United States by providing opportunities for teachers, students, and faculty to study in foreign countries.
(b) Under the program, the Secretary awards grants to eligible institutions, departments, and organizations to conduct overseas group projects in research, training, and curriculum development.
The following are eligible to apply for assistance under this part:
(a) Institutions of higher education;
(b) State departments of education;
(c) Private non-profit educational organizations; and
(d) Consortia of institutions, departments, and organizations described in paragraphs (a), (b), or (c) of this section.
An individual is eligible to participate in a Fulbright-Hays Group Projects Abroad, if the individual—(a)(1) Is a citizen or national of the United States; or
(2) Is a permanent resident of the United States; and
(b)(1) Is a faculty member who teaches modern foreign languages or area studies in an institution of higher education;
(2) Is a teacher in an elementary or secondary school;
(3) Is an experienced education administrator responsible for planning, conducting, or supervising programs in modern foreign languages or area studies at the elementary, secondary, or postsecondary level; or
(4) Is a graduate student, or a junior or senior in an institution of higher education, who plans a teaching career in modern foreign languages or area studies.
The following regulations apply to this program:
(a) The regulations in this part 664; and
(b) The Education Department General Administrative Regulations (EDGAR) (34 CFR parts 75, 77, 81, 82, and 86).
(c)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
(a) General definitions. The following terms used in this part are defined in 2 CFR part 200, subpart A, or 34 CFR part 77:
(b) Definitions that apply to this program: The following definitions apply to the Fulbright-Hays Group Projects Abroad Program:
Area studies means a program of comprehensive study of the aspects of a society or societies, including the study of their geography, history, culture, economy, politics, international relations, and languages.
Binational commission means an educational and cultural commission established, through an agreement between the United States and either a foreign government or an international organization, to carry out functions in connection with the program covered by this part.
Institution of higher education means an educational institution in any State that—
(1) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate;
(2) Is legally authorized within such State to provide a program of education beyond secondary education;
(3) Provides an educational program for which it awards a bachelor's degree or provides not less than a two-year program which is acceptable for full credit toward such a degree;
(4) Is a public or other nonprofit institution; and
(5) Is accredited by a nationally recognized accrediting agency or association.
J. William Fulbright Foreign Scholarship Board means the presidentially appointed board that is responsible for supervision of the program covered by this part.
The Secretary assists projects designed to develop or improve programs in modern foreign language or area studies at the elementary, secondary, or postsecondary level by supporting overseas projects in research, training, and curriculum development by groups of individuals engaged in a common endeavor. Projects may include, as described in §§ 664.11 through 664.14, short-term seminars, curriculum development teams, group research or study, and advanced intensive language programs.
A short-term seminar project is—
(a) Designed to help integrate international studies into an institution's or school system's general curriculum; and
(b) Normally four to six weeks in length and focuses on a particular aspect of area study, such as, for example, the culture of the area or a portion of the culture.
(a) A curriculum development project—
(1) Is designed to permit faculty and administrators in institutions of higher education and elementary and secondary schools, and administrators in State departments of education the opportunity to spend generally from four to eight weeks in a foreign country acquiring resource materials for curriculum development in modern foreign language and area studies; and
(2) Must provide for the systematic use and dissemination in the United States of the acquired materials.
(b) For the purpose of this section, resource materials include artifacts, books, documents, educational films, museum reproductions, recordings, and other instructional material.
(a)(1) A group research or study project is designed to permit a group of faculty of an institution of higher education and graduate and undergraduate students to undertake research or study in a foreign country.
(2) The period of research or study in a foreign country is generally from three to twelve months.
(b) As a prerequisite to participating in a research or training project, participants—
(1) Must possess the requisite language proficiency to conduct the research or study, and disciplinary competence in their area of research; and
(2) In a project of a semester or longer, shall have completed, at a minimum, one semester of intensive language training and one course in area studies relevant to the projects.
(a)(1) An advanced overseas intensive language project is designed to take advantage of the opportunities present in the foreign country that are not present in the United States when providing intensive advanced foreign language training.
(2) Project activities may be carried out during a full year, an academic year, a semester, a trimester, a quarter, or a summer.
(3) Generally, language training must be given at the advanced level, i.e., at the level equivalent to that provided to students who have successfully completed two academic years of language training.
(4) The language to be studied must be indigenous to the host country and maximum use must be made of local institutions and personnel.
(b) Generally, participants in projects under this program must have successfully completed at least two academic years of training in the language to be studied.
(a) The Secretary evaluates an application for a Group Project Abroad on the basis of the criteria in § 664.31. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
(b) All selections by the Secretary are subject to review and final approval by the J. William Fulbright Foreign Scholarship Board.
(c) The Secretary does not recommend a project to the J. William Fulbright Foreign Scholarship Board if the applicant proposes to carry it out in a country in which the United States does not have diplomatic representation.
The Secretary uses the criteria in this section to evaluate applications for the purpose of recommending to the J. William Fulbright Foreign Scholarship Board Group Projects Abroad for funding under this part.
(a) Plan of operation. (1) The Secretary reviews each application for information to determine the quality of the plan of operation for the project.
(2) The Secretary looks for information that shows—
(i) High quality in the design of the project;
(ii) An effective plan of management that insures proper and efficient administration of the project;
(iii) A clear description of how the objectives of the project relate to the purpose of the program;
(iv) The way the applicant plans to use its resources and personnel to achieve each objective; and
(v) A clear description of how the applicant will ensure that project participants who are otherwise eligible to participate are selected without regard to race, color, national origin, gender, age, or handicapping condition.
(b) Quality of key personnel. (1) The Secretary reviews each application for information to determine the quality of key personnel the applicant plans to use on the project.
(2) The Secretary looks for information that shows—
(i) The qualifications of the project director;
(ii) The qualifications of each of the other key personnel to be used in the project;
(iii) The time that each person referred to in paragraphs (b)(2)(i) and (ii) of this section will commit to the project; and
(iv) The extent to which the applicant, as part of its nondiscriminatory employment practices, will ensure that its personnel are selected for employment without regard to race, color, national origin, gender, age, or handicapping condition.
(3) To determine the qualifications of a person, the Secretary considers evidence of past experience and training in fields related to the objectives of the project as well as other information that the applicant provides.
(c) Budget and cost effectiveness. (1) The Secretary reviews each application for information that shows that the project has an adequate budget and is cost effective.
(2) The Secretary looks for information that shows—
(i) The budget for the project is adequate to support the project activities; and
(ii) Costs are reasonable in relation to the objectives of the project.
(d) Evaluation plan. (1) The Secretary reviews each application for information that shows the quality of the evaluation plan for the project.
(2) The Secretary looks for information that shows that the methods of evaluation are appropriate for the project and, to the extent possible, are objective and produce data that are quantifiable.
(e) Adequacy of resources. (1) The Secretary reviews each application for information that shows that the applicant plans to devote adequate resources to the project.
(2) The Secretary looks for information that shows that the facilities, equipment, and supplies that the applicant plans to use are adequate.
(f) Specific program criteria. (1) In addition to the general selection criteria contained in this section, the Secretary reviews each application for information that shows that the project meets the specific program criteria.
(2) The Secretary looks for information that shows—
(i) The potential impact of the project on the development of the study of modern foreign languages and area studies in American education.
(ii) The project's relevance to the applicant's educational goals and its relationship to its program development in modern foreign languages and area studies.
(iii) The extent to which direct experience abroad is necessary to achieve the project's objectives and the effectiveness with which relevant host country resources will be utilized.
(g) Priorities. The Secretary looks for information that shows the extent to which the project addresses program priorities in the field of modern foreign languages and area studies for that year.
(a) The Secretary may establish for each funding competition one or more of the following priorities:
(1) Categories of projects described in § 664.10.
(2) Specific languages, topics, countries or geographic regions of the world; for example, Chinese and Arabic, Curriculum Development in Multicultural Education and Transitions from Planned Economies to Market Economies, Brazil and Nigeria, Middle East and South Asia.
(3) Levels of education; for example, elementary and secondary, postsecondary, or postgraduate.
(b) The Secretary announces any priorities in the application notice published in the
(a) The Secretary pays only part of the cost of a project funded under this part. Other than travel costs, the Secretary does not pay any of the costs for project-related expenses within the United States.
(b) The Secretary pays the cost of the following—
(1) A maintenance stipend related to the cost of living in the host country or countries;
(2) Round-trip international travel;
(3) A local travel allowance for necessary project-related transportation within the country of study, exclusive of the purchase of transportation equipment;
(4) Purchase of project-related artifacts, books, and other teaching materials in the country of study;
(5) Rent for instructional facilities in the country of study;
(6) Clerical and professional services performed by resident instructional personnel in the country of study; and
(7) Other expenses in the country of study, if necessary for the project's success and approved in advance by the Secretary.
(c) The Secretary may pay—
(1) Emergency medical expenses not covered by a participant's health and accident insurance; and
(2) The costs of preparing and transporting the remains of a participant who dies during the term of a project to his or her former home.
(a) Participation may be terminated only by the J. William Fulbright Foreign Scholarship Board upon the recommendation of the Secretary.
(b) The Secretary may recommend a termination of participation on the basis of failure by the grantee to ensure that participants adhere to the standards of conduct adopted by the J. William Fulbright Foreign Scholarship Board.
Section 668.14 also issued under 20 U.S.C. 1085, 1088, 1091, 1092, 1094, 1099a-3, 1099c, and 1141.
Section 668.41 also issued under 20 U.S.C. 1092, 1094, 1099c.
Section 668.91 also issued under 20 U.S.C. 1082, 1094.
Section 668.171 also issued under 20 U.S.C. 1094 and 1099c and 5 U.S.C. 404.
Section 668.172 also issued under 20 U.S.C. 1094 and 1099c and 5 U.S.C. 404.
Section 668.175 also issued under 20 U.S.C. 1094 and 1099c.
(a) This part establishes general rules that apply to an institution that participates in any student financial assistance program authorized by Title IV of the Higher Education Act of 1965, as amended (Title IV, HEA program). To the extent that an institution contracts with a third-party servicer to administer any aspect of the institution's participation in any Title IV, HEA program, the applicable rules in this part also apply to that servicer. An institution's use of a third-party servicer does not alter the institution's responsibility for compliance with the rules in this part.
(b) As used in this part, an “institution,” unless otherwise specified, includes—
(1) An institution of higher education as defined in 34 CFR 600.4;
(2) A proprietary institution of higher education as defined in 34 CFR 600.5; and
(3) A postsecondary vocational institution as defined in 34 CFR 600.6.
(c) The Title IV, HEA programs include—
(1) The Federal Pell Grant Program (20 U.S.C. 1070a et seq.; 34 CFR part 690);
(2) The Academic Competitiveness Grant (ACG) Program (20 U.S.C. 1070a-1; 34 CFR part 691);
(3) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program (20 U.S.C. 1070b et seq.; 34 CFR parts 673 and 676);
(4) The Leveraging Educational Assistance Partnership (LEAP) Program (20 U.S.C. 1070c et seq.; 34 CFR part 692);
(5) The Federal Stafford Loan Program (20 U.S.C. 1071 et seq.; 34 CFR part 682);
(6) The Federal PLUS Program (20 U.S.C. 1078-2; 34 CFR part 682);
(7) The Federal Consolidation Loan Program (20 U.S.C. 1078-3; 34 CFR part 682);
(8) The Federal Work-Study (FWS) Program (42 U.S.C. 2751 et seq.; 34 CFR parts 673 and 675);
(9) The William D. Ford Federal Direct Loan (Direct Loan) Program (20 U.S.C. 1087a et seq.; 34 CFR part 685);
(10) The Federal Perkins Loan Program (20 U.S.C. 1087aa et seq.; 34 CFR parts 673 and 674);
(11) The National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Program (20 U.S.C. 1070a-1; 34 CFR part 691); and
(12) The Teacher Education Assistance for College and Higher Education (TEACH) Grant program.
(a) The following definitions are contained in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(1) Accredited.
(2) Award year.
(3) Branch campus.
(4) Clock hour.
(5)Correspondence course.
(6) Credit hour.
(7) Direct assessment program.
(8) Distance education.
(9) Educational program.
(10) Eligible institution.
(11) Federal Family Education Loan (FFEL) programs.
(12) Foreign institution.
(13) Incarcerated student.
(14) Institution of higher education.
(15)Legally authorized.
(16) Nationally recognized accrediting agency.
(17) Nonprofit institution.
(18) One-year training program.
(19) Postsecondary vocational institution.
(20) Preaccredited.
(21) Proprietary institution of higher education.
(22) Recognized equivalent of a high school diploma.
(23) Recognized occupation.
(24) Regular student.
(25) Religious mission.
(26) Secretary.
(27) State.
(28) Teach-out.
(29) Teach-out agreement.
(30) Teach-out plan.
(31) Title IV, HEA program.
(b) The following definitions apply to all Title IV, HEA programs:
Annual debt-to-earnings rate (annual D/E rate): The ratio of a program's annual loan payment amount to the annual earnings of the students who completed the program, expressed as a percentage, as calculated under § 668.403.
Campus-based programs: (1) The Federal Perkins Loan Program (34 CFR parts 673 and 674);
(2) The Federal Work-Study (FWS) Program (34 CFR parts 673 and 675); and
(3) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program (34 CFR parts 673 and 676).
Classification of instructional program (CIP) code: A taxonomy of instructional program classifications and descriptions developed by the U.S. Department of Education's National Center for Education Statistics (NCES). Specific programs offered by institutions are classified using a six-digit CIP code.
Cohort period: The set of award years used to identify a cohort of students who completed a program and whose debt and earnings outcomes are used to calculate debt-to-earnings rates and the earnings premium measure under subpart Q of this part. The Secretary uses a 2-year cohort period to calculate the debt-to-earnings rates and earnings premium measure for a program when the number of students (after exclusions identified in §§ 668.403(e) and 668.404(c)) in the 2-year cohort period is 30 or more. The Secretary uses a 4-year cohort period to calculate the debt-to-earnings rates and earnings premium measure when the number of students completing the program in the two-year cohort period is fewer than 30 and when the number of students completing the program in the 4-year cohort period is 30 or more. The cohort period covers consecutive award years that are—
(1) For the 2-year cohort period—
(i) The third and fourth award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated, pursuant to §§ 668.403 and 668.404; or
(ii) For a qualifying graduate program, the sixth and seventh award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated.
(2) For the four-year cohort period—
(i) The third, fourth, fifth, and sixth award years prior to the year for which the most recent data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated, pursuant to §§ 668.403 and 668.404; or
(ii) For a qualifying graduate program, the sixth, seventh, eighth, and ninth award years prior to the year for which the most recent earnings data are available from the Federal agency with earnings data at the time the D/E rates and earnings premium measure are calculated.
Credential level: The level of the academic credential awarded by an institution to students who complete the program. For the purposes of this part, the undergraduate credential levels are: undergraduate certificate or diploma, associate degree, bachelor's degree, and post-baccalaureate certificate; and the graduate credential levels are master's degree, doctoral degree, first-professional degree (e.g., MD, DDS, JD), and graduate certificate (including a postgraduate certificate).
Debt-to-earnings rates (D/E rates): The discretionary debt-to-earnings rate and annual debt-to-earnings rate as calculated under § 668.403.
Defense loan: A loan made before July 1, 1972, under Title II of the National Defense Education Act of 1958.
Dependent student: Any student who does not qualify as an independent student (see Independent student).
Designated department official: An official of the Department of Education to whom the Secretary has delegated responsibilities indicated in this part.
Direct Loan Program loan: A loan made under the William D. Ford Federal Direct Loan Program.
Direct PLUS Loan: A loan made under the Federal Direct PLUS Program.
Direct Subsidized Loan: A loan made under the Federal Direct Stafford/Ford Loan Program.
Direct Unsubsidized Loan: A loan made under the Federal Direct Unsubsidized Stafford/Ford Loan Program.
Discretionary debt-to-earnings rate (discretionary D/E rate): The percentage of a program's annual loan payment compared to the discretionary earnings of the students who completed the program, as calculated under § 668.403.
Earnings premium: The amount by which the median annual earnings of students who recently completed a program exceed the earnings threshold, as calculated under § 668.404. If the median annual earnings of recent completers is equal to the earnings threshold, the earnings premium is zero. If the median annual earnings of recent completers is less than the earnings threshold, the earnings premium is negative.
Earnings threshold: Based on data from the Census Bureau, the median earnings for working adults aged 25-34, who either worked during the year or indicated they were unemployed (i.e., not employed but looking for and available to work) when interviewed, with only a high school diploma (or recognized equivalent)—
(1) In the State in which the institution is located; or
(2) Nationally, if fewer than 50 percent of the students in the program are from the State where the institution is located, or if the institution is a foreign institution.
Eligible career pathway program: A program that combines rigorous and high-quality education, training, and other services that—
(i) Align with the skill needs of industries in the economy of the State or regional economy involved;
(ii) Prepare an individual to be successful in any of a full range of secondary or postsecondary education options, including apprenticeships registered under the Act of August 16, 1937 (commonly known as the “National Apprenticeship Act”; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.);
(iii) Include counseling to support an individual in achieving the individual's education and career goals;
(iv) Include, as appropriate, education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster;
(v) Organize education, training, and other services to meet the particular needs of an individual in a manner that accelerates the educational and career advancement of the individual to the extent practicable;
(vi) Enable an individual to attain a secondary school diploma or its recognized equivalent, and at least one recognized postsecondary credential; and
(vii) Help an individual enter or advance within a specific occupation or occupational cluster.
Eligible non-GE program: An educational program other than a gainful employment (GE) program offered by an institution and included in the institution's participation in the title IV, HEA programs, identified by a combination of the institution's six-digit Office of Postsecondary Education ID (OPEID) number, the program's six-digit CIP code as assigned by the institution or determined by the Secretary, and the program's credential level. Includes all coursework associated with the program's credential level.
Enrolled: The status of a student who—
(1) Has completed the registration requirements (except for the payment of tuition and fees) at the institution that he or she is attending; or
(2) Has been admitted into an educational program offered predominantly by correspondence and has submitted one lesson, completed by him or her after acceptance for enrollment and without the help of a representative of the institution.
Expected family contribution (EFC): The amount, as determined under title IV, part F of the HEA, an applicant and his or her spouse and family are expected to contribute toward the applicant's cost of attendance.
Federal agency with earnings data: A Federal agency with which the Department enters into an agreement to access earnings data for the D/E rates and earnings threshold measure. The agency must have individual earnings data sufficient to match with title IV, HEA recipients who completed any eligible program during the cohort period and may include agencies such as the Treasury Department (including the Internal Revenue Service), the Social Security Administration (SSA), the Department of Health and Human Services (HHS), and the Census Bureau.
Federal Consolidation Loan program: The loan program authorized by Title IV-B, section 428C, of the HEA that encourages the making of loans to borrowers for the purpose of consolidating their repayment obligations, with respect to loans received by those borrowers, under the Federal Insured Student Loan (FISL) Program as defined in 34 CFR part 682, the Federal Stafford Loan, Federal PLUS (as in effect before October 17, 1986), Federal Consolidation Loan, Federal SLS, ALAS (as in effect before October 17, 1986), Federal Direct Student Loan, and Federal Perkins Loan programs, and under the Health Professions Student Loan (HPSL) Program authorized by subpart II of part C of Title VII of the Public Health Service Act, for Federal PLUS borrowers whose loans were made after October 17, 1986, and for Higher Education Assistance Loans (HEAL) authorized by subpart I of part A of Title VII of the Public Health Services Act.
Federal Direct PLUS Program: A loan program authorized by title IV, Part D of the HEA that is one of the components of the Direct Loan Program. The Federal Direct PLUS Program provides loans to parents of dependent students attending schools that participate in the Direct Loan Program. The Federal Direct PLUS Program also provides loans to graduate or professional students attending schools that participate in the Direct Loan Program. The borrower is responsible for the interest that accrues during any period.
Federal Direct Stafford/Ford Loan Program: A loan program authorized by Title IV, Part D of the HEA that is one of the components of the Direct Loan Program. The Federal Direct Stafford/Ford Loan Program provides loans to undergraduate, graduate, and professional students attending schools that participate in the Direct Loan Program. The Secretary subsidizes the interest while the borrower is in an in-school, grace, or deferment period.
Federal Direct Unsubsidized Stafford/Ford Loan Program: A loan program authorized by Title IV, Part D of the HEA that is one of the components of the Direct Loan Program. The Federal Direct Unsubsidized Stafford/Ford Loan Program provides loans to undergraduate, graduate, and professional students attending schools that participate in the Direct Loan Program. The borrower is responsible for the interest that accrues during any period.
Federal Pell Grant Program: A grant program authorized by Title IV-A-1 of the HEA under which grants are awarded to help financially needy students meet the cost of their postsecondary education.
Federal Perkins loan: A loan made under Title IV-E of the HEA to cover the cost of attendance for a period of enrollment beginning on or after July 1, 1987, to an individual who on July 1, 1987, had no outstanding balance of principal or interest owing on any loan previously made under Title IV-E of the HEA.
Federal Perkins Loan program: The student loan program authorized by Title IV-E of the HEA after October 16, 1986. Unless otherwise noted, as used in this part, the Federal Perkins Loan Program includes the National Direct Student Loan Program and the National Defense Student Loan Program.
Federal PLUS loan: A loan made under the Federal PLUS Program.
Federal PLUS program: The loan program authorized by Title IV-B, section 428B, of the HEA, that encourages the making of loans to parents of dependent undergraduate students. Before October 17, 1986, the PLUS Program also provided for making loans to graduate, professional, and independent undergraduate students. Before July 1, 1993, the PLUS Program also provided for making loans to parents of dependent graduate students. Beginning July 1, 2006, the PLUS Program provides for making loans to graduate and professional students.
Federal SLS loan: A loan made under the Federal SLS Program.
Federal Stafford loan: A loan made under the Federal Stafford Loan Program.
Federal Stafford Loan program: The loan program authorized by Title IV-B (exclusive of sections 428A, 428B, and 428C) that encourages the making of subsidized Federal Stafford and unsubsidized Federal Stafford loans as defined in 34 CFR part 682 to undergraduate, graduate, and professional students.
Federal Supplemental Educational Opportunity Grant (FSEOG) program: The grant program authorized by Title IV-A-2 of the HEA.
Federal Supplemental Loans for Students (Federal SLS) Program: The loan program authorized by Title IV-B, section 428A of the HEA, as in effect for periods of enrollment that began before July 1, 1994. The Federal SLS Program encourages the making of loans to graduate, professional, independent undergraduate, and certain dependent undergraduate students.
Federal Work Study (FWS) program: The part-time employment program for students authorized by Title IV-C of the HEA.
FFELP loan: A loan made under the FFEL programs.
Financial exigency: A status declared by an institution to a governmental entity or its accrediting agency representing severe financial distress that, absent significant reductions in expenditures or increases in revenue, reductions in administrative staff or faculty, or the elimination of programs, departments, or administrative units, could result in the closure of the institution.
Free application for Federal student aid (FAFSA): The student aid application provided for under section 483 of the HEA, which is used to determine an applicant's eligibility for the title IV, HEA programs.
Full-time student: An enrolled student who is carrying a full-time academic workload, as determined by the institution, under a standard applicable to all students enrolled in a particular educational program. The student's workload may include any combination of courses, work, research, or special studies that the institution considers sufficient to classify the student as a full-time student. For a term-based program that is not subscription-based, the student's workload may include repeating any coursework previously taken in the program; however, the workload may not include more than one repetition of a previously passed course. For an undergraduate student, an institution's minimum standard must equal or exceed one of the following minimum requirements, based on the type of program:
(1) For a program that measures progress in credit hours and uses standard terms (semesters, trimesters, or quarters), 12 semester hours or 12 quarter hours per academic term.
(2) For a program that measures progress in credit hours and does not use terms, 24 semester hours or 36 quarter hours over the weeks of instructional time in the academic year, or the prorated equivalent if the program is less than one academic year.
(3) For a program that measures progress in credit hours and uses nonstandard-terms (terms other than semesters, trimesters, or quarters) the number of credits determined by—
(i) Dividing the number of weeks of instructional time in the term by the number of weeks of instructional time in the program's academic year; and
(ii) Multiplying the fraction determined under paragraph (3)(i) of this definition by the number of credit hours in the program's academic year.
(4) For a program that measures progress in clock hours, 24 clock hours per week.
(5) A series of courses or seminars that equals 12 semester hours or 12 quarter hours in a maximum of 18 weeks.
(6) The work portion of a cooperative education program in which the amount of work performed is equivalent to the academic workload of a full-time student.
(7) For correspondence coursework—
(i) A full-time course load must be commensurate with the requirements listed in paragraphs (1) through (6) of this definition; and
(ii) At least one-half of the coursework must be made up of non-correspondence coursework that meets one-half of the institution's requirement for full-time students.
(8) For a subscription-based program, completion of a full-time course load commensurate with the requirements in paragraphs (1), (3), and (5) through (7) of this definition.
Gainful employment program (GE program): An educational program offered by an institution under § 668.8(c)(3) or (d) and identified by a combination of the institution's six-digit OPEID number, the program's six-digit CIP code as assigned by the institution or determined by the Secretary, and the program's credential level.
Graduate or professional student: A student who—
(1) Is not receiving title IV aid as an undergraduate student for the same period of enrollment;
(2) Is enrolled in a program or course above the baccalaureate level or is enrolled in a program leading to a professional degree; and
(3) Has completed the equivalent of at least three years of full-time study either prior to entrance into the program or as part of the program itself.
Half-time student: (1) Except as provided in paragraph (2) of this definition, an enrolled student who is carrying a half-time academic workload, as determined by the institution, that amounts to at least half of the workload of the applicable minimum requirement outlined in the definition of a full-time student.
(2) A student enrolled solely in a program of study by correspondence who is carrying a workload of at least 12 hours of work per week, or is earning at least six credit hours per semester, trimester, or quarter. However, regardless of the work, no student enrolled solely in correspondence study is considered more than a half-time student.
Independent student: A student who qualifies as an independent student under section 480(d) of the HEA.
Initiating official: The designated department official authorized to begin an emergency action under 34 CFR 668.83.
Institutional student information record (ISIR): An electronic record that the Secretary transmits to an institution that includes an applicant's—
(1) FAFSA information; and
(2) EFC.
Institutional grants and scholarships: Assistance that the institution or its affiliate controls or directs to reduce or offset the original amount of a student's institutional costs and that does not have to be repaid. Typically, an institutional grant or scholarship includes a grant, scholarship, fellowship, discount, or fee waiver.
Length of the program: The amount of time in weeks, months, or years that is specified in the institution's catalog, marketing materials, or other official publications for a student to complete the requirements needed to obtain the degree or credential offered by the program.
Leveraging Educational Assistance Partnership (LEAP) Program: The grant program authorized by Title IV-A-4 of the HEA.
Metropolitan statistical area: A core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core.
National Defense Student Loan program: The student loan program authorized by Title II of the National Defense Education Act of 1958.
National Direct Student Loan (NDSL) program: The student loan program authorized by Title IV-E of the HEA between July 1, 1972, and October 16, 1986.
National Early Intervention Scholarship and Partnership (NEISP) program: The scholarship program authorized by Chapter 2 of subpart 1 of Title IV-A of the HEA.
National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Program: A grant program authorized by Title IV-A-1 of the HEA under which grants are awarded during the third and fourth academic years of study to eligible financially needy undergraduate students pursuing eligible majors in the physical, life, or computer sciences, mathematics, technology, or engineering, or foreign languages determined to be critical to the national security of the United States.
One-third of an academic year: A period that is at least one-third of an academic year as determined by an institution. At a minimum, one-third of an academic year must be a period that begins on the first day of classes and ends on the last day of classes or examinations and is a minimum of 10 weeks of instructional time during which, for an undergraduate educational program, a full-time student is expected to complete at least 8 semester or trimester hours or 12 quarter hours in an educational program whose length is measured in credit hours or 300 clock hours in an educational program whose length is measured in clock hours. For an institution whose academic year has been reduced under § 668.3, one-third of an academic year is the pro-rated equivalent, as measured in weeks and credit or clock hours, of at least one-third of the institution's academic year.
Output document: The Student Aid Report (SAR), Electronic Student Aid Report (ESAR), or other document or automated data generated by the Department of Education's central processing system or Multiple Data Entry processing system as the result of the processing of data provided in a Free Application for Federal Student Aid (FAFSA).
Parent: A student's biological or adoptive mother or father or the student's stepparent, if the biological parent or adoptive mother or father has remarried at the time of application.
Participating institution: An eligible institution that meets the standards for participation in Title IV, HEA programs in subpart B and has a current program participation agreement with the Secretary.
Poverty Guideline: The Poverty Guideline for a single person in the continental United States, as published by the U.S. Department of Health and Human Services and available at https://aspe.hhs.gov/poverty or its successor site.
Professional degree: A degree that signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor's degree. Professional licensure is also generally required. Examples of a professional degree include but are not limited to Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), and Theology (M.Div., or M.H.L.).
Prospective student: An individual who has contacted an eligible institution for the purpose of requesting information about enrolling in a program or who has been contacted directly by the institution or by a third party on behalf of the institution about enrolling in a program.
Qualifying graduate program: (1) For the first three award years that the Secretary calculates debt-to-earnings rates and the earnings premium measure under subpart Q of this part (“initial period”), a graduate program—
(i) Whose students must complete required postgraduation training programs to obtain licensure in one of the following fields: medicine, osteopathy, dentistry, clinical psychology, marriage and family counseling, clinical social work, and clinical counseling; and
(ii) For which the institution attests, in the manner established by the Secretary, that—
(A) If necessary for licensure, the program is accredited by an accrediting agency that meets State requirements; and
(B) At least half of the program's graduates obtain licensure in a State where the postgraduation training requirements apply.
(2)(i) After the initial period, the graduate programs that are on the list described in paragraph (2)(ii) of this definition and for which the Secretary has received an attestation that meets the requirements in paragraph (1)(ii) of this definition.
(ii) For the first award year following the initial period, and every three years thereafter, using publicly available information and information received in response to a request for information, the Secretary publishes in the
(A) That lead to a graduate (master's, first-professional, or doctoral) degree;
(B) For which the Department determines that graduates must complete a required postgraduate training program that takes, on average, three or more years to complete; and
(C) For which, based on College Scorecard data, the Secretary determines that a majority of programs with the same credential level and CIP code have outlier earnings growth. An individual program has outlier earnings growth if the percent change in median earnings between its earnings measured one or three years post-completion and its earnings measured either five or ten years post-completion is more than two standard deviations above the average earnings growth for other programs with the same credential level.
(3) For the purpose of this definition, a “required postgraduation training program” is a supervised training program that—
(i) Requires the student to hold a degree in one of the listed fields in paragraph (1)(i) of this definition or one of the fields identified in the list described in paragraph (2)(ii) of this definition; and
(ii) Must be completed before the student may be licensed by a State and board certified for professional practice or service.
Show-cause official: The designated department official authorized to conduct a show-cause proceeding for an emergency action under 34 CFR 668.83.
Student: For the purposes of subparts Q and S of this part and of § 668.43(d), an individual who received title IV, HEA program funds for enrolling in the program.
Student aid report (SAR): A report provided to an applicant by the Secretary showing his or her FAFSA information and the amount of his or her EFC.
Subscription-based program: A standard or nonstandard-term program in which the institution charges a student for each term on a subscription basis with the expectation that the student completes a specified number of credit hours (or the equivalent) during that term. Coursework in a subscription-based program is not required to begin or end within a specific timeframe in each term. Students in subscription-based programs must complete a cumulative number of credit hours (or the equivalent) during or following the end of each term before receiving subsequent disbursements of title IV, HEA program funds. An institution establishes an enrollment status (for example, full-time or half-time) that will apply to a student throughout the student's enrollment in the program, except that a student may change his or her enrollment status no more often than once per academic year. The number of credit hours (or the equivalent) a student must complete before receiving subsequent disbursements is calculated by—
(1) Determining for each term the number of credit hours (or the equivalent) associated with the institution's minimum standard for the student's enrollment status (for example, full-time, three-quarter time, or half-time) for that period commensurate with paragraph (8) in the definition of “full-time student,” adjusted for less than full-time students in light of the definitions of “half-time student” and “three-quarter time student,” and adjusted to at least one credit (or the equivalent) for a student who is enrolled less than half-time; and
(2) Adding together the number of credit hours (or the equivalent) determined under paragraph (1) for each term in which the student was enrolled in and attended that program, excluding the current and most recently attended terms.
Substantially similar program: For the purposes of subpart Q and S of this part, a program is substantially similar to another program if the two programs share the same four-digit CIP code. The Secretary presumes a program is not substantially similar to another program if the two programs have different four-digit CIP codes, but the institution must provide an explanation of how the new program is not substantially similar to the ineligible or voluntarily discontinued program with its certification under § 668.604.
Teacher Education Assistance for College and Higher Education (TEACH) Grant Program: A grant program authorized by title IV of the HEA under which grants are awarded by an institution to students who are completing, or intend to complete, coursework to begin a career in teaching and who agree to serve for not less than four years as a full-time, highly-qualified teacher in a high-need field in a low-income school. If the recipient of a TEACH Grant does not complete four years of qualified teaching service within eight years of completing the course of study for which the TEACH Grant was received or otherwise fails to meet the requirements of 34 CFR 686.12, the amount of the TEACH Grant converts into a Federal Direct Unsubsidized Loan.
TEACH Grant: A grant authorized under title IV-A-9 of the HEA and awarded to students in exchange for prospective teaching service.
Third-party servicer: (1) An individual or a State, or a private, profit or nonprofit organization that enters into a contract with an eligible institution to administer, through either manual or automated processing, any aspect of the institution's participation in any Title IV, HEA program. The Secretary considers administration of participation in a Title IV, HEA program to—
(i) Include performing any function required by any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA, such as, but not restricted to—
(A) Processing student financial aid applications;
(B) Performing need analysis;
(C) Determining student eligibility and related activities;
(D) Originating loans;
(E) Processing output documents for payment to students;
(F) Receiving, disbursing, or delivering Title IV, HEA program funds, excluding lock-box processing of loan payments and normal bank electronic fund transfers;
(G) Conducting activities required by the provisions governing student consumer information services in subpart D of this part;
(H) Preparing and certifying requests for advance or reimbursement funding;
(I) Loan servicing and collection;
(J) Preparing and submitting notices and applications required under 34 CFR part 600 and subpart B of this part; and
(K) Preparing a Fiscal Operations Report and Application to Participate (FISAP);
(ii) Exclude the following functions—
(A) Publishing ability-to-benefit tests;
(B) Performing functions as a Multiple Data Entry Processor (MDE);
(C) Financial and compliance auditing;
(D) Mailing of documents prepared by the institution;
(E) Warehousing of records; and
(F) Providing computer services or software; and
(iii) Notwithstanding the exclusions referred to in paragraph (1)(ii) of this definition, include any activity comprised of any function described in paragraph (1)(i) of this definition.
(2) For purposes of this definition, an employee of an institution is not a third-party servicer. The Secretary considers an individual to be an employee if the individual—
(i) Works on a full-time, part-time, or temporary basis;
(ii) Performs all duties on site at the institution under the supervision of the institution;
(iii) Is paid directly by the institution;
(iv) Is not employed by or associated with a third-party servicer; and
(v) Is not a third-party servicer for any other institution.
Three-quarter time student: An enrolled student who is carrying a three-quarter-time academic workload, as determined by the institution, that amounts to at least three quarters of the work of the applicable minimum requirement outlined in the definition of a full-time student.
Two-thirds of an academic year: A period that is at least two-thirds of an academic year as determined by an institution. At a minimum, two-thirds of an academic year must be a period that begins on the first day of classes and ends on the last day of classes or examinations and is a minimum of 20 weeks of instructional time during which, for an undergraduate educational program, a full-time student is expected to complete at least 16 semester or trimester hours or 24 quarter hours in an educational program whose length is measured in credit hours or 600 clock hours in an educational program whose length is measured in clock hours. For an institution whose academic year has been reduced under § 668.3, two-thirds of an academic year is the pro-rated equivalent, as measured in weeks and credit or clock hours, of at least two-thirds of the institution's academic year.
Undergraduate student: (1) A student who is enrolled in an undergraduate course of study that usually does not exceed four years, or is enrolled in a longer program designed to lead to a degree at the baccalaureate level. For purposes of 34 CFR 690.6(c)(5) students who have completed a baccalaureate program of study and who are subsequently completing a State-required teacher certification program are treated as undergraduates.
(2) In addition to meeting the definition in paragraph (1) of this definition, a student is only considered an undergraduate for purposes of the Federal Supplemental Educational Opportunity Grant (FSEOG) Program, the Federal Pell Grant Program, the Academic Competitiveness Grant (ACG) Program, National Science and Mathematics Access to Retain Talent (SMART) Grant Program, and TEACH Grant program if the student has not yet earned a baccalaureate or professional degree. However, for purposes of 34 CFR 690.6(c)(5) and 686.3(a) students who have completed a baccalaureate program of study and who are subsequently completing a State-required teacher certification program are treated as undergraduates.
(3) For purposes of dual degree programs that allow individuals to complete a bachelor's degree and either a graduate or professional degree within the same program, a student is considered an undergraduate student for at least the first three years of that program.
(4) A student enrolled in a four to five year program designed to lead to an undergraduate degree. A student enrolled in a program of any other, longer length is considered an undergraduate student for only the first four years of that program.
U.S. citizen or national: (1) A citizen of the United States; or
(2) A person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.
Valid institutional student information record (valid ISIR): An ISIR on which all the information reported on a student's FAFSA is accurate and complete as of the date the application is signed.
Valid student aid report (valid SAR): A student aid report on which all of the information reported on a student's FAFSA is accurate and complete as of the date the application is signed.
William D. Ford Federal Direct Loan (Direct Loan) Program: The loan program authorized by Title IV, Part D of the HEA.
(a) General. Except as provided in paragraph (c) of this section, an academic year for a program of study must include—
(1)(i) For a program offered in credit hours, a minimum of 30 weeks of instructional time; or
(ii) For a program offered in clock hours, a minimum of 26 weeks of instructional time; and
(2) For an undergraduate educational program, an amount of instructional time whereby a full-time student is expected to complete at least—
(i) Twenty-four semester or trimester credit hours or 36 quarter credit hours for a program measured in credit hours; or
(ii) 900 clock hours for a program measured in clock hours.
(b) Definitions. For purposes of paragraph (a) of this section—
(1) A week is a consecutive seven-day period;
(2) A week of instructional time is any week in which—
(i) At least one day of regularly scheduled instruction or examinations occurs, or, after the last scheduled day of classes for a term or payment period, at least one day of study for final examinations occurs; or
(ii)(A) In a program offered using asynchronous coursework through distance education or correspondence courses, the institution makes available the instructional materials, other resources, and instructor support necessary for academic engagement and completion of course objectives; and
(B) In a program using asynchronous coursework through distance education, the institution expects enrolled students to perform educational activities demonstrating academic engagement during the week; and
(3) Instructional time does not include any scheduled breaks and activities not included in the definition of “academic engagement” in 34 CFR 600.2, or periods of orientation or counseling.
(c) Reduction in the length of an academic year. (1) Upon the written request of an institution, the Secretary may approve, for good cause, an academic year of 26 through 29 weeks of instructional time for educational programs offered by the institution if the institution offers a two-year program leading to an associate degree or a four-year program leading to a baccalaureate degree.
(2) An institution's written request must—
(i) Identify each educational program for which the institution requests a reduction, and the requested number of weeks of instructional time for that program;
(ii) Demonstrate good cause for the requested reductions; and
(iii) Include any other information that the Secretary may require to determine whether to grant the request.
(3)(i) The Secretary approves the request of an eligible institution for a reduction in the length of its academic year if the institution has demonstrated good cause for granting the request and the institution's accrediting agency and State licensing agency have approved the request.
(ii) If the Secretary approves the request, the approval terminates when the institution's program participation agreement expires. The institution may request an extension of that approval as part of the recertification process.
(a) Payment periods for an eligible program that measures progress in credit hours and uses standard terms or nonstandard terms that are substantially equal in length. For a student enrolled in an eligible program that measures progress in credit hours and uses standard terms (semesters, trimesters, or quarters), or for a student enrolled in an eligible program that measures progress in credit hours and uses nonstandard terms that are substantially equal in length, the payment period is the academic term.
(b) Payment periods for an eligible program that measures progress in credit hours and uses nonstandard terms that are not substantially equal in length. For a student enrolled in an eligible program that measures progress in credit hours and uses nonstandard terms that are not substantially equal in length—
(1) For Pell Grant, ACG, National SMART Grant, FSEOG, Perkins Loan, and TEACH Grant program funds, the payment period is the academic term;
(2) For FFEL and Direct Loan program funds—
(i) For a student enrolled in an eligible program that is one academic year or less in length—
(A) The first payment period is the period of time in which the student successfully completes half of the number of credit hours in the program and half of the number of weeks of instructional time in the program; and
(B) The second payment period is the period of time in which the student successfully completes the program; and
(ii) For a student enrolled in an eligible program that is more than one academic year in length—
(A) For the first academic year and any subsequent full academic year—
(1) The first payment period is the period of time in which the student successfully completes half of the number of credit hours in the academic year and half of the number of weeks of instructional time in the academic year; and
(2) The second payment period is the period of time in which the student successfully completes the academic year;
(B) For any remaining portion of an eligible program that is more than half an academic year but less than a full academic year in length—
(1) The first payment period is the period of time in which the student successfully completes half of the number of credit hours in the remaining portion of the program and half of the number of weeks of instructional time remaining in the program; and
(2) The second payment period is the period of time in which the student successfully completes the remainder of the program; and
(C) For any remaining portion of an eligible program that is not more than half an academic year, the payment period is the remainder of the program.
(c) Payment periods for an eligible program that measures progress in credit hours and does not have academic terms or for a program that measures progress in clock hours. (1) For a student enrolled in an eligible program that is one academic year or less in length—
(i) The first payment period is the period of time in which the student successfully completes half of the number of credit hours or clock hours, as applicable, in the program and half of the number of weeks of instructional time in the program; and
(ii) The second payment period is the period of time in which the student successfully completes the program or the remainder of the program.
(2) For a student enrolled in an eligible program that is more than one academic year in length—
(i) For the first academic year and any subsequent full academic year—
(A) The first payment period is the period of time in which the student successfully completes half of the number of credit hours or clock hours, as applicable, in the academic year and half of the number of weeks of instructional time in the academic year; and
(B) The second payment period is the period of time in which the student successfully completes the academic year;
(ii) For any remaining portion of an eligible program that is more than half an academic year but less than a full academic year in length—
(A) The first payment period is the period of time in which the student successfully completes half of the number of credit hours or clock hours, as applicable, in the remaining portion of the program and half of the number of weeks of instructional time remaining in the program; and
(B) The second payment period is the period of time in which the student successfully completes the remainder of the program; and
(iii) For any remaining portion of an eligible program that is not more than half an academic year, the payment period is the remainder of the program.
(3) For purposes of paragraphs (c)(1) and (c)(2) of this section, if an institution is unable to determine when a student has successfully completed half of the credit hours or clock hours in a program, academic year, or remainder of a program, the student is considered to begin the second payment period of the program, academic year, or remainder of a program at the later of the date, as determined by the institution, on which the student has successfully completed—
(i) Half of the academic coursework in the program, academic year, or remainder of the program; or
(ii) Half of the number of weeks of instructional time in the program, academic year, or remainder of the program.
(d) Application of the cohort default rate exemption. Notwithstanding paragraphs (a), (b), and (c) of this section, if 34 CFR 682.604(c)(10) or 34 CFR 685.301(b)(8) applies to an eligible program that measures progress in credit hours and uses nonstandard terms, an eligible program that measures progress in credit hours and does not have academic terms, or an eligible program that measures progress in clock hours, the payment period for purposes of FFEL and Direct Loan funds is the loan period for those portions of the program to which 34 CFR 682.604(c)(10) or 34 CFR 685.301(b)(8) applies.
(e) Excused absences. For purposes of this section, in determining whether a student successfully completes the clock hours in a payment period, an institution may include clock hours for which the student has an excused absence (i.e., an absence that a student does not have to make up) if—
(1) The institution has a written policy that permits excused absences; and
(2) The number of excused absences under the written policy for purposes of this paragraph (e) does not exceed the lesser of—
(i) The policy on excused absences of the institution's accrediting agency or, if the institution has more than one accrediting agency, the agency designated under 34 CFR 600.11(b);
(ii) The policy on excused absences of any State agency that licenses the institution or otherwise legally authorizes the institution to operate in the State; or
(iii) Ten percent of the clock hours in the payment period.
(f) Re-entry within 180 days. If a student withdraws from a program described in paragraph (c) of this section during a payment period and then reenters the same program within 180 days, the student remains in that same payment period when he or she returns and, subject to conditions established by the Secretary or by the FFEL lender or guaranty agency, is eligible to receive any title IV, HEA program funds for which he or she was eligible prior to withdrawal, including funds that were returned by the institution or student under the provisions of § 668.22.
(g) Re-entry after 180 days or transfer. (1) Except as provided in paragraph (g)(3) of this section, and subject to the conditions of paragraph (g)(2) of this section, an institution calculates new payment periods for the remainder of a student's program based on paragraph (c) of this section, for a student who withdraws from a program described in paragraph (c) of this section, and—
(i) Reenters that program after 180 days;
(ii) Transfers into another program at the same institution within any time period; or
(iii) Transfers into a program at another institution within any time period.
(2) For a student described in paragraph (g)(1) of this section—
(i) For the purpose of calculating payment periods only, the length of the program is the number of credit hours and the number of weeks of instructional time, or the number of clock hours and the number of weeks of instructional time, that the student has remaining in the program he or she enters or reenters; and
(ii) If the remaining hours and weeks constitute half of an academic year or less, the remaining hours constitute one payment period.
(3) Notwithstanding the provisions of paragraph (g)(1) of this section, an institution may consider a student who transfers into another program at the same institution to remain in the same payment period if—
(i) The student is continuously enrolled at the institution;
(ii) The coursework in the payment period the student is transferring out of is substantially similar to the coursework the student will be taking when he or she first transfers into the new program;
(iii) The payment periods are substantially equal in length in weeks of instructional time and credit hours or clock hours, as applicable;
(iv) There are little or no changes in institutional charges associated with the payment period to the student; and
(v) The credits from the payment period the student is transferring out of are accepted toward the new program.
(h) Definitions. For purposes of this section—
(1) Terms are substantially equal in length if no term in the program is more than two weeks of instructional time longer than any other term in that program; and
(2) A student successfully completes credit hours or clock hours if the institution considers the student to have passed the coursework associated with those hours.
(a) Written arrangements between eligible institutions. (1) Except as provided in paragraph (a)(2) of this section, if an eligible institution enters into a written arrangement with another eligible institution, or with a consortium of eligible institutions, under which the other eligible institution or consortium provides part of the educational program to students enrolled in the first institution, the Secretary considers that educational program to be an eligible program if the educational program offered by the institution that grants the degree, certificate, or other recognized educational credential otherwise satisfies the requirements of § 668.8.
(2) If the written arrangement is between two or more eligible institutions that are owned or controlled by the same individual, partnership, or corporation, the Secretary considers the educational program to be an eligible program if the educational program offered by the institution that grants the degree, certificate, or other recognized educational credential otherwise satisfies the requirements of § 668.8.
(b) Written arrangements for study-abroad. Under a study abroad program, if an eligible institution enters into a written arrangement under which an institution in another country, or an organization acting on behalf of an institution in another country, provides part of the educational program of students enrolled in the eligible institution, the Secretary considers that educational program to be an eligible program if it otherwise satisfies the requirements of paragraphs (c)(1) through (c)(3) of this section.
(c) Written arrangements between an eligible institution and an ineligible institution or organization. Except as provided in paragraph (d) of this section, if an eligible institution enters into a written arrangement with an institution or organization that is not an eligible institution under which the ineligible institution or organization provides part of the educational program of students enrolled in the eligible institution, the Secretary considers that educational program to be an eligible program if—
(1) The ineligible institution or organization has not—
(i) Had its eligibility to participate in the title IV, HEA programs terminated by the Secretary;
(ii) Voluntarily withdrawn from participation in the title IV, HEA programs under a termination, show-cause, suspension, or similar type proceeding initiated by the institution's State licensing agency, accrediting agency, or guarantor, or by the Secretary;
(iii) Had its certification to participate in the title IV, HEA programs revoked by the Secretary;
(iv) Had its application for recertification to participate in the title IV, HEA programs denied by the Secretary; or
(v) Had its application for certification to participate in the title IV, HEA programs denied by the Secretary;
(2) The educational program offered by the institution that grants the degree, certificate, or other recognized educational credential otherwise satisfies the requirements of § 668.8; and
(3)(i) The ineligible institution or organization provides 25 percent or less of the educational program, including in accordance with 34 CFR 602.22(b)(4); or
(ii)(A) The ineligible institution or organization provides more than 25 percent but less than 50 percent of the educational program, in accordance with 34 CFR 602.22(a)(1)(ii)(J);
(B) The eligible institution and the ineligible institution or organization are not owned or controlled by the same individual, partnership, or corporation; and
(C) The eligible institution's accrediting agency or, if the institution is a public postsecondary vocational educational institution, the State agency listed in the
(d) Administration of title IV, HEA programs. (1) If an institution enters into a written arrangement as described in paragraph (a), (b), or (c) of this section, or provides coursework as provided in paragraph (h)(2) of this section, except as provided in paragraph (d)(2) of this section, the institution at which the student is enrolled as a regular student must determine the student's eligibility for the title IV, HEA program funds, and must calculate and disburse those funds to that student.
(2) In the case of a written arrangement between eligible institutions, the institutions may agree in writing to have any eligible institution in the written arrangement make those calculations and disbursements, and the Secretary does not consider that institution to be a third-party servicer for that arrangement.
(3) The institution that calculates and disburses a student's title IV, HEA program assistance under paragraph (d)(1) or (d)(2) of this section must—
(i) Take into account all the hours in which the student enrolls at each institution that apply to the student's degree or certificate when determining the student's enrollment status and cost of attendance; and (ii) Maintain all records regarding the student's eligibility for and receipt of title IV, HEA program funds.
(e) Information made available to students. If an institution enters into a written arrangement described in paragraph (a), (b), or (c) of this section, the institution must provide the information described in § 668.43(a)(12) to enrolled and prospective students.
(f) Workforce responsiveness. Nothing in this or any other section in this part prohibits an institution utilizing written arrangements from aligning or modifying its curriculum or academic requirements in order to meet the recommendations or requirements of industry advisory boards that include employers who hire program graduates, widely recognized industry standards and organizations, or industry-recognized credentialing bodies, including making governance or decision-making changes as an alternative to allowing or requiring faculty control or approval or integrating industry-recognized credentials into existing degree programs.
(g) Calculation of percentage of program. When determining the percentage of the program that is provided by an ineligible institution or organization under paragraph (c) of this section, the institution divides the number of semester, trimester, or quarter credit hours, clock hours, or the equivalent that are provided by the ineligible organization or organizations by the total number of semester, trimester, or quarter credit hours, clock hours, or the equivalent required for completion of the program. A course is provided by an ineligible institution or organization if the organization with which the institution has a written arrangement has authority over the design, administration, or instruction in the course, including, but not limited to—
(1) Establishing the requirements for successful completion of the course;
(2) Delivering instruction in the course; or
(3) Assessing student learning.
(h) Non-applicability to other interactions with outside entities. Written arrangements are not necessary for, and the limitations in this section do not apply to—
(1) Acceptance by the institution of transfer credits or use of prior learning assessment or other non-traditional methods of providing academic credit; or
(2) The internship or externship portion of a program if the internship or externship is governed by accrediting agency standards, or, in the case of an eligible foreign institution, the standards of an outside oversight entity, such as an accrediting agency or government entity, that require the oversight and supervision of the institution, where the institution is responsible for the internship or externship and students are monitored by qualified institutional personnel.
(a) General. An eligible program is an educational program that—
(1) Is provided by a participating institution; and
(2) Satisfies the other relevant requirements contained in this section.
(b) Definitions. For purposes of this section—
(1) The Secretary considers the “equivalent of an associate degree” to be—
(i) An associate degree; or
(ii) The successful completion of at least a two-year program that is acceptable for full credit toward a bachelor's degree and qualifies a student for admission into the third year of a bachelor's degree program;
(2) A week is a consecutive seven-day period; and
(3)(i) The Secretary considers that an institution provides one week of instructional time in an academic program during any week the institution provides at least one day of regularly scheduled instruction or examinations, or, after the last scheduled day of classes for a term or a payment period, at least one day of study for final examinations.
(ii) Instructional time does not include any vacation periods, homework, or periods of orientation or counseling.
(c) Institution of higher education. An eligible program provided by an institution of higher education must—
(1) Lead to an associate, bachelor's, professional, or graduate degree;
(2) Be at least a two-academic-year program that is acceptable for full credit toward a bachelor's degree; or
(3) Be at least a one-academic-year training program that leads to a certificate, or other nondegree recognized credential, and prepares students for gainful employment in a recognized occupation.
(d) Proprietary institution of higher education and postsecondary vocational institution. An eligible program provided by a proprietary institution of higher education or postsecondary vocational institution—
(1)(i) Must require a minimum of 15 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Must be at least 600 clock hours, 16 semester or trimester hours, or 24 quarter hours;
(iii) Must provide undergraduate training that prepares a student for gainful employment in a recognized occupation; and
(iv) May admit as regular students persons who have not completed the equivalent of an associate degree;
(2) Must—
(i) Require a minimum of 10 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Be at least 300 clock hours, 8 semester or trimester hours, or 12 quarter hours;
(iii) Provide training that prepares a student for gainful employment in a recognized occupation; and
(iv)(A) Be a graduate or professional program; or
(B) Admit as regular students only persons who have completed the equivalent of an associate degree;
(3) For purposes of the FFEL and Direct Loan programs only, must—
(i) Require a minimum of 10 weeks of instruction, beginning on the first day of classes and ending on the last day of classes or examinations;
(ii) Be at least 300 clock hours but less than 600 clock hours;
(iii) Provide undergraduate training that prepares a student for gainful employment in a recognized occupation;
(iv) Admit as regular students some persons who have not completed the equivalent of an associate degree; and
(v) Satisfy the requirements of paragraph (e) of this section; or
(4) For purposes of a proprietary institution of higher education only, is a program leading to a baccalaureate degree in liberal arts, as defined in 34 CFR 600.5(e), that—
(i) Is provided by an institution that is accredited by a recognized accrediting agency or association that was defined as a regional accrediting agency or association on October 1, 2007, and has held such accreditation since October 1, 2007, or earlier; and
(ii) The institution has provided continuously since January 1, 2009.
(e) Qualitative factors. (1) An educational program that satisfies the requirements of paragraphs (d)(3)(i) through (iv) of this section qualifies as an eligible program only if—
(i) The program has a substantiated completion rate of at least 70 percent, as calculated under paragraph (f) of this section;
(ii) The program has a substantiated placement rate of at least 70 percent, as calculated under paragraph (g) of this section;
(iii) The institution can demonstrate reasonable program length, in accordance with § 668.14(b)(26); and
(iv) The program has been in existence for at least one year. The Secretary considers an educational program to have been in existence for at least one year only if an institution has been legally authorized to provide, and has continuously provided, the program during the 12 months (except for normal vacation periods and, at the discretion of the Secretary, periods when the institution closes due to a natural disaster that directly affects the institution or the institution's students) preceding the date on which the institution applied for eligibility for that program.
(2) An institution shall substantiate the calculation of its completion and placement rates by having the certified public accountant who prepares its audit report required under § 668.23 report on the institution's calculation based on performing an attestation engagement in accordance with the Statements on Standards for Attestation Engagements of the American Institute of Certified Public Accountants (AICPA).
(f) Calculation of completion rate. An institution shall calculate its completion rate for an educational program for any award year as follows:
(1) Determine the number of regular students who were enrolled in the program during the award year.
(2) Subtract from the number of students determined under paragraph (f)(1) of this section, the number of regular students who, during that award year, withdrew from, dropped out of, or were expelled from the program and were entitled to and actually received, in a timely manner a refund of 100 percent of their tuition and fees.
(3) Subtract from the total obtained under paragraph (f)(2) of this section the number of students who were enrolled in the program at the end of that award year.
(4) Determine the number of regular students who, during that award year, received within 150 percent of the published length of the educational program the degree, certificate, or other recognized educational credential awarded for successfully completing the program.
(5) Divide the number determined under paragraph (f)(4) of this section by the total obtained under paragraph (f)(3) of this section.
(g) Calculation of placement rate. (1) An institution shall calculate its placement rate for an educational program for any award year as follows:
(i) Determine the number of students who, during the award year, received the degree, certificate, or other recognized educational credential awarded for successfully completing the program.
(ii) Of the total obtained under paragraph (g)(1)(i) of this section, determine the number of students who, within 180 days of the day they received their degree, certificate, or other recognized educational credential, obtained gainful employment in the recognized occupation for which they were trained or in a related comparable recognized occupation and, on the date of this calculation, are employed, or have been employed, for at least 13 weeks following receipt of the credential from the institution.
(iii) Divide the number of students determined under paragraph (g)(1)(ii) of this section by the total obtained under paragraph (g)(1)(i) of this section.
(2) An institution shall document that each student described in paragraph (g)(1)(ii) of this section obtained gainful employment in the recognized occupation for which he or she was trained or in a related comparable recognized occupation. Examples of satisfactory documentation of a student's gainful employment include, but are not limited to—
(i) A written statement from the student's employer;
(ii) Signed copies of State or Federal income tax forms; and
(iii) Written evidence of payments of Social Security taxes.
(h) Eligibility for Federal Pell Grant, ACG, National SMART Grant, TEACH Grant, and FSEOG Programs. In addition to satisfying other relevant provisions of the section—
(1) An educational program qualifies as an eligible program for purposes of the Federal Pell Grant Program only if the educational program is an undergraduate program or a postbaccalaureate teacher certificate or licensing program as described in 34 CFR 690.6(c);
(2) An educational program qualifies as an eligible program for purposes of the ACG, National SMART Grant, and FSEOG programs only if the educational program is an undergraduate program; and
(3) An educational program qualifies as an eligible program for purposes of the TEACH Grant program if it satisfies the requirements of the definition of TEACH Grant-eligible program in 34 CFR 686.2(d).
(i) Flight training. In addition to satisfying other relevant provisions of this section, for a program of flight training to be an eligible program, it must have a current valid certification from the Federal Aviation Administration.
(j) English as a second language (ESL). (1) In addition to satisfying the relevant provisions of this section, an educational program that consists solely of instruction in ESL qualifies as an eligible program if—
(i) The institution admits to the program only students who the institution determines need the ESL instruction to use already existing knowledge, training, or skills; and
(ii) The program leads to a degree, certificate, or other recognized educational credential.
(2) An institution shall document its determination that ESL instruction is necessary to enable each student enrolled in its ESL program to use already existing knowledge, training, or skills with regard to the students that it admits to its ESL program under paragraph (j)(1)(i) of this section.
(3) An ESL program that qualifies as an eligible program under this paragraph is eligible for purposes of the Federal Pell Grant Program only.
(k) Undergraduate educational program in credit hours. If an institution offers an undergraduate educational program in credit hours, the institution must use the formula contained in paragraph (l) of this section to determine whether that program satisfies the requirements contained in paragraph (c)(3) or (d) of this section, and the number of credit hours in that educational program for purposes of the title IV, HEA programs, unless—
(1) The program is at least two academic years in length and provides an associate degree, a bachelor's degree, a professional degree, or an equivalent degree as determined by the Secretary; or
(2) Each course within the program is acceptable for full credit toward completion of an eligible program offered by the institution that provides an associate degree, bachelor's degree, professional degree, or equivalent degree as determined by the Secretary, provided that—
(i) The eligible program requires at least two academic years of study; and
(ii) The institution can demonstrate that least one student graduated from the program during the current award year or the two preceding award years.
(l) Formula. For purposes of determining whether a program described in paragraph (h) of this section satisfies the requirements contained in paragraph (c)(3) or (d) of this section, and the number of credit hours in that educational program for the purposes of the title IV, HEA programs—
(1) A semester or trimester hour must include at least 30 clock hours of instruction; and
(2) A quarter hour must include at least 20 clock hours of instruction.
(m) An otherwise eligible program that is offered in whole or in part through telecommunications is eligible for title IV, HEA program purposes if the program is offered by an institution, other than a foreign institution, that has been evaluated and is accredited for its effective delivery of distance education programs by an accrediting agency or association that—
(1) Is recognized by the Secretary under subpart 2 of part H of the HEA; and
(2) Has accreditation of distance education within the scope of its recognition.
(n) Other eligible programs. For title IV, HEA program purposes, eligible program includes a direct assessment program approved by the Secretary under § 668.10, a comprehensive transition and postsecondary program approved by the Secretary under § 668.232, and an eligible prison education program under subpart P of this part.
(a) In determining the amount of Title IV, HEA program assistance that a student who is enrolled in a program described in § 668.8(k) is eligible to receive, the institution shall apply the formula contained in § 668.8(l) to determine the number of semester, trimester, or quarter hours in that program, if the institution measures academic progress in that program in semester, trimester, or quarter hours.
(b) Notwithstanding paragraph (a) of this section, a public or private nonprofit hospital-based school of nursing that awards a diploma at the completion of the school's program of education is not required to apply the formula contained in § 668.8(l) to determine the number of semester, trimester, or quarter hours in that program for purposes of calculating Title IV, HEA program assistance.
(a)(1) A direct assessment program is a program that, in lieu of credit or clock hours as the measure of student learning, utilizes direct assessment of student learning, or recognizes the direct assessment of student learning by others. The assessment must be consistent with the accreditation of the institution or program utilizing the results of the assessment.
(2) Direct assessment of student learning means a measure of a student's knowledge, skills, and abilities designed to provide evidence of the student's proficiency in the relevant subject area.
(3) An institution must establish a methodology to reasonably equate each module in the direct assessment program to either credit hours or clock hours. This methodology must be consistent with the requirements of the institution's accrediting agency or State approval agency.
(4) All regulatory requirements in this chapter that refer to credit or clock hours as a measurement apply to direct assessment programs according to whether they use credit or clock hour equivalencies, respectively.
(5) A direct assessment program that is not consistent with the requirements of the institution's accrediting agency or State approval agency is not an eligible program as provided under § 668.8. In order for any direct assessment program to qualify as an eligible program, the accrediting agency must have—
(i) Evaluated the program based on the agency's accreditation standards and criteria, and included it in the institution's grant of accreditation or preaccreditation; and
(ii) Reviewed and approved the institution's claim of each direct assessment program's equivalence in terms of credit or clock hours.
(b)(1) An institution that wishes to offer a direct assessment program must apply to the Secretary to have its direct assessment program or programs determined to be eligible programs for title IV, HEA program purposes. Following the Secretary's initial approval of a direct assessment program, additional direct assessment programs at an equivalent or lower academic level may be determined to be eligible without further approvals from the Secretary except as required by 34 CFR 600.10(c)(1)(iii), 600.20(c)(1), or 600.21(a), as applicable, if such programs are consistent with the institution's accreditation or its State approval agency.
(2) The institution's direct assessment application must provide information satisfactory to the Secretary that includes—
(i) A description of the educational program, including the educational credential offered (degree level or certificate) and the field of study;
(ii) A description of how the direct assessment program is structured, including information about how and when the institution determines on an individual basis what each student enrolled in the program needs to learn and how the institution excludes from consideration of a student's eligibility for title IV, HEA program funds any credits or competencies earned on the basis of prior learning;
(iii) A description of how learning is assessed and how the institution assists students in gaining the knowledge needed to pass the assessments;
(iv) The number of semester, trimester, or quarter credit hours, or clock hours, that are equivalent to the amount of student learning being directly assessed for the certificate or degree;
(v) The methodology the institution uses to determine the number of credit or clock hours to which the program or programs are equivalent; and
(vi) Documentation from the institution's accrediting agency or State approval agency indicating that the agency has evaluated the institution's offering of direct assessment program(s) and has included the program(s) in the institution's grant of accreditation and approval documentation from the accrediting agency or State approval agency indicating agreement with the institutions methodology for determining the direct assessment program's equivalence in terms of credit or clock hours.
(vii) Notwithstanding paragraphs (a) and (b) of this section, no program offered by a foreign institution that involves direct assessment will be considered to be an eligible program under § 668.8.
(c) A direct assessment program may use learning resources (e.g., courses or portions of courses) that are provided by entities other than the institution providing the direct assessment program without regard to the limitations on contracting for part of an educational program in § 668.5(c)(3).
(d) Title IV, HEA program funds may be used to support instruction provided, or overseen, by the institution, except for the portion of the program that the student is awarded based on prior learning.
(e) Unless an institution has received initial approval from the Secretary to offer direct assessment programs, and the institution's offering of direct assessment coursework is consistent with the institution's accreditation and State authorization, if applicable, title IV, HEA program funds may not be used for—
(1) The course of study described in § 668.32(a)(1)(ii) and (iii) and (a)(2)(i)(B), if offered using direct assessment; or
(2) Remedial coursework described in § 668.20, if offered using direct assessment.
(f) Student progress in a direct assessment program may be measured using a combination of—
(1) Credit hours and credit hour equivalencies; or
(2) Clock hours and clock hour equivalencies.
If any provision of this part or its application to any person, act, or practice is held invalid, the remainder of the part or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) This subpart establishes standards that an institution must meet in order to participate in any Title IV, HEA program.
(b) Noncompliance with these standards by an institution already participating in any Title IV, HEA program or with applicable standards in this subpart by a third-party servicer that contracts with the institution may subject the institution or servicer, or both, to proceedings under subpart G of this part. These proceedings may lead to any of the following actions:
(1) An emergency action.
(2) The imposition of a fine.
(3) The limitation, suspension, or termination of the participation of the institution in a Title IV, HEA program.
(4) The limitation, suspension, or termination of the eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.
(a) Requirements for certification. (1)(i) The Secretary certifies an institution to participate in the title IV, HEA programs if the institution qualifies as an eligible institution under 34 CFR part 600, meets the standards of this subpart and 34 CFR part 668, subpart L, and satisfies the requirements of paragraph (a)(2) of this section.
(ii) On application from the institution, the Secretary certifies a location of an institution that meets the requirements of § 668.13(a)(1)(i) as a branch if it satisfies the definition of “branch” in 34 CFR 600.2.
(2) Except as provided in paragraph (a)(3) of this section, if an institution wishes to participate for the first time in the title IV, HEA programs or has undergone a change in ownership that results in a change in control as described in 34 CFR 600.31, the institution must require the following individuals to complete title IV, HEA program training provided or approved by the Secretary no later than 12 months after the institution executes its program participation agreement under § 668.14:
(i) The individual the institution designates under § 668.16(b)(1) as its title IV, HEA program administrator.
(ii) The institution's chief administrator or a high level institutional official the chief administrator designates.
(3)(i) An institution may request the Secretary to waive the training requirement for any individual described in paragraph (a)(2) of this section.
(ii) When the Secretary receives a waiver request under paragraph (a)(3)(i) of this section, the Secretary may grant or deny the waiver, require another institutional official to take the training, or require alternative training.
(b) Period of participation. (1) If the Secretary certifies that an institution meets the standards of this subpart, the Secretary also specifies the period for which the institution may participate in a title IV, HEA program. An institution's period of participation expires no more than six years after the date that the Secretary certifies that the institution meets the standards of this subpart, except that—
(i) The period of participation for a private, for profit foreign institution expires three years after the date of the Secretary's certification; and
(ii) The Secretary may specify a shorter period.
(2) Provided that an institution has submitted an application for a renewal of certification that is materially complete at least 90 days prior to the expiration of its current period of participation, the institution's existing certification will be extended on a month to month basis following the expiration of the institution's period of participation until the end of the month in which the Secretary issues a decision on the application for recertification.
(c) Provisional certification. (1)(i) The Secretary may provisionally certify an institution if—
(A) The institution seeks initial participation in a Title IV, HEA program;
(B) The institution is an eligible institution that has undergone a change in ownership that results in a change in control according to the provisions of 34 CFR part 600;
(C) The institution is a participating institution that is applying for a renewal of certification—
(1) That the Secretary determines has jeopardized its ability to perform its financial responsibilities by not meeting the factors of financial responsibility under subpart L of this part or the standards of administrative capability under § 668.16;
(2) Whose participation has been limited or suspended under subpart G of this part; or
(3) That voluntarily enters into provisional certification;
(D) The institution seeks to be reinstated to participate in a title IV, HEA program after a prior period of participation in that program ended;
(E) The institution is a participating institution that was accredited or preaccredited by a nationally recognized accrediting agency on the day before the Secretary withdrew the Secretary's recognition of that agency according to the provisions contained in 34 CFR part 602;
(F) The Secretary has determined that the institution is at risk of closure; or
(G) The institution is under the provisional certification alternative of subpart L of this part.
(ii) An institution's certification becomes provisional upon notification from the Secretary if—
(A) The institution triggers one of the financial responsibility events under § 668.171(c) or (d) and, as a result, the Secretary requires the institution to post financial protection; or
(B) Any owner or interest holder of the institution with control over that institution, as defined in 34 CFR 600.31, also owns another institution with fines or liabilities owed to the Department and is not making payments in accordance with an agreement to repay that liability.
(iii) A proprietary institution's certification automatically becomes provisional at the start of a fiscal year if it did not derive at least 10 percent of its revenue for its preceding fiscal year from sources other than Federal educational assistance funds, as required under § 668.14(b)(16).
(2) If the Secretary provisionally certifies an institution, the Secretary also specifies the period for which the institution may participate in a title IV, HEA program. Except as provided in paragraph (c)(3) of this section or subpart L of this part, a provisionally certified institution's period of participation expires—
(i) Not later than the end of the first complete award year following the date on which the Secretary provisionally certified the institution for its initial certification;
(ii) Not later than the end of the third complete award year following the date on which the Secretary provisionally certified an institution for reasons—
(A) Related to substantial liabilities owed or potentially owed to the Department for discharges related to borrower defense to repayment or false certification, or arising from claims under consumer protection laws; or
(B) As a result of a change in ownership, recertification, reinstatement, automatic re-certification, or a failure under § 668.14(b)(32); and
(iii) If the Secretary provisionally certified the institution as a result of its accrediting agency losing recognition, not later than 18 months after the date that the Secretary withdrew recognition from the institution's nationally recognized accrediting agency.
(3) Notwithstanding the maximum periods of participation provided for in paragraph (c)(2) of this section, if the Secretary provisionally certifies an institution, the Secretary may specify a shorter period of participation for that institution.
(4) For the purposes of this section, “provisional certification” means that the Secretary certifies that an institution has demonstrated to the Secretary's satisfaction that the institution—
(i) Is capable of meeting the standards of this subpart within a specified period; and
(ii) Is able to meet the institution's responsibilities under its program participation agreement, including compliance with any additional conditions specified in the institution's program participation agreement that the Secretary requires the institution to meet in order for the institution to participate under provisional certification.
(d) Revocation of provisional certification. (1) If, before the expiration of a provisionally certified institution's period of participation in a Title IV, HEA program, the Secretary determines that the institution is unable to meet its responsibilities under its program participation agreement, the Secretary may revoke the institution's provisional certification for participation in that program.
(2)(i) If the Secretary revokes the provisional certification of an institution under paragraph (d)(1) of this section, the Secretary sends the institution a notice by certified mail, return receipt requested. The Secretary also may transmit the notice by other, more expeditious means, if practical.
(ii) The revocation takes effect on the date that the Secretary transmits the notice to the institution.
(iii) The notice states the basis for the revocation, the consequences of the revocation to the institution, and that the institution may request the Secretary to reconsider the revocation. The consequences of a revocation are described in § 668.26.
(3)(i) An institution may request reconsideration of a revocation under this section by submitting to the Secretary, within 20 days of the institution's receipt of the Secretary's notice, written evidence that the revocation is unwarranted. The institution must file the request with the Secretary by hand-delivery, mail, or electronic transmission.
(ii) The filing date of the request is the date on which the request is—
(A) Hand-delivered;
(B) Mailed; or
(C) Sent by electronic transmission.
(iii) Documents filed by electronic transmission must be transmitted to the Secretary in accordance with instructions provided by the Secretary in the notice of revocation.
(4)(i) The designated department official making the decision concerning an institution's request for reconsideration of a revocation is different from, and not subject to supervision by, the official who initiated the revocation of the institution's provisional certification. The deciding official promptly considers an institution's request for reconsideration of a revocation and notifies the institution, by certified mail, return receipt requested, of the final decision. The Secretary also may transmit the notice by other, more expeditious means, if practical.
(ii) If the Secretary determines that the revocation is warranted, the Secretary's notice informs the institution that the institution may apply for reinstatement of participation only after the later of the expiration of—
(A) Eighteen months after the effective date of the revocation; or
(B) A debarment or suspension of the institution under Executive Order (E.O.) 12549 (3 CFR, 1986 comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.
(iii) If the Secretary determines that the revocation of the institution's provisional certification is unwarranted, the Secretary's notice informs the institution that the institution's provisional certification is reinstated, effective on the date that the Secretary's original revocation notice was mailed, for a specified period of time.
(5) The mailing date of a notice of revocation or a request for reconsideration of a revocation is the date evidenced on the original receipt of mailing from the U.S. Postal Service or another service that provides delivery confirmation for that document.
(e) Supplementary performance measures. In determining whether to certify, or condition the participation of, an institution under this section and § 668.14, the Secretary may consider the following, among other information at the program or institutional level:
(1) Withdrawal rate. The percentage of students who withdrew from the institution within 100 percent or 150 percent of the published length of the program.
(2) Educational and pre-enrollment expenditures. The amounts the institution spent on instruction and instructional activities, academic support, and support services, compared to the amounts spent on recruiting activities, advertising, and other pre-enrollment expenditures.
(3) Licensure pass rate. If a program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, and the institution is required by an accrediting agency or State to report passage rates for the licensure exam for the program, such passage rates.
(a)(1) An institution may participate in any Title IV, HEA program, other than the LEAP and NEISP programs, only if the institution enters into a written program participation agreement with the Secretary, on a form approved by the Secretary. A program participation agreement conditions the initial and continued participation of an eligible institution in any Title IV, HEA program upon compliance with the provisions of this part, the individual program regulations, and any additional conditions specified in the program participation agreement that the Secretary requires the institution to meet.
(2) An institution's program participation agreement applies to each branch campus and other location of the institution that meets the applicable requirements of this part unless otherwise specified by the Secretary.
(3) An institution's program participation agreement must be signed by—
(i) An authorized representative of the institution; and
(ii) For a proprietary or private nonprofit institution, an authorized representative of an entity with direct or indirect ownership of the institution if that entity has the power to exercise control over the institution. The Secretary considers the following as examples of circumstances in which an entity has such power:
(A) If the entity has at least 50 percent control over the institution through direct or indirect ownership, by voting rights, by its right to appoint board members to the institution or any other entity, whether by itself or in combination with other entities or natural persons with which it is affiliated or related, or pursuant to a proxy or voting or similar agreement.
(B) If the entity has the power to block significant actions.
(C) If the entity is the 100 percent direct or indirect interest holder of the institution.
(D) If the entity provides or will provide the financial statements to meet any of the requirements of 34 CFR 600.20(g) or (h) or subpart L of this part.
(b) By entering into a program participation agreement, an institution agrees that—
(1) It will comply with all statutory provisions of or applicable to Title IV of the HEA, all applicable regulatory provisions prescribed under that statutory authority, and all applicable special arrangements, agreements, and limitations entered into under the authority of statutes applicable to Title IV of the HEA, including the requirement that the institution will use funds it receives under any Title IV, HEA program and any interest or other earnings thereon, solely for the purposes specified in and in accordance with that program;
(2) As a fiduciary responsible for administering Federal funds, if the institution is permitted to request funds under a Title IV, HEA program advance payment method, the institution will time its requests for funds under the program to meet the institution's immediate Title IV, HEA program needs;
(3) It will not request from or charge any student a fee for processing or handling any application, form, or data required to determine a student's eligibility for, and amount of, Title IV, HEA program assistance;
(4) It will establish and maintain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds received from the Secretary or from students under the Title IV, HEA programs, together with assurances that the institution will provide, upon request and in a timely manner, information relating to the administrative capability and financial responsibility of the institution to—
(i) The Secretary;
(ii) A guaranty agency, as defined in 34 CFR part 682, that guarantees loans made under the Federal Stafford Loan and Federal PLUS programs for attendance at the institution or any of the institution's branch campuses or other locations;
(iii) The nationally recognized accrediting agency that accredits or preaccredits the institution or any of the institution's branch campuses, other locations, or educational programs;
(iv) The State agency that legally authorizes the institution and any branch campus or other location of the institution to provide postsecondary education; and
(v) In the case of a public postsecondary vocational educational institution that is approved by a State agency recognized for the approval of public postsecondary vocational education, that State agency;
(5) It will comply with the provisions of subpart L of this part relating to factors of financial responsibility;
(6) It will comply with the provisions of § 668.16 relating to standards of administrative capability;
(7) It will submit reports to the Secretary and, in the case of an institution participating in the Federal Stafford Loan, Federal PLUS, or the Federal Perkins Loan Program, to holders of loans made to the institution's students under that program at such times and containing such information as the Secretary may reasonably require to carry out the purpose of the Title IV, HEA programs;
(8) It will not provide any statement to any student or certification to any lender in the case of an FFEL Program loan, or origination record to the Secretary in the case of a Direct Loan Program loan that qualifies the student or parent for a loan or loans in excess of the amount that the student or parent is eligible to borrow in accordance with sections 425(a), 428(a)(2), 428(b)(1)(A) and (B), 428B, 428H, and 455(a) of the HEA;
(9) It will comply with the requirements of subpart D of this part concerning institutional and financial assistance information for students and prospective students;
(10) In the case of an institution that advertises job placement rates as a means of attracting students to enroll in the institution, the institution will make available to prospective students, at or before the time that those students apply for enrollment—
(i) The most recent available data concerning employment statistics, graduation statistics, and any other information necessary to substantiate the truthfulness of the advertisements; and
(ii) Relevant State licensing requirements of the State in which the institution is located for any job for which the course of instruction is designed to prepare such prospective students, as provided in § 668.43(a)(5)(v);
(11) In the case of an institution participating in the FFEL program, the institution will inform all eligible borrowers, as defined in 34 CFR part 682, enrolled in the institution about the availability and eligibility of those borrowers for State grant assistance from the State in which the institution is located, and will inform borrowers from another State of the source of further information concerning State grant assistance from that State;
(12) It will provide the certifications described in paragraph (c) of this section;
(13) In the case of an institution whose students receive financial assistance pursuant to section 484(d) of the HEA, the institution will make available to those students a program proven successful in assisting students in obtaining the recognized equivalent of a high school diploma;
(14) It will not deny any form of Federal financial aid to any eligible student solely on the grounds that the student is participating in a program of study abroad approved for credit by the institution;
(15)(i) Except as provided under paragraph (b)(15)(ii) of this section, the institution will use a default management plan approved by the Secretary with regard to its administration of the FFEL or Direct Loan programs, or both for at least the first two years of its participation in those programs, if the institution—
(A) Is participating in the FFEL or Direct Loan programs for the first time; or
(B) Is an institution that has undergone a change of ownership that results in a change in control and is participating in the FFEL or Direct Loan programs.
(ii) The institution does not have to use an approved default management plan if—
(A) The institution, including its main campus and any branch campus, does not have a cohort default rate in excess of 10 percent; and
(B) The owner of the institution does not own and has not owned any other institution that had a cohort default rate in excess of 10 percent while that owner owned the institution.
(16) For a proprietary institution, the institution will derive at least 10 percent of its revenues for each fiscal year from sources other than Federal funds, as provided in § 668.28(a), or be subject to sanctions described in § 668.28(c);
(17) The Secretary, guaranty agencies, and lenders as defined in 34 CFR part 682, nationally recognized accrediting agencies, Federal agencies, State agencies recognized under 34 CFR part 603 for the approval of public postsecondary vocational education, State agencies that legally authorize institutions and branch campuses or other locations of institutions to provide postsecondary education, and State attorneys general have the authority to share with each other any information pertaining to the institution's eligibility for or participation in the title IV, HEA programs or any information on fraud, abuse, or other violations of law;
(18) It will not knowingly—
(i) Employ in a capacity that involves the administration of the title IV, HEA programs or the receipt of funds under those programs, an individual who has been:
(A) Convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds;
(B) Administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds;
(C) An owner, director, officer, or employee who exercised substantial control over an institution, or a direct or indirect parent entity of an institution, that owes a liability for a violation of a title IV, HEA program requirement and is not making payments in accordance with an agreement to repay that liability; or
(D) A ten-percent-or-higher equity owner, director, officer, principal, executive, or contractor at an institution in any year in which the institution incurred a loss of Federal funds in excess of 5 percent of the participating institution's annual title IV, HEA program funds; or
(ii) Contract with any institution, third-party servicer, individual, agency, or organization that has, or whose owners, officers or employees have—
(A) Been convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds;
(B) Been administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds;
(C) Had its participation in the title IV programs terminated, certification revoked, or application for certification or recertification for participation in the title IV programs denied;
(D) Been an owner, director, officer, or employee who exercised substantial control over an institution, or a direct or indirect parent entity of an institution, that owes a liability for a violation of a title IV, HEA program requirement and is not making payments in accordance with an agreement to repay that liability; or
(E) Been a 10 percent-or-higher equity owner, director, officer, principal, executive, or contractor affiliated with another institution in any year in which the other institution incurred a loss of Federal funds in excess of 5 percent of the participating institution's annual title IV, HEA program funds;
(19) It will complete, in a timely manner and to the satisfaction of the Secretary, surveys conducted as a part of the Integrated Postsecondary Education Data System (IPEDS) or any other Federal collection effort, as designated by the Secretary, regarding data on postsecondary institutions;
(20) In the case of an institution that is co-educational and has an intercollegiate athletic program, it will comply with the provisions of § 668.48;
(21) It will not impose any penalty, including, but not limited to, the assessment of late fees, the denial of access to classes, libraries, or other institutional facilities, or the requirement that the student borrow additional funds for which interest or other charges are assessed, on any student because of the student's inability to meet his or her financial obligations to the institution as a result of the delayed disbursement of the proceeds of a Title IV, HEA program loan due to compliance with statutory and regulatory requirements of or applicable to the Title IV, HEA programs, or delays attributable to the institution;
(22)(i) It will not provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of title IV, HEA program funds.
(A) The restrictions in paragraph (b)(22) of this section do not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance.
(B) For the purpose of paragraph (b)(22) of this section, an employee who receives multiple adjustments to compensation in a calendar year and is engaged in any student enrollment or admission activity or in making decisions regarding the award of title IV, HEA program funds is considered to have received such adjustments based upon success in securing enrollments or the award of financial aid if those adjustments create compensation that is based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid.
(ii) Notwithstanding paragraph (b)(22)(i) of this section, eligible institutions, organizations that are contractors to eligible institutions, and other entities may make—
(A) Merit-based adjustments to employee compensation provided that such adjustments are not based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid; and
(B) Profit-sharing payments so long as such payments are not provided to any person or entity engaged in student recruitment or admission activity or in making decisions regarding the award of title IV, HEA program funds.
(iii) As used in paragraph (b)(22) of this section,
(A) Commission, bonus, or other incentive payment means a sum of money or something of value, other than a fixed salary or wages, paid to or given to a person or an entity for services rendered.
(B) Securing enrollments or the award of financial aid means activities that a person or entity engages in at any point in time through completion of an educational program for the purpose of the admission or matriculation of students for any period of time or the award of financial aid to students.
(1) These activities include contact in any form with a prospective student, such as, but not limited to—contact through preadmission or advising activities, scheduling an appointment to visit the enrollment office or any other office of the institution, attendance at such an appointment, or involvement in a prospective student's signing of an enrollment agreement or financial aid application.
(2) These activities do not include making a payment to a third party for the provision of student contact information for prospective students provided that such payment is not based on—
(i) Any additional conduct or action by the third party or the prospective students, such as participation in preadmission or advising activities, scheduling an appointment to visit the enrollment office or any other office of the institution or attendance at such an appointment, or the signing, or being involved in the signing, of a prospective student's enrollment agreement or financial aid application; or
(ii) The number of students (calculated at any point in time of an educational program) who apply for enrollment, are awarded financial aid, or are enrolled for any period of time, including through completion of an educational program.
(C) Entity or person engaged in any student recruitment or admission activity or in making decisions about the award of financial aid means—
(1) With respect to an entity engaged in any student recruitment or admission activity or in making decisions about the award of financial aid, any institution or organization that undertakes the recruiting or the admitting of students or that makes decisions about and awards title IV, HEA program funds; and
(2) With respect to a person engaged in any student recruitment or admission activity or in making decisions about the award of financial aid, any employee who undertakes recruiting or admitting of students or who makes decisions about and awards title IV, HEA program funds, and any higher level employee with responsibility for recruitment or admission of students, or making decisions about awarding title IV, HEA program funds.
(D) Enrollment means the admission or matriculation of a student into an eligible institution.
(23) It will meet the requirements established pursuant to part H of Title IV of the HEA by the Secretary and nationally recognized accrediting agencies;
(24) It will comply with the requirements of § 668.22;
(25) It is liable for all—
(i) Improperly spent or unspent funds received under the Title IV, HEA programs, including any funds administered by a third-party servicer; and
(ii) Returns of title IV, HEA program funds that the institution or its servicer may be required to make;
(26) If an educational program offered by the institution on or after July 1, 2024, is required to prepare a student for gainful employment in a recognized occupation, the institution must—
(i) Establish the need for the training for the student to obtain employment in the recognized occupation for which the program prepares the student; and
(ii) Demonstrate a reasonable relationship between the length of the program and the entry level requirements for the recognized occupation for which the program prepares the student by limiting the number of hours in the program to the greater of—
(A) The required minimum number of clock hours, credit hours, or the equivalent required for training in the recognized occupation for which the program prepares the student, as established by the State in which the institution is located, if the State has established such a requirement or as established by any Federal agency; or
(B) Another State's required minimum number of clock hours, credit hours, or the equivalent required for training in the recognized occupation for which the program prepares the student, if the institution documents, with substantiation by a certified public accountant who prepares the institution's compliance audit report as required under § 668.23 that—
(1) A majority of students resided in that State while enrolled in the program during the most recently completed award year;
(2) A majority of students who completed the program in the most recently completed award year were employed in that State; or
(3) The other State is part of the same metropolitan statistical area as the institution's home State and a majority of students, upon enrollment in the program during the most recently completed award year, stated in writing that they intended to work in that other State; and
(iii) Notwithstanding paragraph (a)(26)(ii) of this section, the program length limitation does not apply for occupations where the State entry level requirements include the completion of an associate or higher-level degree; or where the program is delivered entirely through distance education or correspondence courses;
(27) In the case of an institution participating in a Title IV, HEA loan program, the institution—
(i) Will develop, publish, administer, and enforce a code of conduct with respect to loans made, insured or guaranteed under the Title IV, HEA loan programs in accordance with 34 CFR 601.21; and
(ii) Must inform its officers, employees, and agents with responsibilities with respect to loans made, insured or guaranteed under the Title IV, HEA loan programs annually of the provisions of the code required under paragraph (b)(27) of this section;
(28) For any year in which the institution has a preferred lender arrangement (as defined in 34 CFR 601.2(b)), it will at least annually compile, maintain, and make available for students attending the institution, and the families of such students, a list in print or other medium, of the specific lenders for loans made, insured, or guaranteed under title IV of the HEA or private education loans that the institution recommends, promotes, or endorses in accordance with such preferred lender arrangement. In making such a list, the institution must comply with the requirements in 34 CFR 682.212(h) and 34 CFR 601.10;
(29)(i) It will, upon the request of an enrolled or admitted student who is an applicant for a private education loan (as defined in 34 CFR 601.2(b)), provide to the applicant the self-certification form required under 34 CFR 601.11(d) and the information required to complete the form, to the extent the institution possesses such information, including—
(A) The applicant's cost of attendance at the institution, as determined by the institution under part F of title IV of the HEA;
(B) The applicant's estimated financial assistance, including amounts of financial assistance used to replace the expected family contribution as determined by the institution in accordance with title IV, for students who have completed the Free Application for Federal Student Aid; and
(C) The difference between the amounts under paragraphs (b)(29)(i)(A) and (29)(i)(B) of this section, as applicable.
(ii) It will, upon the request of the applicant, discuss with the applicant the availability of Federal, State, and institutional student financial aid;
(30) The institution—
(i) Has developed and implemented written plans to effectively combat the unauthorized distribution of copyrighted material by users of the institution's network, without unduly interfering with educational and research use of the network, that include—
(A) The use of one or more technology-based deterrents;
(B) Mechanisms for educating and informing its community about appropriate versus inappropriate use of copyrighted material, including that described in § 668.43(a)(10);
(C) Procedures for handling unauthorized distribution of copyrighted material, including disciplinary procedures; and
(D) Procedures for periodically reviewing the effectiveness of the plans to combat the unauthorized distribution of copyrighted materials by users of the institution's network using relevant assessment criteria. No particular technology measures are favored or required for inclusion in an institution's plans, and each institution retains the authority to determine what its particular plans for compliance with paragraph (b)(30) of this section will be, including those that prohibit content monitoring; and
(ii) Will, in consultation with the chief technology officer or other designated officer of the institution—
(A) Periodically review the legal alternatives for downloading or otherwise acquiring copyrighted material;
(B) Make available the results of the review in paragraph (b)(30)(ii)(A) of this section to its students through a Web site or other means; and
(C) To the extent practicable, offer legal alternatives for downloading or otherwise acquiring copyrighted material, as determined by the institution;
(31) The institution will submit a teach-out plan to its accrediting agency in compliance with 34 CFR 602.24(c) and the standards of the institution's accrediting agency. The institution will update its teach-out plan upon the occurrence of any of the following events:
(i) The Secretary initiates the limitation, suspension, or termination of the participation of an institution in any Title IV, HEA program under 34 CFR 600.41 or subpart G of this part or initiates an emergency action under § 668.83.
(ii) The institution's accrediting agency acts to withdraw, terminate, or suspend the accreditation or preaccreditation of the institution.
(iii) The institution's State licensing or authorizing agency revokes the institution's license or legal authorization to provide an educational program.
(iv) The institution intends to close a location that provides 100 percent of at least one program.
(v) The institution otherwise intends to cease operations;
(32) In each State in which: the institution is located; students enrolled by the institution in distance education or correspondence courses are located, as determined at the time of initial enrollment in accordance with 34 CFR 600.9(c)(2); or for the purposes of paragraphs (b)(32)(i) and (ii) of this section, each student who enrolls in a program on or after July 1, 2024, and attests that they intend to seek employment, the institution must determine that each program eligible for title IV, HEA program funds—
(i) Is programmatically accredited if the State or a Federal agency requires such accreditation, including as a condition for employment in the occupation for which the program prepares the student, or is programmatically pre-accredited when programmatic pre-accreditation is sufficient according to the State or Federal agency;
(ii) Satisfies the applicable educational requirements for professional licensure or certification requirements in the State so that a student who enrolls in the program, and seeks employment in that State after completing the program, qualifies to take any licensure or certification exam that is needed for the student to practice or find employment in an occupation that the program prepares students to enter; and
(iii) Complies with all State laws related to closure, including record retention, teach-out plans or agreements, and tuition recovery funds or surety bonds;
(33) It will not withhold official transcripts or take any other negative action against a student related to a balance owed by the student that resulted from an error in the institution's administration of the title IV, HEA programs, or any fraud or misconduct by the institution or its personnel;
(34) Upon request by a student, the institution will provide an official transcript that includes all the credit or clock hours for payment periods—
(i) In which the student received title IV, HEA funds; and
(ii) For which all institutional charges were paid or included in an agreement to pay at the time the request is made; and
(35) It will not maintain policies and procedures to encourage, or that condition institutional aid or other student benefits in a manner that induces, a student to limit the amount of Federal student aid, including Federal loan funds, that the student receives, except that the institution may provide a scholarship on the condition that a student forego borrowing if the amount of the scholarship provided is equal to or greater than the amount of Federal loan funds that the student agrees not to borrow.
(c) In order to participate in any Title IV, HEA program (other than the LEAP and NEISP programs), the institution must certify that it—
(1) Has in operation a drug abuse prevention program that the institution has determined to be accessible to any officer, employee, or student at the institution; and
(2)(i) Has established a campus security policy in accordance with section 485(f) of the HEA; and
(ii) Has complied with the disclosure requirements of § 668.47 as required by section 485(f) of the HEA.
(d)(1) The institution, if located in a State to which section 4(b) of the National Voter Registration Act (42 U.S.C. 1973gg-2(b)) does not apply, will make a good faith effort to distribute a mail voter registration form, requested and received from the State, to each student enrolled in a degree or certificate program and physically in attendance at the institution, and to make those forms widely available to students at the institution.
(2) The institution must request the forms from the State 120 days prior to the deadline for registering to vote within the State. If an institution has not received a sufficient quantity of forms to fulfill this section from the State within 60 days prior to the deadline for registering to vote in the State, the institution is not liable for not meeting the requirements of this section during that election year.
(3) This paragraph applies to elections as defined in section 301(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(1)), and includes the election for Governor or other chief executive within such State.
(e) If an institution is provisionally certified, the Secretary may apply such conditions as are determined to be necessary or appropriate to the institution, including, but not limited to—
(1) For an institution that the Secretary determines may be at risk of closure—
(i) Submission of an acceptable teach-out plan or agreement to the Department, the State, and the institution's recognized accrediting agency; and
(ii) Submission to the Department of an acceptable records retention plan that addresses title IV, HEA records, including but not limited to student transcripts, and evidence that the plan has been implemented;
(2) For an institution that the Secretary determines may be at risk of closure, that is teaching out or closing, or that is not financially responsible or administratively capable, the release of holds on student transcripts;
(3) Restrictions or limitations on the addition of new programs or locations;
(4) Restrictions on the rate of growth, new enrollment of students, or title IV, HEA volume in one or more programs;
(5) Restrictions on the institution providing a teach-out on behalf of another institution;
(6) Restrictions on the acquisition of another participating institution, which may include, in addition to any other required financial protection, the posting of financial protection in an amount determined by the Secretary but not less than 10 percent of the acquired institution's title IV, HEA volume for the prior fiscal year;
(7) Additional reporting requirements, which may include, but are not limited to, cash balances, an actual and protected cash flow statement, student rosters, student complaints, and interim unaudited financial statements;
(8) Limitations on the institution entering into a written arrangement with another eligible institution or an ineligible institution or organization for that other eligible institution or ineligible institution or organization to provide between 25 and 50 percent of the institution's educational program under § 668.5(a) or (c); and
(9) For an institution found to have engaged in substantial misrepresentations to students, engaged in aggressive recruiting practices, or violated incentive compensation rules, requirements to hire a monitor and to submit marketing and other recruiting materials (e.g., call scripts) for the review and approval of the Secretary; and
(10) Reporting to the Department, no later than 21 days after an institution receives from any local, State, Tribal, Federal, or foreign government or government entity a civil investigative demand, a subpoena, a request for documents or information, or other formal inquiry that is related to the marketing or recruitment of prospective students, the awarding of Federal financial aid for enrollment at the school, or the provision of educational services for which Federal aid is provided.
(f) If a proprietary institution seeks to convert to nonprofit status following a change in ownership, the following conditions will apply to the institution following the change in ownership, in addition to any other conditions that the Secretary may deem appropriate:
(1) The institution must continue to meet the requirements under § 668.28(a) until the Department has accepted, reviewed, and approved the institution's financial statements and compliance audits that cover two complete consecutive fiscal years in which the institution meets the requirements of paragraph (b)(16) of this section under its new ownership, or until the Department approves the institution's request to convert to nonprofit status, whichever is later.
(2) The institution must continue to meet the gainful employment requirements of subpart S of this part until the Department has accepted, reviewed, and approved the institution's financial statements and compliance audits that cover two complete consecutive fiscal years under its new ownership, or until the Department approves the institution's request to convert to nonprofit status, whichever is later.
(3) The institution must submit regular and timely reports on agreements entered into with a former owner of the institution or a natural person or entity related to or affiliated with the former owner of the institution, so long as the institution participates as a nonprofit institution.
(4) The institution may not advertise that it operates as a nonprofit institution for the purposes of title IV, HEA until the Department approves the institution's request to convert to nonprofit status.
(g) If an institution is initially certified as a nonprofit institution, or if it has undergone a change in ownership and seeks to convert to nonprofit status, the following conditions will apply to the institution upon initial certification or following the change in ownership, in addition to any other conditions that the Secretary may deem appropriate:
(1) The institution must submit reports on accreditor and State authorization agency actions and any new servicing agreements within 10 business days of receipt of the notice of the action or of entering into the agreement, as applicable, until the Department has accepted, reviewed, and approved the institution's financial statements and compliance audits that cover two complete consecutive fiscal years following initial certification, or two complete fiscal years after a change in ownership, or until the Department approves the institution's request to convert to nonprofit status, whichever is later.
(2) The institution must submit a report and copy of the communications from the Internal Revenue Service (IRS) or any State or foreign country related to tax-exempt or nonprofit status within 10 business days of receipt so long as the institution participates as a nonprofit institution.
(h)(1) A program participation agreement becomes effective on the date that the Secretary signs the agreement.
(2) A new program participation agreement supersedes any prior program participation agreement between the Secretary and the institution.
(i)(1) Except as provided in paragraphs (g) and (h) of this section, the Secretary terminates a program participation agreement through the proceedings in subpart G of this part.
(2) An institution may terminate a program participation agreement.
(3) If the Secretary or the institution terminates a program participation agreement under paragraph (f) of this section, the Secretary establishes the termination date.
(j) An institution's program participation agreement automatically expires on the date that—
(1) The institution changes ownership that results in a change in control as determined by the Secretary under 34 CFR part 600; or
(2) The institution's participation ends under the provisions of § 668.26(a) (1), (2), (4), or (7).
(k) An institution's program participation agreement no longer applies to or covers a location of the institution as of the date on which that location ceases to be a part of the participating institution.
To begin and to continue to participate in any title IV, HEA program, an institution must demonstrate to the Secretary that the institution is capable of adequately administering that program under each of the standards established in this section. The Secretary considers an institution to have that administrative capability if the institution—
(a) Administers the Title IV, HEA programs in accordance with all statutory provisions of or applicable to Title IV of the HEA, all applicable regulatory provisions prescribed under that statutory authority, and all applicable special arrangements, agreements, and limitations entered into under the authority of statutes applicable to Title IV of the HEA;
(b)(1) Designates a capable individual to be responsible for administering all the Title IV, HEA programs in which it participates and for coordinating those programs with the institution's other Federal and non-Federal programs of student financial assistance. The Secretary considers an individual to be “capable” under this paragraph if the individual is certified by the State in which the institution is located, if the State requires certification of financial aid administrators. The Secretary may consider other factors in determining whether an individual is capable, including, but not limited to, the individual's successful completion of Title IV, HEA program training provided or approved by the Secretary, and previous experience and documented success in administering the Title IV, HEA programs properly;
(2) Uses an adequate number of qualified persons to administer the Title IV, HEA programs in which the institution participates. The Secretary considers the following factors to determine whether an institution uses an adequate number of qualified persons—
(i) The number and types of programs in which the institution participates;
(ii) The number of applications evaluated;
(iii) The number of students who receive any student financial assistance at the institution and the amount of funds administered;
(iv) The financial aid delivery system used by the institution;
(v) The degree of office automation used by the institution in the administration of the Title IV, HEA programs;
(vi) The number and distribution of financial aid staff; and
(vii) The use of third-party servicers to aid in the administration of the Title IV, HEA programs;
(3) Communicates to the individual designated to be responsible for administering Title IV, HEA programs, all the information received by any institutional office that bears on a student's eligibility for Title IV, HEA program assistance; and
(4) Has written procedures for or written information indicating the responsibilities of the various offices with respect to the approval, disbursement, and delivery of Title IV, HEA program assistance and the preparation and submission of reports to the Secretary;
(c)(1) Administers Title IV, HEA programs with adequate checks and balances in its system of internal controls; and
(2) Divides the functions of authorizing payments and disbursing or delivering funds so that no office has responsibility for both functions with respect to any particular student aided under the programs. For example, the functions of authorizing payments and disbursing or delivering funds must be divided so that for any particular student aided under the programs, the two functions are carried out by at least two organizationally independent individuals who are not members of the same family, as defined in § 668.15, or who do not together exercise substantial control, as defined in § 668.15, over the institution;
(d)(1) Establishes and maintains records required under this part and the individual Title IV, HEA program regulations; and
(2)(i) Reports annually to the Secretary on any reasonable reimbursements paid or provided by a private education lender or group of lenders as described under section 140(d) of the Truth in Lending Act (15 U.S.C. 1631(d)) to any employee who is employed in the financial aid office of the institution or who otherwise has responsibilities with respect to education loans, including responsibilities involving the selection of lenders, or other financial aid of the institution, including—
(A) The amount for each specific instance of reasonable expenses paid or provided;
(B) The name of the financial aid official, other employee, or agent to whom the expenses were paid or provided;
(C) The dates of the activity for which the expenses were paid or provided; and
(D) A brief description of the activity for which the expenses were paid or provided.
(ii) Expenses are considered to be reasonable if the expenses—
(A) Meet the standards of and are paid in accordance with a State government reimbursement policy applicable to the entity; or
(B) Meet the standards of and are paid in accordance with the applicable Federal cost principles for reimbursement, if no State policy that is applicable to the entity exists.
(iii) The policy must be consistently applied to an institution's employees reimbursed under this paragraph;
(e) For purposes of determining student eligibility for assistance under a title IV, HEA program, establishes, publishes, and applies reasonable standards for measuring whether an otherwise eligible student is maintaining satisfactory academic progress in his or her educational program. The Secretary considers an institution's standards to be reasonable if the standards are in accordance with the provisions specified in § 668.34.
(f) Develops and applies an adequate system to identify and resolve discrepancies in the information that the institution receives from different sources with respect to a student's application for financial aid under Title IV, HEA programs. In determining whether the institution's system is adequate, the Secretary considers whether the institution obtains and reviews—
(1) All student aid applications, need analysis documents, Statements of Educational Purpose, Statements of Registration Status, and eligibility notification documents presented by or on behalf of each applicant;
(2) Any documents, including any copies of State and Federal income tax returns, that are normally collected by the institution to verify information received from the student or other sources; and
(3) Any other information normally available to the institution regarding a student's citizenship, previous educational experience, documentation of the student's social security number, or other factors relating to the student's eligibility for funds under the Title IV, HEA programs;
(g) Refers to the Office of Inspector General of the Department of Education for investigation—
(1) After conducting the review of an application provided for under paragraph (f) of this section, any credible information indicating that an applicant for Title IV, HEA program assistance may have engaged in fraud or other criminal misconduct in connection with his or her application. The type of information that an institution must refer is that which is relevant to the eligibility of the applicant for Title IV, HEA program assistance, or the amount of the assistance. Examples of this type of information are—
(i) False claims of independent student status;
(ii) False claims of citizenship;
(iii) Use of false identities;
(iv) Forgery of signatures or certifications; and
(v) False statements of income; and
(2) Any credible information indicating that any employee, third-party servicer, or other agent of the institution that acts in a capacity that involves the administration of the Title IV, HEA programs, or the receipt of funds under those programs, may have engaged in fraud, misrepresentation, conversion or breach of fiduciary responsibility, or other illegal conduct involving the Title IV, HEA programs. The type of information that an institution must refer is that which is relevant to the eligibility and funding of the institution and its students through the Title IV, HEA programs;
(h) Provides adequate financial aid counseling with clear and accurate information to students who apply for title IV, HEA program assistance. In determining whether an institution provides adequate counseling, the Secretary considers whether its counseling and financial aid communications advise students and families to accept the most beneficial types of financial assistance available to them and include information regarding—
(1) The cost of attendance of the institution as defined under section 472 of the HEA, including the individual components of those costs and a total of the estimated costs that will be owed directly to the institution, for students, based on their attendance status;
(2) The source and amount of each type of aid offered, separated by the type of the aid and whether it must be earned or repaid;
(3) The net price, as determined by subtracting total grant or scholarship aid included in paragraph (h)(2) of this section from the cost of attendance in paragraph (h)(1) of this section;
(4) The method by which aid is determined and disbursed, delivered, or applied to a student's account, and instructions and applicable deadlines for accepting, declining, or adjusting award amounts; and
(5) The rights and responsibilities of the student with respect to enrollment at the institution and receipt of financial aid, including the institution's refund policy, the requirements for the treatment of title IV, HEA program funds when a student withdraws under § 668.22, its standards of satisfactory progress, and other conditions that may alter the student's aid package;
(i) Has provided all program and fiscal reports and financial statements required for compliance with the provisions of this part and the individual program regulations in a timely manner;
(j) Shows no evidence of significant problems that affect, as determined by the Secretary, the institution's ability to administer a Title IV, HEA program and that are identified in—
(1) Reviews of the institution conducted by the Secretary, the Department of Education's Office of Inspector General, nationally recognized accrediting agencies, guaranty agencies as defined in 34 CFR part 682, the State agency or official by whose authority the institution is legally authorized to provide postsecondary education, or any other law enforcement agency; or
(2) Any findings made in any criminal, civil, or administrative proceeding;
(k)(1) Is not, and has not been—
(i) Debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or
(ii) Engaging in any activity that is a cause under 2 CFR 180.700 or 180.800, as adopted at 2 CFR 3485.12, for debarment or suspension under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; and
(2) Does not have any principal or affiliate of the institution (as those terms are defined in 2 CFR parts 180 and 3485), or any individual who exercises or previously exercised substantial control over the institution as defined in § 668.174(c)(3), who—
(i) Has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, Tribal, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds; or
(ii) Is a current or former principal or affiliate (as those terms are defined in 2 CFR parts 180 and 3485), or any individual who exercises or exercised substantial control as defined in § 668.174(c)(3), of another institution whose misconduct or closure contributed to liabilities to the Federal Government in excess of 5 percent of its title IV, HEA program funds in the award year in which the liabilities arose or were imposed;
(l) For an institution that seeks initial participation in a Title IV, HEA program, does not have more than 33 percent of its undergraduate regular students withdraw from the institution during the institution's latest completed award year. The institution must count all regular students who are enrolled during the latest completed award year, except those students who, during that period—
(1) Withdrew from, dropped out of, or were expelled from the institution;
(2) Were entitled to and actually received in a timely manner, a refund of 100 percent of their tuition and fees;
(m)(1) Has a cohort default rate—
(i) That is less than 25 percent for each of the three most recent fiscal years during which rates have been issued, to the extent those rates are calculated under subpart M of this part;
(ii) On or after 2014, that is less than 30 percent for at least two of the three most recent fiscal years during which the Secretary has issued rates for the institution under subpart N of this part; and
(iii) As defined in 34 CFR 674.5, on loans made under the Federal Perkins Loan Program to students for attendance at that institution that does not exceed 15 percent;
(2) Provided that—
(i) If the Secretary determines that an institution's administrative capability is impaired solely because the institution fails to comply with paragraph (m)(1) of this section, and the institution is not subject to a loss of eligibility under § 668.187(a) or § 668.206(a), the Secretary allows the institution to continue to participate in the title IV, HEA programs. In such a case, the Secretary may provisionally certify the institution in accordance with § 668.13(c) except as provided in paragraphs (m)(2)(ii) through (v) of this section;
(ii) An institution that fails to meet the standard of administrative capability under paragraph (m)(1)(ii) of this section based on two cohort default rates that are greater than or equal to 30 percent but less than or equal to 40 percent is not placed on provisional certification under paragraph (m)(2)(i) of this section if it—
(A) Has timely filed a request for adjustment or appeal under § 668.209, § 668.210, or § 668.212 with respect to the second such rate, and the request for adjustment or appeal is either pending or succeeds in reducing the rate below 30 percent;
(B) Has timely filed an appeal under § 668.213 after receiving the second such rate, and the appeal is either pending or successful; or
(C)(1) Has timely filed a participation rate index challenge or appeal under § 668.204(c) or § 668.214 with respect to either or both of the two rates, and the challenge or appeal is either pending or successful; or
(2) If the second rate is the most recent draft rate, and the institution has timely filed a participation rate challenge to that draft rate that is either pending or successful;
(iii) The institution may appeal the loss of full participation in a title IV, HEA program under paragraph (m)(2)(i) of this section by submitting an erroneous data appeal in writing to the Secretary in accordance with and on the grounds specified in § 668.192 or § 668.211 as applicable;
(iv) If the institution has 30 or fewer borrowers in the three most recent cohorts of borrowers used to calculate its cohort default rate under subpart N of this part, we will not provisionally certify it solely based on cohort default rates; and
(v) If a rate that would otherwise potentially subject the institution to provisional certification under paragraphs (m)(1)(ii) and (m)(2)(i) of this section is calculated as an average rate, we will not provisionally certify it solely based on cohort default rates;
(n) Has not been subject to a significant negative action or a finding as by a State or Federal agency, a court, or an accrediting agency, where the basis of the action is repeated or unresolved, such as non-compliance with a prior enforcement order or supervisory directive, and the institution has not lost eligibility to participate in another Federal educational assistance program due to an administrative action against the institution;
(o) Participates in the electronic processes that the Secretary—
(1) Provides at no substantial charge to the institution; and
(2) Identifies through a notice published in the
(p) Develops and follows adequate procedures to evaluate the validity of a student's high school diploma if the institution or the Secretary has reason to believe that the high school diploma is not valid or was not obtained from an entity that provides secondary school education, consistent with the following requirements:
(1) Adequate procedures to evaluate the validity of a student's high school diploma must include—
(i) Obtaining documentation from the high school that confirms the validity of the high school diploma, including at least one of the following—
(A) Transcripts;
(B) Written descriptions of course requirements; or
(C) Written and signed statements by principals or executive officers at the high school attesting to the rigor and quality of coursework at the high school;
(ii) If the high school is regulated or overseen by a State agency, Tribal agency, or Bureau of Indian Education, confirming with, or receiving documentation from that agency that the high school is recognized or meets requirements established by that agency; and
(iii) If the Secretary has published a list of high schools that issue invalid high school diplomas, confirming that the high school does not appear on that list; and
(2) A high school diploma is not valid if it—
(i) Did not meet the applicable requirements established by the appropriate State agency, Tribal agency, or Bureau of Indian Education in the State where the high school is located;
(ii) Has been determined to be invalid by the Department, the appropriate State agency in the State where the high school was located, or through a court proceeding; or
(iii) Was obtained from an entity that requires little or no secondary instruction or coursework to obtain a high school diploma, including through a test that does not meet the requirements for a recognized equivalent of a high school diploma under 34 CFR 600.2;
(q) Provides adequate career services to eligible students who receive title IV, HEA program assistance. In determining whether an institution provides adequate career services, the Secretary considers—
(1) The share of students enrolled in programs designed to prepare students for gainful employment in a recognized occupation;
(2) The number and distribution of career services staff;
(3) The career services the institution has promised to its students; and
(4) The presence of institutional partnerships with recruiters and employers who regularly hire graduates of the institution;
(r) Provides students, within 45 days of successful completion of other required coursework, geographically accessible clinical or externship opportunities related to and required for completion of the credential or licensure in a recognized occupation;
(s) Disburses funds to students in a timely manner that best meets the students' needs. The Secretary does not consider the manner of disbursements to be consistent with students' needs if, among other conditions—
(1) The Secretary is aware of multiple valid and relevant student complaints;
(2) The institution has high rates of withdrawals attributable to delays in disbursements;
(3) The institution has delayed disbursements until after the point at which students have earned 100 percent of their eligibility for title IV, HEA funds, in accordance with the return to title IV, HEA requirements in § 668.22; or
(4) The institution has delayed disbursements with the effect of ensuring the institution passes the 90/10 ratio;
(t) Offers gainful employment (GE) programs subject to subpart S of this part and at least half of its total title IV, HEA funds in the most recent award year are not from programs that are “failing” under subpart S of this part;
(u) Does not engage in substantial misrepresentations, as defined in subpart F of this part, or aggressive and deceptive recruitment tactics or conduct, including as defined in subpart R of this part; and
(v) Does not otherwise appear to lack the ability to administer the title IV, HEA programs competently.
(a) General. (1) An institution may not deny readmission to a person who is a member of, applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform, service in the uniformed services on the basis of that membership, application for membership, performance of service, application for service, or obligation to perform service.
(2)(i) An institution must promptly readmit to the institution a person described in paragraph (a)(1) of this section with the same academic status as the student had when the student last attended the institution or was last admitted to the institution, but did not begin attendance because of that membership, application for membership, performance of service, application for service, or obligation to perform service.
(ii) “Promptly readmit” means that the institution must readmit the student into the next class or classes in the student's program beginning after the student provides notice of his or her intent to reenroll, unless the student requests a later date of readmission or unusual circumstances require the institution to admit the student at a later date.
(iii) To readmit a person with the “same academic status” means that the institution admits the student—
(A) To the same program to which he or she was last admitted by the institution or, if that exact program is no longer offered, the program that is most similar to that program, unless the student requests or agrees to admission to a different program;
(B) At the same enrollment status that the student last held at the institution, unless the student requests or agrees to admission at a different enrollment status;
(C) With the same number of credit hours or clock hours completed previously by the student, unless the student is readmitted to a different program to which the completed credit hours or clock hours are not transferable;
(D) With the same academic standing (e.g., with the same satisfactory academic progress status) the student previously had; and
(E)(1) If the student is readmitted to the same program, for the first academic year in which the student returns, assessing—
(i) The tuition and fee charges that the student was or would have been assessed for the academic year during which the student left the institution; or
(ii) Up to the amount of tuition and fee charges that other students in the program are assessed for that academic year, if veterans' education benefits, as defined in section 480(c) of the HEA, or other servicemember education benefits, will pay the amount in excess of the tuition and fee charges assessed for the academic year in which the student left the institution; or
(2) If the student is admitted to a different program, and for subsequent academic years for a student admitted to the same program, assessing no more than the tuition and fee charges that other students in the program are assessed for that academic year.
(iv)(A) If the institution determines that the student is not prepared to resume the program with the same academic status at the point where the student left off, or will not be able to complete the program, the institution must make reasonable efforts at no extra cost to the student to help the student become prepared or to enable the student to complete the program including, but not limited to, providing refresher courses at no extra cost to the student and allowing the student to retake a pretest at no extra cost to the student.
(B) The institution is not required to readmit the student on his or her return if—
(1) After reasonable efforts by the institution, the institution determines that the student is not prepared to resume the program at the point where he or she left off;
(2) After reasonable efforts by the institution, the institution determines that the student is unable to complete the program; or
(3) The institution determines that there are no reasonable efforts the institution can take to prepare the student to resume the program at the point where he or she left off or to enable the student to complete the program.
(C)(1) “Reasonable efforts” means actions that do not place an undue hardship on the institution.
(2) “Undue hardship” means an action requiring significant difficulty or expense when considered in light of the overall financial resources of the institution and the impact otherwise of such action on the operation of the institution.
(D) The institution carries the burden to prove by a preponderance of the evidence that the student is not prepared to resume the program with the same academic status at the point where the student left off, or that the student will not be able to complete the program.
(3) This section applies to an institution that has continued in operation since the student ceased attending or was last admitted to the institution but did not begin attendance, notwithstanding any changes of ownership of the institution since the student ceased attendance.
(4) The requirements of this section supersede any State law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this section for the period of enrollment during which the student resumes attendance, and continuing so long as the institution is unable to comply with such requirements through other means.
(b) Service in the uniformed services. For purposes of this section, service in the uniformed services means service, whether voluntary or involuntary, in the Armed Forces, including service by a member of the National Guard or Reserve, on active duty, active duty for training, or full-time National Guard duty under Federal authority, for a period of more than 30 consecutive days under a call or order to active duty of more than 30 consecutive days.
(c) Readmission procedures. (1) Any student whose absence from an institution is necessitated by reason of service in the uniformed services shall be entitled to readmission to the institution if—
(i) Except as provided in paragraph (d) of this section, the student (or an appropriate officer of the Armed Forces or official of the Department of Defense) gives advance oral or written notice of such service to an office designated by the institution, and provides such notice as far in advance as is reasonable under the circumstances;
(ii) The cumulative length of the absence and of all previous absences from that institution by reason of service in the uniformed services, including only the time the student spends actually performing service in the uniformed services, does not exceed five years; and
(iii) Except as provided in paragraph (f) of this section, the student gives oral or written notice of his or her intent to return to an office designated by the institution—
(A) For a student who completes a period of service in the uniformed services, not later than three years after the completion of the period of service; or
(B) For a student who is hospitalized for or convalescing from an illness or injury incurred in or aggravated during the performance of service in the uniformed services, not later than two years after the end of the period that is necessary for recovery from such illness or injury.
(2)(i) An institution must designate one or more offices at the institution that a student may contact to provide notification of service required by paragraph (c)(1)(i) of this section and notification of intent to return required by paragraph (c)(1)(iii) of this section.
(ii) An institution may not require that the notice provided by the student under paragraph (c)(1)(i) or (c)(1)(iii) of this section follow any particular format.
(iii) The notice provided by the student under paragraph (c)(1)(i) of this section—
(A) May not be subject to any rule for timeliness; timeliness must be determined by the facts in any particular case; and
(B) Does not need to indicate whether the student intends to return to the institution.
(iv) For purposes of paragraph (c)(1)(i) of this section, an “appropriate officer” is a commissioned, warrant, or noncommissioned officer authorized to give such notice by the military service concerned.
(d) Exceptions to advance notice. (1) No notice is required under paragraph (c)(1)(i) of this section if the giving of such notice is precluded by military necessity, such as—
(i) A mission, operation, exercise, or requirement that is classified; or
(ii) A pending or ongoing mission, operation, exercise, or requirement that may be compromised or otherwise adversely affected by public knowledge.
(2) Any student (or an appropriate officer of the Armed Forces or official of the Department of Defense) who did not give advance written or oral notice of service to the appropriate official at the institution in accordance with paragraph (c)(1) of this section may meet the notice requirement by submitting, at the time the student seeks readmission, an attestation to the institution that the student performed service in the uniformed services that necessitated the student's absence from the institution.
(e) Cumulative length of absence. For purposes of paragraph (c)(1)(ii) of this section, a student's cumulative length of absence from an institution does not include any service—
(1) That is required, beyond five years, to complete an initial period of obligated service;
(2) During which the student was unable to obtain orders releasing the student from a period of service in the uniformed services before the expiration of the five-year period and such inability was through no fault of the student; or
(3) Performed by a member of the Armed Forces (including the National Guard and Reserves) who is—
(i) Ordered to or retained on active duty under—
(A) 10 U.S.C. 688 (involuntary active duty by a military retiree);
(B) 10 U.S.C. 12301(a) (involuntary active duty in wartime);
(C) 10 U.S.C. 12301(g) (retention on active duty while in captive status);
(D) 10 U.S.C. 12302 (involuntary active duty during a national emergency for up to 24 months);
(E) 10 U.S.C. 12304 (involuntary active duty for an operational mission for up to 270 days);
(F) 10 U.S.C. 12305 (involuntary retention on active duty of a critical person during time of crisis or other specific conditions);
(G) 14 U.S.C. 331 (involuntary active duty by retired Coast Guard officer);
(H) 14 U.S.C. 332 (voluntary active duty by retired Coast Guard officer);
(I) 14 U.S.C. 359 (involuntary active duty by retired Coast Guard enlisted member);
(J) 14 U.S.C. 360 (voluntary active duty by retired Coast Guard enlisted member);
(K) 14 U.S.C. 367 (involuntary retention of Coast Guard enlisted member on active duty); or
(L) 14 U.S.C. 712 (involuntary active duty by Coast Guard Reserve member for natural or man-made disasters);
(ii) Ordered to or retained on active duty (other than for training) under any provision of law because of a war or national emergency declared by the President or the Congress, as determined by the Secretary concerned;
(iii) Ordered to active duty (other than for training) in support, as determined by the Secretary concerned, of an operational mission for which personnel have been ordered to active duty under section 12304 of title 10, United States Code;
(iv) Ordered to active duty in support, as determined by the Secretary concerned, of a critical mission or requirement of the Armed Forces (including the National Guard or Reserve); or
(v) Called into Federal service as a member of the National Guard under chapter 15 of title 10, United States Code, or section 12406 of title 10, United States Code (i.e., called to respond to an invasion, danger of invasion, rebellion, danger of rebellion, insurrection, or the inability of the President with regular forces to execute the laws of the United States).
(f) Notification of intent to reenroll. A student who fails to apply for readmission within the periods described in paragraph (c)(1)(iii) of this section does not automatically forfeit eligibility for readmission to the institution, but is subject to the institution's established leave of absence policy and general practices.
(g) Documentation. (1) A student who submits an application for readmission to an institution under paragraph (c)(1)(iii) of this section shall provide to the institution documentation to establish that—
(i) The student has not exceeded the service limitation in paragraph (c)(1)(ii) of this section; and
(ii) The student's eligibility for readmission has not been terminated due to an exception in paragraph (h) of this section.
(2)(i) Documents that satisfy the requirements of paragraph (g)(1) of this section include, but are not limited to, the following:
(A) DD (Department of Defense) 214 Certificate of Release or Discharge from Active Duty.
(B) Copy of duty orders prepared by the facility where the orders were fulfilled carrying an endorsement indicating completion of the described service.
(C) Letter from the commanding officer of a Personnel Support Activity or someone of comparable authority.
(D) Certificate of completion from military training school.
(E) Discharge certificate showing character of service.
(F) Copy of extracts from payroll documents showing periods of service.
(G) Letter from National Disaster Medical System (NDMS) Team Leader or Administrative Officer verifying dates and times of NDMS training or Federal activation.
(ii) The types of documents that are necessary to establish eligibility for readmission will vary from case to case. Not all of these documents are available or necessary in every instance to establish readmission eligibility.
(3) An institution may not delay or attempt to avoid a readmission of a student under this section by demanding documentation that does not exist, or is not readily available, at the time of readmission.
(h) Termination of readmission eligibility. A student's eligibility for readmission to an institution under this section by reason of such student's service in the uniformed services terminates upon the occurrence of any of the following events:
(1) A separation of such person from the Armed Forces (including the National Guard and Reserves) with a dishonorable or bad conduct discharge.
(2) A dismissal of a commissioned officer permitted under section 1161(a) of title 10, United States Code by sentence of a general court-martial; in commutation of a sentence of a general court-martial; or, in time of war, by order of the President.
(3) A dropping of a commissioned officer from the rolls pursuant to section 1161(b) of title 10, United States Code due to absence without authority for at least three months; separation by reason of a sentence to confinement adjudged by a court-martial; or, a sentence to confinement in a Federal or State penitentiary or correctional institution.
(a) Before an institution may disburse title IV, HEA program funds to a student who previously attended another eligible institution, the institution must use information it obtains from the Secretary, through the National Student Loan Data System (NSLDS) or its successor system, to determine—
(1) Whether the student is in default on any title IV, HEA program loan;
(2) Whether the student owes an overpayment on any title IV, HEA program grant or Federal Perkins Loan;
(3) For the award year for which a Federal Pell Grant, an ACG, a National SMART Grant, or a TEACH Grant is requested, the student's Scheduled Federal Pell Grant, ACG, National SMART Grant, or a TEACH Grant Award and the amount of Federal Pell Grant, ACG, National SMART Grant, or a TEACH Grant funds disbursed to the student;
(4) The outstanding principal balance of loans made to the student under each of the title IV, HEA loan programs; and
(5) For the academic year for which title IV, HEA aid is requested, the amount of, and period of enrollment for, loans made to the student under each of the title IV, HEA loan programs.
(b)(1) If a student transfers from one institution to another institution during the same award year, the institution to which the student transfers must request from the Secretary, through NSLDS, updated information about that student so it can make the determinations required under paragraph (a) of this section; and
(2) The institution may not make a disbursement to that student for seven days following its request, unless it receives the information from NSLDS in response to its request or obtains that information directly by accessing NSLDS, and the information it receives allows it to make that disbursement.
(a) A noncredit or reduced credit remedial course is a course of study designed to increase the ability of a student to pursue a course of study leading to a certificate or degree.
(1) A noncredit remedial course is one for which no credit is given toward a certificate or degree; and
(2) A reduced credit remedial course is one for which reduced credit is given toward a certificate or degree.
(b) Except as provided in paragraphs (c) and (d) of this section, in determining a student's enrollment status and cost of attendance, an institution shall include any noncredit or reduced credit remedial course in which the student is enrolled. The institution shall attribute the number of credit or clock hours to a noncredit or reduced credit remedial course by—
(1) Calculating the number of classroom and homework hours required for that course;
(2) Comparing those hours with the hours required for nonremedial courses in a similar subject; and
(3) Giving the remedial course the same number of credit or clock hours it gives the nonremedial course with the most comparable classroom and homework requirements.
(c) In determining a student's enrollment status under the Title IV, HEA programs or a student's cost of attendance under the campus-based, FFEL, and Direct Loan programs, an institution may not take into account any noncredit or reduced credit remedial course if—
(1) That course is part of a program of instruction leading to a high school diploma or the recognized equivalent of a high school diploma, even if the course is necessary to enable the student to complete a degree or certificate program;
(2) The educational level of instruction provided in the noncredit or reduced credit remedial course is below the level needed to pursue successfully the degree or certificate program offered by that institution after one year in that remedial course; or
(3) Except for a course in English as a second language, the educational level of instruction provided in that course is below the secondary level. For purposes of this section, the Secretary considers a course to be below the secondary level if any of the following entities determine that course to be below the secondary level:
(i) The State agency that legally authorized the institution to provide postsecondary education.
(ii) In the case of an accredited or preaccredited institution, the nationally recognized accrediting agency or association that accredits or preaccredits the institution.
(iii) In the case of a public postsecondary vocational institution that is approved by a State agency recognized for the approval of public postsecondary vocational education, the State agency recognized for the approval of public postsecondary vocational education that approves the institution.
(iv) The institution.
(d) Except as set forth in paragraph (f) of this section, an institution may not take into account more than one academic year's worth of noncredit or reduced credit remedial coursework in determining—
(1) A student's enrollment status under the title IV, HEA programs; and
(2) A student's cost of attendance under the campus-based, FFEL, and Direct Loan programs.
(e) One academic year's worth of noncredit or reduced credit remedial coursework is equivalent to—
(1) Thirty semester or 45 quarter hours; or
(2) Nine hundred clock hours.
(f) Courses in English as a second language do not count against the one-year academic limitation contained in paragraph (d) of this section.
(a) If a student does not begin attendance in a payment period or period of enrollment—
(1) The institution must return all title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for that payment period or period of enrollment, for Federal Perkins Loan, FSEOG TEACH Grant, Federal Pell Grant, ACG, and National SMART Grant program funds; and
(2) For FFEL and Direct Loan funds—
(i)(A) The institution must return all FFEL and Direct Loan funds that were credited to the student's account at the institution for that payment period or period of enrollment; and
(B) The institution must return the amount of payments made directly by or on behalf of the student to the institution for that payment period or period of enrollment, up to the total amount of the loan funds disbursed;
(ii) For remaining amounts of FFEL or Direct Loan funds disbursed directly to the student for that payment period or period of enrollment, including funds that are disbursed directly to the student by the lender for a study-abroad program in accordance with § 682.207(b)(1)(v)(C)(1) or for a student enrolled in a foreign school in accordance with § 682.207(b)(1)(v)(D), the institution is not responsible for returning the funds, but must immediately notify the lender or the Secretary, as appropriate, when it becomes aware that the student will not or has not begun attendance so that the lender or Secretary will issue a final demand letter to the borrower in accordance with 34 CFR 682.412 or 34 CFR 685.211, as appropriate; and
(iii) Notwithstanding paragraph (a)(2)(ii) of this section, if an institution knew that a student would not begin attendance prior to disbursing FFEL or Direct Loan funds directly to the student for that payment period or period of enrollment (e.g., the student notified the institution that he or she would not attend, or the institution expelled the student), the institution must return those funds.
(b) The institution must return those funds for which it is responsible under paragraph (a) of this section to the respective title IV, HEA program as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance.
(c) For purposes of this section, the Secretary considers that a student has not begun attendance in a payment period or period of enrollment if the institution is unable to document the student's attendance at any class during the payment period or period of enrollment.
(d) In accordance with procedures established by the Secretary or FFEL Program lender, an institution returns title IV, HEA funds timely if—
(1) The institution deposits or transfers the funds into the bank account it maintains under § 668.163 as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance;
(2) The institution initiates an electronic funds transfer (EFT) as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance;
(3) The institution initiates an electronic transaction, as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance, that informs an FFEL lender to adjust the borrower's loan account for the amount returned; or
(4) The institution issues a check as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance. An institution does not satisfy this requirement if—
(i) The institution's records show that the check was issued more than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance; or
(ii) The date on the cancelled check shows that the bank used by the Secretary or FFEL Program lender endorsed that check more than 45 days after the date that the institution becomes aware that the student will not or has not begun attendance.
(a) General. (1) When a recipient of title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with paragraph (e) of this section.
(2)(i) Except as provided in paragraphs (a)(2)(ii) and (a)(2)(iii) of this section, a student is considered to have withdrawn from a payment period or period of enrollment if—
(A) In the case of a program that is measured in credit hours, the student does not complete all the days in the payment period or period of enrollment that the student was scheduled to complete;
(B) In the case of a program that is measured in clock hours, the student does not complete all of the clock hours and weeks of instructional time in the payment period or period of enrollment that the student was scheduled to complete;
(C) For a student in a standard or nonstandard-term program, excluding a subscription-based program, the student is not scheduled to begin another course within a payment period or period of enrollment for more than 45 calendar days after the end of the module the student ceased attending, unless the student is on approved leave of absence, as defined in paragraph (d) of this section; or
(D) For a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
(ii)(A) Notwithstanding paragraph (a)(2)(i) of this section—
(1) A student who completes all the requirements for graduation from his or her program before completing the days or hours in the period that he or she was scheduled to complete is not considered to have withdrawn;
(2) In a program offered in modules, a student is not considered to have withdrawn if the student successfully completes—
(i) One module that includes 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules;
(ii) A combination of modules that when combined contain 49 percent or more of the number of days in the payment period, excluding scheduled breaks of five or more consecutive days and all days between modules; or
(iii) Coursework equal to or greater than the coursework required for the institution's definition of a half-time student under § 668.2 for the payment period;
(3) For a payment period or period of enrollment in which courses in the program are offered in modules—
(i) A student is not considered to have withdrawn if the institution obtains written confirmation from the student at the time that would have been a withdrawal of the date that he or she will attend a module that begins later in the same payment period or period of enrollment; and
(ii) For standard and nonstandard-term programs, excluding subscription-based programs, that module begins no later than 45 calendar days after the end of the module the student ceased attending;
(4) For a subscription-based program, a student is not considered to have withdrawn if the institution obtains written confirmation from the student at the time that would have been a withdrawal of the date that he or she will resume attendance, and that date occurs within the same payment period or period of enrollment and is no later than 60 calendar days after the student ceased attendance; and
(5) For a non-term program, a student is not considered to have withdrawn if the institution obtains written confirmation from the student at the time that would have been a withdrawal of the date that he or she will resume attendance, and that date is no later than 60 calendar days after the student ceased attendance.
(B) If an institution has obtained the written confirmation of future attendance in accordance with paragraph (a)(2)(ii)(A) of this section—
(1) A student may change the date of return that begins later in the same payment period or period of enrollment, provided that the student does so in writing prior to the return date that he or she had previously confirmed;
(2) For standard and nonstandard-term programs, excluding subscription-based programs the later module that he or she will attend begins no later than 45 calendar days after the end of the module the student ceased attending; and
(3) For non-term and subscription-based programs, the student's program permits the student to resume attendance no later than 60 calendar days after the student ceased attendance.
(C) If an institution obtains written confirmation of future attendance in accordance with paragraph (a)(2)(ii)(A) of this section and, if applicable, paragraph (a)(2)(ii)(B) of this section, but the student does not return as scheduled—
(1) The student is considered to have withdrawn from the payment period or period of enrollment; and
(2) The student's withdrawal date and the total number of calendar days in the payment period or period of enrollment would be the withdrawal date and total number of calendar days that would have applied if the student had not provided written confirmation of a future date of attendance in accordance with paragraph (a)(2)(ii)(A) of this section.
(iii)(A) If a student withdraws from a term-based credit-hour program offered in modules during a payment period or period of enrollment and reenters the same program prior to the end of the period, subject to conditions established by the Secretary, the student is eligible to receive any title IV, HEA program funds for which he or she was eligible prior to withdrawal, including funds that were returned by the institution or student under the provisions of this section, provided the student's enrollment status continues to support the full amount of those funds.
(B) In accordance with § 668.4(f), if a student withdraws from a clock-hour or non-term credit hour program during a payment period or period of enrollment and then reenters the same program within 180 calendar days, the student remains in that same period when he or she returns and, subject to conditions established by the Secretary, is eligible to receive any title IV, HEA program funds for which he or she was eligible prior to withdrawal, including funds that were returned by the institution or student under the provisions of this section.
(3) For purposes of this section, “title IV grant or loan assistance” includes only assistance from the Direct Loan, Federal Pell Grant, Iraq and Afghanistan Service Grant, TEACH Grant, and FSEOG programs, not including the non-Federal share of FSEOG awards if an institution meets its FSEOG matching share by the individual recipient method or the aggregate method.
(4) If the total amount of title IV grant or loan assistance, or both, that the student earned as calculated under paragraph (e)(1) of this section is less than the amount of title IV grant or loan assistance that was disbursed to the student or on behalf of the student in the case of a PLUS loan, as of the date of the institution's determination that the student withdrew—
(i) The difference between these amounts must be returned to the title IV programs in accordance with paragraphs (g) and (h) of this section in the order specified in paragraph (i) of this section; and
(ii) No additional disbursements may be made to the student for the payment period or period of enrollment.
(5) If the total amount of title IV grant or loan assistance, or both, that the student earned as calculated under paragraph (e)(1) of this section is greater than the total amount of title IV grant or loan assistance, or both, that was disbursed to the student or on behalf of the student in the case of a PLUS loan, as of the date of the institution's determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement in accordance with paragraph (a)(6) of this section and § 668.164(i).
(6)(i) A post-withdrawal disbursement must be made from available grant funds before available loan funds.
(ii)(A) If outstanding charges exist on the student's account, the institution may credit the student's account up to the amount of outstanding charges in accordance with § 668.164(c) with all or a portion of any—
(1) Grant funds that make up the post-withdrawal disbursement; and
(2) Loan funds that make up the post-withdrawal disbursement only after obtaining confirmation from the student, or parent in the case of a parent PLUS loan, that they still wish to have the loan funds disbursed in accordance with paragraph (a)(6)(iii) of this section.
(B)(1) The institution must disburse directly to a student any amount of a post-withdrawal disbursement of grant funds that is not credited to the student's account. The institution must make the disbursement as soon as possible, but no later than 45 days after the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(2) The institution must offer to disburse directly to a student, or parent in the case of a parent PLUS loan, any amount of a post-withdrawal disbursement of loan funds that is not credited to the student's account, in accordance with paragraph (a)(6)(iii) of this section.
(3) The institution must make a direct disbursement of any loan funds that make up the post-withdrawal disbursement only after obtaining the student's, or parent's in the case of a parent PLUS loan, confirmation that the student or parent still wishes to have the loan funds disbursed in accordance with paragraph (a)(6)(iii) of this section.
(iii)(A) The institution must provide within 30 days of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section, a written notification to the student, or parent in the case of parent PLUS loan, that—
(1) Requests confirmation of any post-withdrawal disbursement of loan funds that the institution wishes to credit to the student's account in accordance with paragraph (a)(6)(ii)(A)(2) of this section, identifying the type and amount of those loan funds and explaining that a student, or parent in the case of a parent PLUS loan, may accept or decline some or all of those funds;
(2) Requests confirmation of any post-withdrawal disbursement of loan funds that the student, or parent in the case of a parent PLUS loan, can receive as a direct disbursement, identifying the type and amount of these title IV funds and explaining that the student, or parent in the case of a parent PLUS loan, may accept or decline some or all of those funds;
(3) Explains that a student, or parent in the case of a parent PLUS loan, who does not confirm that a post-withdrawal disbursement of loan funds may be credited to the student's account may not receive any of those loan funds as a direct disbursement unless the institution concurs;
(4) Explains the obligation of the student, or parent in the case of a parent PLUS loan, to repay any loan funds he or she chooses to have disbursed; and
(5) Advises the student, or parent in the case of a parent PLUS loan, that no post-withdrawal disbursement of loan funds will be made, unless the institution chooses to make a post-withdrawal disbursement based on a late response in accordance with paragraph (a)(6)(iii)(C) of this section, if the student or parent in the case of a parent PLUS loan, does not respond within 14 days of the date that the institution sent the notification, or a later deadline set by the institution.
(B) The deadline for a student, or parent in the case of a parent PLUS loan, to accept a post-withdrawal disbursement under paragraph (a)(6)(iii)(A) of this section must be the same for both a confirmation of a direct disbursement of the post-withdrawal disbursement of loan funds and a confirmation of a post-withdrawal disbursement of loan funds to be credited to the student's account.
(C) If the student, or parent in the case of a parent PLUS loan, submits a timely response that confirms that they wish to receive all or a portion of a direct disbursement of the post-withdrawal disbursement of loan funds, or confirms that a post-withdrawal disbursement of loan funds may be credited to the student's account, the institution must disburse the funds in the manner specified by the student, or parent in the case of a parent PLUS loan, as soon as possible, but no later than 180 days after the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(D) If a student, or parent in the case of a parent PLUS loan, submits a late response to the institution's notice requesting confirmation, the institution may make the post-withdrawal disbursement of loan funds as instructed by the student, or parent in the case of a parent PLUS loan (provided the institution disburses all the funds accepted by the student, or parent in the case of a parent PLUS loan), or decline to do so.
(E) If a student, or parent in the case of a parent PLUS loan, submits a late response to the institution and the institution does not choose to make the post-withdrawal disbursement of loan funds, the institution must inform the student, or parent in the case of a parent PLUS loan, in writing of the outcome of the post-withdrawal disbursement request.
(F) If the student, or parent in the case of a parent PLUS loan, does not respond to the institution's notice, no portion of the post-withdrawal disbursement of loan funds that the institution wishes to credit to the student's account, nor any portion of loan funds that would be disbursed directly to the student, or parent in the case of a parent PLUS loan, may be disbursed.
(iv) An institution must document in the student's file the result of any notification made in accordance with paragraph (a)(6)(iii) of this section of the student's right to cancel all or a portion of loan funds or of the student's right to accept or decline loan funds, and the final determination made concerning the disbursement.
(b) Withdrawal date for a student who withdraws from an institution that is required to take attendance. (1) For purposes of this section, for a student who ceases attendance at an institution that is required to take attendance, including a student who does not return from an approved leave of absence, as defined in paragraph (d) of this section, or a student who takes a leave of absence that does not meet the requirements of paragraph (d) of this section, the student's withdrawal date is the last date of academic attendance as determined by the institution from its attendance records.
(2) An institution must document a student's withdrawal date determined in accordance with paragraph (b)(1) of this section and maintain the documentation as of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(3)(i) An institution is required to take attendance if—
(A) An outside entity (such as the institution's accrediting agency or a State agency) has a requirement that the institution take attendance;
(B) The institution itself has a requirement that its instructors take attendance; or
(C) The institution or an outside entity has a requirement that can only be met by taking attendance or a comparable process, including, but not limited to, requiring that students in a program demonstrate attendance in the classes of that program, or a portion of that program.
(ii) If, in accordance with paragraph (b)(3)(i) of this section, an institution is required to take attendance or requires that attendance be taken for only some students, the institution must use its attendance records to determine a withdrawal date in accordance with paragraph (b)(1) of this section for those students.
(iii)(A) If, in accordance with paragraph (b)(3)(i) of this section, an institution is required to take attendance, or requires that attendance be taken, for a limited period, the institution must use its attendance records to determine a withdrawal date in accordance with paragraph (b)(3)(i) of this section for that limited period.
(B) A student in attendance the last time attendance is required to be taken during the limited period identified in paragraph (b)(3)(iii)(A) of this section who subsequently stops attending during the payment period will be treated as a student for whom the institution was not required to take attendance.
(iv) If an institution is required to take attendance or requires that attendance be taken, on only one specified day to meet a census reporting requirement, the institution is not considered to take attendance.
(c) Withdrawal date for a student who withdraws from an institution that is not required to take attendance. (1) For purposes of this section, for a student who ceases attendance at an institution that is not required to take attendance, the student's withdrawal date is—
(i) The date, as determined by the institution, that the student began the withdrawal process prescribed by the institution;
(ii) The date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw;
(iii) If the student ceases attendance without providing official notification to the institution of his or her withdrawal in accordance with paragraph (c)(1)(i) or (c)(1)(ii) of this section, the mid-point of the payment period (or period of enrollment, if applicable);
(iv) If the institution determines that a student did not begin the institution's withdrawal process or otherwise provide official notification (including notice from an individual acting on the student's behalf) to the institution of his or her intent to withdraw because of illness, accident, grievous personal loss, or other such circumstances beyond the student's control, the date that the institution determines is related to that circumstance;
(v) If a student does not return from an approved leave of absence as defined in paragraph (d) of this section, the date that the institution determines the student began the leave of absence; or
(vi) If a student takes a leave of absence that does not meet the requirements of paragraph (d) of this section, the date that the student began the leave of absence.
(2)(i)(A) An institution may allow a student to rescind his or her official notification to withdraw under paragraph (c)(1)(i) or (ii) of this section by filing a written statement that he or she is continuing to participate in academically-related activities and intends to complete the payment period or period of enrollment.
(B) If the student subsequently ceases to attend the institution prior to the end of the payment period or period of enrollment, the student's rescission is negated and the withdrawal date is the student's original date under paragraph (c)(1)(i) or (ii) of this section, unless a later date is determined under paragraph (c)(3) of this section.
(ii) If a student both begins the withdrawal process prescribed by the institution and otherwise provides official notification of his or her intent to withdraw in accordance with paragraphs (c)(1)(i) and (c)(1)(ii) of this section respectively, the student's withdrawal date is the earlier date unless a later date is determined under paragraph (c)(3) of this section.
(3) Notwithstanding paragraphs (c)(1) and (2) of this section, an institution that is not required to take attendance may use as the student's withdrawal date a student's last date of attendance at an academically-related activity provided that the institution documents that the activity is academically related and documents the student's attendance at the activity.
(4) An institution must document a student's withdrawal date determined in accordance with paragraphs (c)(1), (2), and (3) of this section and maintain the documentation as of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section.
(5)(i) “Official notification to the institution” is a notice of intent to withdraw that a student provides to an office designated by the institution.
(ii) An institution must designate one or more offices at the institution that a student may readily contact to provide official notification of withdrawal.
(d) Approved leave of absence. (1) For purposes of this section (and, for a title IV, HEA program loan borrower, for purposes of terminating the student's in-school status), an institution does not have to treat a leave of absence as a withdrawal if it is an approved leave of absence. A leave of absence is an approved leave of absence if—
(i) The institution has a formal policy regarding leaves of absence;
(ii) The student followed the institution's policy in requesting the leave of absence;
(iii) The institution determines that there is a reasonable expectation that the student will return to the school;
(iv) The institution approved the student's request in accordance with the institution's policy;
(v) The leave of absence does not involve additional charges by the institution;
(vi) The number of days in the approved leave of absence, when added to the number of days in all other approved leaves of absence, does not exceed 180 days in any 12-month period;
(vii) Except for a clock hour or non-term credit hour program, or a subscription-based program, upon the student's return from the leave of absence, the student is permitted to complete the coursework he or she began prior to the leave of absence; and
(viii) If the student is a title IV, HEA program loan recipient, the institution explains to the student, prior to granting the leave of absence, the effects that the student's failure to return from a leave of absence may have on the student's loan repayment terms, including the exhaustion of some or all of the student's grace period.
(2) If a student does not resume attendance at the institution at or before the end of a leave of absence that meets the requirements of this section, the institution must treat the student as a withdrawal in accordance with the requirements of this section.
(3) For purposes of this paragraph—
(i) The number of days in a leave of absence is counted beginning with the first day of the student's initial leave of absence in a 12-month period.
(ii) A “12-month period” begins on the first day of the student's initial leave of absence.
(iii) An institution's leave of absence policy is a “formal policy” if the policy—
(A) Is in writing and publicized to students; and
(B) Requires students to provide a written, signed, and dated request, that includes the reason for the request, for a leave of absence prior to the leave of absence. However, if unforeseen circumstances prevent a student from providing a prior written request, the institution may grant the student's request for a leave of absence, if the institution documents its decision and collects the written request at a later date.
(e) Calculation of the amount of title IV assistance earned by the student—(1) General. The amount of title IV grant or loan assistance that is earned by the student is calculated by—
(i) Determining the percentage of title IV grant or loan assistance that has been earned by the student, as described in paragraph (e)(2) of this section; and
(ii) Applying this percentage to the total amount of title IV grant or loan assistance that was disbursed (and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student, or on the student's behalf, for the payment period or period of enrollment as of the student's withdrawal date.
(2) Percentage earned. The percentage of title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student's withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) Sixty percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student's withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) Sixty percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
(3) Percentage unearned. The percentage of title IV grant or loan assistance that has not been earned by the student is calculated by determining the complement of the percentage of title IV grant or loan assistance earned by the student as described in paragraph (e)(2) of this section.
(4) Total amount of unearned title IV assistance to be returned. The unearned amount of title IV assistance to be returned is calculated by subtracting the amount of title IV assistance earned by the student as calculated under paragraph (e)(1) of this section from the amount of title IV aid that was disbursed to the student as of the date of the institution's determination that the student withdrew.
(5) Use of payment period or period of enrollment. (i) The treatment of title IV grant or loan funds if a student withdraws must be determined on a payment period basis for a student who attended a standard term-based (semester, trimester, or quarter) educational program.
(ii)(A) The treatment of title IV grant or loan funds if a student withdraws may be determined on either a payment period basis or a period of enrollment basis for a student who attended a non-term based educational program or a nonstandard term-based educational program.
(B) An institution must consistently use either a payment period or period of enrollment for all purposes of this section for each of the following categories of students who withdraw from the same non-term based or nonstandard term-based educational program:
(1) Students who have attended an educational program at the institution from the beginning of the payment period or period of enrollment.
(2) Students who re-enter the institution during a payment period or period of enrollment.
(3) Students who transfer into the institution during a payment period or period of enrollment.
(iii) For a program that measures progress in credit hours and uses nonstandard terms that are not substantially equal in length, if the institution uses the payment period to determine the treatment of title IV grant or loan funds for a category of students found in paragraph (e)(5)(ii)(B) of this section, the institution must—
(A)(1) For students in the category who are disbursed or could have been disbursed aid using both the payment period definition in § 668.4(b)(1) and the payment period definition in § 668.4(b)(2), use the payment period during which the student withdrew that ends later; and
(2) If in the payment period that ends later there are funds that have been or could have been disbursed from overlapping payment periods, the institution must include in the return calculation any funds that can be attributed to the payment period that ends later; and
(B) For students in the category who are disbursed or could have been disbursed aid using only the payment period definition in § 668.4(b)(1) or the payment period definition in § 668.4(b)(2), use the payment period definition for which title IV, HEA program funds were disbursed for a student's calculation under this section.
(f) Percentage of payment period or period of enrollment completed. (1) For purposes of paragraph (e)(2)(i) of this section, the percentage of the payment period or period of enrollment completed is determined—
(i) In the case of a program that is measured in credit hours, by dividing the total number of calendar days in the payment period or period of enrollment into the number of calendar days completed in that period as of the student's withdrawal date; and
(ii)(A) In the case of a program that is measured in clock hours, by dividing the total number of clock hours in the payment period or period of enrollment into the number of clock hours scheduled to be completed as of the student's withdrawal date.
(B) The scheduled clock hours used must be those established by the institution prior to the student's beginning class date for the payment period or period of enrollment and must be consistent with the published materials describing the institution's programs, unless the schedule was modified prior to the student's withdrawal.
(C) The schedule must have been established in accordance with requirements of the accrediting agency and the State licensing agency, if such standards exist.
(2)(i) The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
(ii) The total number of calendar days in a payment period or period of enrollment does not include—
(A) Days in which the student was on an approved leave of absence; or
(B) For a payment period or period of enrollment in which any courses in the program are offered in modules, any scheduled breaks of at least five consecutive days when the student is not scheduled to attend a module or other course offered during that period of time.
(g) Return of unearned aid, responsibility of the institution. (1) The institution must return, in the order specified in paragraph (i) of this section, the lesser of—
(i) The total amount of unearned title IV assistance to be returned as calculated under paragraph (e)(4) of this section; or
(ii) An amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of title IV grant or loan assistance that has not been earned by the student, as described in paragraph (e)(3) of this section.
(2) For purposes of this section, “institutional charges” are tuition, fees, room and board (if the student contracts with the institution for the room and board) and other educationally-related expenses assessed by the institution.
(3) If, for a non-term program an institution chooses to calculate the treatment of title IV assistance on a payment period basis, but the institution charges for a period that is longer than the payment period, “total institutional charges incurred by the student for the payment period” is the greater of—
(i) The prorated amount of institutional charges for the longer period; or
(ii) The amount of title IV assistance retained for institutional charges as of the student's withdrawal date.
(h) Return of unearned aid, responsibility of the student. (1) After the institution has allocated the unearned funds for which it is responsible in accordance with paragraph (g) of this section, the student must return assistance for which the student is responsible in the order specified in paragraph (i) of this section.
(2) The amount of assistance that the student is responsible for returning is calculated by subtracting the amount of unearned aid that the institution is required to return under paragraph (g) of this section from the total amount of unearned title IV assistance to be returned under paragraph (e)(4) of this section.
(3) The student (or parent in the case of funds due to a parent PLUS Loan) must return or repay, as appropriate, the amount determined under paragraph (h)(1) of this section to—
(i) Any title IV loan program in accordance with the terms of the loan; and
(ii) Any title IV grant program as an overpayment of the grant; however, a student is not required to return the following—
(A) The portion of a grant overpayment amount that is equal to or less than 50 percent of the total grant assistance that was disbursed (and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student for the payment period or period of enrollment.
(B) With respect to any grant program, a grant overpayment amount, as determined after application of paragraph (h)(3)(ii)(A) of this section, of 50 dollars or less that is not a remaining balance.
(4)(i) A student who owes an overpayment under this section remains eligible for title IV, HEA program funds through and beyond the earlier of 45 days from the date the institution sends a notification to the student of the overpayment, or 45 days from the date the institution was required to notify the student of the overpayment if, during those 45 days the student—
(A) Repays the overpayment in full to the institution;
(B) Enters into a repayment agreement with the institution in accordance with repayment arrangements satisfactory to the institution; or
(C) Signs a repayment agreement with the Secretary, which will include terms that permit a student to repay the overpayment while maintaining his or her eligibility for title IV, HEA program funds.
(ii) Within 30 days of the date of the institution's determination that the student withdrew, an institution must send a notice to any student who owes a title IV, HEA grant overpayment as a result of the student's withdrawal from the institution in order to recover the overpayment in accordance with paragraph (h)(4)(i) of this section.
(iii) If an institution chooses to enter into a repayment agreement in accordance with paragraph (h)(4)(i)(B) of this section with a student who owes an overpayment of title IV, HEA grant funds, it must—
(A) Provide the student with terms that permit the student to repay the overpayment while maintaining his or her eligibility for title IV, HEA program funds; and
(B) Require repayment of the full amount of the overpayment within two years of the date of the institution's determination that the student withdrew.
(iv) An institution must refer to the Secretary, in accordance with procedures required by the Secretary, an overpayment of title IV, HEA grant funds owed by a student as a result of the student's withdrawal from the institution if—
(A) The student does not repay the overpayment in full to the institution, or enter a repayment agreement with the institution or the Secretary in accordance with paragraph (h)(4)(i) of this section within the earlier of 45 days from the date the institution sends a notification to the student of the overpayment, or 45 days from the date the institution was required to notify the student of the overpayment;
(B) At any time the student fails to meet the terms of the repayment agreement with the institution entered into in accordance with paragraph (h)(4)(i)(B) of this section; or
(C) The student chooses to enter into a repayment agreement with the Secretary.
(v) A student who owes an overpayment is ineligible for title IV, HEA program funds—
(A) If the student does not meet the requirements in paragraph (h)(4)(i) of this section, on the day following the 45-day period in that paragraph; or
(B) As of the date the student fails to meet the terms of the repayment agreement with the institution or the Secretary entered into in accordance with paragraph (h)(4)(i) of this section.
(vi) A student who is ineligible under paragaraph (h)(4)(v) of this section regains eligibility if the student and the Secretary enter into a repayment agreement.
(5) The Secretary may waive grant overpayment amounts that students are required to return under this section if the withdrawals on which the returns are based are withdrawals by students—
(i) Who were residing in, employed in, or attending an institution of higher education that is located in an area in which the President has declared that a major disaster exists, in accordance with section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170);
(ii) Whose attendance was interrupted because of the impact of the disaster on the student or institution; and
(iii) Whose withdrawal occurred within the award year during which the designation occurred or during the next succeeding award year.
(i) Order of return of title IV funds—(1) Loans. Unearned funds returned by the institution or the student, as appropriate, in accordance with paragraph (g) or (h) of this section respectively, must be credited to outstanding balances on title IV loans made to the student or on behalf of the student for the payment period or period of enrollment for which a return of funds is required. Those funds must be credited to outstanding balances for the payment period or period of enrollment for which a return of funds is required in the following order:
(i) Unsubsidized Federal Direct Stafford loans.
(ii) Subsidized Federal Direct Stafford loans.
(iii) Federal Direct PLUS received on behalf of the student.
(2) Remaining funds. If unearned funds remain to be returned after repayment of all outstanding loan amounts, the remaining excess must be credited to any amount awarded for the payment period or period of enrollment for which a return of funds is required in the following order:
(i) Federal Pell Grants.
(ii) Iraq and Afghanistan Service Grants.
(iii) FSEOG Program aid.
(iv) TEACH Grants.
(j) Timeframe for the return of title IV funds. (1) An institution must return the amount of title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. The timeframe for returning funds is further described in § 668.173(b).
(2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the—
(i) Payment period or period of enrollment, as appropriate, in accordance with paragraph (e)(5) of this section;
(ii) Academic year in which the student withdrew; or
(iii) Educational program from which the student withdrew.
(k) Consumer information. An institution must provide students with information about the requirements of this section in accordance with § 668.43.
(l) Definitions. For purposes of this section—
(1) Title IV grant or loan funds that “could have been disbursed” are determined in accordance with the late disbursement provisions in § 668.164(j).
(2) A “period of enrollment” is the academic period established by the institution for which institutional charges are generally assessed (i.e. length of the student's program or academic year).
(3) The “date of the institution's determination that the student withdrew”for an institution that is not required to take attendance is—
(i) For a student who provides notification to the institution of his or her withdrawal, the student's withdrawal date as determined under paragraph (c) of this section or the date of notification of withdrawal, whichever is later;
(ii) For a student who did not provide notification of his of her withdrawal to the institution, the date that the institution becomes aware that the student ceased attendance;
(iii) For a student who does not return from an approved leave of absence, the earlier of the date of the end of the leave of absence or the date the student notifies the institution that he or she will not be returning to the institution; or
(iv) For a student whose rescission is negated under paragraph (c)(2)(i)(B) of this section, the date the institution becomes aware that the student did not, or will not, complete the payment period or period of enrollment.
(v) For a student who takes a leave of absence that is not approved in accordance with paragraph (d) of this section, the date that the student begins the leave of absence.
(4) A “recipient of title IV grant or loan assistance” is a student for whom the requirements of § 668.164(j)(2) have been met.
(5) Terms are “substantially equal in length” if no term in the program is more than two weeks of instructional time longer than any other term in that program.
(6) A program is “offered in modules” if the program uses a standard term or nonstandard-term academic calendar, is not a subscription-based program, and a course or courses in the program do not span the entire length of the payment period or period of enrollment.
(7)(i) “Academic attendance” and “attendance at an academically-related activity” must include academic engagement as defined under 34 CFR 600.2.
(ii) A determination of “academic attendance” or “attendance at an academically-related activity” must be made by the institution; a student's certification of attendance that is not supported by institutional documentation is not acceptable.
(8) A program is a nonstandard-term program if the program is a term-based program that does not qualify under 34 CFR 690.63(a)(1) or (a)(2) to calculate Federal Pell Grant payments under 34 CFR 690.63(b) or (c).
(9) A student in a program offered in modules is scheduled to complete the days in a module if the student's coursework in that module was used to determine the amount of the student's eligibility for title IV, HEA funds for the payment period or period of enrollment.
(a) General—(1) Independent auditor. For purposes of this section, the term “independent auditor” refers to an independent certified public accountant or a government auditor. To conduct an audit under this section, a government auditor must meet the Government Auditing Standards qualification and independence standards, including standards related to organizational independence.
(2) Institutions. An institution that participates in any title IV, HEA program must at least annually have an independent auditor conduct a compliance audit of its administration of that program and an audit of the institution's general purpose financial statements.
(3) Third-party servicers. Except as provided under this part or 34 CFR part 682, with regard to complying with the provisions under this section a third-party servicer must follow the procedures contained in the audit guides developed by and available from the Department of Education's Office of Inspector General. A third-party servicer is defined under § 668.2 and 34 CFR 682.200.
(4) Submission deadline. Except as provided by the Single Audit Act, chapter 75 of title 31, United States Code, an institution must submit annually to the Department its compliance audit and its audited financial statements by the date that is the earlier of—
(i) Thirty days after the later of the date of the auditor's report for the compliance audit and the date of the auditor's report for the audited financial statements; or
(ii) Six months after the last day of the institution's fiscal year.
(5) Audit submission requirements. In general, the Department considers the compliance audit and audited financial statements submission requirements of this section to be satisfied by an audit conducted in accordance with 2 CFR part 200, or the audit guides developed by and available from the Department of Education's Office of Inspector General, whichever is applicable to the entity, and provided that the Federal student aid functions performed by that entity are covered in the submission.
(b) Compliance audits for institutions. (1) An institution's compliance audit must cover, on a fiscal year basis, all title IV, HEA program transactions, and must cover all of those transactions that have occurred since the period covered by the institution's last compliance audit.
(2) The compliance audit required under this section must be conducted in accordance with—
(i) The general standards and the standards for compliance audits contained in the U.S. General Accounting Office's (GAO's) Government Auditing Standards. (This publication is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402); and
(ii) Procedures for audits contained in audit guides developed by, and available from, the Department of Education's Office of Inspector General.
(3) The Secretary may require an institution to provide a copy of its compliance audit report to guaranty agencies or eligible lenders under the FFEL programs, State agencies, the Secretary of Veterans Affairs, or nationally recognized accrediting agencies.
(c) Compliance audits for third-party servicers. (1) A third-party servicer that administers title IV, HEA programs for institutions does not have to have a compliance audit performed if—
(i) The servicer contracts with only one institution; and
(ii) The audit of that institution's administration of the title IV, HEA programs involves every aspect of the servicer's administration of that program for that institution.
(2) A third-party servicer that contracts with more than one participating institution may submit a compliance audit report that covers the servicer's administration of the title IV, HEA programs for all institutions with which the servicer contracts.
(3) A third-party servicer must submit annually to the Secretary its compliance audit no later than six months after the last day of the servicer's fiscal year.
(4) The Secretary may require a third-party servicer to provide a copy of its compliance audit report to guaranty agencies or eligible lenders under the FFEL programs, State agencies, the Secretary of Veterans Affairs, or nationally recognized accrediting agencies.
(d) Audited financial statements— (1) General. To enable the Department to make a determination of financial responsibility, an institution must, to the extent requested by the Department, submit to the Department a set of acceptable financial statements for its latest complete fiscal year (or such fiscal years as requested by the Department or required by this part), as well as any other documentation the Department deems necessary to make that determination. For fiscal years beginning on or after July 1, 2024, financial statements submitted to the Department must match the fiscal year end of the entity's annual return(s) filed with the IRS. Financial statements submitted to the Department must include the Supplemental Schedule required under § 668.172(a) and section 2 of appendices A and B to subpart L of this part, and be prepared on an accrual basis in accordance with generally accepted accounting principles (GAAP), and audited by an independent auditor in accordance with generally accepted government auditing standards (GAGAS), issued by the Comptroller General of the United States and other guidance contained in 2 CFR part 200; or in audit guides developed by and available from the Department of Education's Office of Inspector General, whichever is applicable to the entity, and provided that the Federal student aid functions performed by that entity are covered in the submission. As part of these financial statements, the institution must include a detailed description of related entities based on the definition of a related entity as set forth in Accounting Standards Codification (ASC) 850. The disclosure requirements under this paragraph (d)(1) extend beyond those of ASC 850 to include all related parties and a level of detail that would enable the Department to readily identify the related party. Such information must include, but is not limited to, the name, location and a description of the related entity including the nature and amount of any transactions between the related party and the institution, financial or otherwise, regardless of when they occurred. If there are no related party transactions during the audited fiscal year or related party outstanding balances reported in the financial statements, then management must add a note to the financial statements to disclose this fact.
(2) Submission of additional information. (i) In determining whether an institution is financially responsible, the Department may also require the submission of audited consolidated financial statements, audited full consolidating financial statements, audited combined financial statements, or the audited financial statements of one or more related parties that have the ability, either individually or collectively, to significantly influence or control the institution, as determined by the Department.
(ii) For a domestic or foreign institution that is owned directly or indirectly by any foreign entity holding at least a 50 percent voting or equity interest in the institution, the institution must provide documentation of the entity's status under the law of the jurisdiction under which the entity is organized, including, at a minimum, the date of organization, a current certificate of good standing, and a copy of the authorizing statute for such entity status. The institution must also provide documentation that is equivalent to articles of organization and bylaws and any current operating or shareholders' agreements. The Department may also require the submission of additional documents related to the entity's status under the foreign jurisdiction as needed to assess the entity's financial status. Documents must be translated into English.
(3) Disclosure of Federal revenue. A proprietary institution must disclose in a footnote to its audited financial statement the percentage of its revenues derived from Federal funds that the institution received during the fiscal year covered by that audit. The revenue percentage must be calculated in accordance with § 668.28. The institution must also report in the footnote the dollar amount of the numerator and denominator of its 90/10 ratio as well as the individual revenue amounts identified in section 2 of appendix C to this subpart.
(4) Audited financial statements for third-party servicers. A third-party servicer that enters into a contract with a lender or guaranty agency to administer any aspect of the lender's or guaranty agency's programs, as provided under 34 CFR part 682, must submit annually an audited financial statement. This financial statement must be prepared on an accrual basis in accordance with generally accepted accounting principles, and audited by an independent auditor in accordance with generally accepted government auditing standards and other guidance contained in audit guides issued by the Department of Education's Office of Inspector General.
(e) Access to records. (1) An institution or a third-party servicer that has a compliance or financial statement audit conducted under this section must—
(i) Give the Secretary and the Inspector General access to records or other documents necessary to review that audit, including the right to obtain copies of those records or documents; and
(ii) Require an individual or firm conducting the audit to give the Secretary and the Inspector General access to records, audit work papers, or other documents necessary to review that audit, including the right to obtain copies of those records, work papers, or documents.
(2) An institution must give the Secretary and the Inspector General access to records or other documents necessary to review a third-party servicer's compliance or financial statement audit, including the right to obtain copies of those records or documents.
(f) Determination of liabilities. (1) Based on the audit finding and the institution's or third-party servicer's response, the Secretary determines the amount of liability, if any, owed by the institution or servicer and instructs the institution or servicer as to the manner of repayment.
(2) If the Secretary determines that a third-party servicer owes a liability for its administration of an institution's title IV, HEA programs, the servicer must notify each institution under whose contract the servicer owes a liability of that determination. The servicer must also notify every institution that contracts with the servicer for the same service that the Secretary determined that a liability was owed.
(g) Repayments. (1) An institution or third-party servicer that must repay funds under the procedures in this section shall repay those funds at the direction of the Secretary within 45 days of the date of the Secretary's notification, unless—
(i) The institution or servicer files an appeal under the procedures established in subpart H of this part; or
(ii) The Secretary permits a longer repayment period.
(2) Notwithstanding paragraphs (f) and (g)(1) of this section—
(i) If an institution or third-party servicer has posted surety or has provided a third-party guarantee and the Secretary questions expenditures or compliance with applicable requirements and identifies liabilities, then the Secretary may determine that deferring recourse to the surety or guarantee is not appropriate because—
(A) The need to provide relief to students or borrowers affected by the act or omission giving rise to the liability outweighs the importance of deferring collection action until completion of available appeal proceedings; or
(B) The terms of the surety or guarantee do not provide complete assurance that recourse to that protection will be fully available through the completion of available appeal proceedings; or
(ii) The Secretary may use administrative offset pursuant to 34 CFR part 30 to collect the funds owed under the procedures of this section.
(3) If, under the proceedings in subpart H, liabilities asserted in the Secretary's notification, under paragraph (e)(1) of this section, to the institution or third-party servicer are upheld, the institution or third-party servicer must repay those funds at the direction of the Secretary within 30 days of the final decision under subpart H of this part unless—
(i) The Secretary permits a longer repayment period; or
(ii) The Secretary determines that earlier collection action is appropriate pursuant to paragraph (g)(2) of this section.
(4) An institution is held responsible for any liability owed by the institution's third-party servicer for a violation incurred in servicing any aspect of that institution's participation in the title IV, HEA programs and remains responsible for that amount until that amount is repaid in full.
(h) Audit submission requirements for foreign institutions. (1) Audited financial statements. (i) The Secretary waives for that fiscal year the submission of audited financial statements if the institution is a foreign public or nonprofit institution that received less than $500,000 in U.S. title IV program funds during its most recently completed fiscal year, unless that foreign public or nonprofit institution is in its initial provisional period of participation, and received title IV program funds during that fiscal year, in which case the institution must submit, in English, audited financial statements prepared in accordance with generally accepted accounting principles of the institution's home country.
(ii) Except as provided in paragraph (h)(1)(iii) of this section, a foreign institution that received $500,000 or more in U.S. title IV program funds during its most recently completed fiscal year must submit, in English, for each most recently completed fiscal year in which it received title IV program funds, audited financial statements prepared in accordance with generally accepted accounting principles of the institution's home country along with corresponding audited financial statements that meet the requirements of paragraph (d) of this section.
(iii) In lieu of making the submission required by paragraph (h)(1)(ii) of this section, a public or private nonprofit institution that received—
(A) $500,000 or more in U.S. title IV program funds, but less than $3,000,000 in U.S. title IV program funds during its most recently completed fiscal year, may submit for that year, in English, audited financial statements prepared in accordance with the generally accepted accounting principles of the institution's home country, and is not required to submit the corresponding audited financial statements that meet the requirements of paragraph (d) of this section;
(B) At least $3,000,000, but less than $10,000,000 in U.S. title IV, program funds during its most recently completed fiscal year, must submit in English, for each most recently completed fiscal year, audited financial statements prepared in accordance with the generally accepted accounting principles of the institution's home country along with corresponding audited financial statements that meet the requirements of paragraph (d) of this section, except that an institution that continues to receive at least $3,000,000 but less than $10,000,000, in U.S. title IV funds during its most recently completed fiscal year may omit the audited financial statements that meet the requirements of paragraph (d) of this section for up to two consecutive years following the submission of audited financial statements that meet the requirements of paragraph (d) of this section.
(2) Compliance audits. A foreign institution's compliance audit must cover, on a fiscal year basis, all title IV, HEA program transactions, and must cover all of those transactions that have occurred since the period covered by the institution's last compliance audit. A compliance audit that is due under this paragraph must be submitted no later than six months after the last day of the institution's fiscal year, and must meet the following requirements:
(i) If the foreign institution received $500,000 or more in U.S. dollars in title IV, HEA program funds during its most recently completed fiscal year, it must submit a standard compliance audit for that prior fiscal year that is performed in accordance with audit guides developed by, and available from, the Department of Education's Office of Inspector General, together with an alternative compliance audit or audits prepared in accordance with paragraph (h)(2)(ii) of this section for any preceding fiscal year or years in which the foreign institution received less than $500,000 in U.S. dollars in title IV, HEA program funds and for which a compliance audit has not already been submitted;
(ii) If the foreign institution received less than $500,000 U.S. in title IV, HEA program funds for its most recently completed fiscal year, it must submit an alternative compliance audit for that prior fiscal year that is performed in accordance with audit guides developed by, and available from, the Department of Education's Office of Inspector General, except as noted in paragraph (h)(2)(iii) of this section.
(iii) If so notified by the Secretary, a foreign institution may submit an alternative compliance audit performed in accordance with audit guides developed by, and available from, the Department of Education's Office of Inspector General, that covers a period not to exceed three of the institution's consecutive fiscal years if such audit is submitted either no later than six months after the last day of the most recent fiscal year, or contemporaneously with a standard compliance audit timely submitted under paragraph (h)(2)(i) or (h)(3)(ii) of this section for the most recently completed fiscal year, and if the following conditions are met:
(A) The institution received less than $500,000 in title IV, HEA program funds for its most recently completed fiscal year.
(B) The institution has timely submitted acceptable compliance audits for two consecutive fiscal years, and following such submission, has no history of late submission since then.
(C) The institution is fully certified.
(3)(i) Exceptions. Notwithstanding the provisions of paragraphs (h)(1)(i) and (h)(1)(iii) of this section, the Secretary may issue a letter to a foreign institution that identifies problems with its financial condition or financial reporting and requires the submission of audited financial statements in the manner specified by the Secretary.
(ii) Notwithstanding the provisions of paragraphs (h)(2)(ii) and (h)(2)(iii) of this section, the Secretary may issue to a foreign institution a letter that identifies problems with its administrative capability or compliance reporting that may require the compliance audit to be performed at a higher level of engagement, and may require the compliance audit to be submitted annually.
(i) Incorporation by reference. The material listed in this paragraph (i) is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. This incorporation by reference (IBR) material is available for inspection at U.S. Department of Education and at the National Archives and Records Administration (NARA). Contact U.S. Department of Education at: Office of the General Counsel, 400 Maryland Avenue SW, room 2C-136, Washington DC 20202; phone: (202) 401-6000; https://www2.ed.gov/about/offices/list/ogc/index.html?src=oc. For information on the availability of this material at NARA, contact the Office of the Federal Register—email: fr.inspection@nara.gov; website: www.archives.gov/federal-register/cfr/ibr-locations.html. The material may be obtained from the Financial Accounting Standards Board (FASB), 401 Merritt 7, P.O. Box 5116, Norwalk, CT 06856-5116; (203) 847-0700; www.fasb.org.
(1) Accounting Standards Codification (ASC) 850, Related Party Disclosures, Updated through September 10, 2018.
(2) [Reserved]
(a) Program records. An institution shall establish and maintain, on a current basis, any application for title IV, HEA program funds and program records that document—
(1) Its eligibility to participate in the title IV, HEA programs;
(2) The eligibility of its educational programs for title IV, HEA program funds;
(3) Its administration of the title IV, HEA programs in accordance with all applicable requirements;
(4) Its financial responsibility, as specified in this part;
(5) Information included in any application for title IV, HEA program funds; and
(6) Its disbursement and delivery of title IV, HEA program funds.
(b) Fiscal records. (1) An institution shall account for the receipt and expenditure of title IV, HEA program funds in accordance with generally accepted accounting principles.
(2) An institution shall establish and maintain on a current basis—
(i) Financial records that reflect each HEA, title IV program transaction; and
(ii) General ledger control accounts and related subsidiary accounts that identify each title IV, HEA program transaction and separate those transactions from all other institutional financial activity.
(c) Required records. (1) The records that an institution must maintain in order to comply with the provisions of this section include but are not limited to—
(i) The Student Aid Report (SAR) or Institutional Student Information Record (ISIR) used to determine eligibility for title IV, HEA program funds;
(ii) Application data submitted to the Secretary, lender, or guaranty agency by the institution on behalf of the student or parent;
(iii) Documentation of each student's or parent borrower's eligibility for title IV, HEA program funds;
(iv) Documentation relating to each student's or parent borrower's receipt of title IV, HEA program funds, including but not limited to documentation of—
(A) The amount of the grant, loan, or FWS award; its payment period; its loan period, if appropriate; and the calculations used to determine the amount of the grant, loan, or FWS award;
(B) The date and amount of each disbursement or delivery of grant or loan funds, and the date and amount of each payment of FWS wages;
(C) The amount, date, and basis of the institution's calculation of any refunds or overpayments due to or on behalf of the student, or the treatment of title IV, HEA program funds when a student withdraws; and
(D) The payment of any overpayment or the return of any title IV, HEA program funds to the title IV, HEA program fund, a lender, or the Secretary, as appropriate;
(v) Documentation of and information collected at any initial or exit loan counseling required by applicable program regulations;
(vi) Reports and forms used by the institution in its participation in a title IV, HEA program, and any records needed to verify data that appear in those reports and forms; and
(vii) Documentation supporting the institution's calculations of its completion or graduation rates under §§ 668.46 and 668.49.
(2) In addition to the records required under this part—
(i) Participants in the Federal Perkins Loan Program shall follow procedures established in 34 CFR 674.19 for documentation of repayment history for that program;
(ii) Participants in the FWS Program shall follow procedures established in 34 CFR 675.19 for documentation of work, earnings, and payroll transactions for that program; and
(iii) Participants in the FFEL Program shall follow procedures established in 34 CFR 682.610 for documentation of additional loan record requirements for that program.
(d) General. (1) An institution shall maintain required records in a systematically organized manner.
(2) An institution shall make its records readily available for review by the Secretary or the Secretary's authorized representative at an institutional location designated by the Secretary or the Secretary's authorized representative.
(3) An institution may keep required records in hard copy or in microform, computer file, optical disk, CD-ROM, or other media formats, provided that—
(i) Except for the records described in paragraph (d)(3)(ii) of this section, all record information must be retrievable in a coherent hard copy format or in other media formats acceptable to the Secretary;
(ii) An institution shall maintain the Student Aid Report (SAR) or Institutional Student Information Record (ISIR) used to determine eligibility for title IV, HEA program funds in the format in which it was received by the institution, except that the SAR may be maintained in an imaged media format;
(iii) Any imaged media format used to maintain required records must be capable of reproducing an accurate, legible, and complete copy of the original document, and, when printed, this copy must be approximately the same size as the original document;
(iv) Any document that contains a signature, seal, certification, or any other image or mark required to validate the authenticity of its information must be maintained in its original hard copy or in an imaged media format; and
(v) Participants in the Federal Perkins Loan Program shall follow procedures established in 34 CFR 674.19 for maintaining the original promissory notes and repayment schedules for that program.
(4) If an institution closes, stops providing educational programs, is terminated or suspended from the title IV, HEA programs, or undergoes a change of ownership that results in a change of control as described in 34 CFR 600.31, it shall provide for—
(i) The retention of required records; and
(ii) Access to those records, for inspection and copying, by the Secretary or the Secretary's authorized representative, and, for a school participating in the FFEL Program, the appropriate guaranty agency.
(e) Record retention. Unless otherwise directed by the Secretary—
(1) An institution shall keep records relating to its administration of the Federal Perkins Loan, FWS, FSEOG, Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant Program for three years after the end of the award year for which the aid was awarded and disbursed under those programs, provided that an institution shall keep—
(i) The Fiscal Operations Report and Application to Participate in the Federal Perkins Loan, FSEOG, and FWS Programs (FISAP), and any records necessary to support the data contained in the FISAP, including “income grid information,” for three years after the end of the award year in which the FISAP is submitted; and
(ii) Repayment records for a Federal Perkins loan, including records relating to cancellation and deferment requests, in accordance with the provisions of 34 CFR 674.19;
(2)(i) An institution shall keep records relating to a student or parent borrower's eligibility and participation in the FFEL or Direct Loan Program for three years after the end of the award year in which the student last attended the institution; and
(ii) An institution shall keep all other records relating to its participation in the FFEL or Direct Loan Program, including records of any other reports or forms, for three years after the end of the award year in which the records are submitted; and
(3) An institution shall keep all records involved in any loan, claim, or expenditure questioned by a title IV, HEA program audit, program review, investigation, or other review until the later of—
(i) The resolution of that questioned loan, claim, or expenditure; or
(ii) The end of the retention period applicable to the record.
(f) Examination of records. (1) An institution that participates in any title IV, HEA program and the institution's third-party servicer, if any, shall cooperate with an independent auditor, the Secretary, the Department of Education's Inspector General, the Comptroller General of the United States, or their authorized representatives, a guaranty agency in whose program the institution participates, and the institution's accrediting agency, in the conduct of audits, investigations, program reviews, or other reviews authorized by law.
(2) The institution and servicer must cooperate by—
(i) Providing timely access, for examination and copying, to requested records, including but not limited to computerized records and records reflecting transactions with any financial institution with which the institution or servicer deposits or has deposited any title IV, HEA program funds, and to any pertinent books, documents, papers, or computer programs; and
(ii) Providing reasonable access to personnel associated with the institution's or servicer's administration of the title IV, HEA programs for the purpose of obtaining relevant information.
(3) The Secretary considers that an institution or servicer has failed to provide reasonable access to personnel under paragraph (f)(2)(ii) of this section if the institution or servicer—
(i) Refuses to allow those personnel to supply all relevant information;
(ii) Permits interviews with those personnel only if the institution's or servicer's management is present; or
(iii) Permits interviews with those personnel only if the interviews are tape recorded by the institution or servicer.
(4) Upon request of the Secretary, or a lender or guaranty agency in the case of a borrower under the FFEL Program, an institution or servicer promptly shall provide the requester with any information the institution or servicer has respecting the last known address, full name, telephone number, enrollment information, employer, and employer address of a recipient of title IV funds who attends or attended the institution.
(a) An institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated under the proceedings of subpart G of this part.
(b) Subject to the provisions of paragraph (d) of this section, a third-party servicer is eligible to enter into a written contract with an institution for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated under the proceedings of subpart G of this part.
(c) In a contract with an institution, a third-party servicer shall agree to—
(1) Comply with all statutory provisions of or applicable to Title IV of the HEA, all regulatory provisions prescribed under that statutory authority, and all special arrangements, agreements, limitations, suspensions, and terminations entered into under the authority of statutes applicable to Title IV of the HEA, including the requirement to use any funds that the servicer administers under any Title IV, HEA program and any interest or other earnings thereon solely for the purposes specified in and in accordance with that program;
(2) Refer to the Office of Inspector General of the Department of Education for investigation any information indicating there is reasonable cause to believe that the institution might have engaged in fraud or other criminal misconduct in connection with the institution's administration of any Title IV, HEA program or an applicant for Title IV, HEA program assistance might have engaged in fraud or other criminal misconduct in connection with his or her application. Examples of the type of information that must be referred are—
(i) False claims by the institution for Title IV, HEA program assistance;
(ii) False claims of independent student status;
(iii) False claims of citizenship;
(iv) Use of false identities;
(v) Forgery of signatures or certifications;
(vi) False statements of income; and
(vii) Payment of any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid to any person or entity engaged in any student recruitment or admission activity or in making decisions regarding the award of title IV, HEA program funds.
(3) Be jointly and severally liable with the institution to the Secretary for any violation by the servicer of any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, and any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA;
(4) In the case of a third-party servicer that disburses funds (including funds received under the Title IV, HEA programs) or delivers Federal Stafford Loan Program proceeds to a student—
(i) Confirm the eligibility of the student before making that disbursement or delivering those proceeds. This confirmation must include, but is not limited to, any applicable information contained in the records required under § 668.24; and
(ii) Calculate and return any unearned title IV, HEA program funds to the title IV, HEA program accounts and the student's lender, as appropriate, in accordance with the provisions of §§ 668.21 and 668.22, and applicable program regulations; and
(5) If the servicer or institution terminates the contract, or if the servicer stops providing services for the administration of a Title IV, HEA program, goes out of business, or files a petition under the Bankruptcy Code, return to the institution all—
(i) Records in the servicer's possession pertaining to the institution's participation in the program or programs for which services are no longer provided; and
(ii) Funds, including Title IV, HEA program funds, received from or on behalf of the institution or the institution's students, for the purposes of the program or programs for which services are no longer provided.
(d) A third-party servicer may not enter into a written contract with an institution for the administration of any aspect of the institution's participation in any Title IV, HEA program, if—
(1)(i) The servicer has been limited, suspended, or terminated by the Secretary within the preceding five years;
(ii) The servicer has had, during the servicer's two most recent audits of the servicer's administration of the Title IV, HEA programs, an audit finding that resulted in the servicer's being required to repay an amount greater than five percent of the funds that the servicer administered under the Title IV, HEA programs for any award year; or
(iii) The servicer has been cited during the preceding five years for failure to submit audit reports required under Title IV of the HEA in a timely fashion; and
(2)(i) In the case of a third-party servicer that has been subjected to a termination action by the Secretary, either the servicer, or one or more persons or entities that the Secretary determines (under the provisions of § 668.15) exercise substantial control over the servicer, or both, have not submitted to the Secretary financial guarantees in an amount determined by the Secretary to be sufficient to satisfy the servicer's potential liabilities arising from the servicer's administration of the Title IV, HEA programs; and
(ii) One or more persons or entities that the Secretary determines (under the provisions of § 668.15) exercise substantial control over the servicer have not agreed to be jointly or severally liable for any liabilities arising from the servicer's administration of the Title IV, HEA programs and civil and criminal monetary penalties authorized under Title IV of the HEA.
(e)(1)(i) An institution that participates in a Title IV, HEA program shall notify the Secretary within 10 days of the date that—
(A) The institution enters into a new contract or significantly modifies an existing contract with a third-party servicer to administer any aspect of that program;
(B) The institution or a third-party servicer terminates a contract for the servicer to administer any aspect of that program; or
(C) A third-party servicer that administers any aspect of the institution's participation in that program stops providing services for the administration of that program, goes out of business, or files a petition under the Bankruptcy Code.
(ii) The institution's notification must include the name and address of the servicer.
(2) An institution that contracts with a third-party servicer to administer any aspect of the institution's participation in a Title IV, HEA program shall provide to the Secretary, upon request, a copy of the contract, including any modifications, and provide information pertaining to the contract or to the servicer's administration of the institution's participation in any Title IV, HEA program.
(a) An institution's participation in a Title IV, HEA program ends on the date that—
(1) The institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students;
(2) The institution loses its institutional eligibility under 34 CFR part 600;
(3) The institution's participation is terminated under the proceedings in subpart G of this part;
(4) The institution's period of participation, as specified under § 668.13, expires, or the institution's provisional certification is revoked under § 668.13;
(5) The institution's program participation agreement is terminated or expires under § 668.14;
(6) The institution's participation ends under subpart M of this part; or
(7) The Secretary receives a notice from the appropriate State postsecondary review entity designated under 34 CFR part 667 that the institution's participation should be withdrawn.
(b) If an institution's participation in a Title IV, HEA program ends, the institution shall—
(1) Immediately notify the Secretary of that fact;
(2) Submit to the Secretary within 45 days after the date that the participation ends—
(i) All financial, performance, and other reports required by appropriate Title IV, HEA program regulations; and
(ii) A letter of engagement for an independent audit of all funds that the institution received under that program, the report of which shall be submitted to the Secretary within 45 days after the date of the engagement letter;
(3) Inform the Secretary of the arrangements that the institution has made for the proper retention and storage for a minimum of three years of all records concerning the administration of that program;
(4) If the institution's participation in the Federal Perkins Loan Program ended, inform the Secretary of how the institution will provide for the collection of any outstanding loans made under that program;
(5) If the institution's participation in the LEAP Program ended—
(i) Inform immediately the State in which the institution is located of that fact; and
(ii) Notwithstanding paragraphs (c) through (e) of this section, follow the instructions of that State concerning the end of that participation;
(6) If the institution's participation in all the Title IV, HEA programs ended, inform the Secretary of how the institution will provide for the collection of any outstanding loans made under the National Defense/Direct Student Loan programs; and
(7) Continue to comply with the requirements of § 668.22 for the treatment of title IV, HEA program funds when a student withdraws.
(c) If an institution closes or stops providing educational programs for a reason other than a normal vacation period or a natural disaster that directly affects the institution or the institution's students, the institution shall—
(1) Return to the Secretary, or otherwise dispose of under instructions from the Secretary, any unexpended funds that the institution has received under the Title IV, HEA programs for attendance at the institution, less the institution's administrative allowance, if applicable; and
(2) Return to the appropriate lenders any Federal Stafford Loan program proceeds that the institution has received but not delivered to, or credited to the accounts of, students attending the institution.
(d)(1) An institution may use funds that it has received under the Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant Program or a campus-based program or request additional funds from the Secretary, under conditions specified by the Secretary, if the institution does not possess sufficient funds, to satisfy any unpaid commitment made to a student under that Title IV, HEA program only if—
(i) The institution's participation in that Title IV, HEA program ends during a payment period;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that payment period, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The commitment was made prior to the end of the participation; and
(iv) The commitment was made for attendance during that payment period or a previously completed payment period.
(2) An institution may credit to a student's account or deliver to the student the proceeds of a disbursement of a Federal Family Education Loan Programs loan to satisfy any unpaid commitment made to the student under the Federal Family Education Loan Programs Loan Program only if—
(i) The institution's participation in that Title IV, HEA program ends during a period of enrollment;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that period of enrollment, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The loan was made for attendance during that period of enrollment.
(iv) The proceeds of the first disbursement of the loan were delivered to the student or credited to the student's account prior to the end of the participation.
(3) An institution may use funds that it has received under the Direct Loan Program or request additional funds from the Secretary, under conditions specified by the Secretary, if the institution does not possess sufficient funds, to credit to a student's account or disburse to the student the proceeds of a Direct Loan Program loan only if—
(i) The institution's participation in the Direct Loan Program ends during a period of enrollment;
(ii) The institution continues to provide, from the date that the participation ends until the scheduled completion date of that period of enrollment, educational programs to otherwise eligible students enrolled in the formerly eligible programs of the institution;
(iii) The loan was made for attendance during that period of enrollment; and
(iv) The proceeds of the first disbursement of the loan were delivered to the student or credited to the student's account prior to the end of the participation.
(e)(1) Notwithstanding the requirements of any other provision in this section, with agreement from the institution's accrediting agency and State, the Secretary may permit an institution to continue to originate, award, or disburse funds under a Title IV, HEA program for no more than 120 days following the date of a final, non-appealable decision by an accrediting agency to withdraw, suspend, or terminate accreditation, by a State authorizing agency to remove State authorization, or by the Secretary to end the institution's participation in title IV, HEA programs if—
(i) The institution has notified the Secretary of its plans to conduct an orderly closure in accordance with any applicable requirements of its accrediting agency;
(ii) As part of the institution's orderly closure, it is performing a teach-out that has been approved by its accrediting agency;
(iii) The institution agrees to abide by the conditions of the program participation agreement that was in effect on the date of the decision under paragraph (e)(1), except that it will originate, award, or disburse funds under that agreement only to enrolled students who can complete the program within 120 days of the decision under paragraph (e)(1) or who can transfer to a new institution; and
(iv) The institution presents the Secretary with acceptable written assurances that—
(A) The health and safety of the institution's students are not at risk;
(B) The institution has adequate financial resources to ensure that instructional services remain available to students during the teach-out; and
(C) The institution is not subject to probation or its equivalent, or adverse action by the institution's State authorizing body or accrediting agency, except as provided in paragraph (e)(1).
(2) An institution is prohibited from engaging in misrepresentation, consistent with 34 CFR part 668 subpart F and consistent with 34 CFR part 685 subpart B, about the nature of its teach-out plans, teach-out agreements, and transfer of credit.
(f) For the purposes of this section—
(1) A commitment under the Federal Pell Grant, ACG, National SMART Grant, and TEACH Grant programs occurs when a student is enrolled and attending the institution and has submitted a valid Student Aid Report to the institution or when an institution has received a valid institutional student information report; and
(2) A commitment under the campus-based programs occurs when a student is enrolled and attending the institution and has received a notice from the institution of the amount that he or she can expect to receive and how and when that amount will be paid.
(a) General. (1) At the request of an institution, the Secretary may waive the annual audit submission requirement for the period of time contained in paragraph (b) of this section if the institution satisfies the requirements contained in paragraph (c) of this section and posts a letter of credit in the amount determined in paragraph (d) of this section.
(2) An institution requesting a waiver must submit an application to the Secretary at such time and in such manner as the Secretary prescribes.
(3) The first fiscal year for which an institution may request a waiver is the fiscal year in which it submits its waiver request to the Secretary.
(b) Waiver period. (1) If the Secretary grants the waiver, the institution need not submit its compliance or audited financial statement until six months after—
(i) The end of the third fiscal year following the fiscal year for which the institution last submitted a compliance audit and audited financial statement; or
(ii) The end of the second fiscal year following the fiscal year for which the institution last submitted compliance and financial statement audits if the award year in which the institution will apply for recertification is part of the third fiscal year.
(2) The Secretary does not grant a waiver if the award year in which the institution will apply for recertification is part of the second fiscal year following the fiscal year for which the institution last submitted compliance and financial statement audits.
(3) When an institution must submit its next compliance and financial statement audits under paragraph (b)(1) of this section—
(i) The institution must submit a compliance audit that covers the institution's administration of the title IV, HEA programs for the period for each fiscal year for which an audit did not have to be submitted as a result of the waiver, and an audited financial statement for its last fiscal year; and
(ii) The auditor who conducts the audit must audit the institution's annual determinations for the period subject to the waiver that it satisfied the 90/10 rule in § 600.5 and the other conditions of institutional eligibility in § 600.7 and § 668.8(e)(2), and disclose the results of the audit of the 90/10 rule for each year in accordance with § 668.23(d)(4).
(c) Criteria for granting the waiver. The Secretary grants a waiver to an institution if the institution—
(1) Is not a foreign institution;
(2) Did not disburse $200,000 or more of title IV, HEA program funds during each of the two completed award years preceding the institution's waiver request;
(3) Agrees to keep records relating to each award year in the unaudited period for two years after the end of the record retention period in § 668.24(e) for that award year;
(4) Has participated in the title IV, HEA programs under the same ownership for at least three award years preceding the institution's waiver request;
(5) Is financially responsible under § 668.171, and does not rely on the alternative standards of § 668.175 to participate in the title IV, HEA programs;
(6) Is not on the reimbursement or cash monitoring system of payment;
(7) Has not been the subject of a limitation, suspension, fine, or termination proceeding, or emergency action initiated by the Department or a guarantee agency in the three years preceding the institution's waiver request;
(8) Has submitted its compliance audits and audited financial statements for the previous two fiscal years in accordance with and subject to § 668.23, and no individual audit disclosed liabilities in excess of $10,000; and
(9) Submits a letter of credit in the amount determined in paragraph (d) of this section, which must remain in effect until the Secretary has resolved the audit covering the award years subject to the waiver.
(d) Letter of credit amount. For purposes of this section, the letter of credit amount equals 10 percent of the amount of title IV, HEA program funds the institution disbursed to or on behalf of its students during the award year preceding the institution's waiver request.
(e) Rescission of the waiver. (1) The Secretary rescinds the waiver if the institution—
(i) Disburses $200,000 or more of title IV, HEA program funds for an award year;
(ii) Undergoes a change in ownership that results in a change of control; or
(iii) Becomes the subject of an emergency action or a limitation, suspension, fine, or termination action initiated by the Department or a guarantee agency.
(2) If the Secretary rescinds a waiver, the rescission is effective on the last day of the fiscal year in which the rescission takes place.
(f) Renewal. An institution may request a renewal of its waiver when it submits its audits under paragraph (b) of this section. The Secretary grants the waiver if the audits and other information available to the Secretary show that the institution continues to satisfy the criteria for receiving that waiver.
(a) General—(1) Calculating the revenue percentage. A proprietary institution meets the requirement in § 668.14(b)(16) that at least 10 percent of its revenue is derived from sources other than Federal funds by using the formula in appendix C to this subpart to calculate its revenue percentage for its latest complete fiscal year. For purposes of this section—
(i) For any fiscal year beginning on or after January 1, 2023, Federal funds used to calculate the revenue percentage include title IV, HEA program funds and any other educational assistance funds provided by a Federal agency directly to an institution or a student including the Federal portion of any grant funds provided by or administered by a non-Federal agency, except for non-title IV Federal funds provided directly to a student to cover expenses other than tuition, fees, and other institutional charges. The Secretary identifies the Federal agency and the other educational assistance funds provided by that agency in a notice published in the
(ii) For any fiscal year beginning prior to January 1, 2023, Federal funds are limited to title IV, HEA program funds.
(2) Disbursement rule. An institution must use the cash basis of accounting in calculating its revenue percentage by—
(i) For each eligible student, counting the amount of Federal funds the institution received to pay tuition, fees, and other institutional charges during its fiscal year—
(A) Directly from an agency identified under paragraph (a)(1)(i) of this section; and
(B) Paid by a student who received Federal funds; and
(ii) For each eligible student, counting the amount of title IV, HEA program funds the institution received to pay tuition, fees, and other institutional charges during its fiscal year. However, before the end of its fiscal year, the institution must—
(A) Request funds under the advanced payment method in § 668.162(b)(2) or the heightened cash monitoring method in § 668.162(d)(1) that the students are eligible to receive and make any disbursements to those students by the end of the fiscal year; or
(B) For institutions under the reimbursement or heightened cash monitoring methods in § 668.162(c) or (d)(2), make disbursements to those students by the end of the fiscal year and report as Federal funds in the revenue calculations the funds that the students are eligible to receive before requesting funds.
(3) Revenue generated from programs and activities. The institution must consider as revenue only those funds it generates from—
(i) Tuition, fees, and other institutional charges for students enrolled in eligible programs as defined in § 668.8;
(ii) Activities conducted by the institution that are necessary for the education and training of its students provided those activities are—
(A) Conducted on campus or at a facility under the institution's control;
(B) Performed under the supervision of a member of the institution's faculty;
(C) Required to be performed by all students in a specific educational program at the institution; and
(D) Related directly to services performed by students; and
(iii) Funds paid by a student, or on behalf of a student by a party unrelated to the institution, its owners, or affiliates, for an education or training program that is not eligible under § 668.8 and that does not include any courses offered in an eligible program. The non-eligible education or training program must be provided by the institution, and taught by one of its instructors, at its main campus or one of its approved additional locations, at another school facility approved by the appropriate State agency or accrediting agency, or at an employer facility. The institution may not count revenue from a non-eligible education or training program for which it merely provides facilities for test preparation courses, acts as a proctor, or oversees a course of self-study. The program must—
(A) Be approved or licensed by the appropriate State agency;
(B) Be accredited by an accrediting agency recognized by the Secretary under 34 CFR part 602;
(C) Provide an industry-recognized credential or certification;
(D) Provide training needed for students to maintain State licensing requirements; or
(E) Provide training needed for students to meet additional licensing requirements for specialized training for practitioners who already meet the general licensing requirements in that field.
(4) Application of funds. The institution must presume that any Federal funds it disburses, or delivers to a student, or determines was provided to a student by another Federal source, will be used to pay the student's tuition, fees, or institutional charges up to the amount of those Federal funds if a student makes a payment to the institution, except to the extent that the student's tuition, fees, or other charges are satisfied by—
(i) Grant funds provided by—
(A) Non-Federal public agencies that do not include Federal or institutional funds, unless the Federal portion of those grant funds can be determined, and that portion of Federal funds is included as Federal funds under this section. If the Federal funds cannot be determined no amount of the grant funds may be included under this section; or
(B) Private sources unrelated to the institution, its owners, or affiliates;
(ii) Funds provided under a contractual arrangement with the institution and a Federal, State, or local government agency for the purpose of providing job training to low-income individuals who need that training;
(iii) Funds used by a student from a savings plan for educational expenses established by or on behalf of the student if the savings plan qualifies for special tax treatment under the Internal Revenue Code of 1986; or
(iv) Institutional scholarships that meet the requirements in paragraph (a)(5)(iv) of this section.
(5) Revenue generated from institutional aid. The institution may include the following institutional aid as revenue:
(i) For loans made to students and credited in full to the students' accounts at the institution and used to satisfy tuition, fees, and other institutional charges, the principal payments made on those loans by current or former students that the institution received during the fiscal year, if the loans are—
(A) Bona fide as evidenced by standalone repayment agreements between the students and the institution that are enforceable promissory notes;
(B) Issued at intervals related to the institution's enrollment periods;
(C) Subject to regular loan repayments and collections by the institution; and
(D) Separate from the enrollment contracts signed by the students.
(ii) Funds from an income share agreement or any other alternative financing agreement in which the agreement is with the institution only or with any entity or individual in the institution's ownership tree, or with any common ownership of the institution and the entity providing the funds, or if the entity or another entity with common ownership has any other relationships or agreements with the institution, provided that—
(A) The institution clearly identifies the student's institutional charges, and those charges are the same or less than the stated rate for institutional charges;
(B) The agreement clearly identifies the maximum time and maximum amount a student would be required to pay, including the implied or imputed interest rate and any fees and revenue generated for a related third-party, the institution, or any entity described in paragraph (a)(5)(ii) introductory text, for that maximum time period; and
(C) All payments are applied with a portion allocated to the return of capital and a portion allocated to profit. Revenue, interest, and fees are not included in the calculation.
(iii) For scholarships provided by the institution in the form of monetary aid and based on the academic achievement or financial need of its students, the amount disbursed to students during the fiscal year. The scholarships must be disbursed from an established restricted account and may be included as revenue only to the extent that the funds in that account represent—
(A) Designated funds from an outside source that is unrelated to the institution, its owners, or its affiliates; or
(B) Income earned on those funds.
(6) Funds excluded from revenues. For the fiscal year, the institution does not include—
(i) The amount of Federal Work Study (FWS) wages paid directly to the student. However, if the institution credits the student's account with FWS funds, those funds are included as revenue;
(ii) The amount of funds received by the institution from a State under the LEAP, Special Leveraging Educational Assistance Partnership (SLEAP), or Grants for Access and Persistence (GAP) program;
(iii) The amount of institutional funds used to match Federal education assistance funds;
(iv) The amount of Federal education assistance funds refunded to students or returned to the Secretary under § 668.22 or required to be returned under the applicable program;
(v) The amount the student is charged for books, supplies, and equipment unless the institution includes that amount as tuition, fees, or other institutional charges;
(vi) Any amount from the proceeds of the factoring or sale of accounts receivable or institutional loans, regardless of whether the loans were sold with or without recourse;
(vii) Any amount from the sale of an income share agreement or other financing agreement; or
(viii) Any funds, including loans, provided by a third party related to the institution, its owners, or affiliates to a student in any form.
(b) [Reserved]
(c) Sanctions. If an institution does not derive at least 10 percent of its revenue from sources other than Federal funds—
(1) For two consecutive fiscal years, it loses its eligibility to participate in the title IV, HEA programs for at least two fiscal years. To regain eligibility, the institution must demonstrate that it complied with the State licensure and accreditation requirements under 34 CFR 600.5(a)(4) and (6), and the financial responsibility requirements under subpart L of this part, for a minimum of two fiscal years after the fiscal year it became ineligible;
(2) For any fiscal year, it becomes provisionally certified under § 668.13(c)(1)(ii) for the two fiscal years after the fiscal year it failed to satisfy the revenue requirement in this section. However, the institution's provisional certification terminates on—
(i) The expiration date of the institution's program participation agreement that was in effect on the date the Secretary determined the institution failed the requirement of this section; or
(ii) The date the institution loses its eligibility to participate under paragraph (c)(1) of this section;
(3) For any fiscal year, it must notify students of the possibility of loss of title IV eligibility;
(4) For any fiscal year, it must report the failure no later than 45 days after the end of its fiscal year, or immediately thereafter if subsequent information is obtained that shows an institution incorrectly determined that it passed the revenue requirement in this section for the prior fiscal year; and
(5) It is liable for any title IV, HEA program funds it disburses after the last day of the fiscal year it becomes ineligible to participate in the title IV, HEA program under paragraph (c)(1) of this section, excluding any funds the institution was entitled to disburse under § 668.26.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) The Third general standard for governmental auditing is: In matters relating to the audit work, the audit organization and the individual auditors shall maintain an independent attitude.
(b) This standard places upon the auditor and the audit organization the responsibility for maintaining sufficient independence so that their opinions, conclusions, judgments, and recommendations will be impartial. If the auditor is not sufficiently independent to produce unbiased opinions, conclusions, and judgments, he should state in a prominent place in the audit report his relationship with the organization or officials being audited.
(c) The auditor should consider not only whether his or her own attitude and beliefs permit him or her to be independent but also whether there is anything about his or her situation which would lead others to question his or her independence. Both situations deserve consideration since it is important not only that the auditor be, in fact, independent and impartial but also that other persons will consider him or her so.
(d) There are three general classes of impairments that the auditor needs to consider; these are personal, external, and organizational impairments. If one or more of these are of such significance as to affect the auditor's ability to perform his or her work and report its results impartially, he or she should decline to perform the audit or indicate in the report that he or she was not fully independent.
There are some circumstances in which an auditor cannot be impartial because of his or her views or his or her personal situation. These circumstances might include:
1. Relationships of an official, professional, and/or personal nature that might cause the auditor to limit the extent or character of the inquiry, to limit disclosure, or to weaken his or her findings in any way.
2. Preconceived ideas about the objectives or quality of a particular operation or personal likes or dislikes of individuals, groups, or objectives of a particular program.
3. Previous involvement in a decisionmaking or management capacity in the operations of the governmental entity or program being audited.
4. Biases and prejudices, including those induced by political or social convictions, which result from employment in or loyalty to a particular group, entity, or level of government.
5. Actual or potential restrictive influence when the auditor performs preaudit work and subsequently performs a post audit.
6. Financial interest, direct or indirect, in an organization or facility which is benefiting from the audited programs.
External factors can restrict the audit or impinge on the auditor's ability to form independent and objective opinions and conclusions. For example, under the following conditions either the audit itself could be adversely affected or the auditor would not have complete freedom to make an independent judgment.
1. Interference or other influence that improperly or imprudently eliminates, restricts, or modifies the scope or character of the audit.
2. Interference with the selection or application of audit procedures of the selection of activities to be examined.
3. Denial of access to such sources of information as books, records, and supporting documents or denial or opportunity to obtain explanations by officials and employees of the governmental organization, program, or activity under audit.
4. Interference in the assignment of personnel to the audit task.
5. Retaliatory restrictions placed on funds or other resources dedicated to the audit operation.
6. Activity to overrule or significantly influence the auditors judgment as to the appropriate content of the audit report.
7. Influences that place the auditor's continued employment in jeopardy for reasons other than competency or the need for audit services.
8. Unreasonable restriction on the time allowed to competently complete an audit assignment.
(a) The auditor's independence can be affected by his or her place within the organizational structure of governments. Auditors employed by Federal, State, or local government units may be subject to policy direction from superiors who are involved either directly or indirectly in the government management process. To achieve maximum independence such auditors and the audit organization itself not only should report to the highest practicable echelon within their government but should be organizationally located outside the line-management function of the entity under audit.
(b) These auditors should also be sufficiently removed from political pressures to ensure that they can conduct their auditing objectively and can report their conclusions completely without fear of censure. Whenever feasible they should be under a system which will place decisions on compensation, training, job tenure, and advancement on a merit basis.
(c) When independent public accountants or other independent professionals are engaged to perform work that includes inquiries into compliance with applicable laws and regulations, efficiency and economy of operations, or achievement of program results, they should be engaged by someone other than the officials responsible for the direction of the effort being audited. This practice removes the pressure that may result if the auditor must criticize the performance of those by whom he or she was engaged. To remove this obstacle to independence, governments should arrange to have auditors engaged by officials not directly involved in operations to be audited.
(a) When outside auditors are engaged for assignments requiring the expression of an opinion on financial reports of governmental organizations, only fully qualified public accountants should be employed. The type of qualifications, as stated by the Comptroller General, deemed necessary for financial audits of governmental organizations and programs is quoted below:
“Such audits shall be conducted * * * by independent certified public accountants or by independent licensed public accountants, licensed on or before December 31, 1970, who are certified or licensed by a regulatory authority of a State or other political subdivision of the United States: Except that independent public accountants licensed to practice by such regulatory authority after December 31, 1970, and persons who although not so certified or licensed, meet, in the opinion of the Secretary, standards of education and experience representative of the highest prescribed by the licensing authorities of the several States which provide for the continuing licensing of public accountants and which are prescribed by the Secretary in appropriate regulations may perform such audits until December 31, 1975; Provided, That if the Secretary deems it necessary in the public interest, he may prescribe by regulations higher standard than those required for the practice of public accountancy by the regulatory authorities of the States.”
(b) The standards for examination and evaluation require consideration of applicable laws and regulations in the auditor's examination. The standards for reporting require a statement in the auditor's report regarding any significant instances of noncompliance disclosed by his or her examination and evaluation work. What is to be included in this statement requires judgment. Significant instances of noncompliance, even those not resulting in legal liability to the audited entity, should be included. Minor procedural noncompliance need not be disclosed.
(c) Although the reporting standard is generally on an exception basis—that only noncompliance need be reported—it should be recognized that governmental entities often want positive statements regarding whether or not the auditor's tests disclosed instances of noncompliance. This is particularly true in grant programs where authorizing agencies frequently want assurance in the auditor's report that this matter has been considered. For such audits, auditors should obtain an understanding with the authorizing agency as to the extent to which such positive comments on compliance are desired. When coordinated audits are involved, the audit program should specify the extent of comments that the auditor is to make regarding compliance.
(d) When noncompliance is reported, the auditor should place the findings in proper perspective. The extent of instances of noncompliance should be related to the number of cases examined to provide the reader with a basis for judging the prevalence of noncompliance.
Sample Student Account Ledger
| Line | Date | Charge/Payment | Memo | Debit | Credit | Balance |
|---|---|---|---|---|---|---|
| 1 | 12/31/2021 | Federal Direct Loan | 1,000.00 | (1,000.00) | ||
| 2 | 1/1/2022 | Tuition and Fees | 17,000.00 | 16,000.00 | ||
| 3 | 2/1/2022 | Cash Payment | 175.00 | 15,825.00 | ||
| 4 | 2/1/2022 | Federal Funds 1 | 2,000.00 | 13,825.00 | ||
| 5 | 2/1/2022 | FSEOG | (Fed. 375/Inst. 125) | 500.00 | 13,325.00 | |
| 6 | 5/1/2022 | Cash Payment | (Federal funds 3) | 500.00 | 12,825.00 | |
| 7 | 7/1/2022 | Federal Pell Grant | 1,700.00 | 11,125.00 | ||
| 8 | 7/1/2022 | Institutional Scholarship | 500.00 | 10,625.00 | ||
| 9 | 7/1/2022 | Federal Direct Loan | 1,500.00 | 9,125.00 | ||
| 10 | 7/1/2022 | Cash Payment | (Federal funds 4) | 3,700.00 | 5,425.00 | |
| 11 | 8/1/2022 | Federal Funds 2 | 3,725.00 | 1,700.00 | ||
| 12 | 9/1/2022 | City Grant | 2,200.00 | (500.00) | ||
| 13 | 9/1/2022 | Refund Check | 500.00 |
| Line item in the sample | Amount in the sample | |
|---|---|---|
| 12 | Grant funds for the student from non-Federal public agencies or private sources independent of the institution | 2,200.00 |
| Funds provided for the student under a contractual arrangement with a Federal, State, or local government agency for the purpose of providing job training to low-income individuals | ||
| Funds used by a student from savings plans for educational expenses established by or on behalf of the student that qualify for special tax treatment under the Internal Revenue Code | ||
| 8 | Qualified institutional scholarships disbursed to the student | 500.00 |
| Adjustment: If the amount of Total Funds Applied First is more than Tuition and Fees, then Adjusted Total Funds Applied First is reduced by the amount over Tuition and Fees | ||
| Total Funds Applied First | 2,700.00 | |
| 1 | Prior Year Title IV Carried Over Credit Balance | 1,000.00 |
| 9 | Federal Direct Loan | 1,500.00 |
| 7 | Federal Pell Grant | 1,700.00 |
| 5 | FSEOG (subject to matching reduction) ($500 −$375 FSEOG and $125 Institutional Match) | 500.00 |
| Federal Work Study Applied to Tuition and Fees (subject to matching reduction) | ||
| 5 | Adjustment: The amount of FSEOG funds disbursed to a student and the amount of FWS funds credited to the student's account are reduced by the amount of the institutional matching funds | −125.00 |
| Adjustment: If the amount of Adjusted Total Funds Applied First + Total Student Title IV Revenue is more than Tuition and Fees, then Adjusted Total Student Title IV Revenue is reduced by the amount over Tuition and Fees | ||
| Adjustment: If Title IV funds are returned for a student under § 668.22, then Student Title IV Revenue is reduced by the amount returned | ||
| Adjusted Total Title IV Aid | 4,575.00 | |
| 4 | Federal Funds 1 | 2,000.00 |
| 11 | Federal Funds 2 | 3,725.00 |
| Adjustment: If the amount of Adjusted Total Funds Applied First + Adjusted Total Student Title IV Revenue + Total Other Federal Funds Paid Directly to the Institution is more than Tuition and Fees, then Adjusted Total Other Federal Funds Paid Directly to the Institution is reduced by the amount over Tuition and Fees | ||
| Adjusted Total Other Federal Funds Paid Directly to the Institution | 5,725.00 | |
| 6 | Federal Funds 3 | 500.00 |
| 10 | Federal Funds 4 | 3,700.00 |
| Adjustment: If the amount of Adjusted Funds Applied First + Adjusted Student Title IV Revenue + Adjusted Total Other Federal Funds Paid Directly to the Institution + Total Other Federal Funds Paid Directly to Student is more than Tuition and Fees, then Adjusted Federal Funds Paid Directly to Student is reduced by the amount over Tuition and Fees | −200.00 | |
| Adjusted Total Other Federal Funds Paid Directly to Student | 4,000.00 | |
| 3 | Student payments | 175.00 |
| 5 | Adjustment: The amount of FSEOG funds disbursed to a student and the amount of FWS funds credited to the student's account are added to cash for the institutional matching funds | 125.00 |
| Adjustment: If the amount of Adjusted Total Funds Applied First + Adjusted Total Student Title IV Revenue + Adjusted Total Other Federal Funds Paid Directly to the Institution + Adjusted Total Other Federal Funds Paid to Student + Total Cash and Other Non- Title Payments are more than Tuition and Fees, then Adjusted Total Cash and Other Non-Title Payments is reduced by the amount over
Tuition and Fees | −300.00 | |
| Adjusted Total Cash and Other Non-Title IV Aid | 0 | |
| Adjusted Total All Federal and Cash Payments | 17,000.00 | |
Section 2—Revenue by Source—One Student Example
| Line item in the sample | Amount disbursed | Adjusted amount | |
|---|---|---|---|
| 1 | Title IV Credit Balance Carried Over from Prior Year | 1,000.00 | 1,000.00 |
| 9 | Federal Direct Loan | 1,500.00 | 1,500.00 |
| 7 | Federal Pell Grant | 1,700.00 | 1,700.00 |
| 5 | FSEOG (federal portion only) | 375.00 | 375.00 |
| Total Student Title IV Revenue | 4,575.00 | 4,575.00 | |
| 6 | Federal Funds 1 | 2,000.00 | 2,000.00 |
| 10 | Federal Funds 2 | 3,725.00 | 3,725.00 |
| Total Student Federal Funds Paid Directly to the Institution | 5,725.00 | 5,725.00 | |
| 4 | Federal Funds 3 | 500.00 | 500.00 |
| 11 | Federal Funds 4 | 3,700.00 | 3,700.00 |
| 13 | Refunds Paid to Student | −200.00 | |
| Adjusted Student Federal Funds Paid Directly to Student | 4,200.00 | 4,000.00 | |
| Adjusted Student Federal Revenue | 14,500.00 | 14,300.00 | |
| 12 | Grant funds for the student from non-Federal public agencies or private sources independent of the institution | 2,200.00 | 2,200.00 |
| 8 | Institutional scholarships disbursed to the student | 500.00 | 500.00 |
| 3,5,13 | Student payments | 300.00 | 0 |
| Student Non-Title IV Revenue | 3,000.00 | 2,700.00 | |
| Total Federal and Non-Federal Revenue | 17,500.00 | 17,000.00 | |
Section 2—Revenue by Source—Calculation
| Amount disbursed | Adjusted amount | |
|---|---|---|
| Title IV Credit Balance Carried Over from Prior Year | 45,000.00 | 45,0000.00 |
| Federal Direct Loan | 1,500,000.00 | 1,500,000.00 |
| Federal Pell Grant | 400,700.00 | 400,700.00 |
| FSEOG (subject to matching reduction) | 11,500.00 | 8,625.00 |
| Total Student Title IV Revenue | 1,957,200.00 | 1,954,325.00 |
| Refunds Paid to Students | −35,500.00 | |
| Federal Funds 3 | 50,000.00 | 50,000.00 |
| Federal Funds 4 | 3,700.00 | 3,700.00 |
| Total Student Federal Funds Paid Directly to Student | 53,700.00 | 53,700.00 |
| Refunds Paid to Student | −200.00 | |
| Adjusted Student Federal Funds Paid Directly to Student | 53,700.00 | 53,500.00 |
| Adjusted Student Federal Revenue | 3,575,625.00 | 3,517,050.00 |
| Adjusted Student Title IV Revenue | 1,957,200.00 | 1,918,825.00 |
| Federal Funds 1 | 200,000.00 | 200,000.00 |
| Federal Funds 2 | 1,355,725.00 | 1,355,725.00 |
| Federal Portion of Other Funds | 9,000.00 | 9,000.00 |
| Total Student Federal Funds Paid Directly to the Institution | 1,564,725.00 | 1,564,725.00 |
| Refunds Paid to Students | −20,000.00 | |
| Adjusted Student Title IV Federal Funds Paid Directly to the Institution | 1,564,725.00 | 1,544,725.00 |
| Activities conducted by the institution that are necessary for education and training | 25,000.00 | 25,000.00 |
| Funds paid to the institution by, or on behalf of, students for education and training in qualified non-Title IV eligible programs | 143,000.00 | 143,000.00 |
| Revenue from Other Sources | 168,000.00 | 168,000.00 |
| Adjusted Non-Federal Revenue and Revenue from Other Sources | 587,800.00 | 559,500.00 |
| Total Federal and Non-Federal Revenue | 4,163,425.00 | 4,076,550.00 |
| Student non-Federal revenue | Amount | Adjusted amount |
|---|---|---|
| Grant funds for the student from non-Federal public agencies or private sources independent of the institution | ||
| —State Grant (9.0451 percent Federal Funds) | 99,500.00 | 90,500.00 |
| —ABC Scholarship | 500.00 | 500.00 |
| Funds provided for the student under a contractual arrangement with a Federal, State, or local government agency for the purpose of providing job training to low-income individuals | ||
| Funds used by a student from savings plan for educational expenses established by or on behalf of the student that qualify for special tax treatment under the Internal Revenue Code | ||
| Qualified institutional scholarships disbursed to the student | 500.00 | 500.00 |
| Student payments | ||
| —Third Party Loans | 50,000.00 | 50,000.00 |
| —Third Party Loans-related Party/Institutional Loans | 107,000.00 | 100,000.00 |
| —ISA Institutional or Related Party | 37,000.00 | 25,000.00 |
| —ISA | 75,000.00 | 75,000.00 |
| —Student Cash | 50,300.00 | 50,300.00 |
| Student Non-Title IV Revenue | 419,800.00 | 391,800.00 |
| Refunds Paid to Student | −300.00 | |
| Adjusted Non-Federal Revenue | 419,800.00 | 391,500.00 |
Numerator 3,517,050.
Denominator 4,076,550 = 86.27 percent.
Section 3—Calculating the Revenue Percentage
| ∑ Adjusted Student Federal Revenue * ÷ ∑ Adjusted Student Federal Revenue + ∑ Adjusted Non-Federal Revenue and Revenue from Other Sources = 90/10 Revenue Percentage. |
* Adjusted Student Federal Revenue = Adjusted Student Title IV Revenue + Adjusted Other Federal Funds Paid Directly to the Institution + Adjusted Other Federal Funds Paid Directly to Student
∑ Adjusted Student Federal Revenue = The sum of the amounts of all Federal funds, as adjusted, for each student at the institution during the fiscal year to whom the institution disbursed Title IV Aid and Other Federal Funds and Federal funds that students directly receive.
∑ Adjusted Non-Federal Revenue = The sum of the amounts of items applied first and adjusted cash payments for each student at the institution during the fiscal year whose non-Federal funds were used to pay all or some of those student's Tuition and Fee charges.
This subpart contains rules by which a student establishes eligibility for assistance under the title IV, HEA programs. In order to qualify as an eligible student, a student must meet all applicable requirements in this subpart.
A student is eligible to receive Title IV, HEA program assistance if the student either meets all of the requirements in paragraphs (a) through (m) of this section or meets the requirement in paragraph (n) of this section as follows:
(a)(1) (i) Is a regular student enrolled, or accepted for enrollment, in an eligible program at an eligible institution;
(ii) For purposes of the FFEL and Direct Loan programs, is enrolled for no longer than one twelve-month period in a course of study necessary for enrollment in an eligible program; or
(iii) For purposes of the Federal Perkins Loan, FWS, FFEL, and Direct Loan programs, is enrolled or accepted for enrollment as at least a half-time student at an eligible institution in a program necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State; and
(2) For purposes of the ACG, National SMART Grant, FFEL, and Direct Loan programs, is at least a half-time student.
(b) Is not enrolled in either an elementary or secondary school.
(c)(1) For purposes of the ACG, National SMART Grant, and FSEOG programs, does not have a baccalaureate or first professional degree;
(2) For purposes of the Federal Pell Grant Program—
(i)(A) Does not have a baccalaureate or first professional degree; or
(B) Is enrolled in a postbaccalaureate teacher certificate or licensing program as described in 34 CFR 690.6(c); and
(ii) If the student is a confined or incarcerated individual as defined in 34 CFR 600.2, is enrolled in an eligible prison education program as defined in § 668.236;
(3) For purposes of the Federal Perkins Loan, FFEL, and Direct Loan programs, is not incarcerated; and
(4) For the purposes of the TEACH Grant program—
(i) For an undergraduate student other than a student enrolled in a post-baccalaureate program, has not completed the requirements for a first baccalaureate degree; or
(ii) For the purposes of a student in a first post-baccalaureate program, has not completed the requirements for a post-baccalaureate program as described in 34 CFR 686.2(d).
(d) Satisfies the citizenship and residency requirements contained in § 668.33 and subpart I of this part.
(e)(1) Has a high school diploma or its recognized equivalent;
(2) Has obtained a passing score specified by the Secretary on an independently administered test in accordance with subpart J of this part, and either—
(i) Was first enrolled in an eligible program before July 1, 2012; or
(ii) Is enrolled in an eligible career pathway program as defined in § 668.2;
(3) Is enrolled in an eligible institution that participates in a State process approved by the Secretary under subpart J of this part, and either—
(i) Was first enrolled in an eligible program before July 1, 2012; or
(ii) Is enrolled in an eligible career pathway program as defined in § 668.2;
(4) Was home-schooled, and either—
(i) Obtained a secondary school completion credential for home school (other than a high school diploma or its recognized equivalent) provided for under State law; or
(ii) If State law does not require a home-schooled student to obtain the credential described in paragraph (e)(4)(i) of this section, has completed a secondary school education in a home school setting that qualifies as an exemption from compulsory attendance requirements under State law; or
(5) Has been determined by the institution to have the ability to benefit from the education or training offered by the institution based on the satisfactory completion of 6 semester hours, 6 trimester hours, 6 quarter hours, or 225 clock hours that are applicable toward a degree or certificate offered by the institution, and either—
(i) Was first enrolled in an eligible program before July 1, 2012; or
(ii) Is enrolled in an eligible career pathway program as defined in § 668.2.
(f) Maintains satisfactory academic progress in his or her course of study according to the institution's published standards of satisfactory academic progress that meet the requirements of § 668.34.
(g) Except as provided in § 668.35—
(1) Is not in default, and certifies that he or she is not in default, on a loan made under any title IV, HEA loan program;
(2) Has not obtained loan amounts that exceed annual or aggregate loan limits made under any title IV, HEA loan program;
(3) Does not have property subject to a judgment lien for a debt owed to the United States; and
(4) Is not liable for a grant or Federal Perkins loan overpayment. A student receives a grant or Federal Perkins loan overpayment if the student received grant or Federal Perkins loan payments that exceeded the amount he or she was eligible to receive; or if the student withdraws, that exceeded the amount he or she was entitled to receive for non-institutional charges.
(h) Files a Statement of Educational Purpose in accordance with the instructions of the Secretary.
(i) Has a correct social security number as determined under § 668.36, except that this requirement does not apply to students who are residents of the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau.
(j) Satisfies the Selective Service registration requirements contained in § 668.37, and, if applicable, satisfies the requirements of § 668.38 and § 668.39 involving enrollment in telecommunication and correspondence courses and a study abroad program, respectively.
(k) Satisfies the program specific requirements contained in—
(1) 34 CFR 674.9 for the Federal Perkins Loan program;
(2) 34 CFR 675.9 for the FWS program;
(3) 34 CFR 676.9 for the FSEOG program;
(4) 34 CFR 682.201 for the FFEL programs;
(5) 34 CFR 685.200 for the William D. Ford Federal Direct Loan programs;
(6) 34 CFR 690.75 for the Federal Pell Grant program;
(7) 34 CFR 691.75 for the ACG and National SMART Grant programs;
(8) 34 CFR 692.40 for the LEAP program; and
(9) 34 CFR 686.11 for the TEACH Grant program.
(l) Is not ineligible under § 668.40.
(m) In the case of a student who has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance, has completed the repayment of such assistance to:
(1) The Secretary; or
(2) The holder, in the case of a title IV, HEA program loan.
(n) Is enrolled in a comprehensive transition and postsecondary program under subpart O of this part and meets the student eligibility criteria in that subpart.
(a) Except as provided in paragraph (b) of this section, to be eligible to receive title IV, HEA program assistance, a student must—
(1) Be a citizen or national of the United States; or
(2) Provide evidence from the U.S. Immigration and Naturalization Service that he or she—
(i) Is a permanent resident of the United States; or
(ii) Is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident;
(b)(1) A citizen of the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau is eligible to receive funds under the FWS, FSEOG, and Federal Pell Grant programs if the student attends an eligible institution in a State, or a public or nonprofit private eligible institution of higher education in those jurisdictions.
(2) A student who satisfies the requirements of paragraph (a) of this section is eligible to receive funds under the FWS, FSEOG, and Federal Pell Grant programs if the student attends a public or nonprofit private eligible institution of higher education in the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau.
(c)(1) If a student asserts that he or she is a citizen of the United States on the Free Application for Federal Student Aid (FAFSA), the Secretary attempts to confirm that assertion under a data match with the Social Security Administration. If the Social Security Administration confirms the student's citizenship, the Secretary reports that confirmation to the institution and the student.
(2) If the Social Security Administration does not confirm the student's citizenship assertion under the data match with the Secretary, the student can establish U.S. citizenship by submitting documentary evidence of that status to the institution. Before denying title IV, HEA assistance to a student for failing to establish citizenship, an institution must give a student at least 30 days notice to produce evidence of U.S. citizenship.
(a) Satisfactory academic progress policy. An institution must establish a reasonable satisfactory academic progress policy for determining whether an otherwise eligible student is making satisfactory academic progress in his or her educational program and may receive assistance under the title IV, HEA programs. The Secretary considers the institution's policy to be reasonable if—
(1) The policy is at least as strict as the policy the institution applies to a student who is not receiving assistance under the title IV, HEA programs;
(2) The policy provides for consistent application of standards to all students within categories of students, e.g., full-time, part-time, undergraduate, and graduate students, and educational programs established by the institution;
(3) The policy provides that a student's academic progress is evaluated—
(i) At the end of each payment period if the educational program is either one academic year in length or shorter than an academic year; or
(ii) For all other educational programs, at the end of each payment period or at least annually to correspond with the end of a payment period;
(4)(i) The policy specifies the grade point average (GPA) that a student must achieve at each evaluation, or if a GPA is not an appropriate qualitative measure, a comparable assessment measured against a norm; and
(ii) If a student is enrolled in an educational program of more than two academic years, the policy specifies that at the end of the second academic year, the student must have a GPA of at least a “C” or its equivalent, or have academic standing consistent with the institution's requirements for graduation;
(5) The policy specifies—
(i) For all programs, the maximum timeframe as defined in paragraph (b) of this section; and
(ii) For a credit hour program using standard or nonstandard terms that is not a subscription-based program, the pace, measured at each evaluation, at which a student must progress through his or her educational program to ensure that the student will complete the program within the maximum timeframe, calculated by either dividing the cumulative number of hours the student has successfully completed by the cumulative number of hours the student has attempted or by determining the number of hours that the student should have completed by the evaluation point in order to complete the program within the maximum timeframe. In making this calculation, the institution is not required to include remedial courses;
(6) The policy describes how a student's GPA and pace of completion are affected by course incompletes, withdrawals, or repetitions, or transfers of credit from other institutions. Credit hours from another institution that are accepted toward the student's educational program must count as both attempted and completed hours;
(7) Except as provided in paragraphs (c) and (d) of this section, the policy provides that, at the time of each evaluation, a student who has not achieved the required GPA, or who is not successfully completing his or her educational program at the required pace, is no longer eligible to receive assistance under the title IV, HEA programs;
(8) If the institution places students on financial aid warning, or on financial aid probation, as defined in paragraph (b) of this section, the policy describes these statuses and that—
(i) A student on financial aid warning may continue to receive assistance under the title IV, HEA programs for one payment period despite a determination that the student is not making satisfactory academic progress. Financial aid warning status may be assigned without an appeal or other action by the student; and
(ii) A student on financial aid probation may receive title IV, HEA program funds for one payment period. While a student is on financial aid probation, the institution may require the student to fulfill specific terms and conditions such as taking a reduced course load or enrolling in specific courses. At the end of one payment period on financial aid probation, the student must meet the institution's satisfactory academic progress standards or meet the requirements of the academic plan developed by the institution and the student to qualify for further title IV, HEA program funds;
(9) If the institution permits a student to appeal a determination by the institution that he or she is not making satisfactory academic progress, the policy describes—
(i) How the student may reestablish his or her eligibility to receive assistance under the title IV, HEA programs;
(ii) The basis on which a student may file an appeal: The death of a relative, an injury or illness of the student, or other special circumstances; and
(iii) Information the student must submit regarding why the student failed to make satisfactory academic progress, and what has changed in the student's situation that will allow the student to demonstrate satisfactory academic progress at the next evaluation;
(10) If the institution does not permit a student to appeal a determination by the institution that he or she is not making satisfactory academic progress, the policy must describe how the student may reestablish his or her eligibility to receive assistance under the title IV, HEA programs; and
(11) The policy provides for notification to students of the results of an evaluation that impacts the student's eligibility for title IV, HEA program funds.
(b) Definitions. The following definitions apply to the terms used in this section:
Appeal. Appeal means a process by which a student who is not meeting the institution's satisfactory academic progress standards petitions the institution for reconsideration of the student's eligibility for title IV, HEA program assistance.
Financial aid probation. Financial aid probation means a status assigned by an institution to a student who fails to make satisfactory academic progress and who has appealed and has had eligibility for aid reinstated.
Financial aid warning. Financial aid warning means a status assigned to a student who fails to make satisfactory academic progress at an institution that evaluates academic progress at the end of each payment period.
Maximum timeframe. Maximum timeframe means—
(1) For an undergraduate program measured in credit hours, a period that is no longer than 150 percent of the published length of the educational program, as measured in credit hours, or expressed in calendar time;
(2) For an undergraduate program measured in clock hours, a period that is no longer than 150 percent of the published length of the educational program, as measured by the cumulative number of clock hours the student is required to complete and expressed in calendar time; and
(3) For a graduate program, a period defined by the institution that is based on the length of the educational program.
(c) Institutions that evaluate satisfactory academic progress at the end of each payment period. (1) An institution that evaluates satisfactory academic progress at the end of each payment period and determines that a student is not making progress under its policy may nevertheless disburse title IV, HEA program funds to the student under the provisions of paragraph (c)(2), (c)(3), or (c)(4) of this section.
(2) For the payment period following the payment period in which the student did not make satisfactory academic progress, the institution may—
(i) Place the student on financial aid warning, and disburse title IV, HEA program funds to the student; or
(ii) Place a student directly on financial aid probation, following the procedures outlined in paragraph (d)(2) of this section and disburse title IV, HEA program funds to the student.
(3) For the payment period following a payment period during which a student was on financial aid warning, the institution may place the student on financial aid probation, and disburse title IV, HEA program funds to the student if—
(i) The institution evaluates the student's progress and determines that student did not make satisfactory academic progress during the payment period the student was on financial aid warning;
(ii) The student appeals the determination; and
(iii)(A) The institution determines that the student should be able to meet the institution's satisfactory academic progress standards by the end of the subsequent payment period; or
(B) The institution develops an academic plan for the student that, if followed, will ensure that the student is able to meet the institution's satisfactory academic progress standards by a specific point in time.
(4) A student on financial aid probation for a payment period may not receive title IV, HEA program funds for the subsequent payment period unless the student makes satisfactory academic progress or the institution determines that the student met the requirements specified by the institution in the academic plan for the student.
(d) Institutions that evaluate satisfactory academic progress annually or less frequently than at the end of each payment period. (1) An institution that evaluates satisfactory academic progress annually or less frequently than at the end of each payment period and determines that a student is not making progress under its policy may nevertheless disburse title IV, HEA program funds to the student under the provisions of paragraph (d)(2) or (d)(3) of this section.
(2) The institution may place the student on financial aid probation and may disburse title IV, HEA program funds to the student for the subsequent payment period if—
(i) The institution evaluates the student and determines that the student is not making satisfactory academic progress;
(ii) The student appeals the determination; and
(iii)(A) The institution determines that the student should be able to be make satisfactory academic progress during the subsequent payment period and meet the institution's satisfactory academic progress standards at the end of that payment period; or
(B) The institution develops an academic plan for the student that, if followed, will ensure that the student is able to meet the institution's satisfactory academic progress standards by a specific point in time.
(3) A student on financial aid probation for a payment period may not receive title IV, HEA program funds for the subsequent payment period unless the student makes satisfactory academic progress or the institution determines that the student met the requirements specified by the institution in the academic plan for the student.
(a) A student who is in default on a loan made under a title IV, HEA loan program may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays the loan in full; or
(2) Except as limited by paragraph (c) of this section—
(i) Makes arrangements, that are satisfactory to the holder of the loan and in accordance with the individual title IV, HEA loan program regulations, to repay the loan balance; and
(ii) Makes at least six consecutive monthly payments under those arrangements.
(b) A student who is subject to a judgment for failure to repay a loan made under a title IV, HEA loan program may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays the debt in full; or
(2) Except as limited by paragraph (c) of this section—
(i) Makes repayment arrangements that are satisfactory to the holder of the debt; and
(ii) Makes at least six consecutive, voluntary monthly payments under those arrangements. Voluntary payments are those payments made directly by the borrower, and do not include payments obtained by Federal offset, garnishment, or income or asset execution.
(c) A student who reestablishes eligibility under either paragraph (a)(2) of this section or paragraph (b)(2) of this section may not reestablish eligibility again under either of those paragraphs.
(d) A student who is not in default on a loan made under a title IV, HEA loan program, but has inadvertently obtained loan funds under a title IV, HEA loan program in an amount that exceeds the annual or aggregate loan limits under that program, may nevertheless be eligible to receive title IV, HEA program assistance if the student—
(1) Repays in full the excess loan amount; or
(2) Makes arrangements, satisfactory to the holder of the loan, to repay that excess loan amount.
(e) Except as provided in 34 CFR 668.22(h), a student who receives an overpayment under the Federal Perkins Loan Program, or under a title IV, HEA grant program, may nevertheless be eligible to receive title IV, HEA program assistance if—
(1) The student pays the overpayment in full;
(2) The student makes arrangements satisfactory to the holder of the overpayment debt to pay the overpayment;
(3) The overpayment amount is less than $25 and is neither a remaining balance nor a result of the application of the overaward threshold in 34 CFR 673.5(d); or
(4) The overpayment is an amount that a student is not required to return under the requirements of § 668.22(h)(3)(ii)(B).
(f) A student who has property subject to a judgement lien for a debt owed to the United States may nevertheless be eligible to receive title IV, HEA program assistance if the student-
(1) Pays the debt in full; or
(2) Makes arrangements, satisfactory to the United States, to pay the debt.
(g) (1) A student is not liable for a Federal Pell Grant overpayment received in an award year if the institution can eliminate that overpayment by adjusting subsequent Federal Pell Grant payments in that same award year.
(2) A student is not liable for an ACG overpayment received in an award year if—
(i) The institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant, ACG, or National SMART Grant) payments in that same award year; or
(ii) The institution cannot eliminate the overpayment under paragraph (g)(2)(i) of this section but can eliminate that overpayment by adjusting subsequent ACG payments in that same award year.
(3) A student is not liable for a National SMART Grant overpayment received in an award year if—
(i) The institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant, ACG, or National SMART Grant) payments in that same award year; or
(ii) The institution cannot eliminate the overpayment under paragraph (g)(3)(i) of this section but can eliminate that overpayment by adjusting subsequent National SMART Grant payments in that same award year.
(4) A student is not liable for a TEACH Grant overpayment received in an award year if—
(i) The institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant) payments in that same award year; or
(ii) The institution cannot eliminate the overpayment under paragraph (g)(4)(i) of this section but can eliminate that overpayment by adjusting subsequent TEACH Grant payments in that same award year.
(5) A student is not liable for a FSEOG or LEAP overpayment or Federal Perkins loan overpayment received in an award year if the institution can eliminate that overpayment by adjusting subsequent title IV, HEA program (other than Federal Pell Grant) payments in that same award year.
(h) A student who otherwise is in default on a loan made under a title IV, HEA loan program, or who otherwise owes an overpayment on a title IV, HEA program grant or Federal Perkins loan, is not considered to be in default or owe an overpayment if the student—
(1) Obtains a judicial determination that the debt has been discharged or is dischargeable in bankruptcy; or
(2) Demonstrates to the satisfaction of the holder of the debt that—
(i) When the student filed the petition for bankruptcy relief, the loan, or demand for the payment of the overpayment, had been outstanding for the period required under 11 U.S.C. 523(a)(8)(A), exclusive of applicable suspensions of the repayment period for either debt of the kind defined in 34 CFR 682.402(m); and
(ii) The debt otherwise qualifies for discharge under applicable bankruptcy law; and
(i) In the case of a student who has been convicted of, or has pled nolo contendere or guilty to a crime involving fraud in obtaining title IV, HEA program assistance, has completed the repayment of such assistance to:
(1) The Secretary; or
(2) The holder, in the case of a title IV, HEA program loan.
(a)(1) Except for residents of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, the Secretary attempts to confirm the social security number a student provides on the Free Application for Federal Student Aid (FAFSA) under a data match with the Social Security Administration. If the Social Security Administration confirms that number, the Secretary notifies the institution and the student of that confirmation.
(2) If the student's verified social security number is the same number as the one he or she provided on the FAFSA, and the institution has no reason to believe that the verified social security number is inaccurate, the institution may consider the number to be accurate.
(3) If the Social Security Administration does not verify the student's social security number on the FAFSA, or the institution has reason to believe that the verified social security number is inaccurate, the student can provide evidence to the institution, such as the student's social security card, indicating the accuracy of the student's social security number. An institution must give a student at least 30 days, or until the end of the award year, whichever is later, to produce that evidence.
(4) An institution may not deny, reduce, delay, or terminate a student's eligibility for assistance under the title IV, HEA programs because verification of that student's social security number is pending.
(b)(1) An institution may not disburse any title IV, HEA program funds to a student until the institution is satisfied that the student's reported social security number is accurate.
(2) The institution shall ensure that the Secretary is notified of the student's accurate social security number if the student demonstrates the accuracy of a social security number that is not the number the student included on the FAFSA.
(c) If the Secretary determines that the social security number provided to an institution by a student is incorrect, and that student has not provided evidence under paragraph (a)(3) of this section indicating the accuracy of the social security number, and a loan has been guaranteed for the student under the FFEL program, the institution shall notify and instruct the lender and guaranty agency making and guaranteeing the loan, respectively, to cease further disbursements of the loan, until the Secretary or the institution determines that the social security number provided by the student is correct, but the guaranty may not be voided or otherwise nullified before the date that the lender and the guaranty agency receive the notice.
(d) Nothing in this section permits the Secretary to take any compliance, disallowance, penalty or other regulatory action against—
(1) Any institution of higher education with respect to any error in a social security number, unless the error was the result of fraud on the part of the institution; or
(2) Any student with respect to any error in a social security number, unless the error was the result of fraud on the part of the student.
(a)(1) To be eligible to receive title IV, HEA program funds, a male student who is subject to registration with the Selective Service must register with the Selective Service.
(2) A male student does not have to register with the Selective Service if the student—
(i) Is below the age of 18, or was born before January 1, 1960;
(ii) Is enrolled in an officer procurement program the curriculum of which has been approved by the Secretary of Defense at the following institutions:
(A) The Citadel, Charleston, South Carolina;
(B) North Georgia College, Dahlonega, Georgia;
(C) Norwich University, Northfield, Vermont; or
(D) Virginia Military Institute, Lexington, Virginia; or
(iii) Is a commissioned officer of the Public Health Service or a member of the Reserve of the Public Health Service who is on active duty as provided in section 6(a)(2) of the Military Selective Service Act.
(b)(1) When the Secretary processes a male student's FAFSA, the Secretary determines whether the student is registered with the Selective Service under a data match with the Selective Service.
(2) Under the data match, Selective Service reports to the Secretary whether its records indicate that the student is registered, and the Secretary reports the results of the data match to the student and the institution the student is attending.
(c)(1) If the Selective Service does not confirm through the data match, that the student is registered, the student can establish that he—
(i) Is registered;
(ii) Is not, or was not required to be, registered;
(iii) Has registered since the submission of the FAFSA; or
(iv) Meets the conditions of paragraph (d) of this section.
(2) An institution must give a student at least 30 days, or until the end of the award year, whichever is later, to provide evidence to establish the condition described in paragraph (c)(1) of this section.
(d) An institution may determine that a student, who was required to, but did not register with the Selective Service, is not ineligible to receive title IV, HEA assistance for that reason, if the student can demonstrate by submitting clear and unambiguous evidence to the institution that—
(1) He was unable to present himself for registration for reasons beyond his control such as hospitalization, incarceration, or institutionalization; or
(2) He is over 26 and when he was between 18 and 26 and required to register—
(i) He did not knowingly and willfully fail to register with the Selective Service; or
(ii) He served as a member of one of the U.S. Armed Forces on active duty and received a DD Form 214, “Certificate of Release or Discharge from Active Duty,” showing military service with other than the reserve forces and National Guard.
(e) For purposes of paragraph (d)(2)(i) of this section, an institution may consider that a student did not knowingly and willfully fail to register with the Selective Service only if—
(1) The student submits to the institution an advisory opinion from the Selective Service System that does not dispute the student's claim that he did not knowingly and willfully fail to register; and
(2) The institution does not have uncontroverted evidence that the student knowingly and willfully failed to register.
(f)(1) A student who is required to register with the Selective Service and has been denied title IV, HEA program assistance because he has not proven to the institution that he has registered with Selective Service may seek a hearing from the Secretary by filing a request in writing with the Secretary. The student must submit with that request—
(i) A statement that he is in compliance with registration requirements;
(ii) A concise statement of the reasons why he has not been able to prove that he is in compliance with those requirements; and
(iii) Copies of all material that he has already supplied to the institution to verify his compliance.
(2) The Secretary provides an opportunity for a hearing to a student who—
(i) Asserts that he is in compliance with registration requirements; and
(ii) Files a written request for a hearing in accordance with paragraph (f)(1) of this section within the award year for which he was denied title IV, HEA program assistance or within 30 days following the end of the payment period, whichever is later.
(3) An official designated by the Secretary shall conduct any hearing held under paragraph (f)(2) of this section. The sole purpose of this hearing is the determination of compliance with registration requirements. At this hearing, the student retains the burden of proving compliance, by credible evidence, with the requirements of the Military Selective Service Act. The designated official shall not consider challenges based on constitutional or other grounds to the requirements that a student state and verify, if required, compliance with registration requirements, or to those registration requirements themselves.
(g) Any determination of compliance made under this section is final unless reopened by the Secretary and revised on the basis of additional evidence.
(h) Any determination of compliance made under this section is binding only for purposes of determining eligibility for title IV, HEA program assistance.
(a) If a student is enrolled in correspondence courses, the student is eligible to receive title IV, HEA program assistance only if the correspondence courses are part of a program that leads to an associate, bachelor's, or graduate degree.
(b)(1) For purposes of this section, a student enrolled in a telecommunications course at an institution of higher education is not enrolled in a correspondence course.
(2) For purposes of paragraph (b)(1) of this section, an institution of higher education is one that is not an institute or school described in section 3(3)(C) of the Carl D. Perkins Vocational and Applied Technology Act of 1995.
A student enrolled in a program of study abroad is eligible to receive title IV, HEA program assistance if—
(a) The student remains enrolled as a regular student in an eligible program at an eligible institution during his or her program of study abroad; and
(b) The eligible institution approves the program of study abroad for academic credit. However, the study abroad program need not be required as part of the student's eligible degree program.
(a)(1) A student is ineligible to receive title IV, HEA program funds, for the period described in paragraph (b) of this section, if the student has been convicted of an offense under any Federal or State law involving the possession or sale of illegal drugs for conduct that occurred during a period of enrollment for which the student was receiving title IV, HEA program funds. However, the student may regain eligibility before that time period expires under the conditions described in paragraph (c) of this section.
(2) For purposes of this section, a conviction means only a conviction that is on a student's record. A conviction that was reversed, set aside, or removed from the student's record is not relevant for purposes of this section, nor is a determination or adjudication arising out of a juvenile proceeding.
(3) For purposes of this section, an illegal drug is a controlled substance as defined by section 102(6) of the Controlled Substances Act (21 U.S.C. 801(6)), and does not include alcohol or tobacco.
(b)(1) Possession. Except as provided in paragraph (c) of this section, if a student has been convicted—
(i) Only one time for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for one year after the date of conviction;
(ii) Two times for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for two years after the date of the second conviction; or
(iii) Three or more times for possession of illegal drugs, the student is ineligible to receive title IV, HEA program funds for an indefinite period after the date of the third conviction.
(2) Sale. Except as provided in paragraph (c) of this section, if a student has been convicted—
(i) Only one time for sale of illegal drugs, the student is ineligible to receive title IV, HEA program funds for two years after the date of conviction; or
(ii) Two or more times for sale of illegal drugs, the student is ineligible to receive Title IV, HEA program funds for an indefinite period after the date of the second conviction.
(c) If a student successfully completes a drug rehabilitation program described in paragraph (d) of this section after the student's most recent drug conviction, the student regains eligibility on the date the student successfully completes the program.
(d) A drug rehabilitation program referred to in paragraph (c) of this section is one which—
(1) Includes at least two unannounced drug tests; and
(2)(i) Has received or is qualified to receive funds directly or indirectly under a Federal, State, or local government program;
(ii) Is administered or recognized by a Federal, State, or local government agency or court;
(iii) Has received or is qualified to receive payment directly or indirectly from a Federally- or State-licensed insurance company; or
(iv) Is administered or recognized by a Federally- or State-licensed hospital, health clinic or medical doctor.
(a) Definitions. The following definitions apply to this subpart:
Athletically related student aid means any scholarship, grant, or other form of financial assistance, offered by an institution, the terms of which require the recipient to participate in a program of intercollegiate athletics at the institution. Other student aid, of which a student-athlete simply happens to be the recipient, is not athletically related student aid.
Certificate or degree-seeking student means a student enrolled in a course of credit who is recognized by the institution as seeking a degree or certificate.
First-time undergraduate student means an entering undergraduate who has never attended any institution of higher education. It includes a student enrolled in the fall term who attended a postsecondary institution for the first time in the prior summer term, and a student who entered with advanced standing (college credit earned before graduation from high school).
Normal time is the amount of time necessary for a student to complete all requirements for a degree or certificate according to the institution's catalog. This is typically four years for a bachelor's degree in a standard term-based institution, two years for an associate degree in a standard term-based institution, and the various scheduled times for certificate programs.
Notice means a notification of the availability of information an institution is required by this subpart to disclose, provided to an individual on a one-to-one basis through an appropriate mailing or publication, including direct mailing through the U.S. Postal Service, campus mail, or electronic mail. Posting on an Internet website or an Intranet website does not constitute a notice.
Official fall reporting date means that date (in the fall) on which an institution must report fall enrollment data to either the State, its board of trustees or governing board, or some other external governing body.
On-campus student housing facility: A dormitory or other residential facility for students that is located on an institution's campus, as defined in § 668.46(a).
Prospective employee means an individual who has contacted an eligible institution for the purpose of requesting information concerning employment with that institution.
Prospective student means an individual who has contacted an eligible institution requesting information concerning admission to that institution.
Undergraduate students, for purposes of §§ 668.45 and 668.48 only, means students enrolled in a bachelor's degree program, an associate degree program, or a vocational or technical program at or below the baccalaureate level.
(b) Disclosure through Internet or Intranet websites. Subject to paragraphs (c)(2), (e)(2) through (4), or (g)(1)(ii) of this section, as appropriate, an institution may satisfy any requirement to disclose information under paragraph (d), (e), or (g) of this section for—
(1) Enrolled students or current employees by posting the information on an Internet website or an Intranet website that is reasonably accessible to the individuals to whom the information must be disclosed; and
(2) Prospective students or prospective employees by posting the information on an Internet website.
(c) Notice to enrolled students. (1) An institution annually must distribute to all enrolled students a notice of the availability of the information required to be disclosed pursuant to paragraphs (d), (e), and (g) of this section, and pursuant to 34 CFR 99.7 (§ 99.7 sets forth the notification requirements of the Family Educational Rights and Privacy Act of 1974). The notice must list and briefly describe the information and tell the student how to obtain the information.
(2) An institution that discloses information to enrolled students as required under paragraph (d), (e), or (g) of this section by posting the information on an internet website or an Intranet website must include in the notice described in paragraph (c)(1) of this section—
(i) The exact electronic address at which the information is posted; and
(ii) A statement that the institution will provide a paper copy of the information on request.
(d) General disclosures for enrolled or prospective students. An institution must make available to any enrolled student or prospective student through appropriate publications, mailings or electronic media, information concerning—
(1) Financial assistance available to students enrolled in the institution (pursuant to § 668.42).
(2) The institution (pursuant to § 668.43).
(3) The institution's retention rate as reported to the Integrated Postsecondary Education Data System (IPEDS). In the case of a request from a prospective student, the information must be made available prior to the student's enrolling or entering into any financial obligation with the institution.
(4) The institution's completion or graduation rate and, if applicable, its transfer-out rate (pursuant to § 668.45). In the case of a request from a prospective student, the information must be made available prior to the student's enrolling or entering into any financial obligation with the institution.
(5) The placement of, and types of employment obtained by, graduates of the institution's degree or certificate programs.
(i) The information provided in compliance with this paragraph may be gathered from—
(A) The institution's placement rate for any program, if it publishes or uses in advertising such a rate;
(B) State data systems;
(C) Alumni or student satisfaction surveys; or
(D) Other relevant sources.
(ii) [Reserved]
(6) The types of graduate and professional education in which graduates of the institution's four-year degree programs enroll.
(i) The information provided in compliance with this paragraph may be gathered from—
(A) State data systems;
(B) Alumni or student satisfaction surveys; or
(C) Other relevant sources.
(ii) The institution must identify the source of the information provided in compliance with this paragraph, as well as any time frames and methodology associated with it.
(e) Annual security report and annual fire safety report— (1) Enrolled students and current employees—annual security report and annual fire safety report. By October 1 of each year, an institution must distribute to all enrolled students and current employees its annual security report described in § 668.46(b), and, if the institution maintains an on-campus student housing facility, its annual fire safety report described in § 668.49(b), through appropriate publications and mailings, including—
(i) Direct mailing to each individual through the U.S. Postal Service, campus mail, or electronic mail;
(ii) A publication or publications provided directly to each individual; or
(iii) Posting on an Internet Web site or an Intranet Web site, subject to paragraph (e)(2) and (3) of this section.
(2) Enrolled students—annual security report and annual fire safety report. If an institution chooses to distribute either its annual security report or annual fire safety report to enrolled students by posting the disclosure or disclosures on an Internet Web site or an Intranet Web site, the institution must comply with the requirements of paragraph (c)(2) of this section.
(3) Current employees—annual security report and annual fire safety report. If an institution chooses to distribute either its annual security report or annual fire safety report to current employees by posting the disclosure or disclosures on an Internet Web site or an Intranet Web site, the institution must, by October 1 of each year, distribute to all current employees a notice that includes a statement of the report's availability, the exact electronic address at which the report is posted, a brief description of the report's contents, and a statement that the institution will provide a paper copy of the report upon request.
(4) Prospective students and prospective employees—annual security report and annual fire safety report. For each of the reports, the institution must provide a notice to prospective students and prospective employees that includes a statement of the report's availability, a description of its contents, and an opportunity to request a copy. An institution must provide its annual security report and annual fire safety report, upon request, to a prospective student or prospective employee. If the institution chooses to provide either its annual security report or annual fire safety report to prospective students and prospective employees by posting the disclosure on an Internet Web site, the notice described in this paragraph must include the exact electronic address at which the report is posted, a brief description of the report, and a statement that the institution will provide a paper copy of the report upon request.
(5) Submission to the Secretary—annual security report and annual fire safety report. Each year, by the date and in a form specified by the Secretary, an institution must submit the statistics required by §§ 668.46(c) and 668.49(c) to the Secretary.
(6) Publication of the annual fire safety report. An institution may publish its annual fire safety report concurrently with its annual security report only if the title of the report clearly states that the report contains both the annual security report and the annual fire safety report. If an institution chooses to publish the annual fire safety report separately from the annual security report, it must include information in each of the two reports about how to directly access the other report.
(f) Prospective student-athletes and their parents, high school coach and guidance counselor—report on completion or graduation rates for student-athletes. (1)(i) Except under the circumstances described in paragraph (f)(1)(ii) of this section, when an institution offers a prospective student-athlete athletically related student aid, it must provide to the prospective student-athlete, and his or her parents, high school coach, and guidance counselor, the report produced pursuant to § 668.48(a).
(ii) An institution's responsibility under paragraph (f)(1)(i) of this section with reference to a prospective student athlete's high school coach and guidance counselor is satisfied if—
(A) The institution is a member of a national collegiate athletic association;
(B) The association compiles data on behalf of its member institutions, which data the Secretary determines are substantially comparable to those required by § 668.48(a); and
(C) The association distributes the compilation to all secondary schools in the United States.
(2) By July 1 of each year, an institution must submit to the Secretary the report produced pursuant to § 668.48.
(g) Enrolled students, prospective students, and the public—report on athletic program participation rates and financial support data. (1)(i) An institution of higher education subject to § 668.47 must, not later than October 15 of each year, make available to enrolled students, prospective students, and the public, the report produced pursuant to § 668.47(c). The institution must make the report easily accessible to students, prospective students, and the public and must provide the report promptly to anyone who requests it.
(ii) The institution must provide notice to all enrolled students, pursuant to paragraph (c)(1) of this section, and prospective students of their right to request the report described in paragraph (g)(1) of this section. If the institution chooses to make the report available by posting the disclosure on an Internet website or an Intranet website, it must provide in the notice the exact electronic address at which the report is posted, a brief description of the report, and a statement that the institution will provide a paper copy of the report on request. For prospective students, the institution may not use an Intranet website for this purpose.
(2) An institution must submit the report described in paragraph (g)(1)(i) of this section to the Secretary within 15 days of making it available to students, prospective students, and the public.
(a)(1) Information on financial assistance that the institution must publish and make readily available to current and prospective students under this subpart includes, but is not limited to, a description of all the Federal, State, local, private and institutional student financial assistance programs available to students who enroll at that institution.
(2) These programs include both need-based and non-need-based programs.
(3) The institution may describe its own financial assistance programs by listing them in general categories.
(4) The institution must describe the terms and conditions of the loans students receive under the Federal Family Education Loan Program, the William D. Ford Federal Direct Student Loan Program, and the Federal Perkins Loan Program.
(b) For each program referred to in paragraph (a) of this section, the information provided by the institution must describe—
(1) The procedures and forms by which students apply for assistance;
(2) The student eligibility requirements;
(3) The criteria for selecting recipients from the group of eligible applicants; and
(4) The criteria for determining the amount of a student's award.
(c) The institution must describe the rights and responsibilities of students receiving financial assistance and, specifically, assistance under the title IV, HEA programs. This description must include specific information regarding—
(1) Criteria for continued student eligibility under each program;
(2)(i) Standards which the student must maintain in order to be considered to be making satisfactory progress in his or her course of study for the purpose of receiving financial assistance; and
(ii) Criteria by which the student who has failed to maintain satisfactory progress may re-establish his or her eligibility for financial assistance;
(3) The method by which financial assistance disbursements will be made to the students and the frequency of those disbursements;
(4) The terms of any loan received by a student as part of the student's financial assistance package, a sample loan repayment schedule for sample loans and the necessity for repaying loans;
(5) The general conditions and terms applicable to any employment provided to a student as part of the student's financial assistance package; and
(6) The exit counseling information the institution provides and collects as required by 34 CFR 674.42 for borrowers under the Federal Perkins Loan Program, by 34 CFR 685.304 for borrowers under the William D. Ford Federal Direct Student Loan Program, and by 34 CFR 682.604 for borrowers under the Federal Stafford Loan Program.
(a) Institutional information that the institution must make readily available to enrolled and prospective students under this subpart includes, but is not limited to—
(1) The cost of attending the institution, including—
(i) Tuition and fees charged to full-time and part-time students;
(ii) Estimates of costs for necessary books and supplies;
(iii) Estimates of typical charges for room and board;
(iv) Estimates of transportation costs for students; and
(v) Any additional cost of a program in which a student is enrolled or expresses a specific interest;
(2) Any refund policy with which the institution is required to comply for the return of unearned tuition and fees or other refundable portions of costs paid to the institution;
(3) The requirements and procedures for officially withdrawing from the institution;
(4) A summary of the requirements under § 668.22 for the return of title IV grant or loan assistance;
(5) The academic program of the institution, including—
(i) The current degree programs and other educational and training programs;
(ii) The instructional, laboratory, and other physical facilities which relate to the academic program;
(iii) The institution's faculty and other instructional personnel;
(iv) Any plans by the institution for improving the academic program of the institution, upon a determination by the institution that such a plan exists;
(v) If an educational program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, or is advertised as meeting such requirements, a list of all States where the institution has determined, including as part of the institution's obligation under § 668.14(b)(32), that the program does and does not meet such requirements; and
(vi) If a prison education program, as defined in § 668.236, is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation (as described in § 668.236(a)(7) and (8)), information regarding whether that occupation typically involves State or Federal prohibitions on the licensure or employment of formerly confined or incarcerated individuals in any other State for which the institution has made a determination about State prohibitions on the licensure or certification of formerly confined or incarcerated individuals;
(6) The names of associations, agencies or governmental bodies that accredit, approve, or license the institution and its programs and the procedures by which documents describing that activity may be reviewed under paragraph (b) of this section;
(7) A description of the services and facilities available to students with disabilities, including students with intellectual disabilities as defined in subpart O of this part;
(8) The titles of persons designated under § 668.44 and information regarding how and where those persons may be contacted;
(9) A statement that a student's enrollment in a program of study abroad approved for credit by the home institution may be considered enrollment at the home institution for the purpose of applying for assistance under the title IV, HEA programs;
(10) Institutional policies and sanctions related to copyright infringement, including—
(i) A statement that explicitly informs its students that unauthorized distribution of copyrighted material, including unauthorized peer-to-peer file sharing, may subject the students to civil and criminal liabilities;
(ii) A summary of the penalties for violation of Federal copyright laws;
(iii) A description of the institution's policies with respect to unauthorized peer-to-peer file sharing, including disciplinary actions that are taken against students who engage in illegal downloading or unauthorized distribution of copyrighted materials using the institution's information technology system;
(11) A description of the transfer of credit policies established by the institution, which must include a statement of the institution's current transfer of credit policies that includes, at a minimum—
(i) Any established criteria the institution uses regarding the transfer of credit earned at another institution and any types of institutions or sources from which the institution will not accept credits;
(ii) A list of institutions with which the institution has established an articulation agreement; and
(iii) Written criteria used to evaluate and award credit for prior learning experience including, but not limited to, service in the armed forces, paid or unpaid employment, or other demonstrated competency or learning;
(12) A description in the program description of written arrangements the institution has entered into in accordance with § 668.5, including, but not limited to, information on—
(i) The portion of the educational program that the institution that grants the degree or certificate is not providing;
(ii) The name and location of the other institutions or organizations that are providing the portion of the educational program that the institution that grants the degree or certificate is not providing;
(iii) The method of delivery of the portion of the educational program that the institution that grants the degree or certificate is not providing; and
(iv) Estimated additional costs students may incur as the result of enrolling in an educational program that is provided, in part, under the written arrangement;
(13) The percentage of those enrolled, full-time students at the institution who—
(i) Are male;
(ii) Are female;
(iii) Receive a Federal Pell Grant; and
(iv) Are a self-identified member of a racial or ethnic group;
(14) If the institution's accrediting agency or State requires the institution to calculate and report a placement rate, the institution's placement in employment of, and types of employment obtained by, graduates of the institution's degree or certificate programs, gathered from such sources as alumni surveys, student satisfaction surveys, the National Survey of Student Engagement, the Community College Survey of Student Engagement, State data systems, or other relevant sources approved by the institution's accrediting agency as applicable;
(15) The types of graduate and professional education in which graduates of the institution's four-year degree programs enrolled, gathered from such sources as alumni surveys, student satisfaction surveys, the National Survey of Student Engagement, State data systems, or other relevant sources;
(16) The fire safety report prepared by the institution pursuant to § 668.49;
(17) The retention rate of certificate- or degree-seeking, first-time, full-time, undergraduate students entering the institution;
(18) Institutional policies regarding vaccinations;
(19) If the institution is required to maintain a teach-out plan by its accrediting agency, notice that the institution is required to maintain such teach-out plan and the reason that the accrediting agency required such plan under § 602.24(c)(1); and
(20) If an enforcement action or prosecution is brought against the institution by a State or Federal law enforcement agency in any matter where a final judgment against the institution, if rendered, would result in an adverse action by an accrediting agency against the institution, revocation of State authorization, or limitation, suspension, or termination of eligibility under title IV, notice of that fact.
(b) The institution must make available for review to any enrolled or prospective student upon request, a copy of the documents describing the institution's accreditation and its State, Federal, or tribal approval or licensing. The institution must also provide its students or prospective students with contact information for filing complaints with its accreditor and with its State approval or licensing entity and any other relevant State official or agency that would appropriately handle a student's complaint.
(c)(1) If the institution has made a determination under paragraph (a)(5)(v) of this section that the program's curriculum does not meet the State educational requirements for licensure or certification in the State in which a prospective student is located, or if the institution has not made a determination regarding whether the program's curriculum meets the State educational requirements for licensure or certification, the institution must provide notice to that effect to the student prior to the student's enrollment in the institution in accordance with § 668.14(b)(32).
(2) If the institution makes a determination under paragraph (a)(5)(v) of this section that a program's curriculum does not meet the State educational requirements for licensure or certification in a State in which a student who is currently enrolled in such program is located, the institution must provide notice to that effect to the student within 14 calendar days of making such determination.
(3)(i) Disclosures under paragraphs (c)(1) and (2) of this section must be made directly to the student in writing, which may include through email or other electronic communication.
(ii)(A) For purposes of this paragraph (c), an institution must make a determination regarding the State in which a student is located in accordance with the institution's policies or procedures, which must be applied consistently to all students.
(B) The institution must, upon request, provide the Secretary with written documentation of its determination of a student's location under paragraph (c)(3)(ii)(A) of this section, including the basis for such determination.
(C) An institution must make a determination regarding the State in which a student is located at the time of the student's initial enrollment in an educational program and, if applicable, upon formal receipt of information from the student, in accordance with the institution's procedures under paragraph (c)(3)(ii)(A) of this section, that the student's location has changed to another State.
(d)(1) Program information website. Beginning on July 1, 2026, the Secretary will establish and maintain a website with information about institutions and their educational programs. For this purpose, an institution must provide to the Department such information about the institution and its programs as the Secretary prescribes through a notice published in the
(i) The website must include, but is not limited to, the following items, to the extent reasonably available:
(A) The published length of the program in calendar time (i.e., weeks, months, years).
(B) The total number of individuals enrolled in the program during the most recently completed award year.
(C) The total cost of tuition and fees, and the total cost of books, supplies, and equipment, that a student would incur for completing the program within the published length of the program.
(D) Of the individuals enrolled in the program during the most recently completed award year, the percentage who received a Direct Loan Program loan, a private loan, or both for enrollment in the program.
(E) As calculated by the Secretary, the median loan debt of students who completed the program during the most recently completed award year or for all students who completed or withdrew from the program during that award year.
(F) As provided by the Secretary, the median earnings of students who completed the program or of all students who completed or withdrew from the program, during a period determined by the Secretary.
(G) Whether the program is programmatically accredited and the name of the accrediting agency, as reported to the Secretary.
(H) As calculated by the Secretary, the program's debt-to-earnings rates.
(I) As calculated by the Secretary, the program's earnings premium measure. (ii) The website may also include other information deemed appropriate by the Secretary, such as the following items:
(A) The primary occupations (by name, SOC code, or both) that the program prepares students to enter, along with links to occupational profiles on O*NET (www.onetonline.org) or its successor site.
(B) As reported to or calculated by the Secretary, the program or institution's completion rates and withdrawal rates for full-time and less-than-full-time students.
(C) As calculated by the Secretary, the medians of the total cost of tuition and fees, and the total cost of books, supplies, and equipment, and the total net cost of attendance paid by students completing the program.
(D) As calculated by the Secretary, the loan repayment rate for students or graduates who entered repayment on Direct Loan Program loans during a period determined by the Secretary.
(E) Whether students who graduate from a program are required to complete postgraduation training program to obtain licensure before eligible for independent practice.
(2) Program web pages. The institution must provide a prominent link to, and any other needed information to access, the website maintained by the Secretary on any web page containing academic, cost, financial aid, or admissions information about the program or institution. The Secretary may require the institution to modify a web page if the information is not sufficiently prominent, readily accessible, clear, conspicuous, or direct.
(3) Distribution to prospective students. The institution must provide the relevant information to access the website maintained by the Secretary to any prospective student, or a third party acting on behalf of the prospective student, before the prospective student signs an enrollment agreement, completes registration, or makes a financial commitment to the institution.
(4) Distribution to enrolled students. The institution must provide the relevant information to access the website maintained by the Secretary to any enrolled title IV, HEA recipient prior to the start date of the first payment period associated with each subsequent award year in which the student continues enrollment at the institution.
(a) Availability. (1) Except as provided in paragraph (b) of this section each institution shall designate an employee or group of employees who shall be available on a full-time basis to assist enrolled or prospective students in obtaining the information specified in §§ 668.42, 668.43, 668.45 and 668.46.
(2) If the institution designates one person, that person shall be available, upon reasonable notice, to any enrolled or prospective student throughout the normal administrative working hours of that institution.
(3) If more than one person is designated, their combined work schedules must be arranged so that at least one of them is available, upon reasonable notice, throughout the normal administrative working hours of that institution.
(b) Waiver. (1) the Secretary may waive the requirement that the employee or group of employees designated under paragraph (a) of this section be available on a full-time basis if the institution's total enrollment, or the portion of the enrollment participating in the title IV, HEA programs, is too small to necessitate an employee or group of employees being available on a full-time basis.
(2) In determining whether an institution's total enrollment or the number of title IV, HEA program recipients is too small, the Secretary considers whether there will be an insufficient demand for information dissemination services among its enrolled or prospective students to necessitate the full-time availability of an employee or group of employees.
(3) To receive a waiver, the institution shall apply to the Secretary at the time and in the manner prescribed by the Secretary.
(c) The granting of a waiver under paragraph (b) of this section does not exempt an institution from designating a specific employee or group of employees to carry out on a part-time basis the information dissemination requirements.
(a)(1) An institution annually must prepare the completion or graduation rate of its certificate- or degree-seeking, first-time, full-time undergraduate students, as provided in paragraph (b) of this section.
(2) An institution that determines that its mission includes providing substantial preparation for students to enroll in another eligible institution must prepare the transfer-out rate of its certificate- or degree-seeking, first-time, full-time undergraduate students, as provided in paragraph (c) of this section.
(3)(i) An institution that offers a predominant number of its programs based on semesters, trimesters, or quarters must base its completion or graduation rate, retention rate, and, if applicable, transfer-out rate calculations, on the cohort of certificate- or degree-seeking, first-time, full-time undergraduate students who enter the institution during the fall term of each year.
(ii) An institution not covered by the provisions of paragraph (a)(3)(i) of this section must base its completion or graduation rate, retention rate, and, if applicable, transfer-out rate calculations, on the cohort of certificate- or degree-seeking, first-time, full-time undergraduate students who enter the institution between September 1 of one year and August 31 of the following year.
(4)(i) An institution covered by the provisions of paragraph (a)(3)(i) of this section must count as an entering student a first-time undergraduate student who is enrolled as of October 15, the end of the institution's drop-add period, or another official reporting date as defined in § 668.41(a).
(ii) An institution covered by paragraph (a)(3)(ii) of this section must count as an entering student a first-time undergraduate student who is enrolled for at least—
(A) 15 days, in a program of up to, and including, one year in length; or
(B) 30 days, in a program of greater than one year in length.
(5) An institution must make available its completion or graduation rate and, if applicable, transfer-out rate, no later than the July 1 immediately following the 12-month period ending August 31 during which 150 percent of the normal time for completion or graduation has elapsed for all of the students in the group on which the institution bases its completion or graduation rate and, if applicable, transfer-out rate calculations.
(6)(i) Completion or graduation rate information must be disaggregated by gender, by each major racial and ethnic subgroup (as defined in IPEDS), by recipients of a Federal Pell Grant, by recipients of a Federal Family Education Loan or a Federal Direct Loan (other than an Unsubsidized Stafford Loan made under the Federal Family Education Loan Program or a Federal Direct Unsubsidized Stafford Loan) who did not receive a Federal Pell Grant, and by recipients of neither a Federal Pell Grant nor a Federal Family Education Loan or a Federal Direct Loan (other than an Unsubsidized Stafford Loan made under the Federal Family Education Loan Program or a Federal Direct Unsubsidized Loan) if the number of students in such group or with such status is sufficient to yield statistically reliable information and reporting will not reveal personally identifiable information about an individual student. If such number is not sufficient for such purpose, i.e., is too small to be meaningful, then the institution shall note that the institution enrolled too few of such students to so disclose or report with confidence and confidentiality.
(ii) With respect to the requirement in paragraph (a)(6)(i) of this section to disaggregate the completion or graduation rate information by the receipt or nonreceipt of Federal student aid, students shall be considered to have received the aid in question only if they received such aid for the period specified in paragraph (a)(3) of this section.
(iii) The requirement in paragraph (a)(6)(i) of this section shall not apply to two-year, degree-granting institutions of higher education until academic year 2011-2012.
(b) In calculating the completion or graduation rate under paragraph (a)(1) of this section, an institution must count as completed or graduated—
(1) Students who have completed or graduated by the end of the 12-month period ending August 31 during which 150 percent of the normal time for completion or graduation from their program has lapsed; and
(2) Students who have completed a program described in § 668.8(b)(1)(ii), or an equivalent program, by the end of the 12-month period ending August 31 during which 150 percent of normal time for completion from that program has lapsed.
(c) In calculating the transfer-out rate under paragraph (a)(2) of this section, an institution must count as transfers-out students who by the end of the 12-month period ending August 31 during which 150 percent of the normal time for completion or graduation from the program in which they were enrolled has lapsed, have not completed or graduated but have subsequently enrolled in any program of an eligible institution for which its program provided substantial preparation.
(d) For the purpose of calculating a completion or graduation rate and a transfer-out rate, an institution may—
(1) Exclude students who—
(i) Have left school to serve in the Armed Forces;
(ii) Have left school to serve on official church missions;
(iii) Have left school to serve with a foreign aid service of the Federal Government, such as the Peace Corps;
(iv) Are totally and permanently disabled; or
(v) Are deceased.
(2) In cases where the students described in paragraphs (d)(1)(i) through (iii) of this section represent 20 percent or more of the certificate- or degree-seeking, full-time, undergraduate students at the institution, recalculate the completion or graduation rates of those students by adding to the 150 percent time-frame they normally have to complete or graduate, as described in paragraph (b) of this section, the time period the students were not enrolled due to their service in the Armed Forces, on official church missions, or with a recognized foreign aid service of the Federal Government.
(e)(1) The Secretary grants a waiver of the requirements of this section dealing with completion and graduation rate data to any institution that is a member of an athletic association or conference that has voluntarily published completion or graduation rate data, or has agreed to publish data, that the Secretary determines are substantially comparable to the data required by this section.
(2) An institution that receives a waiver of the requirements of this section must still comply with the requirements of § 668.41(d)(3) and (f).
(3) An institution, or athletic association or conference applying on behalf of an institution, that seeks a waiver under paragraph (e)(1) of this section must submit a written application to the Secretary that explains why it believes the data the athletic association or conference publishes are accurate and substantially comparable to the information required by this section.
(f) In addition to calculating the completion or graduation rate required by paragraph (a)(1) of this section, an institution may, but is not required to—
(1) Calculate a completion or graduation rate for students who transfer into the institution;
(2) Calculate a completion or graduation rate for students described in paragraphs (d)(1)(i) through (iv) of this section; and
(3) Calculate a transfer-out rate as specified in paragraph (c) of this section, if the institution determines that its mission does not include providing substantial preparation for its students to enroll in another eligible institution.
(a) Definitions. Additional definitions that apply to this section:
Business day. Monday through Friday, excluding any day when the institution is closed.
Campus. (i) Any building or property owned or controlled by an institution within the same reasonably contiguous geographic area and used by the institution in direct support of, or in a manner related to, the institution's educational purposes, including residence halls; and
(ii) Any building or property that is within or reasonably contiguous to the area identified in paragraph (i) of this definition, that is owned by the institution but controlled by another person, is frequently used by students, and supports institutional purposes (such as a food or other retail vendor).
Campus security authority. (i) A campus police department or a campus security department of an institution.
(ii) Any individual or individuals who have responsibility for campus security but who do not constitute a campus police department or a campus security department under paragraph (i) of this definition, such as an individual who is responsible for monitoring entrance into institutional property.
(iii) Any individual or organization specified in an institution's statement of campus security policy as an individual or organization to which students and employees should report criminal offenses.
(iv) An official of an institution who has significant responsibility for student and campus activities, including, but not limited to, student housing, student discipline, and campus judicial proceedings. If such an official is a pastoral or professional counselor as defined below, the official is not considered a campus security authority when acting as a pastoral or professional counselor.
Clery geography. (i) For the purposes of collecting statistics on the crimes listed in paragraph (c) of this section for submission to the Department and inclusion in an institution's annual security report, Clery geography includes—
(A) Buildings and property that are part of the institution's campus;
(B) The institution's noncampus buildings and property; and
(C) Public property within or immediately adjacent to and accessible from the campus.
(ii) For the purposes of maintaining the crime log required in paragraph (f) of this section, Clery geography includes, in addition to the locations in paragraph (i) of this definition, areas within the patrol jurisdiction of the campus police or the campus security department.
Dating violence. Violence committed by a person who is or has been in a social relationship of a romantic or intimate nature with the victim.
(i) The existence of such a relationship shall be determined based on the reporting party's statement and with consideration of the length of the relationship, the type of relationship, and the frequency of interaction between the persons involved in the relationship.
(ii) For the purposes of this definition—
(A) Dating violence includes, but is not limited to, sexual or physical abuse or the threat of such abuse.
(B) Dating violence does not include acts covered under the definition of domestic violence.
(iii) For the purposes of complying with the requirements of this section and § 668.41, any incident meeting this definition is considered a crime for the purposes of Clery Act reporting.
Domestic violence. (i) A felony or misdemeanor crime of violence committed—
(A) By a current or former spouse or intimate partner of the victim;
(B) By a person with whom the victim shares a child in common;
(C) By a person who is cohabitating with, or has cohabitated with, the victim as a spouse or intimate partner;
(D) By a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction in which the crime of violence occurred, or
(E) By any other person against an adult or youth victim who is protected from that person's acts under the domestic or family violence laws of the jurisdiction in which the crime of violence occurred.
(ii) For the purposes of complying with the requirements of this section and § 668.41, any incident meeting this definition is considered a crime for the purposes of Clery Act reporting.
Federal Bureau of Investigation's (FBI) Uniform Crime Reporting (UCR) program. A nationwide, cooperative statistical effort in which city, university and college, county, State, Tribal, and federal law enforcement agencies voluntarily report data on crimes brought to their attention. The UCR program also serves as the basis for the definitions of crimes in Appendix A to this subpart and the requirements for classifying crimes in this subpart.
Hate crime. A crime reported to local police agencies or to a campus security authority that manifests evidence that the victim was intentionally selected because of the perpetrator's bias against the victim. For the purposes of this section, the categories of bias include the victim's actual or perceived race, religion, gender, gender identity, sexual orientation, ethnicity, national origin, and disability.
Hierarchy Rule. A requirement in the FBI's UCR program that, for purposes of reporting crimes in that system, when more than one criminal offense was committed during a single incident, only the most serious offense be counted.
Noncampus building or property. (i) Any building or property owned or controlled by a student organization that is officially recognized by the institution; or
(ii) Any building or property owned or controlled by an institution that is used in direct support of, or in relation to, the institution's educational purposes, is frequently used by students, and is not within the same reasonably contiguous geographic area of the institution.
Pastoral counselor. A person who is associated with a religious order or denomination, is recognized by that religious order or denomination as someone who provides confidential counseling, and is functioning within the scope of that recognition as a pastoral counselor.
Professional counselor. A person whose official responsibilities include providing mental health counseling to members of the institution's community and who is functioning within the scope of the counselor's license or certification.
Programs to prevent dating violence, domestic violence, sexual assault, and stalking. (i) Comprehensive, intentional, and integrated programming, initiatives, strategies, and campaigns intended to end dating violence, domestic violence, sexual assault, and stalking that—
(A) Are culturally relevant, inclusive of diverse communities and identities, sustainable, responsive to community needs, and informed by research or assessed for value, effectiveness, or outcome; and
(B) Consider environmental risk and protective factors as they occur on the individual, relationship, institutional, community, and societal levels.
(ii) Programs to prevent dating violence, domestic violence, sexual assault, and stalking include both primary prevention and awareness programs directed at incoming students and new employees and ongoing prevention and awareness campaigns directed at students and employees, as defined in paragraph (j)(2) of this section.
Public property. All public property, including thoroughfares, streets, sidewalks, and parking facilities, that is within the campus, or immediately adjacent to and accessible from the campus.
Referred for campus disciplinary action. The referral of any person to any campus official who initiates a disciplinary action of which a record is kept and which may result in the imposition of a sanction.
Sexual assault. An offense that meets the definition of rape, fondling, incest, or statutory rape as used in the FBI's UCR program and included in Appendix A of this subpart.
Stalking. (i) Engaging in a course of conduct directed at a specific person that would cause a reasonable person to—
(A) Fear for the person's safety or the safety of others; or
(B) Suffer substantial emotional distress.
(ii) For the purposes of this definition—
(A) Course of conduct means two or more acts, including, but not limited to, acts in which the stalker directly, indirectly, or through third parties, by any action, method, device, or means, follows, monitors, observes, surveils, threatens, or communicates to or about a person, or interferes with a person's property.
(B) Reasonable person means a reasonable person under similar circumstances and with similar identities to the victim.
(C) Substantial emotional distress means significant mental suffering or anguish that may, but does not necessarily, require medical or other professional treatment or counseling.
(iii) For the purposes of complying with the requirements of this section and section 668.41, any incident meeting this definition is considered a crime for the purposes of Clery Act reporting.
Test. Regularly scheduled drills, exercises, and appropriate follow-through activities, designed for assessment and evaluation of emergency plans and capabilities.
(b) Annual security report. An institution must prepare an annual security report reflecting its current policies that contains, at a minimum, the following information:
(1) The crime statistics described in paragraph (c) of this section.
(2) A statement of policies regarding procedures for students and others to report criminal actions or other emergencies occurring on campus. This statement must include the institution's policies concerning its response to these reports, including—
(i) Policies for making timely warning reports to members of the campus community, as required by paragraph (e) of this section, regarding the occurrence of crimes described in paragraph (c)(1) of this section;
(ii) Policies for preparing the annual disclosure of crime statistics;
(iii) A list of the titles of each person or organization to whom students and employees should report the criminal offenses described in paragraph (c)(1) of this section for the purposes of making timely warning reports and the annual statistical disclosure; and
(iv) Policies or procedures for victims or witnesses to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics.
(3) A statement of policies concerning security of and access to campus facilities, including campus residences, and security considerations used in the maintenance of campus facilities.
(4) A statement of policies concerning campus law enforcement that—
(i) Addresses the enforcement authority and jurisdiction of security personnel;
(ii) Addresses the working relationship of campus security personnel with State and local police agencies, including—
(A) Whether those security personnel have the authority to make arrests; and
(B) Any agreements, such as written memoranda of understanding between the institution and such agencies, for the investigation of alleged criminal offenses.
(iii) Encourages accurate and prompt reporting of all crimes to the campus police and the appropriate police agencies, when the victim of a crime elects to, or is unable to, make such a report; and
(iv) Describes procedures, if any, that encourage pastoral counselors and professional counselors, if and when they deem it appropriate, to inform the persons they are counseling of any procedures to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics.
(5) A description of the type and frequency of programs designed to inform students and employees about campus security procedures and practices and to encourage students and employees to be responsible for their own security and the security of others.
(6) A description of programs designed to inform students and employees about the prevention of crimes.
(7) A statement of policy concerning the monitoring and recording through local police agencies of criminal activity by students at noncampus locations of student organizations officially recognized by the institution, including student organizations with noncampus housing facilities.
(8) A statement of policy regarding the possession, use, and sale of alcoholic beverages and enforcement of State underage drinking laws.
(9) A statement of policy regarding the possession, use, and sale of illegal drugs and enforcement of Federal and State drug laws.
(10) A description of any drug or alcohol-abuse education programs, as required under section 120(a) through (d) of the HEA, otherwise known as the Drug-Free Schools and Communities Act of 1989. For the purpose of meeting this requirement, an institution may cross-reference the materials the institution uses to comply with section 120(a) through (d) of the HEA.
(11) A statement of policy regarding the institution's programs to prevent dating violence, domestic violence, sexual assault, and stalking, as defined in paragraph (a) of this section, and of procedures that the institution will follow when one of these crimes is reported. The statement must include—
(i) A description of the institution's educational programs and campaigns to promote the awareness of dating violence, domestic violence, sexual assault, and stalking, as required by paragraph (j) of this section;
(ii) Procedures victims should follow if a crime of dating violence, domestic violence, sexual assault, or stalking has occurred, including written information about—
(A) The importance of preserving evidence that may assist in proving that the alleged criminal offense occurred or may be helpful in obtaining a protection order;
(B) How and to whom the alleged offense should be reported;
(C) Options about the involvement of law enforcement and campus authorities, including notification of the victim's option to—
(1) Notify proper law enforcement authorities, including on-campus and local police;
(2) Be assisted by campus authorities in notifying law enforcement authorities if the victim so chooses; and
(3) Decline to notify such authorities; and
(D) Where applicable, the rights of victims and the institution's responsibilities for orders of protection, “no-contact” orders, restraining orders, or similar lawful orders issued by a criminal, civil, or tribal court or by the institution;
(iii) Information about how the institution will protect the confidentiality of victims and other necessary parties, including how the institution will—
(A) Complete publicly available recordkeeping, including Clery Act reporting and disclosures, without the inclusion of personally identifying information about the victim, as defined in section 40002(a)(20) of the Violence Against Women Act of 1994 (42 U.S.C. 13925(a)(20)); and
(B) Maintain as confidential any accommodations or protective measures provided to the victim, to the extent that maintaining such confidentiality would not impair the ability of the institution to provide the accommodations or protective measures;
(iv) A statement that the institution will provide written notification to students and employees about existing counseling, health, mental health, victim advocacy, legal assistance, visa and immigration assistance, student financial aid, and other services available for victims, both within the institution and in the community;
(v) A statement that the institution will provide written notification to victims about options for, available assistance in, and how to request changes to academic, living, transportation, and working situations or protective measures. The institution must make such accommodations or provide such protective measures if the victim requests them and if they are reasonably available, regardless of whether the victim chooses to report the crime to campus police or local law enforcement;
(vi) An explanation of the procedures for institutional disciplinary action in cases of alleged dating violence, domestic violence, sexual assault, or stalking, as required by paragraph (k) of this section; and
(vii) A statement that, when a student or employee reports to the institution that the student or employee has been a victim of dating violence, domestic violence, sexual assault, or stalking, whether the offense occurred on or off campus, the institution will provide the student or employee a written explanation of the student's or employee's rights and options, as described in paragraphs (b)(11)(ii) through (vi) of this section.
(12) A statement advising the campus community where law enforcement agency information provided by a State under section 121 of the Adam Walsh Child Protection and Safety Act of 2006 (42 U.S.C. 16921), concerning registered sex offenders may be obtained, such as the law enforcement office of the institution, a local law enforcement agency with jurisdiction for the campus, or a computer network address.
(13) A statement of policy regarding emergency response and evacuation procedures, as required by paragraph (g) of this section.
(14) A statement of policy regarding missing student notification procedures, as required by paragraph (h) of this section.
(c) Crime statistics—(1) Crimes that must be reported and disclosed. An institution must report to the Department and disclose in its annual security report statistics for the three most recent calendar years concerning the number of each of the following crimes that occurred on or within its Clery geography and that are reported to local police agencies or to a campus security authority:
(i) Primary crimes, including—
(A) Criminal homicide:
(1) Murder and nonnegligent manslaughter; and
(2) Negligent manslaughter.
(B) Sex offenses:
(1) Rape;
(2) Fondling;
(3) Incest; and
(4) Statutory rape.
(C) Robbery.
(D) Aggravated assault.
(E) Burglary.
(F) Motor vehicle theft.
(G) Arson.
(ii) Arrests and referrals for disciplinary actions, including—
(A) Arrests for liquor law violations, drug law violations, and illegal weapons possession.
(B) Persons not included in paragraph (c)(1)(ii)(A) of this section who were referred for campus disciplinary action for liquor law violations, drug law violations, and illegal weapons possession.
(iii) Hate crimes, including—
(A) The number of each type of crime in paragraph (c)(1)(i) of this section that are determined to be hate crimes; and
(B) The number of the following crimes that are determined to be hate crimes:
(1) Larceny-theft.
(2) Simple assault.
(3) Intimidation.
(4) Destruction/damage/vandalism of property.
(iv) Dating violence, domestic violence, and stalking as defined in paragraph (a) of this section.
(2) All reported crimes must be recorded. (i) An institution must include in its crime statistics all crimes listed in paragraph (c)(1) of this section occurring on or within its Clery geography that are reported to a campus security authority for purposes of Clery Act reporting. Clery Act reporting does not require initiating an investigation or disclosing personally identifying information about the victim, as defined in section 40002(a)(20) of the Violence Against Women Act of 1994 (42 U.S.C. 13925(a)(20)).
(ii) An institution may not withhold, or subsequently remove, a reported crime from its crime statistics based on a decision by a court, coroner, jury, prosecutor, or other similar noncampus official.
(iii) An institution may withhold, or subsequently remove, a reported crime from its crime statistics in the rare situation where sworn or commissioned law enforcement personnel have fully investigated the reported crime and, based on the results of this full investigation and evidence, have made a formal determination that the crime report is false or baseless and therefore “unfounded.” Only sworn or commissioned law enforcement personnel may “unfound” a crime report for purposes of reporting under this section. The recovery of stolen property, the low value of stolen property, the refusal of the victim to cooperate with the prosecution, and the failure to make an arrest do not “unfound” a crime report.
(A) An institution must report to the Department and disclose in its annual security report statistics the total number of crime reports listed in paragraph (c)(1) of this section that were “unfounded” and subsequently withheld from its crime statistics pursuant to paragraph (c)(2)(iii) of this section during each of the three most recent calendar years.
(B) [Reserved]
(3) Crimes must be recorded by calendar year. (i) An institution must record a crime statistic for the calendar year in which the crime was reported to local police agencies or to a campus security authority.
(ii) When recording crimes of stalking by calendar year, an institution must follow the requirements in paragraph (c)(6) of this section.
(4) Hate crimes must be recorded by category of bias. For each hate crime recorded under paragraph (c)(1)(iii) of this section, an institution must identify the category of bias that motivated the crime. For the purposes of this paragraph, the categories of bias include the victim's actual or perceived—
(i) Race;
(ii) Gender;
(iii) Gender identity;
(iv) Religion;
(v) Sexual orientation;
(vi) Ethnicity;
(vii) National origin; and
(viii) Disability.
(5) Crimes must be recorded by location. (i) An institution must specify whether each of the crimes recorded under paragraph (c)(1) of this section occurred—
(A) On campus;
(B) In or on a noncampus building or property; or
(C) On public property.
(ii) An institution must identify, of the crimes that occurred on campus, the number that took place in dormitories or other residential facilities for students on campus.
(iii) When recording stalking by location, an institution must follow the requirements in paragraph (c)(6) of this section.
(6) Recording reports of stalking. (i) When recording reports of stalking that include activities in more than one calendar year, an institution must record a crime statistic for each and every year in which the course of conduct is reported to a local police agency or to a campus security authority.
(ii) An institution must record each report of stalking as occurring at only the first location within the institution's Clery geography in which:
(A) A perpetrator engaged in the stalking course of conduct; or
(B) A victim first became aware of the stalking.
(7) Identification of the victim or the accused. The statistics required under paragraph (c) of this section do not include the identification of the victim or the person accused of committing the crime.
(8) Pastoral and professional counselor. An institution is not required to report statistics under paragraph (c) of this section for crimes reported to a pastoral or professional counselor.
(9) Using the FBI's UCR program and the Hierarchy Rule. (i) An institution must compile the crime statistics for murder and nonnegligent manslaughter, negligent manslaughter, rape, robbery, aggravated assault, burglary, motor vehicle theft, arson, liquor law violations, drug law violations, and illegal weapons possession using the definitions of those crimes from the “Summary Reporting System (SRS) User Manual” from the FBI's UCR Program, as provided in Appendix A to this subpart.
(ii) An institution must compile the crime statistics for fondling, incest, and statutory rape using the definitions of those crimes from the “National Incident-Based Reporting System (NIBRS) User Manual” from the FBI's UCR Program, as provided in Appendix A to this subpart.
(iii) An institution must compile the crime statistics for the hate crimes of larceny-theft, simple assault, intimidation, and destruction/damage/vandalism of property using the definitions provided in the “Hate Crime Data Collection Guidelines and Training Manual” from the FBI's UCR Program, as provided in Appendix A to this subpart.
(iv) An institution must compile the crime statistics for dating violence, domestic violence, and stalking using the definitions provided in paragraph (a) of this section.
(v) In counting crimes when more than one offense was committed during a single incident, an institution must conform to the requirements of the Hierarchy Rule in the “Summary Reporting System (SRS) User Manual.
(vi) If arson is committed, an institution must always record the arson in its statistics, regardless of whether or not it occurs in the same incident as another crime.
(vii) If rape, fondling, incest, or statutory rape occurs in the same incident as a murder, an institution must record both the sex offense and the murder in its statistics.
(10) Use of a map. In complying with the statistical reporting requirements under this paragraph (c) of this section, an institution may provide a map to current and prospective students and employees that depicts its campus, noncampus buildings or property, and public property areas if the map accurately depicts its campus, noncampus buildings or property, and public property areas.
(11) Statistics from police agencies. (i) In complying with the statistical reporting requirements under paragraph (c) of this section, an institution must make a reasonable, good-faith effort to obtain statistics for crimes that occurred on or within the institution's Clery geography and may rely on the information supplied by a local or State police agency.
(ii) If the institution makes such a reasonable, good-faith effort, it is not responsible for the failure of the local or State police agency to supply the required statistics.
(d) Separate campus. An institution must comply with the requirements of this section for each separate campus.
(e) Timely warning and emergency notification. (1) An institution must, in a manner that is timely and that withholds as confidential the names and other identifying information of victims, as defined in section 40002(a)(20) of the Violence Against Women Act of 1994 (42 U.S.C. 13925(a)(20)), and that will aid in the prevention of similar crimes, report to the campus community on crimes that are—
(i) Described in paragraph (c)(1) of this section;
(ii) Reported to campus security authorities as identified under the institution's statement of current campus policies pursuant to paragraph (b)(2) of this section or local police agencies; and
(iii) Considered by the institution to represent a threat to students and employees.
(2) An institution is not required to provide a timely warning with respect to crimes reported to a pastoral or professional counselor.
(3) If there is an immediate threat to the health or safety of students or employees occurring on campus, as described in paragraph (g)(1) of this section, an institution must follow its emergency notification procedures. An institution that follows its emergency notification procedures is not required to issue a timely warning based on the same circumstances; however, the institution must provide adequate follow-up information to the community as needed.
(f) Crime log. (1) An institution that maintains a campus police or a campus security department must maintain a written, easily understood daily crime log that records, by the date the crime was reported, any crime that occurred within its Clery geography, as described in paragraph (ii) of the definition of Clery geography in paragraph (a) of this section, and that is reported to the campus police or the campus security department. This log must include—
(i) The nature, date, time, and general location of each crime; and
(ii) The disposition of the complaint, if known.
(2) The institution must make an entry or an addition to an entry to the log within two business days, as defined under paragraph (a) of this section, of the report of the information to the campus police or the campus security department, unless that disclosure is prohibited by law or would jeopardize the confidentiality of the victim.
(3)(i) An institution may withhold information required under paragraphs (f)(1) and (2) of this section if there is clear and convincing evidence that the release of the information would—
(A) Jeopardize an ongoing criminal investigation or the safety of an individual;
(B) Cause a suspect to flee or evade detection; or
(C) Result in the destruction of evidence.
(ii) The institution must disclose any information withheld under paragraph (f)(3)(i) of this section once the adverse effect described in that paragraph is no longer likely to occur.
(4) An institution may withhold under paragraph (f)(2) and (3) of this section only that information that would cause the adverse effects described in those paragraphs.
(5) The institution must make the crime log for the most recent 60-day period open to public inspection during normal business hours. The institution must make any portion of the log older than 60 days available within two business days of a request for public inspection.
(g) Emergency response and evacuation procedures. An institution must include a statement of policy regarding its emergency response and evacuation procedures in the annual security report. This statement must include—
(1) The procedures the institution will use to immediately notify the campus community upon the confirmation of a significant emergency or dangerous situation involving an immediate threat to the health or safety of students or employees occurring on the campus;
(2) A description of the process the institution will use to—
(i) Confirm that there is a significant emergency or dangerous situation as described in paragraph (g)(1) of this section;
(ii) Determine the appropriate segment or segments of the campus community to receive a notification;
(iii) Determine the content of the notification; and
(iv) Initiate the notification system.
(3) A statement that the institution will, without delay, and taking into account the safety of the community, determine the content of the notification and initiate the notification system, unless issuing a notification will, in the professional judgment of responsible authorities, compromise efforts to assist a victim or to contain, respond to, or otherwise mitigate the emergency;
(4) A list of the titles of the person or persons or organization or organizations responsible for carrying out the actions described in paragraph (g)(2) of this section;
(5) The institution's procedures for disseminating emergency information to the larger community; and
(6) The institution's procedures to test the emergency response and evacuation procedures on at least an annual basis, including—
(i) Tests that may be announced or unannounced;
(ii) Publicizing its emergency response and evacuation procedures in conjunction with at least one test per calendar year; and
(iii) Documenting, for each test, a description of the exercise, the date, time, and whether it was announced or unannounced.
(h) Missing student notification policies and procedures. (1) An institution that provides any on-campus student housing facility must include a statement of policy regarding missing student notification procedures for students who reside in on-campus student housing facilities in its annual security report. This statement must—
(i) Indicate a list of titles of the persons or organizations to which students, employees, or other individuals should report that a student has been missing for 24 hours;
(ii) Require that any missing student report must be referred immediately to the institution's police or campus security department, or, in the absence of an institutional police or campus security department, to the local law enforcement agency that has jurisdiction in the area;
(iii) Contain an option for each student to identify a contact person or persons whom the institution shall notify within 24 hours of the determination that the student is missing, if the student has been determined missing by the institutional police or campus security department, or the local law enforcement agency;
(iv) Advise students that their contact information will be registered confidentially, that this information will be accessible only to authorized campus officials, and that it may not be disclosed, except to law enforcement personnel in furtherance of a missing person investigation;
(v) Advise students that if they are under 18 years of age and not emancipated, the institution must notify a custodial parent or guardian within 24 hours of the determination that the student is missing, in addition to notifying any additional contact person designated by the student; and
(vi) Advise students that the institution will notify the local law enforcement agency within 24 hours of the determination that the student is missing, unless the local law enforcement agency was the entity that made the determination that the student is missing.
(2) The procedures that the institution must follow when a student who resides in an on-campus student housing facility is determined to have been missing for 24 hours include—
(i) If the student has designated a contact person, notifying that contact person within 24 hours that the student is missing;
(ii) If the student is under 18 years of age and is not emancipated, notifying the student's custodial parent or guardian and any other designated contact person within 24 hours that the student is missing; and
(iii) Regardless of whether the student has identified a contact person, is above the age of 18, or is an emancipated minor, informing the local law enforcement agency that has jurisdiction in the area within 24 hours that the student is missing.
(i) [Reserved]
(j) Programs to prevent dating violence, domestic violence, sexual assault, and stalking. As required by paragraph (b)(11) of this section, an institution must include in its annual security report a statement of policy that addresses the institution's programs to prevent dating violence, domestic violence, sexual assault, and stalking.
(1) The statement must include—
(i) A description of the institution's primary prevention and awareness programs for all incoming students and new employees, which must include—
(A) A statement that the institution prohibits the crimes of dating violence, domestic violence, sexual assault, and stalking, as those terms are defined in paragraph (a) of this section;
(B) The definition of “dating violence,” “domestic violence,” “sexual assault,” and “stalking” in the applicable jurisdiction;
(C) The definition of “consent,” in reference to sexual activity, in the applicable jurisdiction;
(D) A description of safe and positive options for bystander intervention;
(E) Information on risk reduction; and
(F) The information described in paragraphs (b)(11) and (k)(2) of this section; and
(ii) A description of the institution's ongoing prevention and awareness campaigns for students and employees, including information described in paragraph (j)(1)(i)(A) through (F) of this section.
(2) For the purposes of this paragraph (j)—
(i) Awareness programs means community-wide or audience-specific programming, initiatives, and strategies that increase audience knowledge and share information and resources to prevent violence, promote safety, and reduce perpetration.
(ii) Bystander intervention means safe and positive options that may be carried out by an individual or individuals to prevent harm or intervene when there is a risk of dating violence, domestic violence, sexual assault, or stalking. Bystander intervention includes recognizing situations of potential harm, understanding institutional structures and cultural conditions that facilitate violence, overcoming barriers to intervening, identifying safe and effective intervention options, and taking action to intervene.
(iii) Ongoing prevention and awareness campaigns means programming, initiatives, and strategies that are sustained over time and focus on increasing understanding of topics relevant to and skills for addressing dating violence, domestic violence, sexual assault, and stalking, using a range of strategies with audiences throughout the institution and including information described in paragraph (j)(1)(i)(A) through (F) of this section.
(iv) Primary prevention programs means programming, initiatives, and strategies informed by research or assessed for value, effectiveness, or outcome that are intended to stop dating violence, domestic violence, sexual assault, and stalking before they occur through the promotion of positive and healthy behaviors that foster healthy, mutually respectful relationships and sexuality, encourage safe bystander intervention, and seek to change behavior and social norms in healthy and safe directions.
(v) Risk reduction means options designed to decrease perpetration and bystander inaction, and to increase empowerment for victims in order to promote safety and to help individuals and communities address conditions that facilitate violence.
(3) An institution's programs to prevent dating violence, domestic violence, sexual assault, and stalking must include, at a minimum, the information described in paragraph (j)(1) of this section.
(k) Procedures for institutional disciplinary action in cases of alleged dating violence, domestic violence, sexual assault, or stalking. As required by paragraph (b)(11)(vi) of this section, an institution must include in its annual security report a clear statement of policy that addresses the procedures for institutional disciplinary action in cases of alleged dating violence, domestic violence, sexual assault, or stalking, as defined in paragraph (a) of this section, and that—
(1)(i) Describes each type of disciplinary proceeding used by the institution; the steps, anticipated timelines, and decision-making process for each type of disciplinary proceeding; how to file a disciplinary complaint; and how the institution determines which type of proceeding to use based on the circumstances of an allegation of dating violence, domestic violence, sexual assault, or stalking;
(ii) Describes the standard of evidence that will be used during any institutional disciplinary proceeding arising from an allegation of dating violence, domestic violence, sexual assault, or stalking;
(iii) Lists all of the possible sanctions that the institution may impose following the results of any institutional disciplinary proceeding for an allegation of dating violence, domestic violence, sexual assault, or stalking; and
(iv) Describes the range of protective measures that the institution may offer to the victim following an allegation of dating violence, domestic violence, sexual assault, or stalking;
(2) Provides that the proceedings will—
(i) Include a prompt, fair, and impartial process from the initial investigation to the final result;
(ii) Be conducted by officials who, at a minimum, receive annual training on the issues related to dating violence, domestic violence, sexual assault, and stalking and on how to conduct an investigation and hearing process that protects the safety of victims and promotes accountability;
(iii) Provide the accuser and the accused with the same opportunities to have others present during any institutional disciplinary proceeding, including the opportunity to be accompanied to any related meeting or proceeding by the advisor of their choice;
(iv) Not limit the choice of advisor or presence for either the accuser or the accused in any meeting or institutional disciplinary proceeding; however, the institution may establish restrictions regarding the extent to which the advisor may participate in the proceedings, as long as the restrictions apply equally to both parties; and
(v) Require simultaneous notification, in writing, to both the accuser and the accused, of—
(A) The result of any institutional disciplinary proceeding that arises from an allegation of dating violence, domestic violence, sexual assault, or stalking;
(B) The institution's procedures for the accused and the victim to appeal the result of the institutional disciplinary proceeding, if such procedures are available;
(C) Any change to the result; and
(D) When such results become final.
(3) For the purposes of this paragraph (k)—
(i) A prompt, fair, and impartial proceeding includes a proceeding that is—
(A) Completed within reasonably prompt timeframes designated by an institution's policy, including a process that allows for the extension of timeframes for good cause with written notice to the accuser and the accused of the delay and the reason for the delay;
(B) Conducted in a manner that—
(1) Is consistent with the institution's policies and transparent to the accuser and accused;
(2) Includes timely notice of meetings at which the accuser or accused, or both, may be present; and
(3) Provides timely and equal access to the accuser, the accused, and appropriate officials to any information that will be used during informal and formal disciplinary meetings and hearings; and
(C) Conducted by officials who do not have a conflict of interest or bias for or against the accuser or the accused.
(ii) Advisor means any individual who provides the accuser or accused support, guidance, or advice.
(iii) Proceeding means all activities related to a non-criminal resolution of an institutional disciplinary complaint, including, but not limited to, factfinding investigations, formal or informal meetings, and hearings. Proceeding does not include communications and meetings between officials and victims concerning accommodations or protective measures to be provided to a victim.
(iv) Result means any initial, interim, and final decision by any official or entity authorized to resolve disciplinary matters within the institution. The result must include any sanctions imposed by the institution. Notwithstanding section 444 of the General Education Provisions Act (20 U.S.C. 1232g), commonly referred to as the Family Educational Rights and Privacy Act (FERPA), the result must also include the rationale for the result and the sanctions.
(l) Compliance with paragraph (k) of this section does not constitute a violation of FERPA.
(m) Prohibition on retaliation. An institution, or an officer, employee, or agent of an institution, may not retaliate, intimidate, threaten, coerce, or otherwise discriminate against any individual for exercising their rights or responsibilities under any provision in this section.
(a) Applicability. This section applies to a co-educational institution of higher education that—
(1) Participates in any title IV, HEA program; and
(2) Has an intercollegiate athletic program.
(b) Definitions. The following definitions apply for purposes of this section only.
(1) Expenses—(i) Expenses means expenses attributable to intercollegiate athletic activities. This includes appearance guarantees and options, athletically related student aid, contract services, equipment, fundraising activities, operating expenses, promotional activities, recruiting expenses, salaries and benefits, supplies, travel, and any other expenses attributable to intercollegiate athletic activities.
(ii) Operating expenses means all expenses an institution incurs attributable to home, away, and neutral-site intercollegiate athletic contests (commonly known as “game-day expenses”), for—
(A) Lodging, meals, transportation, uniforms, and equipment for coaches, team members, support staff (including, but not limited to team managers and trainers), and others; and
(B) Officials.
(iii) Recruiting expenses means all expenses an institution incurs attributable to recruiting activities. This includes, but is not limited to, expenses for lodging, meals, telephone use, and transportation (including vehicles used for recruiting purposes) for both recruits and personnel engaged in recruiting, any other expenses for official and unofficial visits, and all other expenses related to recruiting.
(2) Institutional salary means all wages and bonuses an institution pays a coach as compensation attributable to coaching.
(3)(i) Participants means students who, as of the day of a varsity team's first scheduled contest—
(A) Are listed by the institution on the varsity team's roster;
(B) Receive athletically related student aid; or
(C) Practice with the varsity team and receive coaching from one or more varsity coaches.
(ii) Any student who satisfies one or more of the criteria in paragraphs (b)(3)(i)(A) through (C) of this section is a participant, including a student on a team the institution designates or defines as junior varsity, freshman, or novice, or a student withheld from competition to preserve eligibility (i.e., a redshirt), or for academic, medical, or other reasons.
(4) Reporting year means a consecutive twelve-month period of time designated by the institution for the purposes of this section.
(5) Revenues means revenues attributable to intercollegiate athletic activities. This includes revenues from appearance guarantees and options, an athletic conference, tournament or bowl games, concessions, contributions from alumni and others, institutional support, program advertising and sales, radio and television, royalties, signage and other sponsorships, sports camps, State or other government support, student activity fees, ticket and luxury box sales, and any other revenues attributable to intercollegiate athletic activities.
(6) Undergraduate students means students who are consistently designated as such by the institution.
(7) Varsity team means a team that—
(i) Is designated or defined by its institution or an athletic association as a varsity team; or
(ii) Primarily competes against other teams that are designated or defined by their institutions or athletic associations as varsity teams.
(c) Report. An institution described in paragraph (a) of this section must annually, for the preceding reporting year, prepare a report that contains the following information:
(1) The number of male and the number of female full-time undergraduate students that attended the institution.
(2) A listing of the varsity teams that competed in intercollegiate athletic competition and for each team the following data:
(i) The total number of participants as of the day of its first scheduled contest of the reporting year, the number of participants who also participated on another varsity team, and the number of other varsity teams on which they participated.
(ii) Total operating expenses attributable to the team, except that an institution may report combined operating expenses for closely related teams, such as track and field or swimming and diving. Those combinations must be reported separately for men's and women's teams.
(iii) In addition to the data required by paragraph (c)(2)(ii) of this section, an institution may report operating expenses attributable to the team on a per-participant basis.
(iv)(A) Whether the head coach was male or female, was assigned to the team on a full-time or part-time basis, and, if assigned on a part-time basis, whether the head coach was a full-time or part-time employee of the institution.
(B) The institution must consider graduate assistants and volunteers who served as head coaches to be head coaches for the purposes of this report.
(v)(A) The number of assistant coaches who were male and the number of assistant coaches who were female, and, within each category, the number who were assigned to the team on a full-time or part-time basis, and, of those assigned on a part-time basis, the number who were full-time and part-time employees of the institution.
(B) The institution must consider graduate assistants and volunteers who served as assistant coaches to be assistant coaches for purposes of this report.
(3) The unduplicated head count of the individuals who were listed under paragraph (c)(2)(i) of this section as a participant on at least one varsity team, by gender.
(4)(i) Revenues derived by the institution according to the following categories (Revenues not attributable to a particular sport or sports must be included only in the total revenues attributable to intercollegiate athletic activities, and, if appropriate, revenues attributable to men's sports combined or women's sports combined. Those revenues include, but are not limited to, alumni contributions to the athletic department not targeted to a particular sport or sports, investment interest income, and student activity fees.):
(A) Total revenues attributable to its intercollegiate athletic activities.
(B) Revenues attributable to all men's sports combined.
(C) Revenues attributable to all women's sports combined.
(D) Revenues attributable to football.
(E) Revenues attributable to men's basketball.
(F) Revenues attributable to women's basketball.
(G) Revenues attributable to all men's sports except football and basketball, combined.
(H) Revenues attributable to all women's sports except basketball, combined.
(ii) In addition to the data required by paragraph (c)(4)(i) of this section, an institution may report revenues attributable to the remainder of the teams, by team.
(5) Expenses incurred by the institution, according to the following categories (Expenses not attributable to a particular sport, such as general and administrative overhead, must be included only in the total expenses attributable to intercollegiate athletic activities.):
(i) Total expenses attributable to intercollegiate athletic activities.
(ii) Expenses attributable to football.
(iii) Expenses attributable to men's basketball.
(iv) Expenses attributable to women's basketball.
(v) Expenses attributable to all men's sports except football and basketball, combined.
(vi) Expenses attributable to all women's sports except basketball, combined.
(6) The total amount of money spent on athletically related student aid, including the value of waivers of educational expenses, aggregately for men's teams, and aggregately for women's teams.
(7) The ratio of athletically related student aid awarded male athletes to athletically related student aid awarded female athletes.
(8) The total amount of recruiting expenses incurred, aggregately for all men's teams, and aggregately for all women's teams.
(9)(i) The average annual institutional salary of the non-volunteer head coaches of all men's teams, across all offered sports, and the average annual institutional salary of the non-volunteer head coaches of all women's teams, across all offered sports, on a per person and a per full-time equivalent position basis. These data must include the number of persons and full-time equivalent positions used to calculate each average.
(ii) If a head coach has responsibilities for more than one team and the institution does not allocate that coach's salary by team, the institution must divide the salary by the number of teams for which the coach has responsibility and allocate the salary among the teams on a basis consistent with the coach's responsibilities for the different teams.
(10)(i) The average annual institutional salary of the non-volunteer assistant coaches of men's teams, across all offered sports, and the average annual institutional salary of the non-volunteer assistant coaches of women's teams, across all offered sports, on a per person and a full-time equivalent position basis. These data must include the number of persons and full-time equivalent positions used to calculate each average.
(ii) If an assistant coach had responsibilities for more than one team and the institution does not allocate that coach's salary by team, the institution must divide the salary by the number of teams for which the coach has responsibility and allocate the salary among the teams on a basis consistent with the coach's responsibilities for the different teams.
(a)(1) Annually, by July 1, an institution that is attended by students receiving athletically-related student aid must produce a report containing the following information:
(i) The number of students, categorized by race and gender, who attended that institution during the year prior to the submission of the report.
(ii) The number of students described in paragraph (a)(1)(i) of this section who received athletically-related student aid, categorized by race and gender within each sport.
(iii) The completion or graduation rate and if applicable, transfer-out rate of all the entering, certificate- or degree-seeking, full-time, undergraduate students described in § 668.45(a)(1), categorized by race and gender.
(iv) The completion or graduation rate and if applicable, transfer-out rate of the entering students described in § 668.45(a)(1) who received athletically-related student aid, categorized by race and gender within each sport.
(v) The average completion or graduation rate and if applicable, transfer-out rate for the four most recent completing or graduating classes of entering students described in § 668.45(a)(1), (3), and (4) categorized by race and gender. If an institution has completion or graduation rates and, if applicable, transfer-out rates for fewer than four of those classes, it must disclose the average rate of those classes for which it has rates.
(vi) The average completion or graduation rate and if applicable, transfer-out rate of the four most recent completing or graduating classes of entering students described in § 668.45 (a)(1) who received athletically-related student aid, categorized by race and gender within each sport. If an institution has completion or graduation rates and if applicable, transfer-out rates for fewer than four of those classes, it must disclose the average rate of those classes for which it has rates.
(2) For purposes of this section, sport means—
(i) Basketball;
(ii) Football;
(iii) Baseball;
(iv) Cross-country and track combined; and
(v) All other sports combined.
(3) If a category of students identified in paragraph (a)(1)(iv) above contains five or fewer students, the institution need not disclose information on that category of students.
(b) The provisions of § 668.45 (a), (b), (c), and (d) apply for purposes of calculating the completion or graduation rates and, if applicable, transfer-out rates required under paragraphs (a)(1)(iii) through (vi) of this section.
(c) Each institution of higher education described in paragraph (a) of this section may also provide to students and the Secretary supplemental information containing—
(1) The graduation or completion rate of the students who transferred into the institution; and
(2) The number of students who transferred out of the institution.
(d) The provisions of § 668.45(e) apply for purposes of this section.
(a) Additional definitions that apply to this section.
Cause of fire: The factor or factors that give rise to a fire. The causal factor may be, but is not limited to, the result of an intentional or unintentional action, mechanical failure, or act of nature.
Fire: Any instance of open flame or other burning in a place not intended to contain the burning or in an uncontrolled manner.
Fire drill: A supervised practice of a mandatory evacuation of a building for a fire.
Fire-related injury: Any instance in which a person is injured as a result of a fire, including an injury sustained from a natural or accidental cause, while involved in fire control, attempting rescue, or escaping from the dangers of the fire. The term “person” may include students, employees, visitors, firefighters, or any other individuals.
Fire-related death: Any instance in which a person—
(1) Is killed as a result of a fire, including death resulting from a natural or accidental cause while involved in fire control, attempting rescue, or escaping from the dangers of a fire; or
(2) Dies within one year of injuries sustained as a result of the fire.
Fire safety system: Any mechanism or system related to the detection of a fire, the warning resulting from a fire, or the control of a fire. This may include sprinkler systems or other fire extinguishing systems, fire detection devices, stand-alone smoke alarms, devices that alert one to the presence of a fire, such as horns, bells, or strobe lights; smoke-control and reduction mechanisms; and fire doors and walls that reduce the spread of a fire.
Value of property damage: The estimated value of the loss of the structure and contents, in terms of the cost of replacement in like kind and quantity. This estimate should include contents damaged by fire, and related damages caused by smoke, water, and overhaul; however, it does not include indirect loss, such as business interruption.
(b) Annual fire safety report. Beginning by October 1, 2010, an institution that maintains any on-campus student housing facility must prepare an annual fire safety report that contains, at a minimum, the following information:
(1) The fire statistics described in paragraph (c) of this section.
(2) A description of each on-campus student housing facility fire safety system.
(3) The number of fire drills held during the previous calendar year.
(4) The institution's policies or rules on portable electrical appliances, smoking, and open flames in a student housing facility.
(5) The institution's procedures for student housing evacuation in the case of a fire.
(6) The policies regarding fire safety education and training programs provided to the students and employees. In these policies, the institution must describe the procedures that students and employees should follow in the case of a fire.
(7) For purposes of including a fire in the statistics in the annual fire safety report, a list of the titles of each person or organization to which students and employees should report that a fire occurred.
(8) Plans for future improvements in fire safety, if determined necessary by the institution.
(c) Fire statistics. (1) An institution must report statistics for each on-campus student housing facility, for the three most recent calendar years for which data are available, concerning—
(i) The number of fires and the cause of each fire;
(ii) The number of persons who received fire-related injuries that resulted in treatment at a medical facility, including at an on-campus health center;
(iii) The number of deaths related to a fire; and
(iv) The value of property damage caused by a fire.
(2) An institution is required to submit a copy of the fire statistics in paragraph (c)(1) of this section to the Secretary on an annual basis.
(d) Fire log. (1) An institution that maintains on-campus student housing facilities must maintain a written, easily understood fire log that records, by the date that the fire was reported, any fire that occurred in an on-campus student housing facility. This log must include the nature, date, time, and general location of each fire.
(2) An institution must make an entry or an addition to an entry to the log within two business days, as defined under § 668.46(a), of the receipt of the information.
(3) An institution must make the fire log for the most recent 60-day period open to public inspection during normal business hours. The institution must make any portion of the log older than 60 days available within two business days of a request for public inspection.
(4) An institution must make an annual report to the campus community on the fires recorded in the fire log. This requirement may be satisfied by the annual fire safety report described in paragraph (b) of this section.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
The following definitions are to be used for reporting the crimes listed in § 668.46, in accordance with the Federal Bureau of Investigation's Uniform Crime Reporting (UCR) Program. The definitions for murder, rape, robbery, aggravated assault, burglary, motor vehicle theft, weapons: carrying, possessing, etc., law violations, drug abuse violations, and liquor law violations are from the “Summary Reporting System (SRS) User Manual” from the FBI's UCR Program. The definitions of fondling, incest, and statutory rape are excerpted from the “National Incident-Based Reporting System (NIBRS) User Manual” from the FBI's UCR Program. The definitions of larceny-theft (except motor vehicle theft), simple assault, intimidation, and destruction/damage/vandalism of property are from the “Hate Crime Data Collection Guidelines and Training Manual” from the FBI's UCR Program.
Any willful or malicious burning or attempt to burn, with or without intent to defraud, a dwelling house, public building, motor vehicle or aircraft, personal property of another, etc.
The killing of another person through gross negligence.
The willful (nonnegligent) killing of one human being by another.
The penetration, no matter how slight, of the vagina or anus with any body part or object, or oral penetration by a sex organ of another person, without the consent of the victim.
The taking or attempting to take anything of value from the care, custody, or control of a person or persons by force or threat of force or violence and/or by putting the victim in fear.
An unlawful attack by one person upon another for the purpose of inflicting severe or aggravated bodily injury. This type of assault usually is accompanied by the use of a weapon or by means likely to produce death or great bodily harm. (It is not necessary that injury result from an aggravated assault when a gun, knife, or other weapon is used which could and probably would result in serious personal injury if the crime were successfully completed.)
The unlawful entry of a structure to commit a felony or a theft. For reporting purposes this definition includes: unlawful entry with intent to commit a larceny or felony; breaking and entering with intent to commit a larceny; housebreaking; safecracking; and all attempts to commit any of the aforementioned.
The theft or attempted theft of a motor vehicle. (Classify as motor vehicle theft all cases where automobiles are taken by persons not having lawful access even though the vehicles are later abandoned—including joyriding.)
The violation of laws or ordinances prohibiting the manufacture, sale, purchase, transportation, possession, concealment, or use of firearms, cutting instruments, explosives, incendiary devices, or other deadly weapons.
The violation of laws prohibiting the production, distribution, and/or use of certain controlled substances and the equipment or devices utilized in their preparation and/or use. The unlawful cultivation, manufacture, distribution, sale, purchase, use, possession, transportation, or importation of any controlled drug or narcotic substance. Arrests for violations of State and local laws, specifically those relating to the unlawful possession, sale, use, growing, manufacturing, and making of narcotic drugs.
The violation of State or local laws or ordinances prohibiting the manufacture, sale, purchase, transportation, possession, or use of alcoholic beverages, not including driving under the influence and drunkenness.
Any sexual act directed against another person, without the consent of the victim, including instances where the victim is incapable of giving consent.
A. Fondling—The touching of the private body parts of another person for the purpose of sexual gratification, without the consent of the victim, including instances where the victim is incapable of giving consent because of his/her age or because of his/her temporary or permanent mental incapacity.
B. Incest—Sexual intercourse between persons who are related to each other within the degrees wherein marriage is prohibited by law.
C. Statutory Rape—Sexual intercourse with a person who is under the statutory age of consent.
The unlawful taking, carrying, leading, or riding away of property from the possession or constructive possession of another. Attempted larcenies are included. Embezzlement, confidence games, forgery, worthless checks, etc., are excluded.
An unlawful physical attack by one person upon another where neither the offender displays a weapon, nor the victim suffers obvious severe or aggravated bodily injury involving apparent broken bones, loss of teeth, possible internal injury, severe laceration, or loss of consciousness.
To unlawfully place another person in reasonable fear of bodily harm through the use of threatening words and/or other conduct, but without displaying a weapon or subjecting the victim to actual physical attack.
To willfully or maliciously destroy, damage, deface, or otherwise injure real or personal property without the consent of the owner or the person having custody or control of it.
(a) Scope and purpose. The regulations in this subpart govern the verification by institutions of information submitted by applicants for student financial assistance under the subsidized student financial assistance programs.
(b) Applicant responsibility. If the Secretary or the institution requests documents or information from an applicant under this subpart, the applicant must provide the specified documents or information.
(c) Foreign schools. The Secretary exempts from the provisions of this subpart participating institutions that are not located in a State.
The following definitions apply to this subpart:
Specified year: (1) The calendar year preceding the first calendar year of an award year, i.e., the base year; or
(2) The year preceding the year described in paragraph (1) of this definition.
Subsidized student financial assistance programs: Title IV, HEA programs for which eligibility is determined on the basis of an applicant's EFC. These programs include the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), Federal Perkins Loan, and Direct Subsidized Loan programs.
Unsubsidized student financial assistance programs: Title IV, HEA programs for which eligibility is not based on an applicant's EFC. These programs include the Teacher Education Assistance for College and Higher Education (TEACH) Grant, Direct Unsubsidized Loan, and Direct PLUS Loan programs.
(a) An institution must establish and use written policies and procedures for verifying an applicant's FAFSA information in accordance with the provisions of this subpart. These policies and procedures must include—
(1) The time period within which an applicant must provide any documentation requested by the institution in accordance with § 668.57;
(2) The consequences of an applicant's failure to provide the requested documentation within the specified time period;
(3) The method by which the institution notifies an applicant of the results of its verification if, as a result of verification, the applicant's EFC changes and results in a change in the amount of the applicant's assistance under the title IV, HEA programs;
(4) The procedures the institution will follow itself or the procedures the institution will require an applicant to follow to correct FAFSA information determined to be in error; and
(5) The procedures for making referrals under § 668.16(g).
(b) An institution's procedures must provide that it will furnish, in a timely manner, to each applicant whose FAFSA information is selected for verification a clear explanation of—
(1) The documentation needed to satisfy the verification requirements; and
(2) The applicant's responsibilities with respect to the verification of FAFSA information, including the deadlines for completing any actions required under this subpart and the consequences of failing to complete any required action.
(c) An institution's procedures must provide that an applicant whose FAFSA information is selected for verification is required to complete verification before the institution exercises any authority under section 479A(a) of the HEA to make changes to the applicant's cost of attendance or to the values of the data items required to calculate the EFC.
(a) General requirements. (1) Except as provided in paragraph (b) of this section, an institution must require an applicant whose FAFSA information is selected for verification by the Secretary, to verify the information specified by the Secretary pursuant to § 668.56.
(2) If an institution has reason to believe that an applicant's FAFSA information is inaccurate, it must verify the accuracy of that information.
(3) An institution may require an applicant to verify any FAFSA information that it specifies.
(4) If an applicant is selected to verify FAFSA information under paragraph (a)(1) of this section, the institution must require the applicant to verify the information as specified in § 668.56 if the applicant is selected for a subsequent verification of FAFSA information, except that the applicant is not required to provide documentation for the FAFSA information previously verified for the applicable award year to the extent that the FAFSA information previously verified remains unchanged.
(b) Exclusions from verification. (1) An institution need not verify an applicant's FAFSA information if—
(i) The applicant dies;
(ii) The applicant does not receive assistance under the title IV, HEA programs for reasons other than failure to verify FAFSA information;
(iii) The applicant is eligible to receive only unsubsidized student financial assistance; or
(iv) The applicant who transfers to the institution, had previously completed verification at the institution from which he or she transferred, and applies for assistance based on the same FAFSA information used at the previous institution, if the current institution obtains a letter from the previous institution—
(A) Stating that it has verified the applicant's information; and
(B) Providing the transaction number of the applicable valid ISIR.
(2) Unless the institution has reason to believe that the information reported by a dependent student is incorrect, it need not verify the applicant's parents' FAFSA information if—
(i) The parents are residing in a country other than the United States and cannot be contacted by normal means of communication;
(ii) The parents cannot be located because their contact information is unknown and cannot be obtained by the applicant; or
(iii) Both of the applicant's parents are mentally incapacitated.
(3) Unless the institution has reason to believe that the information reported by an independent student is incorrect, it need not verify the applicant's spouse's information if—
(i) The spouse is deceased;
(ii) The spouse is mentally incapacitated;
(iii) The spouse is residing in a country other than the United States and cannot be contacted by normal means of communication; or
(iv) The spouse cannot be located because his or her contact information is unknown and cannot be obtained by the applicant.
(a) If an applicant's dependency status changes at any time during the award year, the applicant must update FAFSA information, except when the update is due to a change in his or her marital status.
(b)(1) An applicant who is selected for verification of the number of persons in his or her household (household size) or the number of those in the household who are attending postsecondary institutions (number in college) must update those items to be correct as of the date of verification, except when the update is due to a change in his or her marital status.
(2) Notwithstanding paragraph (b)(1) of this section, an applicant is not required to provide documentation of household size or number in college during a subsequent verification of either item if the information has not changed.
(c) An institution may require an applicant to update FAFSA information under paragraph (a) or (b) of this section for a change in the applicant's marital status if the institution determines the update is necessary to address an inequity or to reflect more accurately the applicant's ability to pay.
(a) For each award year the Secretary publishes in the
(b) For each applicant whose FAFSA information is selected for verification by the Secretary, the Secretary specifies the specific information under paragraph (a) of this section that the applicant must verify.
If an applicant is selected to verify any of the following information, an institution must obtain the specified documentation.
(a) Adjusted Gross Income (AGI), income earned from work, or U.S. income tax paid. (1) Except as provided in paragraphs (a)(2), (a)(3), and (a)(4) of this section, an institution must require an applicant selected for verification of AGI, income earned from work or U.S. income tax paid to submit to it—
(i) A copy of the income tax return or an Internal Revenue Service (IRS) form that lists tax account information of the applicant, his or her spouse, or his or her parents, as applicable for the specified year. The copy of the return must include the signature (which need not be an original) of the filer of the return or of one of the filers of a joint return;
(ii) For a dependent student, a copy of each IRS Form W-2 for the specified year received by the parent whose income is being taken into account if—
(A) The parents filed a joint return; and
(B) The parents are divorced or separated or one of the parents has died; and
(iii) For an independent student, a copy of each IRS Form W-2 for the specified year he or she received if the independent student—
(A) Filed a joint return; and
(B) Is a widow or widower, or is divorced or separated.
(2) An institution may accept, in lieu of an income tax return or an IRS form that lists tax account information, the information reported for an item on the applicant's FAFSA for the specified year if the Secretary has identified that item as having been obtained from the IRS and not having been changed.
(3) An institution must accept, in lieu of an income tax return or an IRS form that lists tax account information, the documentation set forth in paragraph (a)(4) of this section if the individual for the specified year—
(i) Has not filed and, under IRS rules, or other applicable government agency rules, is not required to file an income tax return;
(ii) Is required to file a U.S. tax return and has been granted a filing extension by the IRS; or
(iii) Has requested a copy of the tax return or an IRS form that lists tax account information, and the IRS or a government of a U.S. territory or commonwealth or a foreign central government cannot locate the return or provide an IRS form that lists tax account information.
(4) An institution must accept—
(i) For an individual described in paragraph (a)(3)(i) of this section, a statement signed by that individual certifying that he or she has not filed and is not required to file an income tax return for the specified year and certifying for that year that individual's—
(A) Sources of income earned from work as stated on the FAFSA; and
(B) Amounts of income from each source. In lieu of a certification of these amounts of income, the applicant may provide a copy of his or her IRS Form W-2 for each source listed under paragraph (a)(4)(i)(A) of this section;
(ii) For an individual described in paragraph (a)(3)(ii) of this section—
(A) A copy of the IRS Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return,” that the individual filed with the IRS for the specified year, or a copy of the IRS's approval of an extension beyond the automatic six-month extension if the individual requested an additional extension of the filing time; and
(B) A copy of each IRS Form W-2 that the individual received for the specified year, or for a self-employed individual, a statement signed by the individual certifying the amount of the AGI for the specified year; and
(iii) For an individual described in paragraph (a)(3)(iii) of this section—
(A) A copy of each IRS Form W-2 that the individual received for the specified year; or
(B) For an individual who is self-employed or has filed an income tax return with a government of a U. S. territory or commonwealth, or a foreign central government, a statement signed by the individual certifying the amount of AGI and taxes paid for the specified year.
(5) An institution may require an individual described in paragraph (a)(3)(ii) of this section to provide to it a copy of his or her completed and signed income tax return when filed. If an institution receives the copy of the return, it must reverify the AGI and taxes paid by the applicant and his or her spouse or parents.
(6) If an individual who is required to submit an IRS Form W-2, under paragraph (a) of this section, is unable to obtain one in a timely manner, the institution may permit that individual to set forth, in a statement signed by the individual, the amount of income earned from work, the source of that income, and the reason that the IRS Form W-2 is not available in a timely manner.
(7) For the purpose of this section, an institution may accept in lieu of a copy of an income tax return signed by the filer of the return or one of the filers of a joint return, a copy of the filer's return that includes the preparer's Social Security Number, Employer Identification Number or the Preparer Tax Identification Number and has been signed, stamped, typed, or printed with the name and address of the preparer of the return.
(b) Number of family members in household. An institution must require an applicant selected for verification of the number of family members in the household to submit to it a statement signed by both the applicant and one of the applicant's parents if the applicant is a dependent student, or only the applicant if the applicant is an independent student, listing the name and age of each family member in the household and the relationship of that household member to the applicant.
(c) Number of family household members enrolled in eligible postsecondary institutions. (1) An institution must require an applicant selected for verification of the number of household members in the applicant's family enrolled on at least a half-time basis in eligible postsecondary institutions to submit a statement signed by both the applicant and one of the applicant's parents, if the applicant is a dependent student, or by only the applicant if the applicant is an independent student, listing—
(i) The name of each family member who is or will be attending an eligible postsecondary educational institution as at least a half-time student in the award year;
(ii) The age of each student; and
(iii) The name of the institution that each student is or will be attending.
(2) If the institution has reason to believe that an applicant's FAFSA information or the statement provided under paragraph (c)(1) of this section regarding the number of family household members enrolled in eligible postsecondary institutions is inaccurate, the institution must obtain a statement from each institution named by the applicant in response to the requirement of paragraph (c)(1)(iii) of this section that the household member in question is or will be attending the institution on at least a half-time basis, unless—
(i) The institution the student is attending determines that such a statement is not available because the household member in question has not yet registered at the institution he or she plans to attend; or
(ii) The institution has information indicating that the student will be attending the same institution as the applicant.
(d) Other information. If an applicant is selected to verify other information specified in the annual
(a)(1) If an institution has reason to believe that an applicant's FAFSA information is inaccurate, until the information is verified and any corrections are made in accordance with § 668.59(a), the institution may not—
(i) Disburse any Federal Pell Grant, FSEOG, or Federal Perkins Loan Program funds to the applicant;
(ii) Employ or allow an employer to employ the applicant in its FWS Program; or
(iii) Originate a Direct Subsidized Loan, or disburse any such loan proceeds for any previously originated Direct Subsidized Loan to the applicant.
(2) If an institution does not have reason to believe that an applicant's FAFSA information is inaccurate prior to verification, the institution may—
(i)(A) Withhold payment of Federal Pell Grant, Federal Perkins Loan, or FSEOG Program funds for the applicant; or
(B) Make one disbursement from each of the Federal Pell Grant, Federal Perkins Loan, or FSEOG Program funds for the applicant's first payment period of the award year;
(ii) Employ or allow an employer to employ that applicant, once he or she is an eligible student, under the FWS Program for the first 60 consecutive days after the student's enrollment in that award year; or
(iii)(A) Withhold origination of the applicant's Direct Subsidized Loan; or
(B) Originate the Direct Subsidized Loan provided that the institution does not disburse Direct Subsidized Loan proceeds.
(3) If, after verification, an institution determines that changes to an applicant's information will not change the amount the applicant would receive under a title IV, HEA program, the institution—
(i) Must ensure corrections are made in accordance with § 668.59(a); and
(ii) May prior to receiving the corrected valid SAR or valid ISIR—
(A) Make one disbursement from each of the Federal Pell Grant, Federal Perkins Loan, or FSEOG Program funds for the applicant's first payment period of the award year;
(B) Employ or allow an employer to employ the applicant, once he or she is an eligible student, under the FWS Program for the first 60 consecutive days after the student's enrollment in that award year; or
(C) Originate the Direct Subsidized Loan and disburse the Direct Subsidized Loan proceeds for the applicant.
(b) If an institution chooses to make a disbursement under—
(1) Paragraph (a)(2)(i)(B) of this section, it—
(i) Is liable for any overpayment discovered as a result of verification to the extent that the overpayment is not recovered through reducing subsequent disbursements in the award year or from the student; and
(ii) Must recover the overpayment in accordance with § 668.61(a);
(2) Paragraph (a)(2)(ii) of this section, it—
(i) Is liable for any overpayment discovered as a result of verification to the extent that the overpayment is not eliminated by adjusting other financial assistance; and
(ii) Must recover the overpayment in accordance with § 668.61(b); or
(3) Paragraph (a)(3) of this section, it—
(i) Is liable for any subsidized student financial assistance disbursed if it does not receive the valid SAR or valid ISIR reflecting corrections within the deadlines established under § 668.60; and
(ii) Must recover the funds in accordance with § 668.61(c).
(a) For the subsidized student financial assistance programs, if an applicant's FAFSA information changes as a result of verification, the applicant or the institution must submit to the Secretary any changes to—
(1) A nondollar item; or
(2) A single dollar item of $25 or more.
(b) For the Federal Pell Grant Program, if an applicant's FAFSA information changes as a result of verification, an institution must—
(1) Recalculate the applicant's Federal Pell Grant on the basis of the EFC on the corrected valid SAR or valid ISIR; and
(2)(i) Disburse any additional funds under that award only if the institution receives a corrected valid SAR or valid ISIR for the applicant and only to the extent that additional funds are payable based on the recalculation;
(ii) Comply with the procedures specified in § 668.61 for an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced; or—
(iii) Comply with the procedures specified in 34 CFR 690.79 for an overpayment that is not an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced.
(c) For the subsidized student financial assistance programs, excluding the Federal Pell Grant Program, if an applicant's FAFSA information changes as a result of verification, the institution must—
(1) Adjust the applicant's financial aid package on the basis of the EFC on the corrected valid SAR or valid ISIR; and
(2)(i) Comply with the procedures specified in § 668.61 for an interim disbursement if, as a result of verification, the financial aid package must be reduced;
(ii) Comply with the procedures specified in 34 CFR 673.5(f) for a Federal Perkins loan or an FSEOG overpayment that is not the result of an interim disbursement if, as a result of verification, the financial aid package must be reduced; and
(iii) Comply with the procedures specified in 34 CFR 685.303(e) for Direct Subsidized Loan excess loan proceeds that are not the result of an interim disbursement if, as a result of verification, the financial aid package must be reduced.
(a) An institution must require an applicant selected for verification to submit to it, within the period of time it or the Secretary specifies, the documentation set forth in § 668.57 that is requested by the institution.
(b) For purposes of the subsidized student financial assistance programs, excluding the Federal Pell Grant Program—
(1) If an applicant fails to provide the requested documentation within a reasonable time period established by the institution—
(i) The institution may not—
(A) Disburse any additional Federal Perkins Loan or FSEOG Program funds to the applicant;
(B) Employ, continue to employ or allow an employer to employ the applicant under FWS; or
(C) Originate the applicant's Direct Subsidized Loan or disburse any additional Direct Subsidized Loan proceeds for the applicant; and
(ii) The applicant must repay to the institution any Federal Perkins Loan or FSEOG received for that award year;
(2) If the applicant provides the requested documentation after the time period established by the institution, the institution may, at its option, disburse aid to the applicant notwithstanding paragraph (b)(1) of this section; and
(3) If an institution has received proceeds for a Direct Subsidized Loan on behalf of an applicant, the institution must return all or a portion of those funds as provided under § 668.166(b) if the applicant does not complete verification within the time period specified.
(c) For purposes of the Federal Pell Grant Program—
(1) An applicant may submit a valid SAR to the institution or the institution may receive a valid ISIR after the applicable deadline specified in 34 CFR 690.61 but within an established additional time period set by the Secretary through publication of a notice in the
(2) If the applicant does not provide to the institution the requested documentation and, if necessary, a valid SAR or the institution does not receive a valid ISIR, within the additional time period referenced in paragraph (c)(1) of this section, the applicant—
(i) Forfeits the Federal Pell Grant for the award year; and
(ii) Must return any Federal Pell Grant payments previously received for that award year.
(d) The Secretary may determine not to process FAFSA information of an applicant who has been requested to provide documentation until the applicant provides the documentation or the Secretary decides that there is no longer a need for the documentation.
(e) If an applicant selected for verification for an award year dies before the deadline for completing verification without completing that process, the institution may not—
(1) Make any further disbursements on behalf of that applicant;
(2) Originate that applicant's Direct Subsidized Loan, or disburse that applicant's Direct Subsidized Loan proceeds; or
(3) Consider any funds it disbursed to that applicant under § 668.58(a)(2) as an overpayment.
(a) If an institution discovers, as a result of verification, that an applicant received under § 668.58(a)(2)(i)(B) more financial aid than the applicant was eligible to receive, the institution must eliminate the Federal Pell Grant, Federal Perkins Loan, or FSEOG overpayment by—
(1) Adjusting subsequent disbursements in the award year in which the overpayment occurred; or
(2) Reimbursing the appropriate program account by—
(i) Requiring the applicant to return the overpayment to the institution if the institution cannot correct the overpayment under paragraph (a)(1) of this section; or
(ii) Making restitution from its own funds, by the earlier of the following dates, if the applicant does not return the overpayment:
(A) Sixty days after the applicant's last day of attendance.
(B) The last day of the award year in which the institution disbursed Federal Pell Grant, Federal Perkins Loan, or FSEOG Program funds to the applicant.
(b) If an institution discovers, as a result of verification, that an applicant received under § 668.58(a)(2)(ii) more financial aid than the applicant was eligible to receive, the institution must eliminate the FWS overpayment by—
(1) Adjusting the applicant's other financial aid; or
(2) Reimbursing the FWS program account by making restitution from its own funds, if the institution cannot correct the overpayment under paragraph (b)(1) of this section. The applicant must still be paid for all work performed under the institution's own payroll account.
(c) If an institution disbursed subsidized student financial assistance to an applicant under § 668.58(a)(3), and did not receive the valid SAR or valid ISIR reflecting corrections within the deadlines established under § 668.60, the institution must reimburse the appropriate program account by making restitution from its own funds. The applicant must still be paid for all work performed under the institution's own payroll account.
(a) If the Secretary determines that an eligible institution has engaged in substantial misrepresentation, the Secretary may—
(1) Revoke the eligible institution's program participation agreement, if the institution is provisionally certified under § 668.13(c);
(2) Impose limitations on the institution's participation in the title IV, HEA programs, if the institution is provisionally certified under § 668.13(c);
(3) Deny participation applications made on behalf of the institution; or
(4) Initiate a proceeding against the eligible institution under subpart G of this part.
(b) This subpart establishes the types of activities that constitute substantial misrepresentation by an eligible institution. An eligible institution is deemed to have engaged in substantial misrepresentation when the institution itself, one of its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs, marketing, advertising, recruiting or admissions services, makes a substantial misrepresentation about the nature of its educational program, its financial charges, or the employability of its graduates. Substantial misrepresentations are prohibited in all forms, including those made in any advertising, promotional materials, or in the marketing or sale of courses or programs of instruction offered by the institution.
(c) The following definitions apply to this subpart:
Misrepresentation. Any false, erroneous or misleading statement an eligible institution, one of its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs, or to provide marketing, advertising, recruiting or admissions services makes directly or indirectly to a student, prospective student or any member of the public, or to an accrediting agency, to a State agency, or to the Secretary. A misleading statement includes any statement that has the likelihood or tendency to mislead under the circumstances. A misleading statement may be included in the institution's marketing materials, website, or any other communication to students or prospective students. A statement is any communication made in writing, visually, orally, or through other means. Misrepresentation includes any statement that omits information in such a way as to make the statement false, erroneous, or misleading. Misrepresentation includes the dissemination of a student endorsement or testimonial that a student gives either under duress or because the institution required such an endorsement or testimonial to participate in a program. Misrepresentation also includes the omission of facts as defined under § 668.75.
Prospective student. Any individual who has contacted an eligible institution for the purpose of requesting information about enrolling at the institution or who has been contacted directly by the institution or indirectly through advertising about enrolling at the institution.
Substantial misrepresentation. Any misrepresentation, including omission of facts as defined under § 668.75, on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied, to that person's detriment.
Misrepresentation concerning the nature of an eligible institution's educational program includes, but is not limited to, false, erroneous or misleading statements concerning—
(a) The particular type(s), specific source(s), nature and extent of its institutional, programmatic, or specialized accreditation;
(b)(1) The general or specific transferability of course credits earned at the institution to other institution(s); or
(2) Acceptance of credits earned through prior work or at another institution toward the educational program at the institution.
(c) Whether successful completion of a course of instruction qualifies a student—
(1) For acceptance into a labor union or similar organization; or
(2) To receive, to apply to take, or to take the examination required to receive a local, State, or Federal license, or a nongovernmental certification required as a precondition for employment, or to perform certain functions in the States in which the educational program is offered, or to meet additional conditions that the institution knows or reasonably should know are generally needed to secure employment in a recognized occupation for which the program is represented to prepare students;
(d) The requirements for successfully completing the course of study or program and the circumstances that would constitute grounds for terminating the student's enrollment;
(e) Whether its courses are recommended or have been the subject of unsolicited testimonials or endorsements by:
(1) Vocational counselors, high schools, colleges, educational organizations, employment agencies, members of a particular industry, students, former students, or others; or
(2) Governmental officials for governmental employment;
(f) Its size, location, facilities, equipment, or institutionally-provided equipment, software technology, books, or supplies;
(g) The availability, frequency, and appropriateness of its courses and programs in relation to the employment objectives that it states its programs are designed to meet;
(h) The number, availability, and qualifications, including the training and experience, of its faculty, instructors, and other personnel;
(i) The nature and availability of any tutorial or specialized instruction, guidance and counseling, or other supplementary assistance it will provide to its students before, during or after the completion of a course;
(j) The nature or extent of any prerequisites established for enrollment in a course;
(k) The subject matter, content of the course of study, or any other fact related to the degree, diploma, certificate of completion, or any similar document that the student is to be, or is, awarded upon completion of the course of study;
(l) Whether the academic, professional, or occupational degree that the institution will confer upon completion of the course of study has been authorized by the appropriate State educational agency;
(m) Institutional or program admissions selectivity if the institution or program actually employs an open enrollment policy;
(n) The classification of the institution (nonprofit, public or proprietary) for purposes of its participation in the title IV, HEA programs, if that is different from the classification determined by the Secretary;
(o) Specialized, programmatic, or institutional certifications, accreditation, or approvals that were not actually obtained, or that the institution fails to remove from marketing materials, websites, or other communications to students within a reasonable period of time after such certifications or approvals are revoked or withdrawn;
(p) Assistance that will be provided in securing required externships or the existence of contracts with specific externship sites;
(q) Assistance that will be provided to obtain a high school diploma or General Educational Development Certificate (GED);
(r) The pace of completing the program or the time it would take to complete the program contrary to the stated length of the educational program; or
(s) Any matters required to be disclosed to prospective students under §§ 668.42, 668.43, and 668.45.
Misrepresentation concerning the nature of an eligible institution's financial charges, or the financial assistance provided includes, but is not limited to, false, erroneous, or misleading statements concerning—
(a) Offers of scholarships to pay all or part of a course charge;
(b) Whether a particular charge is the customary charge at the institution for a course;
(c) The cost of the program and the institution's refund policy if the student does not complete the program;
(d) The availability, amount, or nature of any financial assistance available to students from the institution or any other entity, including any government agency, to pay the costs of attendance at the institution, including part-time employment, housing, and transportation assistance;
(e) A student's responsibility to repay any loans provided, regardless of whether the student is successful in completing the program and obtaining employment;
(f) The student's right to reject any particular type of financial aid or other assistance, or whether the student must apply for a particular type of financial aid, such as financing offered by the institution; or
(g) The amount, method, or timing of payment of tuition and fees that the student would be charged for the program.
Misrepresentation regarding the employability of an eligible institution's graduates includes, but is not limited to, false, erroneous, or misleading statements concerning—
(a) The institution's relationship with any organization, employment agency, or other agency providing authorized training leading directly to employment;
(b) The institution's intentions to maintain a placement service for graduates or to otherwise assist its graduates to obtain employment, including any requirements to receive such assistance;
(c) The institution's knowledge about the current or likely future conditions, compensation, or employment opportunities in the industry or occupation for which the students are being prepared;
(d) Whether employment is being offered by the institution exclusively for graduates of the institution, or that a talent hunt or contest is being conducted, including, but not limited to, through the use of phrases such as “Men/women wanted to train for . . . , ” “Help Wanted,” “Employment,” or “Business Opportunities”;
(e) Government job market statistics in relation to the potential placement of its graduates;
(f) Actual licensure passage rates, if they are materially lower than those included in the institution's marketing materials, website, or other communications made to the student or prospective student; or
(g)(1) Actual employment rates, if they are materially lower than those included in the institution's marketing materials, website, or other communications made to the student or prospective student, including but not limited to:
(i) Rates that are calculated in a manner that is inconsistent with the standards or methodology set forth by the institution's accreditor or a State agency that regulates the institution, or in its institutional policy.
(ii) Rates that the institution discloses to students are inflated by means such as:
(A) Counting individuals as employed who are not bona fide employees, such as individuals placed on a 1-day job fair, an internship, externship, or in employment subsidized by the institution;
(B) Counting individuals as employed who were employed in the field prior to graduation; or
(C) Excluding students from an employment rate calculation due to assessments of employability or difficulty with placement.
(2) Upon request, the institution must furnish to the Secretary documentation and other information used to calculate the institution's employment rate calculations.
An omission of fact is a misrepresentation under § 668.71 if a reasonable person would have considered the omitted information in making a decision to enroll or continue attendance at the institution. An omission of fact includes, but is not limited to, the concealment, suppression, or absence of material information or statement concerning—
(a) The entity that is actually providing the educational instruction, or implementing the institution's recruitment, admissions, or enrollment process;
(b) The availability of enrollment openings in the student's desired program;
(c) The factors that would prevent an applicant from meeting the legal or other requirements to be employed in the field for which the training is provided, for reasons such as prior criminal record or preexisting medical conditions;
(d) The factors that would prevent an applicant from meeting the legal or other requirements to be employed, licensed, or certified in the field for which the training is provided because the academic, professional, or occupational degree or credential that the institution will confer upon completion of the course of study has not been authorized by the appropriate State educational or licensure agency, or requires specialized accreditation that the institution does not have; or,
(e) The nature of the institution's educational programs, the institution's financial charges, or the employability of the institution's graduates as defined in § 668.72-74.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) This subpart establishes regulations for the following actions with respect to a participating institution or third-party servicer:
(1) An emergency action.
(2) The imposition of a fine.
(3) The limitation, suspension, or termination of the participation of the institution in a title IV, HEA program.
(4) The limitation, suspension, or termination of the eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.
(5) The determination of—
(i) Borrower defense to repayment claims that are brought by the Department against an institution under § 685.206, § 685.222 or part 685, subpart D, of this chapter; and
(ii) Liability of an institution to the Secretary for losses to the Secretary arising from these claims.
(b) This subpart applies to an institution or a third-party servicer that violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA.
(c) This subpart does not apply to a determination that—
(1) An institution or any of its locations or educational programs fails to qualify for initial designation as an eligible institution, location, or educational program because the institution, location, or educational program fails to satisfy the statutory and regulatory provisions that define an eligible institution or educational program with respect to the Title IV, HEA program for which a designation of eligibility is sought;
(2) An institution fails to qualify for initial certification or provisional certification to participate in any Title IV, HEA program because the institution does not meet the factors of financial responsibility and standards of administrative capability contained in subpart B of this part;
(3) A participating institution's or a provisionally certified participating institution's period of participation, as specified under § 668.13, has expired; or
(4) A participating institution's provisional certification is revoked under the procedures in § 668.13.
(d) This subpart does not apply to a determination by the Secretary of the system to be used to disburse Title IV, HEA program funds to a participating institution (i.e., advance payments and payments by way of reimbursements).
(e) The proceedings described in this subpart provide the institution's sole opportunity for a hearing on the existence and amount of the debt that is required by applicable law prior to the Department collecting the debt from any available funds, including but not limited to offsetting the debt or any liability against funds to be provided to an institution pursuant to any Title IV, HEA program in which that institution participates.
(f) Nothing contained in this subpart limits the right of the Department to gather information, including by subpoena, or conduct any examination, audit, program review, investigation, or other review authorized by other applicable law.
(g) Unless directed by a court of competent jurisdiction, the hearing official, or the Secretary for good cause, if a collateral attack is brought in any court concerning all or any part of any proceeding under this subpart, the challenged proceeding shall continue without regard to the pendency of that court proceeding. No default or other failure to timely act as directed in a proceeding authorized by this subpart shall be excused based on the pendency of such court proceeding.
(a) A participating institution or a third-party servicer that contracts with that institution acts in the nature of a fiduciary in the administration of the Title IV, HEA programs. To participate in any Title IV, HEA program, the institution or servicer must at all times act with the competency and integrity necessary to qualify as a fiduciary.
(b) In the capacity of a fiduciary—
(1) A participating institution is subject to the highest standard of care and diligence in administering the programs and in accounting to the Secretary for the funds received under those programs; and
(2) A third-party servicer is subject to the highest standard of care and diligence in administering any aspect of the programs on behalf of the institutions with which the servicer contracts and in accounting to the Secretary and those institutions for any funds administered by the servicer under those programs.
(c) The failure of a participating institution or any of the institution's third-party servicers to administer a Title IV, HEA program, or to account for the funds that the institution or servicer receives under that program, in accordance with the highest standard of care and diligence required of a fiduciary, constitutes grounds for—
(1) An emergency action against the institution, a fine on the institution, or the limitation, suspension, or termination of the institution's participation in that program; or
(2) An emergency action against the servicer, a fine on the servicer, or the limitation, suspension, or termination of the servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in that program.
(d)(1) A participating institution or a third-party servicer with which the institution contracts violates its fiduciary duty if—
(i)(A) The servicer has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds;
(B) A person who exercises substantial control over the servicer, as determined according to § 668.15, has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds;
(C) The servicer employs a person in a capacity that involves the administration of Title IV, HEA programs or the receipt of Title IV, HEA program funds who has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or who has been administratively or judicially determined to have committed fraud or any other material violation of law involving those funds; or
(D) The servicer uses or contracts in a capacity that involves any aspect of the administration of the Title IV, HEA programs with any other person, agency, or organization that has been or whose officers or employees have been—
(1) Convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds; or
(2) Administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds; and
(ii) Upon learning of a conviction, plea, or administrative or judicial determination described in paragraph (d)(1)(i) of this section, the institution or servicer, as applicable, does not promptly remove the person, agency, or organization from any involvement in the administration of the institution's participation in Title IV, HEA programs, or, as applicable, the removal or elimination of any substantial control, as determined according to § 668.15, over the servicer.
(2) A violation for a reason contained in paragraph (d)(1) of this section is grounds for terminating—
(i) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program; and
(ii) The participation in any Title IV, HEA program of any institution under whose contract the servicer committed the violation, if that institution had been aware of the violation and had failed to take the appropriate action described in paragraph (d)(1)(ii) of this section.
(e)(1) A participating institution or third-party servicer, as applicable, violates its fiduciary duty if—
(i)(A) The institution or servicer, as applicable, is debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or
(B) Cause exists under 2 CFR 180.700 or 180.800, as both those sections are adopted at 2 CFR 3485.12, for debarring or suspending the institution, servicer, or any principal or affiliate of the institution or servicer under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; and
(ii) Upon learning of the debarment, suspension, or cause for debarment or suspension, the institution or servicer, as applicable, does not promptly—
(A) Discontinue the affiliation; or
(B) Remove the principal from responsibility for any aspect of the administration of an institution's or servicer's participation in the Title IV, HEA programs.
(2) A violation for a reason contained in paragraph (e)(1) of this section is grounds for terminating—
(i) The institution's participation in any Title IV, HEA program; and
(ii) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program. The violation is also grounds for terminating, under this subpart, the participation in any Title IV, HEA program of any institution under whose contract the servicer committed the violation, if that institution knew or should have known of the violation.
(f)(1) The debarment of a participating institution or third-party servicer, as applicable, under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, or another Federal agency from participation in Federal programs, under the procedures described in 2 CFR 3485.612(d) terminates, for the duration of the debarment—
(i) The institution's participation in any Title IV, HEA program; and
(ii) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program.
(2)(i) The suspension of a participating institution or third-party servicer, as applicable, under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, or another Federal agency from participation in Federal programs, under the procedures described in 2 CFR 3485.612(d), suspends—
(A) The institution's participation in any Title IV, HEA program; and
(B) The servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program.
(ii) A suspension described in paragraph (f)(2) of this section lasts for a period of 60 days, beginning on the effective date specified in the notice by the Secretary under 2 CFR 3485.612(c), unless—
(A) The institution or servicer, as applicable, and the Secretary, agree to an extension of the suspension; or
(B) The Secretary begins a limitation or termination proceeding against the institution or servicer, as applicable, under this subpart before the 60th day of the suspension.
(3) A debarment or suspension not described in (f)(1) or (f)(2) of this section of a participating institution or third-party servicer by another Federal agency constitutes prima facie evidence in a proceeding under this subpart that cause for suspension or debarment and termination, as applicable, exists.
(a) Under an emergency action, the Secretary may—
(1) Withhold Title IV, HEA program funds from a participating institution or its students, or from a third-party servicer, as applicable;
(2)(i) Withdraw the authority of the institution or servicer, as applicable, to commit, disburse, deliver, or cause the commitment, disbursement, or delivery of Title IV, HEA program funds; or
(ii) Withdraw the authority of the institution or servicer, as applicable, to commit, disburse, deliver, or cause the commitment, disbursement, or delivery of Title IV, HEA program funds except in accordance with a particular procedure; and
(3)(i) Withdraw the authority of the servicer to administer any aspect of any institution's participation in any Title IV, HEA program; or
(ii) Withdraw the authority of the servicer to administer any aspect of any institution's participation in any Title IV, HEA program except in accordance with a particular procedure.
(b)(1) An initiating official begins an emergency action against an institution or third-party servicer by sending the institution or servicer a notice by registered mail, return receipt requested. In an emergency action against a third-party servicer, the official also sends the notice to each institution that contracts with the servicer. The official also may transmit the notice by other, more expeditious means if practical.
(2) The emergency action takes effect on the date the initiating official mails the notice to the institution or servicer, as applicable.
(3) The notice states the grounds on which the emergency action is based, the consequences of the emergency action, and that the institution or servicer, as applicable, may request an opportunity to show cause why the emergency action is unwarranted.
(c)(1) An initiating official takes emergency action against an institution or third-party servicer only if that official—
(i) Receives information, determined by the official to be reliable, that the institution or servicer, as applicable, is violating any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA;
(ii) Determines that immediate action is necessary to prevent misuse of Title IV, HEA program funds; and
(iii) Determines that the likelihood of loss from that misuse outweighs the importance of awaiting completion of any proceeding that may be initiated to limit, suspend, or terminate, as applicable—
(A) The participation of the institution in one or more Title IV, HEA programs; or
(B) The eligibility of the servicer to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program.
(2) Examples of violations of a Title IV, HEA program requirement that cause misuse and the likely loss of Title IV, HEA program funds include—
(i) Causing the commitment, disbursement, or delivery by any party of Title IV, HEA program funds in an amount that exceeds—
(A) The amount for which students are eligible; or
(B) The amount of principal, interest, or special allowance payments that would have been payable to the holder of a Federal Stafford or Federal PLUS loan if a refund allocable to that loan had been made in the amount and at the time required;
(ii) Using, offering to make available, or causing the use or availability of Title IV, HEA program funds for educational services if—
(A) The institution, servicer, or agents of the institution or servicer have made a substantial misrepresentation as described in §§ 668.72, 668.73, or 668.74 related to those services;
(B) The institution lacks the administrative or financial ability to provide those services in full; or
(C) The institution, or servicer, as applicable, lacks the administrative or financial ability to make all required payments under § 668.22; and
(iii) Engaging in fraud involving the administration of a Title IV, HEA program. Examples of fraud include—
(A) Falsification of any document received from a student or pertaining to a student's eligibility for assistance under a Title IV, HEA program;
(B) Falsification, including false certifications, of any document submitted by the institution or servicer to the Secretary;
(C) Falsification, including false certifications, of any document used for or pertaining to—
(1) The legal authority of an institution to provide postsecondary education in the State in which the institution is located; or
(2) The accreditation or preaccreditation of an institution or any of the institution's educational programs or locations;
(D) Falsification, including false certifications, of any document submitted to a guaranty agency under the Federal Stafford Loan or Federal PLUS programs or an independent auditor;
(E) Falsification of any document submitted to a third-party servicer by an institution or to an institution by a third-party servicer pertaining to the institution's participation in a Title IV, HEA program; and
(F) Falsification, including false certifications, of any document pertaining to the performance of any loan collection activity, including activity that is not required by the HEA or applicable program regulations.
(3) If the Secretary begins an emergency action against a third-party servicer, the Secretary may also begin an emergency action against any institution under whose contract a third-party servicer commits the violation.
(d)(1) Except as provided in paragraph (d)(2) of this section, after an emergency action becomes effective, an institution or third-party servicer, as applicable, may not—
(i) Make or increase awards or make other commitments of aid to a student under the applicable Title IV, HEA program;
(ii) Disburse either program funds, institutional funds, or other funds as assistance to a student under that Title IV, HEA program;
(iii) In the case of an emergency action pertaining to participation in the Federal Stafford Loan or Federal PLUS programs—
(A) Certify an application for a loan under that program;
(B) Deliver loan proceeds to a student under that program; or
(C) Retain the proceeds of a loan made under that program that are received after the emergency action takes effect; or
(iv) In the case of an emergency action against a third-party servicer, administer any aspect of any institution's participation in any Title IV, HEA program.
(2) If the initiating official withdraws, by an emergency action, the authority of the institution or servicer to commit, disburse, deliver, or cause the commitment, disbursement, or delivery of Title IV, HEA program funds, or the authority of the servicer to administer any aspect of any institution's participation in any Title IV, HEA program, except in accordance with a particular procedure specified in the notice of emergency action, the institution or servicer, as applicable, may not take any action described in paragraph (d)(1) of this section except in accordance with the procedure specified in the notice.
(e)(1) Upon request by the institution or servicer, as applicable, the Secretary provides the institution or servicer, as soon as practicable, with an opportunity to show cause that the emergency action is unwarranted or should be modified.
(2) An opportunity to show cause consists of an opportunity to present evidence and argument to a show-cause official. The initiating official does not act as the show-cause official for any emergency action that the initiating official has begun. The show-cause official is authorized to grant relief from the emergency action. The institution or servicer may make its presentation in writing or, upon its request, at an informal meeting with the show-cause official.
(3) The show-cause official may limit the time and manner in which argument and evidence may be presented in order to avoid unnecessary delay or the presentation of immaterial, irrelevant, or repetitious matter.
(4) The institution or servicer, as applicable, has the burden of persuading the show-cause official that the emergency action imposed by the notice is unwarranted or should be modified because—
(i) The grounds stated in the notice did not, or no longer, exist;
(ii) The grounds stated in the notice will not cause loss or misuse of Title IV, HEA program funds; or
(iii) The institution or servicer, as applicable, will use procedures that will reliably eliminate the risk of loss from the misuse described in the notice.
(5) The show-cause official continues, modifies, or revokes the emergency action promptly after consideration of any argument and evidence presented by the institution or servicer, as applicable, and the initiating official.
(6) The show-cause official notifies the institution or servicer, as applicable, of that official's determination promptly after the completion of the show-cause meeting or, if no meeting is requested, after the official receives all the material submitted by the institution in opposition to the emergency action. In the case of a notice to a third-party servicer, the official also notifies each institution that contracts with the servicer of that determination. The show-cause official may explain that determination by adopting or modifying the statement of reasons provided in the notice of emergency action.
(f)(1) An emergency action does not extend more than 30 days after initiated unless the Secretary initiates a limitation, suspension, or termination proceeding under this part or under 34 CFR part 600 against the institution or servicer, as applicable, within that 30-day period, in which case the emergency action continues until a final decision is issued in that proceeding, as provided in § 668.91(c), as applicable.
(2) Until a final decision is issued by the Secretary in a proceeding described in paragraph (f)(1) of this section, any action affecting the emergency action is at the sole discretion of the initiating official, or, if a show- cause proceeding is conducted, the show-cause official.
(3) If an emergency action extends beyond 180 days by virtue of paragraph (f)(1) of this section, the institution or servicer, as applicable, may then submit written material to the show-cause official to demonstrate that because of facts occurring after the later of the notice by the initiating official or the show-cause meeting, continuation of the emergency action is unwarranted and the emergency action should be modified or ended. The show-cause official considers any written material submitted and issues a determination that continues, modifies, or revokes the emergency action.
(g) The expiration of an emergency action, or its modification or revocation by the show-cause official, does not bar subsequent emergency action on a ground other than one specifically identified in the notice imposing the prior emergency action. Separate grounds may include violation of an agreement or limitation imposed or resulting from the prior emergency action.
(a) Scope and consequences. (1) The Secretary may impose a fine of up to $71,545
(i) Violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) Substantially misrepresents the nature of—
(A) In the case of an institution, its educational program, its financial charges, or the employability of its graduates; or
(B) In the case of a third-party servicer, as applicable, the educational program, financial charges, or employability of the graduates of any institution that contracts with the servicer.
(2) If the Secretary begins a fine proceeding against a third-party servicer, the Secretary also may begin a fine, limitation, suspension, or termination proceeding against any institution under whose contract a third-party servicer commits the violation.
(b) Procedures. (1) A designated department official begins a fine proceeding by sending the institution or servicer, as applicable, a notice by certified mail, return receipt requested. In the case of a fine proceeding against a third-party servicer, the official also sends the notice to each institution that is affected by the alleged violations identified as the basis for the fine action, and, to the extent possible, to each institution that contracts with the servicer for the same service affected by the violation. This notice—
(i) Informs the institution or servicer of the Secretary's intent to fine the institution or servicer, as applicable, and the amount of the fine and identifies the alleged violations that constitute the basis for the action;
(ii) Specifies the proposed effective date of the fine, which is at least 20 days from mailing of the notice of intent;
(iii) Informs the institution or servicer that the fine will not be effective on the date specified in the notice if the designated department official receives from the institution or servicer, as applicable, by that date a written request for a hearing or written material indicating why the fine should not be imposed; and
(iv) In the case of a fine proceeding against a third-party servicer, informs each institution that is affected by the alleged violations of the consequences of the action to the institution.
(2) If the institution or servicer does not request a hearing but submits written material, the designated department official, after considering that material, notifies the institution or, in the case of a third-party servicer, the servicer and each institution affected by the alleged violations that—
(i) The fine will not be imposed; or
(ii) The fine is imposed as of a specified date, and in a specified amount.
(3) If the institution or servicer requests a hearing by the time specified in paragraph (b)(1)(iii) of this section, the designated department official transmits the request for hearing and response to the Office of Hearings and Appeals, which sets the date and the place. The date is at least 15 days after the designated department official receives the request.
(4) A hearing official conducts a hearing in accordance with § 668.89.
(c) Expedited proceedings. With the approval of the hearing official and the consent of the designated department official and the institution or servicer, any time schedule specified in this section may be shortened.
(a) Scope and consequences. (1) The Secretary may suspend an institution's participation in a Title IV, HEA program or the eligibility of a third-party servicer to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program, if the institution or servicer—
(i) Violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) Substantially misrepresents the nature of—
(A) In the case of an institution, its educational program, its financial charges, or the employability of its graduates; or
(B) In the case of a third-party servicer, as applicable, the educational program, financial charges, or employability of the graduates of any institution that contracts with the servicer.
(2) If the Secretary begins a suspension proceeding against a third-party servicer, the Secretary also may begin a fine, limitation, suspension, or termination proceeding against any institution under whose contract a third-party servicer commits the violation.
(3) The suspension may not exceed 60 days unless—
(i) The institution or servicer and the Secretary agree to an extension if the institution or servicer, as applicable, has not requested a hearing; or
(ii) The designated department official begins a limitation or termination proceeding under § 668.86.
(b) Procedures. (1) A designated department official begins a suspension proceeding by sending a notice to an institution or third-party servicer by certified mail, return receipt requested. In the case of a suspension proceeding against a third-party servicer, the official also sends the notice to each institution that contracts with the servicer. The designated department official may also transmit the notice by other, more expeditious means if practical. The notice—
(i) Informs the institution or servicer of the intent of the Secretary to suspend the institution's participation or the servicer's eligibility, as applicable, cites the consequences of that action, and identifies the alleged violations that constitute the basis for the action;
(ii) Specifies the proposed effective date of the suspension, which is at least 20 days after the date of mailing of the notice of intent;
(iii) Informs the institution or servicer that the suspension will not be effective on the date specified in the notice, except as provided in § 668.91(b)(2), if the designated department official receives from the institution or servicer, as applicable, by that date a request for a hearing or written material indicating why the suspension should not take place; and
(iv) In the case of a suspension proceeding against a third-party servicer, informs each institution that contracts with the servicer of the consequences of the action to the institution.
(2) If the institution or servicer does not request a hearing, but submits written material, the designated department official, after considering that material, notifies the institution or, in the case of a third-party servicer, the servicer and each institution that contracts with the servicer that—
(i) The proposed suspension is dismissed; or
(ii) The suspension is effective as of a specified date.
(3) If the institution or servicer requests a hearing by the time specified in paragraph (b)(1)(iii) of this section, the designated department official transmits the request for hearing and response to the Office of Hearings and Appeals, which sets the date and the place. The date is at least 15 days after the designated department official receives the request. The suspension does not take place until the requested hearing is held.
(4) A hearing official conducts a hearing in accordance with § 668.89.
(c) Expedited proceedings. With the approval of the hearing official and the consent of the designated department official and the institution or servicer, as applicable, any time period specified in this section may be shortened.
(a) Scope and consequences. (1) The Secretary may limit or terminate an institution's participation in a Title IV, HEA program or the eligibility of a third-party servicer to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program, if the institution or servicer—
(i) Violates any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) Substantially misrepresents the nature of—
(A) In the case of an institution, its educational program, its financial charges, or the employability of its graduates; or
(B) In the case of a third-party servicer, as applicable, the educational program, financial charges, or employability of the graduates of any institution that contracts with the servicer.
(2) If the Secretary begins a limitation or termination proceeding against a third-party servicer, the Secretary also may begin a fine, limitation, suspension, or termination proceeding against any institution under whose contract a third-party servicer commits the violation.
(3) The consequences of the limitation or termination of the institution's participation or the servicer's eligibility are described in §§ 668.94 and 668.95, respectively.
(b) Procedures. (1) A designated department official begins a limitation or termination proceeding by sending an institution or third-party servicer a notice by certified mail, return receipt requested. In the case of a limitation or termination proceeding against a third-party servicer, the official also sends the notice to each institution that contracts with the servicer. The designated department official may also transmit the notice by other, more expeditious means if practical. This notice—
(i) Informs the institution or servicer of the intent of the Secretary to limit or terminate the institution's participation or servicer's eligibility, as applicable, cites the consequences of that action, and identifies the alleged violations that constitute the basis for the action, and, in the case of a limitation proceeding, states the limits to be imposed;
(ii) Specifies the proposed effective date of the limitation or termination, which is at least 20 days after the date of mailing of the notice of intent;
(iii) Informs the institution or servicer that the limitation or termination will not be effective on the date specified in the notice if the designated department official receives from the institution or servicer, as applicable, by that date a request for a hearing or written material indicating why the limitation or termination should not take place; and
(iv) In the case of a limitation or termination proceeding against a third-party servicer, informs each institution that contracts with the servicer of the consequences of the action to the institution.
(2) If the institution or servicer does not request a hearing but submits written material, the designated department official, after considering that material, notifies the institution or, in the case of a third-party servicer, the servicer and each institution that contracts with the servicer that—
(i) The proposed action is dismissed;
(ii) Limitations are effective as of a specified date; or
(iii) The termination is effective as of a specified date.
(3) If the institution or servicer requests a hearing by the time specified in paragraph (b)(1)(iii) of this section, the designated department official transmits the request for hearing and response to the Office of Hearings and Appeals, which sets the date and place. The date is at least 15 days after the designated department official receives the request. The limitation or termination does not take place until after the requested hearing is held.
(4) A hearing official conducts a hearing in accordance with § 668.89.
(c) Expedited proceeding. With the approval of the hearing official and the consent of the designated department official and the institution or servicer, as applicable, any time schedule specified in this section may be shortened.
(a) A hearing official may convene a prehearing conference if he or she thinks that the conference would be useful, or if the conference is requested by—
(1) The designated department official who brought a proceeding against an institution or third-party servicer under this subpart; or
(2) The institution or servicer, as applicable.
(b) The purpose of a prehearing conference is to allow the parties to settle or narrow the dispute.
(c) If the hearing official, the designated department official, and the institution, or servicer, as applicable, agree, a prehearing conference may consist of—
(1) A conference telephone call;
(2) An informal meeting; or
(3) The submission and exchange of written material.
(d) A non-dispositive motion shall be made, if at all, consistent with any procedures set forth by the hearing official. In the absence of such procedures, non-dispositive motions shall be permitted, and responses to such motions shall be permitted though not required.
(e)(1) A party may make a motion for summary disposition asserting that the undisputed facts, admissions, affidavits, stipulations, documentary evidence, matters as to which official notice may be taken, and any other evidentiary materials properly submitted in connection with a motion for summary disposition establish that—
(i) There is no genuine issue as to any material fact; and
(ii) The moving party is entitled to a decision in its favor as a matter of law.
(2) A motion for summary disposition must be accompanied by a statement of the material facts as to which the moving party contends there is no genuine issue. Such motion must be supported by evidence that the moving party contends support his or her position. The motion must be accompanied by a brief containing the points and authorities supporting the motion.
(f) A motion under consideration by the Secretary or the hearing official shall not stay proceedings before the hearing official unless the Secretary or the hearing official, as appropriate, so orders.
(a) A hearing is an orderly presentation of arguments and evidence conducted by a hearing official. At the discretion of the hearing official, any right to a hearing may be satisfied by one or more of the following: Summary disposition pursuant to § 668.88(e), with or without oral argument; an oral evidentiary hearing conducted in person, by telephone, by video conference, or any combination thereof; or a review limited to written evidence.
(b)(1) Notwithstanding any provision to the contrary, the hearing official sets the procedures to be used in the hearing, and may take steps to expedite the proceeding as appropriate.
(2) The formal rules of evidence and procedures applicable to proceedings in a court of law are not applicable. However, discussions of settlement between the parties or the terms of settlement offers are not admissible to prove the validity or invalidity of any claim or defense.
(3)(i) The proponent of any factual proposition has the burden of proof with respect thereto.
(ii) The designated department official has the burden of persuasion in any fine, suspension, limitation, or termination proceeding under this subpart.
(iii) For borrower defenses under §§ 685.206(c) and (e) and 685.222 of this chapter, the designated department official has the burden of persuasion in a borrower defense and recovery action; however, for a borrower defense claim based on a substantial misrepresentation under § 682.222(d) of this chapter, the designated department official has the burden of persuasion regarding the substantial misrepresentation, and the institution has the burden of persuasion in establishing any offsetting value of the education under § 685.222(i)(2)(i).
(4) Discovery, as provided for under the Federal Rules of Civil Procedure, is not permitted.
(5) The hearing official accepts only evidence that is relevant and material to the proceeding and is not unduly repetitious.
(6) The hearing official may restrict the number of witnesses or exclude witnesses to avoid undue delay or presentation of cumulative evidence. Any witness permitted to appear may do so via telephonic, video, or other means, with the approval of the hearing official.
(7) Either party may call qualified expert witnesses. Each party will be limited to calling three expert witnesses, as a matter of right, including any rebuttal or surrebuttal witnesses. Additional expert witnesses shall be allowed only by order of the hearing official, granted only upon a showing of good cause.
(i) At a date set by the hearing official, each party shall serve the other with any report prepared by each of its expert witnesses. Each party shall serve the other party with a list of any rebuttal expert witnesses and a rebuttal report prepared by each such witness not later than 60 days after the deadline for service of expert reports, unless another date is set by the hearing official. A rebuttal report shall be limited to rebuttal of matters set forth in the expert report for which it is offered in rebuttal. If material outside the scope of fair rebuttal is presented, a party may file a motion not later than five days after the deadline for service of rebuttal reports, seeking appropriate relief with the hearing official, including striking all or part of the report, leave to submit a surrebuttal report by the party's own experts, or leave to call a surrebuttal witness and to submit a surrebuttal report by that witness.
(ii) No party may call an expert witness at the hearing unless the party has listed the expert and has provided reports as required by this section.
(iii) Each report shall be signed by the expert and contain a complete statement of all opinions to be expressed and the basis and reasons therefor; the data, materials, or other information considered by the witness in forming the opinions; any exhibits to be used as a summary of or support for the opinions; the qualifications of the witness, including a list of all publications authored or co-authored by the witness within the preceding ten years; the compensation to be paid for the study and testimony; and a listing of any other cases in which the witness has testified or sought to testify as an expert at trial or hearing, or by deposition, within the preceding four years. A rebuttal or surrebuttal report need not include any information already included in the initial report of the witness.
(8)(i) Except as provided in paragraph (b)(8)(ii) of this section, if an institution has been required through compulsory process under section 490A of the HEA or other applicable law to submit to the United States or to the Department material regarding an express or an implied representation, the institution cannot thereafter, in any proceeding under this subpart in which it is alleged that the representation was false, erroneous, or misleading, and for any purpose relating to the defense of such allegation, introduce into the record, either directly or indirectly through references contained in documents or oral testimony, any material of any type that was required to be but was not timely submitted in response to that compulsory process.
(ii) The hearing official shall, upon motion at any stage, exclude all material that was required to be but was not timely submitted in response to a compulsory process described in paragraph (b)(8)(i) of this section, or any reference to such material, unless the institution demonstrates, and the hearing official finds, that by the exercise of due diligence the material could not have been timely submitted in response to the compulsory process, and the institution notified the Department or such other party that issued the order to produce, of the existence of the material immediately upon its discovery. The hearing official shall specify with particularity the evidence relied upon.
(9) When issues not raised in the notice of proposed action are tried without objection at the hearing, they will be treated in all respects as if they had been raised in the notice of proposed action, and no formal amendments are required.
(c) The hearing official makes a transcribed record of the proceeding and makes a copy of the record available to the designated Department official and to the institution or servicer.
(a) The hearing official regulates the course of a hearing and the conduct of the parties during the hearing. The hearing official takes all necessary steps to conduct a fair and impartial hearing.
(b)(1) The hearing official is not authorized to issue subpoenas.
(2) If requested by the hearing official, the parties to a hearing shall provide available personnel who have knowledge about the matter under review for oral or written examination.
(c) The hearing official takes whatever measures are appropriate to expedite a hearing. These measures may include, but are not limited to, the following—
(1) Scheduling of conferences;
(2) Setting time limits for hearings and submission of written documents; and
(3) Terminating the hearing and issuing a decision against a party if that party does not meet those time limits.
(d) The hearing official is bound by all applicable statutes and regulations. The hearing official may not—
(1) Waive applicable statutes and regulations; or
(2) Rule them invalid.
(a)(1)(i) A hearing official issues a written initial decision in a hearing by certified mail, return receipt requested to—
(A) The designated department official who began a proceeding against an institution or third-party servicer;
(B) The institution or servicer, as applicable; and
(C) In the case of a proceeding against a third-party servicer, each institution that contracts with the servicer.
(ii) The hearing official may also transmit the notice by other, more expeditious means if practical.
(iii) The hearing official issues the decision within the latest of the following dates:
(A) The 30th day after the last submission is filed with the hearing official.
(B) The 60th day after the last submission is filed with the hearing official if the Secretary, upon request of the hearing official, determines that the unusual complexity of the case requires additional time for preparation of the decision.
(C) The 50th day after the last day of the hearing, if the hearing official does not request the parties to make any posthearing submission.
(2) The hearing official's initial decision states whether the imposition of the fine, limitation, suspension, or termination or recovery sought by the designated department official is warranted, in whole or in part. If the designated department official brought a termination action against the institution or servicer, the hearing official may, if appropriate, issue an initial decision to fine the institution or servicer, as applicable, or, rather than terminating the institution's participation or servicer's eligibility, as applicable, impose one or more limitations on the institution's participation or servicer's eligibility.
(3) Notwithstanding the provisions of paragraph (a)(2) of this section—
(i) If, in a termination action against an institution, the hearing official finds that the institution has violated the provisions of § 668.14(b)(18), the hearing official also finds that termination of the institution's participation is warranted;
(ii) If, in a termination action against a third-party servicer, the hearing official finds that the servicer has violated the provisions of § 668.14(b)(18), the hearing official also finds that termination of the institution's participation or servicer's eligibility is warranted;
(iii) In an action brought against an institution or third-party servicer that involves its failure to provide a letter of credit, or other financial protection under § 668.15 or § 668.171(c) or (d), the hearing official finds that the amount of the letter of credit or other financial protection established by the Secretary under § 668.175 is appropriate, unless the institution demonstrates that the amount was not warranted because—
(A) For financial protection demanded based on events or conditions described in § 668.171(c) or (d), the events or conditions no longer exist, have been resolved, or the institution demonstrates that it has insurance that will cover all potential debts and liabilities that arise from the triggering event or condition. The institution can demonstrate it has insurance that covers risk by presenting the Department with a copy of the insurance policy that makes clear the institution's coverage;
(B) For financial protection demanded based on the grounds identified in § 668.171(d), the action or event does not and will not have a material adverse effect on the financial condition, business, or results of operations of the institution;
(C) The institution has proffered alternative financial protection that provides students and the Department adequate protection against losses resulting from the risks identified by the Secretary. Adequate protection may consist of one or more of the following—
(1) An agreement with the Secretary that a portion of the funds due to the institution under a reimbursement or heightened cash monitoring funding arrangement will be temporarily withheld in such amounts as will meet, no later than the end of a six to 12 month period, the amount of the required financial protection demanded; or
(2) Other form of financial protection specified by the Secretary in a notice published in the
(iv) In a termination action taken against an institution or third-party servicer based on the grounds that the institution or servicer failed to comply with the requirements of § 668.23(c)(3), if the hearing official finds that the institution or servicer failed to meet those requirements, the hearing official finds that the termination is warranted;
(v)(A) In a termination action against an institution based on the grounds that the institution is not financially responsible under § 668.15(c)(1), the hearing official finds that the termination is warranted unless the institution demonstrates that all applicable conditions described in § 668.15(d)(4) have been met; and
(B) In a termination or limitation action against an institution based on the grounds that the institution is not financially responsible—
(1) Upon proof of the conditions in § 668.174(a), the hearing official finds that the limitation or termination is warranted unless the institution demonstrates that all the conditions in § 668.175(h)(2) have been met; and
(2) Upon proof of the conditions in § 668.174(b)(1), the hearing official finds that the limitation or termination is warranted unless the institution demonstrates that all applicable conditions described in § 668.174(b)(2) or § 668.175(h)(2) have been met; and
(vi) In a termination action against a GE program based upon the program's failure to meet the requirements in § 668.403 or § 668.404, the hearing official must terminate the program's eligibility unless the hearing official concludes that the Secretary erred in the applicable calculation.
(4) The hearing official bases findings of fact only on evidence considered at the hearing and on matters given judicial notice.
(b)(1) In a suspension proceeding, the Secretary reviews the hearing official's initial decision and issues a final decision within 20 days after the initial decision. The Secretary adopts the initial decision unless it is clearly unsupported by the evidence presented at the hearing.
(2) The Secretary notifies the institution or servicer and, in the case of a suspension proceeding against a third-party servicer, each institution that contracts with the servicer of the final decision. If the Secretary suspends the institution's participation or servicer's eligibility, the suspension takes effect on the later of—
(i) The day that the institution or servicer receives the notice; or
(ii) The date specified in the designated department official's original notice of intent to suspend the institution's participation or servicer's eligibility.
(3) A suspension may not exceed 60 days unless a designated department official begins a limitation or termination proceeding under this subpart before the expiration of that period. In that case, the period may be extended until a final decision is issued in that proceeding according to paragraph (c) of this section.
(c)(1) In a fine, limitation, or termination proceeding, the hearing official's initial decision automatically becomes the Secretary's final decision 30 days after the initial decision is issued and received by both parties unless, within that 30-day period, the institution or servicer, as applicable, or the designated department official appeals the initial decision to the Secretary.
(2)(i) A party may appeal the hearing official's initial decision by submitting to the Secretary, within 30 days after the party receives the initial decision, a brief or other written statement that explains why the party believes that the Secretary should reverse or modify the decision of the hearing official.
(ii) At the time the party files its appeal submission, the party shall provide a copy of that submission to the opposing party.
(iii) The opposing party shall submit its brief or other responsive statement to the Secretary, with a copy to the appellant, within 30 days after the opposing party receives the appellant's brief or written statement.
(iv) The appealing party may submit proposed findings of fact or conclusions of law. However, the proposed findings of fact must be supported by—
(A) The evidence introduced into the record at the hearing;
(B) Stipulations of the parties if the hearing consisted of written submissions; or
(C) Matters that may be judicially noticed.
(v) Neither party may introduce new evidence on appeal.
(vi) The initial decision of the hearing official imposing a fine or limiting or terminating the institution's participation or servicer's eligibility does not take effect pending the appeal.
(vii) The Secretary renders a final decision. The Secretary may delegate to a designated department official the functions described in paragraph (c)(2) (vii) through (ix) of this section.
(viii) In rendering a final decision, the Secretary considers only evidence introduced into the record at the hearing and facts agreed to by the parties if the hearing consisted only of written submissions and matters that may be judicially noticed.
(ix) If the hearing official finds that a termination is warranted pursuant to paragraph (a)(3) of this section, the Secretary may affirm, modify, or reverse the initial decision, or may remand the case to the hearing official for further proceedings consistent with the Secretary's decision. If the Secretary affirms the initial decision without issuing a statement of reasons, the Secretary adopts the opinion of the hearing official as the decision of the Secretary. If the Secretary modifies, remands, or reverses the initial decision, in whole or in part, the Secretary's decision states the reasons for the action taken.
(a) Filing of request for hearing, show-cause opportunity, or appeal. (1)(i) A request by an institution or third-party servicer for a hearing or show-cause opportunity, or other material submitted by an institution or third-party servicer in response to a notice of proposed action under this subpart, must be filed with the designated department official by hand-delivery, mail, or facsimile transmission.
(ii) An appeal to the Secretary by a party must be filed with the designated department official by hand-delivery, mail, facsimile transmission, or by use of the Office of Hearings and Appeals Electronic Filing System (OES).
(2) Documents filed by facsimile transmission must be transmitted to the designated department official identified, either in the notice initiating the action, or, for an appeal, in instructions provided by the hearing official, as the individual responsible to receive them. A party filing a document by facsimile transmission must confirm that a complete and legible copy of the document was received by the Department of Education, and may be required by the designated department official to provide a hard copy of the document.
(3) The Secretary discourages the use of facsimile transmission for documents longer than five pages.
(4)(i) A party may file an appeal to the Secretary, and any other pleading or other document submitted in a proceeding under this subpart, by use of the Office of Hearings and Appeals Electronic Filing System (OES), by hand-delivery, by mail, or by facsimile transmission.
(ii) A party must serve a copy on the other party of any pleading or other document it files, including an appeal to the Secretary, in a proceeding under this subpart. A party must do so by certified mail, return receipt requested; by hand-delivery; or, if agreed upon by the parties, service may also be made by use of the OES or any other means agreed to by the parties.
(iii) A party who agrees to receive a document by any means other than service by certified mail, return receipt requested or hand-delivery may limit that agreement to one or more particular documents.
(iv) A party who agrees to service of a document through the OES thereby agrees that the notice of such filing provided to the party by the OES suffices to meet any obligation of the filing party under these regulations to provide a copy of that document.
(5) Documents filed using the OES must be transmitted to the designated department official identified in instructions provided by the hearing official as the individual responsible to receive them. A party filing a document using the OES must ensure that the party has received an electronic confirmation that the document was accepted and approved for filing by the OES, and may be required by the designated department official to provide a hard copy of the document.
(6) Electronic documents must be formatted in Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at www.adobe.com.
(b) Confirmation of mailing and receipt dates. (1) The mailing date of a notice from a designated department official initiating an action under this subpart is the date evidenced on the original receipt of mailing from the U.S. Postal Service.
(2) The date on which a request for a show-cause opportunity, a request for a hearing, other material submitted in response to a notice of action under this subpart, a decision by a hearing official, or a notice of appeal is received is, as applicable—
(i) The date of receipt evidenced on the original receipt for a document sent by certified mail.
(ii) The date following the date recorded by the delivery service as the date material was sent for a document sent by next-day delivery service.
(iii) The date a document sent by regular mail is recorded, according to the regular business practice of the office receiving the document, as received.
(iv) The date a document sent by facsimile transmission is recorded as received by the facsimile equipment that receives the transmission.
(v) The date a document sent electronically via the OES is recorded as received by the OES as indicated in the confirmation of receipt email for E-filing.
(c) Refusals. If an institution or third-party servicer refuses to accept a notice mailed under this subpart, the Secretary considers the notice as being received on the date that the institution or servicer refuses to accept the notice.
(a) In determining the amount of a fine, the designated department official, hearing official, and Secretary take into account—
(1) (i) The gravity of an institution's or third-party servicer's violation or failure to carry out the relevant statutory provision, regulatory provision, special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA; or
(ii) The gravity of the institution's or servicer's misrepresentation;
(2) The size of the institution;
(3) The size of the servicer's business, including the number of institutions and students served by the servicer;
(4) In the case of a violation by a third-party servicer, the extent to which the servicer can document that the institution contributed to that violation; and
(5) For purposes of assessing a fine on a third-party servicer, the extent to which—
(i) Violations are caused by repeated mechanical systemic unintentional errors. The Secretary counts the total of violations caused by a repeated mechanical systemic unintentional error as a single violation, unless the servicer has been cited for a similar violation previously and had failed to make the appropriate corrections to the system; and
(ii) The financial loss of Title IV, HEA program funds was attributable to a repeated mechanical systemic unintentional error.
(b) In determining the gravity of the institution's or servicer's violation, failure, or misrepresentation under paragraph (a) of this section, the designated department official, hearing official, and Secretary take into account the amount of any liability owed by the institution and any third-party servicer that contracts with the institution, and the number of students affected as a result of that violation, failure, or misrepresentation on—
(1) Improperly expended or unspent Title IV, HEA program funds received by the institution or servicer, as applicable; or
(2) Required refunds, including the treatment of title IV, HEA program funds when a student withdraws under § 668.22.
(c) Upon the request of the institution or third-party servicer, the Secretary may compromise the fine.
(d)(1) Notwithstanding any other provision of statute or regulation, any individual described in paragraph (d)(2) of this section, in addition to other penalties provided by law, is liable to the Secretary for amounts that should have been refunded or returned under § 668.22 of the title IV program funds not returned, to the same extent with respect to those funds that such an individual would be liable as a responsible person for a penalty under section 6672(a) of Internal Revenue Code of 1986 with respect to the nonpayment of taxes.
(2) The individual subject to the penalty described in paragraph (d)(1) is any individual who—
(i) The Secretary determines, in accordance with § 668.174(c), exercises substantial control over an institution participating in, or seeking to participate in, a program under this title;
(ii) Is required under § 668.22 to return title IV program funds to a lender or to the Secretary on behalf of a student or borrower, or was required under § 668.22 in effect on June 30, 2000 to return title IV program funds to a lender or to the Secretary on behalf of a student or borrower; and
(iii) Willfully fails to return those funds or willfully attempts in any manner to evade that payment.
A limitation may include, as appropriate to the Title IV, HEA program in question—
(a) A limit on the number or percentage of students enrolled in an institution who may receive Title IV, HEA program funds;
(b) A limit, for a stated period of time, on the percentage of an institution's total receipts from tuition and fees derived from Title IV, HEA program funds;
(c) A limit on the number or size of institutions with which a third-party servicer may contract;
(d) A limit on the number of borrower or loan accounts that a third-party servicer may service under a contract with an institution;
(e) A limit on the responsibilities that a third-party servicer may perform under a contract with an institution;
(f) A requirement for a third-party servicer to perform additional responsibilities under a contract with an institution;
(g) A requirement that an institution obtain surety, in a specified amount, to assure its ability to meet its financial obligations to students who receive Title IV, HEA program funds;
(h) A change in the participation status of the institution from fully certified to participate to provisionally certified to participate under § 668.13(c).
(i) A requirement that a third-party servicer obtain surety, in a specified amount, to assure the servicer's ability to meet the servicer's financial obligations under a contract; or
(j) Other conditions as may be determined by the Secretary to be reasonable and appropriate.
(a) A termination—(1) Ends an institution's participation in a Title IV, HEA program or ends a third-party servicer's eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program;
(2) Ends the authority of a third-party servicer to administer any aspect of any institution's participation in that program;
(3) Prohibits an institution or third-party servicer, as applicable, or the Secretary from making or increasing awards under that program;
(4) Prohibits an institution or third-party servicer, as applicable, from making any other new commitments of funds under that program; and
(5) If an institution's participation in the Federal Stafford Loan Program or Federal PLUS programs has been terminated, prohibits further guarantee commitments by the Secretary for loans under that program to students to attend that institution, and, if the institution is a lender under that program, prohibits further disbursements by the institution (whether or not guarantee commitments have been issued by the Secretary or a guaranty agency for those disbursements).
(b) After its participation in a Title IV, HEA program has been terminated, an institution may disburse or deliver funds under that Title IV, HEA program to students enrolled at the institution only in accordance with § 668.26 and with any additional requirements imposed under this part.
(c) If a third-party servicer's eligibility is terminated, the servicer must return to each institution that contracts with the servicer any funds received by the servicer under the applicable Title IV, HEA program on behalf of the institution or the institution's students or otherwise dispose of those funds under instructions from the Secretary. The servicer also must return to each institution that contracts with the servicer all records pertaining to the servicer's administration of that program on behalf of that institution.
(a) In an action to fine an institution or servicer, or to limit, suspend, or terminate the participation of an institution or the eligibility of a servicer, the designated department official, hearing official, or Secretary may require an institution or third-party servicer to take reasonable and appropriate corrective action to remedy the institution's or servicer's violation, as applicable, of any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA.
(b) The corrective action under paragraph (a) of this section may include payment of any funds to the Secretary, or to designated recipients, that the institution or servicer, as applicable, improperly received, withheld, disbursed, or caused to be disbursed. Corrective action may, for example, relate to—
(1) With respect to the Federal Stafford Loan, Federal PLUS, and Federal SLS programs—
(i) Ineligible interest benefits, special allowances, or other claims paid by the Secretary; and
(ii) Discounts, premiums, or excess interest paid in violation of 34 CFR part 682; and
(2) With respect to all Title IV, HEA programs—
(i) Refunds or returns of title IV, HEA program funds required under program regulations when a student withdraws.
(ii) Any grants, work-study assistance, or loans made in violation of program regulations.
(c) If any final decision in any action under this subpart requires an institution or third-party servicer to reimburse or make any other payment to the Secretary, the Secretary may offset these claims against any benefits or claims due to the institution or servicer.
(d) If an institution's violation in paragraph (a) of this section results from an administrative, accounting, or recordkeeping error, and that error was not part of a pattern of error, and there is no evidence of fraud or misconduct related to the error, the Secretary permits the institution to correct or cure the error. If the institution corrects or cures the error, the Secretary does not limit, suspend, terminate, or fine the institution for that error.
(a)(1) An institution whose participation in a Title IV, HEA program has been terminated may file a request for reinstatement of that participation.
(2) A third-party servicer whose eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program has been terminated may file a request for reinstatement of that eligibility.
(b) An institution whose participation has been terminated or a third-party servicer whose eligibility has been terminated may request reinstatement only after the later of the expiration of—
(1) Eighteen months from the effective date of the termination; or
(2) A debarment or suspension under Executive Order 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.
(c) To be reinstated, an institution or third-party servicer must submit its request for reinstatement in writing to the Secretary and must—
(1) Demonstrate to the Secretary's satisfaction that it has corrected the violation or violations on which its termination was based, including payment in full to the Secretary or to other recipients of funds that the institution or servicer, as applicable, has improperly received, withheld, disbursed, or caused to be disbursed;
(2) Meet all applicable requirements of this part; and
(3) In the case of an institution, enter into a new program participation agreement with the Secretary.
(d) The Secretary, within 60 days of receiving the reinstatement request—
(1) Grants the request;
(2) Denies the request; or
(3) Grants the request subject to a limitation or limitations.
(a) An institution whose participation in a Title IV, HEA program has been limited may not apply for removal of the limitation before the expiration of 12 months from the effective date of the limitation.
(b) A third-party servicer whose eligibility to contract with any institution to administer any aspect of the institution's participation in a Title IV, HEA program has been limited may request removal of the limitation.
(c) The institution or servicer may not apply for removal of the limitation before the later of the expiration of—
(1) Twelve months from the effective date of the limitation; or
(2) A debarment or suspension under Executive Order 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations, 48 CFR part 9, subpart 9.4.
(d) If the institution or servicer requests removal of the limitation, the request must be in writing and show that the institution or servicer, as applicable, has corrected the violation or violations on which the limitation was based.
(e) No later than 60 days after the Secretary receives the request, the Secretary responds to the institution or servicer—
(1) Granting its request;
(2) Denying its request; or
(3) Granting the request subject to other limitation or limitations.
(f) If the Secretary denies the request or establishes other limitations, the Secretary grants the institution or servicer, upon the institution's or servicer's request, an opportunity to show cause why the participation or eligibility, as applicable, should be fully reinstated.
(g) The institution's or servicer's request for an opportunity to show cause does not waive—
(1) The institution's right to participate in any or all Title IV, HEA programs if it complies with the continuing limitation or limitations pending the outcome of the opportunity to show cause; and
(2) The servicer's right to contract with any institution to administer any aspect of the institution's participation in any Title IV, HEA program, if the servicer complies with the continuing limitation pending the outcome of the opportunity to show cause.
(a) A ruling by a hearing official may not be appealed to the Secretary until the issuance of an initial decision, except that the Secretary may, at any time prior to the issuance of the initial decision, grant a review of a ruling upon either a certification by a hearing official of the ruling to the Secretary for review or the filing of a petition for review of a ruling by one or both of the parties, if—
(1) That ruling involves a controlling question of substantive or procedural law; and
(2) The immediate resolution of the question will materially advance the final disposition of the proceeding or subsequent review will be an inadequate remedy.
(b)(1) A petition for interlocutory review of an interim ruling must include the following:
(i) A brief statement of the facts necessary to an understanding of the issue on which review is sought.
(ii) A statement of the issue.
(iii) A statement of the reasons showing that the ruling complained of involves a controlling question of substantive or procedural law and why immediate review of the ruling will materially advance the disposition of the case, or why subsequent review will be an inadequate remedy.
(2) A petition may not exceed ten pages, double-spaced, and must be filed with a copy of the ruling and any findings and opinions relating to the ruling.
(c) A copy of the petition must be provided to the hearing official at the time of filing with the Secretary, and a copy of a petition or any certification must be served upon the parties as provided in § 668.92(a)(4). The petition or certification must reflect this service.
(d) If a party files a petition under this section, the hearing official may state to the Secretary a view as to whether review is appropriate or inappropriate by submitting a brief statement addressing the party's petition within 10 days of the receipt of that petition by the hearing official. A copy of the statement must be served on all parties in the manner provided in § 668.91(a)(4)(ii).
(e) A party's response to a petition or certification for interlocutory review must be filed within 7 days after service of the petition or statement, as applicable, and may not exceed 10 pages, double-spaced, in length. The response must be filed, and a copy served on the other party, as provided in § 668.91(a)(4).
(f) The filing of a petition for interlocutory review does not automatically stay the proceedings. A stay during consideration of a petition for review may be granted by the hearing official if that official has certified or stated to the Secretary that review of the ruling is appropriate. The Secretary may order a stay of proceedings at any time after the filing of a request for interlocutory review.
(g) The Secretary notifies the parties if a petition or certification for interlocutory review is accepted, and may provide the parties a reasonable time within which to submit written argument with regard to the merit of the petition or certification.
(h) If the Secretary takes no action on a petition or certification for review within 15 days of receipt of it, the request is deemed to be denied.
(i) The Secretary may affirm, modify, set aside, or remand the interim ruling of the hearing official.
(j) The Secretary may delegate to a designated department official the functions described in paragraphs (f) through (i) of this section.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) This subpart establishes rules governing the issuance by the Department of and appeal by an institution or third-party servicer from a final audit determination or a final program review determination arising from an audit or program review of the institution's participation in any Title IV, HEA program or of the servicer's administration of any aspect of an institution's participation in any Title IV, HEA program.
(b) This subpart applies to any participating institution or third-party servicer that appeals a final audit determination or final program review determination.
(c) This subpart does not apply to proceedings governed by subpart G of this part or to a determination that—
(1) An institution fails to meet the applicable statutory definition set forth in sections 435, 481, or 1201 of the HEA, except to the extent that such a determination forms the basis of a final audit determination or a final program review determination; or
(2) An institution fails to qualify for certification to participate in the title IV, HEA programs because it does not meet the fiscal and administrative standards set forth in subpart B of this part, except to the extent that such a determination forms the basis of a final audit determination or a program review determination.
The following definitions apply to this subpart:
(a) Final audit determination means the written notice of a determination issued by a designated department official based on an audit of—
(1) An institution's participation in any or all of the Title IV, HEA programs; or
(2) A third-party servicer's administration of any aspect of an institution's participation in any or all of the Title IV, HEA programs.
(b) Final program review determination means the written notice of a determination issued by a designated department official and resulting from a program compliance review of—
(1) An institution's participation in any or all of the Title IV, HEA programs; or
(2) A third-party servicer's administration of any aspect of an institution's participation in any Title IV, HEA program.
(a) An institution or third-party servicer seeking the Secretary's review of a final audit determination or a final program review determination shall file a written request for review with the designated department official.
(b) The institution or servicer must file its request for review no later than 45 days from the date that the institution or servicer receives the final audit determination or final program review determination.
(c) The institution or servicer must attach to the request for review a copy of the final audit determination or final program review determination, and must—
(1) Identify the issues and facts in dispute; and
(2) State the institution's or servicer's position, as applicable, together with the pertinent facts and reasons supporting that position.
(d)(1) If the final audit determination or final program review determination in paragraph (a) of this section results from the institution's classification of a course or program as distance education, or the institution's assignment of credit hours, the Secretary relies upon the requirements of the institution's accrediting agency or State approval agency regarding qualifications for instruction and whether the amount of work associated with the institution's credit hours is consistent with commonly accepted practice in postsecondary education, in applying the definitions of “distance education” and “credit hour” in 34 CFR 600.2.
(2) If an institution's violation that resulted in the final audit determination or final program review determination in paragraph (a) of this section results from an administrative, accounting, or recordkeeping error, and that error was not part of a pattern of error, and there is no evidence of fraud or misconduct related to the error, the Secretary permits the institution to correct or cure the error.
(3) If the institution is charged with a liability as a result of an error described in paragraph (d)(1) of this section, the institution cures or corrects that error with regard to that liability if the cure or correction eliminates the basis for the liability.
(a) Upon receipt of an institution's or third-party servicer's request for review, the designated department official arranges for a hearing before a hearing official.
(b) Within 30 days of the designated department official's receipt of an institution's or third-party servicer's request for review, the hearing official notifies the designated department official and the parties to the proceeding of the schedule for the submission of briefs by both the designated department official and, as applicable, the institution or servicer.
(c) The hearing official schedules the submission of briefs and of accompanying evidence admissible under the terms of § 668.116 (e) and (f) to occur no later than 120 days from the date that the hearing official notifies the institution or servicer.
(a) In the event that the hearing official considers a prehearing conference necessary, he may convene a prehearing conference.
(b) The purpose of a prehearing conference is to allow the parties to settle or narrow the dispute. A prehearing conference consists of—
(1) A telephone conference call;
(2) An informal meeting of the parties with the hearing official; or
(3) The submission and exchange of written materials by the parties.
(c) All prehearing conferences requiring appearances by the parties shall take place in the Washington, D.C. metropolitan area.
(a) A hearing is a process conducted by the hearing official whereby an orderly presentation of arguments and evidence is made by the parties.
(b) The hearing process consists of the submission of written briefs to the hearing official by the institution or third-party servicer, as applicable, and by the designated department official, unless the hearing official determines, under paragraph (g) of this section, that an oral hearing is also necessary.
(c) Each party shall provide a copy of its brief and any accompanying materials to the opposing party simultaneously with the filing of its brief and materials with the hearing official.
(d) An institution or third-party servicer requesting review of the final audit determination or final program review determination issued by the designated department official shall have the burden of proving the following matters, as applicable:
(1) That expenditures questioned or disallowed were proper.
(2) That the institution or servicer complied with program requirements.
(e)(1) A party may submit as evidence to the hearing official only materials within one or more of the following categories:
(i) Department of Education audit reports and audit work papers for audits performed by the department's Office of Inspector General.
(ii) In the case of an institution, institutional audit work papers, records, and other materials.
(iii) In the case of a third-party servicer, the servicer's audit work papers and the records and other materials of the servicer or any institution that contracts with the servicer.
(iv) Department of Education program review reports and work papers for program reviews.
(v) Institutional or servicer records and other materials (including records and other materials of any institution that contracts with the servicer) provided to the Department of Education in response to a program review.
(vi) Other Department of Education records and materials.
(f) The hearing official accepts only evidence that is both admissible and timely under the terms of paragraph (e) of this section, and relevant and material to the appeal. Examples of evidence that shall be deemed irrelevant and immaterial except upon a clear showing of probative value respecting the matters described in paragraph (d) of this section include—
(1) Evidence relating to a period of time other than the period of time covered by the audit or program review;
(2) Evidence relating to an audit or program review of an institution or third-party servicer other than the institution or servicer bringing the appeal, or the resolution thereof; and
(3) Evidence relating to the current practice of the institution or servicer bringing the appeal in the program areas at issue in the appeal.
(g)(1) The hearing official may schedule an oral argument if he or she determines that an oral argument is necessary to clarify the issues and the positions of the parties as presented in the parties' written submissions.
(2) In the event that an oral argument is conducted, the designated department official makes a transcribed record of the proceedings and makes one copy of that record available to each of the parties to the proceeding.
(h) Any oral argument shall take place in the Washington, DC metropolitan area.
(i) Either party may be represented by counsel.
(a) The hearing official regulates the course of the proceedings and the conduct of the parties following a request for review and takes all steps necessary to conduct fair and impartial proceedings.
(b) The hearing official is not authorized to issue subpoenas or compel discovery as provided for in the Federal Rules of Civil Procedure.
(c) The hearing official shall take whatever measures are appropriate to expedite the proceedings. These measures may include, but are not limited to, one or more of the following:
(1) Scheduling of conferences.
(2) Setting time limits for oral arguments and the submission of briefs.
(3) Terminating the hearing process and issuing a decision against a party if that party does not meet time limits established by the hearing official.
(d) The hearing official is bound by all applicable statutes and regulations. The hearing official may not—
(1) Waive applicable statutes and regulations; or
(2) Rule them invalid.
(a) Upon review of the parties' written submissions and termination of the oral argument if one is held, the hearing official issues a written decision.
(b) The hearing official's decision states and explains whether the final audit determination or final program review determination issued by the designated ED official was supportable, in whole or in part.
(c) The hearing official bases any findings of fact only on evidence properly presented before him, on matters given official notice, or on facts stipulated to by the parties.
(a) Within 30 days of its receipt of the initial decision of the hearing official, a party wishing to appeal the decision shall submit a brief or other written material to the Secretary explaining why the decision of the hearing official should be overturned or modified.
(b) The party appealing the initial decision shall, simultaneously with its filing of the appeal, provide the opposing party with a copy of its brief or other written material.
(c) In its brief to the Secretary, the party appealing the initial decision may submit proposed findings of fact or conclusions of law. However, the proposed findings of fact must be supported by—
(1) The admissible evidence already in the record;
(2) Matters that may be given official notice; or
(3) Stipulations of the parties
(d) The opposing party shall file its response to the appeal, if any, with the Secretary within 30 days of that party's receipt of the appeal to the Secretary.
(e) The opposing party shall, simultaneously with the filing of any response, provide a copy of its response to the appeal to the party appealing the initial decision.
(f) Neither party may introduce new evidence on appeal.
(a)(1) The Secretary issues a final decision. The Secretary may affirm, modify, or reverse the decision of the hearing official, or may remand the case to the hearing official for further proceedings consistent with the Secretary's decision.
(2) The Secretary may delegate the performance of functions under this section to a designated department official.
(b) If the Secretary modifies, remands, or overturns the initial decision of the hearing official, the Secretary issues a decision that—
(1) Includes a statement of the reasons for this action;
(2) Is provided to both parties; and
(3) Unless the decision is remanded to the hearing official for further review or determination of fact, becomes final upon its issuance.
(a) In the event that the initial decision of the hearing official is appealed, the decision of the Secretary is the final decision of the Department, unless the hearing official's decision is remanded by the Secretary.
(b) In the event that the initial decision of the hearing official is not appealed within the time limit specified in § 668.119(a), the initial decision automatically becomes the final decision of the Department.
(a)(1) Appeals and written submissions to a hearing official referred to in this subpart may be hand-delivered, mailed, or filed electronically by use of the Office of Hearings and Appeals Electronic Filing System (OES).
(2)(i) Service on the other party of a document required to be served on another party may be made by mail or by hand delivery, or, if agreed upon by the parties, by use of the OES or by any other means agreed to by the parties. A party who agrees to receive a document filed by another party by any means other than service by mail or hand-delivery may limit that agreement to one or more particular documents.
(ii) A party who agrees to service of a document through the OES thereby agrees that the notice of such filing provided to the party by the OES suffices to meet any obligation of the filing party under these regulations to provide a copy of that document.
(b) All mailed written submissions referred to in this subpart shall be mailed by certified mail, return receipt requested.
(c) Determination of filing, receipt, or submission dates is based on the date of hand-delivery, the date of receipt recorded by the U.S. Postal Service, the date a document sent electronically by using the OES is recorded as received as indicated in the confirmation of receipt email for E-filing, or for other means, the date on which the delivery is recorded in the medium used for delivery.
To the extent that the decision of the Secretary sustains the final audit determination or program review determination, subject to the provisions of § 668.24(c)(3), the Department of Education will take steps to collect the debt at issue or otherwise effect the determination that was subject to the request for review.
(a) A ruling by a hearing official may not be appealed to the Secretary until the issuance of an initial decision, except that the Secretary may, at any time prior to the issuance of the initial decision, grant a review of a ruling upon either a certification by a hearing official of the ruling to the Secretary for review or the filing of a petition for review of a ruling by one or both of the parties, if—
(1) That ruling involves a controlling question of substantive or procedural law; and
(2) The immediate resolution of the question will materially advance the final disposition of the proceeding or subsequent review will be an inadequate remedy.
(b)(1) A petition for interlocutory review of an interim ruling must include the following:
(i) A brief statement of the facts necessary to an understanding of the issue on which review is sought.
(ii) A statement of the issue.
(iii) A statement of the reasons showing that the ruling complained of involves a controlling question of substantive or procedural law and why immediate review of the ruling will materially advance the disposition of the case, or why subsequent review will be an inadequate remedy.
(2) A petition may not exceed ten pages, double-spaced, and must be filed with a copy of the ruling and any findings and opinions relating to the ruling.
(c) A copy of the petition must be provided to the hearing official at the time of filing with the Secretary, and a copy of a petition or any certification must be served upon the parties as provided in § 668.122(a)(2). The petition or certification must reflect this service.
(d) If a party files a petition under this section, the hearing official may state to the Secretary a view as to whether review is appropriate or inappropriate by submitting a brief statement addressing the party's petition within 10 days of the receipt of that petition by the hearing official. A copy of the statement must be served on all parties in the manner provided in § 668.122(a)(2).
(e) A party's response to a petition or certification for interlocutory review must be filed within 7 days after service of the petition or statement, as applicable, and may not exceed 10 pages, double-spaced, in length. A copy of the response must be served on the parties and the hearing official as provided in § 668.122(a)(2).
(f) The filing of a petition for interlocutory review does not automatically stay the proceedings. A stay during consideration of a petition for review may be granted by the hearing official if that official has certified or stated to the Secretary that review of the ruling is appropriate. The Secretary may order a stay of proceedings at any time after the filing of a request for interlocutory review.
(g) The Secretary notifies the parties if a petition or certification for interlocutory review is accepted, and may provide the parties a reasonable time within which to submit written argument with regard to the merit of the petition or certification.
(h) If the Secretary takes no action on a petition or certification for review within 15 days of receipt of it, the request is deemed to be denied.
(i) The Secretary may affirm, modify, set aside, or remand the interim ruling of the hearing official.
(j) The Secretary may delegate to a designated department official the functions described in paragraphs (f) through (i) of this section.
(a) If the Department determines that the institution is liable for any amounts discharged or reimbursed to borrowers under the discharge process described in § 685.408, it will provide the institution with written notice of the determination and the amount and basis of the liability.
(b) An institution may request review of the determination that it is liable for the amounts discharged or reimbursed by filing a written request for review with the designated department official no later than 45 days from the date that the institution receives the written notice.
(c) Upon receipt of an institution's request for review, the designated official arranges for a hearing before a hearing official.
(d) Except as provided in this section, the proceedings will be conducted in accordance with §§ 668.115 to 668.124 of this subpart. For purposes of this section references in §§ 668.115 to 668.124 to a final audit determination or a final program review determination will be read to refer to the written notice provided under paragraph (a) of this section.
(e) In place of the provisions in § 668.116(d), the following requirements shall apply:
(1) The Department has the burden of production to demonstrate that loans made to students to attend the institution were discharged on the basis of a borrower defense to repayment claim.
(2) The institution has the burden of proof to demonstrate that the decision to discharge the loans was incorrect or inconsistent with law and that the institution is not liable for the loan amounts discharged or reimbursed.
(3) A party may submit as evidence to the hearing official only materials within one or more of the following categories:
(i) Materials submitted to the Department during the process of adjudicating claims by borrowers relating to alleged acts or omissions of the institution, including materials submitted by the borrowers, the institution or any third parties;
(ii) Any material on which the Department relied in adjudicating claims by borrowers relating to alleged acts or omissions of the institution and provided by the Department to the institution; and
(iii) The institution may submit any other relevant documentary evidence that relates to the bases cited by the Department in approving the borrower defense claims and pursuing recoupment from the institution.
(a) Scope and purpose. The regulations in this subpart govern the responsibilities of institutions and students in determining the eligibility of those noncitizen applicants for title IV, HEA assistance who must, under § 668.33(a)(2), produce evidence from the United States Immigration and Naturalization Service (INS) that they are permanent residents of the United States or in the United States for other than a temporary purpose with the intention of becoming citizens or permanent residents.
(b) Student responsibility. At the request of the Secretary or the institution at which an applicant for title IV, HEA financial assistance is enrolled or accepted for enrollment, an applicant who asserts eligibility under § 668.33(a)(2) shall provide documentation from the INS of immigration status.
The following definitions apply to this subpart:
Eligible noncitizen: An individual possessing an immigration status that meets the requirements of § 668.33(a)(2).
Immigration status: The status conferred on a noncitizen under the Immigration and Nationality Act of 1952, as amended, 8 U.S.C. 1182.
Primary confirmation: A process by which the Secretary, by means of a matching program conducted with the INS, compares the information contained in an Application for Federal Student Aid or a multiple data entry application regarding the immigration status of a noncitizen applicant for title IV, HEA assistance with records of that status maintained by the INS in its Alien Status Verification Index (ASVI) system for the purpose of determining whether a student's immigration status meets the requirements of § 668.33(a)(2) and reports the results of this comparison on an output document.
Secondary confirmation: A process by which the INS, in response to the submission of INS Document Verification Form G-845 by an institution, searches pertinent paper and automated INS files, other than the ASVI database, for the purpose of determining a student's immigration status and the validity of the submitted INS documents, and reports the results of this search to the institution.
(a) Except as provided in § 668.133(a)(1)(ii), the institution shall determine a student to be an eligible noncitizen if the institution receives an output document for that student establishing that—
(1) The INS has confirmed the student's immigration status; and
(2) The student's immigration status meets the noncitizen eligibility requirements of § 668.33(a)(2).
(b) If an institution determines a student to be an eligible noncitizen in accordance with paragraph (a) of this section, the institution may not require the student to produce the documentation otherwise required under § 668.33(a)(2).
(a) General requirements. Except as provided in paragraph (b) of this section, an institution shall require the student to produce the documentation required under § 668.33(a)(2) and request the INS to perform secondary confirmation for a student claiming eligibility under § 668.33(a)(2), in accordance with the procedures set forth in § 668.135, if—
(1) The institution—
(i) Receives an output document indicating that the student must provide the institution with evidence of the student's immigration status required under § 668.33(a)(2); or
(ii) Receives an output document that satisfies the requirements of § 668.132(a) (1) and (2), but the institution—
(A) Has documentation that conflicts with immigration-status documents submitted by the student or the immigration status reported on the output document; or
(B) Has reason to believe that the immigration status reported by the student or on the output document is incorrect; and
(2) The institution determines that the immigration-status documents submitted by the student constitute reasonable evidence of the student's claim to be an eligible noncitizen.
(b) Exclusions from secondary confirmation. (1) An institution may not require the student to produce the documentation requested under § 668.33(a)(2) and may not request that INS perform secondary confirmation, if the student—
(i) Demonstrates eligibility under the provisions of § 668.33 (a)(1) or (b); or
(ii) Demonstrated eligibility under the provisions of § 668.33(a)(2) in a previous award year as a result of secondary confirmation and the documents used to establish that eligibility have not expired; and
(iii) The institution does not have conflicting documentation or reason to believe that the student's claim of citizenship or immigration status is incorrect.
(2) [Reserved]
(a) An institution shall establish and use written policies and procedures for requesting proof and securing confirmation of the immigration status of applicants for title IV, HEA student financial assistance who claim to meet the eligibility requirements of § 668.33(a)(2). These policies and procedures must include—
(1) Providing the student a deadline by which to provide the documentation that the student wishes to have considered to support the claim that the student meets the requirements of § 668.33(a)(2);
(2) Providing to the student information concerning the consequences of a failure to provide the documentation by the deadline set by the institution; and
(3) Providing that the institution will not make a determination that the student is not an eligible noncitizen until the institution has provided the student the opportunity to submit the documentation in support of the student's claim of eligibility under § 668.33(a)(2).
(b) An institution shall furnish, in writing, to each student required to undergo secondary confirmation—
(1) A clear explanation of the documentation the student must submit as evidence that the student satisfies the requirements of § 668.33(a)(2); and
(2) A clear explanation of the student's responsibilities with respect to the student's compliance with § 668.33(a)(2), including the deadlines for completing any action required under this subpart and the consequences of failing to complete any required action, as specified in § 668.137.
Within 10 business days after an institution receives the documentary evidence of immigration status submitted by a student required to undergo secondary confirmation, the institution shall—
(a) Complete the request portion of the INS Document Verification Request Form G-845;
(b) Copy front and back sides of all immigration-status documents received from the student and attach copies to the Form G-845; and
(c) Submit Form G-845 and attachments to the INS District Office.
(a) Except as provided in paragraphs (b) and (c) of this section, an institution that has requested secondary confirmation under § 668.133(a) shall make its determination concerning a student's eligibility under § 668.33(a)(2) by relying on the INS response to the Form G-845.
(b) An institution shall make its determination concerning a student's eligibility under § 668.33(a)(2) pending the institution's receipt of an INS response to the institution's Form G-845 request concerning that student, if—
(1) The institution has given the student an opportunity to submit documents to the institution to support the student's claim to be an eligible noncitizen;
(2) The institution possesses sufficient documentation concerning a student's immigration status to make that determination;
(3) At least 15 business days have elapsed from the date that the institution sent the Form G-845 request to the INS;
(4) The institution has no documentation that conflicts with the immigration-status documentation submitted by the student; and
(5) The institution has no reason to believe that the immigration status reported by the applicant is incorrect.
(c) An institution shall establish and use policies and procedures to ensure that, if the institution has disbursed or released title IV, HEA funds to the student in the award year or employed the student under the Federal Work-Study Program, and the institution determines, in reliance on the INS response to the institution's request for secondary confirmation regarding that student, that the student was in fact not an eligible noncitizen during that award year, the institution provides the student with notice of the institution's determination, an opportunity to contest the institution's determination, and notice of the institution's final determination.
(a) A student shall submit before a deadline specified by the institution all documentation the student wishes to have considered to support a claim that the student meets the requirements of § 668.33(a)(2). The deadline, set by the institution, must be not less than 30 days from the date the institution receives the student's output document.
(b) If a student fails to submit the documentation by the deadline established in accordance with paragraph (a) of this section, the institution may not disburse to the student, or certify the student as eligible for, any title IV, HEA program funds for that period of enrollment or award year; employ the student under the Federal Work-Study Program; certify a Federal Stafford or Federal PLUS loan application, or originate a Direct Loan Program loan application for the student for that period of enrollment.
(a) A student is liable for any LEAP, FSEOG, Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant payment and for any Federal Stafford, Direct Subsidized, Direct Unsubsidized or Federal Perkins loan made to him or her if the student was ineligible for the Title IV, HEA assistance.
(b) A Federal PLUS or Direct PLUS Loan borrower is liable for any Federal PLUS or Direct PLUS Loan made to him or her on behalf of an ineligible student.
(c) The Secretary does not take any action against an institution with respect to an error in the institution's determination that a student is an eligible noncitizen if, in making that determination, the institution followed the provisions in this subpart and relied on—
(1) An output document for that student indicating that the INS has confirmed that the student's immigration status meets the eligibility requirements for title IV, HEA assistance;
(2) An INS determination of the student's immigration status and the authenticity of the student's immigration documents provided in response to the institution's request for secondary confirmation; or
(3) Immigration-status documents submitted by the student and the institution did not have reason to believe that the documents did not support the student's claim to be an eligible noncitizen.
(d) Except as provided in paragraph (c) of this section, if an institution makes an error in its determination that a student is an eligible noncitizen, the institution is liable for any title IV, HEA disbursements made to this student during the award year or period of enrollment for which the student applied for title IV, HEA assistance.
(a) If an institution makes a payment of a grant or a disbursement of a Federal Perkins loan to an ineligible student for which it is not liable in accordance with § 668.138, it shall assist the Secretary in recovering the funds by—
(1) Making a reasonable effort to contact the student; and
(2) Making a reasonable effort to collect the payment or Federal Perkins loan.
(b) If an institution causes a Federal Stafford, Federal PLUS, Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan to be disbursed to or on behalf of an ineligible student for which it is not liable in accordance with § 668.138, it shall assist the Secretary in recovering the funds by notifying the lender in the case of an FFEL Program loan or the Secretary in the case of a Direct Loan Program loan that the student has failed to establish eligibility under the requirements of §§ 668.201 or 685.200, as appropriate.
(c) If an institution is liable for a payment of a grant or Federal Perkins loan to an ineligible student, the institution shall restore the amount equal to the payment or disbursement to the institution's Federal Perkins loan fund or Federal Pell Grant, ACG, National SMART Grant, TEACH Grant, FSEOG, or LEAP amount, even if the institution cannot collect the payment or disbursement from the student.
(d) If an institution is liable for a Federal Stafford, Federal PLUS, Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan disbursement to an ineligible student, the institution shall repay an amount equal to the disbursement to the lender in the case of an FFEL Program loan or the Secretary in the case of a Direct Loan Program loan, and provide written notice to the borrower.
(a) This subpart sets forth the provisions under which a student who has neither a high school diploma nor its recognized equivalent may become eligible to receive title IV, HEA program funds by—
(1) Achieving a passing score, specified by the Secretary, on an independently administered test approved by the Secretary under this subpart; or
(2) Being enrolled in an eligible institution that participates in a State process approved by the Secretary under this subpart.
(b) Under this subpart, the Secretary sets forth—
(1) The procedures and criteria the Secretary uses to approve tests;
(2) The basis on which the Secretary specifies a passing score on each approved test;
(3) The procedures and conditions under which the Secretary determines that an approved test is independently administered;
(4) The information that a test publisher or a State must submit, as part of its test submission, to explain the methodology it will use for the test anomaly studies as described in § 668.144(c)(17) and (d)(8), as appropriate;
(5) The requirements that a test publisher or a State, as appropriate—
(i) Have a process to identify and follow up on test score irregularities;
(ii) Take corrective action—up to and including decertification of test administrators—if the test publisher or the State determines that test score irregularities have occurred; and
(iii) Report to the Secretary the names of any test administrators it decertifies and any other action taken as a result of test score analyses; and
(6) The procedures and conditions under which the Secretary determines that a State process demonstrates that students in the process have the ability to benefit from the education and training being offered to them.
The following definitions apply to this subpart:
Assessment center: A facility that—
(1) Is located at an eligible institution that provides two-year or four-year degrees or is a postsecondary vocational institution;
(2) Is responsible for gathering and evaluating information about individual students for multiple purposes, including appropriate course placement;
(3) Is independent of the admissions and financial aid processes at the institution at which it is located;
(4) Is staffed by professionally trained personnel;
(5) Uses test administrators to administer tests approved by the Secretary under this subpart; and
(6) Does not have as its primary purpose the administration of ability to benefit tests.
ATB test irregularity: An irregularity that results from an ATB test being administered in a manner that does not conform to the established rules for test administration consistent with the provisions of subpart J of part 668 and the test administrator's manual.
Computer-based test: A test taken by a student on a computer and scored by a computer.
General learned abilities: Cognitive operations, such as deductive reasoning, reading comprehension, or translation from graphic to numerical representation, that may be learned in both school and non-school environments.
Independent test administrator: A test administrator who administers tests at a location other than an assessment center and who—
(1) Has no current or prior financial or ownership interest in the institution, its affiliates, or its parent corporation, other than the fees earned for administering approved ATB tests through an agreement with the test publisher or State and has no controlling interest in any other institution;
(2) Is not a current or former employee of or consultant to the institution, its affiliates, or its parent corporation, a person in control of another institution, or a member of the family of any of these individuals;
(3) Is not a current or former member of the board of directors, a current or former employee of or a consultant to a member of the board of directors, chief executive officer, chief financial officer of the institution, its affiliates, or its parent corporation or of any other institution, or a member of the family of any of these individuals; and
(4) Is not a current or former student of the institution.
Individual with a disability: A person who has a physical or mental impairment which substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment.
Non-native speaker of English: A person whose first language is not English and who is not fluent in English.
Secondary school level: As applied to “content,” “curricula,” or “basic verbal and quantitative skills,” the basic knowledge or skills generally learned in the 9th through 12th grades in United States secondary schools.
Test: A standardized test, assessment or instrument that has formal protocols on how it is to be administered in order to be valid. These protocols include, for example, the use of parallel, equated forms; testing conditions; time allowed for the test; and standardized scoring. Tests are not limited to traditional paper and pencil (or computer-administered) instruments for which forms are constructed prior to administration to examinees. Tests may also include adaptive instruments that use computerized algorithms for selecting and administering items in real time; however, for such instruments, the size of the item pool and the method of item selection must ensure negligible overlap in items across retests.
Test administrator: An individual who is certified by the test publisher (or the State, in the case of an approved State test or assessment) to administer tests approved under this subpart in accordance with the instructions provided by the test publisher or the State, as applicable, which includes protecting the test and the test results from improper disclosure or release, and who is not compensated on the basis of test outcomes.
Test item: A question on a test.
Test publisher: An individual, organization, or agency that owns a registered copyright of a test, or has been authorized by the copyright holder to represent the copyright holder's interests regarding the test.
(a) The Secretary only reviews tests under this subpart that are submitted by the publisher of that test or by a State.
(b) A test publisher or a State that wishes to have its test approved by the Secretary under this subpart must submit an application to the Secretary at such time and in such manner as the Secretary may prescribe. The application must contain all the information necessary for the Secretary to approve the test under this subpart, including but not limited to, the information contained in paragraph (c) or (d) of this section, as applicable.
(c) A test publisher must include with its application—
(1) A summary of the precise editions, forms, levels, and (if applicable) sub-tests for which approval is being sought;
(2) The name, address, telephone number, and e-mail address of a contact person to whom the Secretary may address inquiries;
(3) Each edition, form, level, and sub-test of the test for which the test publisher requests approval;
(4) The distribution of test scores for each edition, form, level, or sub-test for which approval is sought, that allows the Secretary to prescribe the passing score for each test in accordance with § 668.147;
(5) Documentation of test development, including a history of the test's use;
(6) Norming data and other evidence used in determining the distribution of test scores;
(7) Material that defines the content domains addressed by the test;
(8) Documentation of periodic reviews of the content and specifications of the test to ensure that the test reflects secondary school level verbal and quantitative skills;
(9) If a test being submitted is a revision of the most recent edition approved by the Secretary, an analysis of the revisions, including the reasons for the revisions, the implications of the revisions for the comparability of scores on the current test to scores on the previous test, and data from validity studies of the test undertaken subsequent to the revisions;
(10) A description of the manner in which test-taking time was determined in relation to the content representativeness requirements in § 668.146(b)(3) and an analysis of the effects of time on performance. This description may also include the manner in which test-taking time was determined in relation to the other requirements in § 668.146(b);
(11) A technical manual that includes—
(i) An explanation of the methodology and procedures for measuring the reliability of the test;
(ii) Evidence that different forms of the test, including, if applicable, short forms, are comparable in reliability;
(iii) Other evidence demonstrating that the test permits consistent assessment of individual skill and ability;
(iv) Evidence that the test was normed using—
(A) Groups that were of sufficient size to produce defensible standard errors of the mean and were not disproportionately composed of any race or gender; and
(B) A contemporary sample that is representative of the population of persons who have earned a high school diploma in the United States;
(v) Documentation of the level of difficulty of the test;
(vi) Unambiguous scales and scale values so that standard errors of measurement can be used to determine statistically significant differences in performance; and
(vii) Additional guidance on the interpretation of scores resulting from any modifications of the test for individuals with temporary impairments, individuals with disabilities and guidance on the types of accommodations that are allowable;
(12) The manual provided to test administrators containing procedures and instructions for test security and administration, and the forwarding of tests to the test publisher;
(13) An analysis of the item-content of each edition, form, level, and (if applicable) sub-test to demonstrate compliance with the required secondary school level criterion specified in § 668.146(b);
(14) A description of retesting procedures and the analysis upon which the criteria for retesting are based;
(15) Other evidence establishing the test's compliance with the criteria for approval of tests as provided in § 668.146;
(16) A description of its test administrator certification process that provides—
(i) How the test publisher will determine that the test administrator has the necessary training, knowledge, skill, and integrity to test students in accordance with this subpart and the test publisher's requirements; and
(ii) How the test publisher will determine that the test administrator has the ability and facilities to keep its test secure against disclosure or release;
(17) A description of the test anomaly analysis the test publisher will conduct and submit to the Secretary that includes—
(i) An explanation of how the test publisher will identify potential test irregularities and make a determination that test irregularities have occurred;
(ii) An explanation of the process and procedures for corrective action (up to and including decertification of a certified test administrator) when the test publisher determines that test irregularities have occurred; and
(iii) Information on when and how the test publisher will notify a test administrator, the Secretary, and the institutions for which the test administrator had previously provided testing services for that test publisher, that the test administrator has been decertified; and
(18)(i) An explanation of any accessible technologies that are available to accommodate individuals with disabilities, and
(ii) A description of the process for a test administrator to identify and report to the test publisher when accommodations for individuals with disabilities were provided, for scoring and norming purposes.
(d) A State must include with its application—
(1) The information necessary for the Secretary to determine that the test the State uses measures a student's skills and abilities for the purpose of determining whether the student has the skills and abilities the State expects of a high school graduate in that State;
(2) The passing scores on that test;
(3) Any guidance on the interpretation of scores resulting from any modifications of the test for individuals with disabilities;
(4) A statement regarding how the test will be kept secure;
(5) A description of retesting procedures and the analysis upon which the criteria for retesting are based;
(6) Other evidence establishing the test's compliance with the criteria for approval of tests as provided in § 668.146;
(7) A description of its test administrator certification process that provides—
(i) How the State will determine that the test administrator has the necessary training, knowledge, skill, and integrity to test students in accordance with the State's requirements; and
(ii) How the State will determine that the test administrator has the ability and facilities to keep its test secure against disclosure or release;
(8) A description of the test anomaly analysis that the State will conduct and submit to the Secretary that includes—
(i) An explanation of how the State will identify potential test irregularities and make a determination that test irregularities have occurred;
(ii) An explanation of the process and procedures for corrective action (up to and including decertification of a test administrator) when the State determines that test irregularities have occurred; and
(iii) Information on when and how the State will notify a test administrator, the Secretary, and the institutions for which the test administrator had previously provided testing services for that State, that the test administrator has been decertified;
(9)(i) An explanation of any accessible technologies that are available to accommodate individuals with disabilities; and
(ii) A description of the process for a test administrator to identify and report to the test publisher when accommodations for individuals with disabilities were provided, for scoring and norming purposes; and
(10) The name, address, telephone number, and e-mail address of a contact person to whom the Secretary may address inquiries.
(11) A technical manual that includes—
(i) An explanation of the methodology and procedures for measuring the reliability of the test;
(ii) Evidence that different forms of the test, including, if applicable, short forms, are comparable in reliability;
(iii) Other evidence demonstrating that the test permits consistent assessment of individual skill and ability;
(iv) Evidence that the test was normed using—
(A) Groups that were of sufficient size to produce defensible standard errors of the mean and were not disproportionately composed of any race or gender; and
(B) A contemporary sample that is representative of the population of persons who have earned a high school diploma in the United States;
(v) Documentation of the level of difficulty of the test;
(vi) Unambiguous scales and scale values so that standard errors of measurement can be used to determine statistically significant differences in performance; and
(vii) Additional guidance on the interpretation of scores resulting from any modifications of the test for individuals with temporary impairments, individuals with disabilities and guidance on the types of accommodations that are allowable;
(12) the manual provided to test administrators containing procedures and instructions for test security and administration, and the forwarding of tests to the State.
(a)(1) When the Secretary receives a complete application from a test publisher or a State, the Secretary selects one or more experts in the field of educational testing and assessment, who possess appropriate advanced degrees and experience in test development or psychometric research, to determine whether the test meets the requirements for test approval contained in §§ 668.146, 668.147, 668.148, or 668.149, as appropriate, and to advise the Secretary of their determinations.
(2) If the test involves a language other than English, the Secretary selects at least one individual who is fluent in the language in which the test is written to collaborate with the testing expert or experts described in paragraph (a)(1) of this section and to advise the Secretary on whether the test meets the additional criteria, provisions, and conditions for test approval contained in §§ 668.148 and 668.149.
(3) For test batteries that contain multiple sub-tests measuring content domains other than verbal and quantitative domains, the Secretary reviews only those sub-tests covering the verbal and quantitative domains.
(b)(1) If the Secretary determines that a test satisfies the criteria and requirements for test approval, the Secretary notifies the test publisher or the State, as applicable, of the Secretary's decision, and publishes the name of the test and the passing scores in the
(2) If the Secretary determines that a test does not satisfy the criteria and requirements for test approval, the Secretary notifies the test publisher or the State, as applicable, of the Secretary's decision, and the reasons why the test did not meet those criteria and requirements.
(3) If the Secretary determines that a test does not satisfy the criteria and requirements for test approval, the test publisher or the State that submitted the test for approval may request that the Secretary reevaluate the Secretary's decision. Such a request must be accompanied by—
(i) Documentation and information that address the reasons for the non-approval of the test; and
(ii) An analysis of why the information and documentation submitted meet the criteria and requirements for test approval notwithstanding the Secretary's earlier decision to the contrary.
(c)(1) The Secretary approves a test for a period not to exceed five years from the date the notice of approval of the test is published in the
(2) The Secretary extends the approval period of a test to include the period of review if the test publisher or the State, as applicable, re-submits the test for review and approval under § 668.144 at least six months before the date on which the test approval is scheduled to expire.
(d)(1) The Secretary's approval of a test may be revoked if the Secretary determines that the test publisher or the State violated any terms of the agreement described in § 668.150, that the information the test publisher or the State submitted as a basis for approval of the test was inaccurate, or that the test publisher or the State substantially changed the test and did not resubmit the test, as revised, for approval.
(2) If the Secretary revokes approval of a previously approved test, the Secretary publishes a notice of that revocation in the
(i) One hundred and twenty days from the date the notice of revocation is published in the
(ii) An earlier date specified by the Secretary in a notice published in the
(a) Except as provided in § 668.148, the Secretary approves a test under this subpart if—
(1) The test meets the criteria set forth in paragraph (b) of this section;
(2) The test publisher or the State satisfies the requirements set forth in paragraph (c) of this section; and
(3) The Secretary makes a determination that the information the test publisher or State submitted in accordance with § 668.144(c)(17) or (d)(8), as applicable, provides adequate assurance that the test publisher or State will conduct rigorous test anomaly analyses and take appropriate action if test administrators do not comply with testing procedures.
(b) To be approved under this subpart, a test must—
(1) Assess secondary school level basic verbal and quantitative skills and general learned abilities;
(2) Sample the major content domains of secondary school level verbal and quantitative skills with sufficient numbers of questions to—
(i) Adequately represent each domain; and
(ii) Permit meaningful analyses of item-level performance by students who are representative of the contemporary population beyond the age of compulsory school attendance and have earned a high school diploma;
(3) Require appropriate test-taking time to permit adequate sampling of the major content domains described in paragraph (b)(2) of this section;
(4) Have all forms (including short forms) comparable in reliability;
(5) Have, in the case of a test that is revised, new scales, scale values, and scores that are demonstrably comparable to the old scales, scale values, and scores;
(6) Meet all standards for test construction provided in the 1999 edition of the Standards for Educational and Psychological Testing, prepared by a joint committee of the American Educational Research Association, the American Psychological Association, and the National Council on Measurement in Education incorporated by reference in this section. Incorporation by reference of this document has been approved by the Director of the Office of the Federal Register pursuant to the Director's authority under 5 U.S.C. 552(a) and 1 CFR part 51. The incorporated document is on file at the Department of Education, Federal Student Aid, room 113E2, 830 First Street, NE., Washington, DC 20002, phone (202) 377-4026, and at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 1-866-272-6272, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. The document also may be obtained from the American Educational Research Association at: http://www.aera.net; and
(7) Have the test publisher's or the State's guidelines for retesting, including time between test-taking, be based on empirical analyses that are part of the studies of test reliability.
(c) In order for a test to be approved under this subpart, a test publisher or a State must—
(1) Include in the test booklet or package—
(i) Clear, specific, and complete instructions for test administration, including information for test takers on the purpose, timing, and scoring of the test; and
(ii) Sample questions representative of the content and average difficulty of the test;
(2) Have two or more secure, equated, alternate forms of the test;
(3) Except as provided in §§ 668.148 and 668.149, provide tables of distributions of test scores which clearly indicate the mean score and standard deviation for high school graduates who have taken the test within three years prior to the date that the test is submitted to the Secretary for approval under § 668.144;
(4) Norm the test with—
(i) Groups that are of sufficient size to produce defensible standard errors of the mean and are not disproportionately composed of any race or gender; and
(ii) A contemporary sample that is representative of the population of persons who have earned a high school diploma in the United States; and
(5) If test batteries include sub-tests assessing different verbal and/or quantitative skills, a distribution of test scores as described in paragraph (c)(3) of this section that allows the Secretary to prescribe either—
(i) A passing score for each sub-test; or
(ii) One composite passing score for verbal skills and one composite passing score for quantitative skills.
Except as provided in §§ 668.144(d), 668.148, and 668.149, to demonstrate that a test taker has the ability to benefit from the education and training offered by the institution, the Secretary specifies that the passing score on each approved test is one standard deviation below the mean score of a sample of individuals who have taken the test within the three years before the test is submitted to the Secretary for approval. The sample must be representative of the population of high school graduates in the United States.
(a) In addition to satisfying the criteria in § 668.146, to be approved by the Secretary, a test must meet the following criteria, if applicable:
(1) In the case of a test developed for a non-native speaker of English who is enrolled in a program that is taught in his or her native language, the test must be—
(i) Linguistically accurate and culturally sensitive to the population for which the test is designed, regardless of the language in which the test is written;
(ii) Supported by documentation detailing the development of normative data;
(iii) If translated from an English version, supported by documentation of procedures to determine its reliability and validity with reference to the population for which the translated test was designed;
(iv) Developed in accordance with guidelines provided in the 1999 edition of the “Testing Individuals of Diverse Linguistic Backgrounds” section of the Standards for Educational and Psychological Testing prepared by a joint committee of the American Educational Research Association, the American Psychological Association, and the National Council on Measurement in Education incorporated by reference in this section. Incorporation by reference of this document has been approved by the Director of the Office of the Federal Register pursuant to the Director's authority under 5 U.S.C. 552(a) and 1 CFR part 51. The incorporated document is on file at the Department of Education, Federal Student Aid, room 113E2, 830 First Street, NE., Washington, DC 20002, phone (202) 377-4026, and at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 1-866-272-6272, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. The document also may be obtained from the American Educational Research Association at: http://www.aera.net; and
(v)(A) If the test is in Spanish, accompanied by a distribution of test scores that clearly indicates the mean score and standard deviation for Spanish-speaking students with high school diplomas who have taken the test within five years before the date on which the test is submitted to the Secretary for approval.
(B) If the test is in a language other than Spanish, accompanied by a recommendation for a provisional passing score based upon performance of a sample of test takers representative of non-English speaking individuals who speak a language other than Spanish and who have a high school diploma. The sample upon which the recommended provisional passing score is based must be large enough to produce stable norms.
(2) In the case of a test that is modified for use for individuals with disabilities, the test publisher or State must—
(i) Follow guidelines provided in the “Testing Individuals with Disabilities” section of the Standards for Educational and Psychological Testing; and
(ii) Provide documentation of the appropriateness and feasibility of the modifications relevant to test performance.
(3) In the case of a computer-based test, the test publisher or State, as applicable, must—
(i) Provide documentation to the Secretary that the test complies with the basic principles of test construction and standards of reliability and validity as promulgated in the Standards for Educational and Psychological Testing;
(ii) Provide test administrators with instructions for familiarizing test takers with computer hardware prior to test-taking; and
(iii) Provide two or more parallel, equated forms of the test, or, if parallel forms are generated from an item pool, provide documentation of the methods of item selection for alternate forms.
(b) If a test is designed solely to measure the English language competence of non-native speakers of English—
(1) The test must meet the criteria set forth in § 668.146(b)(6), (c)(1), (c)(2), and (c)(4); and
(2) The test publisher must recommend a passing score based on the mean score of test takers beyond the age of compulsory school attendance who completed U.S. high school equivalency programs, formal training programs, or bilingual vocational programs.
If no test is reasonably available for individuals with disabilities so that no test can be approved under §§ 668.146 or 668.148 for these individuals, the following procedures apply:
(a) The Secretary considers a modified test or testing procedure, or instrument that has been scientifically developed specifically for the purpose of evaluating the ability to benefit from postsecondary training or education of individuals with disabilities to be an approved test for purposes of this subpart provided that the testing procedure or instrument measures both basic verbal and quantitative skills at the secondary school level.
(b) The Secretary considers the passing scores for these testing procedures or instruments to be those recommended by the test publisher or State, as applicable.
(c) The test publisher or State, as applicable, must—
(1) Maintain appropriate documentation, including a description of the procedures or instruments, their content domains, technical properties, and scoring procedures; and
(2) Require the test administrator to—
(i) Use the procedures or instruments in accordance with instructions provided by the test publisher or State, as applicable; and
(ii) Use the passing scores recommended by the test publisher or State, as applicable.
(a) If the Secretary approves a test under this subpart, the test publisher or the State that submitted the test must enter into an agreement with the Secretary that contains the provisions set forth in paragraph (b) of this section before an institution may use the test to determine a student's eligibility for title IV, HEA program funds.
(b) The agreement between a test publisher or a State, as applicable, and the Secretary provides that the test publisher or the State, as applicable, must—
(1) Allow only test administrators that it certifies to give its test;
(2) Require each test administrator it certifies to—
(i) Provide the test publisher or the State, as applicable, with a certification statement that indicates he or she is not currently decertified; and
(ii) Notify the test publisher or the State, as applicable, immediately if any other test publisher or State decertifies the test administrator;
(3) Only certify test administrators who—
(i) Have the necessary training, knowledge, and skill to test students in accordance with the test publisher's or the State's testing requirements;
(ii) Have the ability and facilities to keep its test secure against disclosure or release; and
(iii) Have not been decertified within the last three years by any test publisher or State;
(4) Decertify a test administrator for a period of three years if the test publisher or the State finds that the test administrator—
(i) Has failed to give its test in accordance with the test publisher's or the State's instructions;
(ii) Has not kept the test secure;
(iii) Has compromised the integrity of the testing process; or
(iv) Has given the test in violation of the provisions contained in § 668.151;
(5) Reevaluate the qualifications of a test administrator who has been decertified by another test publisher or State and determine whether to continue the test administrator's certification or to decertify the test administrator;
(6) Immediately notify the test administrator, the Secretary, and the institutions where the test administrator previously administered approved tests when the test publisher or the State decertifies a test administrator;
(7)(i) Review the test results of the tests administered by a decertified test administrator and determine which tests may have been improperly administered during the five (5) year period preceding the date of decertification;
(ii) Immediately notify the affected institutions and students or prospective students; and
(iii) Provide a report to the Secretary on the results of the review and the notifications provided to institutions and students or prospective students;
(8) Report to the Secretary if the test publisher or the State certifies a previously decertified test administrator after the three year period specified in paragraph (b)(4) of this section;
(9) Score a test answer sheet that it receives from a test administrator;
(10) If a computer-based test is used, provide the test administrator with software that will—
(i) Immediately generate a score report for each test taker;
(ii) Allow the test administrator to send to the test publisher or the State, as applicable, a record of the test taker's performance on each test item and the test taker's test scores using a data transfer method that is encrypted and secure; and
(iii) Prohibit any changes in test taker responses or test scores;
(11) Promptly send to the student and the institution the student indicated he or she is attending or scheduled to attend a notice stating the student's score for the test and whether or not the student passed the test;
(12) Keep each test answer sheet or electronic record forwarded for scoring and all other documents forwarded by the test administrator with regard to the test for a period of three years from the date the analysis of the tests results, described in paragraph (b)(13) of this section, was sent to the Secretary;
(13) Analyze the test scores of students who take the test to determine whether the test scores and data produce any irregular pattern that raises an inference that the tests were not being properly administered, and provide the Secretary with a copy of this analysis within 18 months after the test was approved and every 18 months thereafter during the period of test approval;
(14) Upon request, give the Secretary, a State agency, an accrediting agency, and law enforcement agencies access to test records or other documents related to an audit, investigation, or program review of an institution, the test publisher, or a test administrator;
(15) Immediately report to the Secretary if the test publisher or the State finds any credible information indicating that a test has been compromised;
(16) Immediately report to the Office of Inspector General of the Department of Education for investigation if the test publisher or the State finds any credible information indicating that a test administrator or institution may have engaged in civil or criminal fraud, or other misconduct; and
(17) Require a test administrator who provides a test to an individual with a disability who requires an accommodation in the test's administration to report to the test publisher or the State within the time period specified in § 668.151(b)(2) or § 668.152(b)(2), as applicable, the nature of the disability and the accommodations that were provided.
(c)(1) The Secretary may terminate an agreement with a test publisher or a State, as applicable, if the test publisher or the State fails to carry out the terms of the agreement described in paragraph (b) of this section.
(2) Before terminating the agreement, the Secretary gives the test publisher or the State, as applicable, the opportunity to show that it has not failed to carry out the terms of its agreement.
(3) If the Secretary terminates an agreement with a test publisher or a State under this section, the Secretary publishes a notice in the
(a)(1) To establish a student's eligibility for title IV, HEA program funds under this subpart, an institution must select a test administrator to give an approved test.
(2) An institution may use the results of an approved test it received from an approved test publisher or assessment center to determine a student's eligibility to receive title IV, HEA program funds if the test was independently administered and properly administered in accordance with this subpart.
(b) The Secretary considers that a test is independently administered if the test is—
(1) Given at an assessment center by a certified test administrator who is an employee of the center; or
(2) Given by an independent test administrator who maintains the test at a secure location and submits the test for scoring by the test publisher or the State or, for a computer-based test, a record of the test scores, within two business days of administering the test.
(c) The Secretary considers that a test is not independently administered if an institution—
(1) Compromises test security or testing procedures;
(2) Pays a test administrator a bonus, commission, or any other incentive based upon the test scores or pass rates of its students who take the test; or
(3) Otherwise interferes with the test administrator's independence or test administration.
(d) The Secretary considers that a test is properly administered if the test administrator—
(1) Is certified by the test publisher or the State, as applicable, to give the test publisher's or the State's test;
(2) Administers the test in accordance with instructions provided by the test publisher or the State, as applicable, and in a manner that ensures the integrity and security of the test;
(3) Makes the test available only to a test-taker, and then only during a regularly scheduled test;
(4) Secures the test against disclosure or release; and
(5) Submits the completed test or, for a computer-based test, a record of test scores, to the test publisher or the State, as applicable, within the time period specified in § 668.152(b) or paragraph (b)(2) of this section, as appropriate, and in accordance with the test publisher's or the State's instructions.
(e) An independent test administrator may not score a test.
(f) An individual who fails to pass a test approved under this subpart may not retake the same form of the test for the period prescribed by the test publisher or the State responsible for the test.
(g) An institution must maintain a record for each individual who took a test under this subpart. The record must include—
(1) The test taken by the individual;
(2) The date of the test;
(3) The individual's scores as reported by the test publisher, an assessment center, or the State;
(4) The name and address of the test administrator who administered the test and any identifier assigned to the test administrator by the test publisher or the State; and
(5) If the individual who took the test is an individual with a disability and was unable to be evaluated by the use of an approved ATB test or the individual requested or required testing accommodations, documentation of the individual's disability and of the testing arrangements provided in accordance with § 668.153(b).
(a) If a test is given by an assessment center, the assessment center must properly administer the test as described in § 668.151(d), and § 668.153, if applicable.
(b)(1) Unless an agreement between a test publisher or a State, as applicable, and an assessment center indicates otherwise, an assessment center scores the tests it gives and promptly notifies the institution and the student of the student's score on the test and whether the student passed the test.
(2) If the assessment center scores the test, it must provide weekly to the test publisher or the State, as applicable—
(i) All copies of the completed test, including the name and address of the test administrator who administered the test and any identifier assigned to the test administrator by the test publisher or the State, as applicable; or
(ii) A report listing all test-takers' scores and institutions to which the scores were sent and the name and address of the test administrator who administered the test and any identifier assigned to the test administrator by the test publisher or the State, as applicable.
(a) Individuals whose native language is not English. For an individual whose native language is not English and who is not fluent in English, the institution must use the following tests, as applicable:
(1) If the individual is enrolled or plans to enroll in a program conducted entirely in his or her native language, the individual must take a test approved under §§ 668.146 and 668.148(a)(1).
(2) If the individual is enrolled or plans to enroll in a program that is taught in English with an ESL component, the individual must take an English language proficiency assessment approved under § 668.148(b) and, before beginning the portion of the program taught in English, a test approved under § 668.146.
(3) If the individual is enrolled or plans to enroll in a program that is taught in English without an ESL component, or the individual does not enroll in any ESL component offered, the individual must take a test in English approved under § 668.146.
(4) If the individual enrolls in an ESL program, the individual must take an ESL test approved under § 668.148(b).
(5) If the individual enrolls or plans to enroll in a program that is taught in the student's native language that either has an ESL component or a portion of the program will be taught in English, the individual must take an English proficiency test approved under § 668.148(b) prior to beginning the portion of the program taught in English.
(b) Individuals with disabilities. (1) For an individual with a disability who has neither a high school diploma nor its equivalent and who is applying for title IV, HEA program funds and seeks to show his or her ability to benefit through the testing procedures in this subpart, an institution must use a test described in § 668.148(a)(2) or § 668.149(a).
(2) The test must reflect the individual's skills and general learned abilities.
(3) The test administrator must ensure that there is documentation to support the determination that the individual is an individual with a disability and requires accommodations—such as extra time or a quiet room—for taking an approved test, or is unable to be evaluated by the use of an approved ATB test.
(4) Documentation of an individual's disability may be satisfied by—
(i) A written determination, including a diagnosis and information about testing accommodations, if such accommodation information is available, by a licensed psychologist or physician; or
(ii) A record of the disability from a local or State educational agency, or other government agency, such as the Social Security Administration or a vocational rehabilitation agency, that identifies the individual's disability. This record may, but is not required to, include a diagnosis and recommended testing accommodations.
An institution is liable for the title IV, HEA program funds disbursed to a student whose eligibility is determined under this subpart only if—
(a) The institution used a test that was not administered independently, in accordance with § 668.151(b);
(b) The institution or an employee of the institution compromised the testing process in any way; or
(c) The institution is unable to document that the student received a passing score on an approved test.
(a)(1) A State that wishes the Secretary to consider its State process as an alternative to achieving a passing score on an approved, independently administered test or satisfactory completion of at least six credit hours or its recognized equivalent coursework for the purpose of determining a student's eligibility for title IV, HEA program funds must apply to the Secretary for approval of that process.
(2) A State's application for approval of its State process must include—
(i) The institutions located in the State included in the proposed process, which need not be all of the institutions located in the State;
(ii) The requirements that participating institutions must meet to offer eligible career pathway programs through the State process;
(iii) A certification that, as of the date of the application, each proposed career pathway program intended for use through the State process constitutes an “eligible career pathway program” as defined in § 668.2 and as documented pursuant to § 668.157;
(iv) The criteria used to determine student eligibility for participation in the State process; and
(v) For an institution listed for the first time on the application, an assurance that not more than 33 percent of the institution's undergraduate regular students withdrew from the institution during the institution's latest completed award year. For purposes of calculating this rate, the institution must count all regular students who were enrolled during the latest completed award year, except those students who, during that period—
(A) Withdrew from, dropped out of, or were expelled from the institution; and
(B) Were entitled to and actually received in a timely manner, a refund of 100 percent of their tuition and fees.
(b) For a State applying for approval for the first time, the Secretary may approve the State process for a two-year initial period if—
(1) The State's process satisfies the requirements contained in paragraphs (a), (c), and (d) of this section; and
(2) The State agrees that the total number of students who enroll through the State process during the initial period will total no more than the greater of 25 students or 1.0 percent of enrollment at each institution participating in the State process.
(c) A State process must—
(1) Allow the participation of only those students eligible under § 668.32(e)(3);
(2) Monitor on an annual basis each participating institution's compliance with the requirements and standards contained in the State's process, including the success rate as calculated in paragraph (f) of this section;
(3) Require corrective action if an institution is found to be in noncompliance with the State process requirements;
(4) Provide a participating institution that has failed to achieve the success rate required under paragraphs (e)(1) and (f) up to three years to achieve compliance;
(5) Terminate an institution from the State process if the institution refuses or fails to comply with the State process requirements, including exceeding the total number of students referenced in paragraph (b)(2) of this section; and
(6) Prohibit an institution from participating in the State process for at least five years after termination.
(d)(1) The Secretary responds to a State's request for approval of its State process within six months after the Secretary's receipt of that request. If the Secretary does not respond by the end of six months, the State's process is deemed to be approved.
(2) An approved State process becomes effective for purposes of determining student eligibility for title IV, HEA program funds under this subpart—
(i) On the date the Secretary approves the process; or
(ii) Six months after the date on which the State submits the process to the Secretary for approval, if the Secretary neither approves nor disapproves the process during that six-month period.
(e) After the initial two-year period described in paragraph (b) of this section, the State must reapply for continued participation and, in its application—
(1) Demonstrate that the students it admits under that process at each participating institution have a success rate as determined under paragraph (f) of this section that is within 85 percent of the success rate of students with high school diplomas;
(2) Demonstrate that the State's process continues to satisfy the requirements in paragraphs (a), (c), and (d) of this section; and
(3) Report information to the Department on the enrollment and success of participating students by eligible career pathway program and by race, gender, age, economic circumstances, and educational attainment, to the extent available.
(f) The State must calculate the success rate for each participating institution as referenced in paragraph (e)(1) of this section by—
(1) Determining the number of students with high school diplomas or equivalent who, during the applicable award year described in paragraph (g)(1) of this section, enrolled in the same programs as students participating in the State process at each participating institution and—
(i) Successfully completed education or training programs;
(ii) Remained enrolled in education or training programs at the end of that award year; or
(iii) Successfully transferred to and remained enrolled in another institution at the end of that award year;
(2) Determining the number of students with high school diplomas or equivalent who, during the applicable award year described in paragraph (g)(1) of this section, enrolled in the same programs as students participating in the State process at each participating institution;
(3) Determining the number of students calculated in paragraph (f)(2) of this section who remained enrolled after subtracting the number of students who subsequently withdrew or were expelled from each participating institution and received a 100 percent refund of their tuition under the institution's refund policies;
(4) Dividing the number of students determined under paragraph (f)(1) of this section by the number of students determined under paragraph (f)(3) of this section; and
(5) Making the calculations described in paragraphs (f)(1) through (4) of this section for students who enrolled through a State process in each participating institution.
(g)(1) For purposes of paragraph (f) of this section, the applicable award year is the latest complete award year for which information is available.
(2) If no students are enrolled in an eligible career pathway program through a State process, then the State will receive a one-year extension to its initial approval of its State process.
(h) A State must submit reports on its State process, in accordance with deadlines and procedures established and published by the Secretary in the
(i) The Secretary approves a State process as described in paragraph (e) of this section for a period not to exceed five years.
(j)(1) The Secretary withdraws approval of a State process if the Secretary determines that the State process violated any terms of this section or that the information that the State submitted as a basis for approval of the State process was inaccurate.
(i) If a State has not terminated an institution from the State process under paragraph (c)(5) of this section for failure to meet the success rate, then the Secretary withdraws approval of the State process, except in accordance with paragraph (j)(1)(ii) of this section.
(ii) At the Secretary's discretion, under exceptional circumstances, the State process may be approved once for a two-year period.
(iii) If 50 percent or more participating institutions across all States do not meet the success rate in a given year, then the Secretary may lower the success rate to no less than 75 percent for two years.
(2) The Secretary provides a State with the opportunity to contest a finding that the State process violated any terms of this section or that the information that the State submitted as a basis for approval of the State process was inaccurate.
(3) If the Secretary upholds the withdrawal of approval of a State process, then the State cannot reapply to the Secretary for a period of five years.
(a) An institution demonstrates to the Secretary that a student is enrolled in an eligible career pathway program by documenting that—
(1) The student has enrolled in or is receiving all three of the following elements simultaneously—
(i) An eligible postsecondary program as defined in § 668.8;
(ii) Adult education and literacy activities under the Workforce Innovation and Opportunity Act as described in 34 CFR 463.30 that assist adults in attaining a secondary school diploma or its recognized equivalent and in the transition to postsecondary education and training; and
(iii) Workforce preparation activities as described in 34 CFR 463.34;
(2) The program aligns with the skill needs of industries in the State or regional labor market in which the institution is located, based on research the institution has conducted, including—
(i) Government reports identifying in-demand occupations in the State or regional labor market;
(ii) Surveys, interviews, meetings, or other information obtained by the institution regarding the hiring needs of employers in the State or regional labor market; and
(iii) Documentation that demonstrates direct engagement with industry;
(3) The skill needs described in paragraph (a)(2) of this section align with the specific coursework and postsecondary credential provided by the postsecondary program or other required training;
(4) The program provides academic and career counseling services that assist students in pursuing their credential and obtaining jobs aligned with skill needs described in paragraph (a)(2) of this section, and identifies the individuals providing the career counseling services;
(5) The appropriate education is offered, concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster through an agreement, memorandum of understanding, or some other evidence of alignment of postsecondary and adult education providers that ensures the education is aligned with the students' career objectives; and
(6) The program is designed to lead to a valid high school diploma as defined in § 668.16(p) or its recognized equivalent.
(b) For a postsecondary institution that offered an eligible career pathway program prior to July 1, 2024, the institution must—
(1) Apply to the Secretary to have one of its career pathway programs determined to be eligible for title IV, HEA program purposes by a date as specified by the Secretary; and
(2) Affirm that any career pathway program offered by the institution meets the documentation standards in paragraph (a) of this section.
(c) For a postsecondary institution that does not offer an eligible career pathway program prior to July 1, 2024, the institution must—
(1) Apply to the Secretary to have its program determined to be an initial eligible career pathway program; and
(2) Affirm that any subsequent career pathway program offered by the institution, initiated only after the approval of the initial eligible career pathway program, will meet the documentation standards outlined in paragraph (a) of this section.
(d) The Secretary provides an institution with the opportunity to appeal an adverse eligibility decision under paragraphs (b) and (c) of this section.
(e) The Secretary maintains the authority to require the approval of additional eligible career pathway programs offered by a postsecondary institution beyond the requirements outlined in paragraphs (b) and (c) of this section for any reason, including but not limited to—
(1) A rapid increase, as determined by the Secretary, of eligible career pathway programs at the institution; or
(2) The Secretary determines that other eligible career pathway programs at the postsecondary institution do not meet the documentation standards outlined in this section.
(a) General. (1) This subpart establishes the rules under which a participating institution requests, maintains, disburses, and otherwise manages title IV, HEA program funds.
(2) As used in this subpart—
(i) Access device means a card, code, or other means of access to a financial account, or any combination thereof, that may be used by a student to initiate electronic fund transfers;
(ii) Day means a calendar day, unless otherwise specified;
(iii) Depository account means an account at a depository institution described in 12 U.S.C. 461(b)(1)(A), or an account maintained by a foreign institution at a comparable depository institution that meets the requirements of § 668.163(a)(1);
(iv) EFT (Electronic Funds Transfer) means a transaction initiated electronically instructing the crediting or debiting of a financial account, or an institution's depository account. For purposes of transactions initiated by the Secretary, the term “EFT” includes all transactions covered by 31 CFR 208.2(f). For purposes of transactions initiated by or on behalf of an institution, the term “EFT” includes, from among the transactions covered by 31 CFR 208.2(f), only Automated Clearinghouse transactions;
(v) Financial account means a student's or parent's checking or savings account, prepaid card account, or other consumer asset account held directly or indirectly by a financial institution;
(vi) Financial institution means a bank, savings association, credit union, or any other person or entity that directly or indirectly holds a financial account belonging to a student, issues to a student an access device associated with a financial account, and agrees with the student to provide EFT services;
(vii) Parent means the parent borrower of a Direct PLUS Loan;
(viii) Student ledger account means a bookkeeping account maintained by an institution to record the financial transactions pertaining to a student's enrollment at the institution; and
(ix) Title IV, HEA programs means the Federal Pell Grant, Iraq-Afghanistan Service Grant, TEACH Grant, FSEOG, Federal Perkins Loan, FWS, and Direct Loan programs, and any other program designated by the Secretary.
(b) Federal interest in title IV, HEA program funds. Except for funds provided by the Secretary for administrative expenses, and for funds used for the Job Location and Development Program under 20 CFR part 675, subpart B, funds received by an institution under the title IV, HEA programs are held in trust for the intended beneficiaries or the Secretary. The institution, as a trustee of those funds, may not use or hypothecate (i.e., use as collateral) the funds for any other purpose or otherwise engage in any practice that risks the loss of those funds.
(c) Standard of conduct. An institution must exercise the level of care and diligence required of a fiduciary with regard to managing title IV, HEA program funds under this subpart.
(a) General. The Secretary has sole discretion to determine the method under which the Secretary provides title IV, HEA program funds to an institution. In accordance with procedures established by the Secretary, the Secretary may provide funds to an institution under the advance payment method, reimbursement payment method, or heightened cash monitoring payment method.
(b) Advance payment method. (1) Under the advance payment method, an institution submits a request for funds to the Secretary. The institution's request may not exceed the amount of funds the institution needs immediately for disbursements the institution has made or will make to eligible students and parents.
(2) If the Secretary accepts that request, the Secretary initiates an EFT of that amount to the depository account designated by the institution.
(3) The institution must disburse the funds requested as soon as administratively feasible but no later than three business days following the date the institution received those funds.
(c) Reimbursement payment method. (1) Under the reimbursement payment method, an institution must credit a student's ledger account for the amount of title IV, HEA program funds that the student or parent is eligible to receive, and pay the amount of any credit balance due under § 668.164(h), before the institution seeks reimbursement from the Secretary for those disbursements.
(2) An institution seeks reimbursement by submitting to the Secretary a request for funds that does not exceed the amount of the disbursements the institution has made to students or parents included in that request.
(3) As part of its reimbursement request, the institution must—
(i) Identify the students or parents for whom reimbursement is sought; and
(ii) Submit to the Secretary, or an entity approved by the Secretary, documentation that shows that each student or parent included in the request was—
(A) Eligible to receive and has received the title IV, HEA program funds for which reimbursement is sought; and
(B) Paid directly any credit balance due under § 668.164(h).
(4) The Secretary will not approve the amount of the institution's reimbursement request for a student or parent and will not initiate an EFT of that amount to the depository account designated by the institution, if the Secretary determines with regard to that student or parent, and in the judgment of the Secretary, that the institution has not—
(i) Accurately determined the student's or parent's eligibility for title IV, HEA program funds;
(ii) Accurately determined the amount of title IV, HEA program funds disbursed, including the amount paid directly to the student or parent; and
(iii) Submitted the documentation required under paragraph (c)(3) of this section.
(d) Heightened cash monitoring payment method. Under the heightened cash monitoring payment method, an institution must credit a student's ledger account for the amount of title IV, HEA program funds that the student or parent is eligible to receive, and pay the amount of any credit balance due under § 668.164(h), before the institution—
(1) Submits a request for funds under the provisions of the advance payment method described in paragraphs (b)(1) and (2) of this section, except that the institution's request may not exceed the amount of the disbursements the institution has made to the students included in that request; or
(2) Seeks reimbursement for those disbursements under the provisions of the reimbursement payment method described in paragraph (c) of this section, except that the Secretary may modify the documentation requirements and review procedures used to approve the reimbursement request.
(a)(1) Institutional depository account. An institution must maintain title IV, HEA program funds in a depository account. For an institution located in a State, the depository account must be insured by the FDIC or NCUA. For a foreign institution, the depository account may be insured by the FDIC or NCUA, or by an equivalent agency of the government of the country in which the institution is located. If there is no equivalent agency, the Secretary may approve a depository account designated by the foreign institution.
(2) For each depository account that includes title IV, HEA program funds, an institution located in a State must clearly identify that title IV, HEA program funds are maintained in that account by—
(i) Including in the name of each depository account the phrase “Federal Funds”; or
(ii)(A) Notifying the depository institution that the depository account contains title IV, HEA program funds that are held in trust and retaining a record of that notice; and
(B) Except for a public institution located in a State or a foreign institution, filing with the appropriate State or municipal government entity a UCC-1 statement disclosing that the depository account contains Federal funds and maintaining a copy of that statement.
(b) Separate depository account. The Secretary may require an institution to maintain title IV, HEA program funds in a separate depository account that contains no other funds if the Secretary determines that the institution failed to comply with—
(1) The requirements in this subpart;
(2) The recordkeeping and reporting requirements in subpart B of this part; or
(3) Applicable program regulations.
(c) Interest-bearing depository account. (1) An institution located in a State is required to maintain its title IV, HEA program funds in an interest-bearing depository account, except as provided in 2 CFR 200.305(b)(8).
(2) Any interest earned on Federal Perkins Loan program funds is retained by the institution as provided under 34 CFR 674.8(a).
(3) An institution may keep the initial $500 in interest it earns during the award year on other title IV, HEA program funds it maintains in accordance with paragraph (c)(1) of this section. No later than 30 days after the end of that award year, the institution must remit to the Department of Health and Human Services, Payment Management System, Rockville, MD 20852, any interest over $500.
(d) Accounting and fiscal records. An institution must—
(1) Maintain accounting and internal control systems that identify the cash balance of the funds of each title IV, HEA program that are included in the institution's depository account or accounts as readily as if those funds were maintained in a separate depository account;
(2) Identify the earnings on title IV, HEA program funds maintained in the institution's depository account or accounts; and
(3) Maintain its fiscal records in accordance with the provisions in § 668.24.
(a) Disbursement. (1) Except as provided under paragraph (a)(2) of this section, a disbursement of title IV, HEA program funds occurs on the date that the institution credits the student's ledger account or pays the student or parent directly with—
(i) Funds received from the Secretary; or
(ii) Institutional funds used in advance of receiving title IV, HEA program funds.
(2)(i) For a Direct Loan for which the student is subject to the delayed disbursement requirements under 34 CFR 685.303(b)(5), if an institution credits a student's ledger account with institutional funds earlier than 30 days after the beginning of a payment period, the Secretary considers that the institution makes that disbursement on the 30th day after the beginning of the payment period; or
(ii) If an institution credits a student's ledger account with institutional funds earlier than 10 days before the first day of classes of a payment period, the Secretary considers that the institution makes that disbursement on the 10th day before the first day of classes of a payment period.
(b) Disbursements by payment period. (1) Except for paying a student under the FWS program or unless 34 CFR 685.303(d)(4)(i) applies, an institution must disburse during the current payment period the amount of title IV, HEA program funds that a student enrolled at the institution, or the student's parent, is eligible to receive for that payment period.
(2) An institution may make a prior year, late, or retroactive disbursement, as provided under paragraph (c)(3), (j), or (k) of this section, respectively, during the current payment period as long as the student was enrolled and eligible during the payment period covered by that prior year, late, or retroactive disbursement.
(3) At the time a disbursement is made to a student for a payment period, an institution must confirm that the student is eligible for the type and amount of title IV, HEA program funds identified by that disbursement. A third-party servicer is also responsible for confirming the student's eligibility if the institution engages the servicer to perform activities or transactions that lead to or support that disbursement. Those activities and transactions include but are not limited to—
(i) Determining the type and amount of title IV, HEA program funds that a student is eligible to receive;
(ii) Requesting funds under a payment method described in § 668.162; or
(iii) Accounting for funds that are originated, requested, or disbursed, in reports or data submissions to the Secretary.
(c) Crediting a student's ledger account. (1) An institution may credit a student's ledger account with title IV, HEA program funds to pay for allowable charges associated with the current payment period. Allowable charges are—
(i) The amount of tuition, fees, and institutionally provided room and board assessed the student for the payment period or, as provided in paragraph (c)(5) of this section, the prorated amount of those charges if the institution debits the student's ledger account for more than the charges associated with the payment period; and
(ii) The amount incurred by the student for the payment period for purchasing books, supplies, and other educationally related goods and services provided by the institution for which the institution obtains the student's or parent's authorization under § 668.165(b).
(2) An institution may include the costs of books and supplies as part of tuition and fees under paragraph (c)(1)(i) of this section if —
(i) The institution—
(A) Has an arrangement with a book publisher or other entity that enables it to make those books or supplies available to students below competitive market rates;
(B) Provides a way for a student to obtain those books and supplies by the seventh day of a payment period; and
(C) Has a policy under which the student may opt out of the way the institution provides for the student to obtain books and supplies under this paragraph (c)(2). A student who opts out under this paragraph (c)(2) is considered to also opt out under paragraph (m)(3) of this section;
(ii) The institution documents on a current basis that the books or supplies, including digital or electronic course materials, are not available elsewhere or accessible by students enrolled in that program from sources other than those provided or authorized by the institution; or
(iii) The institution demonstrates there is a compelling health or safety reason.
(3)(i) An institution may include in one or more payment periods for the current year, prior year charges of not more than $200 for—
(A) Tuition, fees, and institutionally provided room and board, as provided under paragraph (c)(1)(i) of this section, without obtaining the student's or parent's authorization; and
(B) Educationally related goods and services provided by the institution, as described in paragraph (c)(1)(ii) of this section, if the institution obtains the student's or parent's authorization under § 668.165(b).
(ii) For purposes of this section—
(A) The current year is—
(1) The current loan period for a student or parent who receives only a Direct Loan;
(2) The current award year for a student who does not receive a Direct Loan but receives funds under any other title IV, HEA program; or
(3) At the discretion of the institution, either the current loan period or the current award year if a student receives a Direct Loan and funds from any other title IV, HEA program.
(B) A prior year is any loan period or award year prior to the current loan period or award year, as applicable.
(4) An institution may include in the current payment period unpaid allowable charges from any previous payment period in the current award year or current loan period for which the student was eligible for title IV, HEA program funds.
(5) For purposes of this section, an institution determines the prorated amount of charges associated with the current payment period by—
(i) For a program with substantially equal payment periods, dividing the total institutional charges for the program by the number of payment periods in the program; or
(ii) For other programs, dividing the number of credit or clock hours in the current payment period by the total number of credit or clock hours in the program, and multiplying that result by the total institutional charges for the program.
(d) Direct payments. (1) Except as provided under paragraph (d)(3) of this section, an institution makes a direct payment—
(i) To a student, for the amount of the title IV, HEA program funds that a student is eligible to receive, including Direct PLUS Loan funds that the student's parent authorized the student to receive, by—
(A) Initiating an EFT of that amount to the student's financial account;
(B) Issuing a check for that amount payable to, and requiring the endorsement of, the student; or
(C) Dispensing cash for which the institution obtains a receipt signed by the student;
(ii) To a parent, for the amount of the Direct PLUS Loan funds that a parent does not authorize the student to receive, by—
(A) Initiating an EFT of that amount to the parent's financial account;
(B) Issuing a check for that amount payable to and requiring the endorsement of the parent; or
(C) Dispensing cash for which the institution obtains a receipt signed by the parent.
(2) Issuing a check. An institution issues a check on the date that it—
(i) Mails the check to the student or parent; or
(ii) Notifies the student or parent that the check is available for immediate pick-up at a specified location at the institution. The institution may hold the check for no longer than 21 days after the date it notifies the student or parent. If the student or parent does not pick up the check, the institution must immediately mail the check to the student or parent, pay the student or parent directly by other means, or return the funds to the appropriate title IV, HEA program.
(3) Payments by the Secretary. The Secretary may pay title IV, HEA credit balances under paragraphs (h) and (m) of this section directly to a student or parent using a method established or authorized by the Secretary and published in the
(4) Student choice. (i) An institution located in a State that makes direct payments to a student by EFT and that enters into an arrangement described in paragraph (e) or (f) of this section, including an institution that uses a third-party servicer to make those payments, must establish a selection process under which the student chooses one of several options for receiving those payments.
(A) In implementing its selection process, the institution must—
(1) Inform the student in writing that he or she is not required to open or obtain a financial account or access device offered by or through a specific financial institution;
(2) Ensure that the student's options for receiving direct payments are described and presented in a clear, fact-based, and neutral manner;
(3) Ensure that initiating direct payments by EFT to a student's existing financial account is as timely and no more onerous to the student as initiating an EFT to an account provided under an arrangement described in paragraph (e) or (f) of this section;
(4) Allow the student to change, at any time, his or her previously selected payment option, as long as the student provides the institution with written notice of the change within a reasonable time;
(5) Ensure that no account option is preselected; and
(6) Ensure that a student who does not make an affirmative selection is paid the full amount of the credit balance within the appropriate time-period specified in paragraph (h)(2) of this section, using a method specified in paragraph (d)(1) of this section.
(B) In describing the options under its selection process, the institution—
(1) Must present prominently as the first option, the financial account belonging to the student;
(2) Must list and identify the major features and commonly assessed fees associated with each financial account offered under the arrangements described in paragraphs (e) and (f) of this section, as well as a URL for the terms and conditions of each account. For each account, if an institution by July 1, 2017 follows the format, content, and update requirements specified by the Secretary in a notice published in the
(3) May provide, for the benefit of the student, information about available financial accounts other than those described in paragraphs (e) and (f) of this section that have deposit insurance under 12 CFR part 330, or share insurance in accordance with 12 CFR part 745.
(ii) An institution that does not offer or use any financial accounts offered under paragraph (e) or (f) of this section may make direct payments to a student's or parent's existing financial account, or issue a check or disburse cash to the student or parent without establishing the selection process described in paragraph (d)(4)(i) of this section.
(e) Tier one arrangement. (1) In a Tier one (T1) arrangement—
(i) An institution located in a State has a contract with a third-party servicer under which the servicer performs one or more of the functions associated with processing direct payments of title IV, HEA program funds on behalf of the institution; and
(ii) The institution or third-party servicer makes payments to—
(A) One or more financial accounts that are offered to students under the contract;
(B) A financial account where information about the account is communicated directly to students by the third-party servicer, or the institution on behalf of or in conjunction with the third-party servicer; or
(C) A financial account where information about the account is communicated directly to students by an entity contracting with or affiliated with the third-party servicer.
(2) Under a T1 arrangement, the institution must—
(i) Ensure that the student's consent to open the financial account is obtained before an access device, or any representation of an access device, is sent to the student, except that an institution may send the student an access device that is a card provided to the student for institutional purposes, such as a student ID card, so long as the institution or financial institution obtains the student's consent before validating the device to enable the student to access the financial account;
(ii) Ensure that any personally identifiable information about a student that is shared with the third-party servicer before the student makes a selection under paragraph (d)(4)(i) of this section—
(A) Does not include information about the student, other than directory information under 34 CFR 99.3 that is disclosed pursuant to 34 CFR 99.31(a)(11) and 99.37, beyond—
(1) A unique student identifier generated by the institution that does not include a Social Security number, in whole or in part;
(2) The disbursement amount;
(3) A password, PIN code, or other shared secret provided by the institution that is used to identify the student; or
(4) Any additional items specified by the Secretary in a notice published in the
(B) Is used solely for activities that support making direct payments to the student and not for any other purpose; and
(C) Is not shared with any other affiliate or entity except for the purpose described in paragraph (e)(2)(ii)(B) of this section;
(iii) Inform the student of the terms and conditions of the financial account, as required under paragraph (d)(4)(i)(B)(2) of this section, before the financial account is opened;
(iv) Ensure that the student—
(A) Has convenient access to the funds in the financial account through a surcharge-free national or regional Automated Teller Machine (ATM) network that has ATMs sufficient in number and housed and serviced such that title IV funds are reasonably available to students, including at the times the institution or its third-party servicer makes direct payments into the financial accounts of those students;
(B) Does not incur any cost—
(1) For opening the financial account or initially receiving an access device;
(2) Assessed by the institution, third-party servicer, or a financial institution associated with the third-party servicer, when the student conducts point-of-sale transactions in a State; and
(3) For conducting a balance inquiry or withdrawal of funds at an ATM in a State that belongs to the surcharge-free regional or national network;
(v) Ensure that—
(A) The financial account or access device is not marketed or portrayed as, or converted into, a credit card;
(B) No credit is extended or associated with the financial account, and no fee is charged to the student for any transaction or withdrawal that exceeds the balance in the financial account or on the access device, except that a transaction or withdrawal that exceeds the balance may be permitted only for an inadvertently authorized overdraft, so long as no fee is charged to the student for such inadvertently authorized overdraft; and
(C) The institution, third-party servicer, or third-party servicer's associated financial institution provides a student accountholder convenient access to title IV, HEA program funds in part and in full up to the account balance via domestic withdrawals and transfers without charge, during the student's entire period of enrollment following the date that such title IV, HEA program funds are deposited or transferred to the financial account;
(vi) No later than September 1, 2016, and then no later than 60 days following the most recently completed award year thereafter, disclose conspicuously on the institution's Web site the contract(s) establishing the T1 arrangement between the institution and third-party servicer or financial institution acting on behalf of the third-party servicer, as applicable, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities;
(vii) No later than September 1, 2017, and then no later than 60 days following the most recently completed award year thereafter, disclose conspicuously on the institution's Web site and in a format established by the Secretary—
(A) The total consideration for the most recently completed award year, monetary and non-monetary, paid or received by the parties under the terms of the contract; and
(B) For any year in which the institution's enrolled students open 30 or more financial accounts under the T1 arrangement, the number of students who had financial accounts under the contract at any time during the most recently completed award year, and the mean and median of the actual costs incurred by those account holders;
(viii) Provide to the Secretary an up-to-date URL for the contract and contract data as described in paragraph (e)(2)(vii) of this section for publication in a centralized database accessible to the public;
(ix) Ensure that the terms of the accounts offered pursuant to a T1 arrangement are not inconsistent with the best financial interests of the students opening them. The Secretary considers this requirement to be met if—
(A) The institution documents that it conducts reasonable due diligence reviews at least every two years to ascertain whether the fees imposed under the T1 arrangement are, considered as a whole, consistent with or below prevailing market rates; and
(B) All contracts for the marketing or offering of accounts pursuant to T1 arrangements to the institution's students make provision for termination of the arrangement by the institution based on complaints received from students or a determination by the institution under paragraph (e)(2)(ix)(A) of this section that the fees assessed under the T1 arrangement are not consistent with or are higher than prevailing market rates; and
(x) Take affirmative steps, by way of contractual arrangements with the third-party servicer as necessary, to ensure that requirements of this section are met with respect to all accounts offered pursuant to T1 arrangements.
(3) Except for paragraphs (e)(2)(ii)(B) and (C) of this section, the requirements of paragraph (e)(2) of this section no longer apply to a student who has an account described under paragraph (e)(1) of this section when the student is no longer enrolled at the institution and there are no pending title IV disbursements for that student, except that nothing in this paragraph (e)(3) should be construed to limit the institution's responsibility to comply with paragraph (e)(2)(vii) of this section with respect to students enrolled during the award year for which the institution is reporting. To effectuate this provision, an institution may share information related to students' enrollment status with the servicer or entity that is party to the arrangement.
(f) Tier two arrangement. (1) In a Tier two (T2) arrangement, an institution located in a State has a contract with a financial institution, or entity that offers financial accounts through a financial institution, under which financial accounts are offered and marketed directly to students enrolled at the institution.
(2) Under a T2 arrangement, an institution must—
(i) Comply with the requirements described in paragraphs (d)(4)(i), (f)(4)(i) through (iii), (vii), and (ix) through (xi), and (f)(5) of this section if it has at least one student with a title IV credit balance in each of the three most recently completed award years, but has less than the number and percentage of students with credit balances as described in paragraphs (f)(2)(ii)(A) and (B) of this section; and
(ii) Comply with the requirements specified in paragraphs (d)(4)(i), (f)(4), and (f)(5) of this section if, for the three most recently completed award years—
(A) An average of 500 or more of its students had a title IV credit balance; or
(B) An average of five percent or more of the students enrolled at the institution had a title IV credit balance. The institution calculates this percentage as follows:
(3) The Secretary considers that a financial account is marketed directly if—
(i) The institution communicates information directly to its students about the financial account and how it may be opened;
(ii) The financial account or access device is cobranded with the institution's name, logo, mascot, or other affiliation and is marketed principally to students at the institution; or
(iii) A card or tool that is provided to the student for institutional purposes, such as a student ID card, is validated, enabling the student to use the device to access a financial account.
(4) Under a T2 arrangement, the institution must—
(i) Ensure that the student's consent to open the financial account has been obtained before—
(A) The institution provides, or permits a third-party servicer to provide, any personally identifiable information about the student to the financial institution or its agents, other than directory information under 34 CFR 99.3 that is disclosed pursuant to 34 CFR 99.31(a)(11) and 99.37;
(B) An access device, or any representation of an access device, is sent to the student, except that an institution may send the student an access device that is a card provided to the student for institutional purposes, such as a student ID card, so long as the institution or financial institution obtains the student's consent before validating the device to enable the student to access the financial account;
(ii) Inform the student of the terms and conditions of the financial account as required under paragraph (d)(4)(i)(B)(2) of this section, before the financial account is opened;
(iii) No later than September 1, 2016, and then no later than 60 days following the most recently completed award year thereafter—
(A) Disclose conspicuously on the institution's Web site the contract(s) establishing the T2 arrangement between the institution and financial institution in its entirety, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities; and
(B) Provide to the Secretary an up-to-date URL for the contract for publication in a centralized database accessible to the public;
(iv) No later than September 1, 2017, and then no later than 60 days following the most recently completed award year thereafter, disclose conspicuously on the institution's Web site and in a format established by the Secretary—
(A) The total consideration for the most recently completed award year, monetary and non-monetary, paid or received by the parties under the terms of the contract; and
(B) For any year in which the institution's enrolled students open 30 or more financial accounts marketed under the T2 arrangement, the number of students who had financial accounts under the contract at any time during the most recently completed award year, and the mean and median of the actual costs incurred by those account holders;
(v) Ensure that the items under paragraph (f)(4)(iv) of this section are posted at the URL that is sent to the Secretary under paragraph (f)(4)(iii)(B) of this section for publication in a centralized database accessible to the public;
(vi) Ensure that the student accountholder can execute balance inquiries and access funds deposited in the financial accounts through surcharge-free in-network ATMs sufficient in number and housed and serviced such that the funds are reasonably available to the accountholder, including at the times the institution or its third-party servicer makes direct payments into them;
(vii) Ensure that the financial accounts are not marketed or portrayed as, or converted into, credit cards;
(viii) Ensure that the terms of the accounts offered pursuant to a T2 arrangement are not inconsistent with the best financial interests of the students opening them. The Secretary considers this requirement to be met if—
(A) The institution documents that it conducts reasonable due diligence reviews at least every two years to ascertain whether the fees imposed under the T2 arrangement are, considered as a whole, consistent with or below prevailing market rates; and
(B) All contracts for the marketing or offering of accounts pursuant to T2 arrangements to the institution's students make provision for termination of the arrangement by the institution based on complaints received from students or a determination by the institution under paragraph (f)(4)(viii)(A) of this section that the fees assessed under the T2 arrangement are not consistent with or are above prevailing market rates;
(ix) Take affirmative steps, by way of contractual arrangements with the financial institution as necessary, to ensure that requirements of this section are met with respect to all accounts offered pursuant to T2 arrangements; and
(x) Ensure students incur no cost for opening the account or initially receiving or validating an access device.
(xi) If the institution enters into an agreement for the cobranding of a financial account with the institution's name, logo, mascot, or other affiliation but maintains that the account is not marketed principally to its enrolled students and is not otherwise marketed directly within the meaning of paragraph (f)(3) of this section, the institution must retain the cobranding contract and other documentation it believes establishes that the account is not marketed directly to its enrolled students, including documentation that the cobranded financial account or access device is offered generally to the public.
(xii) Institutions falling below the thresholds described in paragraph (f)(2) of this section are encouraged to comply voluntarily with the applicable provisions of paragraphs (f)(4) and (f)(5) of this section.
(5) The requirements of paragraph (f)(4) of this section no longer apply with respect to a student who has an account described under paragraph (f)(1) of this section when the student is no longer enrolled at the institution and there are no pending title IV disbursements, except that nothing in this paragraph should be construed to limit the institution's responsibility to comply with paragraph (f)(4)(iv) of this section with respect to students enrolled during the award year for which the institution is reporting. To effectuate this provision, an institution may share information related to students' enrollment status with the financial institution or entity that is party to the arrangement.
(g) Ownership of financial accounts opened through outreach to an institution's students. Any financial account offered or marketed pursuant to an arrangement described in paragraph (e) or (f) of this section must meet the requirements of 31 CFR 210.5(a) or (b)(5), as applicable.
(h) Title IV, HEA credit balances. (1) A title IV, HEA credit balance occurs whenever the amount of title IV, HEA program funds credited to a student's ledger account for a payment period exceeds the amount assessed the student for allowable charges associated with that payment period as provided under paragraph (c) of this section.
(2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than—
(i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or
(ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period.
(i) Early disbursements. (1) Except as provided in paragraph (i)(2) of this section, the earliest an institution may disburse title IV, HEA funds to an eligible student or parent is—
(i) If the student is enrolled in a credit-hour program offered in terms that are substantially equal in length that is not a subscription-based program, 10 days before the first day of classes of a payment period;
(ii) If the student is enrolled in a credit-hour program offered in terms that are not substantially equal in length that is not a subscription-based program, a non-term credit-hour program, or a clock-hour program, the later of—
(A) Ten days before the first day of classes of a payment period; or
(B) The date the student completed the previous payment period for which he or she received title IV, HEA program funds; or
(iii) If the student is enrolled in a subscription-based program, the later of—
(A) Ten days before the first day of classes of a payment period; or
(B) The date the student completed the cumulative number of credit hours associated with the student's enrollment status in all prior terms that the student attended under the definition of a subscription-based program in § 668.2.
(2) An institution may not— or
(i) Make an early disbursement of a Direct Loan to a first-year, first-time borrower who is subject to the 30-day delayed disbursement requirements in 34 CFR 685.303(b)(5). This restriction does not apply if the institution is exempt from the 30-day delayed disbursement requirements under 34 CFR 685.303(b)(5)(i)(A) or (B); or
(ii) Compensate a student employed under the FWS program until the student earns that compensation by performing work, as provided in 34 CFR 675.16(a)(5).
(j) Late disbursements—(1) Ineligible student. For purposes of this paragraph (j), an otherwise eligible student becomes ineligible to receive title IV, HEA program funds on the date that—
(i) For a Direct Loan, the student is no longer enrolled at the institution as at least a half-time student for the period of enrollment for which the loan was intended; or
(ii) For an award under the Federal Pell Grant, FSEOG, Federal Perkins Loan, Iraq-Afghanistan Service Grant, and TEACH Grant programs, the student is no longer enrolled at the institution for the award year.
(2) Conditions for a late disbursement. Except as limited under paragraph (j)(4) of this section, a student who becomes ineligible, as described in paragraph (j)(1) of this section, qualifies for a late disbursement (and the parent qualifies for a parent Direct PLUS Loan disbursement) if, before the date the student became ineligible—
(i) The Secretary processed a SAR or ISIR with an official expected family contribution for the student for the relevant award year; and
(ii)(A) For a loan made under the Direct Loan program or for an award made under the TEACH Grant program, the institution originated the loan or award; or
(B) For an award under the Federal Perkins Loan or FSEOG programs, the institution made that award to the student.
(3) Making a late disbursement. Provided that the conditions described in paragraph (j)(2) of this section are satisfied—
(i) If the student withdrew from the institution during a payment period or period of enrollment, the institution must make any post-withdrawal disbursement required under § 668.22(a)(4) in accordance with the provisions of § 668.22(a)(5);
(ii) If the student completed the payment period or period of enrollment, the institution must provide the student or parent the choice to receive the amount of title IV, HEA program funds that the student or parent was eligible to receive while the student was enrolled at the institution. For a late disbursement in this circumstance, the institution may credit the student's ledger account as provided in paragraph (c) of this section, but must pay or offer any remaining amount to the student or parent; or
(iii) If the student did not withdraw but ceased to be enrolled as at least a half-time student, the institution may make the late disbursement of a loan under the Direct Loan program to pay for educational costs that the institution determines the student incurred for the period in which the student or parent was eligible.
(4) Limitations. (i) An institution may not make a late disbursement later than 180 days after the date the institution determines that the student withdrew, as provided in § 668.22, or for a student who did not withdraw, 180 days after the date the student otherwise became ineligible, pursuant to paragraph (j)(1) of this section.
(ii) An institution may not make a late second or subsequent disbursement of a loan under the Direct Loan program unless the student successfully completed the period of enrollment for which the loan was intended.
(iii) An institution may not make a late disbursement of a Direct Loan if the student was a first-year, first-time borrower as described in 34 CFR 685.303(b)(5) unless the student completed the first 30 days of his or her program of study. This limitation does not apply if the institution is exempt from the 30-day delayed disbursement requirements under 34 CFR 685.303(b)(5)(i)(A) or (B).
(iv) An institution may not make a late disbursement of any title IV, HEA program assistance unless it received a valid SAR or a valid ISIR for the student by the deadline date established by the Secretary in a notice published in the
(k) Retroactive payments. If an institution did not make a disbursement to an enrolled student for a payment period the student completed (for example, because of an administrative delay or because the student's ISIR was not available until a subsequent payment period), the institution may pay the student for all prior payment periods in the current award year or loan period for which the student was eligible. For Pell Grant payments under this paragraph (k), the student's enrollment status must be determined according to work already completed, as required by 34 CFR 690.76(b).
(l) Returning funds. (1) Notwithstanding any State law (such as a law that allows funds to escheat to the State), an institution must return to the Secretary any title IV, HEA program funds, except FWS program funds, that it attempts to disburse directly to a student or parent that are not received by the student or parent. For FWS program funds, the institution is required to return only the Federal portion of the payroll disbursement.
(2) If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period.
(3) If a check sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check.
(m) Provisions for books and supplies. (1) An institution must provide a way for a student who is eligible for title IV, HEA program funds to obtain or purchase, by the seventh day of a payment period, the books and supplies applicable to the payment period if, 10 days before the beginning of the payment period—
(i) The institution could disburse the title IV, HEA program funds for which the student is eligible; and
(ii) Presuming the funds were disbursed, the student would have a credit balance under paragraph (h) of this section.
(2) The amount the institution provides to the student to obtain or purchase books and supplies is the lesser of the presumed credit balance under this paragraph or the amount needed by the student, as determined by the institution.
(3) The institution must have a policy under which the student may opt out of the way the institution provides for the student to obtain or purchase books and supplies under this paragraph (m). A student who opts out under this paragraph is considered to also opt out under paragraph (c)(2)(i)(C) of this section;
(4) If a student uses the method provided by the institution to obtain or purchase books and supplies under this paragraph, the student is considered to have authorized the use of title IV, HEA funds and the institution does not need to obtain a written authorization under paragraph (c)(1)(ii) of this section and § 668.165(b) for this purpose.
(a) Notices. (1) Before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans.
(2) Except in the case of a post-withdrawal disbursement made in accordance with § 668.22(a)(5), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan, or TEACH Grant program funds, the institution must notify the student or parent of—
(i) The anticipated date and amount of the disbursement;
(ii) The student's or parent's right to cancel all or a portion of that loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan proceeds or TEACH Grant proceeds returned to the Secretary; and
(iii) The procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement.
(3) The institution must provide the notice described in paragraph (a)(2) of this section in writing—
(i) No earlier than 30 days before, and no later than 30 days after, crediting the student's ledger account at the institution, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or
(ii) No earlier than 30 days before, and no later than seven days after, crediting the student's ledger account at the institution, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section.
(4)(i) A student or parent must inform the institution if he or she wishes to cancel all or a portion of a loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement.
(ii) The institution must return the loan or TEACH Grant proceeds, cancel the loan or TEACH Grant, or do both, in accordance with program regulations provided that the institution receives a loan or TEACH Grant cancellation request—
(A) By the later of the first day of a payment period or 14 days after the date it notifies the student or parent of his or her right to cancel all or a portion of a loan or TEACH Grant, if the institution obtains affirmative confirmation from the student under paragraph (a)(6)(i) of this section; or
(B) Within 30 days of the date the institution notifies the student or parent of his or her right to cancel all or a portion of a loan, if the institution does not obtain affirmative confirmation from the student under paragraph (a)(6)(i) of this section.
(iii) If a student or parent requests a loan cancellation after the period set forth in paragraph (a)(4)(ii) of this section, the institution may return the loan or TEACH Grant proceeds, cancel the loan or TEACH Grant, or do both, in accordance with program regulations.
(5) An institution must inform the student or parent in writing regarding the outcome of any cancellation request.
(6) For purposes of this section—
(i) Affirmative confirmation is a process under which an institution obtains written confirmation of the types and amounts of title IV, HEA program loans that a student wants for the period of enrollment before the institution credits the student's account with those loan funds. The process under which the TEACH Grant program is administered is considered to be an affirmative confirmation process; and
(ii) An institution is not required by this section to return any loan or TEACH Grant proceeds that it disbursed directly to a student or parent.
(b) Student or parent authorizations. (1) If an institution obtains written authorization from a student or parent, as applicable, the institution may—
(i) Use the student's or parent's title IV, HEA program funds to pay for charges described in § 668.164(c)(1)(ii) or (c)(3)(i)(B) that are included in that authorization; and
(ii) Unless the Secretary provides funds to the institution under the reimbursement payment method or the heightened cash monitoring payment method described in § 668.162(c) or (d), respectively, hold on behalf of the student or parent any title IV, HEA program funds that would otherwise be paid directly to the student or parent as a credit balance under § 668.164(h).
(2) In obtaining the student's or parent's authorization to perform an activity described in paragraph (b)(1) of this section, an institution—
(i) May not require or coerce the student or parent to provide that authorization;
(ii) Must allow the student or parent to cancel or modify that authorization at any time; and
(iii) Must clearly explain how it will carry out that activity.
(3) A student or parent may authorize an institution to carry out the activities described in paragraph (b)(1) of this section for the period during which the student is enrolled at the institution.
(4)(i) If a student or parent modifies an authorization, the modification takes effect on the date the institution receives the modification notice.
(ii) If a student or parent cancels an authorization to use title IV, HEA program funds to pay for authorized charges under paragraph (a)(4) of this section, the institution may use title IV, HEA program funds to pay only those authorized charges incurred by the student before the institution received the notice.
(iii) If a student or parent cancels an authorization to hold title IV, HEA program funds under paragraph (b)(1)(ii) of this section, the institution must pay those funds directly to the student or parent as soon as possible but no later than 14 days after the institution receives that notice.
(5) If an institution holds excess student funds under paragraph (b)(1)(ii) of this section, the institution must—
(i) Identify the amount of funds the institution holds for each student or parent in a subsidiary ledger account designed for that purpose;
(ii) Maintain, at all times, cash in its depository account in an amount at least equal to the amount of funds the institution holds on behalf of the student or the parent; and
(iii) Notwithstanding any authorization obtained by the institution under this paragraph, pay any remaining balance on loan funds by the end of the loan period and any remaining other title IV, HEA program funds by the end of the last payment period in the award year for which they were awarded.
(a) General. The Secretary considers excess cash to be any amount of title IV, HEA program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution—
(1) Received those funds from the Secretary; or
(2) Deposited or transferred to its depository account previously disbursed title IV, HEA program funds, such as those resulting from award adjustments, recoveries, or cancellations.
(b) Excess cash tolerance. An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period.
(c) Consequences for maintaining excess cash. Upon a finding that an institution maintained excess cash for any amount or time over that allowed in the tolerance provisions in paragraph (b) of this section, the actions the Secretary may take include, but are not limited to—
(1) Requiring the institution to reimburse the Secretary for the costs the Federal government incurred in providing that excess cash to the institution; and
(2) Providing funds to the institution under the reimbursement payment method or heightened cash monitoring payment method described in § 668.162(c) and (d), respectively.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the section or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) Purpose. To begin and to continue to participate in any title IV, HEA program, an institution must demonstrate to the Secretary that it is financially responsible under the standards established in this subpart. As provided under section 498(c)(1) of the HEA, the Secretary determines whether an institution is financially responsible based on the institution's ability to—
(1) Provide the services described in its official publications and statements;
(2) Meet all of its financial obligations; and
(3) Provide the administrative resources necessary to comply with title IV, HEA program requirements.
(b) General standards of financial responsibility. Except as provided in paragraph (h) of this section, the Department considers an institution to be financially responsible if the Department determines that—
(1) The institution's Equity, Primary Reserve, and Net Income ratios yield a composite score of at least 1.5, as provided under § 668.172 and appendices A and B to this subpart;
(2) The institution has sufficient cash reserves to make required returns of unearned title IV, HEA program funds, as provided under § 668.173;
(3) The institution is able to meet all of its financial obligations and provide the administrative resources necessary to comply with title IV, HEA program requirements. An institution is not deemed able to meet its financial or administrative obligations if—
(i) It fails to make refunds under its refund policy, return title IV, HEA program funds for which it is responsible under § 668.22, or pay title IV, HEA credit balances as required under § 668.164(h)(2);
(ii) It fails to make repayments to the Department for any debt or liability arising from the institution's participation in the title IV, HEA programs;
(iii) It fails to make a payment in accordance with an existing undisputed financial obligation for more than 90 days;
(iv) It fails to satisfy payroll obligations in accordance with its published payroll schedule;
(v) It borrows funds from retirement plans or restricted funds without authorization; or
(vi) It is subject to an action or event described in paragraph (c) of this section (mandatory triggering events), or an action or event that the Department has determined to have a significant adverse effect on the financial condition of the institution under paragraph (d) of this section (discretionary triggering events); and
(4) The institution or persons affiliated with the institution are not subject to a condition of past performance under § 668.174(a) or (b).
(c) Mandatory triggering events. (1) Except for the mandatory triggers that require a recalculation of the institution's composite score, the mandatory triggers in this paragraph (c) constitute automatic failures of financial responsibility. For any mandatory triggers under this paragraph (c) that result in a recalculated composite score of less than 1.0, and for those mandatory triggers that constitute automatic failures of financial responsibility, the Department will require the institution to provide financial protection as set forth in this subpart, unless the institution demonstrates that the event is resolved or that insurance covers the loss in accordance with paragraph (f)(3) of this section. The financial protection required under this paragraph is not less than 10 percent of the total title IV, HEA funding in the prior fiscal year. If the Department requires financial protection as a result of more than one mandatory or discretionary trigger, the Department will require separate financial protection for each individual trigger. For automatic triggers, the Department will consider whether the financial protection can be released following the institution's submission of two full fiscal years of audited financial statements following the Department's notice that requires the posting of the financial protection. In making this determination, the Department considers whether the administrative or financial risk caused by the event has ceased or been resolved, including full payment of all damages, fines, penalties, liabilities, or other financial relief. For triggers that require a recalculation of the composite score, the Department will consider whether the financial protection can be released if subsequent annual submissions pass the Department's requirements for financial responsibility.
(2) The following are mandatory triggers:
(i) Legal and administrative actions. (A) For an institution or entity with a composite score of less than 1.5, other than a composite score calculated under 34 CFR 600.20(g) and § 668.176, that has entered against it a final monetary judgment or award, or enters into a monetary settlement which results from a legal proceeding, including from a lawsuit, arbitration, or mediation, whether or not the judgment, award or settlement has been paid, and as a result, the recalculated composite score for the institution or entity is less than 1.0, as determined by the Department under paragraph (e) of this section;
(B) On or after July 1, 2024, the institution or any entity whose financial statements were submitted in the prior fiscal year to meet the requirements of 34 CFR 600.20(g) or this subpart, is sued by a Federal or State authority to impose an injunction, establish fines or penalties, or to obtain financial relief such as damages, or in a qui tam action in which the United States has intervened, but only if the Federal or State action has been pending for 120 days, or a qui tam action has been pending for 120 days following intervention by the United States, and—
(1) No motion to dismiss, or its equivalent under State law has been filed within the applicable 120-day period; or
(2) If a motion to dismiss or its equivalent under State law, has been filed within the applicable 120-day period and denied, upon such denial;
(C) The Department has initiated action to recover from the institution the cost of adjudicated claims in favor of borrowers under the borrower defense to repayment provisions in 34 CFR part 685 and, the recalculated composite score for the institution or entity as a result of the adjudicated claims is less than 1.0, as determined by the Department under paragraph (e) of this section; or
(D) For an institution or entity that has submitted an application for a change in ownership under 34 CFR 600.20 that has entered against it a final monetary judgment or award, or enters into a monetary settlement which results from a legal proceeding, including from a lawsuit, arbitration, or mediation, or a monetary determination arising from an administrative proceeding described in paragraph (c)(2)(i)(B) or (C) of this section, at any point through the end of the second full fiscal year after the change in ownership has occurred, and as a result, the recalculated composite score for the institution or entity is less than 1.0, as determined by the Department under paragraph (e) of this section. This trigger applies whether the judgment, award, settlement, or monetary determination has been paid.
(ii) Withdrawal of owner's equity. (A) For a proprietary institution whose composite score is less than 1.5, or for any proprietary institution through the end of the first full fiscal year following a change in ownership, and there is a withdrawal of owner's equity by any means, including by declaring a dividend, unless the withdrawal is a transfer to an entity included in the affiliated entity group on whose basis the institution's composite score was calculated; or is the equivalent of wages in a sole proprietorship or general partnership or a required dividend or return of capital; and
(B) As a result of that withdrawal, the institution's recalculated composite score for the entity whose financial statements were submitted to meet the requirements of § 668.23 for the annual submission, or 34 CFR 600.20(g) or (h) for a change in ownership, is less than 1.0, as determined by the Department under paragraph (e) of this section.
(iii) Gainful employment. As determined annually by the Department, the institution received at least 50 percent of its title IV, HEA program funds in its most recently completed fiscal year from gainful employment (GE) programs that are “failing” under subpart S of this part.
(iv) Institutional teach-out plans or agreements. The institution is required to submit a teach-out plan or agreement, by a State, the Department or another Federal agency, an accrediting agency, or other oversight body for reasons related in whole or in part to financial concerns.
(v) [Reserved]
(vi) Publicly listed entities. For an institution that is directly or indirectly owned at least 50 percent by an entity whose securities are listed on a domestic or foreign exchange, the entity is subject to one or more of the following actions or events:
(A) SEC actions. The U.S. Securities and Exchange Commission (SEC) issues an order suspending or revoking the registration of any of the entity's securities pursuant to section 12(j) of the Securities Exchange Act of 1934 (the “Exchange Act”) or suspends trading of the entity's securities pursuant to section 12(k) of the Exchange Act.
(B) Other SEC actions. The SEC files an action against the entity in district court or issues an order instituting proceeding pursuant to section 12(j) of the Exchange Act.
(C) Exchange actions. The exchange on which the entity's securities are listed notifies the entity that it is not in compliance with the exchange's listing requirements, or its securities are delisted.
(D) SEC reports. The entity failed to file a required annual or quarterly report with the SEC within the time period prescribed for that report or by any extended due date under 17 CFR 240.12b-25.
(E) Foreign exchanges or oversight authority. The entity is subject to an event, notification, or condition by a foreign exchange or oversight authority that the Department determines is equivalent to those identified in paragraphs (c)(2)(vi)(A) through (D) of this section.
(vii) Non-Federal educational assistance funds. For its most recently completed fiscal year, a proprietary institution did not receive at least 10 percent of its revenue from sources other than Federal educational assistance, as provided under § 668.28(c). The financial protection provided under this paragraph (c)(3)(viii) will remain in place until the institution passes the 90/10 revenue requirement under § 668.28(c) for two consecutive years.
(viii) Cohort default rates. The institution's two most recent official cohort default rates are 30 percent or greater, as determined under subpart N of this part, unless—
(A) The institution files a challenge, request for adjustment, or appeal under subpart N of this part with respect to its rates for one or both of those fiscal years; and
(B) That challenge, request, or appeal remains pending, results in reducing below 30 percent the official cohort default rate for either or both of those years or precludes the rates from either or both years from resulting in a loss of eligibility or provisional certification.
(ix) [Reserved]
(x) Contributions and distributions. (A) An institution's financial statements required to be submitted under § 668.23 reflect a contribution in the last quarter of the fiscal year, and the entity that is part of the financial statements then made a distribution during the first two quarters of the next fiscal year; and
(B) The offset of such distribution against the contribution results in a recalculated composite score of less than 1.0, as determined by the Department under paragraph (e) of this section.
(xi) Creditor events. As a result of an action taken by the Department, the institution or any entity included in the financial statements submitted in the current or prior fiscal year under 34 CFR 600.20(g) or (h), § 668.23, or this subpart is subject to a default or other adverse condition under a line of credit, loan agreement, security agreement, or other financing arrangement.
(xii) Declaration of financial exigency. The institution declares a state of financial exigency to a Federal, State, Tribal, or foreign governmental agency or its accrediting agency.
(xiii) Receivership. The institution, or an owner or affiliate of the institution that has the power, by contract or ownership interest, to direct or cause the direction of the management of policies of the institution, files for a State or Federal receivership, or an equivalent proceeding under foreign law, or has entered against it an order appointing a receiver or appointing a person of similar status under foreign law.
(d) Discretionary triggering events. The Department may determine that an institution is not able to meet its financial or administrative obligations if the Department determines that a discretionary triggering event is likely to have a significant adverse effect on the financial condition of the institution. For those discretionary triggers that the Department determines will have a significant adverse effect on the financial condition of the institution, the Department will require the institution to provide financial protection as set forth in this subpart. The financial protection required under this paragraph (d) is not less than 10 percent of the total title IV, HEA funding in the prior fiscal year. If the Department requires financial protection as a result of more than one mandatory or discretionary trigger, the Department will require separate financial protection for each individual trigger. The Department will consider whether the financial protection can be released following the institution's submission of two full fiscal years of audited financial statements following the Department's notice that requires the posting of the financial protection. In making this determination, the Department considers whether the administrative or financial risk caused by the event has ceased or been resolved, including full payment of all damages, fines, penalties, liabilities, or other financial relief. The following are discretionary triggers:
(1) Accrediting agency and government agency actions. The institution's accrediting agency or a Federal, State, local, or Tribal authority places the institution on probation or issues a show-cause order or places the institution in a comparable status that poses an equivalent or greater risk to its accreditation, authorization, or eligibility.
(2) Other defaults, delinquencies, creditor events, and judgments. (i) Except as provided in paragraph (c)(2)(xi) of this section, the institution or any entity included in the financial statements submitted in the current or prior fiscal year under 34 CFR 600.20(g) or (h), § 668.23, or this subpart is subject to a default or other adverse condition under a line of credit, loan agreement, security agreement, or other financing arrangement;
(ii) Under that line of credit, loan agreement, security agreement, or other financing arrangement, a monetary or nonmonetary default or delinquency or other event occurs that allows the creditor to require or impose on the institution or any entity included in the financial statements submitted in the current or prior fiscal year under 34 CFR 600.20(g) or (h), § 668.23, or this subpart, an increase in collateral, a change in contractual obligations, an increase in interest rates or payments, or other sanctions, penalties, or fees;
(iii) Any creditor of the institution or any entity included in the financial statements submitted in the current or prior fiscal year under 34 CFR 600.20(g) or (h), § 668.23, or this subpart takes action to terminate, withdraw, limit, or suspend a loan agreement or other financing arrangement or calls due a balance on a line of credit with an outstanding balance;
(iv) The institution or any entity included in the financial statements submitted in the current or prior fiscal year under 34 CFR 600.20(g) or (h), § 668.23, or this subpart enters into a line of credit, loan agreement, security agreement, or other financing arrangement whereby the institution or entity may be subject to a default or other adverse condition as a result of any action taken by the Department; or
(v) The institution or any entity included in the financial statements submitted in the current or prior fiscal year under 34 CFR 600.20(g) or (h), § 668.23, or this subpart has a judgment awarding monetary relief entered against it that is subject to appeal or under appeal.
(3) Fluctuations in title IV volume. There is a significant fluctuation between consecutive award years, or a period of award years, in the amount of Direct Loan or Pell Grant funds, or a combination of those funds, received by the institution that cannot be accounted for by changes in those programs.
(4) High annual dropout rates. As calculated by the Department, the institution has high annual dropout rates.
(5) Interim reporting. For an institution required to provide additional financial reporting to the Department due to a failure to meet the financial responsibility standards in this subpart or due to a change in ownership, there are negative cash flows, failure of other financial ratios, cash flows that significantly miss the projections submitted to the Department, withdrawal rates that increase significantly, or other indicators of a significant change in the financial condition of the institution.
(6) Pending borrower defense claims. There are pending claims for borrower relief discharge under 34 CFR 685.400 from students or former students of the institution and the Department has formed a group process to consider claims under 34 CFR 685.402 and, if approved, those claims could be subject to recoupment.
(7) Discontinuation of programs. The institution discontinues academic programs that enroll more than 25 percent of its enrolled students who receive title IV, HEA program funds.
(8) Closure of locations. The institution closes locations that enroll more than 25 percent of its students who receive title IV, HEA program funds.
(9) State actions and citations. The institution, or one or more of its programs, is cited by a State licensing or authorizing agency for failing to meet State or agency requirements, including notice that it will withdraw or terminate the institution's licensure or authorization if the institution does not take the steps necessary to come into compliance with that requirement.
(10) Loss of institutional or program eligibility. The institution or one or more of its programs has lost eligibility to participate in another Federal educational assistance program due to an administrative action against the institution or its programs.
(11) Exchange disclosures. If an institution is directly or indirectly owned at least 50 percent by an entity whose securities are listed on a domestic or foreign exchange, the entity discloses in a public filing that it is under investigation for possible violations of State, Federal or foreign law.
(12) Actions by another Federal agency. The institution is cited and faces loss of education assistance funds from another Federal agency if it does not comply with the agency's requirements.
(13) Other teach-out plans or agreements not included in paragraph (c) of this section. The institution is required to submit a teach-out plan or agreement, including programmatic teach-outs, by a State, the Department or another Federal agency, an accrediting agency, or other oversight body.
(14) Other events or conditions. Any other event or condition that the Department learns about from the institution or other parties, and the Department determines that the event or condition is likely to have a significant adverse effect on the financial condition of the institution.
(e) Recalculating the composite score. When a recalculation of an institution's most recent composite score is required by the mandatory triggering events described in paragraph (c) of this section, the Department makes the recalculation as follows:
(1) For a proprietary institution, debts, liabilities, and losses (including cumulative debts, liabilities, and losses for all triggering events) since the end of the prior fiscal year incurred by the entity whose financial statements were submitted in the prior fiscal year to meet the requirements of § 668.23 or this subpart, and debts, liabilities, and losses (including cumulative debts, liabilities, and losses for all triggering events) through the end of the first full fiscal year following a change in ownership incurred by the entity whose financial statements were submitted for 34 CFR 600.20(g) or (h), will be adjusted as follows:
(i) For the primary reserve ratio, increasing expenses and decreasing adjusted equity by that amount.
(ii) For the equity ratio, decreasing modified equity by that amount.
(iii) For the net income ratio, decreasing income before taxes by that amount.
(2) For a nonprofit institution, debts, liabilities, and losses (including cumulative debts, liabilities, and losses for all triggering events) since the end of the prior fiscal year incurred by the entity whose financial statements were submitted in the prior fiscal year to meet the requirements of § 668.23 or this subpart, and debts, liabilities, and losses (including cumulative debts, liabilities, and losses for all triggering events) through the end of the first full fiscal year following a change in ownership incurred by the entity whose financial statements were submitted for 34 CFR 600.20(g) or (h), will be adjusted as follows:
(i) For the primary reserve ratio, increasing expenses and decreasing expendable net assets by that amount.
(ii) For the equity ratio, decreasing modified net assets by that amount.
(iii) For the net income ratio, decreasing change in net assets without donor restrictions by that amount.
(3) For a proprietary institution, the withdrawal of equity (including cumulative withdrawals of equity) since the end of the prior fiscal year from the entity whose financial statements were submitted in the prior fiscal year to meet the requirements of § 668.23 or this subpart, and the withdrawal of equity (including cumulative withdrawals of equity) through the end of the first full fiscal year following a change in ownership from the entity whose financial statements were submitted for 34 CFR 600.20(g) or (h), will be adjusted as follows:
(i) For the primary reserve ratio, decreasing adjusted equity by that amount.
(ii) For the equity ratio, decreasing modified equity and modified total assets by that amount.
(4) For a proprietary institution, a contribution and distribution in the entity whose financial statements were submitted in the prior fiscal year to meet the requirements of § 668.23, this subpart, or 34 CFR 600.20(g) will be adjusted as follows:
(i) For the primary reserve ratio, decreasing adjusted equity by the amount of the distribution.
(ii) For the equity ratio, decreasing modified equity by the amount of the distribution.
(f) Reporting requirements. (1) In accordance with procedures established by the Department, an institution must timely notify the Department of the following actions or events:
(i) For a monetary judgment, award, or settlement incurred under paragraph (c)(2)(i)(A) of this section, no later than 21 days after either the date of written notification to the institution or entity of the monetary judgment or award, or the execution of the settlement agreement by the institution or entity.
(ii) For a lawsuit described in paragraph (c)(2)(i)(B) of this section, no later than 21 days after the institution or entity is served with the complaint, and an updated notice must be provided 21 days after the suit has been pending for 120 days.
(iii) [Reserved]
(iv) For a withdrawal of owner's equity described in paragraph (c)(2)(ii) of this section—
(A) For a capital distribution that is the equivalent of wages in a sole proprietorship or general partnership, no later than 21 days after the date the Department notifies the institution that its composite score is less than 1.5. In response to that notice, the institution must report the total amount of the wage-equivalent distributions it made during its prior fiscal year and any distributions that were made to pay any taxes related to the operation of the institution. During its current fiscal year and the first six months of its subsequent fiscal year (18-month period), the institution is not required to report any distributions to the Department, provided that the institution does not make wage-equivalent distributions that exceed 150 percent of the total amount of wage-equivalent distributions it made during its prior fiscal year, less any distributions that were made to pay any taxes related to the operation of the institution. However, if the institution makes wage-equivalent distributions that exceed 150 percent of the total amount of wage-equivalent distributions it made during its prior fiscal year less any distributions that were made to pay any taxes related to the operation of the institution at any time during the 18-month period, it must report each of those distributions no later than 21 days after they are made, and the Department recalculates the institution's composite score based on the cumulative amount of the distributions made at that time;
(B) For a distribution of dividends or return of capital, no later than 21 days after the dividends are declared or the amount of return of capital is approved; or
(C) For a related party receivable or other assets, no later than 21 days after that receivable/other assets are booked or occur.
(v) For a contribution and distribution described in paragraph (c)(2)(x) of this section, no later than 21 days after the distribution.
(vi) For the provisions relating to a publicly listed entity under paragraph (c)(2)(vi) or (d)(11) of this section, no later than 21 days after the date that such event occurs.
(vii) For any action by an accrediting agency, Federal, State, local, or Tribal authority that is either a mandatory or discretionary trigger, no later than 21 days after the date on which the institution is notified of the action.
(viii) For the creditor events described in paragraph (c)(2)(xi) of this section, no later than 21 days after the date on which the institution is notified of the action by its creditor.
(ix) For the other defaults, delinquencies, or creditor events described in paragraphs (d)(2)(i), (ii), (iii), and (iv) of this section, no later than 21 days after the event occurs, with an update no later than 21 days after the creditor waives the violation, or the creditor imposes sanctions or penalties, including sanctions or penalties imposed in exchange for or as a result of granting the waiver. For a monetary judgment subject to appeal or under appeal described in paragraph (d)(2)(v) of this section, no later than 21 days after the court enters the judgment, with an update no later than 21 days after the appeal is filed or the period for appeal expires without a notice of appeal being filed. If an appeal is filed, no later than 21 days after the decision on the appeal is issued.
(x) For the non-Federal educational assistance funds provision in paragraph (c)(2)(vii) of this section, no later than 45 days after the end of the institution's fiscal year, as provided in § 668.28(c)(3).
(xi) For an institution or entity that has submitted an application for a change in ownership under 34 CFR 600.20 that is required to pay a debt or incurs a liability from a settlement, arbitration proceeding, final judgment in a judicial proceeding, or a determination arising from an administrative proceeding described in paragraph (c)(2)(i)(B) or (C) of this section, the institution must report this no later than 21 days after the action. The reporting requirement in this paragraph (f)(1)(xi) is applicable to any action described in this section occurring through the end of the second full fiscal year after the change in ownership has occurred.
(xii) For a discontinuation of academic programs described in paragraph (d)(7) of this section, no later than 21 days after the discontinuation of programs.
(xiii) For a failure to meet any of the standards in paragraph (b) of this section, no later than 21 days after the institution ceases to meet the standard.
(xiv) For a declaration of financial exigency, no later than 21 days after the institution communicates its declaration to a Federal, State, Tribal, or foreign governmental agency or its accrediting agency.
(xv) If the institution, or an owner or affiliate of the institution that has the power, by contract or ownership interest, to direct or cause the direction of the management of policies of the institution, files for a State or Federal receivership, or an equivalent proceeding under foreign law, or has entered against it an order appointing a receiver or appointing a person of similar status under foreign law, no later than 21 days after either the filing for receivership or the order appointing a receiver or appointing a person of similar status under foreign law, as applicable.
(xvi) The institution closes locations that enroll more than 25 percent of its students no later than 21 days after the closure that meets or exceeds the thresholds in this paragraph (f)(1)(xvi).
(xvii) If the institution is directly or indirectly owned at least 50 percent by an entity whose securities are listed on a domestic or foreign exchange, and the entity discloses in a public filing that it is under investigation for possible violations of State, Federal, or foreign law, no later than 21 days after the public filing.
(xviii) For any other event or condition that is likely to have a significant adverse condition on the financial condition of the institution, no later than 21 days after the event or condition occurs.
(2) The Department may take an administrative action under paragraph (i) of this section against an institution, or determine that the institution is not financially responsible, if it fails to provide timely notice to the Department as provided under paragraph (f)(1) of this section, or fails to respond, within the timeframe specified by the Department, to any determination made, or request for information, by the Department under paragraph (f)(3) of this section.
(3)(i) In its timely notice to the Department under this paragraph (f), or in its response to a determination by the Department that the institution is not financially responsible because of a triggering event under paragraph (c) or (d) of this section that does not have a notice requirement set forth in this paragraph (f), in accordance with procedures established by the Department, the institution may—
(A) Show that the creditor waived a violation of a loan agreement under paragraph (d)(2) of this section. However, if the creditor imposes additional constraints or requirements as a condition of waiving the violation, or imposes penalties or requirements under paragraph (d)(2)(ii) of this section, the institution must identify and describe those penalties, constraints, or requirements and demonstrate that complying with those actions will not significantly affect the institution's ability to meet its financial obligations;
(B) Show that the triggering event has been resolved, or for obligations resulting from monetary judgments, awards, settlements, or administrative determinations that arise under paragraph (c)(2)(i)(A) or (D) of this section, that the institution can demonstrate that insurance will cover all of the obligation, or for purposes of recalculation under paragraph (e) of this section, that insurance will cover a portion of the obligation; or
(C) Explain or provide information about the conditions or circumstances that precipitated a triggering event under paragraph (d) of this section that demonstrates that the triggering event has not had, or will not have, a significant adverse effect on the financial condition of the institution.
(ii) The Department will consider the information provided by the institution in its notification of the triggering event in determining whether to issue a determination that the institution is not financially responsible.
(g) Public institutions. (1) The Department considers a domestic public institution to be financially responsible if the institution—
(i) Notifies the Department that it is designated as a public institution by the State, local, or municipal government entity, Tribal authority, or other government entity that has the legal authority to make that designation; and
(ii) Provides a letter or other documentation acceptable to the Department and signed by an official of that government entity confirming that the institution is a public institution and is backed by the full faith and credit of the government entity in the following circumstances—
(A) Before the institution's initial certification as a public institution;
(B) Upon a change in ownership and request to be recognized as a public institution; or
(C) Upon request by the Department, which could include during the recertification of a public institution;
(iii) Is not subject to a condition of past performance under § 668.174; and
(iv) Is not subject to an automatic mandatory triggering event as described in paragraph (c) of this section or a discretionary triggering event as described in paragraph (d) of this section that the Department determines will have a significant adverse effect on the financial condition of the institution.
(2) The Department considers a foreign public institution to be financially responsible if the institution—
(i) Notifies the Department that it is designated as a public institution by the country or other government entity that has the legal authority to make that designation; and
(ii) Provides a letter or other documentation acceptable to the Department and signed by an official of that country or other government entity confirming that the institution is a public institution and is backed by the full faith and credit of the country or other government entity. This letter or other documentation must be submitted before the institution's initial certification, upon a change in ownership and request to be recognized as a public institution, and for the first re-certification of a public institution after July 1, 2024. Thereafter, the letter or other documentation must be submitted in the following circumstances—
(A) When the institution submits an application for re-certification following any period of provisional certification;
(B) Within 10 business days following a change in the governmental status of the institution whereby the institution is no longer backed by the full faith and credit of the government entity; or
(C) Upon request by the Department;
(iii) Is not subject to a condition of past performance under § 668.174; and
(iv) Is not subject to an automatic mandatory triggering event as described in paragraph (c) of this section or a discretionary triggering event as described in paragraph (d) of this section that the Department determines will have a significant adverse effect on the financial condition of the institution.
(h) Audit opinions and disclosures. Even if an institution satisfies all of the general standards of financial responsibility under paragraph (b) of this section, the Department does not consider the institution to be financially responsible if the institution's audited financial statements—
(1) Include an opinion expressed by the auditor that was an adverse, qualified, or disclaimed opinion, unless the Department determines that the adverse, qualified, or disclaimed opinion does not have a significant bearing on the institution's financial condition; or
(2) Include a disclosure in the notes to the institution's or entity's audited financial statements about the institution's or entity's diminished liquidity, ability to continue operations, or ability to continue as a going concern, unless the Department determines that the diminished liquidity, ability to continue operations, or ability to continue as a going concern has been alleviated. The Department may conclude that diminished liquidity, ability to continue operations, or ability to continue as a going concern has not been alleviated even if the disclosure provides that those concerns have been alleviated.
(i) Administrative actions. If the Department determines that an institution is not financially responsible under the standards and provisions of this section or under an alternative standard in § 668.175, or the institution does not submit its financial statements and compliance audits by the date and in the manner required under § 668.23, the Department may—
(1) Initiate an action under subpart G of this part to fine the institution, or limit, suspend, or terminate the institution's participation in the title IV, HEA programs;
(2) For an institution that is provisionally certified, take an action against the institution under the procedures established in § 668.13(d); or
(3) Deny the institution's application for certification or recertification to participate in the title IV, HEA programs.
(a) Appendices A and B, ratio methodology. As provided under appendices A and B to this subpart, the Secretary determines an institution's composite score by—
(1) Calculating the result of its Primary Reserve, Equity, and Net Income ratios, as described under paragraph (b) of this section;
(2) Calculating the strength factor score for each of those ratios by using the corresponding algorithm;
(3) Calculating the weighted score for each ratio by multiplying the strength factor score by its corresponding weighting percentage;
(4) Summing the resulting weighted scores to arrive at the composite score; and
(5) Rounding the composite score to one digit after the decimal point.
(b) Ratios. The Primary Reserve, Equity, and Net Income ratios are defined under appendix A to this subpart for proprietary institutions, and under appendix B to this subpart for private non-profit institutions.
(c) Excluded items. In calculating an institution's ratios, the Secretary—
(1) Generally excludes income or losses from discontinued operations under Accounting Standards Codification 205, prior period adjustments, the cumulative effect of changes in accounting principles, and the effect of changes in accounting estimates;
(2) May include or exclude the effects of questionable accounting treatments, such as excessive capitalization of marketing costs;
(3) Excludes all unsecured or uncollateralized related-party receivables;
(4) Excludes all intangible assets defined as intangible in accordance with generally accepted accounting principles; and
(5) Excludes from the ratio calculations Federal funds provided to an institution by the Secretary under program authorized by the HEA only if—
(i) In the notes to the institution's audited financial statement, or as a separate attestation, the auditor discloses by name and CFDA number, the amount of HEA program funds reported as expenses in the Statement of Activities for the fiscal year covered by that audit or attestation; and
(ii) The institution's composite score, as determined by the Secretary, is less than 1.5 before the reported expenses arising from those HEA funds are excluded from the ratio calculations.
(d) Accounting for operating leases. The Secretary accounts for operating leases by—
(1) Applying FASB Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) to all leases the institution has entered into on or after December 15, 2018 (post-implementation operating/financing leases), as specified in the Supplemental Schedule (see Section 2 of Appendix A to this subpart and Section 2 of Appendix B to this subpart);
(2) Treating leases the institution entered into prior to December 15, 2018 (pre-implementation operating/financing leases), as they would have been treated prior to the requirements of ASU 2016-02, as long as the institution provides information about those leases on the Supplemental Schedule and a note in, or on the face of, its audited financial statements; and
(3) Accounting for any adjustments, such as any options exercised by the institution to extend the life of a pre-implementation operating/finance lease, as post-implementation operating/finance leases.
(e) Incorporation by reference. The material listed in this paragraph (e) is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. This incorporation by reference (IBR) material is available for inspection at U.S. Department of Education and at the National Archives and Records Administration (NARA). Contact U.S. Department of Education at: Office of the General Counsel, 400 Maryland Avenue SW, Room 2C-136, Washington DC 20202; phone: (202) 401-6000; https://www2.ed.gov/about/offices/list/ogc/index.html?src=oc. For information on the availability of this material at NARA, contact the Office of the Federal Register—email: fr.inspection@nara.gov; website: www.archives.gov/federal-register/cfr/ibr-locations.html. The material may be obtained from the Financial Accounting Standards Board (FASB), 401 Merritt 7, P.O. Box 5116, Norwalk, CT 06856-5116; (203) 847-0700; www.fasb.org.
(1) Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), (February 2016).
(2) Accounting Standards Codification (ASC) 205, Presentation of Financial Statements, Updated through August 9, 2021 (with taxonomy revisions as of January 26, 2022).
(a) General. The Secretary considers that an institution has sufficient cash reserves, as required under § 668.171(b)(2), if the institution—
(1) Satisfies the requirements for a public institution under § 668.171(c)(1);
(2) Is located in a State that has a tuition recovery fund approved by the Secretary and the institution contributes to that fund; or
(3) Returns, in a timely manner as described in paragraph (b) of this section, unearned title IV, HEA program funds that it is responsible for returning under the provisions of § 668.22 for a student that withdrew from the institution.
(b) Timely return of title IV, HEA program funds. In accordance with procedures established by the Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds timely if—
(1) The institution deposits or transfers the funds into the bank account it maintains under § 668.163 no later than 45 days after the date it determines that the student withdrew;
(2) The institution initiates an electronic funds transfer (EFT) no later than 45 days after the date it determines that the student withdrew;
(3) The institution initiates an electronic transaction, no later than 45 days after the date it determines that the student withdrew, that informs a FFEL lender to adjust the borrower's loan account for the amount returned; or
(4) The institution issues a check no later than 45 days after the date it determines that the student withdrew. An institution does not satisfy this requirement if—
(i) The institution's records show that the check was issued more than 45 days after the date the institution determined that the student withdrew; or
(ii) The date on the cancelled check shows that the bank used by the Secretary or FFEL Program lender endorsed that check more than 60 days after the date the institution determined that the student withdrew.
(c) Compliance thresholds. (1) An institution does not comply with the reserve standard under § 668.173(a)(3) if, in a compliance audit conducted under § 668.23, an audit conducted by the Office of the Inspector General, or a program review conducted by the Department or guaranty agency, the auditor or reviewer finds—
(i) In the sample of student records audited or reviewed that the institution did not return unearned title IV, HEA program funds within the timeframes described in paragraph (b) of this section for 5% or more of the students in the sample. (For purposes of determining this percentage, the sample includes only students for whom the institution was required to return unearned funds during its most recently completed fiscal year.); or
(ii) A material weakness or reportable condition in the institution's report on internal controls relating to the return of unearned title IV, HEA program funds.
(2) The Secretary does not consider an institution to be out of compliance with the reserve standard under § 668.173(a)(3) if the institution is cited in any audit or review report because it did not return unearned funds in a timely manner for one or two students, or for less than 5% of the students in the sample referred to in paragraph (c)(1)(i) of this section.
(d) Letter of credit. (1) Except as provided under paragraph (e)(1) of this section, an institution that can satisfy the reserve standard only under paragraph (a)(3) of this section, must submit an irrevocable letter of credit acceptable and payable to the Secretary if a finding in an audit or review shows that the institution exceeded the compliance thresholds in paragraph (c) of this section for either of its two most recently completed fiscal years.
(2) The amount of the letter of credit required under paragraph (d)(1) of this section is 25 percent of the total amount of unearned title IV, HEA program funds that the institution was required to return under § 668.22 during the institution's most recently completed fiscal year.
(3) An institution that is subject to paragraph (d)(1) of this section must submit to the Secretary a letter of credit no later than 30 days after the earlier of the date that—
(i) The institution is required to submit its compliance audit;
(ii) The Office of the Inspector General issues a final audit report;
(iii) The designated department official issues a final program review determination;
(iv) The Department issues a preliminary program review report or draft audit report, or a guaranty agency issues a preliminary report showing that the institution did not return unearned funds for more than 10% of the sampled students; or
(v) The Secretary sends a written notice to the institution requesting the letter of credit that explains why the institution has failed to return unearned funds in a timely manner.
(e) Exceptions. With regard to the letter of credit described in paragraph (d) of this section—
(1) An institution does not have to submit the letter of credit if the amount calculated under paragraph (d)(2) of this section is less than $5,000 and the institution can demonstrate that it has cash reserves of at least $5,000 available at all times.
(2) An institution may delay submitting the letter of credit and request the Secretary to reconsider a finding made in its most recent audit or review report that it failed to return unearned title IV, HEA program funds in a timely manner if—
(i)(A) The institution submits documents showing that the unearned title IV, HEA program funds were not returned in a timely manner solely because of exceptional circumstances beyond the institution's control and that the institution would not have exceeded the compliance thresholds under paragraph (c)(1) of this section had it not been for these exceptional circumstances; or
(B) The institution submits documents showing that it did not fail to make timely refunds as provided under paragraphs (b) and (c) of this section; and
(ii) The institution's request, along with the documents described in paragraph (e)(2)(i) of this section, is submitted to the Secretary no later than the date it would otherwise be required to submit a letter of credit under paragraph (d)(3).
(3) If the Secretary denies the institution's request under paragraph (e)(2) of this section, the Secretary notifies the institution of the date it must submit the letter of credit.
(f) State tuition recovery funds. In determining whether to approve a State's tuition recovery fund, the Secretary considers the extent to which that fund—
(1) Provides refunds to both in-State and out-of-State students;
(2) Allocates all refunds in accordance with the order required under § 668.22; and
(3) Provides a reliable mechanism for the State to replenish the fund should any claims arise that deplete the fund's assets.
(a) Past performance of an institution. An institution is not financially responsible if the institution—
(1) Has been limited, suspended, terminated, or entered into a settlement agreement to resolve a limitation, suspension, or termination action initiated by the Secretary or a guaranty agency, as defined in 34 CFR part 682, within the preceding five years;
(2) In either of its two most recently submitted compliance audits had a final audit determination or in a Departmentally issued report, including a final program review determination report, issued in its current fiscal year or either of its preceding two fiscal years, had a program review finding that resulted in the institution's being required to repay an amount greater than five percent of the funds that the institution received under the title IV, HEA programs during the year covered by that audit or program review;
(3) Has been cited during the preceding five years for failure to submit in a timely fashion acceptable compliance and financial statement audits required under this part, or acceptable audit reports required under the individual title IV, HEA program regulations; or
(4) Has failed to resolve satisfactorily any compliance problems identified in audit or program review reports based upon a final decision of the Secretary issued pursuant to subpart G or H of this part.
(b) Past performance of persons or entities affiliated with an institution. (1)(i) Except as provided in paragraph (b)(2) of this section, an institution is not financially responsible if a person or entity who exercises substantial ownership or control over the institution, as described under 34 CFR 600.31, or any member or members of that person's family alone or together—
(A) Exercises or exercised substantial ownership or control over another institution or a third-party servicer that owes a liability for a violation of a title IV, HEA program requirement;
(B) Exercised substantial ownership or control over another institution that closed without a viable teach-out plan or agreement approved by the institution's accrediting agency and faithfully executed by the institution; or
(C) Owes a liability for a violation of a title IV, HEA program requirement; and
(ii) That person, entity, family member, institution, or servicer does not demonstrate that the liability is being repaid in accordance with an agreement with the Secretary.
(2) The Secretary may determine that an institution is financially responsible, even if the institution is not otherwise financially responsible under paragraph (b)(1) of this section, if—
(i) The institution notifies the Department, within the time permitted and as provided under 34 CFR 600.21, that the person or entity referenced in paragraph (b)(1) of this section exercises substantial control over the institution; and
(ii) The person or entity referenced in paragraph (b)(1) of this section repaid to the Secretary a portion of the applicable liability, and the portion repaid equals or exceeds the greater of—
(A) The total percentage of the ownership interest held in the institution or third-party servicer that owes the liability by that entity, person or any member or members of that person's family, either alone or in combination with one another;
(B) The total percentage of the ownership interest held in the institution or servicer that owes the liability that the entity, person or any member or members of the person's family, either alone or in combination with one another, represents or represented under a voting trust, power of attorney, proxy, or similar agreement; or
(C) Twenty-five percent, if the person or any member of the person's family is or was a member of the board of directors, chief executive officer, or other executive officer of the institution or servicer that owes the liability, or of an entity holding at least a 25 percent ownership interest in the institution that owes the liability; or
(iii) The applicable liability described in paragraph (b)(1) of this section is currently being repaid in accordance with a written agreement with the Secretary; or
(iv) The institution demonstrates to the satisfaction of the Secretary why—
(A) The person or entity who exercises substantial control over the institution should nevertheless be considered to lack that control; or
(B) The person or entity who exercises substantial control over the institution and each member of that person's family nevertheless does not or did not exercise substantial control over the institution or servicer that owes the liability.
(3) An institution is not financially responsible if an owner who exercises substantial control, or the owner's spouse, has been in default on a Federal student loan, including parent PLUS loans, in the preceding five years, unless—
(i) The defaulted Federal student loan has been fully repaid and five years have elapsed since the repayment in full;
(ii) The defaulted Federal student loan has been approved for, and the borrower is in compliance with, a rehabilitation agreement and has been current for five consecutive years; or
(iii) The defaulted Federal student loan has been discharged, canceled, or forgiven by the Department.
(c) Ownership interest. (1) An ownership interest is defined in 34 CFR 600.31(b).
(2) The term “ownership interest” does not include any share of the ownership or control of, or any right to share in the proceeds of the operation of a profit-sharing plan, provided that all employees are covered by the plan.
(3) The Secretary generally considers a person or entity to exercise substantial control over an institution or third-party servicer if the person or entity—
(i) Directly or indirectly holds at least a 25 percent ownership interest in the institution or servicer;
(ii) Holds, together with other members of his or her family, at least a 25 percent ownership interest in the institution or servicer;
(iii) Represents, either alone or together with other persons under a voting trust, power of attorney, proxy, or similar agreement, one or more persons who hold, either individually or in combination with the other persons represented or the person representing them, at least a 25 percent ownership in the institution or servicer; or
(iv) Is a member of the board of directors, a general partner, the chief executive officer, or other executive officer of—
(A) The institution or servicer; or
(B) An entity that holds at least a 25 percent ownership interest in the institution or servicer.
(4) “Family member” is defined in § 600.21(f) of this chapter.
(a) General. An institution that is not financially responsible under the general standards and provisions in § 668.171, may begin or continue to participate in the title IV, HEA programs by qualifying under an alternate standard set forth in this section.
(b) Letter of credit or cash escrow alternative for new institutions. A new institution that is not financially responsible solely because the Department determines that its composite score is less than 1.5, qualifies as a financially responsible institution by submitting an irrevocable letter of credit that is acceptable and payable to the Department, or providing other financial protection described under paragraph (h)(2)(i) of this section, for an amount equal to at least one-half of the amount of title IV, HEA program funds that the Department determines the institution will receive during its initial year of participation. A new institution is an institution that seeks to participate for the first time in the title IV, HEA programs.
(c) Financial protection alternative for participating institutions. A participating institution that is not financially responsible, either because it does not satisfy one or more of the standards of financial responsibility under § 668.171(b), (c), or (d), or because of an audit opinion or disclosure about the institution's liquidity, ability to continue operations, or ability to continue as a going concern described under § 668.171(h), qualifies as a financially responsible institution by submitting an irrevocable letter of credit that is acceptable and payable to the Department, or providing other financial protection described under paragraph (h)(2)(i) of this section, for an amount determined by the Department that is not less than one-half of the title IV, HEA program funds received by the institution during its most recently completed fiscal year, except that this paragraph (c) does not apply to a public institution. For purposes of a failure under § 668.171(b)(2) or (3), the institution must also remedy the issue(s) that gave rise to the failure to the Department's satisfaction.
(d) Zone alternative. (1) A participating institution that is not financially responsible solely because the Department determines that its composite score under § 668.172 is less than 1.5 may participate in the title IV, HEA programs as a financially responsible institution for no more than three consecutive years, beginning with the year in which the Department determines that the institution qualifies under the alternative in this paragraph (d).
(i)(A) An institution qualifies initially under this alternative if, based on the institution's audited financial statements for its most recently completed fiscal year, the Department determines that its composite score is in the range from 1.0 to 1.4; and
(B) An institution continues to qualify under this alternative if, based on the institution's audited financial statements for each of its subsequent two fiscal years, the Department determines that the institution's composite score is in the range from 1.0 to 1.4.
(ii) An institution that qualified under this alternative for three consecutive years, or for one of those years, may not seek to qualify again under this alternative until the year after the institution achieves a composite score of at least 1.5, as determined by the Department.
(2) Under the zone alternative, the Department—
(i) Requires the institution to make disbursements to eligible students and parents, and to otherwise comply with the provisions, under either the heightened cash monitoring or reimbursement payment method described in § 668.162;
(ii) Requires the institution to provide timely information regarding any of the following oversight and financial events—
(A) Any event that causes the institution, or related entity as defined in Accounting Standards Codification (ASC) 850, to realize any liability that was noted as a contingent liability in the institution's or related entity's most recent audited financial statements; or
(B) In accordance with Accounting Standards Update (ASU) No. 2015-01 and ASC 225 and taking into account the environment in which the entity operates, any losses that are unusual in nature, meaning the underlying event or transaction should possess a high degree of abnormality and be of a type clearly unrelated to, or only incidentally related to, the ordinary and typical activities of the entity, taking into account the environment in which the entity operates; infrequently occur, meaning the underlying event or transaction should be of a type that would not reasonably be expected to recur in the foreseeable future; or both;
(iii) May require the institution to submit its financial statement and compliance audits earlier than the time specified under § 668.23(a)(4); and
(iv) May require the institution to provide information about its current operations and future plans.
(3) Under the zone alternative, the institution must—
(i) For any oversight or financial event described in paragraph (d)(2)(ii) of this section for which the institution is required to provide information, in accordance with procedures established by the Department, notify the Department no later than 10 days after that event occur; and
(ii) As part of its compliance audit, require its auditor to express an opinion on the institution's compliance with the requirements under the zone alternative in this paragraph (d), including the institution's administration of the payment method under which the institution received and disbursed title IV, HEA program funds.
(4) If an institution fails to comply with the requirements under paragraph (d)(2) or (3) of this section, the Department may determine that the institution no longer qualifies under the alternative in this paragraph (d).
(e) [Reserved]
(f) Provisional certification alternative. (1) The Department may permit an institution that is not financially responsible to participate in the title IV, HEA programs under a provisional certification for no more than three consecutive years if—
(i) The institution is not financially responsible because it does not satisfy the general standards under § 668.171(b), its recalculated composite score under § 668.171(e) is less than 1.0, it is subject to an action or event under § 668.171(c), or an action or event under paragraph (d) of this section has a significant adverse effect on the institution as determined by the Department, or because of an audit opinion or going concern disclosure described in § 668.171(h); or
(ii) The institution is not financially responsible because of a condition of past performance, as provided under § 668.174(a), and the institution demonstrates to the Department that it has satisfied or resolved that condition; and
(2) Under the alternative in this paragraph (f), the institution must—
(i) Provide to the Department an irrevocable letter of credit that is acceptable and payable to the Department, or provide other financial protection described under paragraph (h) of this section, for an amount determined by the Department that is not less than 10 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year, except that this paragraph (f)(2)(i) does not apply to a public institution that the Department determines is backed by the full faith and credit of the State or equivalent governmental entity;
(ii) Remedy the issue(s) that gave rise to its failure under § 668.171(b)(2) or (3) to the Department's satisfaction; and
(iii) Comply with the provisions under the zone alternative, as provided under paragraph (d)(2) and (3) of this section.
(3) If at the end of the period for which the Secretary provisionally certified the institution, the institution is still not financially responsible, the Secretary may again permit the institution to participate under a provisional certification but the Secretary—
(i) May require the institution, or one or more persons or entities that exercise substantial control over the institution, as determined under § 668.174(b)(1) and (c), or both, to provide to the Secretary financial guarantees for an amount determined by the Secretary to be sufficient to satisfy any potential liabilities that may arise from the institution's participation in the title IV, HEA programs;
(ii) May require one or more of the persons or entities that exercise substantial control over the institution, as determined under § 668.174(b)(1) and (c), to be jointly or severally liable for any liabilities that may arise from the institution's participation in the title IV, HEA programs; and
(iii) May require the institution to provide, or continue to provide, the financial protection resulting from an event described in § 668.171(c) and (d) until the institution meets the requirements of paragraph (f)(4) of this section.
(4) The Secretary maintains the full amount of financial protection provided by the institution under this section until the Secretary first determines that the institution has—
(i) A composite score of 1.0 or greater based on a review of the audited financial statements for the fiscal year in which all liabilities from any event described in § 668.171(c) or (d) on which financial protection was required; or
(ii) A recalculated composite score of 1.0 or greater, and any event or condition described in § 668.171(c) or (d) has ceased to exist.
(g) Provisional certification alternative for persons or entities owing liabilities. (1) The Secretary may permit an institution that is not financially responsible because the persons or entities that exercise substantial control over the institution owe a liability for a violation of a title IV, HEA program requirement, to participate in the title IV, HEA programs under a provisional certification only if—
(i)(A) The persons or entities that exercise substantial control, as determined under § 668.174(b)(1) and (c), repay or enter into an agreement with the Secretary to repay the applicable portion of that liability, as provided under § 668.174(b)(2)(ii); or
(B) The institution assumes that liability, and repays or enters into an agreement with the Secretary to repay that liability;
(ii) The institution satisfies the general standards and provisions of financial responsibility under § 668.171(b) and (d)(1), except that institution must demonstrate that it was current on its debt payments and has met all of its financial obligations, as required under § 668.171 (b)(3) and (b)(4), for its two most recent fiscal years; and
(iii) The institution submits to the Secretary an irrevocable letter of credit that is acceptable and payable to the Secretary, for an amount determined by the Secretary that is not less than 10 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year.
(2) Under this alternative, the Secretary—
(i) Requires the institution to comply with the provisions under the zone alternative, as provided under paragraph (d) (2) and (3) of this section;
(ii) May require the institution, or one or more persons or entities that exercise substantial control over the institution, or both, to submit to the Secretary financial guarantees for an amount determined by the Secretary to be sufficient to satisfy any potential liabilities that may arise from the institution's participation in the title IV, HEA programs; and
(iii) May require one or more of the persons or entities that exercise substantial control over the institution to be jointly or severally liable for any liabilities that may arise from the institution's participation in the title IV, HEA programs.
(h) Financial protection. (1) In accordance with procedures established by the Secretary or as part of an agreement with an institution under this section, the Secretary may use the funds from that financial protection to satisfy the debts, liabilities, or reimbursable costs, including costs associated with teach-outs as allowed by the Department, owed to the Secretary that are not otherwise paid directly by the institution.
(2) In lieu of submitting a letter of credit for the amount required by the Secretary under this section, the Secretary may permit an institution to—
(i) Provide the amount required in the form of other surety or financial protection that the Secretary specifies in a document published in the
(ii) Provide cash for the amount required; or
(iii) Enter into an arrangement under which the Secretary offsets the amount of title IV, HEA program funds that an institution has earned in a manner that ensures that, no later than the end of a six to twelve-month period selected by the Secretary, the amount offset equals the amount of financial protection the institution is required to provide. The Secretary provides to the institution any funds not used for the purposes described in paragraph (h)(1) of this section during the period covered by the agreement, or provides the institution any remaining funds if the institution subsequently submits other financial protection for the amount originally required.
(i) Incorporation by reference. The material listed in this paragraph (i) is incorporated by reference into this section with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. This incorporation by reference (IBR) material is available for inspection at U.S. Department of Education and at the National Archives and Records Administration (NARA). Contact U.S. Department of Education at: Office of the General Counsel, 400 Maryland Avenue SW, Room 2C-136, Washington, DC 20202; phone: (202) 401-6000; https://www2.ed.gov/about/offices/list/ogc/index.html?src=oc. For information on the availability of this material at NARA, visit www.archives.gov/federal-register/cfr/ibr-locations or email fr.inspection@nara.gov. The material may be obtained from the Financial Accounting Standards Board (FASB), 401 Merritt 7, P.O. Box 5116, Norwalk, CT 06856-5116; (203) 847-0700; www.fasb.org>.
(1) Accounting Standards Codification (ASC) 850, Related Party Disclosures, Updated through September 10, 2018.
(2) [Reserved]
(a) Purpose. To continue participation in the title IV, HEA programs during and following a change in ownership, institutions must meet the financial responsibility requirements in this section.
(b) Materially complete application. To meet the requirements of a materially complete application under 34 CFR 600.20(g)(3)(iii) and (iv)—
(1) An institution undergoing a change in ownership and control as provided under 34 CFR 600.31 must submit audited financial statements of its two most recently completed fiscal years prior to the change in ownership, at the level of the change in ownership or the level of financial statements required by the Department, that are prepared and audited in accordance with the requirements of § 668.23(d); and
(2) The institution must submit audited financial statements of the institution's new owner's two most recently completed fiscal years prior to the change in ownership that are prepared and audited in accordance with the requirements of § 668.23 at the highest level of unfractured ownership or at the level required by the Department.
(i) If the institution's new owner does not have two years of acceptable audited financial statements, the institution must provide financial protection in the form of a letter of credit or cash to the Department in the amount of 25 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year;
(ii) If the institution's new owner only has one year of acceptable financial statements, the institution must provide financial protection in the form of a letter of credit or cash to the Department in the amount of 10 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year; or
(iii) For an entity where no individual new owner obtains control, but the combined ownership of the new owners is equal to or exceeds the ownership share of the existing ownership, financial protection in the form of a letter of credit or cash to the Department in the amount of 25 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year, based on the combined ownership share of the new owners, except for any new owner that submits two years or one year of acceptable audited financial statements as described in paragraphs (b)(2)(i) and (ii) of this section.
(3) The institution must meet the financial responsibility requirements in this paragraph (b)(3). In general, the Department considers an institution to be financially responsible only if it—
(i) For a for-profit institution evaluated at the ownership level required by the Department for the new owner—
(A) Has not had operating losses in either or both of its two latest fiscal years that in sum result in a decrease in tangible net worth in excess of 10 percent of the institution's tangible net worth at the beginning of the first year of the two-year period. The Department may calculate an operating loss for an institution by excluding prior period adjustment and the cumulative effect of changes in accounting principle. For purposes of this section, the calculation of tangible net worth must exclude all related party accounts receivable/other assets and all assets defined as intangible in accordance with the composite score;
(B) Has, for its two most recent fiscal years, a positive tangible net worth. In applying the standard in this paragraph (b)(3)(ii)(B), a positive tangible net worth occurs when the institution's tangible assets exceed its liabilities. The calculation of tangible net worth excludes all related party accounts receivable/other assets and all assets classified as intangible in accordance with the composite score; and
(C) Has a passing composite score and meets the other financial requirements of this subpart for its most recently completed fiscal year.
(ii) For a nonprofit institution evaluated at the ownership level required by the Department for the new owner—
(A) Has, at the end of its two most recent fiscal years, positive net assets without donor restrictions. The Department will exclude all related party receivables/other assets from net assets without donor restrictions and all assets classified as intangibles in accordance with the composite score;
(B) Has not had an excess of net assets without donor restriction expenditures over net assets without donor restriction revenues over both of its two latest fiscal years that results in a decrease exceeding 10 percent in either the net assets without donor restrictions from the start to the end of the two-year period or the net assets without donor restriction in either one of the two years. The Department may exclude from net changes in fund balances for the operating loss calculation prior period adjustment and the cumulative effect of changes in accounting principle. In calculating the net assets without donor restriction, the Department will exclude all related party accounts receivable/other assets and all assets classified as intangible in accordance with the composite score; and
(C) Has a passing composite score and meets the other financial requirements of this subpart for its most recently completed fiscal year.
(iii) For a public institution, has its liabilities backed by the full faith and credit of a State or equivalent governmental entity.
(4) For a for-profit or nonprofit institution that is not financially responsible under paragraph (b)(3) of this section, provide financial protection in the form of a letter of credit or cash in an amount that is not less than 10 percent of the prior year title IV, HEA funding or an amount determined by the Department, and follow the zone requirements in § 668.175(d).
(c) Acquisition debt. (1) Notwithstanding any other provision in this section, the Department may determine that the institution is not financially responsible following a change in ownership if the amount of debt assumed to complete the change in ownership requires payments (either periodic or balloon) that are inconsistent with available cash to service those payments based on enrollments for the period prior to when the payment is or will be due.
(2) For a for-profit or nonprofit institution that is not financially responsible under this section, provide financial protection in the form of a letter of credit or cash in an amount that is not less than 10 percent of the prior year title IV, HEA funding or an amount determined by the Department, and follow the zone requirements in § 668.175(d).
(d) Terms of the extension. To meet the requirements for a temporary provisional program participation agreement following a change in ownership, as described in 34 CFR 600.20(h)(3)(i), an institution must meet the following requirements:
(1) For a proprietary institution or a nonprofit institution—
(i) The institution must provide the Department a same-day balance sheet for a proprietary institution or a statement of financial position for a nonprofit institution that shows the financial position of the institution under its new owner, as of the day after the change in ownership, and that meets the following requirements:
(A) The same-day balance sheet or statement of financial position must be prepared in accordance with generally accepted accounting principles (GAAP) published by the Financial Accounting Standards Board and audited in accordance with generally accepted government auditing standards (GAGAS) published by the U.S. Government Accountability Office (GAO);
(B) As part of the same-day balance sheet or statement of financial position, the institution must include a disclosure that includes all related-party transactions, and such details as would enable the Department to identify the related party in accordance with the requirements of § 668.23(d). Such information must include, but is not limited to, the name, location, and description of the related entity, including the nature and amount of any transaction between the related party and the institution, financial or otherwise, regardless of when it occurred;
(C) Such balance sheet or statement of financial position must be a consolidated same-day financial statement at the level of highest unfractured ownership or at a level determined by the Department for an ownership of less than 100 percent;
(D) The same-day balance sheet or statement of financial position must demonstrate an acid test ratio of at least 1:1. The acid test ratio must be calculated by adding cash and cash equivalents to current accounts receivable and dividing the sum by total current liabilities. The calculation of the acid test ratio must exclude all related party receivables/other assets and all assets classified as intangibles in accordance with the composite score;
(E) A proprietary institution's same-day balance sheet must demonstrate a positive tangible net worth the day after the change in ownership. A positive tangible net worth occurs when the tangible assets exceed liabilities. The calculation of tangible net worth must exclude all related party accounts receivable/other assets and all assets classified as intangible in accordance with the composite score; and
(F) A nonprofit institution's statement of financial position must have positive net assets without donor restriction the day after the change in ownership. The calculation of net assets without donor restriction must exclude all related party accounts receivable/other assets and all assets classified as intangible in accordance with the composite score; and
(ii) If the institution fails to meet the requirements in paragraphs (d)(1)(i) of this section, the institution must provide financial protection in the form of a letter of credit or cash to the Department in the amount of at least 25 percent of the title IV, HEA program funds received by the institution during its most recently completed fiscal year, or an amount determined by the Department, and must follow the zone requirements of § 668.175(d); and
(2) For a public institution, the institution must have its liabilities backed by the full faith and credit of a State, or by an equivalent governmental entity, or must follow the requirements of this section for a proprietary or nonprofit institution.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) General. Your cohort default rate is a measure we use to determine your eligibility to participate in various Title IV, HEA programs. We may also use it for determining your eligibility for exemptions, such as those for certain disbursement requirements under the FFEL and Direct Loan Programs. This subpart applies solely to cohorts, as defined in §§ 668.182(a) and 668.183(b), for fiscal years through 2011. For these cohorts, this subpart describes how cohort default rates are calculated, some of the consequences of cohort default rates, and how you may request changes to your cohort default rates or appeal their consequences. Under this subpart, you submit a “challenge” after you receive your draft cohort default rate, and you request an “adjustment” or “appeal” after your official cohort default rate is published.
(b) Cohort Default Rates. Notwithstanding anything to the contrary in this subpart, we will issue annually two sets of draft and official cohort default rates for fiscal years 2009, 2010, and 2011. For each of these years, you will receive one set of draft and official cohort default rates under this subpart and another set of draft and official cohort default rates under subpart N of this part.
We use the following definitions in this subpart:
(a) Cohort. Your cohort is a group of borrowers used to determine your cohort default rate. The method for identifying the borrowers in a cohort is provided in § 668.183(b).
(b) Data manager. (1) For FFELP loans held by a guaranty agency or lender, the guaranty agency is the data manager.
(2) For FFELP loans that we hold, we are the data manager.
(3) For Direct Loan Program loans, the Direct Loan Servicer, as defined in 34 CFR 685.102, is the data manager.
(c) Days. In this subpart, “days” means calendar days.
(d) Default. A borrower is considered to be in default for cohort default rate purposes under the rules in § 668.183(c).
(e) Draft cohort default rate. Your draft cohort default rate is a rate we issue, for your review, before we issue your official cohort default rate. A draft cohort default rate is used only for the purposes described in § 668.185.
(f) Entering repayment. (1) Except as provided in paragraphs (f)(2) and (f)(3) of this section, loans are considered to enter repayment on the dates described in 34 CFR 682.200 (under the definition of “repayment period”) and in 34 CFR 685.207.
(2) A Federal SLS loan is considered to enter repayment—
(i) At the same time the borrower's Federal Stafford loan enters repayment, if the borrower received the Federal SLS loan and the Federal Stafford loan during the same period of continuous enrollment; or
(ii) In all other cases, on the day after the student ceases to be enrolled at an institution on at least a half-time basis in an educational program leading to a degree, certificate, or other recognized educational credential.
(3) For the purposes of this subpart, a loan is considered to enter repayment on the date that a borrower repays it in full, if the loan is paid in full before the loan enters repayment under paragraphs (f)(1) or (f)(2) of this section.
(g) Fiscal year. A fiscal year begins on October 1 and ends on the following September 30. A fiscal year is identified by the calendar year in which it ends.
(h) Loan record detail report. The loan record detail report is a report that we produce. It contains the data used to calculate your draft or official cohort default rate.
(i) Official cohort default rate. Your official cohort default rate is the cohort default rate that we publish for you under § 668.186. Cohort default rates calculated under this subpart are not related in any way to cohort default rates that are calculated for the Federal Perkins Loan Program.
(j) We. We are the Department, the Secretary, or the Secretary's designee.
(k) You. You are an institution.
(a) General. This section describes the four steps that we follow to calculate and apply your cohort default rate for a fiscal year:
(1) First, under paragraph (b) of this section, we identify the borrowers in your cohort for the fiscal year. If the total number of borrowers in that cohort is fewer than 30, we also identify the borrowers in your cohorts for the 2 most recent prior fiscal years.
(2) Second, under paragraph (c) of this section, we identify the borrowers in the cohort (or cohorts) who are considered to be in default. If more than one cohort will be used to calculate your cohort default rate, we identify defaulted borrowers separately for each cohort.
(3) Third, under paragraph (d) of this section, we calculate your cohort default rate.
(4) Fourth, we apply your cohort default rate to all of your locations—
(i) As you exist on the date you receive the notice of your official cohort default rate; and
(ii) From the date on which you receive the notice of your official cohort default rate until you receive our notice that the cohort default rate no longer applies.
(b) Identify the borrowers in a cohort. (1) Except as provided in paragraph (b)(3) of this section, your cohort for a fiscal year consists of all of your current and former students who, during that fiscal year, entered repayment on any Federal Stafford loan, Federal SLS loan, Direct Subsidized loan, or Direct Unsubsidized loan that they received to attend your institution, or on the portion of a loan made under the Federal Consolidation Loan Program or the Federal Direct Consolidation Loan Program (as defined in 34 CFR 685.102) that is used to repay those loans.
(2) A borrower may be included in more than one of your cohorts and may be included in the cohorts of more than one institution in the same fiscal year.
(3) A TEACH Grant that has been converted to a Federal Direct Unsubsidized Loan is not considered for the purpose of calculating and applying cohort default rates.
(c) Identify the borrowers in a cohort who are in default. (1) Except as provided in paragraph (c)(2) of this section, for the purposes of this subpart a borrower in a cohort for a fiscal year is considered to be in default if—
(i) Before the end of the following fiscal year, the borrower defaults on any FFELP loan that was used to include the borrower in the cohort or on any Federal Consolidation Loan Program loan that repaid a loan that was used to include the borrower in the cohort (however, a borrower is not considered to be in default unless a claim for insurance has been paid on the loan by a guaranty agency or by us);
(ii) Before the end of the following fiscal year, the borrower fails to make an installment payment, when due, on any Direct Loan Program loan that was used to include the borrower in the cohort or on any Federal Direct Consolidation Loan Program loan that repaid a loan that was used to include the borrower in the cohort, and the borrower's failure persists for 360 days (or for 270 days, if the borrower's first day of delinquency was before October 7, 1998);
(iii) Before the end of the following fiscal year, you or your owner, agent, contractor, employee, or any other affiliated entity or individual make a payment to prevent a borrower's default on a loan that is used to include the borrower in that cohort: or
(iv) Before the end of the following fiscal year, the borrower fails to make an installment payment, when due, on a Federal Stafford Loan that is held by the Secretary or a Federal Consolidation Loan that is held by the Secretary and was used to repay a Federal Stafford Loan, if such Federal Stafford Loan or Federal Consolidation Loan was used to include the borrower in the cohort, and the borrower's failure persists for 360 days.
(2) A borrower is not considered to be in default based on a loan that is, before the end of the fiscal year immediately following the fiscal year in which it entered repayment—
(i) Rehabilitated under 34 CFR 682.405 or 34 CFR 685.211(e); or
(ii) Repurchased by a lender because the claim for insurance was submitted or paid in error.
(d) Calculate the cohort default rate. Except as provided in § 668.184, if there are—
(1) Thirty or more borrowers in your cohort for a fiscal year, your cohort default rate is the percentage that is derived by dividing—
(i) The number of borrowers in the cohort who are in default, as determined under paragraph (c) of this section; by
(ii) The number of borrowers in the cohort, as determined under paragraph (b) of this section.
(2) Fewer than 30 borrowers in your cohort for a fiscal year, your cohort default rate is the percentage that is derived by dividing—
(i) The total number of borrowers in that cohort and in the two most recent prior cohorts who are in default, as determined for each cohort under paragraph (c) of this section; by
(ii) The total number of borrowers in that cohort and the two most recent prior cohorts, as determined for each cohort under paragraph (b) of this section.
(a) General. (1) Except as provided under 34 CFR 600.32(d), if you undergo a change in status identified in this section, your cohort default rate is determined under this section.
(2) In determining cohort default rates under this section, the date of a merger, acquisition, or other change in status is the date the change occurs.
(3) A change in status may affect your eligibility to participate in Title IV, HEA programs under § 668.187 or § 668.188.
(4) If another institution's cohort default rate is applicable to you under this section, you may challenge, request an adjustment, or submit an appeal for the cohort default rate under the same requirements that would be applicable to the other institution under §§ 668.185 and 668.189.
(b) Acquisition or merger of institutions. If your institution acquires, or was created by the merger of, one or more institutions that participated independently in the Title IV, HEA programs immediately before the acquisition or merger—
(1) For the cohort default rates published before the date of the acquisition or merger, your cohort default rates are the same as those of your predecessor that had the highest total number of borrowers entering repayment in the two most recent cohorts used to calculate those cohort default rates; and
(2) Beginning with the first cohort default rate published after the date of the acquisition or merger, your cohort default rates are determined by including the applicable borrowers from each institution involved in the acquisition or merger in the calculation under § 668.183.
(c) Acquisition of branches or locations. If you acquire a branch or a location from another institution participating in the Title IV, HEA programs—
(1) The cohort default rates published for you before the date of the change apply to you and to the newly acquired branch or location;
(2) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and the other institution (including all of its locations) in the calculation under § 668.183;
(3) After the period described in paragraph (c)(2) of this section, your cohort default rates do not include borrowers from the other institution in the calculation under § 668.183; and
(4) At all times, the cohort default rate for the institution from which you acquired the branch or location is not affected by this change in status.
(d) Branches or locations becoming institutions. If you are a branch or location of an institution that is participating in the Title IV, HEA programs, and you become a separate, new institution for the purposes of participating in those programs—
(1) The cohort default rates published before the date of the change for your former parent institution are also applicable to you;
(2) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and your former parent institution (including all of its locations) in the calculation under § 668.183; and
(3) After the period described in paragraph (d)(2) of this section, your cohort default rates do not include borrowers from your former parent institution in the calculation under § 668.183.
(a) General. (1) We notify you of your draft cohort default rate before your official cohort default rate is calculated. Our notice includes the loan record detail report for the draft cohort default rate.
(2) Regardless of the number of borrowers included in your cohort, your draft cohort default rate is always calculated using data for that fiscal year alone, using the method described in § 668.183(d)(1).
(3) Your draft cohort default rate and the loan record detail report are not considered public information and may not be otherwise voluntarily released to the public by a data manager.
(4) Any challenge you submit under this section and any response provided by a data manager must be in a format acceptable to us. This acceptable format is described in the “Cohort Default Rate Guide” that we provide to you. If your challenge does not comply with the requirements in the “Cohort Default Rate Guide,” we may deny your challenge.
(b) Incorrect data challenges. (1) You may challenge the accuracy of the data included on the loan record detail report by sending a challenge to the relevant data manager, or data managers, within 45 days after you receive the data. Your challenge must include—
(i) A description of the information in the loan record detail report that you believe is incorrect; and
(ii) Documentation that supports your contention that the data are incorrect.
(2) Within 30 days after receiving your challenge, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation that supports the data manager's position.
(3) If your data manager concludes that draft data in the loan record detail report are incorrect, and we agree, we use the corrected data to calculate your cohort default rate.
(4) If you fail to challenge the accuracy of data under this section, you cannot contest the accuracy of those data in an uncorrected data adjustment, under § 668.190, or in an erroneous data appeal, under § 668.192.
(c) Participation rate index challenges. (1)(i) You may challenge an anticipated loss of eligibility under § 668.187(a)(1), based on one cohort default rate over 40 percent, if your participation rate index for that cohort's fiscal year is equal to or less than 0.06015.
(ii) You may challenge an anticipated loss of eligibility under § 668.187(a)(2), based on three cohort default rates of 25 percent or greater, if your participation rate index is equal to or less than 0.0375 for any of those three cohorts' fiscal years.
(2) For a participation rate index challenge, your participation rate index is calculated as described in § 668.195(b), except that—
(i) The draft cohort default rate is considered to be your most recent cohort default rate; and
(ii) If the cohort used to calculate your draft cohort default rate included fewer than 30 borrowers, you may calculate your participation rate index for that fiscal year using either your most recent draft cohort default rate or the average rate that would be calculated for that fiscal year, using the method described in § 668.183(d)(2).
(3) You must send your participation rate index challenge, including all supporting documentation, to us within 45 days after you receive your draft cohort default rate.
(4) We notify you of our determination on your participation rate index challenge before your official cohort default rate is published.
(5) If we determine that you qualify for continued eligibility based on your participation rate index challenge, you will not lose eligibility under § 668.187 when your next official cohort default rate is published. A successful challenge that is based on your draft cohort default rate does not excuse you from any other loss of eligibility. However, if your successful challenge of a loss of eligibility under paragraph (c)(1)(ii) of this section is based on a prior, official cohort default rate, and not on your draft cohort default rate, we also excuse you from any subsequent loss of eligibility, under § 668.187(a)(2), that would be based on that official cohort default rate.
(a) We electronically notify you of your cohort default rate after we calculate it, by sending you an eCDR notification package to the destination point you designate. After we send our notice to you, we publish a list of cohort default rates calculated under this subpart for all institutions.
(b) If you have one or more borrowers entering repayment or are subject to sanctions, or if the Department believes you will have an official cohort default rate calculated as an average rate, you will receive a loan record detail report as part of your eCDR notification package.
(c) You have five business days, from the transmission date for eCDR notification packages as posted on the Department's Web site, to report any problem with receipt of the electronic transmission of your eCDR notification package.
(d) Except as provided in paragraph (e) of this section, timelines for submitting challenges, adjustments, and appeals begin on the sixth business day following the transmission date for eCDR notification packages that is posted on the Department's Web site.
(e) If you timely report a problem with the receipt of the electronic transmission of your eCDR notification package under paragraph (c) of this section and the Department agrees that the problem with transmission was not caused by you, the Department will extend the challenge, appeal and adjustment deadlines and timeframes to account for a retransmission of your eCDR notification package after the technical problem is resolved.
(a) End of participation. (1) Except as provided in paragraph (e) of this section, you lose your eligibility to participate in the FFEL and Direct Loan programs 30 days after you receive our notice that your most recent cohort default rate is greater than 40 percent.
(2) Except as provided in paragraphs (d) and (e) of this section, you lose your eligibility to participate in the FFEL, Direct Loan, and Federal Pell Grant programs 30 days after you receive our notice that your three most recent cohort default rates are each 25 percent or greater.
(b) Length of period of ineligibility. Your loss of eligibility under this section continues—
(1) For the remainder of the fiscal year in which we notify you that you are subject to a loss of eligibility; and
(2) For the next 2 fiscal years.
(c) Using a cohort default rate more than once. The use of a cohort default rate as a basis for a loss of eligibility under this section does not preclude its use as a basis for—
(1) Any concurrent or subsequent loss of eligibility under this section; or
(2) Any other action by us.
(d) Continuing participation in Pell. If you are subject to a loss of eligibility under paragraph (a)(2) of this section, based on three cohort default rates of 25 percent or greater, you may continue to participate in the Federal Pell Grant Program if we determine that you—
(1) Were ineligible to participate in the FFEL and Direct Loan programs before October 7, 1998, and your eligibility was not reinstated;
(2) Requested in writing, before October 7, 1998, to withdraw your participation in the FFEL and Direct Loan programs, and you were not later reinstated; or
(3) Have not certified an FFELP loan or originated a Direct Loan Program loan on or after July 7, 1998.
(e) Requests for adjustments and appeals. (1) A loss of eligibility under this section does not take effect while your request for adjustment or appeal, as listed in § 668.189(a), is pending, provided your request for adjustment or appeal is complete, timely, accurate, and in the required format.
(2) Eligibility continued under paragraph (e)(1) of this section ends if we determine that none of the requests for adjustments and appeals you have submitted qualify you for continued eligibility under § 668.189. Loss of eligibility takes effect on the date that you receive notice of our determination on your last pending request for adjustment or appeal.
(3) You do not lose eligibility under this section if we determine that your request for adjustment or appeal meets all requirements of this subpart and qualifies you for continued eligibility under § 668.189.
(4) To avoid liabilities you might otherwise incur under paragraph (f) of this section, you may choose to suspend your participation in the FFEL and Direct Loan programs during the adjustment or appeal process.
(f) Liabilities during the adjustment or appeal process. If you continued to participate in the FFEL or Direct Loan Program under paragraph (e)(1) of this section, and we determine that none of your requests for adjustments or appeals qualify you for continued eligibility—
(1) For any FFEL or Direct Loan Program loan that you certified and delivered or originated and disbursed more than 30 days after you received the notice of your cohort default rate, we estimate the amount of interest, special allowance, reinsurance, and any related or similar payments we make or are obligated to make on those loans;
(2) We exclude from this estimate any amount attributable to funds that you delivered or disbursed more than 45 days after you submitted your completed appeal to us;
(3) We notify you of the estimated amount; and
(4) Within 45 days after you receive our notice of the estimated amount, you must pay us that amount, unless—
(i) You file an appeal under the procedures established in subpart H of this part (for the purposes of subpart H of this part, our notice of the estimate is considered to be a final program review determination); or
(ii) We permit a longer repayment period.
(g) Regaining eligibility. If you lose your eligibility to participate in a program under this section, you may not participate in that program until—
(1) The period described in paragraph (b) of this section has ended;
(2) You pay any amount owed to us under this section or are meeting that obligation under an agreement acceptable to us;
(3) You submit a new application for participation in the program;
(4) We determine that you meet all of the participation requirements in effect at the time of your application; and
(5) You and we enter into a new program participation agreement.
(a) General. You are subject to a loss of eligibility that has already been imposed against another institution as a result of cohort default rates if—
(1) You and the ineligible institution are both parties to a transaction that results in a change of ownership, a change in control, a merger, a consolidation, an acquisition, a change of name, a change of address, any change that results in a location becoming a freestanding institution, a purchase or sale, a transfer of assets, an assignment, a change of identification number, a contract for services, an addition or closure of one or more locations or branches or educational programs, or any other change in whole or in part in institutional structure or identity;
(2) Following the change described in paragraph (a)(1) of this section, you offer an educational program at substantially the same address at which the ineligible institution had offered an educational program before the change; and
(3) There is a commonality of ownership or management between you and the ineligible institution, as the ineligible institution existed before the change.
(b) Commonality of ownership or management. For the purposes of this section, a commonality of ownership or management exists if, at each institution, the same person (as defined in 34 CFR 600.31) or members of that person's family, directly or indirectly—
(1) Holds or held a managerial role; or
(2) Has or had the ability to affect substantially the institution's actions, within the meaning of 34 CFR 600.21.
(c) Teach-outs. Notwithstanding paragraph (b)(1) of this section, a commonality of management does not exist if you are conducting a teach-out under a teach-out agreement as defined in 34 CFR 600.2 and administered in accordance with 34 CFR 602.24(c), and—
(1)(i) Within 60 days after the change described in this section, you send us the names of the managers for each facility undergoing the teach-out as it existed before the change and for each facility as it exists after you believe that the commonality of management has ended; and
(ii) We determine that the commonality of management, as described in paragraph (b)(1) of this section, has ended; or
(2)(i) Within 30 days after you receive our notice that we have denied your submission under paragraph (c)(1)(i) of this section, you make the management changes we request and send us a list of the names of the managers for each facility undergoing the teach-out as it exists after you make those changes; and
(ii) We determine that the commonality of management, as described in paragraph (b)(1) of this section, has ended.
(d) Initial determination. We encourage you to contact us before undergoing a change described in this section. If you write to us, providing the information we request, we will provide a written initial determination of the anticipated change's effect on your eligibility.
(e) Notice of accountability. (1) We notify you in writing if, in response to your notice or application filed under 34 CFR 600.20 or 600.21, we determine that you are subject to a loss of eligibility, under paragraph (a) of this section, that has been imposed against another institution.
(2) Our notice also advises you of the scope and duration of your loss of eligibility. The loss of eligibility applies to all of your locations from the date you receive our notice until the expiration of the period of ineligibility applicable to the other institution.
(3) If you are subject to a loss of eligibility under this section that has already been imposed against another institution, you may only request an adjustment or submit an appeal for the loss of eligibility under the same requirements that would be applicable to the other institution under § 668.189.
(a) Remaining eligible. You do not lose eligibility under § 668.187 if—
(1) We recalculate your cohort default rate, and it is below the percentage threshold for the loss of eligibility as the result of—
(i) An uncorrected data adjustment submitted under this section and § 668.190;
(ii) A new data adjustment submitted under this section and § 668.191;
(iii) An erroneous data appeal submitted under this section and § 668.192; or
(iv) A loan servicing appeal submitted under this section and § 668.193; or
(2) You meet the requirements for—
(i) An economically disadvantaged appeal submitted under this section and § 668.194;
(ii) A participation rate index appeal submitted under this section and § 668.195;
(iii) An average rates appeal submitted under this section and § 668.196; or
(iv) A thirty-or-fewer borrowers appeal submitted under this section and § 668.197.
(b) Limitations on your ability to dispute your cohort default rate. (1) You may not dispute the calculation of a cohort default rate except as described in this subpart.
(2) You may not request an adjustment or appeal a cohort default rate, under § 668.190, § 668.191, § 668.192, or § 668.193, more than once.
(3) You may not request an adjustment or appeal a cohort default rate, under § 668.190, § 668.191, § 668.192, or § 668.193, if you previously lost your eligibility to participate in a Title IV, HEA program, under § 668.187, based entirely or partially on that cohort default rate.
(c) Content and format of requests for adjustments and appeals. We may deny your request for adjustment or appeal if it does not meet the following requirements:
(1) All appeals, notices, requests, independent auditor's opinions, management's written assertions, and other correspondence that you are required to send under this subpart must be complete, timely, accurate, and in a format acceptable to us. This acceptable format is described in the “Cohort Default Rate Guide” that we provide to you.
(2) Your completed request for adjustment or appeal must include—
(i) All of the information necessary to substantiate your request for adjustment or appeal; and
(ii) A certification by your chief executive officer, under penalty of perjury, that all the information you provide is true and correct.
(d) Our copies of your correspondence. Whenever you are required by this subpart to correspond with a party other than us, you must send us a copy of your correspondence within the same time deadlines. However, you are not required to send us copies of documents that you received from us originally.
(e) Requirements for data managers' responses. (1) Except as otherwise provided in this subpart, if this subpart requires a data manager to correspond with any party other than us, the data manager must send us a copy of the correspondence within the same time deadlines.
(2) If a data manager sends us correspondence under this subpart that is not in a format acceptable to us, we may require the data manager to revise that correspondence's format, and we may prescribe a format for that data manager's subsequent correspondence with us.
(f) Our decision on your request for adjustment or appeal. (1) We determine whether your request for an adjustment or appeal is in compliance with this subpart.
(2) In making our decision for an adjustment, under § 668.190 or § 668.191, or an appeal, under § 668.192 or § 668.193—
(i) We presume that the information provided to you by a data manager is correct unless you provide substantial evidence that shows the information is not correct; and
(ii) If we determine that a data manager did not provide the necessary clarifying information or legible records in meeting the requirements of this subpart, we presume that the evidence that you provide to us is correct unless it is contradicted or otherwise proven to be incorrect by information we maintain.
(3) Our decision is based on the materials you submit under this subpart. We do not provide an oral hearing.
(4) We notify you of our decision—
(i) If you request an adjustment or appeal because you are subject to a loss of eligibility under § 668.187, within 45 days after we receive your completed request for an adjustment or appeal; or
(ii) In all other cases, except for appeals submitted under § 668.192(a) to avoid provisional certification, before we notify you of your next official cohort default rate.
(5) You may not seek judicial review of our determination of a cohort default rate until we issue our decision on all pending requests for adjustments or appeals for that cohort default rate.
(a) Eligibility. You may request an uncorrected data adjustment for your most recent cohort of borrowers, used to calculate your most recent official cohort default rate, if in response to your challenge under § 668.185(b), a data manager agreed correctly to change the data, but the changes are not reflected in your official cohort default rate.
(b) Deadlines for requesting an uncorrected data adjustment. You must send us a request for an uncorrected data adjustment, including all supporting documentation, within 30 days after you receive your loan record detail report from us.
(c) Determination. We recalculate your cohort default rate, based on the corrected data, and electronically correct the rate that is publicly released, if we determine that—
(1) In response to your challenge under § 668.185(b), a data manager agreed to change the data;
(2) The changes described in paragraph (c)(1) of this section are not reflected in your official cohort default rate; and
(3) We agree that the data are incorrect.
(a) Eligibility. You may request a new data adjustment for your most recent cohort of borrowers, used to calculate your most recent official cohort default rate, if—
(1) A comparison of the loan record detail reports that we provide to you for the draft and official cohort default rates shows that the data have been newly included, excluded, or otherwise changed; and
(2) You identify errors in the data described in paragraph (a)(1) of this section that are confirmed by the data manager.
(b) Deadlines for requesting a new data adjustment. (1) You must send to the relevant data manager, or data managers, and us a request for a new data adjustment, including all supporting documentation, within 15 days after you receive your loan record detail report from us.
(2) Within 20 days after receiving your request for a new data adjustment, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation used to support the data manager's position.
(3) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for a new data adjustment for that loan. We respond to your request as set forth under paragraph (b)(2) of this section.
(4) Within 15 days after receiving incomplete or illegible records or data from a data manager, you must send a request for replacement records or clarification of data to the data manager and us.
(5) Within 20 days after receiving your request for replacement records or clarification of data, the data manager must—
(i) Replace the missing or illegible records;
(ii) Provide clarifying information; or
(iii) Notify you and us that no clarifying information or additional or improved records are available.
(6) You must send us your completed request for a new data adjustment, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request or requests; or
(ii) If you are also filing an erroneous data appeal or a loan servicing appeal, by the latest of the filing dates required in paragraph (b)(6)(i) of this section or in § 668.192(b)(6)(i) or § 668.193(c)(10)(i).
(c) Determination. If we determine that incorrect data were used to calculate your cohort default rate, we recalculate your cohort default rate based on the correct data and electronically correct the rate that is publicly released.
(a) Eligibility. Except as provided in § 668.189(b), you may appeal the calculation of a cohort default rate upon which a loss of eligibility, under § 668.187, or provisional certification, under § 668.16(m), is based if—
(1) You dispute the accuracy of data that you previously challenged on the basis of incorrect data, under § 668.185(b); or
(2) A comparison of the loan record detail reports that we provide to you for the draft and official cohort default rates shows that the data have been newly included, excluded, or otherwise changed, and you dispute the accuracy of that data.
(b) Deadlines for submitting an appeal. (1) You must send a request for verification of data errors to the relevant data manager, or data managers, and to us within 15 days after you receive the notice of your loss of eligibility or provisional certification. Your request must include a description of the information in the cohort default rate data that you believe is incorrect and all supporting documentation that demonstrates the error.
(2) Within 20 days after receiving your request for verification of data errors, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation used to support the data manager's position.
(3) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for verification of that loan's data errors. Your request must include a description of the information in the cohort default rate data that you believe is incorrect and all supporting documentation that demonstrates the error. We respond to your request under paragraph (b)(2) of this section.
(4) Within 15 days after receiving incomplete or illegible records or data, you must send a request for replacement records or clarification of data to the data manager and us.
(5) Within 20 days after receiving your request for replacement records or clarification of data, the data manager must—
(i) Replace the missing or illegible records;
(ii) Provide clarifying information; or
(iii) Notify you and us that no clarifying information or additional or improved records are available.
(6) You must send your completed appeal to us, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request; or
(ii) If you are also requesting a new data adjustment or filing a loan servicing appeal, by the latest of the filing dates required in paragraph (b)(6)(i) of this section or in § 668.191(b)(6)(i) or § 668.193(c)(10)(i).
(c) Determination. If we determine that incorrect data were used to calculate your cohort default rate, we recalculate your cohort default rate based on the correct data and electronically correct the rate that is publicly released.
(a) Eligibility. Except as provided in § 668.189(b), you may appeal, on the basis of improper loan servicing or collection, the calculation of—
(1) Your most recent cohort default rate; or
(2) Any cohort default rate upon which a loss of eligibility under § 668.187 is based.
(b) Improper loan servicing. For the purposes of this section, a default is considered to have been due to improper loan servicing or collection only if the borrower did not make a payment on the loan and you prove that the FFEL Program lender or the Direct Loan Servicer, as defined in 34 CFR 685.102, failed to perform one or more of the following activities, if that activity applies to the loan:
(1) Send at least one letter (other than the final demand letter) urging the borrower to make payments on the loan;
(2) Attempt at least one phone call to the borrower;
(3) Send a final demand letter to the borrower;
(4) For a Direct Loan Program loan only, document that skip tracing was performed if the Direct Loan Servicer determined that it did not have the borrower's current address; and
(5) For an FFELP loan only—
(i) Submit a request for preclaims or default aversion assistance to the guaranty agency; and
(ii) Submit a certification or other documentation that skip tracing was performed to the guaranty agency.
(c) Deadlines for submitting an appeal. (1) If the loan record detail report was not included with your official cohort default rate notice, you must request it within 15 days after you receive the notice of your official cohort default rate.
(2) You must send a request for loan servicing records to the relevant data manager, or data managers, and to us within 15 days after you receive your loan record detail report from us. If the data manager is a guaranty agency, your request must include a copy of the loan record detail report.
(3) Within 20 days after receiving your request for loan servicing records, the data manager must—
(i) Send you and us a list of the borrowers in your representative sample, as described in paragraph (d) of this section (the list must be in social security number order, and it must include the number of defaulted loans included in the cohort for each listed borrower);
(ii) Send you and us a description of how your representative sample was chosen; and
(iii) Either send you copies of the loan servicing records for the borrowers in your representative sample and send us a copy of its cover letter indicating that the records were sent, or send you and us a notice of the amount of its fee for providing copies of the loan servicing records.
(4) The data manager may charge you a reasonable fee for providing copies of loan servicing records, but it may not charge more than $10 per borrower file. If a data manager charges a fee, it is not required to send the documents to you until it receives your payment of the fee.
(5) If the data manager charges a fee for providing copies of loan servicing records, you must send payment in full to the data manager within 15 days after you receive the notice of the fee.
(6) If the data manager charges a fee for providing copies of loan servicing records, and—
(i) You pay the fee in full and on time, the data manager must send you, within 20 days after it receives your payment, a copy of all loan servicing records for each loan in your representative sample (the copies are provided to you in hard copy format unless the data manager and you agree that another format may be used), and it must send us a copy of its cover letter indicating that the records were sent; or
(ii) You do not pay the fee in full and on time, the data manager must notify you and us of your failure to pay the fee and that you have waived your right to challenge the calculation of your cohort default rate based on the data manager's records. We accept that determination unless you prove that it is incorrect.
(7) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for the loan servicing records for that loan. We respond to your request under paragraph (c)(3) of this section.
(8) Within 15 days after receiving incomplete or illegible records, you must send a request for replacement records to the data manager and us.
(9) Within 20 days after receiving your request for replacement records, the data manager must either—
(i) Replace the missing or illegible records; or
(ii) Notify you and us that no additional or improved copies are available.
(10) You must send your appeal to us, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request for loan servicing records; or
(ii) If you are also requesting a new data adjustment or filing an erroneous data appeal, by the latest of the filing dates required in paragraph (c)(10)(i) of this section or in § 668.191(b)(6)(i) or § 668.192(b)(6)(i).
(d) Representative sample of records. (1) To select a representative sample of records, the data manager first identifies all of the borrowers for whom it is responsible and who had loans that were considered to be in default in the calculation of the cohort default rate you are appealing.
(2) From the group of borrowers identified under paragraph (d)(1) of this section, the data manager identifies a sample that is large enough to derive an estimate, acceptable at a 95 percent confidence level with a plus or minus 5 percent confidence interval, for use in determining the number of borrowers who should be excluded from the calculation of the cohort default rate due to improper loan servicing or collection.
(e) Loan servicing records. Loan servicing records are the collection and payment history records—
(1) Provided to the guaranty agency by the lender and used by the guaranty agency in determining whether to pay a claim on a defaulted loan; or
(2) Maintained by our Direct Loan Servicer that are used in determining your cohort default rate.
(f) Determination. (1) We determine the number of loans, included in your representative sample of loan servicing records, that defaulted due to improper loan servicing or collection, as described in paragraph (b) of this section.
(2) Based on our determination, we use a statistically valid methodology to exclude the corresponding percentage of borrowers from both the numerator and denominator of the calculation of your cohort default rate, and electronically correct the rate that is publicly released.
(a) Eligibility. As described in this section, you may appeal a notice of a loss of eligibility under § 668.187 if an independent auditor's opinion certifies that your low income rate is two-thirds or more and—
(1) You offer an associate, baccalaureate, graduate, or professional degree, and your completion rate is 70 percent or more; or
(2) You do not offer an associate, baccalaureate, graduate, or professional degree, and your placement rate is 44 percent or more.
(b) Low income rate. (1) Your low income rate is the percentage of your students, as described in paragraph (b)(2) of this section, who—
(i) For an award year that overlaps the 12-month period selected under paragraph (b)(2) of this section, have an expected family contribution, as defined in 34 CFR 690.2, that is equal to or less than the largest expected family contribution that would allow a student to receive one-half of the maximum Federal Pell Grant award, regardless of the student's enrollment status or cost of attendance; or
(ii) For a calendar year that overlaps the 12-month period selected under paragraph (b)(2) of this section, have an adjusted gross income that, when added to the adjusted gross income of the student's parents (if the student is a dependent student) or spouse (if the student is a married independent student), is less than the amount listed in the Department of Health and Human Services poverty guidelines for the size of the student's family unit.
(2) The students who are used to determine your low income rate include only students who were enrolled on at least a half-time basis in an eligible program at your institution during any part of a 12-month period that ended during the 6 months immediately preceding the cohort's fiscal year.
(c) Completion rate. (1) Your completion rate is the percentage of your students, as described in paragraph (c)(2) of this section, who—
(i) Completed the educational programs in which they were enrolled;
(ii) Transferred from your institution to a higher level educational program;
(iii) Remained enrolled and are making satisfactory progress toward completion of their educational programs at the end of the same 12-month period used to calculate the low income rate; or
(iv) Entered active duty in the Armed Forces of the United States within 1 year after their last date of attendance at your institution.
(2) The students who are used to determine your completion rate include only regular students who were—
(i) Initially enrolled on a full-time basis in an eligible program; and
(ii) Originally scheduled to complete their programs during the same 12-month period used to calculate the low income rate.
(d) Placement rate. (1) Except as provided in paragraph (d)(2) of this section, your placement rate is the percentage of your students, as described in paragraphs (d)(3) and (d)(4) of this section, who—
(i) Are employed, in an occupation for which you provided training, on the date following 1 year after their last date of attendance at your institution;
(ii) Were employed for at least 13 weeks, in an occupation for which you provided training, between the date they enrolled at your institution and the first date that is more than a year after their last date of attendance at your institution; or
(iii) Entered active duty in the Armed Forces of the United States within 1 year after their last date of attendance at your institution.
(2) For the purposes of this section, a former student is not considered to have been employed based on any employment by your institution.
(3) The students who are used to determine your placement rate include only former students who—
(i) Were initially enrolled in an eligible program on at least a half-time basis;
(ii) Were originally scheduled, at the time of enrollment, to complete their educational programs during the same 12-month period used to calculate the low income rate; and
(iii) Remained in the program beyond the point at which a student would have received a 100 percent tuition refund from you.
(4) A student is not included in the calculation of your placement rate if that student, on the date that is 1 year after the student's originally scheduled completion date, remains enrolled in the same program and is making satisfactory progress.
(e) Scheduled to complete. In calculating a completion or placement rate under this section, the date on which a student is originally scheduled to complete a program is based on—
(1) For a student who is initially enrolled full-time, the amount of time specified in your enrollment contract, catalog, or other materials for completion of the program by a full-time student; or
(2) For a student who is initially enrolled less than full-time, the amount of time that it would take the student to complete the program if the student remained at that level of enrollment throughout the program.
(f) Deadline for submitting an appeal. (1) Within 30 days after you receive the notice of your loss of eligibility, you must send us your management's written assertion, as described in the Cohort Default Rate Guide.
(2) Within 60 days after you receive the notice of your loss of eligibility, you must send us the independent auditor's opinion described in paragraph (g) of this section.
(g) Independent auditor's opinion. (1) The independent auditor's opinion must state whether your management's written assertion, as you provided it to the auditor and to us, meets the requirements for an economically disadvantaged appeal and is fairly stated in all material respects.
(2) The engagement that forms the basis of the independent auditor's opinion must be an examination-level compliance attestation engagement performed in accordance with—
(i) The American Institute of Certified Public Accountant's (AICPA) Statement on Standards for Attestation Engagements, Compliance Attestation (AICPA, Professional Standards, vol. 1, AT sec. 500), as amended (these standards may be obtained by calling the AICPA's order department, at 1-888-777-7077); and
(ii) Government Auditing Standards issued by the Comptroller General of the United States.
(h) Determination. You do not lose eligibility under § 668.187 if—
(1) Your independent auditor's opinion agrees that you meet the requirements for an economically disadvantaged appeal; and
(2) We determine that the independent auditor's opinion and your management's written assertion—
(i) Meet the requirements for an economically disadvantaged appeal; and
(ii) Are not contradicted or otherwise proven to be incorrect by information we maintain, to an extent that would render the independent auditor's opinion unacceptable.
(a) Eligibility. (1) You may appeal a notice of a loss of eligibility under § 668.187(a)(1), based on one cohort default rate over 40 percent, if your participation rate index for that cohort's fiscal year is equal to or less than 0.06015.
(2) You may appeal a notice of a loss of eligibility under § 668.187(a)(2), based on three cohort default rates of 25 percent or greater, if your participation rate index is equal to or less than 0.0375 for any of those three cohorts' fiscal years.
(b) Calculating your participation rate index. (1) Except as provided in paragraph (b)(2) of this section, your participation rate index for a fiscal year is determined by multiplying your cohort default rate for that fiscal year by the percentage that is derived by dividing—
(i) The number of students who received an FFELP or a Direct Loan Program loan to attend your institution during a period of enrollment, as defined in 34 CFR 682.200 or 685.102, that overlaps any part of a 12-month period that ended during the 6 months immediately preceding the cohort's fiscal year, by
(ii) The number of regular students who were enrolled at your institution on at least a half-time basis during any part of the same 12-month period.
(2) If your cohort default rate for a fiscal year is calculated as an average rate under § 668.183(d)(2), you may calculate your participation rate index for that fiscal year using either that average rate or the cohort default rate that would be calculated for the fiscal year alone using the method described in § 668.183(d)(1).
(c) Deadline for submitting an appeal. You must send us your appeal under this section, including all supporting documentation, within 30 days after you receive the notice of your loss of eligibility.
(d) Determination. (1) You do not lose eligibility under § 668.187 if we determine that you meet the requirements for a participation rate index appeal.
(2) If we determine that your participation rate index for a fiscal year is equal to or less than 0.0375, under paragraph (d)(1) of this section, we also excuse you from any subsequent loss of eligibility under § 668.187(a)(2) that would be based on the official cohort default rate for that fiscal year.
(a) Eligibility. (1) You may appeal a notice of a loss of eligibility under § 668.187(a)(1), based on one cohort default rate over 40 percent, if that cohort default rate is calculated as an average rate under § 668.183(d)(2).
(2) You may appeal a notice of a loss of eligibility under § 668.187(a)(2), based on three cohort default rates of 25 percent or greater, if at least two of those cohort default rates—
(i) Are calculated as average rates under § 668.183(d)(2); and
(ii) Would be less than 25 percent if calculated for the fiscal year alone using the method described in § 668.183(d)(1).
(b) Deadline for submitting an appeal. (1) Before notifying you of your official cohort default rate, we make an initial determination about whether you qualify for an average rates appeal. If we determine that you qualify, we notify you of that determination at the same time that we notify you of your official cohort default rate.
(2) If you disagree with our initial determination, you must send us your average rates appeal, including all supporting documentation, within 30 days after you receive the notice of your loss of eligibility.
(c) Determination. You do not lose eligibility under § 668.187 if we determine that you meet the requirements for an average rates appeal.
(a) Eligibility. You may appeal a notice of a loss of eligibility under § 668.187 if 30 or fewer borrowers, in total, are included in the 3 most recent cohorts of borrowers used to calculate your cohort default rates.
(b) Deadline for submitting an appeal. (1) Before notifying you of your official cohort default rate, we make an initial determination about whether you qualify for a thirty-or-fewer borrowers appeal. If we determine that you qualify, we notify you of that determination at the same time that we notify you of your official cohort default rate.
(2) If you disagree with our initial determination, you must send us your thirty-or-fewer borrowers appeal, including all supporting documentation, within 30 days after you receive the notice of your loss of eligibility.
(c) Determination. You do not lose eligibility under § 668.187 if we determine that you meet the requirements for a thirty-or-fewer borrowers appeal.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
(a) General. Your cohort default rate is a measure we use to determine your eligibility to participate in various Title IV, HEA programs. We may also use it for determining your eligibility for exemptions, such as those for certain disbursement requirements under the FFEL and Direct Loan Programs. This subpart applies solely to cohorts, as defined in §§ 668.201(a) and 668.202(b), for fiscal years 2009 and later. For these cohorts, this subpart describes how cohort default rates are calculated, some of the consequences of cohort default rates, and how you may request changes to your cohort default rates or appeal their consequences. Under this subpart, you submit a “challenge” after you receive your draft cohort default rate, and you request an “adjustment” or “appeal” after your official cohort default rate is published.
(b) Cohort Default Rates. Notwithstanding anything to the contrary in this subpart, we will issue annually two sets of draft and official cohort default rates for fiscal years 2009, 2010, and 2011. For each of these years, you will receive one set of draft and official cohort default rates under this subpart and another set of draft and official cohort default rates under subpart M of this part.
We use the following definitions in this subpart:
(a) Cohort. Your cohort is a group of borrowers used to determine your cohort default rate. The method for identifying the borrowers in a cohort is provided in § 668.202(b).
(b) Data manager. (1) For FFELP loans held by a guaranty agency or lender, the guaranty agency is the data manager.
(2) For FFELP loans that we hold, we are the data manager.
(3) For Direct Loan Program loans, the Direct Loan Servicer, as defined in 34 CFR 685.102, is the data manager.
(c) Days. In this subpart, “days” means calendar days.
(d) Default. A borrower is considered to be in default for cohort default rate purposes under the rules in § 668.202(c).
(e) Draft cohort default rate. Your draft cohort default rate is a rate we issue, for your review, before we issue your official cohort default rate. A draft cohort default rate is used only for the purposes described in § 668.204.
(f) Entering repayment. (1) Except as provided in paragraphs (f)(2) and (f)(3) of this section, loans are considered to enter repayment on the dates described in 34 CFR 682.200 (under the definition of “repayment period”) and in 34 CFR 685.207.
(2) A Federal SLS loan is considered to enter repayment—
(i) At the same time the borrower's Federal Stafford loan enters repayment, if the borrower received the Federal SLS loan and the Federal Stafford loan during the same period of continuous enrollment; or
(ii) In all other cases, on the day after the student ceases to be enrolled at an institution on at least a half-time basis in an educational program leading to a degree, certificate, or other recognized educational credential.
(3) For the purposes of this subpart, a loan is considered to enter repayment on the date that a borrower repays it in full, if the loan is paid in full before the loan enters repayment under paragraphs (f)(1) or (f)(2) of this section.
(g) Fiscal year. A fiscal year begins on October 1 and ends on the following September 30. A fiscal year is identified by the calendar year in which it ends.
(h) Loan record detail report. The loan record detail report is a report that we produce. It contains the data used to calculate your draft or official cohort default rate.
(i) Official cohort default rate. Your official cohort default rate is the cohort default rate that we publish for you under § 668.205. Cohort default rates calculated under this subpart are not related in any way to cohort default rates that are calculated for the Federal Perkins Loan Program.
(j) We. We are the Department, the Secretary, or the Secretary's designee.
(k) You. You are an institution.
(a) General. This section describes the four steps that we follow to calculate and apply your cohort default rate for a fiscal year:
(1) First, under paragraph (b) of this section, we identify the borrowers in your cohort for the fiscal year. If the total number of borrowers in that cohort is fewer than 30, we also identify the borrowers in your cohorts for the 2 most recent prior fiscal years.
(2) Second, under paragraph (c) of this section, we identify the borrowers in the cohort (or cohorts) who are considered to be in default by the end of the second fiscal year following the fiscal year those borrowers entered repayment. If more than one cohort will be used to calculate your cohort default rate, we identify defaulted borrowers separately for each cohort.
(3) Third, under paragraph (d) of this section, we calculate your cohort default rate.
(4) Fourth, we apply your cohort default rate to all of your locations—
(i) As you exist on the date you receive the notice of your official cohort default rate; and
(ii) From the date on which you receive the notice of your official cohort default rate until you receive our notice that the cohort default rate no longer applies.
(b) Identify the borrowers in a cohort. (1) Except as provided in paragraph (b)(3) of this section, your cohort for a fiscal year consists of all of your current and former students who, during that fiscal year, entered repayment on any Federal Stafford loan, Federal SLS loan, Direct Subsidized loan, or Direct Unsubsidized loan that they received to attend your institution, or on the portion of a loan made under the Federal Consolidation Loan Program or the Federal Direct Consolidation Loan Program (as defined in 34 CFR 685.102) that is used to repay those loans.
(2) A borrower may be included in more than one of your cohorts and may be included in the cohorts of more than one institution in the same fiscal year.
(3) A TEACH Grant that has been converted to a Federal Direct Unsubsidized Loan is not considered for the purpose of calculating and applying cohort default rates.
(c) Identify the borrowers in a cohort who are in default. (1) Except as provided in paragraph (c)(2) of this section, a borrower in a cohort for a fiscal year is considered to be in default if, before the end of the second fiscal year following the fiscal year the borrower entered repayment—
(i) The borrower defaults on any FFELP loan that was used to include the borrower in the cohort or on any Federal Consolidation Loan Program loan that repaid a loan that was used to include the borrower in the cohort (however, a borrower is not considered to be in default unless a claim for insurance has been paid on the loan by a guaranty agency or by us);
(ii) The borrower fails to make an installment payment, when due, on any Direct Loan Program loan that was used to include the borrower in the cohort or on any Federal Direct Consolidation Loan Program loan that repaid a loan that was used to include the borrower in the cohort, and the borrower's failure persists for 360 days (or for 270 days, if the borrower's first day of delinquency was before October 7, 1998);
(iii) You or your owner, agent, contractor, employee, or any other affiliated entity or individual make a payment to prevent a borrower's default on a loan that is used to include the borrower in that cohort; or
(iv) The borrower fails to make an installment payment, when due, on a Federal Stafford Loan that is held by the Secretary or a Federal Consolidation Loan that is held by the Secretary and that was used to repay a Federal Stafford Loan, if such Federal Stafford Loan or Federal Consolidation was used to include the borrower in the cohort, and the borrower's failure persists for 360 days.
(2) A borrower is not considered to be in default based on a loan that is, before the end of the second fiscal year following the fiscal year in which it entered repayment—
(i) Rehabilitated under 34 CFR 682.405 or 34 CFR 685.211(e); or
(ii) Repurchased by a lender because the claim for insurance was submitted or paid in error.
(d) Calculate the cohort default rate. Except as provided in § 668.203, if there are—
(1)(i) Thirty or more borrowers in your cohort for a fiscal year, your cohort default rate is the percentage that is calculated by—
(ii) Dividing the number of borrowers in the cohort who are in default, as determined under paragraph (c) of this section by the number of borrowers in the cohort, as determined under paragraph (b) of this section.
(2)(i) Fewer than 30 borrowers in your cohort for a fiscal year, your cohort default rate is the percentage that is calculated by—
(ii) Dividing the total number of borrowers in that cohort and in the two most recent prior cohorts who are in default, as determined for each cohort under paragraph (c) of this section by the total number of borrowers in that cohort and the two most recent prior cohorts, as determined for each cohort under paragraph (b) of this section.
(a) General. (1) Except as provided under 34 CFR 600.32(d), if you undergo a change in status identified in this section, your cohort default rate is determined under this section.
(2) In determining cohort default rates under this section, the date of a merger, acquisition, or other change in status is the date the change occurs.
(3) A change in status may affect your eligibility to participate in Title IV, HEA programs under § 668.206 or § 668.207.
(4) If another institution's cohort default rate is applicable to you under this section, you may challenge, request an adjustment, or submit an appeal for the cohort default rate under the same requirements that would be applicable to the other institution under §§ 668.204 and 668.208.
(b) Acquisition or merger of institutions. If your institution acquires, or was created by the merger of, one or more institutions that participated independently in the Title IV, HEA programs immediately before the acquisition or merger—
(1) For the cohort default rates published before the date of the acquisition or merger, your cohort default rates are the same as those of your predecessor that had the highest total number of borrowers entering repayment in the two most recent cohorts used to calculate those cohort default rates; and
(2) Beginning with the first cohort default rate published after the date of the acquisition or merger, your cohort default rates are determined by including the applicable borrowers from each institution involved in the acquisition or merger in the calculation under § 668.202.
(c) Acquisition of branches or locations. If you acquire a branch or a location from another institution participating in the Title IV, HEA programs—
(1) The cohort default rates published for you before the date of the change apply to you and to the newly acquired branch or location;
(2) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and the other institution (including all of its locations) in the calculation under § 668.202;
(3) After the period described in paragraph (c)(2) of this section, your cohort default rates do not include borrowers from the other institution in the calculation under § 668.202; and
(4) At all times, the cohort default rate for the institution from which you acquired the branch or location is not affected by this change in status.
(d) Branches or locations becoming institutions. If you are a branch or location of an institution that is participating in the Title IV, HEA programs, and you become a separate, new institution for the purposes of participating in those programs—
(1) The cohort default rates published before the date of the change for your former parent institution are also applicable to you;
(2) Beginning with the first cohort default rate published after the date of the change, your cohort default rates for the next 3 fiscal years are determined by including the applicable borrowers from your institution and your former parent institution (including all of its locations) in the calculation under § 668.202; and
(3) After the period described in paragraph (d)(2) of this section, your cohort default rates do not include borrowers from your former parent institution in the calculation under § 668.202.
(a) General. (1) We notify you of your draft cohort default rate before your official cohort default rate is calculated. Our notice includes the loan record detail report for the draft cohort default rate.
(2) Regardless of the number of borrowers included in your cohort, your draft cohort default rate is always calculated using data for that fiscal year alone, using the method described in § 668.202(d)(1).
(3) Your draft cohort default rate and the loan record detail report are not considered public information and may not be otherwise voluntarily released to the public by a data manager.
(4) Any challenge you submit under this section and any response provided by a data manager must be in a format acceptable to us. This acceptable format is described in the “Cohort Default Rate Guide” that we provide to you. If your challenge does not comply with the requirements in the “Cohort Default Rate Guide,” we may deny your challenge.
(b) Incorrect data challenges. (1) You may challenge the accuracy of the data included on the loan record detail report by sending a challenge to the relevant data manager, or data managers, within 45 days after you receive the data. Your challenge must include—
(i) A description of the information in the loan record detail report that you believe is incorrect; and
(ii) Documentation that supports your contention that the data are incorrect.
(2) Within 30 days after receiving your challenge, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation that supports the data manager's position.
(3) If your data manager concludes that draft data in the loan record detail report are incorrect, and we agree, we use the corrected data to calculate your cohort default rate.
(4) If you fail to challenge the accuracy of data under this section, you cannot contest the accuracy of those data in an uncorrected data adjustment, under § 668.209, or in an erroneous data appeal, under § 668.211.
(c) Participation rate index challenges. (1)(i) You may challenge an anticipated loss of eligibility under § 668.206(a)(1), based on one cohort default rate over 40 percent, if your participation rate index for that cohort's fiscal year is equal to or less than 0.0832.
(ii) Subject to § 668.208(b), you may challenge a potential loss of eligibility under § 668.206(a)(2), based on any cohort default rate that is less than or equal to 40 percent, but greater than or equal to 30 percent, for any of the three most recently calculated fiscal years, if your participation rate index is equal to or less than 0.0625 for that cohort's fiscal year.
(iii) You may challenge a potential placement on provisional certification under § 668.16(m)(2)(i), based on any cohort default rate that fails to satisfy the standard of administrative capability in § 668.16(m)(1)(ii), if your participation rate index is equal to or less than 0.0625 for that cohort's fiscal year.
(2) For a participation rate index challenge, your participation rate index is calculated as described in § 668.214(b), except that—
(i) The draft cohort default rate is considered to be your most recent cohort default rate; and
(ii) If the cohort used to calculate your draft cohort default rate included fewer than 30 borrowers, you may calculate your participation rate index for that fiscal year using either your most recent draft cohort default rate or the average rate that would be calculated for that fiscal year, using the method described in § 668.202(d)(2).
(3) You must send your participation rate index challenge, including all supporting documentation, to us within 45 days after you receive your draft cohort default rate.
(4) We notify you of our determination on your participation rate index challenge before your official cohort default rate is published.
(5) If we determine that you qualify for continued eligibility or full certification based on your participation rate index challenge, you will not lose eligibility under § 668.206 or be placed on provisional certification under § 668.16(m)(2)(i) when your next official cohort default rate is published. Unless that next official cohort default rate is less than or equal to your draft cohort default rate, a successful challenge that is based on your draft cohort default rate does not excuse you from any other loss of eligibility or placement on provisional certification. However, if your successful challenge under paragraph (c)(1)(ii) or (iii) of this section is based on a prior, official cohort default rate, and not on your draft cohort default rate, or if the next official cohort default rate published is less than or equal to the draft rate you successfully challenged, we also excuse you from any subsequent loss of eligibility, under § 668.206(a)(2), or placement on provisional certification, under § 668.16(m)(2)(i), that would be based on that official cohort default rate.
(a) We electronically notify you of your cohort default rate after we calculate it, by sending you an eCDR notification package to the destination point you designate. After we send our notice to you, we publish a list of cohort default rates for all institutions.
(b) If you had one or more borrowers entering repayment in the fiscal year for which the rate is calculated, or are subject to sanctions, or if the Department believes you will have an official cohort default rate calculated as an average rate, you will receive a loan record detail report as part of your eCDR notification package.
(c) You have five business days, from the transmission date for eCDR notification packages as posted on the Department's Web site, to report any problem with receipt of the electronic transmission of your eCDR notification package.
(d) Except as provided in paragraph (e) of this section, timelines for submitting challenges, adjustments, and appeals begin on the sixth business day following the transmission date for eCDR notification packages that is posted on the Department's Web site.
(e) If you timely report a problem with transmission of your eCDR notification package under paragraph (c) of this section and the Department agrees that the problem with transmission was not caused by you, the Department will extend the challenge, appeal and adjustment deadlines and timeframes to account for a retransmission of your eCDR notification package after the technical problem is resolved.
(a) End of participation. (1) Except as provided in paragraph (e) of this section, you lose your eligibility to participate in the FFEL and Direct Loan programs 30 days after you receive our notice that your most recent cohort default rate for fiscal year 2011 or later is greater than 40 percent.
(2) Except as provided in paragraphs (d) and (e) of this section, you lose your eligibility to participate in the FFEL, Direct Loan, and Federal Pell Grant programs 30 days after you receive our notice that your three most recent cohort default rates are each 30 percent or greater.
(b) Length of period of ineligibility. Your loss of eligibility under this section continues—
(1) For the remainder of the fiscal year in which we notify you that you are subject to a loss of eligibility; and
(2) For the next 2 fiscal years.
(c) Using a cohort default rate more than once. The use of a cohort default rate as a basis for a loss of eligibility under this section does not preclude its use as a basis for—
(1) Any concurrent or subsequent loss of eligibility under this section; or
(2) Any other action by us.
(d) Continuing participation in Pell. If you are subject to a loss of eligibility under paragraph (a)(2) of this section, based on three cohort default rates of 30 percent or greater, you may continue to participate in the Federal Pell Grant Program if we determine that you—
(1) Were ineligible to participate in the FFEL and Direct Loan programs before October 7, 1998, and your eligibility was not reinstated;
(2) Requested in writing, before October 7, 1998, to withdraw your participation in the FFEL and Direct Loan programs, and you were not later reinstated; or
(3) Have not certified an FFELP loan or originated a Direct Loan Program loan on or after July 7, 1998.
(e) Requests for adjustments and appeals. (1) A loss of eligibility under this section does not take effect while your request for adjustment or appeal, as listed in § 668.208(a), is pending, provided your request for adjustment or appeal is complete, timely, accurate, and in the required format.
(2) Eligibility continued under paragraph (e)(1) of this section ends if we determine that none of the requests for adjustments and appeals you have submitted qualify you for continued eligibility under § 668.208. Loss of eligibility takes effect on the date that you receive notice of our determination on your last pending request for adjustment or appeal.
(3) You do not lose eligibility under this section if we determine that your request for adjustment or appeal meets all requirements of this subpart and qualifies you for continued eligibility under § 668.208.
(4) To avoid liabilities you might otherwise incur under paragraph (f) of this section, you may choose to suspend your participation in the FFEL and Direct Loan programs during the adjustment or appeal process.
(f) Liabilities during the adjustment or appeal process. If you continued to participate in the FFEL or Direct Loan Program under paragraph (e)(1) of this section, and we determine that none of your requests for adjustments or appeals qualify you for continued eligibility—
(1) For any FFEL or Direct Loan Program loan that you certified and delivered or originated and disbursed more than 30 days after you received the notice of your cohort default rate, we estimate the amount of interest, special allowance, reinsurance, and any related or similar payments we make or are obligated to make on those loans;
(2) We exclude from this estimate any amount attributable to funds that you delivered or disbursed more than 45 days after you submitted your completed appeal to us;
(3) We notify you of the estimated amount; and
(4) Within 45 days after you receive our notice of the estimated amount, you must pay us that amount, unless—
(i) You file an appeal under the procedures established in subpart H of this part (for the purposes of subpart H of this part, our notice of the estimate is considered to be a final program review determination); or
(ii) We permit a longer repayment period.
(g) Regaining eligibility. If you lose your eligibility to participate in a program under this section, you may not participate in that program until—
(1) The period described in paragraph (b) of this section has ended;
(2) You pay any amount owed to us under this section or are meeting that obligation under an agreement acceptable to us;
(3) You submit a new application for participation in the program;
(4) We determine that you meet all of the participation requirements in effect at the time of your application; and
(5) You and we enter into a new program participation agreement.
(a) General. You are subject to a loss of eligibility that has already been imposed against another institution as a result of cohort default rates if—
(1) You and the ineligible institution are both parties to a transaction that results in a change of ownership, a change in control, a merger, a consolidation, an acquisition, a change of name, a change of address, any change that results in a location becoming a freestanding institution, a purchase or sale, a transfer of assets, an assignment, a change of identification number, a contract for services, an addition or closure of one or more locations or branches or educational programs, or any other change in whole or in part in institutional structure or identity;
(2) Following the change described in paragraph (a)(1) of this section, you offer an educational program at substantially the same address at which the ineligible institution had offered an educational program before the change; and
(3) There is a commonality of ownership or management between you and the ineligible institution, as the ineligible institution existed before the change.
(b) Commonality of ownership or management. For the purposes of this section, a commonality of ownership or management exists if, at each institution, the same person (as defined in 34 CFR 600.31) or members of that person's family, directly or indirectly—
(1) Holds or held a managerial role; or
(2) Has or had the ability to affect substantially the institution's actions, within the meaning of 34 CFR 600.21.
(c) Teach-outs. Notwithstanding paragraph (b)(1) of this section, a commonality of management does not exist if you are conducting a teach-out under a teach-out agreement as defined in 34 CFR 602.3 and administered in accordance with 34 CFR 602.24(c), and—
(1)(i) Within 60 days after the change described in this section, you send us the names of the managers for each facility undergoing the teach-out as it existed before the change and for each facility as it exists after you believe that the commonality of management has ended; and
(ii) We determine that the commonality of management, as described in paragraph (b)(1) of this section, has ended; or
(2)(i) Within 30 days after you receive our notice that we have denied your submission under paragraph (c)(1)(i) of this section, you make the management changes we request and send us a list of the names of the managers for each facility undergoing the teach-out as it exists after you make those changes; and
(ii) We determine that the commonality of management, as described in paragraph (b)(1) of this section, has ended.
(d) Initial determination. We encourage you to contact us before undergoing a change described in this section. If you write to us, providing the information we request, we will provide a written initial determination of the anticipated change's effect on your eligibility.
(e) Notice of accountability. (1) We notify you in writing if, in response to your notice or application filed under 34 CFR 600.20 or 600.21, we determine that you are subject to a loss of eligibility, under paragraph (a) of this section, that has been imposed against another institution.
(2) Our notice also advises you of the scope and duration of your loss of eligibility. The loss of eligibility applies to all of your locations from the date you receive our notice until the expiration of the period of ineligibility applicable to the other institution.
(3) If you are subject to a loss of eligibility under this section that has already been imposed against another institution, you may only request an adjustment or submit an appeal for the loss of eligibility under the same requirements that would be applicable to the other institution under § 668.208.
(a) Remaining eligible. You do not lose eligibility under § 668.206 if—
(1) We recalculate your cohort default rate, and it is below the percentage threshold for the loss of eligibility as the result of—
(i) An uncorrected data adjustment submitted under this section and § 668.209;
(ii) A new data adjustment submitted under this section and § 668.210;
(iii) An erroneous data appeal submitted under this section and § 668.211; or
(iv) A loan servicing appeal submitted under this section and § 668.212; or
(2) You meet the requirements for—
(i) An economically disadvantaged appeal submitted under this section and § 668.213;
(ii) A participation rate index challenge or appeal submitted under this section and § 668.204 or § 668.214;
(iii) An average rates appeal submitted under this section and § 668.215; or
(iv) A thirty-or-fewer borrowers appeal submitted under this section and § 668.216.
(b) Limitations on your ability to dispute your cohort default rate. (1) You may not dispute the calculation of a cohort default rate except as described in this subpart or in § 668.16(m)(2).
(2) You may not challenge, request an adjustment to, or appeal a draft or official cohort default rate, under § 668.204, § 668.209, § 668.210, § 668.211, § 668.212, or § 668.214, more than once on that cohort default rate.
(3) You may not challenge, request an adjustment to, or appeal a draft or official cohort default rate, under § 668.204, § 668.209, § 668.210, § 668.211, § 668.212, or § 668.214, if you previously lost your eligibility to participate in a Title IV, HEA program, under § 668.206, or were placed on provisional certification under § 668.16(m)(2)(i), based entirely or partially on that cohort default rate.
(c) Content and format of requests for adjustments and appeals. We may deny your request for adjustment or appeal if it does not meet the following requirements:
(1) All appeals, notices, requests, independent auditor's opinions, management's written assertions, and other correspondence that you are required to send under this subpart must be complete, timely, accurate, and in a format acceptable to us. This acceptable format is described in the “Cohort Default Rate Guide” that we provide to you.
(2) Your completed request for adjustment or appeal must include—
(i) All of the information necessary to substantiate your request for adjustment or appeal; and
(ii) A certification by your chief executive officer, under penalty of perjury, that all the information you provide is true and correct.
(d) Our copies of your correspondence. Whenever you are required by this subpart to correspond with a party other than us, you must send us a copy of your correspondence within the same time deadlines. However, you are not required to send us copies of documents that you received from us originally.
(e) Requirements for data managers' responses. (1) Except as otherwise provided in this subpart, if this subpart requires a data manager to correspond with any party other than us, the data manager must send us a copy of the correspondence within the same time deadlines.
(2) If a data manager sends us correspondence under this subpart that is not in a format acceptable to us, we may require the data manager to revise that correspondence's format, and we may prescribe a format for that data manager's subsequent correspondence with us.
(f) Our decision on your request for adjustment or appeal. (1) We determine whether your request for an adjustment or appeal is in compliance with this subpart.
(2) In making our decision for an adjustment, under § 668.209 or § 668.210, or an appeal, under § 668.211 or § 668.212—
(i) We presume that the information provided to you by a data manager is correct unless you provide substantial evidence that shows the information is not correct; and
(ii) If we determine that a data manager did not provide the necessary clarifying information or legible records in meeting the requirements of this subpart, we presume that the evidence that you provide to us is correct unless it is contradicted or otherwise proven to be incorrect by information we maintain.
(3) Our decision is based on the materials you submit under this subpart. We do not provide an oral hearing.
(4) We notify you of our decision—
(i) If you request an adjustment or appeal because you are subject to a loss of eligibility under § 668.206 or potential placement on provisional certification under § 668.16(m)(2)(i) or file an economically disadvantaged appeal under § 668.213(a)(2), within 45 days after we receive your completed request for an adjustment or appeal; or
(ii) In all other cases, except for appeals submitted under § 668.211(a) following placement on provisional certification, before we notify you of your next official cohort default rate.
(5) You may not seek judicial review of our determination of a cohort default rate until we issue our decision on all pending requests for adjustments or appeals for that cohort default rate.
(a) Eligibility. You may request an uncorrected data adjustment for your most recent cohort of borrowers, used to calculate your most recent official cohort default rate, if in response to your challenge under § 668.204(b), a data manager agreed correctly to change the data, but the changes are not reflected in your official cohort default rate.
(b) Deadlines for requesting an uncorrected data adjustment. You must send us a request for an uncorrected data adjustment, including all supporting documentation, within 30 days after you receive your loan record detail report from us.
(c) Determination. We recalculate your cohort default rate, based on the corrected data, and electronically correct the rate that is publicly released if we determine that—
(1) In response to your challenge under § 668.204(b), a data manager agreed to change the data;
(2) The changes described in paragraph (c)(1) of this section are not reflected in your official cohort default rate; and
(3) We agree that the data are incorrect.
(a) Eligibility. You may request a new data adjustment for your most recent cohort of borrowers, used to calculate your most recent official cohort default rate, if—
(1) A comparison of the loan record detail reports that we provide to you for the draft and official cohort default rates shows that the data have been newly included, excluded, or otherwise changed; and
(2) You identify errors in the data described in paragraph (a)(1) of this section that are confirmed by the data manager.
(b) Deadlines for requesting a new data adjustment. (1) You must send to the relevant data manager, or data managers, and us a request for a new data adjustment, including all supporting documentation, within 15 days after you receive your loan record detail report from us.
(2) Within 20 days after receiving your request for a new data adjustment, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation used to support the data manager's position.
(3) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for a new data adjustment for that loan. We respond to your request as set forth under paragraph (b)(2) of this section.
(4) Within 15 days after receiving incomplete or illegible records or data from a data manager, you must send a request for replacement records or clarification of data to the data manager and us.
(5) Within 20 days after receiving your request for replacement records or clarification of data, the data manager must—
(i) Replace the missing or illegible records;
(ii) Provide clarifying information; or
(iii) Notify you and us that no clarifying information or additional or improved records are available.
(6) You must send us your completed request for a new data adjustment, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request or requests; or
(ii) If you are also filing an erroneous data appeal or a loan servicing appeal, by the latest of the filing dates required in paragraph (b)(6)(i) of this section or in § 668.211(b)(6)(i) or § 668.212(c)(10)(i).
(c) Determination. If we determine that incorrect data were used to calculate your cohort default rate, we recalculate your cohort default rate based on the correct data and make electronic corrections to the rate that is publicly released.
(a) Eligibility. Except as provided in § 668.208(b), you may appeal the calculation of a cohort default rate upon which a loss of eligibility, under § 668.206, or provisional certification, under § 668.16(m), is based if—
(1) You dispute the accuracy of data that you previously challenged on the basis of incorrect data, under § 668.204(b); or
(2) A comparison of the loan record detail reports that we provide to you for the draft and official cohort default rates shows that the data have been newly included, excluded, or otherwise changed, and you dispute the accuracy of that data.
(b) Deadlines for submitting an appeal. (1) You must send a request for verification of data errors to the relevant data manager, or data managers, and to us within 15 days after you receive the notice of your loss of eligibility or provisional certification. Your request must include a description of the information in the cohort default rate data that you believe is incorrect and all supporting documentation that demonstrates the error.
(2) Within 20 days after receiving your request for verification of data errors, the data manager must send you and us a response that—
(i) Addresses each of your allegations of error; and
(ii) Includes the documentation used to support the data manager's position.
(3) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for verification of that loan's data errors. Your request must include a description of the information in the cohort default rate data that you believe is incorrect and all supporting documentation that demonstrates the error. We respond to your request as set forth under paragraph (b)(2) of this section.
(4) Within 15 days after receiving incomplete or illegible records or data, you must send a request for replacement records or clarification of data to the data manager and us.
(5) Within 20 days after receiving your request for replacement records or clarification of data, the data manager must—
(i) Replace the missing or illegible records;
(ii) Provide clarifying information; or
(iii) Notify you and us that no clarifying information or additional or improved records are available.
(6) You must send your completed appeal to us, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request; or
(ii) If you are also requesting a new data adjustment or filing a loan servicing appeal, by the latest of the filing dates required in paragraph (b)(6)(i) of this section or in § 668.210(b)(6)(i) or § 668.212(c)(10)(i).
(c) Determination. If we determine that incorrect data were used to calculate your cohort default rate, we recalculate your cohort default rate based on the correct data and electronically correct the rate that is publicly released.
(a) Eligibility. Except as provided in § 668.208(b), you may appeal, on the basis of improper loan servicing or collection, the calculation of—
(1) Your most recent cohort default rate; or
(2) Any cohort default rate upon which a loss of eligibility under § 668.206 is based.
(b) Improper loan servicing. For the purposes of this section, a default is considered to have been due to improper loan servicing or collection only if the borrower did not make a payment on the loan and you prove that the FFEL Program lender or the Direct Loan Servicer, as defined in 34 CFR 685.102, failed to perform one or more of the following activities, if that activity applies to the loan:
(1) Send at least one letter (other than the final demand letter) urging the borrower to make payments on the loan.
(2) Attempt at least one phone call to the borrower.
(3) Send a final demand letter to the borrower.
(4) For a Direct Loan Program loan only, document that skip tracing was performed if the Direct Loan Servicer determined that it did not have the borrower's current address.
(5) For an FFELP loan only—
(i) Submit a request for preclaims or default aversion assistance to the guaranty agency; and
(ii) Submit a certification or other documentation that skip tracing was performed to the guaranty agency.
(c) Deadlines for submitting an appeal. (1) If the loan record detail report was not included with your official cohort default rate notice, you must request it within 15 days after you receive the notice of your official cohort default rate.
(2) You must send a request for loan servicing records to the relevant data manager, or data managers, and to us within 15 days after you receive your loan record detail report from us. If the data manager is a guaranty agency, your request must include a copy of the loan record detail report.
(3) Within 20 days after receiving your request for loan servicing records, the data manager must—
(i) Send you and us a list of the borrowers in your representative sample, as described in paragraph (d) of this section (the list must be in social security number order, and it must include the number of defaulted loans included in the cohort for each listed borrower);
(ii) Send you and us a description of how your representative sample was chosen; and
(iii) Either send you copies of the loan servicing records for the borrowers in your representative sample and send us a copy of its cover letter indicating that the records were sent, or send you and us a notice of the amount of its fee for providing copies of the loan servicing records.
(4) The data manager may charge you a reasonable fee for providing copies of loan servicing records, but it may not charge more than $10 per borrower file. If a data manager charges a fee, it is not required to send the documents to you until it receives your payment of the fee.
(5) If the data manager charges a fee for providing copies of loan servicing records, you must send payment in full to the data manager within 15 days after you receive the notice of the fee.
(6) If the data manager charges a fee for providing copies of loan servicing records, and—
(i) You pay the fee in full and on time, the data manager must send you, within 20 days after it receives your payment, a copy of all loan servicing records for each loan in your representative sample (the copies are provided to you in hard copy format unless the data manager and you agree that another format may be used), and it must send us a copy of its cover letter indicating that the records were sent; or
(ii) You do not pay the fee in full and on time, the data manager must notify you and us of your failure to pay the fee and that you have waived your right to challenge the calculation of your cohort default rate based on the data manager's records. We accept that determination unless you prove that it is incorrect.
(7) Within 15 days after receiving a guaranty agency's notice that we hold an FFELP loan about which you are inquiring, you must send us your request for the loan servicing records for that loan. We respond to your request under paragraph (c)(3) of this section.
(8) Within 15 days after receiving incomplete or illegible records, you must send a request for replacement records to the data manager and us.
(9) Within 20 days after receiving your request for replacement records, the data manager must either—
(i) Replace the missing or illegible records; or
(ii) Notify you and us that no additional or improved copies are available.
(10) You must send your appeal to us, including all supporting documentation—
(i) Within 30 days after you receive the final data manager's response to your request for loan servicing records; or
(ii) If you are also requesting a new data adjustment or filing an erroneous data appeal, by the latest of the filing dates required in paragraph (c)(10)(i) of this section or in § 668.210(b)(6)(i) or § 668.211(b)(6)(i).
(d) Representative sample of records. (1) To select a representative sample of records, the data manager first identifies all of the borrowers for whom it is responsible and who had loans that were considered to be in default in the calculation of the cohort default rate you are appealing.
(2) From the group of borrowers identified under paragraph (d)(1) of this section, the data manager identifies a sample that is large enough to derive an estimate, acceptable at a 95 percent confidence level with a plus or minus 5 percent confidence interval, for use in determining the number of borrowers who should be excluded from the calculation of the cohort default rate due to improper loan servicing or collection.
(e) Loan servicing records. Loan servicing records are the collection and payment history records—
(1) Provided to the guaranty agency by the lender and used by the guaranty agency in determining whether to pay a claim on a defaulted loan; or
(2) Maintained by our Direct Loan Servicer that are used in determining your cohort default rate.
(f) Determination. (1) We determine the number of loans, included in your representative sample of loan servicing records, that defaulted due to improper loan servicing or collection, as described in paragraph (b) of this section.
(2) Based on our determination, we use a statistically valid methodology to exclude the corresponding percentage of borrowers from both the numerator and denominator of the calculation of your cohort default rate, and electronically correct the rate that is publicly released.
(a) General. As provided in this section you may appeal—
(1) A notice of a loss of eligibility under § 668.206; or
(2) A notice of a second successive official cohort default rate calculated under this subpart that is equal to or greater than 30 percent but less than or equal to 40 percent, potentially subjecting you to provisional certification under § 668.16(m)(2)(i).
(b) Eligibility. You may appeal under this section if an independent auditor's opinion certifies that your low income rate is two-thirds or more and—
(1) You offer an associate, baccalaureate, graduate, or professional degree, and your completion rate is 70 percent or more; or
(2) You do not offer an associate, baccalaureate, graduate, or professional degree, and your placement rate is 44 percent or more.
(c) Low income rate. (1) Your low income rate is the percentage of your students, as described in paragraph (c)(2) of this section, who—
(i) For an award year that overlaps the 12-month period selected under paragraph (c)(2) of this section, have an expected family contribution, as defined in 34 CFR 690.2, that is equal to or less than the largest expected family contribution that would allow a student to receive one-half of the maximum Federal Pell Grant award, regardless of the student's enrollment status or cost of attendance; or
(ii) For a calendar year that overlaps the 12-month period selected under paragraph (c)(2) of this section, have an adjusted gross income that, when added to the adjusted gross income of the student's parents (if the student is a dependent student) or spouse (if the student is a married independent student), is less than the amount listed in the Department of Health and Human Services poverty guidelines for the size of the student's family unit.
(2) The students who are used to determine your low income rate include only students who were enrolled on at least a half-time basis in an eligible program at your institution during any part of a 12-month period that ended during the 6 months immediately preceding the cohort's fiscal year.
(d) Completion rate. (1) Your completion rate is the percentage of your students, as described in paragraph (d)(2) of this section, who—
(i) Completed the educational programs in which they were enrolled;
(ii) Transferred from your institution to a higher level educational program;
(iii) Remained enrolled and are making satisfactory progress toward completion of their educational programs at the end of the same 12-month period used to calculate the low income rate; or
(iv) Entered active duty in the Armed Forces of the United States within 1 year after their last date of attendance at your institution.
(2) The students who are used to determine your completion rate include only regular students who were—
(i) Initially enrolled on a full-time basis in an eligible program; and
(ii) Originally scheduled to complete their programs during the same 12-month period used to calculate the low income rate.
(e) Placement rate. (1) Except as provided in paragraph (e)(2) of this section, your placement rate is the percentage of your students, as described in paragraphs (e)(3) and (e)(4) of this section, who—
(i) Are employed, in an occupation for which you provided training, on the date following 1 year after their last date of attendance at your institution;
(ii) Were employed for at least 13 weeks, in an occupation for which you provided training, between the date they enrolled at your institution and the first date that is more than a year after their last date of attendance at your institution; or
(iii) Entered active duty in the Armed Forces of the United States within 1 year after their last date of attendance at your institution.
(2) For the purposes of this section, a former student is not considered to have been employed based on any employment by your institution.
(3) The students who are used to determine your placement rate include only former students who—
(i) Were initially enrolled in an eligible program on at least a half-time basis;
(ii) Were originally scheduled, at the time of enrollment, to complete their educational programs during the same 12-month period used to calculate the low income rate; and
(iii) Remained in the program beyond the point at which a student would have received a 100 percent tuition refund from you.
(4) A student is not included in the calculation of your placement rate if that student, on the date that is 1 year after the student's originally scheduled completion date, remains enrolled in the same program and is making satisfactory progress.
(f) Scheduled to complete. In calculating a completion or placement rate under this section, the date on which a student is originally scheduled to complete a program is based on—
(1) For a student who is initially enrolled full-time, the amount of time specified in your enrollment contract, catalog, or other materials for completion of the program by a full-time student; or
(2) For a student who is initially enrolled less than full-time, the amount of time that it would take the student to complete the program if the student remained at that level of enrollment throughout the program.
(g) Deadline for submitting an appeal. (1) Within 30 days after you receive the notice of your loss of eligibility or of a rate described in paragraph (a)(2) of this section, you must send us your management's written assertion, as described in the Cohort Default Rate Guide.
(2) Within 60 days after you receive the notice of your loss of eligibility or of a rate described in paragraph (a)(2) of this section, you must send us the independent auditor's opinion described in paragraph (h) of this section.
(h) Independent auditor's opinion. (1) The independent auditor's opinion must state whether your management's written assertion, as you provided it to the auditor and to us, meets the requirements for an economically disadvantaged appeal and is fairly stated in all material respects.
(2) The engagement that forms the basis of the independent auditor's opinion must be an examination-level compliance attestation engagement performed in accordance with—
(i) The American Institute of Certified Public Accountants' (AICPA) Statement on Standards for Attestation Engagements, Compliance Attestation (AICPA, Professional Standards, vol. 1, AT sec. 500), as amended (these standards may be obtained by calling the AICPA's order department, at 1-888-777-7077); and
(ii) Government Auditing Standards issued by the Comptroller General of the United States.
(i) Determination. You do not lose eligibility under § 668.206, and we do not provisionally certify you under § 668.16(m)(2)(i), if—
(1) Your independent auditor's opinion agrees that you meet the requirements for an economically disadvantaged appeal; and
(2) We determine that the independent auditor's opinion and your management's written assertion—
(i) Meet the requirements for an economically disadvantaged appeal; and
(ii) Are not contradicted or otherwise proven to be incorrect by information we maintain, to an extent that would render the independent auditor's opinion unacceptable.
(a) Eligibility. (1) You do not lose eligibility under § 668.206(a)(1), based on one cohort default rate over 40 percent, if you bring an appeal in accordance with this section that demonstrates that your participation rate index for that cohort's fiscal year is equal to or less than 0.0832.
(2) Subject to § 668.208(b), you do not lose eligibility under § 668.206(a)(2) if you bring an appeal in accordance with this section that demonstrates that your participation rate index for any of the three most recent cohorts' fiscal years is equal to or less than 0.0625.
(3) Subject to § 668.208(b), you are not placed on provisional certification under § 668.16(m)(2)(i) based on two cohort default rates that fail to satisfy the standard of administrative capability in § 668.16(m)(1)(ii) if you bring an appeal in accordance with this section that demonstrates that your participation rate index for either of those two cohorts' fiscal years is equal to or less than 0.0625.
(b) Calculating your participation rate index. (1) Except as provided in paragraph (b)(2) of this section, your participation rate index for a fiscal year is determined by multiplying your cohort default rate for that fiscal year by the percentage that is derived by dividing—
(i) The number of students who received an FFELP or a Direct Loan Program loan to attend your institution during a period of enrollment, as defined in 34 CFR 682.200 or 685.102, that overlaps any part of a 12-month period that ended during the 6 months immediately preceding the cohort's fiscal year, by
(ii) The number of regular students who were enrolled at your institution on at least a half-time basis during any part of the same 12-month period.
(2) If your cohort default rate for a fiscal year is calculated as an average rate under § 668.202(d)(2), you may calculate your participation rate index for that fiscal year using either that average rate or the cohort default rate that would be calculated for the fiscal year alone using the method described in § 668.202(d)(1).
(c) Deadline for submitting an appeal. You must send us your appeal under this section, including all supporting documentation, within 30 days after you receive—
(1) Notice of your loss of eligibility; or
(2) Notice under § 668.205 of a cohort default rate that equals or exceeds 30 percent but is less than or equal to 40 percent.
(d) Determination. (1) You do not lose eligibility under § 668.206 and we do not place you on provisional certification, if we determine that you meet the requirements for a participation rate index appeal.
(2) If we determine that your participation rate index for a fiscal year is equal to or less than 0.0832 or 0.0625, as applicable, under paragraph (d)(1) of this section, we also excuse you from any subsequent loss of eligibility under § 668.206(a)(2) or placement on provisional certification under § 668.16(m)(2)(i) that would be based on the official cohort default rate for that fiscal year.
(a) Eligibility. (1) You may appeal a notice of a loss of eligibility under § 668.206(a)(1), based on one cohort default rate over 40 percent, if that cohort default rate is calculated as an average rate under § 668.202(d)(2).
(2) You may appeal a notice of a loss of eligibility under § 668.206(a)(2), based on three cohort default rates of 30 percent or greater, if at least two of those cohort default rates—
(i) Are calculated as average rates under § 668.202(d)(2); and
(ii) Would be less than 30 percent if calculated for the fiscal year alone using the method described in § 668.202(d)(1).
(b) Deadline for submitting an appeal. (1) Before notifying you of your official cohort default rate, we make an initial determination about whether you qualify for an average rates appeal. If we determine that you qualify, we notify you of that determination at the same time that we notify you of your official cohort default rate.
(2) If you disagree with our initial determination, you must send us your average rates appeal, including all supporting documentation, within 30 days after you receive the notice of your loss of eligibility.
(c) Determination. You do not lose eligibility under § 668.206 if we determine that you meet the requirements for an average rates appeal.
(a) Eligibility. You may appeal a notice of a loss of eligibility under § 668.206 if 30 or fewer borrowers, in total, are included in the 3 most recent cohorts of borrowers used to calculate your cohort default rates.
(b) Deadline for submitting an appeal. (1) Before notifying you of your official cohort default rate, we make an initial determination about whether you qualify for a thirty-or-fewer borrowers appeal. If we determine that you qualify, we notify you of that determination at the same time that we notify you of your official cohort default rate.
(2) If you disagree with our initial determination, you must send us your thirty-or-fewer borrowers appeal, including all supporting documentation, within 30 days after you receive the notice of your loss of eligibility.
(c) Determination. You do not lose eligibility under § 668.206 if we determine that you meet the requirements for a thirty-or-fewer borrowers appeal.
(a) First year. (1) If your cohort default rate is equal to or greater than 30 percent you must establish a default prevention task force that prepares a plan to—
(i) Identify the factors causing your cohort default rate to exceed the threshold;
(ii) Establish measurable objectives and the steps you will take to improve your cohort default rate;
(iii) Specify the actions you will take to improve student loan repayment, including counseling students on repayment options; and
(iv) Submit your default prevention plan to us.
(2) We will review your default prevention plan and offer technical assistance intended to improve student loan repayment.
(b) Second year. (1) If your cohort default rate is equal to or greater than 30 percent for two consecutive fiscal years, you must revise your default prevention plan and submit it to us for review.
(2) We may require you to revise your default prevention plan or specify actions you need to take to improve student loan repayment.
This appendix is provided as a sample plan for those institutions developing a default prevention plan in accordance with § 668.217(a). It describes some measures you may find helpful in reducing the number of students that default on Federally funded loans. These are not the only measures you could implement when developing a default prevention plan.
1. Establish your default prevention team by engaging your chief executive officer and relevant senior executive officials and enlisting the support of representatives from offices other than the financial aid office. Consider including individuals and organizations independent of your institution that have experience in preventing title IV loan defaults.
2. Consider your history, resources, dollars in default, and targets for default reduction to determine which activities will result in the most benefit to you and your students.
3. Define evaluation methods and establish a data collection system for measuring and verifying relevant default prevention statistics, including a statistical analysis of the borrowers who default on their loans.
4. Identify and allocate the personnel, administrative, and financial resources appropriate to implement the default prevention plan.
5. Establish annual targets for reductions in your rate.
6. Establish a process to ensure the accuracy of your rate.
1. Enhance the borrower's understanding of his or her loan repayment responsibilities through counseling and debt management activities.
2. Enhance the enrollment retention and academic persistence of borrowers through counseling and academic assistance.
3. Maintain contact with the borrower after he or she leaves your institution by using activities such as skip tracing to locate the borrower.
4. Track the borrower's delinquency status by obtaining reports from data managers and FFEL Program lenders.
5. Enhance student loan repayments through counseling the borrower on loan repayment options and facilitating contact between the borrower and the data manager or FFEL Program lender.
6. Assist a borrower who is experiencing difficulty in finding employment through career counseling, job placement assistance, and facilitating unemployment deferments.
7. Identify and implement alternative financial aid award policies and develop alternative financial resources that will reduce the need for student borrowing in the first 2 years of academic study.
1. The number of students enrolled at your institution during each fiscal year.
2. The average amount borrowed by a student each fiscal year.
3. The number of borrowers scheduled to enter repayment each fiscal year.
4. The number of enrolled borrowers who received default prevention counseling services each fiscal year.
5. The average number of contacts that you or your agent had with a borrower who was in deferment or forbearance or in repayment status during each fiscal year.
6. The number of borrowers at least 60 days delinquent each fiscal year.
7. The number of borrowers who defaulted in each fiscal year.
8. The type, frequency, and results of activities performed in accordance with the default prevention plan.
This subpart establishes regulations that apply to an institution that offers comprehensive transition and postsecondary programs to students with intellectual disabilities. Students enrolled in these programs are eligible for Federal financial assistance under the Federal Pell Grant, FSEOG, and FWS programs. Except for provisions related to needs analysis, the Secretary may waive any Title IV, HEA program requirement related to the Federal Pell Grant, FSEOG, and FWS programs or institutional eligibility, to ensure that students with intellectual disabilities remain eligible for funds under these assistance programs. However, unless provided in this subpart or subsequently waived by the Secretary, students with intellectual disabilities and institutions that offer comprehensive transition and postsecondary programs are subject to the same regulations and procedures that otherwise apply to Title IV, HEA program participants.
The following definitions apply to this subpart:
(a) Comprehensive transition and postsecondary program means a degree, certificate, nondegree, or noncertificate program that—
(1) Is offered by a participating institution;
(2) Is delivered to students physically attending the institution;
(3) Is designed to support students with intellectual disabilities who are seeking to continue academic, career and technical, and independent living instruction at an institution of higher education in order to prepare for gainful employment;
(4) Includes an advising and curriculum structure;
(5) Requires students with intellectual disabilities to have at least one-half of their participation in the program, as determined by the institution, focus on academic components through one or more of the following activities:
(i) Taking credit-bearing courses with students without disabilities.
(ii) Auditing or otherwise participating in courses with students without disabilities for which the student does not receive regular academic credit.
(iii) Taking non-credit-bearing, nondegree courses with students without disabilities.
(iv) Participating in internships or work-based training in settings with individuals without disabilities; and
(6) Provides students with intellectual disabilities opportunities to participate in coursework and other activities with students without disabilities.
(b) Student with an intellectual disability means a student—
(1) With a cognitive impairment characterized by significant limitations in—
(i) Intellectual and cognitive functioning; and
(ii) Adaptive behavior as expressed in conceptual, social, and practical adaptive skills; and
(2) Who is currently, or was formerly, eligible for special education and related services under the Individuals with Disabilities Education Act (IDEA) (20 U.S.C. 1401), including a student who was determined eligible for special education or related services under the IDEA but was home-schooled or attended private school.
An institution that offers a comprehensive transition and postsecondary program must apply to the Secretary to have the program determined to be an eligible program. The institution applies under the provisions in 34 CFR 600.20 for adding an educational program, and must include in its application—
(a) A detailed description of the comprehensive transition and postsecondary program that addresses all of the components of the program, as defined in § 668.231;
(b) The institution's policy for determining whether a student enrolled in the program is making satisfactory academic progress;
(c) The number of weeks of instructional time and the number of semester or quarter credit hours or clock hours in the program, including the equivalent credit or clock hours associated with noncredit or reduced credit courses or activities;
(d) A description of the educational credential offered (e.g., degree or certificate) or identified outcome or outcomes established by the institution for all students enrolled in the program;
(e) A copy of the letter or notice sent to the institution's accrediting agency informing the agency of its comprehensive transition and postsecondary program. The letter or notice must include a description of the items in paragraphs (a) through (d) of this section; and
(f) Any other information the Secretary may require.
A student with an intellectual disability is eligible to receive Federal Pell, FSEOG, and FWS program assistance under this subpart if—
(a) The student satisfies the general student eligibility requirements under § 668.32, except for the requirements in paragraphs (a), (e), and (f) of that section. With regard to these exceptions, a student—
(1) Does not have to be enrolled for the purpose of obtaining a degree or certificate;
(2) Is not required to have a high school diploma, a recognized equivalent of a high school diploma, or have passed an ability to benefit test; and
(3) Is making satisfactory progress according to the institution's published standards for students enrolled in its comprehensive transition and postsecondary programs;
(b) The student is enrolled in a comprehensive transition and postsecondary program approved by the Secretary; and
(c) The institution obtains a record from a local educational agency that the student is or was eligible for special education and related services under the IDEA. If that record does not identify the student as having an intellectual disability, as described in paragraph (1) of the definition of a student with an intellectual disability in § 668.231, the institution must also obtain documentation establishing that the student has an intellectual disability, such as—
(1) A documented comprehensive and individualized psycho-educational evaluation and diagnosis of an intellectual disability by a psychologist or other qualified professional; or
(2) A record of the disability from a local or State educational agency, or government agency, such as the Social Security Administration or a vocational rehabilitation agency, that identifies the intellectual disability.
This subpart establishes regulations that apply to an institution that offers prison education programs to confined or incarcerated individuals. A confined or incarcerated individual enrolled in an eligible prison education program is eligible for Federal financial assistance under the Federal Pell Grant program. Unless provided in this subpart, confined or incarcerated individuals and institutions that offer prison education programs are subject to the same regulations and procedures that otherwise apply to title IV, HEA program participants.
The following definitions apply to this subpart:
Additional location has the meaning given in 34 CFR 600.2.
Advisory committee is a group established by the oversight entity that provides nonbinding feedback to the oversight entity regarding the approval and operation of a prison education program within the oversight entity's jurisdiction.
Confined or incarcerated individual has the meaning given in 34 CFR 600.2.
Feedback process is the process developed by the oversight entity to gather nonbinding input from relevant stakeholders regarding the approval and operation of a prison education program within the oversight entity's jurisdiction. A feedback process may include an advisory committee.
Oversight entity means—
(1) The appropriate State department of corrections or other entity that is responsible for overseeing correctional facilities; or
(2) The Federal Bureau of Prisons.
Relevant stakeholders are individuals and organizations that provide input as part of a feedback process to the oversight entity regarding the approval and operation of a prison education program within the oversight entity's jurisdiction. These stakeholders must include representatives of confined or incarcerated individuals, organizations representing confined or incarcerated individuals, State higher education executive offices, and accrediting agencies and may include additional stakeholders as determined by the oversight entity.
(a) An eligible prison education program means an education or training program that—
(1) Is an eligible program under § 668.8 offered by an institution of higher education as defined in 34 CFR 600.4, or a postsecondary vocational institution as defined in 34 CFR 600.6;
(2) Is offered by an eligible institution that has been approved to operate in a correctional facility by the oversight entity;
(3) After an initial two-year approval, is determined by the oversight entity to be operating in the best interest of students as described in § 668.241;
(4) Offers transferability of credits to at least one institution of higher education (as defined in 34 CFR 600.4 and 600.6) in the State where the correctional facility is located, or, in the case of a Federal correctional facility, in the State where most of the individuals confined or incarcerated individuals in such facility will reside upon release as determined by the institution based on information provided by the oversight entity;
(5) Is offered by an institution that has not been subject, during the five years preceding the date of the determination, to—
(i) Any suspension, emergency action, or termination of programs under this title;
(ii) Any final accrediting action that is an adverse action as defined in 34 CFR 602.3 by the institution's accrediting agency; or
(iii) Any action by the State to revoke a license or other authority to operate;
(6) Subject to paragraph (b) of this section, is offered by an institution that is not subject to a current initiated adverse action;
(7) Satisfies any applicable educational requirements for professional licensure or certification, including any requirements to sit for licensure or certification examinations needed to practice or obtain employment in the sectors or occupations for which the program prepares the individual, in the State where the correctional facility is located or, in the case of a Federal correctional facility, in the State where most of the individuals confined or incarcerated individuals in such facility will reside upon release, as determined by the institution not less than annually based on information provided by the oversight entity; and
(8) Does not offer education that is designed to lead to licensure or employment for a specific job or occupation in the State if such job or occupation typically involves prohibitions on the licensure or employment of formerly confined or incarcerated individuals in the State where the correctional facility is located, or, in the case of a Federal correctional facility, in the State where most of the individuals confined or incarcerated individuals in such facility will reside upon release, as determined by the institution not less than annually based on information provided by the oversight entity.
(b) With respect to the criterion in paragraph (a)(6) of this section—
(1) If an accrediting agency initiates an adverse action, the institution cannot begin its first or a subsequent prison education program unless and until the initiated adverse action has been rescinded; and
(2) If the institution currently offers one or more prison education programs and is subject to an initiated adverse action, the institution must submit a teach-out plan and if practicable, a teach-out agreement, as defined in 34 CFR 600.2, to the institution's accrediting agency.
(c) With respect to the criterion in paragraph (a)(8) of this section—
(1) In the case of State and local correctional facilities, the postsecondary institution may not enroll any student in a prison education program if the student is prohibited or barred by any Federal law, or law in the State in which the correctional facility is located, from licensure or employment in the sectors or occupations for which the program prepares the individual based on any criminal conviction or specific types of criminal convictions; or
(2) In the case of a Federal correctional facility, the postsecondary institution may not enroll any student in a prison education program if the student is prohibited or barred by any Federal law, or law in the State in which more than half of the confined or incarcerated individuals in such facility will reside upon release, from licensure or employment in the sectors or occupations for which the program prepares the individual based on any criminal conviction or specific types of criminal convictions.
(3) Prohibitions on licensure or employment do not include local laws, screening requirements for good moral character, or similar provisions; State or Federal laws that have been repealed, even if the repeal has not yet taken effect or if the repeal occurs between assessments of the postsecondary institution by the oversight entity; or other restrictions as determined by the Secretary.
(a) To be an eligible program under § 668.236, a prison education program must meet the requirements of the institution's accrediting agency or State approval agency.
(b) In order for any prison education program to qualify as an eligible program, the accrediting agency must have—
(1) Evaluated at least the first prison education program at the first two additional locations to ensure the institution's ability to offer and implement the program and that the program meets the agency's accreditation standards, and included it in the institution's grant of accreditation or pre-accreditation;
(2) Evaluated the first additional prison education program offered by a new method of delivery to ensure the institution's ability to offer and implement the program and that the program meets the agency's standards, and included it in the institution's grant of accreditation or pre-accreditation;
(3) Performed a site visit as soon as practicable but no later than one year after initiating the prison education program at the first two additional locations; and
(4) If the requirements under § 668.236(a)(3) are satisfied, reviewed and approved the methodology for how the institution, in collaboration with the oversight entity, made the determination that the prison education program meets the same standards as substantially similar programs that are not prison education programs at the institution.
(a) An institution that seeks to offer a prison education program must apply to the Secretary to have its first prison education program at the first two additional locations determined to be eligible programs for title IV, HEA program purposes. Following the Secretary's initial approval of an institution's prison education program, additional prison education programs offered by the same postsecondary institution at the same location may be determined eligible without further approvals from the Secretary except as required by 34 CFR 600.7, 600.10, 600.20(c)(1), or 600.21(a), as applicable, if such programs are consistent with the institution's accreditation or its State approval agency requirements.
(b) The institution's prison education program application must provide information satisfactory to the Secretary that includes—
(1) A description of the educational program, including the educational credential offered (degree level or certificate) and the field of study;
(2) Documentation from the institution's accrediting agency or State approval agency indicating that the agency has evaluated the prison education program and has included the program in the institution's grant of accreditation and approval documentation from the accrediting agency or State approval agency;
(3) The name of the correctional facility and documentation from the oversight entity that the prison education program has been approved to operate in the correctional facility;
(4) Documentation detailing the methodology, including thresholds, benchmarks, standards, metrics, data, and other information, the oversight entity used in approving the prison education program and how all the information was collected;
(5) Information about the types of services offered to admitted students, including orientation, tutoring, and academic and reentry counseling. If reentry counseling is provided by a community-based organization that has partnered with the eligible prison education program, institution, or correctional facility to provide reentry services, the application also must provide information about the types of services offered by that community-based organization;
(6) Affirmative acknowledgement that the Secretary can limit or terminate approval of an institution to provide a prison education program as described in § 668.237;
(7) Affirmative agreement to submit all required reports to the Secretary pursuant to § 668.239;
(8) Documentation that the institution has entered into an agreement with the oversight entity to obtain data about transfer and release dates of confined or incarcerated individuals, which will be reported to the Department of Education; and
(9) Such other information as the Secretary deems necessary.
(c) For the second or subsequent eligible prison education program at a location, to meet the requirements under 34 CFR 600.21, an institution must submit—
(1) Documentation from the institution's accrediting agency noting that the institution complies with § 668.236(a)(6) and was not subject in the last five years to any final accrediting action that is an adverse action by the institution's accrediting agency;
(2) Documentation from the institution confirming that it was not subject in the last five years to any State action to revoke a license or other authority to operate; and
(3) Documentation that the institution has entered into an agreement with the oversight entity to obtain data about transfer and release dates of confined or incarcerated individuals, which will be reported to the Department of Education pursuant to § 668.239.
(a) An institution must submit reports, in accordance with deadlines established and published by the Secretary in the
(b) The institution reports such information as the Secretary requires, in compliance with procedures the Secretary describes.
(c) The institution reports information about transfer and release dates of confined or incarcerated individuals, as required by the Secretary, through an agreement with the oversight entity.
(a) The Secretary may limit or terminate or otherwise end the approval of an institution to provide an eligible prison education program if the Secretary determines that the institution violated any terms of this subpart or that the institution submitted materially inaccurate information to the Secretary, accrediting agency, State agency, or oversight entity.
(b) If the Secretary initiates action limiting or terminating an institution's approval to operate an eligible prison education program, the institution must submit a teach-out plan and, if practicable, a teach-out agreements (as defined in 34 CFR 600.2) to its accrediting agency upon occurrence of the event.
(a) An oversight entity's determination that a prison education program is operating in the best interest of students—
(1) Must include an assessment of—
(i) Whether the experience, credentials, and rates of turnover or departure of instructors for the prison education program are substantially similar to other programs at the institution, accounting for the unique geographic and other constraints of prison education programs;
(ii) Whether the transferability of credits for courses available to confined or incarcerated individuals and the applicability of such credits toward related degree or certificate programs is substantially similar to those at other similar programs at the institution, accounting for the unique geographic and other constraints of prison education programs;
(iii) Whether the prison education program's offering of relevant academic and career advising services to participating confined or incarcerated individuals, while they are confined or incarcerated, in advance of reentry, and upon release, is substantially similar to offerings to a student who is not a confined or incarcerated individual and who is enrolled in, and may be preparing to transfer from, the same institution, accounting for the unique geographic and other constraints of prison education programs; and
(iv) Whether the institution ensures that all formerly confined or incarcerated individuals are able to fully transfer their credits and continue their programs at any location of the institution that offers a comparable program, including by the same mode of instruction; and
(2) May include an assessment of—
(i) Whether the rates of recidivism, which do not include any recidivism by the student after a reasonable number of years of release and which only include new felony convictions, defined as each sentence of imprisonment exceeding one year and one month (see United States Sentencing Guideline section 4A1.1(a)), meet thresholds set by the oversight entity;
(ii) Whether the rates of completion reported by the Department, which do not include any students who were transferred across facilities and which account for the status of part-time students, meet thresholds set by the oversight entity with input from relevant stakeholders;
(iii) Whether the rate of confined or incarcerated individuals continuing their education post-release, as determined by the percentage of students who reenroll in higher education reported by the Department, meets thresholds established by the oversight entity with input from relevant stakeholders;
(iv) Whether job placement rates in the relevant field for such individuals meet any applicable standards required by the accrediting agency for the institution or program or a State where the institution is authorized. If no job placement rate standard applies to prison education programs offered by the institution, the oversight entity may define, and the institution may report, a job placement rate, with input from relevant stakeholders;
(v) Earnings for such individuals, which could include measuring such earnings against a threshold established by the oversight entity; and
(vi) Other indicators pertinent to program success as determined by the oversight entity.
(b) An oversight entity makes the best interest determination—
(1) Through a feedback process that considers input from relevant stakeholders; and
(2) In light of the totality of the circumstances.
(c) If the oversight entity does not find a program to be in the best interest of students, it must allow for programs to re-apply within a reasonable timeframe.
(d) After the two years of initial approval under § 668.236, the oversight entity must determine that the prison education program is operating in the best interest of students, under paragraph (a) of this section.
(e)(1) After its initial determination under paragraph (d) of this section that a program is operating in the best interest of confined or incarcerated individuals, the institution must obtain subsequent evaluations of each eligible prison education program from the responsible oversight entity not less than 120 calendar days prior to the expiration of the institution's Program Participation Agreements. The oversight entity may also make a determination between subsequent evaluations based on the oversight entity's regular monitoring and evaluation of program outcomes.
(2) Each subsequent evaluation must—
(i) Include the entire period following the prior determination and be based on the applicable factors in paragraph (a) of this section for all students enrolled in the program since the prior determination;
(ii) Include input from relevant stakeholders through the oversight entity's feedback process; and
(iii) Be submitted to the Secretary no later than 30 days following completion of the evaluation.
(f)(1) The institution must obtain and maintain documentation of the methodology by which the oversight entity made each determination under this section and under § 668.236(a)(2) and (3) for review by the institution's accrediting agency, for submission to the Department for approval of the first program at the first two additional locations, to document input from relevant stakeholders through the oversight entity's feedback process in paragraphs (b)(1) and (e)(2)(ii) of this section, for reporting to the Department, and for public disclosure.
(2) The institution must maintain the documentation described in paragraph (f)(1) of this section for as long as the program is active or, if the program is discontinued, for three years following the date of discontinuance.
For institutions operating eligible prison education programs in a correctional facility that is not a Federal or State penal institution:
(a) A confined or incarcerated individual who otherwise meets the eligibility requirements to receive a Federal Pell Grant and is enrolled in an eligible program that does not meet the requirements under subpart P of this part may continue to receive a Federal Pell Grant until the earlier of—
(1) July 1, 2029;
(2) The student reaches the maximum timeframe for program completion under § 668.34; or
(3) The student has exhausted Pell Grant eligibility under 34 CFR 690.6(e).
(b) An institution is not permitted to enroll a confined or incarcerated individual on or after July 1, 2023, who was not enrolled in an eligible program prior to July 1, 2023, unless the institution first converts the eligible program into an eligible prison education program as defined in § 668.236.
(a) General. Except as provided under paragraph (b) of this section, this subpart applies to a GE program or eligible non-GE program offered by an eligible institution, and establishes the rules and procedures under which—
(1) An institution reports information about the program to the Secretary; and
(2) Except as provided in paragraph (b)(1) of this section, the Secretary assesses the program's debt and earnings outcomes.
(b) Applicability. (1) This subpart does not apply to institutions located in U.S. Territories or freely associated states, except that such institutions are subject to the reporting requirements in § 668.408 and the Secretary will follow the procedures in §§ 668.403(b) and (d) and 668.405(b) and (c) to calculate median debt and obtain earnings information for their GE programs and eligible non-GE programs.
(2) For each award year that the Secretary calculates D/E rates or the earnings premium measure under § 668.402, this subpart does not apply to an institution if, over the most recently completed four award years, it offered no groups of substantially similar programs, defined as all programs in the same four-digit CIP code at an institution, with 30 or more completers.
(a) General. The Secretary assesses the program's debt and earnings outcomes using debt-to-earnings rates (D/E rates) and an earnings premium measure.
(b) Debt-to-earnings rates. The Secretary calculates for each award year two D/E rates for an eligible program, the discretionary debt-to-earnings rate, and the annual debt-to-earnings rate, using the procedures in §§ 668.403 and 668.405.
(c) Outcomes of the D/E rates. (1) A program passes the D/E rates if—
(i) Its discretionary debt-to-earnings rate is less than or equal to 20 percent;
(ii) Its annual debt-to-earnings rate is less than or equal to 8 percent; or
(iii) The denominator (median annual or discretionary earnings) of either rate is zero and the numerator (median debt payments) is zero.
(2) A program fails the D/E rates if—
(i) Its discretionary debt-to-earnings rate is greater than 20 percent or the income for the denominator of the rate (median discretionary earnings) is negative or zero and the numerator (median debt payments) is positive; and
(ii) Its annual debt-to-earnings rate is greater than 8 percent or the denominator of the rate (median annual earnings) is zero and the numerator (median debt payments) is positive.
(d) Earnings premium measure. For each award year, the Secretary calculates the earnings premium measure for an eligible program, using the procedures in §§ 668.404 and 668.405.
(e) Outcomes of the earnings premium measure. (1) A program passes the earnings premium measure if the median annual earnings of the students who completed the program exceed the earnings threshold.
(2) A program fails the earnings premium measure if the median annual earnings of the students who completed the program are equal to or less than the earnings threshold.
(a) General. Except as provided under paragraph (f) of this section, for each award year, the Secretary calculates D/E rates for a program as follows:
(1) Discretionary debt-to-earnings rate = annual loan payment/(the median annual earnings—(1.5 x Poverty Guideline)). For the purposes of this paragraph (a)(1), the Secretary applies the Poverty Guideline for the most recent calendar year for which annual earnings are obtained under paragraph (c) of this section.
(2) Annual debt-to-earnings rate = annual loan payment/the median annual earnings.
(b) Annual loan payment. The Secretary calculates the annual loan payment for a program by—
(1)(i) Determining the median loan debt of the students who completed the program during the cohort period, based on the lesser of the loan debt incurred by each student as determined under paragraph (d) of this section or the total amount for tuition and fees and books, equipment, and supplies for each student, less the amount of institutional grant or scholarship funds provided to that student;
(ii) Removing, if applicable, the appropriate number of largest loan debts as described in § 668.405(d)(2); and
(iii) Calculating the median of the remaining amounts; and
(2) Amortizing the median loan debt—
(i)(A) Over a 10-year repayment period for a program that leads to an undergraduate certificate, a post-baccalaureate certificate, an associate degree, or a graduate certificate;
(B) Over a 15-year repayment period for a program that leads to a bachelor's degree or a master's degree; or
(C) Over a 20-year repayment period for any other program; and
(ii) Using an annual interest rate that is the average of the annual statutory interest rates on Federal Direct Unsubsidized Loans that were in effect during—
(A) The three consecutive award years, ending in the final year of the cohort period, for undergraduate certificate programs, post-baccalaureate certificate programs, and associate degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to undergraduate students;
(B) The three consecutive award years, ending in the final year of the cohort period, for graduate certificate programs and master's degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to graduate students;
(C) The six consecutive award years, ending in the final year of the cohort period, for bachelor's degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to undergraduate students; and
(D) The six consecutive award years, ending in the final year of the cohort period, for doctoral programs and first professional degree programs. For these programs, the Secretary uses the Federal Direct Unsubsidized Loan interest rate applicable to graduate students.
(c) Annual earnings. (1) The Secretary obtains from a Federal agency with earnings data, under § 668.405, the most currently available median annual earnings of the students who completed the program during the cohort period and who are not excluded under paragraph (e) of this section; and
(2) The Secretary uses the median annual earnings to calculate the D/E rates.
(d) Loan debt and assessed charges. (1) In determining the loan debt for a student, the Secretary includes—
(i) The amount of Direct Loans that the student borrowed (total amount disbursed less any cancellations or adjustments except for those related to false certification, borrower defense discharges, or categorical debt relief initiated under the Secretary's statutory authority) for enrollment in the program, excluding Direct PLUS Loans made to parents of dependent students and Direct Unsubsidized Loans that were converted from TEACH Grants;
(ii) Any private education loans as defined in 34 CFR 601.2, including private education loans made by the institution, that the student borrowed for enrollment in the program and that are required to be reported by the institution under § 668.408; and
(iii) The amount outstanding, as of the date the student completes the program, on any other credit (including any unpaid charges) extended by or on behalf of the institution for enrollment in any program attended at the institution that the student is obligated to repay after completing the program, including extensions of credit described in paragraphs (1) and (2) of the definition of, and excluded from, the term “private education loan” in 34 CFR 601.2;
(2) The Secretary attributes all the loan debt incurred by the student for enrollment in any—
(i) Undergraduate program at the institution to the highest credentialed undergraduate program subsequently completed by the student at the institution as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section; and
(ii) Graduate program at the institution to the highest credentialed graduate program subsequently completed by the student at the institution as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section; and
(3) The Secretary excludes any loan debt incurred by the student for enrollment in any program at any other institution. However, the Secretary may include loan debt incurred by the student for enrollment in programs at other institutions if the institution and the other institutions are under common ownership or control, as determined by the Secretary in accordance with 34 CFR 600.31.
(e) Exclusions. The Secretary excludes a student from both the numerator and the denominator of the D/E rates calculation if the Secretary determines that—
(1) One or more of the student's Direct Loan Program loans are under consideration by the Secretary, or have been approved, for a discharge on the basis of the student's total and permanent disability, under 34 CFR 674.61, 682.402, or 685.212;
(2) The student was enrolled full time in any other eligible program at the institution or at another institution during the calendar year for which the Secretary obtains earnings information under paragraph (c) of this section;
(3) For undergraduate programs, the student completed a higher credentialed undergraduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section;
(4) For graduate programs, the student completed a higher credentialed graduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the D/E rates under this section;
(5) The student is enrolled in an approved prison education program;
(6) The student is enrolled in a comprehensive transition and postsecondary program; or
(7) The student died.
(f) D/E rates not issued. The Secretary does not issue D/E rates for a program under § 668.406 if—
(1) After applying the exclusions in paragraph (e) of this section, fewer than 30 students completed the program during the two-year or four-year cohort period; or
(2) The Federal agency with earnings data does not provide the median earnings for the program as provided under paragraph (c) of this section.
(a) General. Except as provided under paragraph (d) of this section, for each award year, the Secretary calculates the earnings premium measure for a program by determining whether the median annual earnings of the students who completed the program exceed the earnings threshold.
(b) Median annual earnings; earnings threshold. (1) The Secretary obtains from a Federal agency with earnings data, under § 668.405, the most currently available median annual earnings of the students who completed the program during the cohort period and who are not excluded under paragraph (c) of this section; and
(2) The Secretary uses the median annual earnings of students with a high school diploma or GED using data from the Census Bureau to calculate the earnings threshold described in § 668.2.
(3) The Secretary determines the earnings thresholds and publishes the thresholds annually through a notice in the
(c) Exclusions. The Secretary excludes a student from the earnings premium measure calculation if the Secretary determines that—
(1) One or more of the student's Direct Loan Program loans are under consideration by the Secretary, or have been approved, for a discharge on the basis of the student's total and permanent disability, under 34 CFR 674.61, 682.402, or 685.212;
(2) The student was enrolled full-time in any other eligible program at the institution or at another institution during the calendar year for which the Secretary obtains earnings information under paragraph (b)(1) of this section;
(3) For undergraduate programs, the student completed a higher credentialed undergraduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the earnings premium measure under this section;
(4) For graduate programs, the student completed a higher credentialed graduate program at the institution subsequent to completing the program as of the end of the most recently completed award year prior to the calculation of the earnings premium measure under this section;
(5) The student is enrolled in an approved prison education program;
(6) The student is enrolled in a comprehensive transition and postsecondary program; or
(7) The student died.
(d) Earnings premium measures not issued. The Secretary does not issue the earnings premium measure for a program under § 668.406 if—
(1) After applying the exclusions in paragraph (c) of this section, fewer than 30 students completed the program during the two-year or four-year cohort period; or
(2) The Federal agency with earnings data does not provide the median earnings for the program as provided under paragraph (b) of this section.
(a) Administrative data. In calculating the D/E rates and earnings premium measure for a program, the Secretary uses student enrollment, disbursement, and program data, or other data the institution is required to report to the Secretary to support its administration of, or participation in, the title IV, HEA programs. In accordance with procedures established by the Secretary, the institution must update or otherwise correct any reported data no later than 60 days after the end of an award year.
(b) Process overview. The Secretary uses the administrative data to—
(1) Compile a list of students who completed each program during the cohort period. The Secretary—
(i) Removes from those lists students who are excluded under § 668.403(e) or § 668.404(c);
(ii) Provides the list to institutions; and
(iii) Allows the institution to correct the information reported by the institution on which the list was based, no later than 60 days after the date the Secretary provides the list to the institution;
(2) Obtain from a Federal agency with earnings data the median annual earnings of the students on each list, as provided in paragraph (c) of this section; and
(3) Calculate the D/E rates and the earnings premium measure and provide them to the institution.
(c) Obtaining earnings data. For each list submitted to the Federal agency with earnings data, the agency returns to the Secretary—
(1) The median annual earnings of the students on the list whom the Federal agency with earnings data has matched to earnings data, in aggregate and not in individual form; and
(2) The number, but not the identities, of students on the list that the Federal agency with earnings data could not match.
(d) Calculating D/E rates and earnings premium measure. (1) If the Federal agency with earnings data includes reports from records of earnings on at least 30 students, the Secretary uses the median annual earnings provided by the Federal agency with earnings data to calculate the D/E rates and earnings premium measure for each program.
(2) If the Federal agency with earnings data reports that it was unable to match one or more of the students on the final list, the Secretary does not include in the calculation of the median loan debt for D/E rates the same number of students with the highest loan debts as the number of students whose earnings the Federal agency with earnings data did not match. For example, if the Federal agency with earnings data is unable to match three students out of 100 students, the Secretary orders by amount the debts of the 100 listed students and excludes from the D/E rates calculation the three largest loan debts.
(a) For each award year for which the Secretary calculates D/E rates and the earnings premium measure for a program, the Secretary issues a notice of determination.
(b) The notice of determination informs the institution of the following:
(1) The D/E rates for each program as determined under § 668.403.
(2) The earnings premium measure for each program as determined under § 668.404.
(3) The determination by the Secretary of whether each program is passing or failing, as described in § 668.402, and the consequences of that determination.
(4) Whether the student acknowledgment is required under § 668.407.
(5) For GE programs, whether the institution is required to provide the student warning under § 668.605.
(6) For GE programs, whether the program could become ineligible under subpart S of this part based on its final D/E rates or earnings premium measure for the next award year for which D/E rates or the earnings premium measure are calculated for the program.
(a) Beginning on July 1, 2026, if an eligible program, other than an undergraduate degree program, has failing D/E rates, the Secretary notifies the institution under § 668.406(b)(4) that student acknowledgments are required for such program in the manner specified in this section.
(b)(1) If student acknowledgements are required, prospective students must acknowledge that they have viewed the information provided through the program information website established and maintained by the Secretary described in § 668.43(d).
(2) The Department will administer and collect the acknowledgment from students through the program information website.
(3) Prospective students must provide such acknowledgments until:
(i) The Secretary notifies the institution pursuant to § 668.406 that the program has passing D/E rates; or
(ii) Three years after the institution was last notified that the program had failing D/E rates, whichever is earlier.
(c)(1) A prospective student must provide the acknowledgment before the institution enters into an agreement to enroll the student.
(2) The Secretary monitors the institution's compliance with the requirements in paragraph (c)(1) of this section through audits, program reviews, or other investigations.
(d) The acknowledgment required in paragraph (c)(1) of this section does not mitigate the institution's responsibility to provide accurate information to students concerning program status, nor will it be considered as dispositive evidence against a student's claim if applying for a loan discharge.
(a) Data elements. In accordance with procedures established by the Secretary, an institution offering any group of substantially similar programs, defined as all programs in the same four-digit CIP code at an institution, with 30 or more completers in total over the four most recent award years must report to the Department—
(1) For each GE program and eligible non-GE program, for its most recently completed award year—
(i) The name, CIP code, credential level, and length of the program;
(ii) Whether the program is programmatically accredited and, if so, the name of the accrediting agency;
(iii) Whether the program meets licensure requirements or prepares students to sit for a licensure examination in a particular occupation for each State in the institution's metropolitan statistical area;
(iv) The total number of students enrolled in the program during the most recently completed award year, including both recipients and non-recipients of title IV, HEA funds; and
(v) Whether the program is a qualifying graduate program whose students are required to complete postgraduate training programs, as described in the definition under § 668.2;
(2) For each student—
(i) Information needed to identify the student and the institution;
(ii) The date the student initially enrolled in the program;
(iii) The student's attendance dates and attendance status (e.g., enrolled, withdrawn, or completed) in the program during the award year;
(iv) The student's enrollment status (e.g., full time, three-quarter time, half time, less than half time) as of the first day of the student's enrollment in the program;
(v) The student's total annual cost of attendance (COA);
(vi) The total tuition and fees assessed to the student for the award year;
(vii) The student's residency tuition status by State or district;
(viii) The student's total annual allowance for books, supplies, and equipment from their COA under HEA section 472;
(ix) The student's total annual allowance for housing and food from their COA under HEA section 472;
(x) The amount of institutional grants and scholarships disbursed to the student;
(xi) The amount of other State, Tribal, or private grants disbursed to the student; and
(xii) The amount of any private education loans disbursed to the student for enrollment in the program that the institution is, or should reasonably be, aware of, including private education loans made by the institution;
(3) If the student completed or withdrew from the program during the award year—
(i) The date the student completed or withdrew from the program;
(ii) The total amount the student received from private education loans, as described in § 668.403(d)(1)(ii), for enrollment in the program that the institution is, or should reasonably be, aware of;
(iii) The total amount of institutional debt, as described in § 668.403(d)(1)(iii), the student owes any party after completing or withdrawing from the program;
(iv) The total amount of tuition and fees assessed the student for the student's entire enrollment in the program;
(v) The total amount of the allowances for books, supplies, and equipment included in the student's title IV, HEA COA for each award year in which the student was enrolled in the program, or a higher amount if assessed the student by the institution for such expenses; and
(vi) The total amount of institutional grants and scholarships provided for the student's entire enrollment in the program; and
(4) As described in a notice published by the Secretary in the
(b) Initial and annual reporting. (1) Except as provided under paragraph (c) of this section, an institution must report the information required under paragraph (a) of this section no later than—
(i) For programs other than qualifying graduate programs, July 31, following July 1, 2024, for the second through seventh award years prior to July 1, 2024;
(ii) For qualifying graduate programs, July 31, following July 1, 2024, for the second through eighth award years prior to July 1, 2024; and
(iii) For subsequent award years, October 1, following the end of the award year, unless the Secretary establishes different dates in a notice published in the
(2) For any award year, if an institution fails to provide all or some of the information required under paragraph (a) of this section, the institution must provide to the Secretary an explanation, acceptable to the Secretary, of why the institution failed to comply with any of the reporting requirements.
(c) Transitional reporting period and metrics. (1) For the first six years for which D/E rates and the earnings premium are calculated under this part, institutions may opt to report the information required under paragraph (a) of this section for its eligible programs either—
(i) For the time periods described in paragraphs (b)(1)(i) and (ii) of this section; or
(ii) For only the two most recently completed award years.
(2) If an institution provides transitional reporting under paragraph (c)(1)(ii) of this section, the Department will calculate transitional D/E rates and earnings premium measures using the median debt for the period reported and the earnings for six years.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of this part and subpart, and the application of this subpart's provisions to any other person, act, or practice, will not be affected thereby.
(a) This subpart identifies the types of activities that constitute aggressive and deceptive recruitment tactics or conduct by an eligible institution. An eligible institution has engaged in aggressive and deceptive recruitment tactics or conduct when the institution itself, one of its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs, marketing, advertising, lead generation, recruiting or admissions services, engages in one or more of the prohibited practices in § 668.501. Aggressive and deceptive recruitment tactics or conduct are prohibited in all forms, including in the institution's advertising or promotional materials, or in the marketing or sale of courses or programs of instruction offered by the institution.
(b) If the Secretary determines that an eligible institution has engaged in aggressive and deceptive recruitment tactics or conduct, the Secretary may:
(1) Revoke the eligible institution's program participation agreement, if the institution is provisionally certified under § 668.13(c);
(2) Impose limitations on the institution's participation in the title IV, HEA programs, if the institution is provisionally certified under § 668.13(c);
(3) Deny participation applications made on behalf of the institution; or
(4) Initiate a proceeding against the eligible institution under subpart G of this part.
(c) The following definitions apply to this subpart:
Prospective student: Has the same meaning in 34 CFR 668.71.
(a) Aggressive and deceptive recruitment tactics or conduct include but are not limited to actions by the institution, any of its representatives, or any institution, organization, or person with whom the institution has an agreement to provide educational programs, marketing, recruitment, or lead generation that:
(1) Demand or pressure the student or prospective student to make enrollment or loan-related decisions immediately, including falsely claiming that the student or prospective student would lose their opportunity to attend;
(2) Take unreasonable advantage of a student's or prospective student's lack of knowledge about, or experience with, postsecondary institutions, postsecondary programs, or financial aid to pressure the student into enrollment or borrowing funds to attend the institution;
(3) Discourage the student or prospective student from consulting an adviser, a family member, or other resource or individual prior to making enrollment or loan-related decisions;
(4) Obtain the student's or prospective student's contact information through websites or other means that:
(i) Falsely offer assistance to individuals seeking Federal, state or local benefits;
(ii) Falsely advertise employment opportunities; or,
(iii) Present false rankings of the institution or its programs;
(5) Use threatening or abusive language or behavior toward the student or prospective student; or,
(6) Repeatedly engage in unsolicited contact for the purpose of enrolling or reenrolling after the student or prospective student has requested not to be contacted further.
(b) [Reserved]
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) General. Except as provided under paragraph (b) of this section, this subpart applies to an educational program offered by an eligible institution that prepares students for gainful employment in a recognized occupation and establishes rules and procedures under which the Secretary determines that the program is eligible for title IV, HEA program funds.
(b) Applicability. (1) This subpart does not apply to programs offered by institutions located in U.S. Territories or freely associated states.
(2) For each award year that the Secretary calculates D/E rates or the earnings premium measure under § 668.402, this subpart does not apply to an institution if, over the most recently completed four award years, it offered no groups of substantially similar programs, defined as all programs in the same four-digit CIP code at an institution, with 30 or more completers in total.
(a) A GE program provides training that prepares students for gainful employment in a recognized occupation if the program—
(1) Satisfies the applicable certification requirements in § 668.604;
(2) Is not a failing program under the D/E rates measure in § 668.402 in two out of any three consecutive award years for which the program's D/E rates are calculated; and
(3) Is not a failing program under the earnings premium measure in § 668.402 in two out of any three consecutive award years for which the program's earnings premium measure is calculated.
(b) If the Secretary does not calculate or issue D/E rates for a program for an award year, the program receives no result under the D/E rates for that award year and remains in the same status under the D/E rates as the previous award year.
(c) In determining a program's eligibility, the Secretary disregards any D/E rates that were calculated more than five calculation years prior.
(d) If the Secretary does not calculate or issue earnings premium measures for a program for an award year, the program receives no result under the earnings premium measure for that award year and remains in the same status under the earnings premium measure as the previous award year.
(e) In determining a program's eligibility, the Secretary disregards any earnings premium that was calculated more than five years prior.
(a) Ineligible programs. If a GE program is a failing program under the D/E rates measure in § 668.402 in two out of any three consecutive award years for which the program's D/E rates are calculated, or the earnings premium measure in § 668.402 in two out of any three consecutive award years for which the program's earnings premium measure is calculated, the program is ineligible and its participation in the title IV, HEA programs ends upon the earliest of—
(1) The issuance of a new Eligibility and Certification Approval Report that does not include that program;
(2) The completion of a termination action of program eligibility, if an action is initiated under subpart G of this part; or
(3) A revocation of program eligibility if the institution is provisionally certified.
(b) Basis for appeal. If the Secretary initiates an action under paragraph (a)(2) of this section, the institution may initiate an appeal under subpart G of this part if it believes the Secretary erred in the calculation of the program's D/E rates under § 668.403 or the earnings premium measure under § 668.404. Institutions may not dispute a program's ineligibility based upon its D/E rates or the earnings premium measure except as described in this paragraph (b).
(c) Restrictions—(1) Ineligible program. Except as provided in § 668.26(d), an institution may not disburse title IV, HEA program funds to students enrolled in an ineligible program.
(2) Period of ineligibility. An institution may not seek to reestablish the eligibility of a failing GE program that it discontinued voluntarily either before or after D/E rates or the earnings premium measure are issued for that program, or reestablish the eligibility of a program that is ineligible under theD/E rates or the earnings premium measure, until three years following the earlier of the date the program loses eligibility under paragraph (a) of this section or the date the institution voluntarily discontinued the failing program.
(3) Restoring eligibility. An ineligible program, or a failing program that an institution voluntarily discontinues, remains ineligible until the institution establishes the eligibility of that program under § 668.604(c).
(a) Transitional certification for existing programs. (1) Except as provided in paragraph (a)(2) of this section, an institution must provide to the Secretary no later than December 31, 2024, in accordance with procedures established by the Secretary, a certification signed by its most senior executive officer that each of its currently eligible GE programs included on its Eligibility and Certification Approval Report meets the requirements of paragraph (d) of this section. The Secretary accepts the certification as an addendum to the institution's program participation agreement with the Secretary under § 668.14.
(2) If an institution makes the certification in its program participation agreement pursuant to paragraph (b) of this section between July 1 and December 31, 2024, it is not required to provide the transitional certification under this paragraph (a).
(b) Program participation agreement certification.
As a condition of its continued participation in the title IV, HEA programs, an institution must certify in its program participation agreement with the Secretary under § 668.14 that each of its currently eligible GE programs included on its Eligibility and Certification Approval Report meets the requirements of paragraph (d) of this section. As provided under 34 CFR 600.21(a)(11)(vi), an institution must update the certification within 10 days if there are any changes in the approvals for a program, or other changes for a program that render an existing certification no longer accurate.
(c) Establishing eligibility and disbursing funds. (1) An institution establishes a GE program's eligibility for title IV, HEA program funds by updating the list of the institution's eligible programs maintained by the Department to include that program, as provided under 34 CFR 600.21(a)(11)(i). By updating the list of the institution's eligible programs, the institution affirms that the program satisfies the certification requirements in paragraph (d) of this section. Except as provided in paragraph (c)(2) of this section, after the institution updates its list of eligible programs, the institution may disburse title IV, HEA program funds to students enrolled in that program.
(2) An institution may not update its list of eligible programs to include a GE program, or a GE program that is substantially similar to a failing program that the institution voluntarily discontinued or became ineligible as described in § 668.603(c), that was subject to the three-year loss of eligibility under § 668.603(c), until that three-year period expires.
(d) GE program eligibility certifications. An institution certifies for each eligible GE program included on its Eligibility and Certification Approval Report, at the time and in the form specified in this section, that such program is approved by a recognized accrediting agency or is otherwise included in the institution's accreditation by its recognized accrediting agency, or, if the institution is a public postsecondary vocational institution, the program is approved by a recognized State agency for the approval of public postsecondary vocational education in lieu of accreditation.
(a) Events requiring a warning to students and prospective students. Beginning on July 1, 2026, the institution must provide a warning with respect to a GE program to students and prospective students for any year for which the Secretary notifies an institution that the GE program could become ineligible under this subpart based on its final D/E rates or earnings premium measure for the next award year for which D/E rates or the earnings premium measure are calculated for the GE program.
(b) Subsequent warning. If a student or prospective student receives a warning under paragraph (a) of this section with respect to a GE program, but does not seek to enroll until more than 12 months after receiving the warning, the institution must again provide the warning to the student or prospective student, unless, since providing the initial warning, the program has passed both the D/E rates and earnings premium measures for the two most recent consecutive award years in which the metrics were calculated for the program.
(c) Content of warning. The institution must provide in the warning—
(1) A warning, as specified by the Secretary in a notice published in the
(i) The program has not passed standards established by the U.S. Department of Education based on the amounts students borrow for enrollment in the program and their reported earnings, as applicable; and
(ii) The program could lose access to Federal grants and loans based on the next calculated program metrics;
(2) The relevant information to access the program information website maintained by the Secretary described in § 668.43(d);
(3) A statement that the student must acknowledge having viewed the warning through the program information website before the institution may disburse any title IV, HEA funds to the student;
(4) A description of the academic and financial options available to students to continue their education in another program at the institution, including whether the students could transfer credits earned in the program to another program at the institution and which course credits would transfer, in the event that the program loses eligibility for title IV, HEA program funds;
(5) An indication of whether, in the event that the program loses eligibility for title IV, HEA program funds, the institution will—
(i) Continue to provide instruction in the program to allow students to complete the program; and
(ii) Refund the tuition, fees, and other required charges paid to the institution by, or on behalf of, students for enrollment in the program; and
(6) An explanation of whether, if the program loses eligibility for title IV, HEA program funds, the students could transfer credits earned in the program to another institution in accordance with an established articulation agreement or teach-out plan or agreement.
(d) Alternative languages. In addition to providing the English-language warning, the institution must also provide translations of the English-language student warning for those students and prospective students who have limited proficiency in English.
(e) Delivery to enrolled students. An institution must provide the warning required under this section in writing, by hand delivery, mail, or electronic means, to each student enrolled in the program no later than 30 days after the date of the Secretary's notice of determination under § 668.406 and maintain documentation of its efforts to provide that warning. The warning must be the only substantive content contained in these written communications.
(f) Delivery to prospective students. (1) An institution must provide the warning as required under this section to each prospective student or to each third party acting on behalf of the prospective student at the first contact about the program between the institution and the student or the third party acting on behalf of the student by—
(i) Hand-delivering the warning as a separate document to the prospective student or third party, individually or as part of a group presentation;
(ii) Sending the warning to the primary email address used by the institution for communicating with the prospective student or third party about the program, provided that the warning is the only substantive content in the email and that the warning is sent by a different method of delivery if the institution receives a response that the email could not be delivered; or
(iii) Providing the warning orally to the student or third party if the contact is by telephone.
(2) An institution may not enroll, register, or enter into a financial commitment with the prospective student with respect to the program earlier than three business days after the institution delivers the warning as described in this paragraph (f).
(g) Acknowledgment prior to enrollment and disbursement. An institution may not allow a prospective student seeking title IV, HEA assistance to sign an enrollment agreement, complete registration, or make a financial commitment to the institution, or disburse title IV, HEA funds to the student until the student or prospective student completes the acknowledgment described in paragraph (c)(3) of this section.
(h) Discharge claims. The provision of a student warning or the acknowledgment described in paragraph (c)(3) of this section does not mitigate the institution's responsibility to provide accurate information to students concerning program status, nor will it be considered as dispositive evidence against a student's claim if applying for a loan discharge.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of this part and subpart, and the application of this subpart's provisions to any other person, act, or practice, will not be affected thereby.
The Language Resource Centers Program makes awards, through grants or contracts, for the purpose of establishing, strengthening, and operating centers that serve as resources for improving the nation's capacity for teaching and learning foreign languages effectively.
An institution of higher education or a combination of institutions of higher education is eligible to receive an award under this part.
Centers funded under this part must carry out activities to improve the teaching and learning of foreign languages. These activities must include effective dissemination efforts, whenever appropriate, and may include—
(a) The conduct and dissemination of research on new and improved methods for teaching foreign languages, including the use of advanced educational technology;
(b) The development and dissemination of new materials for teaching foreign languages, to reflect the results of research on effective teaching strategies;
(c) The development, application, and dissemination of performance testing that is appropriate for use in an educational setting to be used as a standard and comparable measurement of skill levels in foreign languages;
(d) The training of teachers in the administration and interpretation of foreign language performance tests, the use of effective teaching strategies, and the use of new technologies;
(e) A significant focus on the teaching and learning needs of the less commonly taught languages, including an assessment of the strategic needs of the United States, the determination of ways to meet those needs nationally, and the publication and dissemination of instructional materials in the less commonly taught languages;
(f) The development and dissemination of materials designed to serve as a resource for foreign language teachers at the elementary and secondary school levels; and
(g) The operation of intensive summer language institutes to train advanced foreign language students, to provide professional development, and to improve language instruction through preservice and inservice language training for teachers.
The following regulations apply to this program:
(a) The regulations in 34 CFR part 655.
(b) The regulations in this part 669.
The following definitions apply to this part:
(a) The definitions in 34 CFR 655.4.
(b) “Language Resource Center” means a coordinated concentration of educational research and training resources for improving the nation's capacity to teach and learn foreign languages.
The Secretary evaluates an application for an award on the basis of the criteria contained in §§ 669.21 and 669.22. The Secretary informs applicants of the maximum possible score for each criterion in the application package or in a notice published in the
The Secretary evaluates an application on the basis of the criteria in this section.
(a) Plan of operation. (See 34 CFR 655.31(a))
(b) Quality of key personnel. (See 34 CFR 655.31(b))
(c) Budget and cost-effectiveness. (See 34 CFR 655.31(c))
(d) Evaluation plan. (See 34 CFR 655.31 (d))
(e) Adequacy of resources. (See 34 CFR 655.31(e))
(f) Need and potential impact. The Secretary reviews each application to determine—
(1) The extent to which the proposed materials or activities are needed in the foreign languages on which the project focuses;
(2) The extent to which the proposed materials may be used throughout the United States; and
(3) The extent to which the proposed work or activity may contribute significantly to strengthening, expanding, or improving programs of foreign language study in the United States.
(g) Likelihood of achieving results. The Secretary reviews each application to determine—
(1) The quality of the outlined methods and procedures for preparing the materials; and
(2) The extent to which plans for carrying out activities are practicable and can be expected to produce the anticipated results.
(h) Description of final form of results. The Secretary reviews each application to determine the degree of specificity and the appropriateness of the description of the expected results from the project.
(i) Priorities. If, under the provisions of § 669.22, the application notice specifies priorities for this program, the Secretary determines the degrees to which the priorities are served.
(a) The Secretary may each year select funding priorities from among the following:
(1) Categories of allowable activities described in § 669.3.
(2) Specific foreign languages for study or materials development.
(3) Levels of education, for example, elementary, secondary, postsecondary, or teacher education.
(b) The Secretary announces any priorities in the application notice published in the
Equipment costs may not exceed fifteen percent of the grant amount.
This part governs the following three programs authorized by title IV of the Higher Education Act of 1965, as amended (HEA) that participating institutions administer:
(a) The Federal Perkins Loan Program, which encourages the making of loans by institutions to needy undergraduate and graduate students to help pay for their cost of education.
(b) The Federal Work-Study (FWS) Program, which encourages the part-time employment of undergraduate and graduate students who need the income to help pay for their cost of education and which encourages FWS recipients to participate in community service activities.
(c) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program, which encourages the providing of grants to exceptionally needy undergraduate students to help pay for their cost of education.
The participating institution is responsible for administering these programs in accordance with the regulations in this part and the applicable program regulations in 34 CFR parts 674, 675, and 676.
(a) To participate in the Federal Perkins Loan, FWS, or FSEOG programs, an institution shall file an application before the deadline date established annually by the Secretary through publication of a notice in the
(b) The application for the Federal Perkins Loan, FWS, and FSEOG programs must be on a form approved by the Secretary and must contain the information needed by the Secretary to determine the institution's allocation or reallocation of funds under sections 462, 442, and 413D of the HEA, respectively.
(a) Allocation and reallocation of Federal Perkins Loan funds. (1) The Secretary allocates Federal capital contributions to institutions participating in the Federal Perkins Loan Program in accordance with section 462 of the HEA.
(2) The Secretary reallocates Federal capital contributions to institutions participating in the Federal Perkins Loan Program by—
(i) Reallocating 80 percent of the total funds available in accordance with section 462(j) of the HEA; and
(ii) Reallocating 20 percent of the total funds available in a manner that best carries out the purposes of the Federal Perkins Loan Program.
(b) Allocation and reallocation of FWS funds. The Secretary allocates and reallocates funds to institutions participating in the FWS Program in accordance with section 442 of the HEA.
(c) Allocation and reallocation of FSEOG funds. (1) The Secretary allocates funds to institutions participating in the FSEOG program in accordance with section 413D of the HEA.
(2) The Secretary reallocates funds to institutions participating in the FSEOG Program in a manner that best carries out the purposes of the FSEOG Program.
(d) General allocation and reallocation—(1) Categories. As used in section 462 (Federal Perkins Loan Program), section 442 (FWS Program), and section 413D (FSEOG Program) of the HEA, “Eligible institutions offering comparable programs of instruction” means institutions that are being compared with the applicant institution and that fall within one of the following six categories:
(i) Cosmetology.
(ii) Business.
(iii) Trade/Technical.
(iv) Art Schools.
(v) Other Proprietary Institutions.
(vi) Non-Proprietary Institutions.
(2) Payments to institutions. The Secretary allocates funds for a specific period of time. The Secretary provides an institution its allocation in accordance with the payment methods described in 34 CFR 668.162.
(3) Unexpended funds. (i) If an institution returns more than 10 percent of its Federal Perkins Loan, FWS, or FSEOG allocation for an award year, the Secretary reduces the institution's allocation for that program for the second succeeding award year by the dollar amount returned.
(ii) The Secretary may waive the provision of paragraph (d)(3)(i) of this section for a specific institution if the Secretary finds that enforcement would be contrary to the interests of the program.
(iii) The Secretary considers enforcement of paragraph (d)(3)(i) of this section to be contrary to the interest of the program only if the institution returns more than 10 percent of its allocation due to circumstances beyond the institution's control that are not expected to recur.
(e) Anticipated collections of Federal Perkins Loan funds. (1) For the purposes of calculating an institution's share of any excess allocation of Federal Perkins Loan funds, an institution's anticipated collections are equal to the amount that was collected by the institution during the second year preceding the beginning of the award period multiplied by 1.21.
(2) The Secretary may waive the provision of paragraph (e)(1) of this section for any institution that has a cohort default rate that does not exceed 7.5 percent.
(f) Authority to expend FWS funds. Except as specifically provided in 34 CFR 675.18 (b), (c), and (f), an institution may not use funds allocated or reallocated for an award year—
(1) To meet FWS wage obligations incurred with regard to an award of FWS employment made for any other award year; or
(2) To satisfy any other obligation incurred after the end of the designated award year.
(g) Authority to expend FSEOG funds. Except as specifically provided in 34 CFR 668.164(g), an institution shall not use funds allocated or reallocated for an award year—
(1) To make FSEOG disbursements to students in any other award year; or
(2) To satisfy any other obligation incurred after the end of the designated award year.
(a) Overaward prohibited—(1) Federal Perkins Loan and FSEOG Programs. An institution may only award or disburse a Federal Perkins loan or an FSEOG to a student if that loan or the FSEOG, combined with the other estimated financial assistance the student receives, does not exceed the student's financial need.
(2) FWS Program. An institution may only award FWS employment to a student if the award, combined with the other estimated financial assistance the student receives, does not exceed the student's financial need.
(b) Awarding and disbursement. (1) When awarding and disbursing a Federal Perkins loan or an FSEOG or awarding FWS employment to a student, the institution shall take into account those amounts of estimated financial assistance it—
(i) Can reasonably anticipate at the time it awards Federal Perkins Loan funds, an FSEOG, or FWS funds to the student;
(ii) Makes available to its students; or
(iii) Otherwise knows about.
(2) If a student receives amounts of estimated financial assistance at any time during the award period that were not considered in calculating the Federal Perkins Loan amount or the FWS or FSEOG award, and the total amount of estimated financial assistance including the loan, the FSEOG, or the prospective FWS wages exceeds the student's need, the overaward is the amount that exceeds need.
(c) Estimated financial assistance. (1) Except as provided in paragraphs (c)(2) and (c)(3) of this section, the Secretary considers that “estimated financial assistance” includes, but is not limited to, any—
(i) Funds a student is entitled to receive from a Federal Pell Grant;
(ii) William D. Ford Federal Direct Loans;
(iii) Federal Family Education Loans;
(iv) Long-term need-based loans, including Federal Perkins loans;
(v) Grants, including FSEOGs, State grants, Academic Competitiveness Grants, and National SMART Grants;
(vi) Scholarships, including athletic scholarships;
(vii) Waivers of tuition and fees;
(viii) Fellowships or assistantships, except non-need-based employment portions of such awards;
(ix) Except as provided in paragraph (c)(2)(v) of this section, veterans' education benefits;
(x) National service education awards or post-service benefits paid for the cost of attendance under title I of the National and Community Service Act of 1990 (AmeriCorps);
(xi) Net earnings from need-based employment;
(xii) Insurance programs for the student's education; and
(xiii) Any educational benefits paid because of enrollment in a postsecondary education institution, or to cover postsecondary education expenses.
(2) The Secretary does not consider as estimated financial assistance—
(i) Any portion of the estimated financial assistance described in paragraph (c)(1) of this section that is included in the calculation of the student's expected family contribution (EFC);
(ii) Earnings from non-need-based employment;
(iii) Those amounts used to replace EFC, including the amounts of any TEACH Grants, unsubsidized Federal Stafford or Direct Loans, Federal PLUS or Federal Direct PLUS Loans, and non-federal non-need-based loans, including private, state-sponsored, and institutional loans. However, if the sum of the amounts received that are being used to replace the student's EFC actually exceed the EFC, the excess amount must be treated as estimated financial assistance;
(iv) Assistance not received under a title IV, HEA program, if that assistance is designated to offset all or a portion of a specific component of the cost of attendance and that amount is excluded from the cost of attendance as well. If that assistance is excluded from either estimated financial assistance or cost of attendance, that amount must be excluded from both;
(v) Federal veterans' education benefits paid under—
(A) Chapter 103 of title 10, United States Code (Senior Reserve Officers' Training Corps);
(B) Chapter 106A of title 10, United States Code (Educational Assistance for Persons Enlisting for Active Duty);
(C) Chapter 1606 of title 10, United States Code (Selected Reserve Educational Assistance Program);
(D) Chapter 1607 of title 10, United States Code (Educational Assistance Program for Reserve Component Members Supporting Contingency Operations and Certain Other Operations);
(E) Chapter 30 of title 38, United States Code (All-Volunteer Force Educational Assistance Program, also known as the “Montgomery GI Bill—active duty”);
(F) Chapter 31 of title 38, United States Code (Training and Rehabilitation for Veterans with Service-Connected Disabilities);
(G) Chapter 32 of title 38, United States Code (Post-Vietnam Era Veterans' Educational Assistance Program);
(H) Chapter 33 of title 38, United States Code (Post 9/11 Educational Assistance);
(I) Chapter 35 of title 38, United States Code (Survivors' and Dependents' Educational Assistance Program);
(J) Section 903 of the Department of Defense Authorization Act, 1981 (10 U.S.C. 2141 note) (Educational Assistance Pilot Program);
(K) Section 156(b) of the “Joint Resolution making further continuing appropriations and providing for productive employment for the fiscal year 1983, and for other purposes” (42 U.S.C. 402 note) (Restored Entitlement Program for Survivors, also known as “Quayle benefits”);
(L) The provisions of chapter 3 of title 37, United States Code, related to subsistence allowances for members of the Reserve Officers Training Corps; and
(M) Any program that the Secretary may determine is covered by section 480(c)(2) of the HEA; and
(vi) Iraq and Afghanistan Service Grants made under section 420R of the HEA.
(3) The institution may also exclude as estimated financial assistance any portion of a subsidized Federal Stafford or Direct Loan that is equal to or less than the amount of a student's national service education awards or post service benefits paid for the cost of attendance under title I of the National and Community Service Act of 1990 (AmeriCorps).
(d) Treatment of estimated financial assistance in excess of need—General. An institution shall take the following steps if it learns that a student has received additional amounts of estimated financial assistance not included in the calculation of Federal Perkins Loan, FWS, or FSEOG eligibility that would result in the student's total amount of estimated financial assistance exceeding his or her financial need by more than $300:
(1) The institution shall decide whether the student has increased financial need that was unanticipated when it awarded financial aid to the student. If the student demonstrates increased financial need and the total amount of estimated financial assistance does not exceed this increased need by more than $300, no further action is necessary.
(2) If the student's total amount of estimated financial assistance still exceeds his or her need by more than $300, as recalculated pursuant to paragraph (d)(1) of this section, the institution shall cancel any undisbursed loan or grant (other than a Federal Pell Grant).
(3) Federal Perkins loan and FSEOG overpayment. If the student's total amount of estimated financial assistance still exceeds his or her need by more than $300, after the institution takes the steps required in paragraphs (d)(1) and (2) of this section, the institution shall consider the amount by which the estimated financial assistance amount exceeds the student's financial need by more than $300 as an overpayment.
(e) Termination of FWS employment. (1) An institution may fund a student's FWS employment with FWS funds only until the amount of the FWS award has been earned or until the student's financial need, as recalculated under paragraph (d)(1) of this section, is met.
(2) Notwithstanding the provisions of paragraph (e)(1) of this section, an institution may provide additional FWS funding to a student whose need has been met until that student's cumulative earnings from all need-based employment occurring subsequent to the time his or her financial need has been met exceed $300.
(f) Liability for and recovery of Federal Perkins loans and FSEOG overpayments. (1) Except as provided in paragraphs (f)(2) and (f)(3) of this section, a student is liable for any Federal Perkins loan or FSEOG overpayment made to him or her. An FSEOG overpayment for purposes of this paragraph does not include the non-Federal share of an FSEOG award if an institution meets its FSEOG matching share by the individual recipient method or the aggregate method.
(2) The institution is liable for a Federal Perkins loan or FSEOG overpayment if the overpayment occurred because the institution failed to follow the procedures in this part or 34 CFR parts 668, 674, or 676. The institution shall restore an amount equal to the overpayment and any administrative cost allowance claimed on that amount to its loan fund for a Federal Perkins loan overpayment or to its FSEOG account for an FSEOG overpayment.
(3) A student is not liable for, and the institution is not required to attempt recovery of, a Federal Perkins loan or FSEOG overpayment, nor is the institution required to refer an FSEOG overpayment to the Secretary, if the overpayment—
(i) Is less than $25; and
(ii) Is neither a remaining balance nor a result of the application of the overaward threshold in paragraph (d) of this section.
(4)(i) Except as provided in paragraph (f)(3) of this section, if an institution makes a Federal Perkins loan or FSEOG overpayment for which it is not liable, it shall promptly send a written notice to the student requesting repayment of the overpayment amount. The notice must state that failure to make that repayment, or to make arrangements satisfactory to the holder of the overpayment debt to pay the overpayment, makes the student ineligible for further title IV, HEA program funds until final resolution of the overpayment.
(ii) If a student objects to the institution's Federal Perkins loan or FSEOG overpayment determination on the grounds that it is erroneous, the institution shall consider any information provided by the student and determine whether the objection is warranted.
(5) Except as provided in paragraph (f)(3) of this section, if a student fails to repay an FSEOG overpayment or make arrangements satisfactory to the holder of the overpayment debt to repay the FSEOG overpayment after the institution has taken the action required by paragraph (f)(4) of this section, the institution must refer the FSEOG overpayment to the Secretary for collection purposes in accordance with procedures required by the Secretary. After referring the FSEOG overpayment to the Secretary under this section, the institution need make no further effort to recover the overpayment.
(a) Coordination of BIA grants with Federal Perkins loans, FWS awards, or FSEOGs. To determine the amount of a Federal Perkins loan, FWS compensation, or an FSEOG for a student who is also eligible for a Bureau of Indian Affairs (BIA) education grant, an institution shall prepare a package of student aid—
(1) From estimated financial assistance other than the BIA education grant the student has received or is expected to receive; and
(2) That is consistent in type and amount with packages prepared for students in similar circumstances who are not eligible for a BIA education grant.
(b)(1) The BIA education grant, whether received by the student before or after the preparation of the student aid package, supplements the student aid package specified in paragraph (a) of this section.
(2) No adjustment may be made to the student aid package as long as the total of the package and the BIA education grant is less than the institution's determination of that student's financial need.
(c)(1) If the BIA education grant, when combined with other aid in the package, exceeds the student's need, the excess must be deducted from the other assistance (except for Federal Pell Grants), not from the BIA education grant.
(2) The institution shall deduct the excess in the following sequence: loans, work-study awards, and grants other than Federal Pell Grants. However, the institution may change the sequence if requested to do so by a student and the institution believes the change benefits the student.
(d) To determine the financial need of a student who is also eligible for a BIA education grant, a financial aid administrator is encouraged to consult with area officials in charge of BIA postsecondary financial aid.
(a) An institution participating in the Federal Perkins Loan, FWS, or FSEOG programs is entitled to an administrative cost allowance for an award year if it advances funds under the Federal Perkins Loan Program, provides FWS employment, or awards grants under the FSEOG Program to students in that year.
(b) An institution may charge the administrative cost allowance calculated in accordance with paragraph (c) of this section for an award year against-(1) The Federal Perkins Loan Fund, if the institution advances funds under the Federal Perkins Loan Program to students in that award year;
(2) The FWS allocation, if the institution provides FWS employment to students in that award year; and
(3) The FSEOG allocation, if the institution awards grants to students under the FSEOG program in that award year.
(c) For any award year, the amount of the administrative costs allowance equals—
(1) Five percent of the first $2,750,000 of the institution's total expenditures to students in that award year under the FWS, FSEOG, and the Federal Perkins Loan programs; plus
(2) Four percent of its expenditures to students that are greater than $2,750,000 but less than $5,500,000; plus
(3) Three percent of its expenditures to students that are $5,500,000 or more.
(d) The institution shall not include, when calculating the allowance in paragraph (c) of this section, the amount of loans made under the Federal Perkins Loan Program that it assigns during the award year to the Secretary under section 463(a)(6) of the HEA.
(e) An institution shall use its administrative costs allowance to offset its cost of administering the Federal Pell Grant, FWS, FSEOG, and Federal Perkins Loan programs. Administrative costs also include the expenses incurred for carrying out the student consumer information services requirements of subpart D of the Student Assistance General Provisions regulations, 34 CFR part 668.
(f) An institution may use up to 10 percent of the administrative costs allowance, as calculated under paragraph (c) of this section, that is attributable to the institution's expenditures under the FWS program to pay the administrative costs of conducting its program of community service. These costs may include the costs of—
(1) Developing mechanisms to assure the academic quality of a student's experience;
(2) Assuring student access to educational resources, expertise, and supervision necessary to achieve community service objectives; and
(3) Collaborating with public and private nonprofit agencies and programs assisted under the National and Community Service Act of 1990 in the planning, development, and administration of these programs.
(g) If an institution charges any administrative cost allowance against its Federal Perkins Loan Fund, it must charge these costs during the same award year in which the expenditures for these costs were made.
An asterisk (*) indicates provisions that are common to parts 674, 675, and 676. The use of asterisks will assure participating institutions that a provision of one regulation is identical to the corresponding provisions in the other two.
(a) The Federal Perkins Loan Program provides low-interest loans to financially needy students attending institutions of higher education to help them pay their educational costs.
(b)(1) The Federal Perkins Loan Program, authorized by title IV-E of the Higher Education Act of 1965, as amended, and previously named the National Direct Student Loan (NDSL) Program, is a continuation of the National Defense Loan Program authorized by title II of the National Defense Education Act of 1958. All rights, privileges, duties, functions, and obligations existing under title II before the enactment of title IV-E continue to exist.
(2) The Secretary considers any student loan fund established under title IV-E to include the assets of an institution's student loan fund established under title II.
*(c) Provisions in these regulations that are common to all campus-based programs are identified with an asterisk.
(d) Provisions in these regulations that refer to “loans” or “student loans” apply to all loans made under title IV-E of the HEA or title II of the National Defense Education Act.
(a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(b) The Secretary defines other terms used in this part as follows:
Default: The failure of a borrower to make an installment payment when due or to comply with other terms of the promissory note or written repayment agreement.
Enter repayment: The day following the expiration of the initial grace period or the day the borrower waives the initial grace period. This date does not change if a forbearance, deferment, or cancellation is granted after the borrower enters repayment.
Federal capital contribution (FCC): Federal funds allocated or reallocated to an institution for deposit into the institution's Fund under section 462 of the HEA.
*Financial need: The difference between a student's cost of attendance and his or her EFC.
Fund (Federal Perkins Loan Fund): A fund established and maintained according to § 674.8.
Initial grace period: That period which immediately follows a period of enrollment and immediately precedes the date of the first required repayment on a loan. This period is generally nine months for Federal Perkins loans, Defense loans, and NDSLs made before October 1, 1980, and six months for other Direct loans.
*Institution of higher education (institution): A public or private nonprofit institution of higher education, a proprietary institution of higher education, or a postsecondary vocational institution.
Institutional capital contribution (ICC): Institutional funds contributed to establish or maintain a Fund.
Making of a loan: When the institution makes the first disbursement of a loan to a student for an award year.
Master Promissory Note (MPN): A promissory note under which the borrower may receive loans for a single award year or multiple award years.
National credit bureau: Any one of the national credit bureaus with which the Secretary has an agreement.
*Need-based employment: Employment provided by an institution itself or by another entity to a student who has demonstrated to the institution or the entity (through standards or methods it establishes) a financial need for the earnings from that employment for the purpose of defraying educational costs of attendance for the award year for which the employment is provided.
Post-deferment grace period: That period of six consecutive months which immediately follows the end of certain periods of deferment and precedes the date on which the borrower is required to resume repayment on a loan.
Satisfactory repayment arrangement: (1) For purposes of regaining eligibility for grant, loan, or work assistance under title IV of the HEA, to the extent that the borrower is otherwise eligible, the making of six on-time, consecutive, voluntary, full monthly payments on a defaulted loan. “On-time” means a payment made within 20 days of the scheduled due date. A borrower may obtain the benefit of this paragraph with respect to renewed eligibility once.
(2) Voluntary payments are payments made directly by the borrower, and do not include payments obtained by income tax offset, garnishment, or income or asset execution.
(3) A borrower has not used the one opportunity to renew eligibility for title IV assistance if the borrower makes six consecutive, on-time, voluntary, full monthly payments under an agreement to rehabilitate a defaulted loan, but does not receive additional title IV assistance prior to defaulting on that loan again.
Student loan: For this part means an NDSL Loan, Defense Loan, or a Federal Perkins Loan.
Total monthly gross income: The gross amount of income received by the borrower from employment (either full-time or part-time) and from other sources.
(a) Default penalty. If an institution's cohort default rate meets the following levels, a default penalty is imposed on the institution as follows:
(1) FCC reduction. If the institution's cohort default rate equals or exceeds 25 percent, the institution's FCC is reduced to zero.
(2) Ineligibility. For award year 2000-2001 and succeeding award years, an institution with a cohort default rate that equals or exceeds 50 percent for each of the three most recent years for which cohort default rate data are available is ineligible to participate in the Federal Perkins Loan Program. Following a review of that data and upon notification by the Secretary, an institution is ineligible to participate for the award year, or the remainder of the award year, in which the determination is made and the two succeeding award years. An institution may appeal a notification of ineligibility from the Secretary within 30 days of its receipt.
(i) Appeal procedures—(A) Inaccurate calculation. An institution may appeal a notice of ineligibility based upon the submission of erroneous data by the institution, the correction of which would result in a recalculation that reduces the institution's cohort default rate to below 50 percent for any of the three award years used to make a determination of ineligibility. The Secretary considers the edit process, by which an institution adjusts the cohort default rate data that it submits to the Secretary on its Fiscal Operations Report, to constitute the procedure to appeal a determination of ineligibility based on a claim of erroneous data.
(B) Small number of borrowers entering repayment. An institution may appeal a notice of ineligibility if, on average, 10 or fewer borrowers enter repayment for the three most recent award years used by the Secretary to make a determination of ineligibility.
(C) Decision of the Secretary. The Secretary issues a decision on an appeal within 45 days of the institution's submission of a complete, accurate, and timely appeal. An institution may continue to participate in the program until the Secretary issues a decision on the institution's appeal.
(ii) Liquidation of an institution's Perkins Loan portfolio. Within 90 days of receiving a notification of ineligibility or, if the institution appeals, within 90 days of the Secretary's decision to deny the appeal, the institution must—
(A) Liquidate its revolving student loan fund by making a capital distribution of the liquid assets of the Fund according to section 466(c) of the HEA; and
(B) Assign any outstanding loans in the institution's portfolio to the Secretary in accordance with § 674.50.
(iii) Effective date. The provisions of paragraph (a)(2) of this section are effective with the cohort default rate calculated as of June 30, 2001.
(b) Cohort default rate. (1) The term “cohort default rate” means, for any award year in which 30 or more current and former students at the institution enter repayment on a loan received for attendance at the institution, the percentage of those current and former students who enter repayment in that award year on the loans received for attendance at that institution who default before the end of the following award year.
(2) For any award year in which less than 30 current and former students at the institution enter repayment on a loan received for attendance at the institution, the “cohort default rate” means the percentage of those current and former students who entered repayment on loans received for attendance at that institution in any of the three most recent award years and who defaulted on those loans before the end of the award year immediately following the year in which they entered repayment.
(c) Defaulted loans to be included in the cohort default rate. For purposes of calculating the cohort default rate under paragraph (b) of this section—
(1) A borrower must be included only if the borrower's default has persisted for at least—
(i) 240 consecutive days for loans repayable in monthly installments; or
(ii) 270 consecutive days for loans repayable in quarterly installments;
(2) A loan is considered to be in default if a payment is made by the institution of higher education, its owner, agency, contractor, employee, or any other entity or individual affiliated with the institution, in order to avoid default by the borrower;
(3)(i) In determining the number of borrowers who default before the end of the following award year, a loan is excluded if the borrower has—
(A) Voluntarily made six consecutive monthly payments;
(B) Voluntarily made all payments currently due;
(C) Repaid the full amount due, including any interest, late fees, and collection costs that have accrued on the loan;
(D) Received a deferment or forbearance based on a condition that predates the borrower reaching a 240- or 270-day past due status; or
(E) Rehabilitated the loan after becoming 240- or 270-days past due.
(ii) A loan is considered canceled and also excluded from an institution's cohort default rate calculation if the loan is—
(A) Discharged due to death or permanent and total disability;
(B) Discharged in bankruptcy;
(C) Discharged due to a closed school;
(D) Repaid in full in accordance with § 674.33(e) or § 674(h); or
(E) Assigned to and conditionally discharged by the Secretary in accordance with § 674.61(b).
(iii) For the purpose of this section, funds obtained by income tax offset, garnishment, income or asset execution, or pursuant to a judgment are not considered voluntary.
(4) In the case of a student who has attended and borrowed at more than one institution, the student and his or her subsequent repayment or default are attributed to the institution for attendance at which the student received the loan that entered repayment in the award year.
(d) Locations of the institution. (1) A cohort default rate of an institution applies to all locations of the institution as it exists on the first day of the award year for which the rate is calculated.
(2) A cohort default rate of an institution applies to all locations of the institution from the date the institution is notified of that rate until the institution is notified by the Secretary that the rate no longer applies.
(3) For an institution that changes status from a location of one institution to a free-standing institution, the Secretary determines the cohort default rate based on the institution's status as of July 1 of the award year for which a cohort default rate is being calculated.
(4)(i) For an institution that changes status from a free-standing institution to a location of another institution, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the combined number of students who default during the applicable award years from both the former free-standing institution and the other institution. This cohort default rate applies to the new consolidated institution and all of its current locations.
(ii) For free-standing institutions that merge, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the combined number of students who default during the applicable award years from both of the institutions that are merging. This cohort default rate applies to the new, consolidated institution.
(iii) For an institution that changes status from a location of one institution to a location of another institution, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the number of students who default during the applicable award years from both of the institutions in their entirety, not limited solely to the respective locations.
(5) For an institution that has a change in ownership that results in a change in control, the Secretary determines the cohort default rate based on the combined number of students who enter repayment during the applicable award year and the combined number of students who default during the applicable award years from the institution under both the old and new control.
To participate in the Federal Perkins Loan program, an institution shall enter into a participation agreement with the Secretary. The agreement provides that the institution shall use the funds it receives solely for the purposes specified in this part and shall administer the program in accordance with the Act, this part and the Student Assistance General Provisions regulations, 34 CFR part 668. The agreement further specifically provides, among other things, that—
(a) The institution shall establish and maintain a Fund and shall deposit into the Fund—
(1) FCC received under this subpart;
(2) Except as provided in paragraph (a)(1) of § 674.7—
(i) ICC equal to at least three-seventeenths of the FCC described in paragraph (a)(1) of this section in award year 1993-94; and
(ii) ICC equal to at least one-third of the FCC described in paragraph (a)(1) of this section in award year 1994-95 and succeeding award years;
(3) ICC equal to the amount of FCC described in paragraph (a)(1) of § 674.7 for an institution that has been granted permission by the Secretary to participate in the ELO under the Federal Perkins Loan program;
(4) Payments of principal, interest, late charges, penalty charges, and collection costs on loans from the Fund;
(5) Payments to the institution as the result of loan cancellations under section 465(b) of the Act;
(6) Any other earnings on assets of the Fund, including the interest earnings of the funds listed in paragraphs (a)(1) through (4) of this section net of bank charges incurred with regard to Fund assets deposited in interest-bearing accounts; and
(7) Proceeds of short-term no-interest loans made to the Fund in anticipation of collections or receipt of FCC.
(b) The institution shall use the money in the Fund only for—
(1) Making loans to students;
(2) Administrative expenses as provided for in 34 CFR 673.7;
(3) Capital distributions provided for in section 466 of the Act;
(4) Litigation costs (see § 674.47);
(5) Other collection costs, agreed to by the Secretary in connection with the collection of principal, interest, and late charges on a loan made from the Fund (see § 674.47); and
(6) Repayment of any short-term, no-interest loans made to the Fund by the institution in anticipation of collections or receipt of FCC.
(c) The institution shall submit an annual report to the Secretary containing information that determines its cohort default rate that includes—
(1) For institutions in which 30 or more of its current or former students first entered repayment in an award year—
(i) The total number of borrowers who first entered repayment in the award year; and
(ii) The number of those borrowers in default by the end of the following award year; or
(2) For institutions in which less than 30 of its current or former students entered repayment in an award year—
(i) The total number of borrowers who first entered repayment in any of the three most recent award years; and
(ii) The number of those borrowers in default before the end of the award year immediately following the year in which they entered repayment.
(d)(1) If an institution determines not to service or collect a loan, the institution may assign its rights to the loan to the United States without recompense at the beginning of a repayment period.
(2) If a loan is in default despite due diligence on the part of the institution in collecting the loan, the institution may assign its rights to the loan to the United States without recompense.
(3) The institution shall, at the request of the Secretary, assign its rights to a loan to the United States without recompense if—
(i) The amount of outstanding principal is $100.00 or more;
(ii) The loan has been in default, as defined in § 674.5(c)(1), for seven or more years; and
(iii) A payment has not been received on the loan in the preceding twelve months, unless payments were not due because the loan was in a period of authorized forbearance or deferment.
(e) To assist institutions in collecting outstanding loans, the Secretary provides to an institution the names and addresses of borrowers or other information relevant to collection which is available to the Secretary.
(f) The institution shall provide the loan information required by section 463A of the HEA to a borrower.
Prior to October 1, 2017, a student at an institution of higher education was eligible to receive a loan under the Federal Perkins Loan program for an award year if the student—
(a) Meets the relevant eligibility requirements contained in 34 CFR part 668;
(b) Is enrolled or accepted for enrollment as an undergraduate, graduate, or professional student at the institution, whether or not engaged in a program of study abroad approved for credit by the home institution;
(c) Has financial need as determined in accordance with part F of title IV of the HEA.
(d) Has received for that award year, if an undergraduate student—
(1) A SAR as a result of applying for a grant under the Federal Pell Grant Program; or
(2) A preliminary determination of eligibility or ineligibility for a Federal Pell Grant by the institution's financial aid administrator after applying for a SAR with a Federal Pell Grant Processor;
(e) Is willing to repay the loan. Failure to meet payment obligations on a previous loan is evidence that the student is unwilling to repay the loan;
(f) Provides to the institution a driver's license number, if any, at the time of application for the loan;
(g) In the case of a borrower whose prior loan under title IV of the Act or whose TEACH Grant service obligation was discharged after a final determination of total and permanent disability—
(1) Obtains a certification from a physician that the borrower is able to engage in substantial gainful activity;
(2) Signs a statement acknowledging that any new Federal Perkins Loan the borrower receives cannot be discharged in the future on the basis of any present impairment, unless that condition substantially deteriorates; and
(3) If the borrower receives a new Federal Perkins Loan within three years of the date that any previous title IV loan or TEACH Grant service obligation was discharged due to a total and permanent disability in accordance with § 674.61(b)(3)(i), 34 CFR 682.402(c), 34 CFR 685.213, or 34 CFR 686.42(b) based on a discharge request received on or after July 1, 2010, resumes repayment on the previously discharged loan in accordance with § 674.61(b)(5), 34 CFR 682.402(c)(5), or 34 CFR 685.213(b)(4), or acknowledges that he or she is once again subject to the terms of the TEACH Grant agreement to serve before receiving the new loan.
(h) In the case of a borrower whose previous loan under title IV of the HEA was conditionally discharged after an initial determination that the borrower was totally and permanently disabled based on a discharge request received prior to July 1, 2010, the borrower must—
(1) Comply with the requirements of paragraphs (g)(1) and (g)(2) of this section; and
(2) Sign a statement acknowledging that—
(i) The loan that has been conditionally discharged prior to a final determination of total and permanent disability cannot be discharged in the future on the basis of any impairment present when the borrower applied for a total and permanent disability discharge or when a new loan is made, unless that impairment substantially deteriorates; and
(ii) Collection activity will resume on any loan in a conditional discharge period.
(i) Does not have any loans under title IV of the HEA on which collection activity has been suspended based on a conditional determination that the borrower was totally and permanently disabled. If a borrower applies for a loan under title IV of the HEA during the conditional discharge period, the suspension of collection activity must be ended before the borrower becomes eligible to receive any additional loans.
(j) In the case of a borrower who is in default on a Federal Perkins Loan, NDSL or Defense loan, satisfies one of the conditions contained in § 674.5(c)(3)(i) or (ii) except that—
(1) For purposes of this section, voluntary payments made by the borrower under paragraph (i) of this section are payments made directly by the borrower; and
(2) Voluntary payments do not include payments obtained by Federal offset, garnishment, or income or asset execution.
(k) In the case of a borrower who is in default on an FFEL Program or a Direct Loan Program loan, makes satisfactory repayment arrangements as defined in 34 CFR 682.200(b) or 685.102(b) on the defaulted loan, as determined by the loan holder; and
(l) For purposes of this section, reaffirmation means the acknowledgment of the loan by the borrower in a legally binding manner. The acknowledgement may include, but is not limited to, the borrower—
(1) Signing a new promissory note or new repayment agreement; or
(2) Making a payment on the loan.
(a)(1) An institution shall make loans under this part reasonably available, to the extent of available funds, to all students eligible under § 674.9 but shall give priority to those students with exceptional financial need.
(2) The institution shall define exceptional financial need for the purpose of the priority described in paragraph (a)(1) of this section and shall develop procedures for implementing that priority.
(b) If an institution's allocation of Federal Capital Contribution is directly or indirectly based in part on the financial need demonstrated by students attending the institution as less-than-full-time or independent students, a reasonable portion of the dollar amount of loans made under this part must be offered to those students.
(c) The institution shall establish selection procedures and these procedures must be—
(1) In writing;
(2) Uniformly applied; and
(3) Maintained in the institution's files.
(a) The maximum annual amount of Federal Perkins Loans and NDSLs an eligible student may borrow is—
(1) $5,500 for a student who is enrolled in a program of undergraduate education; and
(2) $8,000 for a graduate or professional student.
(b) The aggregate unpaid principal amount of all Federal Perkins Loans and NDSLs received by an eligible student may not exceed—
(1) $27,500 for a student who has successfully completed two years of a program leading to a bachelor's degree but who has not received the degree;
(2) $60,000 for a graduate or professional student; and
(3) $11,000 for any other student.
(c) The maximum annual amounts described in paragraph (a) of this section and the aggregate maximum amounts described in paragraph (b) of this section may be exceeded by 20 percent if the student is engaged in a program of study abroad that is approved for credit by the home institution at which the student is enrolled and that has reasonable costs in excess of the home institution's cost of attendance.
(d) For each student, the maximum annual amounts described in paragraphs (a) and (c) of this section, and the aggregate maximum amounts described in paragraphs (b) and (c) of this section, include any amounts borrowed previously by the student under title IV, part E of the HEA at any institution.
(a) The Secretary may require an institution to reimburse its Fund in an amount equal to that portion of the outstanding balance of—
(1) A loan disbursed by the institution to a borrower in excess of the amount that the borrower was eligible to receive, as determined on the basis of information the institution had, or should have had, at the time of disbursement; or
(2) Except as provided in paragraph (b) of this section, a defaulted loan with regard to which the institution failed—
(i) To record or retain the loan note in accordance with the requirements of this part;
(ii) To record advances on the loan note in accordance with the requirements of this part; or
(iii) To exercise due diligence in collecting in accordance with the requirements of this part.
(b) The Secretary does not require an institution to reimburse its Fund for the portion of the outstanding balance of a defaulted loan described in paragraph (a)(2) of this section—
(1) That the institution—
(i) Recovers from the borrower or endorser; or
(ii) Demonstrates, to the Secretary's satisfaction, would not have been collected from the borrower even if the institution complied in a timely manner with the due diligence requirements of subpart C of this part; or
(2) On which the institution obtains a judgment.
(c) An institution that is required to reimburse its Fund under paragraph (a) of this section shall also reimburse the Fund for the amount of the administrative cost allowance claimed by the institution for that portion of the loans to be reimbursed.
(d) An institution that reimburses its Fund under paragraph (a) of this section thereby acquires for its own account all the right, title and interest of the Fund in the loan for which reimbursement has been made.
(a)(1) Before an institution makes its first disbursement to a student, the student shall sign the promissory note and the institution shall provide the student with the following information:
(i) The name of the institution and the address to which communications and payments should be sent.
(ii) The principal amount of the loan and a statement that the institution will report the amount of the loan to a national credit bureau at least annually.
(iii) The stated interest rate on the loan.
(iv) The yearly and cumulative maximum amounts that may be borrowed.
(v) An explanation of when repayment of the loan will begin and when the borrower will be obligated to pay interest that accrues on the loan.
(vi) The minimum and maximum repayment terms which the institution may impose and the minimum monthly repayment required.
(vii) A statement of the total cumulative balance owed by the student to that institution, and an estimate of the monthly payment amount needed to repay that balance.
(viii) Special options the borrowers may have for loan consolidation or other refinancing of the loan.
(ix) The borrower's right to prepay all or part of the loan, at any time, without penalty, and a summary of the circumstances in which repayment of the loan or interest that accrues on the loan may be deferred or canceled including a brief notice of the Department of Defense program for repayment of loans on the basis of specified military service.
(x) A definition of default and the consequences to the borrower, including a statement that the institution may report the default to a national credit bureau.
(xi) The effect of accepting the loan on the eligibility of the borrower for other forms of student assistance.
(xii) The amount of any charges collected by the institution at or prior to the disbursement of the loan and any deduction of such charges from the proceeds of the loan or paid separately by the borrower.
(xiii) Any cost that may be assessed on the borrower in the collection of the loan including late charges and collection and litigation costs.
(2) The institution shall provide the information in paragraph (a)(1) of this section to the borrower in writing—
(i) As part of the written application material;
(ii) As part of the promissory note; or
(iii) On a separate written form.
(b)(1) Except as provided in paragraphs (c) and (f) of this section, an institution shall advance in each payment period a portion of a loan awarded for a full academic year.
(2) The institution shall determine the amount advanced each payment period by the following fraction:
(3) An institution may advance funds, within each payment period, at such time and in such amounts as it determines best meets the student's needs.
(c) If a student incurs uneven costs or estimated financial assistance amounts during an academic year and needs additional funds in a particular payment period, the institution may disburse loan funds to the student for those uneven costs.
(d)(1) The institution shall disburse funds to a student or the student's account in accordance with 34 CFR 668.164.
(2) The institution shall ensure that each loan is supported by a legally enforceable promissory note as proof of the borrower's indebtedness.
(3) If the institution uses a Master Promissory Note (MPN), the institution's ability to make additional loans based on that MPN will automatically expire upon the earliest of—
(i) The date the institution receives written notification from the borrower requesting that the MPN no longer be used as the basis for additional loans;
(ii) Twelve months after the date the borrower signed the MPN if no disbursements are made by the institution under that MPN; or
(iii) Ten years from the date the borrower signed the MPN or the date the institution receives the MPN, except that a remaining portion of a loan may be disbursed after this date.
(e) The institution shall advance funds to a student in accordance with the provisions of § 668.164.
(f)(1) The institution shall return to the Fund any amount advanced to a student who, before the first day of classes—
(i) Officially or unofficially withdraws; or
(ii) Is expelled.
(2) A student who does not begin class attendance is deemed to have withdrawn.
(g) An institutional official may not, without prior approval from the Secretary, obtain a student's power of attorney to endorse any check used to disburse loan funds.
(h)(1) An institution must report to at least one national credit bureau—
(i) The amount and the date of each disbursement;
(ii) Information concerning the repayment and collection of the loan until the loan is paid in full; and
(iii) The date the loan was repaid, canceled, or discharged for any reason.
(2) An institution must promptly report any changes to information previously reported on a loan to the same credit bureaus to which the information was previously reported.
(i) [Reserved]
(j) The institution must report enrollment and loan status information, or any Title IV loan-related information required by the Secretary, to the Secretary by the deadline date established by the Secretary.
(a) If an institution responsible for a Federal Perkins Loan fund closes or no longer wants to participate in the program, the Secretary directs the institution to take the following steps to protect the outstanding loans and the Federal interest in that Fund:
(1) A capital distribution of the liquid assets of the Fund according to section 466(c) of the Act.
(2) The assignment of the outstanding loans to the United States.
(b) An institution that assigns outstanding loans under this paragraph relinquishes its interest in those loans.
(a) General. An institution shall deposit the funds it receives under the Federal Perkins Loan program into its Fund. It may use these funds only for making loans and the other activities specified in § 674.8(b).
(b) Transfer of funds. (1) An institution may transfer up to 25 percent of the sum of its initial and supplemental Federal Perkins Loan allocations for an award year to the Federal Work-Study program or Federal Supplemental Educational Opportunity Grant program, or to both.
(2) An institution may transfer up to the total of the sum of its initial and supplemental Federal Perkins Loan allocations for an award year to the Work-Colleges program.
(3) An institution shall use transferred funds according to the requirements of the program to which they are transferred.
(4) An institution shall report any transferred funds on the Fiscal Operations Report required under § 674.19(d).
(5) An institution shall transfer back to the Federal Perkins Loan program any funds unexpended at the end of the award year that it transferred to the FWS program, the FSEOG program, or the Work-Colleges program from the Federal Perkins Loan program.
(a) Fiscal procedures. (1) In administering its Federal Perkins Loan program, an institution shall establish and maintain an internal control system of checks and balances that ensures that no office can both authorize payments and disburse funds to students.
(2)(i) A separate bank account for Federal funds is not required, except as provided in paragraph (b) of this section.
(ii) An institution shall notify any bank in which it deposits Federal funds of the accounts into which those funds are deposited by—
(A) Ensuring that the name of the account clearly discloses the fact that Federal funds are deposited in the account; or
(B) Notifying the bank, in writing, of the names of the accounts in which it deposits Federal funds. The institution shall retain a copy of this notice in its files.
(3)(i) The institution shall ensure that the cash balances of the accounts into which it deposits Federal Perkins Loan Fund cash assets do not fall below the amount of Fund cash assets deposited in those accounts but not yet expended on authorized purposes in accordance with applicable title IV HEA program requirements, as determined from the records of the institution.
(ii) If the cash balances of the accounts at any time fall below the amount described in paragraph (a)(3)(i) of this section, the institution is deemed to make any subsequent deposits into the accounts of funds derived from other sources with the intent to restore to that amount those Fund assets previously withdrawn from those accounts. To the extent that these institutional deposits restore the amount previously withdrawn, they are deemed to be Fund assets.
(b) Account for Perkins Loan Fund. An institution shall maintain the funds it receives under this part in accordance with the requirements in § 668.163.
(c) Deposit of ICC into Fund. An institution shall deposit its ICC into its Fund prior to or at the same time it deposits any FCC.
(d) Records and reporting. (1) An institution shall establish and maintain program and fiscal records that are reconciled at least monthly.
(2) Each year an institution shall submit a Fiscal Operations Report plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary.
(e) Retention of records—(1) Records. An institution shall follow the record retention and examination provisions in this part and in 34 CFR 668.24.
(2) Loan records. (i) An institution shall retain a record of disbursements for each loan made to a borrower on a Master Promissory Note (MPN). This record must show the date and amount of each disbursement.
(ii) For any loan signed electronically, an institution must maintain an affidavit or certification regarding the creation and maintenance of the institution's electronic MPN or promissory note, including the institution's authentication and signature process in accordance with the requirements of § 674.50(c)(12).
(iii) An institution shall maintain a repayment history for each borrower. This repayment history must show the date and amount of each repayment over the life of the loan. It must also indicate the amount of each repayment credited to principal, interest, collection costs, and either penalty or late charges.
(3) Period of retention of disbursement records, electronic authentication and signature records, and repayment records.
(i) An institution shall retain disbursement and electronic authentication and signature records for each loan made using an MPN for at least three years from the date the loan is canceled, repaid, or otherwise satisfied.
(ii) An institution shall retain repayment records, including cancellation and deferment requests for at least three years from the date on which a loan is assigned to the Secretary, canceled or repaid.
(4) Manner of retention of promissory notes and repayment schedules. An institution shall keep the original promissory notes and repayment schedules until the loans are satisfied. If required to release original documents in order to enforce the loan, the institution must retain certified true copies of those documents.
(i) An institution shall keep the original paper promissory note or original paper MPN and repayment schedules in a locked, fireproof container.
(ii) If a promissory note was signed electronically, the institution must store it electronically and the promissory note must be retrievable in a coherent format. An original electronically signed MPN must be retained by the institution for 3 years after all the loans made on the MPN are satisfied.
(iii) After the loan obligation is satisfied, the institution shall return the original or a true and exact copy of the note marked “paid in full” to the borrower, or otherwise notify the borrower in writing that the loan is paid in full, and retain a copy for the prescribed period.
(iv) An institution shall maintain separately its records pertaining to cancellations of Defense, NDSL, and Federal Perkins Loans.
(v) Only authorized personnel may have access to the loan documents.
(f) Enrollment reporting process. (1) Upon receipt of an enrollment report from the Secretary, an institution must update all information included in the report and return the report to the Secretary—
(i) In the manner and format prescribed by the Secretary; and
(ii) Within the timeframe specified by the Secretary.
(2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the school discovers that—
(i) A loan under title IV of the HEA was made to a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
(ii) A student who is enrolled at the institution and who received a loan under title IV of the HEA has changed his or her permanent address.
(a) In making a loan, an institution shall comply with the equal credit opportunity requirements of Regulation B (12 CFR part 202).
(b) The Secretary considers the Federal Perkins Loan program to be a credit assistance program authorized by Federal law for the benefit of an economically disadvantaged class of persons within the meaning of 12 CFR 202.8(a)(1). Therefore, the institution may request a loan applicant to disclose his or her marital status, income from alimony, child support, and spouse's income and signature.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) Promissory note. (1) An institution may use only the promissory note that the Secretary provides. The institution may make only nonsubstantive changes, such as changes to the type style or font, or the addition of items such as the borrower's driver's license number, to this note.
(2)(i) The institution shall print the note on one page, front and back; or
(ii) The institution may print the note on more than one page if—
(A) The note requires the signature of the borrower on each page; or
(B) Each page of the note contains both the total number of pages in the complete note as well as the number of each page, e.g., page 1 of 4, page 2 of 4, etc.
(iii) The promissory note must state the exact amount of the minimum monthly repayment amount if the institution chooses the option under § 674.33(b).
(b) Provisions of the promissory note—(1) Interest. The promissory note must state that—
(i) The rate of interest on the loan is 5 percent per annum on the unpaid balance; and
(ii) No interest shall accrue before the repayment period begins, during certain deferment periods as provided by this subpart, or during the grace period following those deferments.
(2) Repayment. (i) Except as otherwise provided in § 674.32, the promissory note must state that the repayment period—
(A) For NDSLs made on or after October 1, 1980, begins 6 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later;
(B) For NDSLs made before October 1, 1980 and Federal Perkins Loans, begins 9 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later;
(C) For purposes of establishing the beginning of the repayment period for NDSL or Perkins loans, the 6- and 9-month grace periods referenced in paragraph (b)(2)(i) of this section exclude any period during which a borrower who is a member of a reserve component of the Armed Forces named in section 10101 of Title 10, United States Code is called or ordered to active duty for a period of more than 30 days. Any single excluded period may not exceed three years and includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any Direct or Perkins loan borrower who is in a grace period when called or ordered to active duty as specified in this paragraph is entitled to a new 6- or 9-month grace period upon completion of the excluded period.
(D) May begin earlier at the borrower's request; and
(E) May vary because of minimum monthly repayments (see § 674.33(b)), extensions of repayment (see § 674.33(c)), forbearance (see § 674.33(d)), or deferments (see §§ 674.34, 674.35, and 674.36);
(ii) The promissory note must state that the borrower shall repay the loan—
(A) In equal quarterly, bimonthly, or monthly amounts, as the institution chooses; or
(B) In graduated installments if the borrower requests a graduated repayment schedule, the institution submits the schedule to the Secretary for approval, and the Secretary approves it.
(3) Cancellation. The promissory note must state that the unpaid principal, interest, collection costs, and either penalty or late charges on the loan are canceled upon the death or permanent and total disability of the borrower.
(4) Prepayment. The promissory note must state that—
(i) The borrower may prepay all or part of the loan at any time without penalty;
(ii) The institution shall use amounts repaid during the academic year in which the loan was made to reduce the original loan amount and not consider these amounts to be prepayments;
(iii) If the borrower repays amounts during the academic year in which the loan was made and the initial grace period ended, only those amounts in excess of the amount due for any repayment period shall be treated as prepayments; and
(iv) If, in an academic year other than that described in paragraph (b)(4)(iii) of this section, a borrower repays more than the amount due for any repayment period, the institution shall use the excess to prepay the principal unless the borrower designates it as an advance payment of the next regular installment.
(5) Late charge. (i) An institution shall state in the promissory note that the institution will assess a late charge if the borrower does not—
(A) Repay all or part of a scheduled repayment when due; or
(B) File a timely request for cancellation or deferment with the institution. This request must include sufficient evidence to enable the institution to determine whether the borrower is entitled to a cancellation or deferment.
(ii)(A) The amount of the late charge on a Federal Perkins Loan or an NDSL Loan made to cover the cost of attendance for a period of enrollment that began on or after January 1, 1986 must be determined in accordance with § 674.43(b) (2), (3) and (4).
(B) The amount of the late or penalty charge on an NDSL made for periods of enrollment that began before January 1, 1986 may be—
(1) For each overdue payment on a loan payable in monthly installments, a maximum monthly charge of $1 for the first month and $2 for each additional month.
(2) For each overdue payment on a loan payable in bimonthly installments, a maximum bimonthly charge of $3.
(3) For each overdue payment on a loan payable in quarterly installments, a maximum charge per quarter of $6. (See appendix E of this part)
(iii) The institution may—
(A) Add either the penalty or late charge to the principal the day after the scheduled repayment was due; or
(B) Include it with the next scheduled repayment after the borrower receives notice of the late charge.
(6) Security and endorsement. The promissory note must state that the loan shall be made without security and endorsement.
(7) Assignment. The promissory note must state that a note may only be assigned to—
(i) The United States or an institution approved by the Secretary; or
(ii) An institution to which the borrower has transferred if that institution is participating in the Federal Perkins Loan program.
(8) Acceleration. The promissory note must state that an institution may demand immediate repayment of the entire loan, including any late charges, collection costs and accrued interest, if the borrower does not—
(i) Make a scheduled repayment on time; or
(ii) File cancellation or deferment form(s) with the institution on time.
(9) Cost of collection. The promissory note must state that the borrower shall pay all attorney's fees and other loan collection costs and charges.
(10) Disclosure of information. The promissory note must state that—
(i) The institution must disclose to at least one national credit bureau the amount of the loan made to the borrower, along with other relevant information.
(ii) If the borrower defaults on the loan, the institution shall disclose that the borrower has defaulted on the loan, along with other relevant information, to the same national credit bureau to which it originally reported the loan; and
(iii) If the borrower defaults on the loan and the loan is assigned to the Secretary for collection, the Secretary may disclose to a national credit bureau that the borrower has defaulted on the loan, along with other relevant information.
(a) The promissory note used with regard to loans to borrowers enrolled on a less than half-time basis must state that the repayment period begins—
(1) On the date of the next scheduled installment payment on any outstanding loan to the borrower; or
(2) If the borrower has no outstanding loan, at the earlier of—
(i) Nine months from the date the loan was made, or
(ii) The end of a nine-month period that includes the date the loan was made and began on the date the borrower ceased to be enrolled as at least a half-time regular student at an institution of higher education or comparable institution outside the U.S. approved for this purpose by the Secretary.
(b) The note must otherwise conform to the provisions of § 674.31.
(a) Repayment Plan. (1) The institution shall establish a repayment plan before the student ceases to be at least a half-time regular student.
(2) If the last scheduled payment would be $25 or less the institution may combine it with the next-to-last repayment.
(3) If the installment payment for all loans made to a borrower by an institution is not a multiple of $5, the institution may round that payment to the next highest dollar amount that is a multiple of $5.
(4) The institution shall apply any payment on a loan in the following order:
(i) Collection costs.
(ii) Late charges.
(iii) Accrued interest.
(iv) Principal.
(b) Minimum monthly repayment—(1) Minimum monthly repayment option. (i) An institution may require a borrower to pay a minimum monthly repayment if—
(A) The promissory note includes a minimum monthly repayment provision specifying the amount of the minimum monthly repayment; and
(B) The monthly repayment of principal and interest for a 10-year repayment period is less than the minimum monthly repayment; or
(ii) An institution may require a borrower to pay a minimum monthly repayment if the borrower has received loans with different interest rates at the same institution and the total monthly repayment would otherwise be less than the minimum monthly repayment.
(2) Minimum monthly repayment of loans from more than one institution. If a borrower has received loans from more than one institution and has notified the institution that he or she wants the minimum monthly payment determination to be based on payments due to other institutions, the following rules apply:
(i) If the total of the monthly repayments is equal to at least the minimum monthly repayment, no institution may exercise a minimum monthly repayment option.
(ii) If only one institution exercises the minimum monthly repayment option when the monthly repayment would otherwise be less than the minimum repayment option, that institution receives the difference between the minimum monthly repayment and the repayment owed to the other institution.
(iii) If each institution exercises the minimum repayment option, the minimum monthly repayment must be divided among the institutions in proportion to the amount of principal advanced by each institution.
(3) Minimum monthly repayment of both Defense and NDSL or Federal Perkins loans from one or more institutions. If the borrower has notified the institution that he or she wants the minimum monthly payment determination to be based on payments due to other institutions, and if the total monthly repayment is less than $30 and the monthly repayment on a Defense loan is less than $15 a month, the amount attributed to the Defense loan may not exceed $15 a month.
(4) Minimum monthly repayment of loans with differing grace periods and deferments. If the borrower has received loans with different grace periods and deferments, the institution shall treat each note separately, and the borrower shall pay the applicable minimum monthly payment for a loan that is not in the grace or deferment period.
(5) Hardship. The institution may reduce the borrower's scheduled repayments for a period of not more than one year at a time if—
(i) It determines that the borrower is unable to make the scheduled repayments due to hardship (see § 674.33(c)); and
(ii) The borrower's scheduled repayment is the minimum monthly repayment described in paragraph (b) of this section.
(6) Minimum monthly repayment rates. For the purposes of this section, the minimum monthly repayment rate is—
(i) $15 for a Defense loan;
(ii) $30 for an NDSL Loan or for a Federal Perkins loan made before October 1, 1992, or for a Federal Perkins loan made on or after October 1, 1992, to a borrower who, on the date the loan is made, has an outstanding balance of principal or interest owing on any loan made under this part; or
(iii) $40 for a Federal Perkins loan made on or after October 1, 1992, to a borrower who, on the date the loan is made, has no outstanding balance of principal or interest owing on any loan made under this part.
(7) The institution shall determine the minimum repayment amount under paragraph (b) of this section for loans with repayment installment intervals greater than one month by multiplying the amounts in paragraph (b) of this section by the number of months in the installment interval.
(c) Extension of repayment period—(1) Hardship. The institution may extend a borrower's repayment period due to prolonged illness or unemployment.
(2) Low-income individual. (i) For Federal Perkins loans and NDSLs made on or after October 1, 1980, the institution may extend the borrower's repayment period up to 10 additional years beyond the 10-year maximum repayment period if the institution determines during the course of the repayment period that the borrower is a “low-income individual.” The borrower qualifies for an extension of the repayment period on the basis of low-income status only during the period in which the borrower meets the criteria described in paragraph (c)(2)(i) (A) or (B) of this section. The term low-income individual means the following:
(A) For an unmarried borrower without dependents, an individual whose total income for the preceding calendar year did not exceed 45 percent of the Income Protection Allowance for the current award year for a family of four with one in college.
(B) For a borrower with a family that includes the borrower and any spouse or legal dependents, an individual whose total family income for the preceding calendar year did not exceed 125 percent of the Income Protection Allowance for the current award year for a family with one in college and equal in size to that of the borrower's family.
(ii) The institution shall use the Income Protection Allowance published annually in accordance with section 478 of the HEA in making this determination.
(iii) The institution shall review the borrower's status annually to determine whether the borrower continues to qualify for an extended repayment period based on his or her status as a “low-income individual.”
(iv) Upon determining that a borrower ceases to qualify for an extended repayment period under this section, the institution shall amend the borrower's repayment schedule. The term of the amended repayment schedule may not exceed the number of months remaining on the original repayment schedule, provided that the institution may not include the time elapsed during any extension of the repayment period granted under this section in determining the number of months remaining on the original repayment schedule.
(3) Interest continues to accrue during any extension of a repayment period.
(d) Forbearance. (1) Forbearance means the temporary cessation of payments, allowing an extension of time for making payments, or temporarily accepting smaller payments than previously were scheduled.
(2) Upon receipt of a request and supporting documentation, the institution shall grant the borrower forbearance of principal and, unless otherwise indicated by the borrower, interest renewable at intervals of up to 12 months for periods that collectively do not exceed three years.
(3) The terms of forbearance must be agreed upon, in writing, by the borrower and the institution. The school confirms this agreement by notice to the borrower, and by recording the terms in the borrower's file.
(4) In granting a forbearance under this section, an institution shall grant a temporary cessation of payments, unless the borrower chooses another form of forbearance subject to paragraph (d)(1) of this section.
(5) An institution shall grant forbearance if—
(i) The amount of the payments the borrower is obligated to make on title IV loans each month (or a proportional share if the payments are due less frequently than monthly) is collectively equal to or greater than 20 percent of the borrower's total monthly gross income;
(ii) The institution determines that the borrower should qualify for the forbearance due to poor health or for other acceptable reasons; or
(iii) The Secretary authorizes a period of forbearance due to a national military mobilization or other national emergency.
(6) Before granting a forbearance to a borrower under paragraph (d)(5)(i) of this section, the institution shall require the borrower to submit at least the following documentation:
(i) Evidence showing the amount of the most recent total monthly gross income received by the borrower; and
(ii) Evidence showing the amount of the monthly payments owed by the borrower for the most recent month for the borrower's title IV loans.
(7) Interest accrues during any period of forbearance.
(8) The institution may not include the periods of forbearance described in this paragraph in determining the 10-year repayment period.
(e) Compromise of repayment. (1) An institution may compromise on the repayment of a defaulted loan if—
(i) The institution has fully complied with all due diligence requirements specified in subpart C of this part; and
(ii) The student borrower pays in a single lump-sum payment—
(A) 90 percent of the outstanding principal balance on the loan under this part;
(B) The interest due on the loan; and
(C) Any collection fees due on the loan.
(2) The Federal share of the compromise repayment must bear the same relation to the institution's share of the compromise repayment as the Federal capital contribution to the institution's loan Fund under this part bears to the institution's capital contribution to the Fund.
(f)(1) Incentive repayment program. An institution may establish the following repayment incentives:
(i) A reduction of no more than one percent of the interest rate on a loan on which the borrower has made 48 consecutive, monthly repayments.
(ii) A discount of no more than five percent on the balance owed on a loan which the borrower pays in full prior to the end of the repayment period.
(iii) With the Secretary's approval, any other incentive the institution determines will reduce defaults and replenish its Fund.
(2) Limitation on the use of funds. (i) The institution must reimburse its Fund, on at least a quarterly basis, for money lost to its Fund that otherwise would have been paid by the borrower as a result of establishing a repayment incentive under paragraphs (f)(1)(i), (ii) and (iii) of this section.
(ii) An institution may not use Federal funds, including Federal funds from the student loan fund, or institutional funds from the student loan fund to pay for any repayment incentive authorized by this section.
(g) Closed school discharge—
(1) General. (i) The holder of an NDSL or a Federal Perkins Loan discharges the borrower's (and any endorser's) obligation to repay the loan if the borrower did not complete the program of study for which the loan was made because the school at which the borrower was enrolled closed.
(ii) For the purposes of this section—
(A) If a school has closed, the school's closure date is the earlier of: the date, determined by the Secretary, that the school ceased to provide educational instruction in programs in which most students at the school were enrolled, or a date determined by the Secretary that reflects when the school ceased to provide educational instruction for all of its students;
(B) “School” means a school's main campus or any location or branch of the main campus regardless of whether the school or its location or branch is considered title IV eligible;
(C) The “holder” means the Secretary or the school that holds the loan; and
(D) “Program” means the credential defined by the level and Classification of Instructional Program code in which a student is enrolled, except that the Secretary may define a borrower's program as multiple levels or Classification of Instructional Program codes if—
(1) The enrollment occurred at the same school in closely proximate periods;
(2) The school granted a credential in a program while the student was enrolled in a different program; or
(3) The programs must be taken in a set order or were presented as necessary for students to complete in order to succeed in the relevant field of employment.
(2) Relief pursuant to discharge. (i) Discharge under this section relieves the borrower of any past or present obligation to repay the loan and any accrued interest or collection costs with respect to the loan.
(ii) The discharge of a loan under this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on the loan.
(iii) A borrower who has defaulted on a loan discharged under this section is not considered to have been in default on the loan after discharge, and such a borrower is eligible to receive assistance under programs authorized by title IV of the HEA.
(iv) The Secretary or the school, if the school holds the loan, reports the discharge of a loan under this section to all consumer reporting agencies to which the status of the loan was previously reported.
(3) Discharge without an application. (i) The Secretary will discharge the borrower's obligation to repay an NDSL or Federal Perkins Loan without an application from the borrower if the—
(A) Borrower qualified for and received a discharge on a loan pursuant to § 682.402(d) (Federal Family Education Loan Program) or § 685.214 (Federal Direct Loan Program) of this chapter, and was unable to receive a discharge on an NDSL or Federal Perkins Loan because the Secretary lacked the statutory authority to discharge the loan; or
(B) Secretary determines that the borrower qualifies for a discharge based on information in the Secretary's possession. The Secretary discharges the loan without an application from the borrower 1 year after the institution's closure date if the borrower did not complete the program at another branch or location of the school or through a teach-out agreement with another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency.
(ii) If the borrower accepts but does not complete a continuation of their program at a branch or another location of the institution or a teach-out agreement at another school approved by the school's accrediting agency and, if applicable, the school's State authorizing agency, then the Secretary discharges the loan 1 year after the borrower's last date of attendance at the institution or in the teach-out program.
(4) Borrower qualification for discharge. Except as provided in paragraph (g)(3) of this section, to qualify for discharge of an NDSL or Federal Perkins Loan, a borrower must submit to the holder of the loan a completed closed school discharge application on a form approved by the Secretary, and the factual assertions in the application must be true and must be made by the borrower under penalty of perjury. The application explains the procedures and eligibility criteria for obtaining a discharge and requires the borrower to—
(i) State that the borrower—
(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986, to attend a school;
(B) Did not complete the program of study at that school because the school closed while the student was enrolled, or the student withdrew from the school not more than 180 days before the school closed. The Secretary may extend the 180-day period if the Secretary determines that exceptional circumstances such as those described in paragraph (g)(9) of this section justify an extension; and
(C) On or after July 1, 2023, did not complete the program at another branch or location of the institution or through a teach-out agreement at another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency.
(ii) State whether the borrower has made a claim with respect to the school's closing with any third party, such as the holder of a performance bond or a tuition recovery program, and, if so, the amount of any payment received by the borrower or credited to the borrower's loan obligation; and
(iii) State that the borrower—
(A) Agrees to provide to the holder of the loan upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(B) Agrees to cooperate with the Secretary in enforcement actions in accordance with paragraph (g)(6) of this section and to transfer any right to recovery against a third party to the Secretary in accordance with paragraph (g)(7) of this section.
(5) Fraudulently obtained loans. A borrower who secured a loan through fraudulent means, as determined by the ruling of a court or an administrative tribunal of competent jurisdiction, is ineligible for a discharge under this section.
(6) Cooperation by borrower in enforcement actions. (i) To obtain a discharge under this section, a borrower must cooperate with the Secretary in any judicial or administrative proceeding brought by the Secretary to recover amounts discharged or to take other enforcement action with respect to the conduct on which the discharge was based. At the request of the Secretary and upon the Secretary's tendering to the borrower the fees and costs that are customarily provided in litigation to reimburse witnesses, the borrower must—
(A) Provide testimony regarding any representation made by the borrower to support a request for discharge;
(B) Provide any documents reasonably available to the borrower with respect to those representations; and
(C) If required by the Secretary, provide a sworn statement regarding those documents and representations.
(ii) The holder denies the request for a discharge or revokes the discharge of a borrower who—
(A) Fails to provide the testimony, documents, or a sworn statement required under paragraph (g)(6)(i) of this section; or
(B) Provides testimony, documents, or a sworn statement that does not support the material representations made by the borrower to obtain the discharge.
(7) Transfer to the Secretary of borrower's right of recovery against third parties. (i) In the case of a loan held by the Secretary, upon discharge under this section, the borrower is deemed to have assigned to and relinquished in favor of the Secretary any right to a loan refund (up to the amount discharged) that the borrower may have by contract or applicable law with respect to the loan or the enrollment agreement for the program for which the loan was received, against the school, its principals, its affiliates and their successors, its sureties, and any private fund, including the portion of a public fund that represents funds received from a private party.
(ii) The provisions of this section apply notwithstanding any provision of State law that would otherwise restrict transfer of those rights by the borrower, limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(iii) Nothing in this section limits or forecloses the borrower's right to pursue legal and equitable relief regarding disputes arising from matters unrelated to the discharged NDSL or Federal Perkins Loan.
(8) Discharge procedures. (i) After confirming the date of a school's closure, the holder of the loan identifies any NDSL or Federal Perkins Loan borrower who appears to have been enrolled at the school on the school closure date or to have withdrawn not more than 180 days prior to the closure date.
(ii) If the borrower's current address is known, the holder of the loan mails the borrower a discharge application and an explanation of the qualifications and procedures for obtaining a discharge. The holder of the loan also promptly suspends any efforts to collect from the borrower on any affected loan. The holder of the loan may continue to receive borrower payments.
(iii) In the case of a loan held by the Secretary, if the borrower's current address is unknown, the Secretary attempts to locate the borrower and determine the borrower's potential eligibility for a discharge under this section by consulting with representatives of the closed school or representatives of the closed school's third-party billing and collection servicers, the school's licensing agency, the school accrediting agency, and other appropriate parties. If the Secretary learns the new address of a borrower, the Secretary mails to the borrower a discharge application and explanation and suspends collection, as described in paragraph (g)(8)(ii) of this section.
(iv) In the case of a loan held by a school, if the borrower's current address is unknown, the school attempts to locate the borrower and determine the borrower's potential eligibility for a discharge under this section by taking steps required to locate the borrower under § 674.44.
(v) If the borrower fails to submit the completed application described in paragraph (g)(4) of this section within 90 days of the holder of the loan's mailing the discharge application, the holder of the loan resumes collection and grants forbearance of principal and interest for the period during which collection activity was suspended.
(vi) Upon resuming collection on any affected loan, the Secretary provides the borrower another discharge application and an explanation of the requirements and procedures for obtaining a discharge.
(vii) If the holder of the loan determines that a borrower who requests a discharge meets the qualifications for a discharge, the holder of the loan notifies the borrower in writing of that determination and the reasons for the determination.
(viii) In the case of a loan held by the Secretary, if the Secretary determines that a borrower who requests a discharge does not meet the qualifications for a discharge, the Secretary notifies that borrower, in writing, of that determination and the reasons for the determination.
(ix) In the case of a loan held by a school, if the school determines that a borrower who requests a discharge does not meet the qualifications for discharge, the school submits that determination and all supporting materials to the Secretary for approval. The Secretary reviews the materials, makes an independent determination, and notifies the borrower in writing of the determination and the reasons for the determination.
(x) In the case of a loan held by a school and discharged by either the school or the Secretary, the school must reimburse its Fund for the entire amount of any outstanding principal and interest on the loan, and any collection costs charged to the Fund as a result of collection efforts on a discharged loan. The school must also reimburse the borrower for any amount of principal, interest, late charges or collection costs the borrower paid on a loan discharged under this section.
(9) Exceptional circumstances. For purposes of this section, exceptional circumstances include, but are not limited to—
(i) The revocation or withdrawal by an accrediting agency of the school's institutional accreditation;
(ii) The school is or was placed on probation or issued a show-cause order, or placed on an equivalent accreditation status, by its accrediting agency for failing to meet one or more of the agency's standards;
(iii) The revocation or withdrawal by the State authorization or licensing authority to operate or to award academic credentials in the State;
(iv) The termination by the Department of the school's participation in a title IV, HEA program;
(v) A finding by a State or Federal government agency that the school violated State or Federal law related to education or services to students;
(vi) A State or Federal court judgment that a School violated State or Federal law related to education or services to students;
(vii) The teach-out of the student's educational program exceeds the 180-day look back period for a closed school discharge;
(viii) The school responsible for the teach-out of the student's educational program fails to perform the material terms of the teach-out plan or agreement, such that the student does not have a reasonable opportunity to complete his or her program of study;
(ix) The school discontinued a significant share of its academic programs;
(x) The school permanently closed all or most of its in-person locations while maintaining online programs;
(xi) The Department placed the school on the heightened cash monitoring payment method as defined in § 668.162(d)(2).
(a) The borrower may defer making a scheduled installment repayment on a Federal Perkins loan, an NDSL, or a Defense loan, regardless of contrary provisions of the borrower's promissory note and regardless of the date the loan was made, during periods described in paragraphs (b), (c), (d), (e), (f), and (g) of this section.
(b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is—
(i) Enrolled and in attendance as a regular student in at least a half-time course of study at an eligible institution;
(ii) Enrolled and in attendance as a regular student in a course of study that is part of a graduate fellowship program approved by the Secretary;
(iii) Engaged in graduate or post-graduate fellowship-supported study (such as a Fulbright grant) outside the United States; or
(iv) Enrolled in a course of study that is part of a rehabilitation training program for disabled individuals approved by the Secretary as described in paragraph (g) of this section.
(2) No borrower is eligible for a deferment under paragraph (b)(1) of this section while serving in a medical internship or residency program, except for a residency program in dentistry.
(3) The institution of higher education at which the borrower is enrolled does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment.
(4) If a borrower is attending an institution of higher education as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to a deferment for 12 months.
(5) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) The borrower of a Federal Perkins loan, an NDSL, or a Defense loan need not repay principal, and interest does not accrue, for any period during which the borrower is engaged in service described in §§ 674.53, 674.54, 674.55, 674.56, 674.57, 674.58, 674.59, and 674.60.
(d) The borrower need not repay principal, and interest does not accrue, for any period not to exceed 3 years during which the borrower is seeking and unable to find full-time employment.
(e) The borrower need not repay principal, and interest does not accrue, for periods of up to one year at a time (except that a deferment under paragraph (e)(4) of this section may be granted for the lesser of the borrower's full term of service in the Peace Corps or the borrower's remaining period of economic hardship deferment eligibility) that, collectively, do not exceed 3 years, during which the borrower is suffering an economic hardship, if the borrower provides documentation satisfactory to the institution showing that the borrower is within any of the categories described in paragraphs (e)(1) through (e)(4) of this section.
(1) Has been granted an economic hardship deferment under either the Federal Direct Loan Program or the FFEL programs for the period of time for which the borrower has requested an economic hardship deferment for his or her Federal Perkins loan.
(2) Is receiving payment under a Federal or state public assistance program, such as Aid to Families with Dependent Children, Supplemental Security Income, Food Stamps, or state general public assistance.
(3) Is working full-time and earning a total monthly gross income that does not exceed the greater of—
(i) The monthly earnings of an individual earning the minimum wage described in section 6 of the Fair Labor Standards Act of 1938; or
(ii) An amount equal to 150 percent of the poverty guideline applicable to the borrower's family size as published annually by the Department of Health and Human Services pursuant to 42 U.S.C. 9902(2). If a borrower is not a resident of a State identified in the poverty guidelines, the poverty guideline to be used for the borrower is the poverty guideline (for the relevant family size) used for the 48 contiguous States.
(4) Is serving as a volunteer in the Peace Corps.
(5) To qualify for a subsequent period of deferment that begins less than one year after the end of a period of deferment under paragraph (e)(3) of this section, the institution shall require the borrower to submit a copy of the borrower's Federal income tax return if the borrower filed a tax return within eight months prior to the date the deferment is requested.
(6)(i) For purposes of paragraph (e)(3) of this section, a borrower is considered to be working full-time if the borrower is expected to be employed for at least three consecutive months at 30 hours per week.
(ii) For purposes of paragraph (e)(3)(ii) of this section, family size means the number that is determined by counting the borrower, the borrower's spouse, and the borrower's children, including unborn children who will be born during the period covered by the deferment, if the children receive more than half their support from the borrower. A borrower's family size includes other individuals if, at the time the borrower requests the economic hardship deferment, the other individuals—
(A) Live with the borrower; and
(B) Receive more than half their support from the borrower and will continue to receive this support from the borrower for the year the borrower certifies family size. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.
(f)(1) To qualify for a deferment for study as part of a graduate fellowship program pursuant to paragraph (b)(1)(ii) of this section, a borrower must provide the institution with a statement from an authorized official of the borrower's graduate fellowship program certifying—
(i) That the borrower holds at least a baccalaureate degree conferred by an institution of higher education;
(ii) That the borrower has been accepted or recommended by an institution of higher education for acceptance on a full-time basis into an eligible graduate fellowship program; and
(iii) The borrower's anticipated completion date in the program.
(2) For purposes of paragraph (b)(1)(ii) of this section, an eligible graduate fellowship program is a fellowship program that—
(i) Provides sufficient financial support to graduate fellows to allow for full-time study for at least six months;
(ii) Requires a written statement from each applicant explaining the applicant's objectives before the award of that financial support;
(iii) Requires a graduate fellow to submit periodic reports, projects, or evidence of the fellow's progress; and
(iv) In the case of a course of study at a foreign university, accepts the course of study for completion of the fellowship program.
(g) To qualify for a deferment for study in a rehabilitation training program, pursuant to paragraph (b)(1)(iv) of this section, the borrower must be receiving, or be scheduled to receive, services under a program designed to rehabilitate disabled individuals and must provide the institution with the following documentation:
(1) A certification from the rehabilitation agency that the borrower is either receiving or scheduled to receive rehabilitation training services from the agency.
(2) A certification from the rehabilitation agency that the rehabilitation program—
(i) Is licensed, approved, certified, or otherwise recognized by one of the following entities as providing rehabilitation training to disabled individuals—
(A) A State agency with responsibility for vocational rehabilitation programs;
(B) A State agency with responsibility for drug abuse treatment programs;
(C) A State agency with responsibility for mental health services programs;
(D) A State agency with responsibility for alcohol abuse treatment programs; or
(E) The Department of Veterans Affairs; and
(ii) Provides or will provide the borrower with rehabilitation services under a written plan that—
(A) Is individualized to meet the borrower's needs;
(B) Specifies the date on which the services to the borrower are expected to end; and
(C) Is structured in a way that requires a substantial commitment by the borrower to his or her rehabilitation. The Secretary considers a substantial commitment by the borrower to be a commitment of time and effort that would normally prevent an individual from engaging in full-time employment either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation.
(h) Military service deferment. (1) The borrower need not pay principal, and interest does not accrue, on a Federal Perkins Loan, an NDSL, or a Defense Loan, for any period during which the borrower is—
(i) Serving on active duty during a war or other military operation or national emergency; or
(ii) Performing qualifying National Guard duty during a war or other military operation or national emergency.
(2) Serving on active duty during a war or other military operation or national emergency means service by an individual who is—
(i) A Reserve of an Armed Force ordered to active duty under 10 U.S.C. 12301(a), 12301(g), 12302, 12304, or 12306;
(ii) A retired member of an Armed Force ordered to active duty under 10 U.S.C. 688 for service in connection with a war or other military operation or national emergency, regardless of the location at which such active duty service is performed; or
(iii) Any other member of an Armed Force on active duty in connection with such emergency or subsequent actions or conditions who has been assigned to a duty station at a location other than the location at which the member is normally assigned.
(3) Qualifying National Guard duty during a war or other operation or national emergency means service as a member of the National Guard on full-time National Guard duty, as defined in 10 U.S.C. 101(d)(5), under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under 32 U.S.C. 502(f) in connection with a war, other military operation, or national emergency declared by the President and supported by Federal funds.
(4) As used in this paragraph—
(i) Active duty means active duty as defined in 10 U.S.C. 101(d)(1) except that it does not include active duty for training or attendance at a service school;
(ii) Military operation means a contingency operation as defined in 10 U.S.C. 101(a)(13); and
(iii) National emergency means the national emergency by reason of certain terrorist attacks declared by the President on September 14, 2001, or subsequent national emergencies declared by the President by reason of terrorist attacks.
(5) These provisions do not authorize the refunding of any payments made by or on behalf of a borrower during a period for which the borrower qualified for a military service deferment.
(6) For a borrower whose active duty service includes October 1, 2007, or begins on or after that date, the deferment period ends 180 days after the demobilization date for each period of service described in paragraphs (h)(1)(i) and (h)(1)(ii) of this section.
(7) Without supporting documentation, a military service deferment may be granted to an otherwise eligible borrower for a period not to exceed 12 months from the date of the qualifying eligible service based on a request from the borrower or the borrower's representative.
(i) Post-active duty student deferment. (1) Effective October 1, 2007, a borrower of a Federal Perkins loan, an NDSL, or a Defense loan serving on active duty military service on that date, or who begins serving on or after that date, need not pay principal, and interest does not accrue for up to 13 months following the conclusion of the borrower's active duty military service and initial grace period if—
(i) The borrower is a member of the National Guard or other reserve component of the Armed Forces of the United States or a member of such forces in retired status; and
(ii) The borrower was enrolled, on at least a half-time basis, in a program of instruction at an eligible institution at the time, or within six months prior to the time, the borrower was called to active duty.
(2) As used in paragraph (i)(1) of this section “Active duty” means active duty as defined in section 101(d)(1) of title 10, United States Code, for at least a 30-day period, except that—
(i) Active duty includes active State duty for members of the National Guard under which the Governor activates National Guard personnel based on State statute or policy and the activities of the National Guard are paid for with State funds;
(ii) Active duty includes full-time National Guard duty under which the Governor is authorized, with the approval of the President or the U.S. Secretary of Defense, to order a member to State active duty and the activities of the National Guard are paid for with Federal funds;
(iii) Active duty does not include active duty for training or attendance at a service school; and
(iv) Active duty does not include employment in a full-time, permanent position in the National Guard unless the borrower employed in such a position is reassigned to active duty under paragraph (i)(2)(i) of this section or full-time National Guard duty under paragraph (i)(2)(ii) of this section.
(3) If the borrower returns to enrolled student status, on at least a half-time basis, during the 13-month deferment period, the deferment expires at the time the borrower returns to enrolled student status, on at least a half-time basis.
(4) If a borrower qualifies for both a military service deferment and a post-active duty student deferment under both paragraphs (h) and (i) of this section, the 180-day post-demobilization military service deferment period and the 13-month post-active duty student deferment period apply concurrently.
(j) The institution may not include the deferment periods described in paragraphs (b), (c), (d), (e), (f), (g), (h), and (i) of this section and the period described in paragraph (k) of this section in determining the 10-year repayment period.
(k) The borrower need not pay principal and interest does not accrue until six months after completion of any period during which the borrower is in deferment under paragraphs (b), (c), (d), (e), (f), (g), and (h) of this section.
(a) The borrower may defer repayment on a Federal Perkins Loan made before July 1, 1993, during the periods described in this section.
(b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at—
(i) An institution of higher education; or
(ii) A comparable institution outside the U.S. approved by the Secretary for this purpose.
(2) The institution of higher education does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment.
(3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months.
(4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) The borrower need not repay principal, and interest does not accrue, for any period not to exceed 3 years during which the borrower is—
(1) A member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard or an officer in the Commissioned Corps of the U.S. Public Health Service (see § 674.59);
(2) On full-time active duty as a member of the National Oceanic and Atmospheric Administration Corps;
(3) A Peace Corps volunteer (see § 674.60);
(4) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60);
(5) A full-time volunteer in service which the Secretary has determined is comparable to service in the Peace Corps or under the Domestic Volunteer Service Act of 1973 (ACTION programs). The Secretary considers that a borrower is providing comparable service if he or she satisfies the following five criteria:
(i) The borrower serves in an organization that is exempt from taxation under the provisions of section 501(c)(3) of the Internal Revenue Code of 1954.
(ii) The borrower provides service to low-income persons and their communities to assist them in eliminating poverty and poverty-related human, social, and environmental conditions.
(iii) The borrower does not receive compensation that exceeds the rate prescribed under section 6 of the Fair Labor Standards Act of 1938 (the Federal minimum wage), except that the tax-exempt organization may provide health, retirement, and other fringe benefits to the volunteer that are substantially equivalent to the benefits offered to other employees of the organization.
(iv) The borrower has agreed to serve on a full-time basis for a term of at least one year.
(6) Temporarily totally disabled, as established by an affidavit of a qualified physician, or unable to secure gainful employment because the borrower is providing care, such as continuous nursing or other similar services, required by a dependent who is so disabled. As used in this paragraph—
(i) “Temporarily totally disabled”, with regard to the borrower, means the inability by virtue of an injury or illness to attend an eligible institution or to be gainfully employed during a reasonable period of recovery; and
(ii) “Temporarily totally disabled”, with regard to a disabled spouse or other dependent of a borrower, means requiring continuous nursing or other services from the borrower for a period of at least three months because of illness or injury.
(d)(1) The borrower need not repay principal, and interest does not accrue, for a period not to exceed two years during which time the borrower is serving an eligible internship.
(2) An eligible internship is one which—
(i) Requires the borrower to hold at least a baccalaureate degree before beginning the internship; and
(ii)(A) A State licensing agency requires an individual to complete as a prerequisite for certification for professional practice or service; or
(B) Is a part of an internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training.
(3) To qualify for an internship deferment as provided in paragraph (d)(2)(ii)(A) of this section, the borrower must provide the institution with the following certifications:
(i) A statement from an official of the appropriate State licensing agency that successful completion of the internship program is a prerequisite for its certification of the individual for professional service or practice.
(ii) A statement from the organization with which the borrower is undertaking the internship program certifying—
(A) That a baccalaureate degree must be attained in order to be admitted into the internship program;
(B) That the borrower has been accepted into its internship program; and
(C) The anticipated dates on which the borrower will begin and complete the program.
(4) To qualify for an internship deferment as provided in paragraph (d)(2)(ii)(B) of this section, the borrower must provide the institution with a statement from an authorized official of the internship program certifying that—
(i) A baccalaureate degree must be attained in order to be admitted into the internship program;
(ii) The borrower has been accepted into its internship program; and
(iii) The internship or residency program in which the borrower has been accepted leads to a degree or certificate awarded by an institution of higher education, a hospital or a health-care facility that offers postgraduate training.
(e) The borrower need not repay principal, and interest does not accrue, for a period not in excess of six months—
(1) During which the borrower is—
(i) Pregnant, caring for a newborn baby, or caring for a child immediately after placement of the child through adoption; and
(ii) Not attending an eligible institution of higher education or gainfully employed; and
(2) That begins not later than six months after a period in which the borrower was at least a half-time regular student at an eligible institution.
(f) The borrower need not repay principal, and interest does not accrue, for a period not in excess of one year during which the borrower—
(1) Is a mother of preschool age children;
(2) Has just entered or reentered the work force; and
(3) Is being compensated at a rate which is not more than $1.00 over the minimum hourly wage established by section 6 of the Fair Labor Standards Act of 1938.
(g) An institution may defer payments of principal and interest, but interest shall continue to accrue, if the institution determines this is necessary to avoid hardship to the borrower (see § 674.33(c)).
(h) The institution may not include the deferment periods described in paragraphs (b), (c), (d), (e), (f), and (g) of this section and the period described in paragraph (i) of this section when determining the 10-year repayment period.
(i) The borrower need not repay principal, and interest does not accrue, until six months after completion of any period during which the borrower is in deferment under paragraphs (b), (c), (d), (e), and (f) of this section.
(a) The borrower may defer repayment on an NDSL Loan made on or after October 1, 1980, but before July 1, 1993, during the periods described in this section.
(b)(1) The borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at—
(i) An institution of higher education; or
(ii) A comparable institution outside the U.S. approved by the Secretary for this purpose.
(2) The institution of higher education does not need to be participating in the Federal Perkins Loan program for the borrower to qualify for a deferment.
(3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least a half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months.
(4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) The borrower need not repay principal, and interest does not accrue, for a period of up to 3 years during which time the borrower is—
(1) A member of the U.S. Army, Navy, Air Force, Marines, or Coast Guard or an officer in the Commissioned Corps of the U.S. Public Health Service (see § 674.59);
(2) A Peace Corps volunteer (see § 674.60);
(3) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60).
(4) A full-time volunteer in service which the Secretary has determined is comparable to service in the Peace Corps or under the Domestic Volunteer Service Act of 1973 (ACTION programs). The Secretary considers that a borrower is providing comparable service if he or she satisfies the following four criteria:
(i) The borrower serves in an organization that is exempt from taxation under the provisions of section 501(c)(3) of the Internal Revenue Code of 1954.
(ii) The borrower provides service to low-income persons and their communities to assist them in eliminating poverty and poverty-related human, social, and environmental conditions.
(iii) The borrower does not receive compensation that exceeds the rate prescribed under section 6 of the Fair Labor Standards Act of 1938 (the Federal minimum wage), except that the tax-exempt organization may provide health, retirement, and other fringe benefits to the volunteer that are substantially equivalent to the benefits offered to other employees of the organization.
(iv) The borrower has agreed to serve on a full-time basis for a term of at least one year.
(5)(i) Temporarily totally disabled, as established by an affidavit of a qualified physician, or unable to secure gainful employment because the borrower is providing care, such as continuous nursing or other similar services, required by a spouse who is so disabled.
(ii) “Temporarily totally disabled” with regard to the borrower, means the inability by virtue of an injury or illness to attend an eligible institution or to be gainfully employed during a reasonable period of recovery; and
(iii) “Temporarily totally disabled” with regard to a disabled spouse, means requiring continuous nursing or other services from the borrower for a period of at least three months because of illness or injury.
(d)(1) The borrower need not repay principal, and interest does not accrue, for a period not to exceed two years during which time the borrower is serving an eligible internship.
(2) An eligible internship is an internship—
(i) That requires the borrower to hold at least a bachelor's degree before beginning the internship program; and
(ii) That the State licensing agency requires the borrower to complete before certifying the individual for professional practice or service.
(3) To qualify for an internship deferment, the borrower shall provide to the institution the following certifications:
(i) A statement from an official of the appropriate State licensing agency that the internship program meets the provisions of paragraph (d)(2) of this section; and
(ii) A statement from the organization with which the borrower is undertaking the internship program certifying—
(A) The acceptance of the borrower into its internship program; and
(B) The anticipated dates on which the borrower will begin and complete the program.
(e) An institution may defer payments of principal and interest, but interest shall continue to accrue, if the institution determines this is necessary to avoid hardship to the borrower (see § 674.33)(c)).
(f) The institution shall not include the deferment periods described in paragraphs (b), (c), (d), and (e) of this section and the period described in paragraph (g) of this section when determining the 10-year repayment period.
(g) No repayment of principal or interest begins until six months after completion of any period during which the borrower is in deferment under paragraphs (b), (c), and (d) of this section.
(a) A borrower may defer repayment—
(1) On an NDSL made before October 1, 1980 during the periods described in paragraphs (b) through (e) of this section; and
(2) On a Defense loan, during the periods described in paragraphs (b) through (f) of this section.
(b)(1) A borrower need not repay principal, and interest does not accrue, during a period after the commencement or resumption of the repayment period on a loan, when the borrower is at least a half-time regular student at—
(i) An institution of higher education; or
(ii) A comparable institution outside the U.S. approved by the Secretary for this purpose.
(2) The institution of higher education does not need to be participating in the Perkins Loan program for the borrower to qualify for a deferment.
(3) If a borrower is attending as at least a half-time regular student for a full academic year and intends to enroll as at least half-time regular student in the next academic year, the borrower is entitled to deferment for 12 months.
(4) If an institution no longer qualifies as an institution of higher education, the borrower's deferment ends on the date the institution ceases to qualify.
(c) A borrower need not repay principal, and interest does not accrue for a period of up to 3 years during which time the borrower is—
(1) A member of the U.S. Army, Navy, Air Force, Marines or Coast Guard (see § 674.59);
(2) A Peace Corps volunteer (see § 674.60); or
(3) A volunteer under the Domestic Volunteer Service Act of 1973 (ACTION programs) (see § 674.60).
(d) The institution shall exclude the deferment periods described in paragraphs (b), (c), and (e) of this section when determining the 10-year repayment period.
(e) An institution may permit the borrower to defer payments of principal and interest, but interest shall continue to accrue, if the institution determines this is necessary to avoid hardship to the borrower (see § 674.33(c)).
(f) The institution may permit the borrower to defer payment of principal and interest, but interest shall continue to accrue, on a Defense loan for a total of 3 years after the commencement or resumption of the repayment period on a loan, during which he or she is attending an institution of higher education as a less-than-half-time regular student.
(a)(1) Except as provided in paragraph (a)(5) of this section, a borrower must request the deferment and provide the institution with all information and documents required by the institution by the date that the institution establishes.
(2) After receiving a borrower's written or verbal request, an institution may grant a deferment under §§ 674.34(b)(1)(ii), 674.34(b)(1)(iii), 674.34(b)(1)(iv), 674.34(d), 674.34(e), 674.34(h), and 674.34(i) if the institution is able to confirm that the borrower has received a deferment on another Perkins Loan, a FFEL Loan, or a Direct Loan for the same reason and the same time period. The institution may grant the deferment based on information from the other Perkins Loan holder, the FFEL Loan holder or the Secretary or from an authoritative electronic database maintained or authorized by the Secretary that supports eligibility for the deferment for the same reason and the same time period.
(3) An institution may rely in good faith on the information it receives under paragraph (a)(2) of this section when determining a borrower's eligibility for a deferment unless the institution, as of the date of the determination, has information indicating that the borrower does not qualify for the deferment. An institution must resolve any discrepant information before granting a deferment under paragraph (a)(2) of this section.
(4) An institution that grants a deferment under paragraph (a)(2) of this section must notify the borrower that the deferment has been granted and that the borrower has the option to cancel the deferment and continue to make payments on the loan.
(5) In the case of an in school deferment, the institution may grant the deferment based on student enrollment information showing that a borrower is enrolled as a regular student on at least a half-time basis, if the institution notifies the borrower of the deferment and of the borrower's option to cancel the deferment and continue paying on the loan.
(6) In the case of a military service deferment under §§ 674.34(h) and 674.35(c)(1), a borrower's representative may request the deferment on behalf of the borrower. An institution that grants a military service deferment based on a request from a borrower's representative must notify the borrower that the deferment has been granted and that the borrower has the option to cancel the deferment and continue to make payments on the loan. The institution may also notify the borrower's representative of the outcome of the deferment request.
(7) If the borrower fails to meet the requirements of paragraph (a) (1) of this section, the institution may declare the loan to be in default, and may accelerate the loan.
(b)(1) The institution may grant a deferment to a borrower after it has declared a loan to be a default.
(2) As a condition for a deferment under this paragraph, the institution—
(i) Shall require the borrower to execute a written repayment agreement on the loan; and
(ii) May require the borrower to pay immediately some or all of the amounts previously scheduled to be repaid before the date on which the institution determined that the borrower had demonstrated that grounds for a deferment existed, plus late charges and collection costs.
(c) If the information supplied by the borrower demonstrates that for some or all of the period for which a deferment is requested, the borrower had retained in-school status or was within the initial grace period on the loan, the institution shall—
(1) Redetermine the date on which the borrower was required to commence repayment on the loan;
(2) Deduct from the loan balance any interest accrued and late charges added before the date on which the repayment period commenced, as determined in paragraph (c)(1) of this section; and
(3) Treat in accordance with paragraph (b) of this section, the request for deferment for any remaining portion of the period for which deferment was requested.
(d) The institution must determine the continued eligibility of a borrower for a deferment at least annually, except that a borrower engaged in service described in §§ 674.34(e)(6), 674.35(c)(3), 674.36(c)(2), 674.37(c)(2), and § 674.60(a)(1) must be granted a deferment for the lesser of the borrower's full term of service in the Peace Corps, or the borrower's remaining period of eligibility for a deferment under § 674.34(e), not to exceed 3 years.
(a) Each institution must establish a loan rehabilitation program for all borrowers for the purpose of rehabilitating defaulted loans made under this part, except for loans for which a judgment has been secured or loans obtained by fraud for which the borrower has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance. The institution's loan rehabilitation program must provide that—
(1) A defaulted borrower is notified of the option and consequences of rehabilitating a loan; and
(2) A loan is rehabilitated if the borrower—
(i) Requests rehabilitation; and
(ii) Makes a full monthly payment—as determined by the institution—within 20 days of the due date, each month for 9 consecutive months.
(b) Within 30 days of receiving the borrower's last on-time, consecutive, monthly payment, the institution must—
(1) Return the borrower to regular repayment status;
(2) Treat the first payment made under the nine consecutive payments as the first payment under the 10-year repayment maximum; and
(3) Instruct any credit bureau to which the default was reported to remove the default from the borrower's credit history.
(c) Collection costs on a rehabilitated loan—
(1) If charged to the borrower, may not exceed 24 percent of the unpaid principal and accrued interest as of the date following application of the twelfth payment;
(2) That exceed the amounts specified in paragraph (c)(1) of this section, may be charged to an institution's Fund until July 1, 2002 in accordance with § 674.47(e)(5); and
(3) Are not restricted to 24 percent in the event the borrower defaults on the rehabilitated loan.
(d) After rehabilitating a defaulted loan and returning to regular repayment status, the borrower regains the balance of the benefits and privileges of the promissory note as applied prior to the borrower's default on the loan. Nothing in this paragraph prohibits an institution from offering the borrower flexible repayment options following the borrower's return to regular repayment status on a rehabilitated loan.
(e) The borrower may rehabilitate a defaulted loan only one time.
(a) An institution may not exercise the minimum monthly repayment provisions on a note when the borrower has received a partial cancellation for the period covered by a postponement.
(b) If a borrower has received Defense, NDSL, and Perkins loans and only one can be cancelled, the amount due on the uncancelled loan is the amount established in § 674.31(b) (2), loan repayment terms; § 674.33(b), minimum repayment rates; or § 674.33(c), extension of repayment period.
(a) General. Each institution shall exercise due diligence in collecting loans by complying with the provisions in this subpart. In exercising this responsibility, each institution shall, in addition to complying with the specific provisions of this subpart—
(1) Keep the borrower informed, on a timely basis, of all changes in the program that affect his or her rights or responsibilities; and
(2) Respond promptly to all inquiries from the borrower.
(3) Provide the borrower with information on the availability of the Student Loan Ombudsman's office if the borrower disputes the terms of the loan in writing and the institution does not resolve the dispute.
(b) Coordination of information. An institution shall ensure that information available in its offices (including the admissions, business, alumni, placement, financial aid and registrar's offices) is provided to those offices responsible for billing and collecting loans, in a timely manner, as needed to determine—
(1) The enrollment status of the borrower;
(2) The expected graduation or termination date of the borrower;
(3) The date the borrower withdraws, is expelled or ceases enrollment on at least a half-time basis; and
(4) The current name, address, telephone number and Social Security number of the borrower.
(a) Disclosure of repayment information. The institution must disclose the following information in a written statement provided to the borrower either shortly before the borrower ceases at least half-time study at the institution or during the exit interview. If the borrower enters the repayment period without the institution's knowledge, the institution must provide the required disclosures to the borrower in writing immediately upon discovering that the borrower has entered the repayment period. The institution must disclose the following information:
(1) The name and address of the institution to which the debt is owed and the name and address of the official or servicing agent to whom communications should be sent.
(2) The name and address of the party to which payments should be sent.
(3) The estimated balance owed by the borrower on the date on which the repayment period is scheduled to begin.
(4) The stated interest rate on the loan.
(5) The repayment schedule for all loans covered by the disclosure including the date the first installment payment is due, and the number, amount, and frequency of required payments.
(6) An explanation of any special options the borrower may have for loan consolidation or other refinancing of the loan, and a statement that the borrower has the right to prepay all or part of the loan at any time without penalty.
(7) A description of the charges imposed for failure of the borrower to pay all or part of an installment when due.
(8) A description of any charges that may be imposed as a consequence of default, such as liability for expenses reasonably incurred in attempts by the Secretary or the institution to collect on the loan.
(9) The total interest charges which the borrower will pay on the loan pursuant to the projected repayment schedule.
(10) The contact information of a party who, upon request of the borrower, will provide the borrower with a copy of his or her signed promissory note.
(11) An explanation that if a borrower is required to make minimum monthly repayments, and the borrower has received loans from more than one institution, the borrower must notify the institution if he or she wants the minimum monthly payment determination to be based on payments due to other institutions.
(b) Exit counseling. (1) An institution must ensure that exit counseling is conducted with each borrower either in person, by audiovisual presentation, or by interactive electronic means. The institution must ensure that exit counseling is conducted shortly before the borrower ceases at least half-time study at the institution. As an alternative, in the case of a student enrolled in a correspondence program or a study-abroad program that the institution approves for credit, the borrower may be provided with written counseling material by mail within 30 days after the borrower completes the program. If a borrower withdraws from the institution without the institution's prior knowledge or fails to complete an exit counseling session as required, the institution must ensure that exit counseling is provided through either interactive electronic means or by mailing counseling materials to the borrower at the borrower's last known address within 30 days after learning that the borrower has withdrawn from the institution or failed to complete exit counseling as required.
(2) The exit counseling must—
(i) Inform the student as to the average anticipated monthly repayment amount based on the student's indebtedness or on the average indebtedness of students who have obtained Perkins loans for attendance at the institution or in the borrower's program of study;
(ii) Explain to the borrower the options to prepay each loan and pay each loan on a shorter schedule;
(iii) Review for the borrower the option to consolidate a Federal Perkins Loan, including the consequences of consolidating a Perkins Loan. Information on the consequences of loan consolidation must include, at a minimum—
(A) The effects of consolidation on total interest to be paid, fees to be paid, and length of repayment;
(B) The effects of consolidation on a borrower's underlying loan benefits, including grace periods, loan forgiveness, cancellation, and deferment opportunities;
(C) The options of the borrower to prepay the loan or to change repayment plans; and
(D) That borrower benefit programs may vary among different lenders;
(iv) Include debt-management strategies that are designed to facilitate repayment;
(v) Explain the use of a Master Promissory Note;
(vi) Emphasize to the borrower the seriousness and importance of the repayment obligation the borrower is assuming;
(vii) Describe the likely consequences of default, including adverse credit reports, delinquent debt collection procedures under Federal law, and litigation;
(viii) Emphasize that the borrower is obligated to repay the full amount of the loan even if the borrower has not completed the program, has not completed the program within the regular time for program completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or did not receive educational or other services that the borrower purchased from the institution;
(ix) Provide—
(A) A general description of the terms and conditions under which a borrower may obtain full or partial forgiveness or cancellation of principal and interest, defer repayment of principal or interest, or be granted an extension of the repayment period or a forbearance on a title IV loan; and
(B) A copy, either in print or by electronic means, of the information the Secretary makes available pursuant to section 485(d) of the HEA;
(x) Require the borrower to provide current information concerning name, address, social security number, references, and driver's license number, the borrower's expected permanent address, the address of the borrower's next of kin, as well as the name and address of the borrower's expected employer;
(xi) Review for the borrower information on the availability of the Student Loan Ombudsman's office;
(xii) Inform the borrower of the availability of title IV loan information in the National Student Loan Data System (NSLDS) and how NSLDS can be used to obtain title IV loan status information; and
(xiii) A general description of the types of tax benefits that may be available to borrowers.
(3) If exit counseling is conducted through interactive electronic means, the institution must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the exit counseling.
(4) The institution must maintain documentation substantiating the institution's compliance with this section for each borrower.
(c) Contact with the borrower during the initial and post deferment grace periods. (1)(i) For loans with a nine-month initial grace period (NDSLs made before October 1, 1980 and Federal Perkins loans), the institution shall contact the borrower three times within the initial grace period.
(ii) For loans with a six-month initial or post deferment grace period (loans not described in paragraph (b)(1)(i) of this section), the institution shall contact the borrower twice during the grace period.
(2)(i) The institution shall contact the borrower for the first time 90 days after the commencement of any grace period. The institution shall at this time remind the borrower of his or her responsibility to comply with the terms of the loan and shall send the borrower the following information:
(A) The total amount remaining outstanding on the loan account, including principal and interest accruing over the remaining life of the loan.
(B) The date and amount of the next required payment.
(ii) The institution shall contact the borrower the second time 150 days after the commencement of any grace period. The institution shall at this time notify the borrower of the date and amount of the first required payment.
(iii) The institution shall contact a borrower with a nine-month initial grace period a third time 240 days after the commencement of the grace period, and shall then inform him or her of the date and amount of the first required payment.
(a) The term billing procedures, as used in this subpart, includes that series of actions routinely performed to notify borrowers of payments due on their accounts, to remind borrowers when payments are overdue, and to demand payment of overdue amounts. An institution shall use billing procedures that include at least the following steps:
(1) If the institution uses a coupon payment system, it shall send the coupons to the borrower at least 30 days before the first payment is due.
(2) If the institution does not use a coupon system, it shall send to the borrower—
(i) A written notice giving the name and address of the party to which payments are to be sent and a statement of account at least 30 days before the first payment is due; and
(ii) A statement of account at least 15 days before the due date of each subsequent payment.
(3) Notwithstanding paragraph (a)(2)(ii) of this section, if the borrower elects to make payment by means of an electronic transfer of funds from the borrower's bank account, the institution shall send to the borrower an annual statement of account.
(b)(1) An institution shall send a first overdue notice within 15 days after the due date for a payment if the institution has not received—
(i) A payment:
(ii) A request for deferment; or
(iii) A request for postponement or for cancellation.
(2) Subject to § 674.47(a), the institution may assess a late charge for loans made for periods of enrollment beginning on or after January 1, 1986, during the period in which the institution takes any steps described in this section to secure—
(i) Any part of an installment payment not made when due, or
(ii) A request for deferment, cancellation, or postponement of repayment on the loan that contains sufficient information to enable the institution to determine whether the borrower is entitled to the relief requested.
(3) The institution shall determine the amount of the late charge imposed for loans described in paragraph (b)(2) of this section based on either—
(i) Actual costs incurred for actions required under this section to secure the required payment or information from the borrower; or
(ii) The average cost incurred for similar attempts to secure payments or information from other borrowers.
(4) The institution may not require a borrower to pay late charges imposed under paragraph (b)(3) of this section in an amount, for each late payment or request, exceeding 20 percent of the installment payment most recently due.
(5) The institution—
(i) Shall determine the amount of the late or penalty charge imposed on loans not described in paragraph (b)(2) of this section in accordance with § 674.31(b)(5) (See appendix E); and
(ii) May assess this charge only during the period described in paragraph (b)(2) of this section.
(6) The institution shall notify the borrower of the amount of the charge it has imposed, and whether the institution—
(i) Has added that amount to the principal amount of the loan as of the first day on which the installment was due; or
(ii) Demands payment for that amount in full no later than the due date of the next installment.
(c) If the borrower does not satisfactorily respond to the first overdue notice, the institution shall continue to contact the borrower as follows, until the borrower makes satisfactory repayment arrangements or demonstrates entitlement to deferment, postponement, or cancellation:
(1) The institution shall send a second overdue notice within 30 days after the first overdue notice is sent.
(2) The institution shall send a final demand letter within 15 days after the second overdue notice. This letter must inform the borrower that unless the institution receives a payment or a request for deferment, postponement, or cancellation within 30 days of the date of the letter, it will refer the account for collection or litigation, and will report the default to a credit bureau.
(d) Notwithstanding paragraphs (b) and (c) of this section, an institution may send a borrower a final demand letter if the institution has not within 15 days after the due date received a payment, or a request for deferment. postponement, or cancellation, and if—
(1) The borrower's repayment history has been unsatisfactory, e.g., the borrower has previously failed to make payment(s) when due or to request deferment, postponement, or cancellation in a timely manner, or has previously received a final demand letter; or
(2) The institution reasonably concludes that the borrower neither intends to repay the loan nor intends to seek deferment, postponement, or cancellation of the loan.
(e)(1) An institution that accelerates a loan as provided in § 674.31 (i.e., makes the entire outstanding balance of the loan, including accrued interest and any applicable late charges, payable immediately) shall—
(i) Provide the borrower, at least 30 days before the effective date of the acceleration, written notice of its intention to accelerate; and
(ii) Provide the borrower on or after the effective date of acceleration, written notice of the date on which it accelerated the loan and the total amount due on the loan.
(2) The institution may provide these notices by including them in other written notices to the borrower, including the final demand letter.
(f) If the borrower does not respond to the final demand letter within 30 days from the date it was sent, the institution shall attempt to contact the borrower by telephone before beginning collection procedures.
(g)(1) An institution shall ensure that any funds collected as a result of billing the borrower are—
(i) Deposited in interest-bearing bank accounts that are—
(A) Insured by an agency of the Federal Government; or
(B) Secured by collateral of reasonably equivalent value; or
(ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States.
(2) An institution shall exercise the level of care required of a fiduciary with regard to these deposits and investments.
(a) If mail, other than unclaimed mail, sent to a borrower is returned undelivered, an institution shall take steps to locate the borrower. These steps must include—
(1) Reviews of records in all appropriate institutional offices;
(2) Reviews of telephone directories or inquiries of information operators in the locale of the borrower's last known address; and
(3) If, after following the procedures in paragraph (a) of this section, an institution is still unable to locate a borrower, the institution may use the Internal Revenue Service skip-tracing service.
(b) If an institution is unable to locate a borrower by the means described in paragraph (a) of this section, it shall—
(1) Use its own personnel to attempt to locate the borrower, employing and documenting efforts comparable to commonly accepted commercial skip-tracing practices; or
(2) Refer the account to a firm that provides commercial skip-tracing services.
(c) If the institution acquires the borrower's address or telephone number through the efforts described in this section, it shall use that new information to continue its efforts to collect on that borrower's account in accordance with the requirements of this subpart.
(d) If the institution is unable to locate the borrower after following the procedures in paragraphs (a) and (b) of this section, the institution shall make reasonable attempts to locate the borrower at least twice a year until—
(1) The loan is recovered through litigation;
(2) The account is assigned to the United States; or
(3) The account is written off under § 674.47(g).
(a) The term “collection procedures,” as used in this subpart, includes that series of more intensive efforts, including litigation as described in § 674.46, to recover amounts owed from defaulted borrowers who do not respond satisfactorily to the demands routinely made as part of the institution's billing procedures. If a borrower does not satisfactorily respond to the final demand letter or the following telephone contact made in accordance with § 674.43(f), the institution shall—
(1) Report the account as being in default to any one national credit bureau; and
(2)(i) Use its own personnel to collect the amount due; or
(ii) Engage a collection firm to collect the account.
(b)(1) An institution must report to any national credit bureau to which it reported the default, according to the reporting procedures of the national credit bureau, any changes to the account status of the loan.
(2) The institution must resolve, within 30 days of its receipt, any inquiry from any credit bureau that disputes the completeness or accuracy of information reported on the loan.
(c)(1) If the institution, or the firm it engages, pursues collection activity for up to 12 months and does not succeed in converting the account to regular repayment status, or the borrower does not qualify for deferment, postponement, or cancellation on the loan, the institution shall—
(i) Litigate in accordance with the procedures in § 674.46;
(ii) Make a second effort to collect the account as follows:
(A) If the institution first attempted to collect the account using its own personnel, it shall refer the account to a collection firm.
(B) If the institution first attempted to collect the account by using a collection firm, it shall either attempt to collect the account using institutional personnel, or place the account with a different collection firm; or
(iii) Submit the account for assignment to the Secretary in accordance with the procedures set forth in § 674.50.
(2) If the collection firm retained by the institution does not succeed in placing an account into a repayment status described in paragraph (c)(1) of this section after 12 months of collection activity, the institution shall require the collection firm to return the account to the institution.
(d) If the institution is unable to place the loan in repayment as described in paragraph (c)(1) of this section after following the procedures in paragraphs (a), (b), and (c) of this section, the institution shall continue to make annual attempts to collect from the borrower until—
(1) The loan is recovered through litigation;
(2) The account is assigned to the United States; or
(3) The account is written off under § 674.47(g).
(e)(1) Subject to § 674.47(d), the institution shall assess against the borrower all reasonable costs incurred by the institution with regard to a loan obligation.
(2) The institution shall determine the amount of collection costs that shall be charged to the borrower for actions required under this section, and §§ 674.44, 674.46, 674. 48, and 674.49, based on either—
(i) Actual costs incurred for these actions with regard to the individual borrower's loan; or
(ii) Average costs incurred for similar actions taken to collect loans in similar stages of delinquency.
(3) For loans placed with a collection firm on or after July 1, 2008, reasonable collection costs charged to the borrower may not exceed—
(i) For first collection efforts, 30 percent of the amount of principal, interest, and late charges collected;
(ii) For second and subsequent collection efforts, 40 percent of the amount of principal, interest, and late charges collected; and
(iii) For collection efforts resulting from litigation, 40 percent of the amount of principal, interest, and late charges collected plus court costs.
(4) The Fund must be reimbursed for collection costs initially charged to the Fund and subsequently paid by the borrower.
(f)(1) An institution shall ensure that any funds collected from the borrower are—
(i) Deposited in interest-bearing bank accounts that are—
(A) Insured by an agency of the Federal Government; or
(B) Secured by collateral of reasonably equivalent value; or
(ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States.
(2) An institution shall exercise the level of care required of a fiduciary with regard to these deposits and investments.
(g) Preemption of State law. The provisions of this section preempt any State law, including State statutes, regulations, or rules, that would conflict with or hinder satisfaction of the requirements or frustrate the purposes of this section.
(h) As part of the collection activities provided for in this section, the institution must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(a)(1) If the collection efforts described in § 674.45 do not result in the repayment of a loan, the institution shall determine at least once every two years whether—
(i) The total amount owing on the borrower's account, including outstanding principal, accrued interest, collection costs and late charges on all of the borrower's Federal Perkins, NDSL and National Defense Student Loans held by that institution, is more than $500;
(ii) The borrower can be located and served with process;
(iii)(A) The borrower has sufficient assets attachable under State law to satisfy a major portion of the oustanding debt; or
(B) The borrower has income from wages or salary which may be garnished under applicable State law sufficient to satisfy a major portion of the debt over a reasonable period of time;
(iv) The borrower does not have a defense that will bar judgment for the institution; and
(v) The expected cost of litigation, including attorney's fees, does not exceed the amount which can be recovered from the borrower.
(2) The institution shall sue the borrower if it determines that the conditions in paragraph (a)(1) of this section are met.
(3) The institution may sue a borrower in default, even if the conditions in paragraph (a)(1) of this section are not met.
(b) The institution shall assess against and attempt to recover from the borrower—
(1) All litigation costs, including attorney's fees, court costs and other related costs, to the extent permitted under applicable law; and
(2) All prior collection costs incurred and not yet paid by the borrower.
(c)(1) An institution shall ensure that any funds collected as a result of litigation procedures are—
(i) Deposited in interest-bearing bank accounts that are—
(A) Insured by an agency of the Federal Government; or
(B) Secured by collateral of reasonably equivalent value; or
(ii) Invested in low-risk income-producing securities, such as obligations issued or guaranteed by the United States.
(2) An institution shall exercise the level of care required of a fiduciary with regard to these deposits and investments.
(d) If the institution is unable to collect the full amount owing on the loan after following the procedures set forth in §§ 674.41 through 674.46, the institution may—
(1) Submit the account to the Secretary for assignment in accordance with the procedures in § 674.50; or
(2) With the Secretary's approval, refer the account to the Department for collection.
(a) General: Billing costs. (1) Except as provided in paragraph (c) of this section, the institution shall assess against the borrower, in accordance with § 674.43(b)(2) the cost of actions taken with regard to past-due payments on the loan.
(2) If the amount recovered from the borrower does not suffice to pay the amount of the past-due payments and the penalty or late charges, the institution may charge the Fund for only that unpaid portion of the cost of telephone calls to the borrower made pursuant to § 674.43 to demand payment of overdue amounts on the loan.
(b) General: Collection costs. (1) Except as provided in paragraph (d) of this section, the institution shall assess against the borrower, in accordance with §§ 674.45(e) and 674.46(b), the costs of actions taken on the loan obligation pursuant to §§ 674.44, 674.45, 674.46, 674.48 and 674.49.
(2) If the amount recovered from the borrower does not suffice to pay the amount on the past-due payments late charges, and these collection costs, the institution may charge and Fund the unpaid collection costs in accordance with paragraph (e) of this section.
(c) Waiver: Late charges. The institution may waive late charges assessed against a borrower who repays the full amount of the past-due payments on a loan.
(d) Waiver: collection costs. Before filing suit on a loan, the institution may waive collection costs as follows:
(1) The institution may waive the percentage of collection costs applicable to the amount then past-due on a loan equal to the percentage of that past-due balance that the borrower pays within 30 days after the date on which the borrower and the institution enter into a written repayment agreement on the loan.
(2) The institution may waive all collection costs in return for a lump-sum payment of the full amount of principal and interest outstanding on a loan.
(e) Limitations on costs charged to the Fund. The institution may charge to the Fund the following collection costs waived under paragraph (d) of this section or not paid by the borrower:
(1) A reasonable amount for the cost of a successful address search required in § 674.44(b).
(2) Costs related to the use of credit bureaus as provided in § 674.45(b)(1).
(3) For first collection efforts pursuant to § 674.45(a)(2), an amount that does not exceed 30 percent of the amount of principal, interest and late charges collected.
(4) For second collection efforts pursuant to § 674.45(c)(1)(ii), an amount that does not exceed 40 percent of the amount of principal, interest and late charges collected.
(5) Until July 1, 2002 on loans rehabilitated pursuant to § 674.39, amounts that exceed the amounts specified in § 674.39(c)(1) but are less than—
(i) 30 percent if the loan was rehabilitated while in a first collection effort; or
(ii) 40 percent if the loan was rehabilitated while in a second collection effort.
(6) For collection costs resulting from litigation, including attorney's fees, an amount that does not exceed the sum of—
(i) Court costs specified in 28 U.S.C. 1920;
(ii) Other costs incurred in bankruptcy proceedings in taking actions required or authorized under § 674.49;
(iii) Costs of other actions in bankruptcy proceedings to the extent that those costs, together with costs described in paragraph (e)(5)(ii) of this section, do not exceed 40 percent of the total amount of judgment obtained on the loan; and
(iv) 40 percent of the total amount recovered from the borrower in any other proceeding.
(7) If a collection firm agrees to perform or obtain the performance of both collection and litigation services on a loan, an amount for both functions that does not exceed the sum of 40 percent of the amount of principal, interest and late charges collected on the loan, plus court costs specified in 28 U.S.C. 1920.
(f) Records. For audit purposes, an institution shall support the amount of collection costs charged to the Fund with appropriate documentation, including telephone bills and receipts from collection firms. The documentation must be maintained in the institution's files as provided in § 674.19.
(g) Cessation of collection activity of defaulted accounts. An institution may cease collection activity on a defaulted account with a balance of less than $200, including outstanding principal, accrued interest, collection costs, and late charges, if—
(1) The institution has carried out the due diligence procedures described in subpart C of this part with regard to this account; and
(2) For a period of at least 4 years, the borrower has not made a payment on the account, converted the account to regular repayment status, or applied for a deferment, postponement, or cancellation on the account.
(h) Write-offs of accounts. (1) Notwithstanding any other provision of this subpart, an institution may write off an account, including outstanding principal, accrued interest, collection costs, and late charges, with a balance of—
(i) Less than $25; or
(ii) Less than $50 if, for a period of at least 2 years, the borrower has been billed for this balance in accordance with § 674.43(a).
(2) An institution that writes off an account under this paragraph may no longer include the amount of the account as an asset of the Fund.
(3) When the institution writes off an account, the borrower is relieved of all repayment obligations.
(a) The institution is responsible for ensuring compliance with the billing and collection procedures set forth in this subpart. The institution may use employees to perform these duties or may contract with other parties to perform them.
(b) An institution that contracts for performance of any duties under this subpart remains responsible for compliance with the requirements of this subpart in performing these duties, including decisions regarding cancellation, postponement, or deferment of repayment, extension of the repayment period, other billing and collection matters, and the safeguarding of all funds collected by its employees and contractors.
(c) If an institution uses a billing service to carry out billing procedures under § 674.43, the institution shall ensure that the service—
(1) Provides at least quarterly, a statement to the institution which shows—
(i) Its activities with regard to each borrower;
(ii) Any changes in the borrower's name, address, telephone number, and, if known, any changes to the borrower's Social Security number; and
(iii) Amounts collected from the borrower;
(2) Provides at least quarterly, a statement to the institution with a listing of its charges for skip-tracing activities and telephone calls;
(3) Does not deduct its fees from the amount is receives from borrowers;
(4)(i) Instructs the borrower to remit payment directly to the institution;
(ii) Instructs the borrower to remit payment to a lock-box maintained for the institution; or
(iii) Deposits those funds received directly from the borrower immediately in an institutional trust account that must be an interest-bearing account if those funds will be held for longer than 45 days; and
(5) Maintains a fidelity bond or comparable insurance in accordance with the requirements in paragraph (f) of this section.
(d) If the institution uses a collection firm, the institution shall ensure that the firm—
(1)(i) Instructs the borrower to remit payment directly to the institution;
(ii) Instructs the borrower to remit payment to a lockbox maintained for the institution; or
(iii) Deposits those funds received directly from the borrower immediately in an institutional trust account that must be an interest-bearing account if those funds will be held for longer than 45 days, after deducting its fees if authorized to do so by the institution; and
(2) Provides at least quarterly, a statement to the institution which shows—
(i) Its activities with regard to each borrower;
(ii) Any changes in the borrower's name, address, telephone number and, if known, any changes to the borrower's Social Security number;
(iii) Amounts collected from the borrower; and
(3) Maintains a fidelity bond or comparable insurance in accordance with the requirements in paragraph (f) of this section.
(e) If an institution uses a billing service to carry out § 674.43 (billing procedures), it may not use a collection firm that—
(1) Owns or controls the billing service;
(2) Is owned or controlled by the billing service; or
(3) Is owned or controlled by the same corporation, partnership, association, or individual that owns or controls the billing service.
(f)(1) An institution that employs a third party to perform billing or collection services required under this subpart shall ensure that the party has and maintains in effect a fidelity bond or comparable insurance in accordance with the requirements of this paragraph.
(2) If the institution does not authorize the third party to deduct its fees from payments from borrowers, the institution shall ensure that the party is bonded or insured in an amount not less than the amount of funds that the institution reasonably expects to be repaid over a two-month period on accounts it refers to the party.
(3) In the institution authorizes the third party performing collection services to deduct its fees from payments from borrowers, the institution shall ensure that—
(i) If the amount of funds that the institution reasonably expects to be paid over a two-month period on accounts it refers to the party is less than $100,000, the party is bonded or insured in an amount equal to the lesser of—
(A) Ten times the amount of funds that the institution reasonably expects to be repaid over a two-month period on accounts it refers to the party; or
(B) The total amount of funds that the party demonstrates will be repaid over a two-month period on all accounts of any kind on which it performs billing and collection services; and
(ii) If the amount of funds that the institution reasonably expects to be repaid over a two-month period on accounts it refers to the party is more than $100,000, the institution shall ensure that the party has and maintains in effect a fidelity bond or comparable insurance—
(A) Naming the institution as beneficiary; and
(B) In an amount not less than the amount of funds reasonably expected to be repaid on accounts referred by the institution to the party during a two-month period.
(4) The institution shall review annually the amount of repayments expected to be made on accounts it refers to a third party for billing or collection services, and shall ensure that the amount of the fidelity bond or insurance coverage maintained continues to meet the requirements of this paragraph.
(a) General. If an institution receives notice that a borrower has filed a petition for relief in bankruptcy, usually by receiving a notice of meeting of creditors, the institution and its agents shall immediately suspend any collection efforts outside the bankruptcy proceeding against the borrower.
(b) Proof of claim. The institution must file a proof of claim in the bankruptcy proceeding unless—
(1) In the case of a proceeding under chapter 7 of the Bankruptcy Code, the notice of meeting of creditors states that the borrower has no assets, or
(2) In the case of a bankruptcy proceeding under either Chapter 7 or Chapter 13 of the Bankruptcy Code in which the repayment plan proposes that the borrower repay less than the full amount owed on the loan, the institution has an authoritative determination by an appropriate State official that in the opinion of the State official, the institution is an agency of the State and is, on that basis, under applicable State law, immune from suit.
(c) Borrower's request for determination of dischargeability. (1) The institution must use due diligence and may assert any defense consistent with its status under applicable law to avoid discharge of the loan. The institution must follow the procedures in this paragraph to respond to a complaint for a determination of dischargeability under 11 U.S.C. 523(a)(8) on the ground that repayment of the loan would impose an undue hardship on the borrower and his or her dependents, unless discharge would be more effectively opposed by avoiding that action.
(2) If the petition for relief in bankruptcy was filed before October 8, 1998 and more than seven years of the repayment period on the loan (excluding any applicable suspension of the repayment period defined in 34 CFR 682.402(m)) have passed before the borrower filed the petition, the institution may not oppose a determination of dischargeability requested under 11 U.S.C. 523(a)(8)(B) on the ground of undue hardship.
(3) In any other case, the institution must determine, on the basis of reasonably available information, whether repayment of the loan under either the current repayment schedule or any adjusted schedule authorized under subpart B or D of this part would impose an undue hardship on the borrower and his or her dependents.
(4) If the institution concludes that repayment would not impose an undue hardship, the institution shall determine whether the costs reasonably expected to be incurred to oppose discharge will exceed one-third of the total amount owed on the loan, including principal, interest, late charges and collection costs.
(5) If the expected costs of opposing discharge of such a loan do not exceed one-third of the total amount owed on the loan, the institution shall—
(i) Oppose the borrower's request for a determination of dischargeability; and
(ii) If the borrower is in default on the loan, seek a judgment for the amount owed on the loan.
(6) In opposing a request for a determination of dischargeability, the institution may compromise a portion of the amount owed on the loan if it reasonably determines that the compromise is necessary in order to obtain a judgment on the loan.
(d) Request for determination of non-dischargeability. The institution may file a complaint for a determination that a loan obligation is not dischargeable and for judgment on the loan if the institution would have been required under paragraph (c) of this section to oppose a request for a determination of dischargeability with regard to that loan.
(e) Chapter 13 repayment plan. (1) The institution shall follow the procedures in this paragraph in response to a repayment plan proposed by a borrower who has filed for relief under chapter 13 of the Bankruptcy Code.
(2) The institution is not required to respond to a proposed repayment plan, if—
(i) The borrower proposes under the repayment plan to repay all principal, interest, late charges and collection costs on the loan; or
(ii) The repayment plan makes no provision with regard either to the loan obligation or to general unsecured claims.
(3)(i) If the borrower proposes under the repayment plan to repay less than the total amount owed on the loan, the institution shall determine from its own records and court documents—
(A) The amount of the loan obligation dischargeable under the plan by deducting the total payments on the loan proposed under the plan from the total amount owed;
(B) Whether the plan or the classification of the loan obligation under the proposed plan meets the requirements of section 1325 of the Code; and
(C) Whether grounds exist under 11 U.S.C. 1307 to move for conversion or dismissal of the chapter 13 case.
(ii) If the institution reasonably expects that costs of the appropriate actions will not exceed one-third of the dischargeable loan debt, the institution shall—
(A) Object to confirmation of a proposed plan that does not meet the requirements of 11 U.S.C. 1325; and
(B) Move to dismiss or convert a case where grounds can be established under 11 U.S.C. 1307.
(4)(i) The institution must monitor the borrower's compliance with the requirements of the plan confirmed by the court. If the institution determines that the debtor has not made the payments required under the plan, or has filed a request for a “hardship discharge” under 11 U.S.C. 1328(b), the institution must determine from its own records and information derived from documents filed with the court—
(A) Whether grounds exist under 11 U.S.C. 1307 to convert or dismiss the case; and
(B) Whether the borrower has demonstrated entitlement to the “hardship discharge” by meeting the requirements of 11 U.S.C. 1328(b).
(ii) If the institution reasonably expects that costs of the appropriate actions, when added to the costs already incurred in taking actions authorized under this section, will not exceed one-third of the dischargeable loan debt, the institution shall—
(A) Move to dismiss or convert a case where grounds can be established under 11 U.S.C. 1307; or
(B) Oppose the requested discharge where the debtor has not demonstrated that the requirements of 11 U.S.C. 1328(b) are met.
(f) Resumption of collection from the borrower. The institution shall resume billing and collection action prescribed in this subpart after—
(1) The borrower's petition for relief in bankruptcy has been dismissed;
(2) The borrower has received a discharge under 11 U.S.C. 727, 11 U.S.C. 1141, or 11 U.S.C. 1228, unless—
(i) The court has found that repayment of the loan would impose an undue hardship on the borrower and the dependents of the borrower; or
(ii)(A) The petition for relief was filed before October 8, 1998;
(B) The loan entered the repayment period more than seven years (excluding any applicable suspension of the repayment period as defined by 34 CFR 682.402(m), and
(C) The loan is not excepted from discharge under other applicable provisions of the Code; or
(3) The borrower has received a discharge under 11 U.S.C. 1328(a) or 1328(b), unless—
(i) The court has found that repayment of the loan would impose an undue hardship on the borrower and the dependents of the borrower; or
(ii)(A) The petition for relief was filed before October 8, 1998;
(B) The loan entered the repayment period more than seven years (excluding any application suspension of the repayment period as defined by 34 CFR 682.402(m) before the filing of the petition; and
(C) The borrower's plan approved in the bankruptcy proceeding made some provision with regard to either the loan obligation or unsecured debts in general.
(g) Termination of collection and write-off. (1) An institution must terminate all collection action and write off a loan if it receives a general order of discharge—
(i) In a bankruptcy in which the borrower filed for relief before October 8, 1998, if the loan entered the repayment period more than seven years (exclusive of any applicable suspension of the repayment period defined by 34 CFR 682.402(m)) from the date on which a petition for relief was filed; or
(ii) In any other case, a judgment that repayment of the debt would constitute an undue hardship and that the debt is therefore dischargeable.
(2) If an institution receives a repayment from a borrower after a loan has been discharged, it must deposit that payment in its Fund.
(a) An institution may submit a defaulted loan note to the Secretary for assignment to the United States if—
(1) The institution has been unable to collect on the loan despite complying with the diligence procedures, including at least a first level collection effort as described in § 674.45(a) and litigation, if required under § 674.46(a), to the extent these actions were required by regulations in effect on the date the loan entered default;
(2) The amount of the borrower's account to be assigned, including outstanding principal, accrued interest, collection costs and late charges is $25.00 or greater; and
(3) The loan has been accelerated.
(b) An institution may submit a defaulted note for assignment only during the submission period established by the Secretary.
(c) The Secretary may require an institution to submit the following documents for any loan it proposes to assign—
(1) An assignment form provided by the Secretary and executed by the institution, which must include a certification by the institution that it has complied with the requirements of this subpart, including at least a first level collection effort as described in § 674.45(a) in attempting collection on the loan.
(2) The original promissory note or a certified copy of the original note.
(3) A copy of the repayment schedule.
(4) A certified copy of any judgment order entered on the loan.
(5) A complete statement of the payment history.
(6) Copies of all approved requests for deferment and cancellation.
(7) A copy of the notice to the borrower of the effective date of acceleration and the total amount due on the loan.
(8) Documentation that the institution has withdrawn the loan from any firm that it employed for address search, billing, collection or litigation services, and has notified that firm to cease collection activity on the loans.
(9) Copies of all pleadings filed or received by the institution on behalf of a borrower who has filed a petition in bankruptcy and whose loan obligation is determined to be nondischargeable.
(10) Documentation that the institution has complied with all of the due diligence requirements described in paragraph (a)(1) of this section if the institution has a cohort default rate that is equal to or greater than 20 percent as of June 30 of the second year preceding the submission period.
(11) A record of disbursements for each loan made to a borrower on an MPN that shows the date and amount of each disbursement.
(12)(i) Upon the Secretary's request with respect to a particular loan or loans assigned to the Secretary and evidenced by an electronically signed promissory note, the institution that created the original electronically signed promissory note must cooperate with the Secretary in all activities necessary to enforce the loan or loans. Such institution must provide—
(A) An affidavit or certification regarding the creation and maintenance of the electronic records of the loan or loans in a form appropriate to ensure admissibility of the loan records in a legal proceeding. This affidavit or certification may be executed in a single record for multiple loans provided that this record is reliably associated with the specific loans to which it pertains; and
(B) Testimony by an authorized official or employee of the institution, if necessary, to ensure admission of the electronic records of the loan or loans in the litigation or legal proceeding to enforce the loan or loans.
(ii) The affidavit or certification in paragraph (c)(12)(i)(A) of this section must include, if requested by the Secretary—
(A) A description of the steps followed by a borrower to execute the promissory note (such as a flowchart);
(B) A copy of each screen as it would have appeared to the borrower of the loan or loans the Secretary is enforcing when the borrower signed the note electronically;
(C) A description of the field edits and other security measures used to ensure integrity of the data submitted to the originator electronically;
(D) A description of how the executed promissory note has been preserved to ensure that it has not been altered after it was executed;
(E) Documentation supporting the institution's authentication and electronic signature process; and
(F) All other documentary and technical evidence requested by the Secretary to support the validity or the authenticity of the electronically signed promissory note.
(iii) The Secretary may request a record, affidavit, certification or evidence under paragraph (a)(6) of this section as needed to resolve any factual dispute involving a loan that has been assigned to the Secretary including, but not limited to, a factual dispute raised in connection with litigation or any other legal proceeding, or as needed in connection with loans assigned to the Secretary that are included in a Title IV program audit sample, or for other similar purposes. The institution must respond to any request from the Secretary within 10 business days.
(iv) As long as any loan made to a borrower under a MPN created by an institution is not satisfied, the institution is responsible for ensuring that all parties entitled to access to the electronic loan record, including the Secretary, have full and complete access to the electronic loan record.
(d) Except as provided in paragraph (e) of this section, and subject to paragraph (g) of this section, the Secretary accepts an assignment of a note described in paragraph (a) of this section and submitted in accordance with paragraph (c) of this section.
(e) The Secretary does not accept assignment of a loan if—
(1) The institution has not provided the Social Security number of the borrower, unless the loan was made before September 13, 1982;
(2) The borrower has received a discharge in bankruptcy, unless—
(i) The bankruptcy court has determined that the loan obligation is nondischargeable and has entered judgment against the borrower; or
(ii) A court of competent jurisdiction has entered judgment against the borrower on the loan after the entry of the discharge order; or
(3) The institution has initiated litigation against the borrower, unless the judgment has been entered against the borrower and assigned to the United States.
(f)(1) The Secretary provides an institution written notice of the acceptance of the assignment of the note. By accepting assignment, the Secretary acquires all rights, title, and interest of the institution in that loan.
(2) The institution shall endorse and forward to the Secretary any payment received from the borrower after the date on which the Secretary accepted the assignment, as noted in the written notice of acceptance.
(g)(1) The Secretary may determine that a loan assigned to the United States is unenforceable in whole or in part because of the acts or omissions of the institution or its agent. The Secretary may make this determination with or without a judicial determination regarding the enforceability of the loan.
(2) The Secretary may require the institution to reimburse the Fund for that portion of the outstanding balance on a loan assigned to the United States which the Secretary determines to be unenforceable because of an act or omission of that institution or its agent.
(3) Upon reimbursement to the Fund by the institution, the Secretary shall transfer all rights, title and interest of the United States in the loan to the institution for its own account.
(h) An institution shall consider a borrower whose loan has been assigned to the United States for collection to be in default on that loan for the purpose of eligibility for title IV financial assistance, until the borrower provides the institution confirmation from the Secretary that he or she has made satisfactory arrangements to repay the loan.
The following definitions apply to this subpart:
(a) Academic year or its equivalent for elementary and secondary schools and special education: (1) One complete school year, or two half years from different school years, excluding summer sessions, that are complete and consecutive and generally fall within a 12-month period.
(2) If such a school has a year-round program of instruction, the Secretary considers a minimum of nine consecutive months to be the equivalent of an academic year.
(b) Academic year or its equivalent for institutions of higher education: A period of time in which a full-time student is expected to complete—
(1) The equivalent of 2 semesters, 2 trimesters, or 3 quarters at an institution using credit hours; or
(2) At least 900 clock hours of training for each program at an institution using clock hours.
(c) Title I Children: Children of ages 5 through 17 who are counted under section 1124(c)(1) of the Elementary and Secondary Education Act of 1965, as amended.
(d) Child with a disability: A child or youth from ages 3 through 21, inclusive, who requires special education and related services because he or she has one or more disabilities as defined in section 602(3) of the Individuals with Disabilities Education Act.
(e) Community defender organizations: A defender organization established in accordance with section 3006A(g)(2)(B) of title 18, United States Code.
(f) Early intervention services: Those services defined in section 632(4) of the Individuals with Disabilities Education Act that are provided to infants and toddlers with disabilities.
(g) Educational service agency: A regional public multi-service agency authorized by State law to develop, manage, and provide services or programs to local educational agencies as defined in section 9101 of the Elementary and Secondary Education Act of 1965, as amended.
(h) Elementary school: A school that provides elementary education, including education below grade 1, as determined by—
(1) State law; or
(2) The Secretary, if the school is not in a State.
(i) Faculty member at a Tribal College or University: An educator or tenured individual who is employed by a Tribal College or University, as that term is defined in section 316 of the HEA, to teach, research, or perform administrative functions. For purposes of this definition an educator may be an instructor, lecturer, lab faculty, assistant professor, associate professor, full professor, dean, or academic department head.
(j) Federal public defender organization: A defender organization established in accordance with section 3006A(g)(2)(A) of title 18, United States Code.
(k) Firefighter: A firefighter is an individual who is employed by a Federal, State, or local firefighting agency to extinguish destructive fires; or provide firefighting related services such as—
(1) Providing community disaster support and, as a first responder, providing emergency medical services;
(2) Conducting search and rescue; or
(3) Providing hazardous materials mitigation (HAZMAT).
(l) Handicapped children: Children of ages 3 through 21 inclusive who require special education and related services because they are—
(1) Individuals with intellectual disabilities;
(2) Hard of hearing;
(3) Deaf;
(4) Speech and language impaired;
(5) Visually handicapped;
(6) Seriously emotionally disturbed;
(7) Orthopedically impaired;
(8) Specific learning disabled; or
(9) Otherwise health impaired.
(m) High-risk children: Individuals under the age of 21 who are low-income or at risk of abuse or neglect, have been abused or neglected, have serious emotional, mental, or behavioral disturbances, reside in placements outside their homes, or are involved in the juvenile justice system.
(n) Infant or toddler with a disability: An infant or toddler from birth to age 2, inclusive, who needs early intervention services for specified reasons, as defined in section 632(5)(A) of the Individuals with Disabilities Education Act.
(o) Librarian with a master's degree: A librarian with a master's degree is an information professional trained in library or information science who has obtained a postgraduate academic degree in library science awarded after the completion of an academic program of up to six years in duration, excluding a doctorate or professional degree.
(p) Local educational agency: (1) A public board of education or other public authority legally constituted within a State to administer, direct, or perform a service function for public elementary or secondary schools in a city, county, township, school district, other political subdivision of a State; or such combination of school districts of counties as are recognized in a State as an administrative agency for its public elementary or secondary schools.
(2) Any other public institution or agency having administrative control and direction of a public elementary or secondary school.
(q) Low-income communities: Communities in which there is a high concentration of children eligible to be counted under title I of the Elementary and Secondary Education Act of 1965, as amended.
(r) Medical technician: An allied health professional (working in fields such as therapy, dental hygiene, medical technology, or nutrition) who is certified, registered, or licensed by the appropriate State agency in the State in which he or she provides health care services. An allied health professional is someone who assists, facilitates, or complements the work of physicians and other specialists in the health care system.
(s) Nurse: A licensed practical nurse, a registered nurse, or other individual who is licensed by the appropriate State agency to provide nursing services.
(t) Qualified professional provider of early intervention services: A provider of services as defined in section 632 of the Individuals with Disabilities Education Act.
(u) Secondary school: (1) A school that provides secondary education, as determined by—
(i) State law; or
(ii) The Secretary, if the school is not in a State.
(2) However, State laws notwithstanding, secondary education does not include any education beyond grade 12.
(v) Speech language pathologist with a master's degree: An individual who evaluates or treats disorders that affect a person's speech, language, cognition, voice, swallowing and the rehabilitative or corrective treatment of physical or cognitive deficits/disorders resulting in difficulty with communication, swallowing, or both and has obtained a postgraduate academic degree awarded after the completion of an academic program of up to six years in duration, excluding a doctorate or professional degree.
(w) State education agency: (1) The State board of education; or
(2) An agency or official designated by the Governor or by State law as being primarily responsible for the State supervision of public elementary and secondary schools.
(x) Substantial gainful activity: A level of work performed for pay or profit that involves doing significant physical or mental activities, or a combination of both.
(y) Teacher: (1) A teacher is a person who provides—
(i) Direct classroom teaching;
(ii) Classroom-type teaching in a non-classroom setting; or
(iii) Educational services to students directly related to classroom teaching such as school librarians or school guidance counselors.
(2) A supervisor, administrator, researcher, or curriculum specialist is not a teacher unless he or she primarily provides direct and personal educational services to students.
(3) An individual who provides one of the following services does not qualify as a teacher unless that individual is licensed, certified, or registered by the appropriate State education agency for that area in which he or she is providing related special educational services, and the services provided by the individual are part of the educational curriculum for handicapped children:
(i) Speech and language pathology and audiology;
(ii) Physical therapy;
(iii) Occupational therapy;
(iv) Psychological and counseling services; or
(v) Recreational therapy.
(z) Teaching in a field of expertise: The majority of classes taught are in the borrower's field of expertise.
(aa) Total and permanent disability: The condition of an individual who—
(1) Is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that—
(i) Can be expected to result in death;
(ii) Has lasted for a continuous period of not less than 60 months; or
(iii) Can be expected to last for a continuous period of not less than 60 months; or
(2) Has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected disability.
(bb) Tribal College or University: An institution that—
(1) Qualifies for funding under the Tribally Controlled Colleges and Universities Assistance Act of 1978 (25 U.S.C. 1801 et seq.) or the Navajo Community College Assistance Act of 1978 (25 U.S.C. 640a note); or
(2) Is cited in section 532 of the Equity in Education Land Grant Status Act of 1994 (7 U.S.C. 301 note).
(a) Application for cancellation. To qualify for cancellation of a loan, a borrower shall submit to the institution to which the loan is owed, by the date that the institution establishes, both a written request for cancellation and any documentation required by the institution to demonstrate that the borrower meets the conditions for the cancellation requested.
(b) Part-time employment. (1) An institution may refuse a request for cancellation based on a claim of simultaneously teaching in two or more schools or institutions if it cannot determine easily from the documentation supplied by the borrower that the teaching is full-time. However, it shall grant the cancellation if one school official certifies that a teacher worked full-time for a full academic year.
(2) An institution may refuse a request for cancellation based on a claim of simultaneous employment as a nurse or medical technician in two or more facilities if it cannot determine easily from the documentation supplied by the borrower that the combined employment is full-time. However, it shall grant the cancellation if one facility official certifies that a nurse or medical technician worked full-time for a full year.
(c) Break in service. (1) If the borrower is unable to complete an academic year of eligible teaching service due to a condition that is covered under the Family and Medical Leave Act of 1993 (FMLA) (29 U.S.C. 2601, et seq.), the borrower still qualifies for the cancellation if—
(i) The borrower completes one half of the academic year; and
(ii) The borrower's employer considers the borrower to have fulfilled his or her contract requirements for the academic year for purposes of salary increases, tenure, and retirement.
(2) If the borrower is unable to complete a year of eligible service under §§ 674.56, 674.57, 674.59, or 674.60 due to a condition that is covered under the FMLA, the borrower still qualifies for the cancellation if the borrower completes at least six consecutive months of eligible service.
(d) Cancellation of a defaulted loan. (1) Except with regard to cancellation on account of the death or disability of the borrower, a borrower whose defaulted loan has not been accelerated may qualify for a cancellation by complying with the requirements of paragraph (a) of this section.
(2) A borrower whose defaulted loan has been accelerated—
(i) May qualify for a loan cancellation for services performed before the date of acceleration; and
(ii) Cannot qualify for a cancellation for services performed on or after the date of acceleration.
(3) An institution shall grant a request for discharge on account of the death or disability of the borrower, or, if the borrower is the spouse of an eligible public servant as defined in § 674.64(a)(1), on account of the death or disability of the borrower's spouse, without regard to the repayment status of the loan.
(e) Concurrent deferment period. The Secretary considers a Perkins Loan, NDSL or Defense Loan borrower's loan deferment under § 674.34(c) to run concurrently with any period for which cancellation under §§ 674.53, 674.54, 674.55, 674.56, 674.57, 674.58, 674.59, and 674.60 is granted.
(2) For loans made on or after July 1, 1993, the Secretary considers a borrower's loan deferment under § 674.34 to run concurrently with any period for which a cancellation under §§ 674.53, 674.56, 674.57, or 674.58 is granted.
(f) National community service. No borrower who has received a benefit under subtitle D of title I of the National and Community Service Act of 1990 may receive a cancellation under this subpart.
(g) Switching cancellation categories. A borrower who qualifies for a cancellation under one of the cancellation categories in §§ 674.53, 674.56, 674.57, or 674.59 receives cancellation of 15 percent of the original principal for the first and second years of qualifying service, 20 percent of the original principal for the third and fourth years of qualifying service, and 30 percent of the original principal for the fifth year of qualifying service. If, after the first, second, third, or fourth complete year of qualifying service—
(1) The borrower switches to a position that qualifies the borrower for cancellation under a different cancellation category under §§ 674.53, 674.56, 674.57, or 674.59, the borrower's cancellation rate progression continues from the last year the borrower received a cancellation under the former cancellation category; or
(2) The borrower switches to a position that qualifies the borrower for cancellation under a different cancellation category under §§ 674.58 or 674.60, the borrower's cancellation rate progression under the new cancellation category begins at the year one cancellation rates specified in §§ 674.58(b) or 674.60(b), respectively.
(a) Cancellation for full-time teaching in an elementary or secondary school serving low-income students. (1)(i) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins loan or an NDSL made on or after July 23, 1992, for full-time teaching in a public or other nonprofit elementary or secondary school.
(ii) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for teaching service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(iii) An institution must cancel up to 100 percent of the outstanding balance of a Federal Perkins, NDSL, or Defense loan for teaching service that includes August 14, 2008, or begins on or after that date, at an educational service agency.
(2) The borrower must be teaching full-time in a public or other nonprofit elementary or secondary school that—
(i) Is in a school district that qualified for funds, in that year, under part A of title I of the Elementary and Secondary Education Act of 1965, as amended; and
(ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's or educational service agency's total enrollment is made up of title I children.
(3) For each academic year, the Secretary notifies participating institutions of the schools and educational service agencies selected under paragraph (a) of this section.
(4)(i) The Secretary selects schools and educational service agencies under paragraph (a)(1) of this section based on a ranking by the State education agency.
(ii) The State education agency must base its ranking of the schools and educational service agencies on objective standards and methods. These standards must take into account the numbers and percentages of title I children attending those schools and educational service agencies.
(5) The Secretary considers all elementary and secondary schools operated by the Bureau of Indian Affairs (BIA) or operated on Indian reservations by Indian tribal groups under contract with BIA to qualify as schools serving low-income students.
(6) A teacher, who performs service in a school or educational service agency that meets the requirement of paragraph (a)(1) of this section in any year and in a subsequent year fails to meet these requirements, may continue to teach in that school or educational service agency and will be eligible for loan cancellation pursuant to paragraph (a) of this section in subsequent years.
(7) If a list of eligible institutions in which a teacher performs services under paragraph (a)(1) of this section is not available before May 1 of any year, the Secretary may use the list for the year preceding the year for which the determination is made to make the service determination.
(b) Cancellation for full-time teaching in special education. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins loan or NDSL loan made on or after July 23, 1992, for the borrower's service as a full-time special education teacher of infants, toddlers, children, or youth with disabilities, in a public or other nonprofit elementary or secondary school system.
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for teaching service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(3) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins, NDSL, or Defense loan for a borrower's service that includes August 14, 2008, or begins on or after that date, as a full-time special education teacher of infants, toddlers, children, or youth with disabilities, in an educational service agency.
(c) Cancellation for full-time teaching in fields of expertise. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins loan or NDSL made on or after July 23, 1992, for full-time teaching in mathematics, science, foreign languages, bilingual education, or any other field of expertise where the State education agency determines that there is a shortage of qualified teachers.
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for teaching service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(d) Cancellation rates. (1) To qualify for cancellation under paragraph (a), (b), or (c) of this section, a borrower must teach full-time for a complete academic year or its equivalent.
(2) Cancellation rates are—
(i) 15 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second years of full-time teaching;
(ii) 20 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth years of full-time teaching; and
(iii) 30 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for the fifth year of full-time teaching.
(e) Teaching in a school system. The Secretary considers a borrower to be teaching in a public or other nonprofit elementary or secondary school system or an educational service agency only if the borrower is directly employed by the school system.
(f) Teaching children and adults. A borrower who teaches both adults and children qualifies for cancellation for this service only if a majority of the students whom the borrower teaches are children.
(a) Cancellation for full-time teaching. (1) An institution shall cancel up to 50 percent of the outstanding balance on a borrower's Defense loan for full-time teaching in—
(i) A public or other nonprofit elementary or secondary school;
(ii) An institution of higher education; or
(iii) An overseas Department of Defense elementary or secondary school.
(2) The cancellation rate is 10 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete year, or its equivalent, of teaching.
(b) Cancellation for full-time teaching in an elementary or secondary school serving low-income students. (1) The institution shall cancel up to 100 percent of the outstanding balance on a borrower's Defense loan for full-time teaching in a public or other nonprofit elementary or secondary school that—
(i) Is in a school district that qualifies for funds in that year under title I of the Elementary and Secondary Education Act of 1965, as amended; and
(ii) Has been selected by the Secretary based on a determination that a high concentration of students enrolled at the school are from low-income families.
(2)(i) The Secretary selects schools under paragraph (b)(1) of this section based on a ranking by the State education agency.
(ii) The State education agency shall base its ranking of the schools on objective standards and methods. These standards must take into account the numbers and percentages of title I children attending those schools.
(3) The Secretary considers all elementary and secondary schools operated by the Bureau of Indian Affairs (BIA) or operated on Indian reservations by Indian tribal groups under contract with BIA to qualify as schools serving low-income students.
(4) For each academic year, the Secretary notifies participating institutions of the schools selected under paragraph (b) of this section.
(5) The cancellation rate is 15 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete academic year, or its equivalent, of full-time teaching.
(6) [Reserved]
(7) Cancellation for full-time teaching under paragraph (b) of this section is available only for teaching beginning with academic year 1966-67.
(c) Cancellation for full-time teaching of the handicapped. (1) An institution shall cancel up to 100 percent of the outstanding balance on a borrower's Defense loan, plus interest, for full-time teaching of handicapped children in a public or other nonprofit elementary or secondary school system.
(2) The cancellation rate is 15 percent of the original principal loan amount, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete academic year, or its equivalent, of full-time teaching.
(3) A borrower qualifies for cancellation under this paragraph only if a majority of the students whom the borrower teaches are handicapped children.
(4) Cancellation for full-time teaching under paragraph (c) of this section is available only for teaching beginning with the academic year 1967-68.
(d) Teaching in a school system. The Secretary considers a borrower to be teaching in a public or other nonprofit elementary or secondary school system only if the borrower is directly employed by the school system.
(e) Teaching children and adults. A borrower who teaches both adults and children qualifies for cancellation for this service only if a majority of the students whom the borrower teaches are children.
(a) Cancellation for full-time employment as a nurse or medical technician. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL made on or after July 23, 1992, for full-time employment as a nurse or medical technician providing health care services.
(2) An institution must cancel up to 100 percent of the outstanding balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for full-time service as a nurse or medical technician performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the borrower's promissory note.
(b) Cancellation for full-time employment in a public or private nonprofit child or family service agency. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins loan or NDSL made on or after July 23, 1992, for service as a full-time employee in a public or private nonprofit child or family service agency who is providing services directly and exclusively to high-risk children who are from low-income communities and the families of these children, or who is supervising the provision of services to high-risk children who are from low-income communities and the families of these children. To qualify for a child or family service cancellation, a non-supervisory employee of a child or family service agency must be providing services only to high-risk children from low-income communities and the families of these children. The employee must work directly with the high-risk children from low-income communities, and the services provided to the children's families must be secondary to the services provided to the children.
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992, for employment in a child or family service agency on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(c) Cancellation for service as a qualified professional provider of early intervention services. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL made on or after July 23, 1992, for the borrower's service as a full-time qualified professional provider of early intervention services in a public or other nonprofit program under public supervision by the lead agency as authorized in section 632 of the Individuals with Disabilities Education Act.
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL or Defense loan made prior to July 23, 1992 for early intervention service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(d) Cancellation for full-time employment as a firefighter to a local, State, or Federal fire department or fire district. An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins, NDSL, or Defense loan for service that includes August 14, 2008, or begins on or after that date, as a full-time firefighter.
(e) Cancellation for full-time employment as a faculty member at a Tribal College or University. An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins, NDSL, or Defense loan for service that includes August 14, 2008, or begins on or after that date, as a full-time faculty member at a Tribal College or University.
(f) Cancellation for full-time employment as a librarian with a master's degree. (1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins Loan, NDSL, or Defense loan for service that includes August 14, 2008, or begins on or after that date, as a full-time librarian, provided that the individual—
(i) Is a librarian with a master's degree; and
(ii) Is employed in an elementary school or secondary school that is eligible for assistance under part A of title I of the Elementary and Secondary Education Act of 1965, as amended; or
(iii) Is employed by a public library that serves a geographic area that contains one or more schools eligible for assistance under part A of title I of the Elementary and Secondary Education Act of 1965, as amended.
(2) For the purposes of paragraph (f) of this section, the term geographic area is defined as the area served by the local school district.
(g) Cancellation for full-time employment as a speech pathologist with a master's degree. An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins Loan, NDSL, or Defense loan for full-time employment that includes August 14, 2008, or begins on or after that date, as a speech pathologist with a master's degree who is working exclusively with schools eligible for funds under part A of title I of the Elementary and Secondary Education Act of 1965, as amended.
(h) Cancellation rates. (1) To qualify for cancellation under paragraphs (a), (b), (c), (d), (e), (f), and (g) of this section, a borrower must work full-time for 12 consecutive months.
(2) [Reserved]
(a)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL made on or after November 29, 1990, for full-time service as a law enforcement or corrections officer for an eligible employing agency.
(2) An institution must cancel up to 100 percent of the outstanding loan balance on a Federal Perkins, NDSL, or Defense loan made prior to November 29, 1990, for law enforcement or correction officer service performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(3) An eligible employing agency is an agency—
(i) That is a local, State, or Federal law enforcement or corrections agency;
(ii) That is publicly-funded; and
(iii) The principal activities of which pertain to crime prevention, control, or reduction or the enforcement of the criminal law.
(4) Agencies that are primarily responsible for enforcement of civil, regulatory, or administrative laws are ineligible employing agencies.
(5) A borrower qualifies for cancellation under this section only if the borrower is—
(i) A sworn law enforcement or corrections officer; or
(ii) A person whose principal responsibilities are unique to the criminal justice system.
(6) To qualify for a cancellation under this section, the borrower's service must be essential in the performance of the eligible employing agency's primary mission.
(7) The agency must be able to document the employee's functions.
(8) A borrower whose principal official responsibilities are administrative or supportive does not qualify for cancellation under this section.
(b) An institution must cancel up to 100 percent of the outstanding balance of a borrower's Federal Perkins, NDSL, or Defense loan for service that includes August 14, 2008, or begins on or after that date, as a full-time attorney employed in Federal public defender organizations or community defender organizations, established in accordance with section 3006A(g)(2) of title 18, U.S.C.
(c)(1) To qualify for cancellation under paragraph (a) of this section, a borrower must work full-time for 12 consecutive months.
(2) Cancellation rates are—
(i) 15 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second years of full-time employment;
(ii) 20 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth years of full-time employment; and
(iii) 30 percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for the fifth year of full-time employment.
(a)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's NDSL or Federal Perkins loan, for service as a full-time staff member in a Head Start program.
(2) An institution must cancel up to 100 percent of the outstanding balance on a Defense loan for service as a full-time staff member in a Head Start program performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(3) An institution must cancel up to 100 percent of the outstanding balance of a borrower's NDSL, Defense, or Federal Perkins loan for service that includes August 14, 2008, or begins on or after that date, as a full-time staff member of a pre-kindergarten or childcare program that is licensed or regulated by the State.
(4) The Head Start, pre-kindergarten or child care program in which the borrower serves must operate for a complete academic year, or its equivalent.
(5) In order to qualify for cancellation, the borrower's salary may not exceed the salary of a comparable employee working in the local educational agency of the area served by the local Head Start, pre-kindergarten or child care program.
(b) The cancellation rate is 15 percent of the original loan principal, plus the interest on the unpaid balance accruing during the year of qualifying service, for each complete academic year, or its equivalent, of full-time teaching service.
(c)(1) “Head Start” is a preschool program carried out under the Head Start Act (subchapter B, chapter 8 of title VI of Pub. L. 97-35, the Budget Reconciliation Act of 1981, as amended; formerly authorized under section 222(a)(1) of the Economic Opportunity Act of 1964). (42 U.S.C. 2809 (a) (1))
(2) A pre-kindergarten program is a State-funded program that serves children from birth through age six and addresses the children's cognitive (including language, early literacy, and early mathematics), social, emotional, and physical development.
(3) A child care program is a program that is licensed or regulated by the State and provides child care services for fewer than 24 hours per day per child, unless care in excess of 24 consecutive hours is needed due to the nature of the parents' work.
(4) “Full-time staff member” is a person regularly employed in a full-time professional capacity to carry out the educational part of a Head Start, pre-kindergarten or child care program.
(a) Cancellation on a Defense loan. (1) An institution must cancel up to 50 percent of a Defense loan made after April 13, 1970, for the borrower's full-time active service starting after June 30, 1970, in the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard.
(2) The cancellation rate is 12
(3) Service for less than a complete year, including any fraction of a year beyond a complete year of service, does not qualify for military cancellation.
(b) Cancellation of an NDSL or Perkins loan. (1) An institution must cancel up to 50 percent of the outstanding balance on an NDSL or Perkins loan for active duty service that ended before August 14, 2008, as a member of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard in an area of hostilities that qualifies for special pay under section 310 of title 37 of the United States Code.
(2) The cancellation rate is 12
(c)(1) An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL loan for a borrower's full year of active duty service that includes August 14, 2008, or begins on or after that date, as a member of the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard in an area of hostilities that qualifies for special pay under section 310 of title 37 of the United States Code.
(2) The cancellation rate is 15 percent for the first and second year of qualifying service, 20 percent for the third and fourth year of qualifying service, and 30 percent for the fifth year of qualifying service.
(d) Service for less than a complete year, including any fraction of a year beyond a complete year of service, does not qualify for military cancellation.
(a)(1) An institution must cancel up to 70 percent of the outstanding balance on a Perkins loan, and 70 percent of the outstanding balance of an NDSL made on or after October 7, 1998, for service as a volunteer under The Peace Corps Act or The Domestic Volunteer Service Act of 1973 (ACTION programs).
(2) An institution must cancel up to 70 percent of the outstanding balance on an NDSL or Defense loan for service as a volunteer under The Peace Corps Act or The Domestic Volunteer Service Act of 1973 (ACTION programs) performed on or after October 7, 1998, if the cancellation benefits provided under this section are not included in the terms of the borrower's promissory note.
(b) Cancellation rates are—
(1) Fifteen percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the first and second twelve-month periods of service;
(2) Twenty percent of the original principal loan amount plus the interest on the unpaid balance accruing during the year of qualifying service, for each of the third and fourth twelve-month periods of service.
(a) Death. (1) An institution must discharge the unpaid balance of a borrower's Defense, NDSL, or Federal Perkins loan, including interest, if the borrower dies. The institution must discharge the loan on the basis of—
(i) An original or certified copy of the death certificate;
(ii) An accurate and complete photocopy of the original or certified copy of the death certificate;
(iii) An accurate and complete original or certified copy of the death certificate that is scanned and submitted electronically or sent by facsimile transmission; or
(iv) Verification of the borrower's death through an authoritative Federal or State electronic database approved for use by the Secretary.
(2) Under exceptional circumstances and on a case-by-case basis, the chief financial officer of the institution may approve a discharge based upon other reliable documentation of the borrower's death.
(b) Total and permanent disability as defined in § 674.51(aa)(1). (1) General. (i) A borrower's Defense, NDSL, or Perkins loan is discharged if the borrower becomes totally and permanently disabled, as defined in § 674.51(aa)(1), and satisfies the additional eligibility requirements in this section.
(ii) For purposes of paragraph (b) of this section, a borrower's representative or a veteran's representative is a member of the borrower's family, the borrower's attorney, or another individual authorized to act on behalf of the borrower in connection with the borrower's total and permanent disability discharge application. References to a “borrower” or a “veteran” include, if applicable, the borrower's representative or the veteran's representative for purposes of applying for a total and permanent disability discharge, providing notifications or information to the Secretary, and receiving notifications from the Secretary.
(2) Discharge application process for borrowers who have a total and permanent disability as defined in § 674.51(aa)(1). (i) If the borrower notifies the institution that the borrower claims to be totally and permanently disabled as defined in § 674.51(aa)(1), the institution must direct the borrower to notify the Secretary of the borrower's intent to submit an application for total and permanent disability discharge and provide the borrower with the information needed for the borrower to notify the Secretary.
(ii) If the borrower notifies the Secretary of the borrower's intent to apply for a total and permanent disability discharge, the Secretary—
(A) Provides the borrower with information needed for the borrower to apply for a total and permanent disability discharge;
(B) Identifies all title IV loans owed by the borrower and notifies the lenders of the borrower's intent to apply for a total and permanent disability discharge;
(C) Directs the lenders to suspend efforts to collect from the borrower for a period not to exceed 120 days; and
(D) Informs the borrower that the suspension of collection activity described in paragraph (b)(2)(ii)(C) of this section will end after 120 days and the collection will resume on the loans if the borrower does not submit a total and permanent disability discharge application to the Secretary within that time.
(iii) If the borrower fails to submit an application for a total and permanent disability discharge to the Secretary within 120 days, collection resumes on the borrower's title IV loans.
(iv) The borrower must submit to the Secretary an application for total and permanent disability discharge on a form approved by the Secretary. The application must contain—
(A) A certification by a physician, who is a doctor of medicine or osteopathy legally authorized to practice in a State, that the borrower is totally and permanently disabled as defined in § 674.51(aa)(1);
(B) A certification by a nurse practitioner or physician assistant licensed by a State or a certified psychologist licensed at the independent practice level by a State, that the borrower is totally and permanently disabled as defined in § 674.51(aa)(1); or
(C) A Social Security Administration (SSA) Benefit Planning Query (BPQY) or an SSA notice of award or other documentation deemed acceptable by the Secretary indicating that—
(1) The borrower qualifies for Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) based on disability and the borrower's next continuing disability review has been scheduled between 5 and 7 years;
(2) The borrower qualifies for SSDI benefits or SSI based on disability and the borrower's next continuing disability review has been scheduled at 3 years;
(3) The borrower has an established onset date for SSDI or SSI of at least 5 years prior to the application for a disability discharge or has been receiving SSDI benefits or SSI based on disability for at least 5 years prior to the application for a disability discharge;
(4) The borrower qualifies for SSDI benefits or SSI based on a compassionate allowance; or
(5) For borrowers currently receiving SSA retirement benefits, documentation that, prior to the borrower qualifying for SSA retirement benefits, the borrower met the requirements in paragraph (b)(2)(iv)(C) of this section.
(v) The borrower must submit the application described in paragraph (b)(2)(iv) of this section to the Secretary within 90 days of the date the physician, nurse practitioner, physician assistant, or psychologist certifies the application, if applicable.
(vi) After the Secretary receives the application described in paragraph (b)(2)(iv) of this section, the Secretary notifies the holders of the borrower's title IV loans that the Secretary has received a total and permanent disability discharge application from the borrower.
(vii) If the application is incomplete, the Secretary notifies the borrower of the missing information and requests the missing information from the borrower, the borrower's representative, or the physician, nurse practitioner, physician assistant, or psychologist who provided the certification, as appropriate. The Secretary does not make a determination of eligibility until the application is complete.
(viii) The lender notification described in paragraph (b)(2)(vi) of this section directs the borrower's loan holders to suspend collection activity or maintain the suspension of collection activity on the borrower's title IV loans.
(ix) After the Secretary receives a disability discharge application, the Secretary sends a notice to the borrower that—
(A) States that the application will be reviewed by the Secretary;
(B) Informs the borrower that the borrower's lenders will suspend collection activity or maintain the suspension of collection activity on the borrower's title IV loans while the Secretary reviews the borrower's application for discharge; and
(C) Explains the process for the Secretary's review of total and permanent disability discharge applications.
(3) Secretary's review of the total and permanent disability discharge application. (i) If, after reviewing the borrower's completed application, the Secretary determines that the data described in paragraph (b)(2) of this section supports the conclusion that the borrower is totally and permanently disabled as defined in § 674.51(aa)(1), the borrower is considered totally and permanently disabled as of the date—
(A) The physician, nurse practitioner, physician assistant, or psychologist certified the borrower's application; or
(B) The Secretary received the SSA data described in paragraph (b)(2)(iv)(C) of this section.
(ii) If the Secretary determines that the borrower's application does not support the conclusion that the borrower is totally and permanently disabled as defined in § 674.51(aa)(1), the Secretary may require the borrower to submit additional medical evidence. As part of the Secretary's review of the borrower's discharge application, the Secretary may require and arrange for an additional review of the borrower's condition by an independent physician or other medical professional identified by the Secretary at no expense to the borrower.
(iii) After determining that the borrower is totally and permanently disabled as defined in § 674.51(aa)(1), the Secretary notifies the borrower and the borrower's lenders that the application for a disability discharge has been approved. With this notification, the Secretary provides the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's loan discharge application or the date the Secretary received the SSA data described in paragraph (b)(2)(iv)(C) of this section and directs each institution holding a Defense, NDSL, or Perkins Loan made to the borrower to assign the loan to the Secretary.
(iv) The institution must assign the loan to the Secretary within 45 days of the date of the notice described in paragraph (b)(3)(iii) of this section.
(v) After the loan is assigned, the Secretary discharges the borrower's obligation to make further payments on the loan and notifies the borrower and the institution that the loan has been discharged. The notification to the borrower explains the terms and conditions under which the borrower's obligation to repay the loan will be reinstated, as specified in paragraph (b)(6) of this section. Any payments received after the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's loan discharge application or the date the Secretary received the SSA data described in paragraph (b)(2)(iv)(C) of this section are returned to the person who made the payments on the loan in accordance with paragraph (b)(7) of this section.
(vi) If the Secretary determines that the physician, nurse practitioner, physician assistant, or psychologist certification or the SSA data described in paragraph (b)(2)(iv)(C) of this section provided by the borrower does not support the conclusion that the borrower is totally and permanently disabled as defined in § 674.51(aa)(1), the Secretary notifies the borrower and the institution that the application for a disability discharge has been denied. The notification includes—
(A) The reason or reasons for the denial;
(B) A statement that the loan is due and payable to the institution under the terms of the promissory note and that the loan will return to the status that would have existed had the total and permanent disability discharge application not been received;
(C) A statement that the institution will notify the borrower of the date the borrower must resume making payments on the loan;
(D) An explanation that the borrower is not required to submit a new total and permanent disability discharge application if the borrower requests that the Secretary re-evaluate the application for discharge by providing, within 12 months of the date of the notification, additional information that supports the borrower's eligibility for discharge; and
(E) An explanation that if the borrower does not request re-evaluation of the borrower's prior discharge application within 12 months of the date of the notification, the borrower must submit a new total and permanent disability discharge application to the Secretary if the borrower wishes the Secretary to reevaluate the borrower's eligibility for a total and permanent disability discharge.
(vii) If the borrower requests reevaluation in accordance with paragraph (b)(3)(vi)(D) of this section or submits a new total and permanent disability discharge application in accordance with paragraph (b)(3)(vi)(E) of this section, the request must include new information regarding the borrower's disabling condition that was not provided to the Secretary in connection with the prior application at the time the Secretary reviewed the borrower's initial application for a total and permanent disability discharge.
(4) Treatment of disbursements made during the period from the certification or the date the Secretary received the SSA data until the date of discharge. If a borrower received a title IV loan or TEACH Grant before the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's discharge application or before the date the Secretary received the SSA data described in paragraph (b)(2)(iv)(C) of this section and a disbursement of that loan or grant is made during the period from the date of the physician, nurse practitioner, physician assistant, or psychologist certification or the date the Secretary received the SSA data described in paragraph (b)(2)(iv)(C) of this section until the date the Secretary grants a discharge under this section, the processing of the borrower's loan discharge application will be suspended until the borrower ensures that the full amount of the disbursement has been returned to the loan holder or to the Secretary, as applicable.
(5) Receipt of new title IV loans or TEACH Grants after the certification or after the date the Secretary received the SSA data. If a borrower receives a disbursement of a new title IV loan or receives a new TEACH Grant made on or after the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's discharge application or on or after the date the Secretary received the SSA data described in paragraph (b)(2)(iv)(C) of this section and before the date the Secretary grants a discharge under this section, the Secretary denies the borrower's discharge request and collection resumes on the borrower's loans.
(6) Conditions for reinstatement of a loan after a total and permanent disability discharge. (i) The Secretary reinstates the borrower's obligation to repay a loan that was discharged in accordance with paragraph (b)(3)(v) of this section if, within 3 years after the date the Secretary granted the discharge, the borrower receives a new TEACH Grant or a new loan under the Direct Loan programs, except for a Direct Consolidation Loan that includes loans that were not discharged.
(ii) If the borrower's obligation to repay a loan is reinstated, the Secretary—
(A) Notifies the borrower that the borrower's obligation to repay the loan has been reinstated;
(B) Returns the loan to the status that would have existed had the total and permanent disability discharge application not been received; and
(C) Does not require the borrower to pay interest on the loan for the period from the date the loan was discharged until the date the borrower's obligation to repay the loan was reinstated.
(iii) The Secretary's notification under paragraph (b)(6)(ii)(A) of this section will include—
(A) The reason or reasons for the reinstatement;
(B) An explanation that the first payment due date on the loan following reinstatement will be no earlier than 90 days after the date of the notification of reinstatement; and
(C) Information on how the borrower may contact the Secretary if the borrower has questions about the reinstatement or believes that the obligation to repay the loan was reinstated based on incorrect information.
(7) Payments received after the certification of total and permanent disability. (i) If the institution receives any payments from or on behalf of the borrower on or attributable to a loan that has been assigned to the Secretary based on the Secretary's determination of eligibility for a total and permanent disability discharge, the institution must return the payments to the sender.
(ii) At the same time that the institution returns the payments, it must notify the borrower that there is no obligation to make payments on the loan after it has been discharged due to a total and permanent disability unless the loan is reinstated in accordance with § 674.61(b)(6), or the Secretary directs the borrower otherwise.
(iii) When the Secretary discharges the loan, the Secretary returns to the sender any payments received on the loan after the date the borrower became totally and permanently disabled.
(c) Total and permanent disability discharges for veterans. (1) General. A veteran's Defense, NDSL, or Perkins loan will be discharged if the veteran is totally and permanently disabled, as defined in § 674.51(aa)(2).
(2) Discharge application process for veterans who have a total and permanent disability as defined in § 674.51(aa)(2). (i) If a veteran notifies the institution that the veteran claims to be totally and permanently disabled as defined in § 674.51(aa)(2), the institution must direct the veteran to notify the Secretary of the veteran's intent to submit an application for a total and permanent disability discharge to the Secretary; and provide the veteran with the information needed for the veteran to apply for a total and permanent disability discharge to the Secretary.
(ii) If the veteran notifies the Secretary of the veteran's intent to apply for a total and permanent disability discharge, the Secretary—
(A) Provides the veteran with information needed for the veteran to apply for a total and permanent disability discharge;
(B) Identifies all title IV loans owed by the veteran and notifies the lenders of the veteran's intent to apply for a total and permanent disability discharge;
(C) Directs the lenders to suspend efforts to collect from the borrower for a period not to exceed 120 days; and
(D) Informs the veteran that the suspension of collection activity described in paragraph (c)(2)(ii)(C) of this section will end after 120 days and collection will resume on the veteran's title IV loans if the veteran does not submit a total and permanent disability discharge application to the Secretary within that time.
(iii) If the veteran fails to submit an application for a total and permanent disability discharge to the Secretary within 120 days, collection resumes on the veteran's title IV loans.
(iv) Except as provided in paragraph (d) of this section, the veteran must submit to the Secretary an application for total and permanent disability discharge on a form approved by the Secretary.
(v) The application must be accompanied by documentation from the Department of Veteran Affairs showing that the Department of Veteran Affairs has determined that the veteran is unemployable due to a service-connected disability. The veteran will not be required to provide any additional documentation related to the veteran's disability.
(vi) After the Secretary receives the application and supporting documentation described in paragraphs (c)(2)(iv) and (c)(2)(v) of this section, the Secretary notifies the holders of the veteran's title IV loans that the Secretary has received a total and permanent disability discharge application from the veteran.
(vii) If the application is incomplete, the Secretary notifies the veteran of the missing information and requests the missing information from the veteran or the veteran's representative. The Secretary does not make a determination of eligibility until the application is complete.
(viii) The lender notification described in paragraph (c)(2)(vi) of this section directs the lenders to suspend collection activity or maintain the suspension of collection activity on the borrower's title IV loans.
(ix) After the Secretary receives the disability discharge application, the Secretary sends a notice to the veteran that—
(A) States that the application will be reviewed by the Secretary;
(B) Informs the veteran that the veteran's lenders will suspend collection activity on the veteran's title IV loans while the Secretary reviews the borrower's application for a discharge; and
(C) Explains the process for the Secretary's review of total and permanent disability discharge applications.
(3) Secretary's review of the total and permanent disability discharge application. (i) If, after reviewing the veteran's completed application, the Secretary determines, based on a review of the documentation from the Department of Veterans Affairs, that the veteran is totally and permanently disabled as defined in § 674.51(aa)(2), the Secretary notifies the veteran and the veteran's lenders that the application for disability discharge has been approved. With this notification, the Secretary provides the effective date of the determination and directs each institution holding a Direct, NDSL, or Perkins Loan made to the veteran to discharge the loan.
(ii) The institution returns any payments received on or after the effective date of the determination by the Department of Veterans Affairs that the veteran is unemployable due to a service-connected disability to the person who made the payments.
(iii) If the Secretary determines, based on a review of the documentation from the Department of Veterans Affairs, that the veteran is not totally and permanently disabled as defined in § 674.51(aa)(2), the Secretary notifies the veteran or the veteran's representative, and the institution that the application for a disability discharge has been denied. The notification includes—
(A) The reason or reasons for the denial;
(B) An explanation that the loan is due and payable to the institution under the terms of the promissory note and that the loan will return to the status that would have existed had the total and permanent disability discharge application not been received;
(C) An explanation that the institution will notify the veteran of the date the veteran must resume making payments on the loan;
(D) An explanation that the veteran is not required to submit a new total and permanent disability discharge application if the veteran requests that the Secretary re-evaluate the veteran's application for discharge by providing, within 12 months of the date of the notification, additional documentation from the Department of Veterans Affairs that supports the veteran's eligibility for discharge; and
(E) Information on how the veteran may reapply for a total and permanent disability discharge in accordance with the procedures described in paragraphs (b)(1) through (b)(8) of this section, if the documentation from the Department of Veterans Affairs does not indicate that the veteran is totally and permanently disabled as defined in § 674.51(aa)(2), but indicates that the veteran may be totally and permanently disabled as defined in § 674.51(aa)(1).
(d) Discharge without an application. (1) The Secretary will discharge a loan under this section without an application or any additional documentation from the borrower if the Secretary—
(i) Obtains data from the Department of Veterans Affairs (VA) showing that the borrower is unemployable due to a service-connected disability; or
(ii) Obtains data from the Social Security Administration (SSA) described in paragraph (b)(2)(iv)(C) of this section.
(e) Notifications and return of payments. (1) After determining that a borrower qualifies for a total and permanent disability discharge under paragraph (d) of this section, the Secretary sends a notification to the borrower informing the borrower that the Secretary will discharge the borrower's title IV loans unless the borrower notifies the Secretary, by a date specified in the Secretary's notification, that the borrower does not wish to receive the loan discharge.
(2) Unless the borrower notifies the Secretary that the borrower does not wish to receive the discharge, the Secretary notifies the borrower's lenders that the borrower has been approved for a disability discharge.
(3) In the case of a discharge based on a disability determination by VA—
(i) The notification—
(A) Provides the effective date of the disability determination by VA; and
(B) Directs each institution holding a Defense, NDSL, or Perkins Loan made to the borrower to discharge the loan; and
(ii) The institution returns to the person who made the payments any payments received on or after the effective date of the determination by VA that the borrower is unemployable due to a service-connected disability.
(4) In the case of a discharge based on a disability determination by the SSA—
(i) The notification—
(A) Provides the date the Secretary received the SSA data described in paragraph (b)(2)(iv)(C) of this section; and
(B) Directs each institution holding a Defense, NDSL, or Perkins Loan made to the borrower to assign the loan to the Secretary within 45 days of the notice described in paragraph (e)(2) of this section; and
(ii) After the loan is assigned, the Secretary discharges the loan in accordance with paragraph (b)(3)(v) of this section.
(5) If the borrower notifies the Secretary that they do not wish to receive the discharge, the borrower will remain responsible for repayment of the borrower's loans in accordance with the terms and conditions of the promissory notes that the borrower signed.
(f) No Federal reimbursement. No Federal reimbursement is made to an institution for discharge of loans due to death or disability.
(g) Retroactive. Discharge for death applies retroactively to all Defense, NDSL, and Perkins loans.
(a) No portion of a loan may be cancelled for teaching. Head Start, volunteer or military service if the borrower's service is performed—
(1) During the same period that he or she received the loan; or
(2) Before the date the loan was disbursed to the borrower.
(b) The institution shall not refund a repayment made during a period for which the borrower qualified for a cancellation unless the borrower made the payment due to an institutional error.
(a) Reimbursement for Defense loan cancellation. (1) The Secretary pays an institution each award year its share of the principal and interest canceled under §§ 674.55 and 674.59(a).
(2) The institution's share of cancelled principal and interest is computed by the following ratio:
(b) Reimbursement for NDSL and Federal Perkins loan cancellation. The Secretary pays an institution each award year the principal and interest canceled from its student loan fund under §§ 674.53, 674.54, 674.56, 674.57, 674.58, 674.59(b), and 674.60. The institution shall deposit this amount in its Fund.
(a) Definition of terms. As used in this section—
(1) Eligible public servant means an individual who—
(i) Served as a police officer, firefighter, other safety or rescue personnel, or as a member of the Armed Forces; and
(ii)(A) Died due to injuries suffered in the terrorist attacks on September 11, 2001; or
(B) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(2) Died due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001, and the individual died as a direct result of these crashes.
(3) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001, and the individual became permanently and totally disabled as a direct result of these crashes.
(i) An individual is considered permanently and totally disabled if—
(A) The disability is the result of a physical injury to the individual that was treated by a medical professional within 72 hours of the injury having been sustained or within 72 hours of the rescue;
(B) The physical injury that caused the disability is verified by contemporaneous medical records created by or at the direction of the medical professional who provided the medical care; and
(C) The individual is unable to work and earn money due to the disability and the disability is expected to continue indefinitely or result in death.
(ii) If the injuries suffered due to the terrorist-related aircraft crashes did not make the individual permanently and totally disabled at the time of or in the immediate aftermath of the attacks, the individual may be considered to be permanently and totally disabled for purposes of this section if the individual's medical condition has deteriorated to the extent that the individual is permanently and totally disabled.
(4) Immediate aftermath means, for an eligible public servant, the period of time from the aircraft crashes until 96 hours after the crashes.
(5) Present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site means physically present at the time of the terrorist-related aircraft crashes or in the immediate aftermath—
(i) In the buildings or portions of the buildings that were destroyed as a result of the terrorist-related aircraft crashes;
(ii) In any area contiguous to the crash site that was sufficiently close to the site that there was a demonstrable risk of physical harm resulting from the impact of the aircraft or any subsequent fire, explosions, or building collapses. Generally, this includes the immediate area in which the impact occurred, fire occurred, portions of buildings fell, or debris fell upon and injured persons; or
(iii) On board American Airlines flights 11 or 77 or United Airlines flights 93 or 175 on September 11, 2001.
(b) September 11 survivors discharge. (1) The obligation of a borrower to make any further payments on an eligible Defense, NDSL, or Perkins Loan is discharged if the borrower was, at the time of the terrorist attacks on September 11, 2001, and currently is, the spouse of an eligible public servant, unless the eligible public servant has died. If the eligible public servant has died, the borrower must have been the spouse of the eligible public servant at the time of the terrorist attacks on September 11, 2001 and until the date the eligible public servant died.
(2) A Defense, NDSL, or Perkins Loan owed by the spouse of an eligible public servant may be discharged under the procedures for a discharge in paragraphs (b)(3) through (b)(6) of this section.
(3) After being notified by the borrower that the borrower claims to qualify for a discharge under this section, an institution shall suspend collection activity on the borrower's eligible Defense, NDSL, and Perkins Loans and promptly request that the borrower submit a request for discharge on a form approved by the Secretary.
(4) If the institution determines that the borrower does not qualify for a discharge under this section, or the institution does not receive the completed discharge request form from the borrower within 60 days of the borrower notifying the institution that the borrower claims to qualify for a discharge, the institution shall resume collection and shall be deemed to have exercised forbearance of payment of both principal and interest from the date the institution was notified by the borrower. The institution must notify the borrower that the application for the discharge has been denied, provide the basis for the denial, and inform the borrower that the institution will resume collection on the loan.
(5) If the institution determines that the borrower qualifies for a discharge under this section, the institution shall notify the borrower that the loan has been discharged and that there is no further obligation to repay the loan. The institution shall return to the sender any payments received by the institution after the date the loan was discharged.
(6) A Defense, NDSL, or Perkins Loan owed by an eligible public servant may be discharged under the procedures in § 674.61 for a discharge based on the death or total and permanent disability of the eligible public servant.
(c) Documentation that an eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001. (1) Documentation that an eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) A certification from an authorized official that the individual was a member of the Armed Forces, or was employed as a police officer, firefighter, or other safety or rescue personnel, and was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes; and
(ii) The inclusion of the individual on an official list of the individuals who died in the terrorist attacks on September 11, 2001.
(2) If the individual is not included on an official list of the individuals who died in the terrorist attacks on September 11, 2001, the borrower must provide—
(i) The certification described in paragraph (c)(1)(i) of this section;
(ii) An original or certified copy of the individual's death certificate; and
(iii) A certification from a physician or a medical examiner that the individual died due to injuries suffered in the terrorist attacks on September 11, 2001.
(3) If the eligible public servant owed a FFEL Program Loan, a Direct Loan, or a Perkins Loan at the time of the terrorist attacks on September 11, 2001, documentation that the individual's loans were discharged by the lender, the Secretary, or the institution due to death may be substituted for the original or certified copy of a death certificate.
(4) If the borrower is the spouse of an eligible public servant, and has been granted a discharge on a FFEL Program Loan, a Direct Loan, or a Perkins Loan held by another institution, because the eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation required in paragraphs (c)(1) through (c)(3) of this section.
(5) Under exceptional circumstances and on a case-by-case basis, the determination that an eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001 may be based on other reliable documentation approved by the chief financial officer of the institution.
(d) Documentation that an eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001. (1) Documentation that an eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) A certification from an authorized official that the individual was a member of the Armed Forces or was employed as a police officer, firefighter or other safety or rescue personnel, and was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes;
(ii) Copies of contemporaneous medical records created by or at the direction of a medical professional who provided medical care to the individual within 24 hours of the injury having been sustained or within 24 hours of the rescue; and
(iii) A certification by a physician, who is a doctor of medicine or osteopathy and legally authorized to practice in a state, that the individual became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(2) If the borrower is the spouse of an eligible public servant, and has been granted a discharge on a FFEL Loan, a Direct Loan, or a Perkins Loan held by another institution, because the eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation required in paragraph (d)(1) of this section.
(e) Additional information. (1) An institution may require the borrower to submit additional information that the institution deems necessary to determine the borrower's eligibility for a discharge under this section.
(2) To establish that the eligible public servant was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site, such additional information may include but is not limited to—
(i) Records of employment;
(ii) Contemporaneous records of a federal, state, city, or local government agency;
(iii) An affidavit or declaration of the eligible public servant's employer; or
(iv) A sworn statement (or an unsworn statement complying with 28 U.S.C. 1746) regarding the presence of the eligible public servant at the site.
(3) To establish that the disability of the eligible public servant is due to injuries suffered in the terrorist attacks on September 11, 2001, such additional information may include but is not limited to—
(i) Contemporaneous medical records of hospitals, clinics, physicians, or other licensed medical personnel;
(ii) Registries maintained by federal, state, or local governments; or
(iii) Records of all continuing medical treatment.
(4) To establish the borrower's relationship to the eligible public servant, such additional information may include but is not limited to—
(i) Copies of relevant legal records including court orders, letters of testamentary or similar documentation;
(ii) Copies of wills, trusts, or other testamentary documents; or
(iii) Copies of approved joint FFEL or Federal Direct Consolidation loan applications.
(f) Limitations on discharge. (1) Only outstanding Defense, NDSL, and Perkins Loans for which amounts were owed on September 11, 2001, are eligible for discharge under this section.
(2) Eligibility for a discharge under this section does not qualify a borrower for a refund of any payments made on the borrower's Defense, NDSL, or Perkins Loans prior to the date the loan was discharged.
(3) A determination by an institution that an eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 for purposes of this section does not qualify the eligible public servant for a discharge based on a total and permanent disability under § 674.61.
(4) The spouse of an eligible public servant may not receive a discharge under this section if the eligible public servant has been identified as a participant or conspirator in the terrorist-related aircraft crashes on September 11, 2001.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
| Monthly repayment schedule | Installment due dates—Missed payments | Separate monthly maximum penalty charges | |||||
|---|---|---|---|---|---|---|---|
| Jan. 2 | Feb. 2 | Mar. 2 | Apr. 2 | May 2 | June 2 | ||
| 1st Past due installment | $1 | $1 | |||||
| 2nd Past due installment | $1 + $2 | 3 | |||||
| 3rd Past due installment | $3 + $2 | 5 | |||||
| 4th Past due installment | $5 + $2 | 7 | |||||
| 5th Past due installment | $7 + $2 | 9 | |||||
| 6th Past due installment | $9 + $2 | 11 | |||||
| Cumulative maximum subtotals | 1 | 4 | 9 | 16 | 25 | 36 | |
| Bimonthly repayment schedule | Installment due dates—Missed payments | Separate bimonthly maximum penalty charges | ||
|---|---|---|---|---|
| Jan. 2 | Mar. 2 | May 2 | ||
| 1st Past due installment | $3 | $3 | ||
| 2nd Past due installment | $3 + $3 | 6 | ||
| 3rd Past due installment | $6 + $3 | 9 | ||
| Cumulative maximum subtotals | 3 | 9 | 18 | |
| Quarterly repayment schedule | Installment due dates—Missed payments | Separate quarterly maximum penalty charges | |
|---|---|---|---|
| Jan. 2 | Apr. 2 | ||
| 1st Past due installment | $6 | $6 | |
| 2nd Past due installment | $6 + $6 | 12 | |
| Cumulative maximum subtotals | 6 | 18 | |
An asterisk (*) indicates provisions that are common to parts 674, 675, and 676. The use of asterisks will assure participating institutions that a provision of one regulation is identical to the corresponding provisions in the other two.
(a) The Federal Work-Study (FWS) program provides part-time employment to students attending institutions of higher education who need the earnings to help meet their costs of postsecondary education and encourages students receiving FWS assistance to participate in community service activities.
*(b) Provisions in these regulations that are common to all campus-based programs are identified with an asterisk.
(a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR 668:
(b) The Secretary defines other terms used in this part as follows:
Community services: Services which are identified by an institution of higher education, through formal or informal consultation with local nonprofit, governmental, and community-based organizations, as designed to improve the quality of life for community residents, particularly low-income individuals, or to solve particular problems related to their needs. These services include—
(1) Such fields as health care, child care (including child care services provided on campus that are open and accessible to the community), literacy training, education (including tutorial services), welfare, social services, transportation, housing and neighborhood improvement, public safety, emergency preparedness and response, crime prevention and control, recreation, rural development, and community improvement;
(2) Work in service opportunities or youth corps as defined in section 101 of the National and Community Service Act of 1990, and service in the agencies, institutions and activities designated in section 124(a) of that Act;
(3) Support services to students with disabilities, including students with disabilities who are enrolled at the institution; and
(4) Activities in which a student serves as a mentor for such purposes as—
(i) Tutoring;
(ii) Supporting educational and recreational activities; and
(iii) Counseling, including career counseling.
*Financial need: The difference between a student's cost of attendance and his or her EFC.
Graduate or professional student: A student who—
(1) Is enrolled in a program or course above the baccalaureate level at an institution of higher education or is enrolled in a program leading to a first professional degree;
(2) Has completed the equivalent of at least three years of full-time study at an institution of higher education, either prior to entrance into the program or as part of the program itself; and
(3) Is not receiving title IV aid as an undergraduate student for the same period of enrollment.
*Institution of higher education (institution). A public or private nonprofit institution of higher education, a proprietary institution of higher education, or a postsecondary vocational institution.
* Need-based employment: Employment provided by an institution itself or by another entity to a student who has demonstrated to the institution or the entity (through standards or methods it establishes) a financial need for the earnings from that employment for the purpose of defraying educational costs of attendance for the award year for which the employment is provided.
Nonprofit organization: An organization owned and operated by one or more nonprofit corporations or associations where no part of the organization's net earnings benefits, or may lawfully benefit, any private shareholder or entity. An organization may show that it is nonprofit by meeting the provisions of § 75.51 of the Education Department General Administrative Regulations (EDGAR), 34 CFR 75.51.
Student services: Services that are offered to students that may include, but are not limited to, financial aid, library, peer guidance counseling, job placement, assisting an instructor with curriculum-related activities, security, and social, health, and tutorial services. Student services do not have to be direct or involve personal interaction with students. For purposes of this definition, facility maintenance, cleaning, purchasing, and public relations are never considered student services.
Undergraduate student: A student enrolled at an institution of higher education who is in an undergraduate course of study which usually does not exceed four academic years, or is enrolled in a four to five academic year program designed to lead to a first degree. A student enrolled in a program of any other length is considered an undergraduate student for only the first four academic years of that program.
To participate in the FWS program, an institution of higher education shall enter into a participation agreement with the Secretary. The agreement provides that, among other things, the institution shall—
(a) Use the funds it receives solely for the purposes specified in this part;
(b) Administer the FWS program in accordance with the HEA, the provisions of this part, and the Student Assistance General Provisions regulations, 34 CFR part 668;
(c) Make employment under the FWS program reasonably available, to the extent of available funds, to all eligible students;
(d) Award FWS employment, to the maximum extent practicable, that will complement and reinforce each recipient's educational program or career goals;
(e) Assure that employment under this part may be used to support programs for supportive services to students with disabilities; and
(f) Inform all eligible students of the opportunity to perform community services and consult with local nonprofit, governmental, and community-based organizations to identify those opportunities.
A student at an institution of higher education is eligible to receive part-time employment under the FWS program for an award year if the student—
(a) Meets the relevant eligibility requirements contained in 34 CFR 668.32;
(b) Is enrolled or accepted for enrollment as an undergraduate, graduate or professional student at the institution; and
(c) Has financial need as determined in accordance with part F of title IV of the HEA.
(a) An institution shall make employment under FWS reasonably available, to the extent of available funds, to all eligible students.
(b) An institution shall establish selection procedures and those procedures must be—
(1) Uniformly applied;
(2) In writing; and
(3) Maintained in the institution's files.
(c) Part-time and independent students. If an institution's allocation of FWS funds is directly or indirectly based in part on the financial need demonstrated by students attending the institution as less-than-full-time or independent students, a reasonable portion of the allocation must be offered to those students.
(a) General. (1) An institution must follow the disbursement procedures in this section for paying a student his or her wages under the FWS Program instead of the disbursement procedures in 34 CFR 668.164(a), (b), and (d) through (g), and 34 CFR 668.165. The institution must follow 34 CFR 668.164(c) on making direct FWS payments to students and 34 CFR 668.164(h) on handling the return of FWS funds that are not received or negotiated by a student.
(2) An institution must pay a student FWS compensation at least once a month.
(3) Before an institution makes an initial disbursement of FWS compensation to a student for an award period, the institution must notify the student of the amount of funds the student is authorized to earn, and how and when the FWS compensation will be paid.
(4) Regardless of who employs the student, the institution is responsible for ensuring that the student is paid for work performed.
(5) A student's FWS compensation is earned when the student performs the work.
(6) An institution may pay a student after the student's last day of attendance for FWS compensation earned while he or she was in attendance at the institution.
(7) A correspondence student must submit his or her first completed lesson before receiving a payment.
(8) The institution may not obtain a student's power of attorney to authorize any disbursement of funds without prior approval from the Secretary.
(9) An institution makes a disbursement of FWS program funds on the date that the institution credits a student's account at the institution or pays a student directly with—
(i) Funds received from the Secretary; or
(ii) Institutional funds used in advance of receiving FWS program funds.
(b) Crediting a student's account at the institution. (1) If the institution obtains the student's authorization described in paragraph (d) of this section, the institution may use the FWS funds to credit a student's account at the institution to satisfy—
(i) Current year charges for—
(A) Tuition and fees;
(B) Board, if the student contracts with the institution for board;
(C) Room, if the student contracts with the institution for room; and
(D) Other educationally related charges incurred by the student at the institution; and
(ii) Prior award year charges with the restriction provided in paragraph (b)(2) of this section for a total of not more than $200 for—
(A) Tuition and fees, room, or board; and
(B) Other institutionally related charges incurred by the student at the institution.
(2) If the institution is using FWS funds in combination with other Title IV, HEA program funds to credit a student's account at the institution to satisfy prior award year charges, a single $200 total prior award year charge limit applies to the use of all the Title IV, HEA program funds for that purpose.
(c) Credit balances. Whenever an institution disburses FWS funds by crediting a student's account and the result is a credit balance, the institution must pay the credit balance directly to the student as soon as possible, but no later than 14 days after the credit balance occurred on the account.
(d) Student authorizations. (1) Except for the noncash contributions allowed under paragraph (e)(2) and (3) of this section, if an institution obtains written authorization from a student, the institution may—
(i) Use the student's FWS compensation to pay for charges described in paragraph (b) of this section that are included in that authorization; and
(ii) Except if prohibited by the Secretary under the reimbursement or cash monitoring payment method, hold on behalf of the student any FWS compensation that would otherwise be paid directly to the student under paragraph (c) of this section.
(2) In obtaining the student's authorization to perform an activity described in paragraph (d)(1) of this section, an institution—
(i) May not require or coerce the student to provide that authorization;
(ii) Must allow the student to cancel or modify that authorization at any time; and
(iii) Must clearly explain how it will carry out that activity.
(3) A student may authorize an institution to carry out the activities described in paragraph (d)(1) of this section for the period during which the student is enrolled at the institution.
(4)(i) If a student modifies an authorization, the modification takes effect on the date the institution receives the modification notice.
(ii) If a student cancels an authorization to use his or her FWS compensation to pay for authorized charges under paragraph (b) of this section, the institution may use those funds to pay only those authorized charges incurred by the student before the institution received the notice.
(iii) If a student cancels an authorization to hold his or her FWS compensation under paragraph (d)(1)(ii) of this section, the institution must pay those funds directly to the student as soon as possible, but no later than 14 days after the institution receives that notice.
(5) If an institution holds excess FWS compensation under paragraph (d)(1)(ii) of this section, the institution must—
(i) Identify the amount of funds the institution holds for each student in a subsidiary ledger account designed for that purpose;
(ii) Maintain, at all times, cash in its bank account in an amount at least equal to the amount of FWS compensation the institution holds for the student; and
(iii) Notwithstanding any authorization obtained by the institution under this paragraph, pay any remaining balances by the end of the institution's final FWS payroll period for an award year.
(e)(1) Timing of institutional share and noncash contributions. Except for the noncash contributions allowed under paragraph (e)(2) or (3) of this section, an institution must pay the student its share of his or her FWS compensation at the same time it pays the Federal share.
(2) If an institution pays a student its FWS share for an award period in the form of tuition, fees, services, or equipment, it must pay that share before the student's final payroll period.
(3) If an institution pays its FWS share in the form of prepaid tuition, fees, services, or equipment for a forthcoming academic period, it must give the student a statement before the close of his or her final payroll period listing the amount of tuition, fees, services, or equipment earned.
(a) General. An institution may use its FWS allocation only for—
(1) Paying the Federal share of FWS wages;
(2) Paying administrative expenses as provided for in 34 CFR 673.7;
(3) Meeting the cost of a Work-Colleges program under subpart C;
(4) Meeting the cost of a Job Location and Development program under subpart B; and
(5) Transferring a portion of its FWS allocation to its FSEOG program as described in paragraph (f) of this section.
(b) Carry forward funds. (1) An institution may carry forward and expend in the next award year up to 10 percent of the sum of its initial and supplemental FWS allocations for the current award year.
(2) Before an institution may spend its current year FWS allocation, it shall spend any funds carried forward from the previous year.
(c) Carry back funds. An institution may carry back and expend in the previous award year up to 10 percent of the sum of its initial and supplemental FWS allocations for the current award year. The institution's official allocation letter represents the Secretary's approval to carry back funds.
(d) The institution may use the funds carried forward or carried back under paragraphs (c) and (d) of this section, respectively, for activities described in paragraph (a) of this section.
(e) Transfer funds to SEOG. (1) Beginning with the 1993-94 award year, an institution may transfer up to 25 percent of the sum of its initial and supplemental FWS allocations for an award year to its FSEOG program.
(2) An institution shall use transferred funds according to the requirements of the program to which they are transferred.
(3) An institution shall report any transferred funds on the Fiscal Operations Report required under § 675.19(b).
(f) Carry back funds for summer employment. An institution may carry back and expend in the previous award year any portion of its initial and supplemental FWS allocations for the current award year to pay student wages earned on or after May 1 of the previous award year but prior to the beginning of the current award year.
(g) Community service. (1) For the 2000-2001 award year and subsequent award years, an institution must use at least seven percent of the sum of its initial and supplemental FWS allocations for an award year to compensate students employed in community service activities. In meeting this community service requirement, an institution must include at least one—
(i) Reading tutoring project that employs one or more FWS students as reading tutors for children who are preschool age or are in elementary school; or
(ii) Family literacy project that employs one or more FWS students in family literacy activities.
(2) The Secretary may waive the requirements in paragraph (g)(1) of this section if the Secretary determines that an institution has demonstrated that enforcing the requirements in paragraph (g)(1) of this section would cause a hardship for students at the institution.
(3) To the extent practicable, in providing reading tutors for children under paragraph (g)(1)(i), an institution must—
(i) Give priority to the employment of students to tutor in reading in schools that are participating in a reading reform project that—
(A) Is designed to train teachers how to teach reading on the basis of scientifically-based research on reading; and
(B) Is funded under the Elementary and Secondary Education Act of 1965; and
(ii) Ensure that any student who is employed in a school participating in a reading reform project described in paragraph (g)(3)(i) of this section receives training from the employing school in the instructional practices used by the school.
(4)(i) In meeting the seven percent community service expenditure requirement in paragraph (g)(1) of this section, students may be employed to perform civic education and participation activities in projects that—
(A) Teach civics in schools;
(B) Raise awareness of government functions or resources; or
(C) Increase civic participation.
(ii) To the extent practicable, in providing civic education and participation activities under paragraph (g)(4)(i) of this section, an institution must—
(A) Give priority to the employment of students in projects that educate or train the public about evacuation, emergency response, and injury prevention strategies relating to natural disasters, acts of terrorism, and other emergency situations; and
(B) Ensure that the students receive appropriate training to carry out the educational services required.
(h) Payment for time spent in training and travel. (1) For any award year, an institution may pay students for a reasonable amount of time spent for training that is directly related to FWS employment.
(2) Beginning with the 1999-2000 award year, an institution may pay students for a reasonable amount of time spent for travel that is directly related to employment in community service activities (including tutoring in reading and family literacy activities).
(i) Flexibility in the event of a major disaster. (1) An institution located in any area affected by a major disaster may make FWS payments to disaster-affected students for the period of time (not to exceed the award period) in which the students were prevented from fulfilling their FWS obligations. The FWS payments—
(i) May be made to disaster-affected students for an amount equal to or less than the amount of FWS wages the students would have been paid had the students been able to complete the work obligation necessary to receive the funds;
(ii) May not be made to any student who was not eligible for FWS or was not completing the work obligation necessary to receive the funds, or had already separated from their employment prior to the occurrence of the major disaster; and
(iii) Must meet the matching requirements of § 675.26, unless those requirements are waived by the Secretary.
(2) The following definitions apply to this section:
(i) Disaster-affected student means a student enrolled at an institution who—
(A) Received an FWS award for the award period during which a major disaster occurred;
(B) Earned FWS wages from an institution for that award period;
(C) Was prevented from fulfilling his or her FWS obligation for all or part of the FWS award period because of the major disaster; and
(D) Was unable to be reassigned to another FWS job.
(ii) Major disaster is defined in section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122(2)).
(a) Fiscal procedures. (1) In administering its FWS program, an institution shall establish and maintain an internal control system of checks and balances that insures that no office can both authorize payments and disburse funds to students.
(2) If an institution uses a fiscal agent, that agent may perform only ministerial acts.
(3) An institution shall maintain funds received under this part in accordance with the requirements in § 668.163.
(b) Records and reporting. (1) An institution must follow the record retention and examination provisions in this part and in 34 CFR 668.24.
(2) The institution must also establish and maintain program and fiscal records that—
(i) Include a certification by the student's supervisor, an official of the institution or off-campus agency, that each student has worked and earned the amount being paid. The certification must include or be supported by, for students paid on an hourly basis, a time record showing the hours each student worked in clock time sequence, or the total hours worked per day;
(ii) Include a payroll voucher containing sufficient information to support all payroll disbursements;
(iii) Include a noncash contribution record to document any payment of the institution's share of the student's earnings in the form of services and equipment (see § 675.27(a)); and
(iv) Are reconciled at least monthly.
(3) Each year an institution shall submit a Fiscal Operations Report plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary.
(a) Eligible FWS employers. A student may be employed under the FWS program by—
(1) The institution in which the student is enrolled;
(2) A Federal, State, or local public agency;
(3) A private nonprofit organization; or
(4) A private for-profit organization.
(b) Agreement between institution and organization. (1) If an institution wishes to have its students employed under this part by a Federal, State or local public agency, or a private nonprofit or for-profit organization, it shall enter into a written agreement with that agency or organization. The agreement must set forth the FWS work conditions. The agreement must indicate whether the institution or the agency or organization shall pay the students employed, except that the agreement between an institution and a for-profit organization must require the employer to pay the non-Federal share of the student earnings.
(2) The institution may enter into an agreement with an agency or organization that has professional direction and staff.
(3) The institution is responsible for ensuring that—
(i) Payment for work performed under each agreement is properly documented; and
(ii) Each student's work is properly supervised.
(4) The agreement between the institution and the employing agency or nonprofit organization may require the employer to pay—
(i) The non-Federal share of the student earnings; and
(ii) Required employer costs such as the employer's share of social security or workers' compensation.
(c) FWS general employment conditions and limitation. (1) Regardless of the student's employer, the student's work must be governed by employment conditions, including pay, that are appropriate and reasonable in terms of—
(i) Type of work;
(ii) Geographical region;
(iii) Employee proficiency; and
(iv) Any applicable Federal, State, or local law.
(2) FWS employment may not—
(i) Impair existing service contracts;
(ii) Displace employees;
(iii) Fill jobs that are vacant because the employer's regular employees are on strike;
(iv) Involve the construction, operation, or maintenance of so much of any facility as is used or is to be used for instruction that is predominantly devotional and religious or as a place for religious worship, except to the extent that excluding such work would impose a substantial burden on a person's exercise of religion.
(v) Include employment for the U.S. Department of Education.
(d) Academic credit and work-study. (1) A student may be employed under the FWS program and also receive academic credit for the work performed. Those jobs include, but are not limited to, work performed when the student is—
(i) Enrolled in an internship;
(ii) Enrolled in a practicum; or
(iii) Employed in a research, teaching, or other assistantship.
(2) A student employed in an FWS job and receiving academic credit for that job may not be—
(i) Paid less than he or she would be if no academic credit were received;
(ii) Paid for receiving instruction in a classroom, laboratory, or other academic setting; and
(iii) Paid unless the employer would normally pay the person for the same position.
(a) An institution, other than a proprietary institution, may employ a student to work for the institution itself, including those operations, such as food service, cleaning, maintenance, or security, for which the institution contracts, if the contract specifies—
(1) The number of students to be employed; and
(2) That the institution selects the students to be employed and determines each student's pay rate.
(b) A proprietary institution may employ a student to work for the institution, but only in jobs that—
(1) Are in community services as defined in § 675.2; or
(2) Are on campus and that—
(i) Involve the provision of student services as defined in § 675.2(b) that are directly related to the work-study student's training or education;
(ii) To the maximum extent possible, complement and reinforce the educational program or vocational goals of the student; and
(iii) Do not involve the solicitation of potential students to enroll at the proprietary institution.
(a) If a student is employed by a Federal, State, or local public agency, or a private nonprofit organization, the work that the student performs must be in the public interest.
(b) FWS employment in the public interest. The Secretary considers work in the public interest to be work performed for the national or community welfare rather than work performed to benefit a particular interest or group. Work is not in the public interest if—
(1) It primarily benefits the members of a limited membership organization such as a credit union, a fraternal or religious order, or a cooperative;
(2) It is for an elected official who is not responsible for the regular administration of Federal, State, or local government;
(3) It is work as a political aide for any elected official;
(4) A student's political support or party affiliation is taken into account in hiring him or her;
(5) It involves any partisan or nonpartisan political activity or is associated with a faction in an election for public or party office; or
(6) It involves lobbying on the Federal, State, or local level.
(a) An institution may use up to 25 percent of its FWS allocation and reallocation for an award year to pay the compensation of FWS students employed by a private for-profit organization.
(b) If a student is employed by a private, for-profit organization—
(1) The work that the student performs must be academically relevant to the student's educational program, to the maximum extent practicable; and
(2) The private for-profit organization—
(i) Must provide the non-Federal share of the student's compensation; and
(ii) May not use any FWS funds to pay an employee who would otherwise be employed by that organization.
(a) Wage rates. (1) Except as provided in paragraph (a)(3) of this section, an institution shall compute FWS compensation on an hourly wage basis for actual time on the job. An institution may not pay a student a salary, commission, or fee.
(2) An institution may not count fringe benefits as part of the wage rate.
(3) An institution may pay a graduate student it employs a salary or an hourly wage, in accordance with its usual practices.
(b) Minimum wage rate. The minimum wage rate for a student employee under the FWS program is the minimum wage rate required under section 6(a) of the Fair Labor Standards Act of 1938.
(a)(1) The institution shall determine the amount of earnings from a FWS job to be applied to a student's cost of attendance (attributed earnings) by subtracting taxes and job related costs from the student's gross earnings.
(2) Job related costs are costs the student incurs because of his or her job. Examples are uniforms and transportation to and from work. Room and board during a vacation period may also be considered a job related cost if they would not otherwise be incurred except for the FWS employment.
(b) If a student is employed under FWS during a vacation or other period when he or she is not attending classes, the institution shall apply the attributed earnings (earnings minus taxes and job related costs) to the cost of attendance for the next period of enrollment.
(a)(1) The Federal share of FWS compensation paid to a student employed other than by a private for-profit organization, as described in § 675.23, may not exceed 75 percent unless the Secretary approves a higher share under paragraph (a)(2) or (d) of this section.
(2) The Federal share of the compensation paid to a student may exceed 75 percent, but may not exceed 90 percent, if—
(i) The student is employed at a private nonprofit organization or a Federal, State, or local public agency that—
(A) Is not a part of, and is not owned, operated, or controlled by, or under common ownership, operation, or control with, the institution;
(B) Is selected by the institution on an individual case-by-case basis;
(C) Would otherwise be unable to afford the costs of this employment; and
(ii) The number of students compensated under paragraph (a)(2)(i) of this section is not more than 10 percent of the total number of students paid under the FWS Program at the institution.
(3) The Federal share of the compensation paid to a student employed by a private for-profit organization may not exceed 50 percent.
(4) An institution may not use FWS funds to pay a student after he or she has, in addition to other estimated financial assistance, earned $300 or more over his or her financial need.
(b) The institution may not include the following when determining the Federal share:
(1) Fringe benefits such as paid sick days, paid vacations, or paid holidays.
(2) The employer's share of social security, workers' compensation, retirement, or any other welfare or insurance program that the employer must pay on account of the student employee.
(c) If an institution receives more money under an employment agreement from an off-campus employer than required employer costs, its not-Federal share, and any share of administrative costs that the employer agreed to pay, the excess funds must be—
(1) Used to reduce the Federal share on a dollar-for-dollar basis;
(2) Held in trust for off-campus student employment next year; or
(3) Refunded to the off-campus employer.
(d) For each award year, the Secretary authorizes a Federal share of 100 percent of the compensation earned by a student under this part if—
(1) The work performed by the student is for the institution itself, for a Federal, State, or local public agency, or for a private nonprofit organization; and
(2)(i) The institution in which the student is enrolled—
(A) Is designated as an eligible institution under—
(1) The Developing Hispanic-Serving Institutions Program (34 CFR part 606);
(2) The Strengthening Institutions Program, American Indian Tribally Controlled Colleges and Universities Program, or Alaska Native and Native Hawaiian-Serving Institutions Program (34 CFR part 607);
(3) The Strengthening Historically Black Colleges and Universities Program (34 CFR part 608); or
(4) The Strengthening Historically Black Graduate Institutions Program (34 CFR part 609); and
(B) Requests that increased Federal share as part of its regular FWS funding application for that year;
(ii) The student is employed as a reading tutor for preschool age children or children who are in elementary school;
(iii) The student is performing family literacy activities in a family literacy project that provides services to families with preschool age children or children who are in elementary school;
(iv) The student is employed as a mathematics tutor for children who are in elementary school through the ninth grade; or
(v) The student is employed in community service activities and is performing civic education and participation activities in a project as defined in § 675.18(g)(4).
(a)(1) An institution may use any resource available to it, except funds allocated under the FWS program, to pay the institutional share of FWS compensation to its students. The institutional share may be paid in the form of services and equipment, e.g., tuition, room, board, and books.
(2) The institution shall document all amounts claimed as non-cash contributions.
(3) Non-cash compensation may not include forgiveness of a charge assessed solely because of a student's employment under the FWS program.
(b) An institution may not solicit or accept fees, commission, contributions, or gifts as a condition for FWS employment, nor permit any organization with which it has an employment agreement to do so.
The purpose of the Job Location and Development program is to expand off-campus job opportunities for students who are enrolled in eligible institutions of higher education and want jobs, regardless of their financial need, and to encourage students to participate in community service activities.
An institution may expend up to the lesser of $50,000 or 10 percent of its FWS allocation and reallocation for an award year to establish or expand a program under which the institution, separately or in combination with other eligible institutions, locates and develops jobs, including community service jobs, for currently enrolled students.
(a)(1) Allowable and unallowable costs. Except as provided in paragraph (a)(2) of this section, costs reasonably related to carrying out the programs described in § 675.32 are allowable.
(2) Costs related to the purchase, construction, or alteration of physical facilities or indirect administrative costs are not allowable.
(b) Federal share of allowable costs. An institution may use FWS funds, as provided in § 675.32, to pay up to 80 percent of allowable costs.
(c) Institutional share of allowable costs. An institution's share of allowable costs may be in cash or in the form of services. The institution shall keep records documenting the amount and source of its share.
(a) An institution participating in the FWS program may enter into a written agreement to establish and operate job location programs for its students with other participating institutions.
(b) The agreement described in paragraph (a) of this section must—
(1) Designate the administrator of the program; and
(2) Specify the terms, conditions, and performance standards of the program.
(c) Each institution shall retain responsibility for the proper disbursement of the Federal funds it contributes under an agreement with other eligible institutions.
(a) A FWS participating institution, to establish or expand these programs, shall enter into an agreement with the Secretary.
(b) The agreement must provide—
(1) That the institution will administer the programs in accordance with the HEA and the provisions of this part;
(2) That the institution will submit to the Secretary an annual report on the use of the funds and an evaluation of the effectiveness of the programs in benefiting the institution's students; and
(3) Satisfactory assurances that—
(i) The institution will not use program funds to locate and develop jobs at an eligible institution;
(ii) The institution will use program funds to locate and develop jobs for students during and between periods of attendance at the institution, not upon graduation;
(iii) The program will not displace employees or impair existing service contracts;
(iv) Program funds can realistically be expected to generate total student wages exceeding the total amount of the Federal funds spent under this subpart; and
(v) If the institution uses Federal funds to contract with another institution, suitable performance standards will be part of that contract.
Procedures and records concerning the administration of a JLD project established and operated under this subpart are governed by applicable provisions of § 675.19.
(a) If the Secretary terminates or suspends an institution's eligibility to participate in the FWS program, the action also applies to the institution's job location and development programs.
(b) The Secretary pays an institution's financial obligations incurred and allowable before the termination but not incurred—
(1) During a suspension; or
(2) In anticipation of a suspension.
(c) However, the institution must cancel as many outstanding obligations as possible.
The following definitions apply to this subpart:
(a) Work-college: An eligible institution that—
(1) Is a public or private nonprofit, four-year, degree-granting institution with a commitment to community service;
(2) Has operated a comprehensive work-learning-service program for at least two years;
(3) Requires resident students, including at least one-half of all students who are enrolled on a full-time basis, to participate in a comprehensive work-learning-service program for at least five hours each week, or at least 80 hours during each period of enrollment, except summer school, unless the student is engaged in an institutionally organized or approved study abroad or externship program; and
(4) Provides students participating in the comprehensive work-learning-service program with the opportunity to contribute to their education and to the welfare of the community as a whole.
(b) Comprehensive student work-learning-service program: A student work-learning-service program that—
(1) Is an integral and stated part of the institution's educational philosophy and program;
(2) Requires participation of all resident students for enrollment and graduation;
(3) Includes learning objectives, evaluation, and a record of work performance as part of the student's college record;
(4) Provides programmatic leadership by college personnel at levels comparable to traditional academic programs;
(5) Recognizes the educational role of work-learning-service supervisors; and
(6) Includes consequences for nonperformance or failure in the work-learning-service program similar to the consequences for failure in the regular academic program.
The Secretary allocates and reallocates funds based on each institution's approved request for Federal funds for the Work-Colleges program as a percent of the total of such approved requests for all applicant institutions.
The purpose of the Work-Colleges program is to recognize, encourage, and promote the use of comprehensive work-learning-service programs as a valuable educational approach when it is an integral part of the institution's educational program and a part of a financial plan that decreases reliance on grants and loans and to encourage students to participate in community service activities.
(a) An institution that satisfies the definition of “work-college” in § 675.41(a) and wishes to participate in the Work-Colleges program must apply to the Secretary at the time and in the manner prescribed by the Secretary.
(b) An institution may expend funds separately, or in combination with other eligible institutions, to provide work-learning-service opportunities for currently enrolled students.
(c) For any given award year, Federal funds allocated and reallocated for that award year under sections 442 and 462 of the HEA may be transferred for the purpose of carrying out the Work-Colleges program to provide flexibility in strengthening the self-help-through-work element in financial aid packaging.
(a) Allowable costs. An institution participating in the Work-Colleges program may use its allocated and reallocated program funds to carry out the following activities:
(1) Support the educational costs of qualified students through self-help payments or credits provided under the work-learning-service program within the limits of part F of title IV of the HEA.
(2) Promote the work-learning-service experience as a tool of postsecondary education, financial self-help, and community service-learning opportunities.
(3) Carry out activities in sections 443 or 446 of the HEA.
(4) Administer, develop, and assess comprehensive work-learning-service programs including—
(i) Community-based work-learning-service alternatives that expand opportunities for community service and career-related work; and
(ii) Alternatives that develop sound citizenship, encourage student persistence, and make optimum use of assistance under the Work-Colleges program in education and student development.
(5) Coordinate and carry out joint projects and activities to promote work-learning-service.
(6) Carry out a comprehensive, longitudinal study of student academic progress and academic and career outcomes, relative to student self-sufficiency in financing their higher education, repayment of student loans, continued community service, kind and quality of service performed, and career choice and community service selected after graduation.
(b) Federal share of allowable costs. An institution, in addition to the funds allocated and reallocated for this program, may use transferred funds provided under its Federal Perkins Loan or its FWS program to pay allowable costs.
(c) Institutional share of allowable costs. An institution must match Federal funds made available for this program on a dollar-for-dollar basis from non-Federal sources. The institution shall keep records documenting the amount and source of its share.
An institution participating in the Work-Colleges program may not use its allocated and reallocated program funds and transferred funds provided under its Federal Perkins Loan or its FWS program to pay costs related to the purchase, construction, or alteration of physical facilities or indirect administrative costs.
(a) An institution participating in the Work-Colleges program may enter into a written agreement with another participating institution to promote the work-learning-service experience.
(b) The agreement described in paragraph (a) of this section must—
(1) Designate the administrator of the program; and
(2) Specify the terms, conditions, and performance standards of the program.
(c) Each institution shall retain responsibility for the proper disbursement of the Federal funds it contributes under an agreement with other eligible institutions.
To participate in the Work-Colleges program, an institution shall enter into an agreement with the Secretary. The agreement provides that, among other things, the institution shall—
(a) Assure that it will comply with all the appropriate provisions of the HEA and the appropriate provisions of the regulations;
(b) Assure that it satisfies the definition of “work-college” in § 675.41(a);
(c) Assure that it will match the Federal funds according to the requirements in § 675.45(c); and
(d) Assure that it will use funds only to carry out the activities in § 675.45(a).
In administering a Work-Colleges program under this subpart, an institution shall comply with the applicable provisions of 34 CFR part 673 and this part 675.
Procedures for termination and suspension under this subpart are governed by applicable provisions found in 34 CFR part 668, subpart G of the Student Assistance General Provisions regulations.
An asterisk (*) indicates provisions that are common to parts 674, 675, and 676. The use of asterisks will assure participating institutions that a provision of one regulation is identical to the corresponding provisions in the other two.
(a) The Federal Supplemental Educational Opportunity Grant (FSEOG) Program awards grants to financially needy students attending institutions of higher education to help them pay their educational costs.
*(b) Provisions in these regulations that are common to all campus-based programs are identified with an asterisk.
(a) The definitions of the following terms used in this part are set forth in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(b) The Secretary defines other terms used in this part as follows:
*Financial need: The difference between a student's cost of attendance and his or her EFC.
*Institution of higher education (institution): A public or private nonprofit institution of higher education, a proprietary institution of higher education, or a postsecondary vocational institution.
* Need-based employment: Employment provided by an institution itself or by another entity to a student who has demonstrated to the institution or the entity (through standards or methods it establishes) a financial need for the earnings from that employment for the purpose of defraying educational costs of attendance for the award year for which the employment is provided.
To participate in the FSEOG program, an institution shall enter into a participation agreement with the Secretary. The participation agreement provides, among other things, that the institution shall—
(a) Use the funds it receives solely for the purposes specified in this part; and
(b) Administer the FSEOG program in accordance with the HEA, the provisions of this part, and the Student Assistance General Provisions regulations, 34 CFR part 668.
A student at an institution of higher education is eligible to receive an FSEOG for an award year if the student—
(a) Meets the relevant eligibility requirements contained in 34 CFR 668.32;
(b) Is enrolled or accepted for enrollment as an undergraduate student at the institution; and
(c) Has financial need as determined in accordance with part F of title IV of the HEA.
(a)(1) In selecting among eligible students for FSEOG awards in each award year, an institution shall select those students with the lowest expected family contributions who will also receive Federal Pell Grants in that year.
(2) If the institution has FSEOG funds remaining after giving FSEOG awards to all the Federal Pell Grant recipients at the institution, the institution shall award the remaining FSEOG funds to those eligible students with the lowest expected family contributions who will not receive Federal Pell Grants.
(b) Part-time and independent students. If an institution's allocation of FSEOG funds is directly or indirectly based in part on the financial need demonstrated by students attending the institution as less-than-full-time or independent students, a reasonable portion of the allocation must be offered to those students.
(a)(1) Except as provided in paragraphs (b) and (e) of this section, an institution shall pay in each payment period a portion of an FSEOG awarded for a full academic year.
(2) The institution shall determine the amount paid each payment period by the following fraction:
(3) An institution may pay the student, within each payment period, at such times and in such amounts as it determines best meets the student's needs.
(b) If a student incurs uneven cost or estimated financial assistance amounts during an academic year and needs additional funds in a particular payment period, the institution may pay FSEOG funds to the student for those uneven costs.
(c) An institution shall disburse funds to a student or the student's account in accordance with the provisions in § 668.164.
(d)(1) The institution shall return to the FSEOG account any funds paid to a student who, before the first day of classes—
(i) Officially or unofficially withdraws; or
(ii) Is expelled.
(2) A student who does not begin class attendance is deemed to have withdrawn.
(e) A correspondence student shall submit his or her first completed lesson before receiving an FSEOG payment.
(a) General. An institution may use its FSEOG allocation and reallocation only for—
(1) Making grants to eligible students; and
(2) Paying administrative expenses as provided for in 34 CFR 673.7.
(b) Transfer back of funds to FWS. An institution shall transfer back to the FWS program any funds unexpended at the end of the award year that it transferred to the FSEOG program from the FWS program.
(c) Carry forward funds. (1) An institution may carry forward and expend in the next award year up to 10 percent of the sum of its initial and supplemental FSEOG allocations for the current award year.
(2) Before an institution may spend its current year FSEOG allocation, it must spend any funds carried forward from the previous year.
(d) Carry back funds. An institution may carry back and expend in the previous award year up to 10 percent of the sum of its initial and supplemental FSEOG allocations for the current award year. The institution's official allocation letter represents the Secretary's approval to carry back funds.
(e) Use of funds carried forward and carried back. An institution may use the funds carried forward or carried back under paragraphs (c) and (d) of this section, respectively, for activities described in paragraph (a) of this section.
(f) Carry back funds for summer FSEOG awards. An institution may carry back and expend in the previous award year any portion of its initial and supplemental FSEOG allocations for the current award year to make awards to eligible students for payment periods that begin on or after May 1 of the previous award year but end prior to the beginning of the current award year.
(a) Fiscal Procedures. (1) In administering its FSEOG program, an institution shall establish and maintain an internal control system of checks and balances that insures that no office can both authorize payments and disburse funds to students.
(2) An institution shall maintain funds received under this part in accordance with the requirements in § 668.163.
(b) Records and reporting. (1) An institution shall follow the record retention and examination provisions in this part and in 34 CFR 668.24.
(2) An institution shall establish and maintain program and fiscal records that are reconciled at least monthly.
(3) Each year an institution shall submit a Fiscal Operations Report plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary.
(a) An institution may award an FSEOG for an academic year in an amount it determines a student needs to continue his or her studies. However, except as provided in paragraph (c) of this section, an FSEOG may not be awarded for a full academic year that is—
(1) Less than $100; or
(2) More than $4,000.
(b) For a student enrolled for less than a full academic year, the minimum allowable FSEOG may be proportionately reduced.
(c) The maximum amount of the FSEOG may be increased from $4,000 to as much as $4,400 for a student participating in a program of study abroad that is approved for credit by the home institution, if reasonable costs for the study abroad program exceed the cost of attendance at the home institution.
(a) Except as provided in paragraph (b) of this section, for the 1993-94 award year and subsequent award years, the Federal share of the FSEOG awards made by an institution may not exceed 75 percent of the amount of FSEOG awards made by that institution.
(b) The Secretary authorizes, for each award year, a Federal share of 100 percent of the FSEOGs awarded to students by an institution that—
(1) Is designated as an eligible institution under—
(i) The Developing Hispanic-Serving Institutions Program (34 CFR part 606);
(ii) The Strengthening Institutions Program, American Indian Tribally Controlled Colleges and Universities Program, or Alaska Native and Native Hawaiian-Serving Institutions Program (34 CFR part 607); or
(iii) The Strengthening Historically Black Colleges and Universities Program (34 CFR part 608); and
(2) Requests that increased Federal share as part of its regular SEOG funding application for that year.
(c) The non-Federal share of SEOG awards must be made from the institution's own resources, which include for this purpose—
(1) Institutional grants and scholarships;
(2) Tuition or fee waivers;
(3) State scholarships; and
(4) Foundation or other charitable organization funds.
For the purpose of calculating allocations under section 314(a)(2)(A)(iii) of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (division M of Pub. L. 116-260, December 27, 2020), an institution that has a total endowment of less than $1,000,000, including an institution that does not have an endowment, will be treated by the Secretary as having a total endowment of $1,000,000.
Student, for purposes of the phrases “grants to students”, “emergency financial aid grants to students” or “financial aid grants to students” as used in the Higher Education Emergency Relief (HEERF) programs, is defined as any individual who is or was enrolled (as defined in 34 CFR 668.2) at an eligible institution (as defined in 34 CFR 600.2) on or after March 13, 2020, the date of declaration of the national emergency concerning the novel coronavirus disease.
(a) The Health Education Assistance Loan (HEAL) program is a program of Federal insurance of educational loans that were made to graduate students in the fields of medicine, osteopathic medicine, dentistry, veterinary medicine, optometry, podiatric medicine, pharmacy, public health, chiropractic, health administration, and clinical psychology. The basic purpose of the program is to encourage lenders to make loans to students in these fields who desire to borrow money to pay for their educational costs. In addition, certain nonstudents (such as doctors serving as interns or residents) could borrow in order to pay the current interest charges accruing on earlier HEAL loans. By taking a HEAL loan, the borrower is obligated to repay the lender or holder the full amount of the money borrowed, plus all interest which accrues on the loan.
(b) HEAL loans were made by schools, banks, credit unions, State agencies, and other institutions eligible as lenders under § 681.30. HEAL school eligibility is described in § 681.50.
(c) The Secretary insures each lender or holder for the losses of principal and interest it may incur in the event that a borrower dies; becomes totally and permanently disabled; files for bankruptcy under chapter 11 or 13 of the Bankruptcy Act; files for bankruptcy under chapter 7 of the Bankruptcy Act and files a compliant to determine the dischargeability of the HEAL loan; or defaults on his or her loan. In these instances, if the lender or holder has complied with all HEAL statutes and regulations and with the lender's or holder's insurance contract, then the Secretary pays the amount of the loss to the lender or holder and the borrower's loan is assigned to the Secretary. Only after assignment does the Secretary become the holder of the HEAL loan and the Secretary will use all collection methods legally authorized to obtain repayment of the HEAL loan, including, but not limited to, reporting the borrower's default on the loan to consumer credit reporting agencies, certifying the debt for offset in the Treasury Offset Program (TOP), using available methods to locate the debtor, utilizing administrative wage garnishment, and referring the debt to the Department of Justice for litigation.
(d) Any person who knowingly makes a false statement or misrepresentation in a HEAL loan transaction, bribes or attempts to bribe a Federal official, fraudulently obtains a HEAL loan, or commits any other illegal action in connection with a HEAL loan is subject to possible fine and imprisonment under Federal statute.
(e) In counting the number of days allowed to comply with any provisions of these regulations, Saturdays, Sundays, and holidays are to be included. However, if a due date falls on a Saturday, Sunday, or Federal holiday, the due date is the next Federal work day.
To receive a HEAL loan, a student must satisfy the following requirements:
(a) He or she must be a citizen, national, or lawful permanent resident of the United States, permanent resident of the Trust Territory of the Pacific Islands (the Republic of Palau), the Republic of the Marshall Islands, the Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, or American Samoa, or lawful permanent resident of the Commonwealth of Puerto Rico, the Virgin Islands or Guam;
(b) He or she must be enrolled or accepted for enrollment at a HEAL school in a course of study that leads to one of the following degrees:
(1) Doctor of Medicine.
(2) Doctor of Osteopathic Medicine.
(3) Doctor of Dentistry or equivalent degree.
(4) Doctor of Veterinary Medicine or equivalent degree.
(5) Doctor of Optometry or equivalent degree.
(6) Doctor of Podiatric Medicine or equivalent degree.
(7) Bachelor or Master of Science in Pharmacy or equivalent degree.
(8) Graduate or equivalent degree in Public Health.
(9) Doctor of Chiropractic or equivalent degree.
(10) Doctoral degree in Clinical Psychology.
(11) Masters or doctoral degree in Health Administration.
(c) He or she must be carrying or plan to carry, during the period for which the loan is intended, the normal work load of a full-time student, as determined by the school. The student's work load may include any combination of courses, work experience, research or special studies that the school considers sufficient to classify the student as full time.
(d) If currently enrolled in school, he or she must be in good standing, as determined by the school.
(e)(1) In the case of a pharmacy student, he or she must have satisfactorily completed 3 years of training toward the pharmacy degree. These 3 years of training may have been taken at the pharmacy school or at a different school whose credits are accepted on transfer by the pharmacy school.
(2) The Doctor of Pharmacy degree is considered to be an equivalent degree if it is taken in a school that does not require the Bachelor or Master of Science in pharmacy as a prerequisite for the Doctor of Pharmacy degree.
(f) In the case of a medical, dental or osteopathic student enrolled in a 6-year program that the student may enter directly from secondary school, the student must be enrolled in the last 4 years of the program.
(g) He or she must agree that all funds received under the proposed loan will be used solely for tuition, other reasonable educational expenses, including fees, books, supplies and equipment, and laboratory expenses, reasonable living expenses, reasonable transportation costs (only to the extent that they are directly related to the borrower's education), and the HEAL insurance premium.
(h) He or she must require the loan to pursue the course of study at the school. This determination of the maximum amount of the loan will be made by the school, applying the considerations in § 681.51(f).
(i) If required under section 3 of the Military Selective Service Act to present himself for and submit to registration under such section, he must have presented himself and submitted to registration under such section.
To receive a HEAL loan, a person who is not a student must satisfy all of the following requirements:
(a) He or she must have received a HEAL loan prior to August 13, 1981, for which he or she is required to make payments of interest, but not principal, during the period for which the new loan is intended. This may be the grace period or a period of internship, residency, or deferment.
(b) He or she must continue to meet the citizenship, nationality, or residency qualifications required of student borrowers.
(c) He or she must agree that all funds received under the proposed loan will be used solely for payment of currently accruing interest on HEAL loans and the HEAL insurance premium.
(d) If required under section 3 of the Military Selective Service Act to present himself for and submit to registration under such section, he must have presented himself and submitted to registration under such section.
(a)(1)(i) A student seeking a HEAL loan applies to a participating lender for a HEAL loan by submitting an application form supplied by the school.
(ii) The applicant must fill out the applicant sections of the form completely and accurately.
(2) The student applicant must have been informed of the Federal debt collection policies and procedures in accordance with the Health and Human Services (HHS) Claims Collection Regulation (45 CFR part 30) prior to the student receiving the loan. The applicant must sign a certification statement attesting that the applicant has been notified of the actions the Federal Government can take in the event that the applicant fails to meet the scheduled payments. This signed statement must be maintained by the school and the lender or holder as part of the borrower's official record.
(3) A student applicant must have his or her school complete a portion of the application providing information relating to:
(i) The applicant's eligibility for the loan;
(ii) The cost of his or her education; and
(iii) The total financial resources that are actually available to the applicant for his or her costs of education for the period covered by the proposed HEAL loan, as determined in accordance with § 681.51(f), and other student aid that the applicant has received or will receive for the period covered by the proposed HEAL loan.
(4) The student applicant must certify on the application that the information provided reflects the applicant's total financial resources actually available for his or her costs of education for the period covered by the proposed HEAL loan and the applicant's total indebtedness, and that the applicant has no other financial resources that are available to the applicant or that the applicant will receive for the period covered by the proposed HEAL loan.
(5) A student applicant must certify on the application that if required under section 3 of the Military Selective Service Act to present himself for and submit to registration under such section, he has presented himself and submitted to registration under such section.
(b) The applicant pursuing a full-time course of study at an institution of higher education that is a “participating school” in the Guaranteed Student Loan Program but is not pursuing a course of study listed in § 681.5(b), applies for a HEAL loan as a nonstudent under paragraph (c) of this section.
(c)(1)(i) A nonstudent seeking a HEAL loan applies to a participating lender for a HEAL loan by submitting an application form supplied by the lender.
(ii) The applicant must fill out the applicant sections of the form completely and accurately.
(2) The nonstudent applicant must have been informed of the Federal debt collection policies and procedures in accordance with HHS' Claims Collection Regulation (45 CFR part 30) prior to the nonstudent receiving the loan. The applicant must sign a certification statement attesting that the applicant has been notified of the actions the Federal Government can take in the event that the applicant fails to meet the scheduled payments. This signed statement will be maintained by the lender or holder as part of the borrower's official record.
(3) A nonstudent applicant must have his or her employer or institution, whichever is relevant, certify on the application that the applicant is:
(i) Enrolled as a full-time student in an eligible school, as described in § 681.12;
(ii) A participant in an accredited internship or residency program, as described in § 681.11(a);
(iii) A member of the Armed Forces of the United States;
(iv) A Peace Corps volunteer;
(v) A member of the National Health Service Corps; or
(vi) A full-time VISTA volunteer under Title I of the Domestic Volunteer Service Act of 1973.
(4) The nonstudent applicant seeking a HEAL loan during the grace period applies to the lender directly.
(5) A nonstudent applicant must certify on the application that if required under section 3 of the Military Selective Service Act to present himself for and submit to registration under such section, he has presented himself and submitted to registration under such section.
(6) The nonstudent applicant must have certified on the application that the information provided reflects the applicant's total financial resources and indebtedness.
(a) The borrower's rights. (1) Once the terms of the HEAL loan have been established, the lender or holder may not change them without the borrower's consent.
(2) The lender must provide the borrower with a copy of the completed promissory note when the loan is made. The lender or holder must return the original note to the borrower when the loan is paid in full.
(3) A lender must disburse HEAL loan proceeds as described in § 681.33(f).
(4) The lender or holder must provide the borrower with a copy of the repayment schedule before repayment begins.
(5) If the loan is sold from one lender or holder to another lender or holder, or if the loan is serviced by a party other than the lender or holder, the buyer must notify the borrower within 30 days of the transaction.
(6) The borrower does not have to begin repayment until 9 full months after leaving school or an accredited internship or residency program as described in § 681.11.
(7) The borrower is entitled to deferment from repayment of the principal and interest installments during periods described in § 681.12.
(8) The borrower may prepay the whole or any portion of the loan at any time without penalty.
(9) The lender or holder must allow the borrower to repay a HEAL loan according to a graduated repayment schedule.
(10) The borrower's total loan obligation is cancelled in the event of death or total and permanent disability.
(11) To assist the borrower in avoiding default, the lender or holder may grant the borrower forbearance. Forbearance, including circumstances in which the lender or holder must grant forbearance, is more fully described in § 681.37.
(12) Any borrower who received a fixed interest rate HEAL loan in excess of 12 percent per year could have entered into an agreement with the lender which made this loan for the reissuance of the loan in accordance with section 739A of the Public Health Service Act (the Act).
(b) The borrower's responsibilities. (1) The borrower must pay any insurance premium that the lender may require as more fully described in § 681.14.
(2) The borrower must pay all interest charges on the loan as required by the lender or holder.
(3) The borrower must immediately notify the lender or holder in writing in the event of:
(i) Change of address;
(ii) Change of name; or
(iii) Change of status that authorizes deferment.
(4) The borrower must repay the loan in accordance with the repayment schedule.
(5) A borrower may not have a HEAL loan discharged in bankruptcy during the first 5 years of the repayment period. This prohibition against the discharge of a HEAL loan applies to bankruptcy under any chapter of the Bankruptcy Act, including Chapter 13. A borrower may have a HEAL loan discharged in bankruptcy after the first 5 years of the repayment period only upon a finding by the Bankruptcy Court that the non-discharge of such debt would be unconscionable and upon the condition that the Secretary shall not have waived his or her rights to reduce any Federal reimbursements or Federal payments for health services under any Federal law in amounts up to the balance of the loan.
(6) If the borrower fails to make payments on the loan on time, the total amount to be repaid by the borrower may be increased by additional interest, late charges, attorney's fees, court costs, and other collection charges. In addition, the Secretary may offset amounts attributable to an unpaid loan from reimbursements or payment for health services provided under any Federal law to a defaulted borrower practicing his or her profession.
(a) Student borrower. An eligible student may borrow an amount to be used solely for expenses, as described in § 681.5(g), incurred or to be incurred over a period of up to an academic year and disbursed in accordance with § 681.33(f). The maximum amount he or she may receive for that period shall be determined by the school in accordance with § 681.51(f) within the following limitations:
(1) A student enrolled in a school of medicine, osteopathic medicine, dentistry, veterinary medicine, optometry or podiatric medicine may borrow up to $80,000 under this part. The amount received may not exceed $20,000 in any academic year.
(2) A student enrolled in a school of public health, pharmacy, or chiropractic, or a graduate program in health administration, clinical psychology, or allied health, may borrow up to $50,000 under this part. The amount received may not exceed $12,500 per academic year.
(3) For purposes of this paragraph, an academic year means the traditional approximately 9-month September-to-June annual session. For the purpose of computing academic year equivalents for students who, during a 12-month period, attend for a longer period than the traditional academic year, the academic year will be considered to be 9 months in length.
(4) The student's estimated cost of attendance shall not exceed the estimated cost of attendance of all students in like circumstances pursuing a similar curriculum at that school.
(b) Non-student borrower. An eligible nonstudent may borrow amounts under this authority with the following restrictions:
(1) In no case may an eligible nonstudent borrower receive a loan that is greater than the sum of the HEAL insurance premium plus the interest that is expected to accrue and must be paid on the borrower's HEAL loans during the period for which the new loan is intended.
(2) An eligible nonstudent in the field of medicine, osteopathic medicine, dentistry, veterinary medicine, optometry, or podiatric medicine may borrow up to $80,000 under this part including loans obtained while the borrower was a student. The loan amount may not exceed $20,000 in any 12-month period.
(3) An eligible nonstudent in the field of pharmacy, public health, chiropractic, health administration, or clinical psychology may borrow up to $50,000 under this part including loans obtained while the borrower was a student. The loan amount received under this part may not exceed $12,500 in any 12-month period.
(a) Commencement of repayment. (1) The borrower's repayment period begins the first day of the 10th month after the month he or she ceases to be a full-time student at a HEAL school. The 9-month period before the repayment period begins is popularly called the “grace period.”
(i) Postponement for internship or residency program. However, if the borrower becomes an intern or resident in an accredited program within 9 full months after leaving school, then the borrower's repayment period begins the first day of the 10th month after the month he or she ceases to be an intern or resident. For a borrower who receives his or her first HEAL loan on or after October 22, 1985, this postponement of the beginning of the repayment period for participation in an internship or residency program is limited to 4 years.
(ii) Postponement for fellowship training or educational activity. For any HEAL loan received on or after October 22, 1985, if the borrower becomes an intern or resident in an accredited program within 9 full months after leaving school, and subsequently enters into a fellowship training program or an educational activity, as described in § 681.12(b)(1) and (2), within 9 months after the completion of the accredited internship or residency program or prior to the completion of such program, the borrower's repayment period begins on the first day of the 10th month after the month he or she ceases to be a participant in the fellowship training program or educational activity. Postponement of the commencement of the repayment period for either activity is limited to 2 years.
(iii) Non-student borrower. If a nonstudent borrower obtains another HEAL loan during the grace period or period of internship, residency, or deferment (as defined in § 681.12), the repayment period on this loan begins when repayment on the borrower's other HEAL loans begins or resumes.
(2) An accredited internship or residency program must be approved by one of the following accrediting agencies:
(i) Accreditation Council for Graduate Medical Education.
(ii) Council on Optometric Education.
(iii) Commission on Accreditation of Dental and Dental Auxiliary Programs.
(iv) American Osteopathic Association.
(v) Council on Podiatry Education.
(vi) American Council on Pharmaceutical Education.
(vii) Council on Education for Public Health.
(viii) American College of Veterinary Surgeons.
(ix) Council on Chiropractic Education.
(b) Length of repayment period. In general, a lender or holder must allow a borrower at least 10 years, but not more than 25 years, to repay a loan calculated from the beginning of the repayment period. A borrower must fully repay a loan within 33 years from the date that the loan is made.
(1) For a HEAL borrower who received any HEAL loan prior to October 22, 1985, periods of deferment (as described in § 681.12) are not included when calculating the 10 to 25 or 33 year limitations.
(2) For a borrower who receives his or her first HEAL loan on or after October 22, 1985, periods of deferment (as described in § 681.12) are included when calculating the 33 year limitation, but are not included when calculating the 10 to 25 year limitation.
(c) Prepayment. The borrower may prepay the whole or any part of the loan at any time without penalty.
(d) Minimum annual payment. During each year of repayment, a borrower's payments to all holders of his or her HEAL loans must total the interest that accrues during the year on all of the loans, unless the borrower, in the promissory note or other written agreement, agrees to make payments during any year or any repayment period in a lesser amount.
(e) Repayment schedule agreement. At least 30 and not more than 60 days before the commencement of the repayment period, a borrower must contact the holder of the loan to establish the precise terms of repayment. The borrower may select a monthly repayment schedule with substantially equal installment payments or a monthly repayment schedule with graduated installment payments that increase in amount over the repayment period. If the borrower does not contact the lender or holder and does not respond to contacts from the lender or holder, the lender or holder may establish a monthly repayment schedule with substantially equal installment payments, subject to the terms of the borrower's HEAL note.
(f) Supplemental repayment agreement. (1) A lender or holder and a borrower may enter into an agreement supplementing the regular repayment schedule agreement. Under a supplemental repayment agreement, the lender or holder agrees to consider that the borrower has met the terms of the regular repayment schedule as long as the borrower makes payments in accordance with the supplemental schedule.
(2) The purpose of a supplemental repayment agreement is to permit a lender or holder, at its option, to offer a borrower a repayment schedule based on other than equal or graduated payments. (For example, a supplemental repayment agreement may base the amount of the borrower's payments on his or her income.)
(3) The supplemental schedule must contain terms which, according to the Secretary, do not unduly burden the borrower and do not extend the Secretary's insurance liability beyond the number of years specified in paragraph (b) of this section. The supplemental schedule must be approved by the Secretary prior to the start of repayment.
(4) The lender or holder may establish a supplemental repayment agreement over the borrower's objection only if the borrower's written consent to enter into a supplemental agreement was obtained by the lender at the time the loan was made.
(5) A lender or holder may assign a loan subject to a supplemental repayment agreement only if it specifically notifies the buyer of the terms of the supplemental agreement. In such cases, the loan and the supplemental agreement must be assigned together.
(6) As authorized by section 525 of the Consolidated Appropriations Act, 2014, any repayment plan available under part B of title IV of the HEA (the Federal Family Education Loan Program (FFELP)) is available for servicing, collecting, or enforcing HEAL loans. Such repayment plans are set forth in 34 CFR part 682, and in particular in §§ 682.102, 682.209, and 682.215.
(a) After the repayment period has commenced, installments of principal and interest need not be paid during any period:
(1) During which the borrower is pursuing a full-time course of study at a HEAL school or at an institution of higher education that is a “participating school” in the William D. Ford Federal Direct Loan Program;
(2) Up to 4 years during which the borrower is a participant in an accredited internship or residency program, as described in § 681.11(a)(2). For a borrower who receives his or her first HEAL loan on or after October 22, 1985, this total of 4 years for an internship or residency program includes any period of postponement of the repayment period, as described in § 681.11(a)(1);
(3) Up to 3 years during which the borrower is a member of the Armed Forces of the United States;
(4) Up to 3 years during which the borrower is in service as a volunteer under the Peace Corps Act;
(5) Up to 3 years during which the borrower is a member of the National Health Service Corps; or
(6) Up to 3 years during which the borrower is a full-time volunteer under title I of the Domestic Volunteer Service Act of 1973.
(b) For any HEAL loan received on or after October 22, 1985, after the repayment period has commenced, installments of principal and interest need not be paid during any period for up to 2 years during which the borrower is a participant in:
(1) A fellowship training program, which:
(i) Is directly related to the discipline for which the borrower received the HEAL loan;
(ii) Begins within 12 months after the borrower ceases to be a participant in an accredited internship or residency program, as described in § 681.11(a)(2), or prior to the completion of the borrower's participation in such program;
(iii) Is a full-time activity in research or research training or health care policy;
(iv) Is not a part of, an extension of, or associated with an internship or residency program, as described in § 681.11(a)(2);
(v) Pays no stipend or one which is not more than the annual stipend level established by the Public Health Service for the payment of uniform levels of financial support for trainees receiving graduate and professional training under Public Health Service grants, as in effect at the time the borrower requests the deferment; and
(vi) Is a formally established fellowship program which was not created for a specific individual; or
(2) A full-time educational activity at an institution defined by section 435(b) of the HEA which:
(i) Is directly related to the discipline for which the borrower received the HEAL loan;
(ii) Begins within 12 months after the borrower ceases to be a participant in an accredited internship or residency program, as described in § 681.11(a)(2), or prior to the completion of the borrower's participation in such program;
(iii) Is not a part of, an extension of, or associated with an internship or residency program, as described in § 681.11(a)(2); and
(iv) Is required for licensure, registration, or certification in the State in which the borrower intends to practice the discipline for which the borrower received the HEAL loan.
(c)(1) To receive a deferment, including a deferral of the onset of the repayment period (see § 681.11(a)), a borrower must at least 30 days prior to, but not more than 60 days prior to, the onset of the activity and annually thereafter, submit to the lender or holder evidence of his or her status in the deferment activity and evidence that verifies deferment eligibility of the activity (with the full expectation that the borrower will begin the activity). It is the responsibility of the borrower to provide the lender or holder with all required information or other information regarding the requested deferment. If written evidence that verifies eligibility of the activity and the borrower for the deferment, including a certification from an authorized official (e.g., the director of the fellowship activity, the dean of the school, etc.), is received by the lender or holder within the required time limit, the lender or holder must approve the deferment. The lender or holder may rely in good faith upon statements of the borrower and the authorized official, except where those statements or other information conflict with information available to the lender or holder. When those verification statements or other information conflict with information available to the lender or holder, to indicate that the applicant fails to meet the requirements for deferment, the lender or holder may not approve the deferment until those conflicts are resolved.
(2) For those activities described in paragraphs (b)(1) or (b)(2) of this section, the borrower may request that the Secretary review a decision by the lender or holder denying the deferment by sending to the Secretary copies of the application for deferment and the lender's or holder's denial of the request. However, if information submitted to the lender or holder conflicts with other information available to the lender or holder, to indicate that the borrower fails to meet the requirements for deferment, the borrower may not request a review until such conflicts have been resolved. During the review process, the lender or holder must comply with any requests for information made by the Secretary. If the Secretary determines that the fellowship or educational activity is eligible for deferment and so notifies the lender or holder, the lender or holder must approve the deferment.
(a) Rate. At the lender's option, the interest rate on the HEAL loan may be calculated on a fixed rate or on a variable rate basis. However, whichever method is selected must continue over the life of the loan, except where the loan is consolidated with another HEAL loan.
(1) For all loans made on or after October 22, 1985, for each calendar quarter, the Secretary determines the maximum annual HEAL interest rate by determining the average of the bond equivalent rates reported for the 91-day U.S. Treasury bills auctioned for the preceding calendar quarter, adding 3 percentage points, and rounding that amount to the next higher one-eighth of 1 percent.
(2) Interest that is calculated on a fixed rate basis is determined for the life of the loan during the calendar quarter in which the loan is executed. It may not exceed the rate determined for that quarter by the Secretary under paragraph (a)(1) of this section.
(3) Interest that is calculated on a variable rate basis varies every calendar quarter throughout the life of the loan as the market price of U.S. Treasury bills changes. For any quarter it may not exceed the rate determined by the Secretary under paragraph (a)(1) of this section.
(4) The Secretary announces the rate determined under paragraph (a)(1) of this section on a quarterly basis through a notice published on the Department's student aid Web site at www.ifap.ed.gov.
(b) Compounding of interest. Interest accrues from the date the loan is disbursed until the loan is paid in full. Unpaid accrued interest shall be compounded not more frequently than semiannually and added to principal. However, a lender or holder may postpone the compounding of interest before the beginning of the repayment period or during periods of deferment or forbearance and add interest to principal at the time repayment of principal begins or resumes.
(c) Payment. Repayment of principal and interest is due when the repayment period begins. A lender or holder must permit a borrower to postpone paying interest before the beginning of the repayment period or during a period of deferment or forbearance. In these cases, payment of interest begins or resumes on the date repayment of principal begins or resumes.
(d) Usury laws. No provision of any Federal or State law that limits the rate or amount of interest payable on loans shall apply to a HEAL loan.
(a) General. (1) The Secretary insures each lender or holder for the losses of principal and interest it may incur in the event that a borrower dies; becomes totally and permanently disabled; files for bankruptcy under chapter 11 or 13 of the Bankruptcy Act; files for bankruptcy under chapter 7 of the Bankruptcy Act and files a complaint to determine the dischargeability of the HEAL loan; or defaults on his or her loan. For this insurance, the Secretary charges the lender an insurance premium. The insurance premium is due to the Secretary on the date of disbursement of the HEAL loan.
(2) The lender may charge the borrower an amount equal to the cost of the insurance premium. The cost of the insurance premium may be charged to the borrower by the lender in the form of a one-time special charge with no subsequent adjustments required. The lender may bill the borrower separately for the insurance premium or may deduct an amount attributable to it from the loan proceeds before the loan is disbursed. In either case, the lender must clearly identify to the borrower the amount of the insurance premium and the method of calculation.
(3) If the lender does not pay the insurance premium on or before 30 days after disbursement of the loan, a late fee will be charged on a daily basis at the same rate as the interest rate that the lender charges for the HEAL loan for which the insurance premium is past due. The lender may not pass on this late fee to the borrower.
(4) HEAL insurance coverage ceases to be effective if the insurance premium is not paid within 60 days of the disbursement of the loan.
(5) Except in cases of error, premiums are not refundable by the Secretary, and need not be refunded by the lender to the borrower, even if the borrower graduates or withdraws from the school, defaults, dies or becomes totally and permanently disabled.
(b) Rate. The rate of the insurance premium shall not exceed the statutory maximum. The Secretary announces changes in the rate of the insurance premium through a notice published on the Department's student aid Web site: www.ifap.ed.gov.
(c) Method of calculation—(1) Student borrowers. For loans disbursed prior to July 22, 1986, the lender must calculate the insurance premium on the basis of the number of months beginning with the month following the month in which the loan proceeds are disbursed to the student borrower and ending 9 full months after the month of the student's anticipated date of graduation. For loans disbursed on or after July 22, 1986, the insurance premium shall be calculated as a one-time flat rate on the principal of the loan at the time of disbursement.
(2) Non-student borrowers. For loans disbursed prior to July 22, 1986, the lender must calculate the insurance premium for nonstudent borrowers on the basis of the number of months beginning with the month following the month in which the loan proceeds are disbursed to the borrower and ending at the conclusion of the month preceding the month in which repayment of principal is expected to begin or resume on the borrower's previous HEAL loans. For loans disbursed on or after July 22, 1986, the insurance premium shall be calculated as a one-time flat rate on the principal of the loan at the time of disbursement.
(3) Multiple installments. In cases where the lender disburses the loan in multiple installments, the insurance premium is calculated for each disbursement.
(a) Late charges. If the borrower fails to pay all of a required installment payment or fails to provide written evidence that verifies eligibility for the deferment of the payment within 30 days after the payment's due date, the lender or holder will require that the borrower pay a late charge. A late charge must be equal to 5 percent of the unpaid portion of the payment due.
(b) Collection charges. The lender or holder may also require that the borrower pay the holder of the note for reasonable costs incurred by the holder or its agent in collecting any installment not paid when due. These costs may include attorney's fees, court costs, telegrams, and long-distance phone calls. The holder may not charge the borrower for the normal costs associated with preparing letters and making personal and local telephone contacts with the borrower. A service agency's fee for normal servicing of a loan may not be passed on to the borrower, either directly or indirectly. No charges, other than those authorized by this section, may be passed on to the borrower, either directly or indirectly, without prior approval of the Secretary.
(c) Other loan making costs. A lender may not pass on to the borrower any cost of making a HEAL loan other than the costs of the insurance premium.
Neither a lender nor a school may obtain a borrower's power of attorney or other authorization to endorse a disbursement check on behalf of a borrower. The borrower must personally endorse the check and may not authorize anyone else to endorse it on his or her behalf.
(a) A HEAL loan must be made without security.
(b) With one exception, it must also be made without endorsement. If a borrower is a minor and cannot under State law create a legally binding obligation by his or her own signature, a lender may require an endorsement by another person on the borrower's HEAL note. For purposes of this paragraph, an “endorsement” means a signature of anyone other than the borrower who is to assume either primary or secondary liability on the note.
HEAL loans may be consolidated as permitted in 34 CFR 685.220.
All HEAL forms are approved by the Secretary and may not be changed without prior approval by the Secretary. HEAL forms shall not be signed in blank by a borrower, a school, a lender or holder, or an agent of any of these. The Secretary may prescribe who must complete the forms, and when and to whom the forms must be sent. All HEAL forms must contain a statement that any person who knowingly makes a false statement or misrepresentation in a HEAL loan transaction, bribes or attempts to bribe a Federal official, fraudulently obtains a HEAL loan, or commits any other illegal action in connection with a HEAL loan is subject to possible fine and imprisonment under Federal statute.
After paying a default claim on a HEAL loan, the Secretary attempts to collect from the borrower and any valid endorser in accordance with the Federal Claims Collection Standards (4 CFR parts 101 through 105), the Office of Management and Budget Circular A-129, issued January 2013, and the Department's Claims Collection Regulation (34 CFR parts 30, 31, and 34). The Secretary attempts collection of all unpaid principal, interest, penalties, administrative costs, and other charges or fees, except in the following situations:
(a) The borrower has a valid defense on the loan. The Secretary refrains from collection against the borrower or endorser to the extent of any defense that the Secretary concludes is valid. Examples of a valid defense include infancy or proof of repayment in part or in full.
(b) A school owes the borrower a refund for the period covered by the loan. In this situation, the Secretary refrains from collection to the extent of the unpaid refund if the borrower assigns to the Secretary the right to receive the refund.
(c) The school or lender or holder is the subject of a lawsuit or Federal administrative proceeding. In this situation, if the Secretary determines that the proceeding involves allegations that, if proven, would provide the borrower with a full or partial defense on the loan, then the Secretary may suspend collection activity on all or part of a loan until the proceeding ends. The Secretary suspends collection activity only for so long as the proceeding is being energetically prosecuted in good faith and the allegations that relate to the borrower's defense are reasonably likely to be proven.
(d) The borrower dies or becomes totally and permanently disabled. In this situation, the Secretary terminates all collection activity against the borrower. The Secretary follows the procedures and standards in 34 CFR 685.213 and 34 CFR 685.212(a) to determine if the borrower is totally and permanently disabled. If the borrower dies or becomes totally and permanently disabled, the Secretary also terminates all collection activity against any endorser.
(a) Student authorization. By applying for a HEAL loan, a student authorizes a participating school to make payment of a refund that is allocable to a HEAL loan directly to the original lender (or to a subsequent holder of the loan note, if the school has knowledge of the holder's identity).
(b) Treatment by lenders or holders. (1) A holder of a HEAL loan must treat a refund payment received from a HEAL school as a downward adjustment in the principal amount of the loan.
(2) When a lender receives a school refund check for a loan it no longer holds, the lender must transfer that payment to the holder of the loan and either inform the borrower about the refund check and where it was sent or, if the borrower's address is unknown, notify the current holder that the borrower was not informed. The current holder must provide the borrower with a written notice of the refund payment.
(a) A HEAL lender may hold loans under the HEAL program.
(b) The following types of organizations were eligible to apply to the Secretary to be HEAL lenders:
(1) A financial or credit institution (including a bank, savings and loan association, credit union, or insurance company) which is subject to examination and supervision in its capacity as a lender by an agency of the United States or of the State in which it has its principal place of business;
(2) A pension fund approved by the Secretary;
(3) An agency or instrumentality of a State; and
(4) A private nonprofit entity, designated by the State, regulated by the State, and approved by the Secretary.
(c) The following types of organizations are eligible to apply to the Secretary to be HEAL holders:
(1) Public entities in the business of purchasing student loans;
(2) Navient (formerly known as the Student Loan Marketing Association, or “Sallie Mae”); and
(3) Other eligible lenders.
(d) HEAL holders must comply with any provisions in the regulations required of HEAL lenders including, but not limited to, provisions regarding applications, contracts, and due diligence.
(a) In order to be a HEAL lender or holder, an eligible organization must submit an application to the Secretary annually.
(b) In determining whether to enter into an insurance contract with an applicant and what the terms of that contract should be, the Secretary may consider the following criteria:
(1) Whether the applicant is capable of complying with the requirements in the HEAL regulations applicable to lenders and holders;
(2) The amount and rate of loans which are currently delinquent or in default, if the applicant has had prior experience with similar Federal or State student loan programs; and
(3) The financial resources of the applicant.
(c) The applicant must develop and follow written procedures for servicing and collecting HEAL loans. These procedures must be reviewed during the biennial audit required by § 681.42(d). If the applicant uses procedures more stringent than those required by §§ 681.34 and 681.35 for its other loans of comparable dollar value, on which it has no Federal, State, or other third party guarantee, it must include those more stringent procedures in its written procedures for servicing and collecting its HEAL loans.
(d) The applicant must submit sufficient materials with his or her application to enable the Secretary to fairly evaluate the application in accordance with these criteria.
(a)(1) If the Secretary approves an application to be a HEAL lender or holder, the Secretary and the lender or holder must sign an insurance contract. Under this contract, the lender or holder agrees to comply with all the laws, regulations, and other requirements applicable to its participation in the HEAL program and the Secretary agrees to insure each eligible HEAL loan held by the lender or holder against the borrower's default, death, total and permanent disability, bankruptcy under chapter 11 or 13 of the Bankruptcy Act, or bankruptcy under chapter 7 of the Bankruptcy Act when the borrower files a complaint to determine the dischargeability of the HEAL loan. The Secretary's insurance covers 100 percent of the lender's or holder's losses on both unpaid principal and interest, except to the extent that a borrower may have a defense on the loan other than infancy.
(2) HEAL insurance, however, is not unconditional. The Secretary issues HEAL insurance on the implied representations of the lender that all the requirements for the initial insurability of the loan have been met. HEAL insurance is further conditioned upon compliance by the holder of the loan with the HEAL statute and regulations, the lender's or holder's insurance contract, and its own loan management procedures set forth in writing pursuant to § 681.31(c). The contract may contain a limit on the duration of the contract and the number or amount of HEAL loans a lender may make or hold. Each HEAL lender has either a standard insurance contract or a comprehensive insurance contract with the Secretary, as described below.
(b) Standard insurance contract. A lender with a standard insurance contract must submit to the Secretary a borrower's loan application for HEAL insurance on each loan that the lender determines to be eligible. The Secretary notifies the lender whether the loan is or is not insurable, the amount of the insurance, and the expiration date of the insurance commitment. A loan which has been disbursed under a standard contract of insurance prior to the Secretary's approval of the application is considered not to have been insured.
(c)(1) Comprehensive insurance contract. A lender with a comprehensive insurance contract may disburse a loan without submitting an individual borrower's loan application to the Secretary for approval. All eligible loans made by a lender with this type of contract are insured immediately upon disbursement.
(2) The Secretary will revoke the comprehensive contract of any lender who utilizes procedures which are inconsistent with the HEAL statute and regulations, the lender's insurance contract, or its own loan management procedures set forth in writing pursuant to § 681.31(c), and require that such lenders disburse HEAL loans only under a standard contract. When the Secretary determines that the lender is in compliance with the HEAL statute and regulations and its own loan management procedures set forth in writing pursuant to § 681.31(c), the lender may reapply for a comprehensive contract.
(3) In providing comprehensive contracts, the Secretary shall give priority to eligible lenders that:
(i) Make loans to students at interest rates below the rates prevailing during the period involved; or
(ii) Make loans under terms that are otherwise favorable to the student relative to the terms under which eligible lenders are generally making loans during the period involved.
The loan-making process includes the processing of necessary forms, the approval of a borrower for a loan, determination of a borrower's creditworthiness, the determination of the loan amount (not to exceed the amount approved by the school), the explanation to a borrower of his or her responsibilities under the loan, the execution of the promissory note, and the disbursement of the loan proceeds. A lender may rely in good faith upon statements of an applicant and the HEAL school contained in the loan application papers, except where those statements are in conflict with information obtained from the report on the applicant's credit history, or other information available to the lender. Except where the statements are in conflict with information obtained from the applicant's credit history or other information available to the lender, a lender making loans to nonstudent borrowers may rely in good faith upon statements by the borrower and authorizing officials of internship, residency, or other programs for which a borrower may receive a deferment.
(a) Processing of forms. Before making a HEAL loan, a lender must determine that all required forms have been completed by the borrower, the HEAL school, the lender, and the authorized official for an internship, a residency, or other deferment activity.
(b) Approval of borrower. A lender may make a HEAL loan only to an eligible student or nonstudent borrower.
(c) Lender determination of the borrower's creditworthiness. The lender may make HEAL loans only to an applicant that the lender has determined to be creditworthy. This determination must be made at least once for each academic year during which the applicant applies for a HEAL loan. An applicant will be determined to be “creditworthy” if he or she has a repayment history that has been satisfactory on any loans on which payments have become due. The lender may not determine that an applicant is creditworthy if the applicant is currently in default on any loan (commercial, consumer, or educational) until the delinquent account is made current or satisfactory arrangements are made between the affected lender(s) and the HEAL applicant. The lender must obtain documentation, such as a letter from the authorized official(s) of the affected lender(s) or a corrected credit report indicating that the HEAL applicant has taken satisfactory actions to bring the account into good standing. It is the responsibility of the HEAL loan applicant to assure that the lender receives each such documentation. No loan may be made to an applicant who is delinquent on any Federal debt until the delinquent account is made current or satisfactory arrangements are made between the affected agency and the HEAL applicant. The lender must receive a letter from the authorized Federal official of the affected Federal agency stating that the borrower has taken satisfactory actions to bring the account into good standing. It is the responsibility of the loan applicant to assure that the lender has received each such letter. The absence of any previous credit, however, is not an indication that the applicant is not creditworthy and is not to be used as a reason to deny the status of creditworthy to an applicant. The lender must determine the creditworthiness of the applicant using, at a minimum, the following:
(1) A report of the applicant's credit history obtained from an appropriate consumer credit reporting agency, which must be used in making the determinations required by paragraph (c) of this section; and
(2) For student applicants only, the certification made by the applicant's school under § 681.51(e).
(d) Determination of loan amount. A lender may not make a HEAL loan in an amount that exceeds the permissible annual and aggregate maximums described in § 681.10.
(e) Promissory note. (1) Each loan must be evidenced by a promissory note approved by the Secretary. A lender must obtain the Secretary's prior approval of the note form before it makes a HEAL loan evidenced by a promissory note containing any deviation from the provisions of the form most currently approved by the Secretary. The lender must give the borrower a copy of each executed note.
(2) The lender must explain to the borrower that the loan must be repaid and that the loan proceeds may be applied toward educational expenses only.
(f) Disbursement of HEAL loan. (1) A lender must disburse HEAL loan proceeds:
(i) To a student borrower, by means of a check or draft payable jointly to the student borrower and the HEAL school. Except where a lender is also a school, a lender must mail the check or draft to the school. A lender may not disburse the loan proceeds earlier than is reasonably necessary to meet the cost of education for the period for which the loan is made.
(ii) To a nonstudent borrower, by means of a check or draft payable to the borrower. However, when a previous loan is held by a different lender, the current lender must make the HEAL loan disbursement check or draft payable jointly to the borrower and the holder of the previous HEAL loan for which interest is payable.
(2) Effective July 1, 1987, a lender must disburse the HEAL loan proceeds in two or more installments unless the loan is intended to cover a period of no more than one-half an academic year. The amount disbursed at one time must correspond to the borrower's educational expenses for the period for which the disbursement is made, and must be indicated by the school on the borrower's application. If the loan is intended for more than one-half an academic year, the school must indicate on the borrower's application both the approximate dates of disbursement and the amount the borrower will need on each such date. In no case may the lender disburse the proceeds earlier than is reasonably necessary to meet the costs of education for the period for which the disbursement or the loan is made.
(g) If the lender determines that the applicant is not creditworthy, pursuant to paragraph (c) of this section, the lender must not approve the HEAL loan request. If the applicant is a student, the lender must notify the applicant and the applicant's school named on the application form of the denial of a HEAL loan, stating the reason for the denial.
(h) The lender must report a borrower's HEAL indebtedness to one or more national credit bureaus within 120 days of the date the final disbursement on the loan is made.
HEAL loan account servicing involves the proper maintenance of records, and the proper review and management of accounts. Generally accepted account servicing standards ensure that collections are received and accounted for, delinquent accounts are identified promptly, and reports are produced comparing actual results to previously established objectives.
(a) Borrower inquiries. A lender or holder must respond on a timely basis to written inquiries and other communications from a borrower and any endorser of a HEAL loan.
(b) Conversion of loan to repayment status. (1) At least 30 and not more than 60 days before the commencement of the repayment period, the lender or holder must contact the borrower in writing to establish the terms of repayment. Lenders or holders may not charge borrowers for the additional interest or other charges, penalties, or fees that accrue when a lender or holder does not contact the borrower within this time period and a late conversion results.
(2) Terms of repayment are established in a written schedule that is made a part of, and subject to the terms of, the borrower's original HEAL note.
(3) The lender or holder may not surrender the original promissory note to the borrower until the loan is paid in full. At that time, the lender or holder must give the borrower the original promissory note.
(c) Borrower contacts. The lender or holder must contact each borrower to request updated contact information for the borrower and to notify the borrower of the balance owed for principal, interest, insurance premiums, and any other charges or fees owed to the lender, at least every 6 months from the time the loan is disbursed. The lender or holder must use this notice to remind the borrower of the option, without penalty, to pay all or part of the principal and accrued interest at any time.
(d) Skip-tracing. If, at any time, the lender or holder is unable to locate a borrower, the lender or holder must initiate skip-tracing procedures as described in § 682.411.
A lender or holder must exercise due diligence in the collection of a HEAL loan with respect to both a borrower and any endorser. In order to exercise due diligence, a lender or holder must implement the following procedures when a borrower fails to honor his or her payment obligations:
(a) When a borrower is delinquent in making a payment, the lender or holder must remind the borrower within 15 days of the date the payment was due by means of a written contact. If payments do not resume, the lender or holder must contact both the borrower and any endorser at least 3 more times at regular intervals during the 120-day delinquent period following the first missed payment of that 120-day period. The second demand notice for a delinquent account must inform the borrower that the continued delinquent status of the account will be reported to consumer credit reporting agencies if payment is not made. Each of the required four contacts must consist of at least a written contact which has an address correction request on the envelope. The last contact must consist of a telephone contact, in addition to the required letter, unless the borrower cannot be contacted by telephone. The lender or holder may choose to substitute a personal contact for a telephone contact. A record must be made of each attempt to contact and each actual contact, and that record must be placed in the borrower's file. Each contact must become progressively firmer in tone. If the lender or holder is unable to locate the borrower and any endorser at any time during the period when the borrower is delinquent, the lender or holder must initiate the skip-tracing procedures described in § 681.34(d).
(b) When a borrower is 90 days delinquent in making a payment, the lender or holder must immediately request preclaim assistance from the Department's servicer. The Secretary does not pay a default claim if the lender or holder fails to request preclaim assistance.
(c) Prior to the filing of a default claim, a lender or holder must use, at a minimum, collection practices that are at least as extensive and effective as those used by the lender or holder in the collection of its other loans. These practices must include, but need not be limited to:
(1) Using collection agents, which may include its own collection department or other internal collection agents;
(2) Immediately notifying an appropriate consumer credit reporting agency regarding accounts overdue by more than 60 days; and
(3) Commencing and prosecuting an action for default unless:
(i) In the determination of the Secretary that:
(A) The lender or holder has made reasonable efforts to serve process on the borrower involved and has been unsuccessful in these efforts; or
(B) Prosecution of such an action would be fruitless because of the financial or other circumstances of the borrower;
(ii) For loans made before November 4, 1988, the loan involved was made in an amount of less than $5,000; or
(iii) For loans made on or after November 4, 1988, the loan involved was made in an amount of less than $2,500.
(d) If the Secretary's preclaim assistance locates the borrower, the lender or holder must implement the loan collection procedures described in this section. When the Secretary's preclaim assistance is unable to locate the borrower, a default claim may be filed by the lender as described in § 681.40. The Secretary does not pay a default claim if the lender or holder has not complied with the HEAL statute and regulations or the lender's or holder's insurance contract.
(e) If a lender or holder does not sue the borrower, it must send a final demand letter to the borrower and any endorser at least 30 days before a default claim is filed.
(f) If a lender or holder sues a defaulted borrower or endorser, it may first apply the proceeds of any judgment against its reasonable attorney's fees and court costs, whether or not the judgment provides for these fees and costs.
(g) Collection of chapter 7 bankruptcies. (1) If a borrower files for bankruptcy under chapter 7 of the Bankruptcy Act and does not file a complaint to determine the dischargeability of the HEAL loan, the lender or holder is responsible for monitoring the bankruptcy case in order to pursue collection of the loan after the bankruptcy proceedings have been completed.
(i) For any loan for which the lender or holder had not begun to litigate against the borrower prior to the imposition of the automatic stay, the period of the automatic stay is to be considered as an extended forbearance authorized by the Secretary, in addition to the 2-year period of forbearance which lenders and holders are authorized to grant without prior approval from the Secretary. Only periods of delinquency following the date of receipt (as documented by a date stamp) of the discharge of debtor notice (or other written notification from the court or the borrower's attorney of the end of the automatic stay imposed by the Bankruptcy Court) can be included in determining default, as described in § 681.40(c)(1)(i). The lender or holder must attempt to reestablish repayment terms with the borrower in writing no more than 30 days after receipt of the discharge of debtor notice (or other written notification from the court or the borrower's attorney of the end of the automatic stay imposed by the Bankruptcy Court), in accordance with the procedures followed at the end of a forbearance period. If the borrower fails to make a payment as scheduled, the lender or holder must attempt to obtain repayment through written and telephone contacts in accordance with the intervals established in paragraph (a)(1) of this section, and must perform the other HEAL loan collection activities required in this section, before filing a default claim.
(ii) For any loan for which the lender or holder had begun to litigate against the borrower prior to the imposition of the automatic stay, the lender or holder must, upon written notification from the court or the borrower's attorney that the bankruptcy proceedings have been completed, either resume litigation or treat the loan in accordance with paragraph (g)(1)(i) of this section.
(2) If the lender or holder has not received written notification of discharge within 12 months of the date that the borrower filed for bankruptcy, the lender or holder must contact the court and the borrower's attorney (if known) within 30 days to determine if the bankruptcy proceedings have been completed. If no response is received within 30 days of the date of these contacts, the lender or holder must resume its collection efforts, in accordance with paragraph (g)(1) of this section. If a written response from the court or the borrower's attorney indicates that the bankruptcy proceedings are still underway, the lender or holder is not to pursue further collection efforts until receipt of written notice of discharge, except that follow-up in accordance with this paragraph must be done at least once every 12 months until the bankruptcy proceedings have been completed. A lender or holder may utilize PACER (Public Access to Court Electronic Records) in place of contact with the court and/or borrower's attorney.
(3) If, despite the lender or holder's compliance with required procedures, a loan subject to the requirements of paragraph (g)(1) of this section is discharged, the lender or holder must file a claim with the Secretary within 10 days of the initial date of receipt (as documented by a date stamp) of written notification of the discharge from the court or the borrower's attorney, in accordance with the procedures set forth in § 681.40(c)(4). The lender or holder also must file with the bankruptcy court an objection to the discharge of the HEAL loan, and must include with the claim documentation showing that the bankruptcy proceedings were handled properly and expeditiously (e.g., all documents sent to or received from the bankruptcy court, including evidence which shows the period of the bankruptcy proceedings).
The delegation of functions to a servicing agency or other party does not relieve a lender or holder of its responsibilities under the HEAL program.
(a) Forbearance means an extension of time for making loan payments or the acceptance of smaller payments than were previously scheduled to prevent a borrower from defaulting on his or her payment obligations. A lender or holder must notify each borrower of the right to request forbearance.
(1) Except as provided in paragraph (a)(2) of this section, a lender or holder must grant forbearance whenever the borrower is temporarily unable to make scheduled payments on a HEAL loan and the borrower continues to repay the loan in an amount commensurate with his or her ability to repay the loan. Any circumstance which affects the borrower's ability to repay the loan must be fully documented.
(2) If the lender or holder determines that the default of the borrower is inevitable and that forbearance will be ineffective in preventing default, the lender or holder may submit a claim to the Secretary rather than grant forbearance. If the Secretary is not in agreement with the determination of the lender or holder, the claim will be returned to the lender or holder as disapproved and forbearance must be granted.
(b) A lender or holder must exercise forbearance in accordance with terms that are consistent with the 25- and 33-year limitations on the length of repayment (described in § 681.11) if the lender or holder and borrower agree in writing to the new terms. Each forbearance period may not exceed 6 months.
(c) A lender or holder may also exercise forbearance for periods of up to 6 months in accordance with terms that are inconsistent with the minimum annual payment requirement if the lender or holder complies with the requirements listed in paragraphs (c)(1) through (4) of this section. Subsequent renewals of the forbearance must also be documented in accordance with the following requirements:
(1) The lender or holder must reasonably believe that the borrower intends to repay the loan but is currently unable to make payments in accordance with the terms of the loan note. The lender or holder must state the basis for its belief in writing and maintain that statement in its loan file on that borrower.
(2) Both the borrower and an authorized official of the lender or holder must sign a written agreement of forbearance.
(3) If the agreement between the borrower and lender or holder provides for forbearance of all payments, the lender or holder must contact the borrower at least every 3 months during the period of forbearance in order to remind the borrower of the outstanding obligation to repay.
(4) The total period of forbearance (with or without interruption) granted by the lender or holder to any borrower must not exceed 2 years. However, when the borrower and the lender or holder believe that there are bona fide reasons why this period should be extended, the lender or holder may request a reasonable extension beyond the 2-year period from the Secretary. This request must document the reasons why the extension should be granted. The lender or holder may grant the extension for the approved time period if the Secretary approves the extension request.
A HEAL note may not be assigned except to another HEAL lender or organization as specified in § 681.30 and except as provided in § 681.40. In this section “seller” means any kind of assignor and “buyer” means any kind of assignee.
(a) Procedure. A HEAL note assigned from one lender or holder to another must be subject to a blanket endorsement together with other HEAL notes being assigned or must individually bear effective words of assignment. Either the blanket endorsement or the HEAL note must be signed and dated by an authorized official of the seller. Within 30 days of the transaction, the buyer must notify the following parties of the assignment:
(1) The Secretary; and
(2) The borrower. The notice to the borrower must contain a clear statement of all the borrower's rights and responsibilities which arise from the assignment of the loan, including a statement regarding the consequences of making payments to the seller subsequent to receipt of the notice.
(b) Risks assumed by the buyer. Upon acquiring a HEAL loan, a new holder assumes responsibility for the consequences of any previous violations of applicable statutes, regulations, or the terms of the note except for defects under § 681.41(d). A HEAL note is not a negotiable instrument, and a subsequent holder is not a holder in due course. If the borrower has a valid legal defense that could be asserted against the previous holder, the borrower can also assert the defense against the new holder. In this situation, if the new holder files a default claim on a loan, the Secretary denies the default claim to the extent of the borrower's defense. Furthermore, when a new holder files a claim on a HEAL loan, it must provide the Secretary with the same documentation that would have been required of the original lender.
(c) Warranty. Nothing in this section precludes the buyer of a HEAL loan from obtaining a warranty from the seller covering certain future reductions by the Secretary in computing the amount of insurable loss, if any, on a claim filed on the loan. The warranty may only cover reductions which are attributable to an act or failure to act of the seller or other previous holder. The warranty may not cover matters for which the buyer is charged with responsibility under the HEAL regulations.
(d) Bankruptcy. If a lender or holder assigns a HEAL loan to a new holder, or a new holder acquires a HEAL loan under 20 U.S.C. 1092a (the Combined Payment Plan authority), and the previous holder(s) subsequently receives court notice that the borrower has filed for bankruptcy, the previous holder(s) must forward the bankruptcy notice to the purchaser within 10 days of the initial date of receipt, as documented by a date stamp, except that if it is a chapter 7 bankruptcy with no complaint for dismissal, the previous holder(s) must file the notice with the purchaser within 30 days of the initial date of receipt, as documented by a date stamp. The previous holder(s) also must file a statement with the court notifying it of the change of ownership. Notwithstanding the above, the current holder will not be held responsible for any loss due to the failure of the prior holder(s) to meet the deadline for giving notice if such failure occurs after the current holder purchased the loan.
(a) Death. The Secretary will discharge a borrower's liability on the loan in accordance with section 738 of the Act upon the death of the borrower. The holder of the loan may not attempt to collect on the loan from the borrower's estate or any endorser. The holder must secure a certification of death or whatever official proof is conclusive under State law. The holder must return to the sender any payments in accordance with § 685.212(a) received from the estate of the borrower or paid on behalf of the borrower after the date of death.
(b) Disability. The Secretary will discharge a borrower's liability on the loan in accordance with 34 CFR 685.213.
(a) A lender or holder must file an insurance claim on a form approved by the Secretary. The lender or holder must attach to the claim all documentation necessary to litigate a default, including any documents required to be submitted by the Federal Claims Collection Standards, and which the Secretary may require. Failure to submit the required documentation and to comply with the HEAL statute and regulations or the lender's or holder's insurance contract will result in a claim not being honored. The Secretary may deny a claim that is not filed within the period specified in this section. The Secretary requires for all claims at least the following documentation:
(1) The original promissory note;
(2) An assignment to the United States of America of all right, title, and interest of the lender or holder in the note;
(3) The loan application;
(4) The history of the loan activities from the date of loan disbursement through the date of claim, including any payments made; and
(5) A Borrower Status Form (HEAL-508), documenting each deferment granted under § 681.12 or a written statement from an appropriate official stating that the borrower was engaged in an activity for which he or she was entitled to receive a deferment at the time the deferment was granted.
(b) The Secretary's payment of a claim is contingent upon receipt of all required documentation and an assignment to the United States of America of all right, title, and interest of the lender or holder in the note underlying the claim. The lender or holder must warrant that the loan is eligible for HEAL insurance.
(c) In addition, the lender or holder must comply with the following requirements for the filing of default, death, disability, and bankruptcy claims:
(1) Default claims. Default means the persistent failure of the borrower to make a payment when due or to comply with other terms of the note or other written agreement evidencing a loan under circumstances where the Secretary finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay the loan. In the case of a loan repayable (or on which interest is payable) in monthly installments, this failure must have persisted for 120 days. In the case of a loan repayable (or on which interest is payable) in less frequent installments, this failure must have persisted for 180 days. If, for a particular loan, an automatic stay is imposed on collection activities by a Bankruptcy Court, and the lender or holder receives written notification of the automatic stay prior to initiating legal proceedings against the borrower, the 120- or 180-day period does not include any period prior to the end of the automatic stay.
(i) If a lender or holder determines that it is not appropriate to commence and prosecute an action against a default borrower pursuant to § 681.35(c)(3), it must file a default claim with the Secretary within 30 days after a loan has been determined to be in default.
(ii) If a lender files suit against a defaulted borrower and does not pursue collection of the judgment obtained as a result of the suit, it must file a default claim with the Secretary within 60 days of the date of issuance of the judgment. If a lender or holder files suit against a defaulted borrower, and pursues collection of the judgment obtained as a result of the suit, these collection activities must begin within 60 days of the date of issuance of the judgment. If the lender or holder is unable to collect the full amount of principal and interest owed, a claim must be filed within 30 days of completion of the post-judgment collection activities. In either case, the lender or holder must assign the judgment to the Secretary as part of the default claim.
(iii) In addition to the documentation required for all claims, the lender or holder must submit with its default claim at least the following:
(A) Repayment schedule(s);
(B) A collection history, if any;
(C) A final demand letter;
(D) The original or a copy of all correspondence relevant to the HEAL loan to or from the borrower (whether received by the original lender, a subsequent holder, or an independent servicing agent);
(E) A claims collection litigation report; and
(F) If the defaulted borrower filed for bankruptcy under chapter 7 of the Bankruptcy Act and did not file a complaint to determine the dischargeability of the loan, all documents sent to or received from the bankruptcy court, including evidence which shows the period of the bankruptcy proceedings.
(iv) If a lender or holder files a default claim on a loan and subsequently receives written notice from the court or the borrower's attorney that the borrower has filed for bankruptcy under chapter 11 or 13 of the Bankruptcy Act, or under chapter 7 with a complaint to determine the dischargeability of the loan, the lender or holder must file that notice with the Secretary within 10 days of the lender or holder's initial date of receipt, as documented by a date stamp. If the borrower is declaring bankruptcy under chapter 7 of the Bankruptcy Act, and has not filed a complaint to determine the dischargeability of the loan, the lender or holder must file the written notice with the Secretary within 30 days of the lender's or holder's initial date of receipt, as documented by a date stamp. If the Secretary has not paid the claim at the time the lender or holder receives that notice, upon receipt of the notice, the lender or holder must file with the bankruptcy court a proof of claim, if applicable, and an objection to the discharge or compromise of the HEAL loan. If the Secretary has paid the claim, the lender or holder must file a statement with the court notifying it that the loan is owned by the Secretary.
(2) Death claims. A lender or holder must file a death claim with the Secretary within 30 days after the lender or holder obtains documentation that a borrower is dead. In addition to the documentation required for all claims, the lender or holder must submit with its death claim those documents which verify the death, including an official copy of the Death Certificate.
(3) Disability claims. A lender or holder must file a disability claim with the Secretary within 30 days after it has been notified that the Secretary has determined a borrower to be totally and permanently disabled. In addition to the documentation required for all claims, the lender or holder must submit with its claim evidence of the Secretary's determination that the borrower is totally and permanently disabled.
(4) Bankruptcy claims. For a bankruptcy under chapter 11 or 13 of the Bankruptcy Act, or a bankruptcy under chapter 7 of the Bankruptcy Act when the borrower files a complaint to determine the dischargeability of the HEAL loan, the current holder must file a claim with the Secretary within 10 days of the initial date of receipt of court notice or written notice from the borrower's attorney that the borrower has filed for bankruptcy under chapter 11 or chapter 13, or has filed a complaint to determine the dischargeability of the HEAL loan under chapter 7. The initial date of receipt of the written notice must be documented by a date stamp. The lender or holder must file with the bankruptcy court a proof of claim, if applicable, and an objection to the discharge or compromise of the HEAL loan. In addition to the documentation required for all claims, with its claim the lender or holder must submit to the Secretary at least the following:
(i) Repayment schedule(s);
(ii) A collection history, if any;
(iii) A proof of claim, where applicable;
(iv) An assignment to the United States of America of its proof of claim, where applicable;
(v) All pertinent documents sent to or received from the bankruptcy court;
(vi) A statement of any facts of which the lender is aware that may form the basis for an objection to the bankrupt's discharge or an exception to the discharge;
(vii) The notice of the first meeting or creditors, or an explanation as to why this is not included;
(viii) In cases where there is defective service, a declaration or affidavit attesting to the fact that the lender or holder was not directly served with the notice of meeting of creditors. This declaration or affidavit must also indicate when and how the lender or holder learned of the bankruptcy; and
(ix) In cases where there is defective service due to the borrower's failure to list the proper creditor, a copy of the letter sent to the borrower at the time of purchase of the HEAL loan by the current holder, or a sample letter with documentation indicating when the letter was sent to the borrower.
(a) General rule. HEAL insurance covers the unpaid balance of principal and interest on an eligible HEAL loan, less the amount of any judgment collected pursuant to default proceedings commenced by the eligible lender or holder involved. In determining whether to approve an insurance claim for payment, the Secretary considers legal defects affecting the initial validity or insurability of the loan. The Secretary also deducts from a claim any amount that is not a legally enforceable obligation of the borrower except to the extent that the defense of infancy applies. The Secretary further considers whether all holders of the loan have complied with the requirements of the HEAL regulations, including those concerned with the making, servicing, and collecting of the loan, the timely filing of claims, and the submission of documents with a claim.
(b) Special rules for loans acquired by assignment. If a claim is filed by a lender or holder that obtained a loan by assignment, that lender or holder is not entitled to any payment under this section greater than that to which a previous holder would have been entitled. In particular, the Secretary deducts from the claim any amounts that are attributable to payments made by the borrower to a prior holder of the loan before the borrower received proper notice of the assignment of the loan.
(c) Special rules for loans made by school lenders. (1) If the loan for which a claim is filed was originally made by a school and the claim is filed by that school, the Secretary deducts from the claim an amount equal to any unpaid refund that the school owes the borrower.
(2) If the loan for which a claim is filed was originally made by a school but the claim is filed by another lender of holder that obtained the note by assignment, the Secretary deducts from the claim an amount equal to any unpaid refund that the school owed the borrower prior to the assignment.
(d) Circumstances under which defects in claims may be cured or excused. The Secretary may permit a lender or holder to cure certain defects in a specified manner as a condition for payment of a default claim. The Secretary may excuse certain defects if the holder submitting the default claim satisfies the Secretary that the defect did not contribute to the default or prejudice the Secretary's attempt to collect the loan from the borrower. The Secretary may also excuse certain defects if the defect arose while the loan was held by another lender or holder and the holder submitting the default claim satisfies the Secretary that the assignment of the loan was an arm's length transaction, that the present holder did not know of the defect at the time of the sale and that the present holder could not have become aware of the defect through an examination of the loan documents.
(e) Payment of insured interest. The payment on an approved claim covers the unpaid principal balance and interest that accrues through the date the claim is paid, except:
(1) If the lender or holder failed to submit a claim within the required period after the borrower's default; death; total and permanent disability; or filing of a petition in bankruptcy under chapter 11 or 13 of the Bankruptcy Act, or under chapter 7 where the borrower files a complaint to determine the dischargeability of the HEAL loan; the Secretary does not pay interest that accrued between the end of that period and the date the Secretary received the claim.
(2) If the Secretary returned the claim to the lender or holder for additional documentation necessary for the approval of the claim, the Secretary pays interest only for the first 30 days following the return of the claim to the lender or holder.
(a) Records. (1) A lender or holder must keep complete and accurate records of each HEAL loan which it holds. The records must be organized in a way that permits them to be easily retrievable and allows the ready identification of the current status of each loan. The required records include:
(i) The loan application;
(ii) The original promissory note;
(iii) The repayment schedule agreement;
(iv) Evidence of each disbursement of loan proceeds;
(v) Notices of changes in a borrower's address and status as a full-time student;
(vi) Evidence of the borrower's eligibility for a deferment;
(vii) The borrower's signed statement describing his or her rights and responsibilities in connection with a HEAL loan;
(viii) The documents required for the exercise of forbearance;
(ix) Documentation of the assignment of the loan; and
(x) Evidence of a borrower's creditworthiness, including the borrower's credit report.
(2) The lender or holder must maintain for each borrower a payment history showing the date and amount of each payment received on the borrower's behalf, and the amounts of each payment attributable to principal and interest. A lender or holder must also maintain for each loan a collection history showing the date and subject of each communication with a borrower or endorser for collection of a delinquent loan. Furthermore, a lender or holder must keep any additional records which are necessary to make any reports required by the Secretary.
(3) A lender or holder must retain the records required for each loan for not less than 5 years following the date the loan is repaid in full by the borrower. However, in particular cases the Secretary may require the retention of records beyond this minimum period. A lender or holder must keep the original copy of an unpaid promissory note, but may store all other records in microform or computer format.
(4) The lender or holder must maintain accurate and complete records on each HEAL borrower and related school activities required by the HEAL program. All HEAL records shall be maintained under security and protected from fire, flood, water leakage, other environmental threats, electronic data system failures or power fluctuations, unauthorized intrusion for use, and theft.
(b) Reports. A lender or holder must submit reports to the Secretary at the time and in the manner required by the Secretary.
(c) Inspections. Upon request, a lender or holder must afford the Secretary, the Comptroller General of the United States, and any of their authorized representatives access to its records in order to assure the correctness of its reports.
(d) The lender or holder must comply with the Department's biennial audit requirements of section 705 of the Act.
(e) Any lender or holder who has information which indicates potential or actual commission of fraud or other offenses against the United States, involving these loan funds, must promptly provide this information to the appropriate Regional Office of Inspector General for Investigations.
(a) The Secretary may limit, suspend, or terminate the eligibility under the HEAL program of an otherwise eligible lender or holder that violates or fails to comply with any provision of the Act, these regulations, or agreements with the Secretary concerning the HEAL program. Prior to terminating a lender or holder's participation in the program, the Secretary will provide the entity an opportunity for a hearing in accordance with the procedures under paragraph (b) of this section.
(b)(1) The Secretary will provide any lender or holder subject to termination with a written notice, sent by certified mail, specifying his or her intention to terminate the lender or holder's participation in the program and stating that the entity may request, within 30 days of the receipt of this notice, a formal hearing. If the entity requests a hearing, it must, within 90 days of the receipt of the notice, submit material, factual issues in dispute to demonstrate that there is cause for a hearing. These issues must be both substantive and relevant. The hearing will be held in the Washington, DC metropolitan area. The Secretary will deny a hearing if:
(i) The request for a hearing is untimely (i.e., fails to meet the 30-day requirement);
(ii) The lender or holder does not provide a statement of material, factual issues in dispute within the 90-day required period; or
(iii) The statement of factual issues in dispute is frivolous or inconsequential.
(2) In the event that the Secretary denies a hearing, the Secretary will send a written denial, by certified mail, to the lender or holder setting forth the reasons for denial. If a hearing is denied, or if as a result of the hearing, termination is still determined to be necessary, the lender or holder will be terminated from participation in the program. An entity will be permitted to reapply for participation in the program when it demonstrates, and the Secretary agrees, that it is in compliance with all HEAL requirements.
(c) This section does not apply to a determination that a HEAL lender fails to meet the statutory definition of an “eligible lender.”
(d) This section also does not apply to administrative action by the Department of Education based on any alleged violation of:
(1) Title VI of the Civil Rights Act of 1964, which is governed by 34 CFR part 100;
(2) Title IX of the Education Amendments of 1972, which is governed by 34 CFR part 106;
(3) The Family Educational Rights and Privacy Act of 1974 (section 444 of the General Education Provisions Act, as amended), which is governed by 34 CFR part 99; or
(4) Title XI of the Right to Financial Privacy Act of 1978, Public Law 95-630 (12 U.S.C. 3401-3422).
(a) In order to participate in the HEAL program, a school must enter into a written agreement with the Secretary. In the agreement, the school promises to comply with provisions of the HEAL law and the HEAL regulations. For initial entry into this agreement and for the agreement to remain in effect, a school must satisfy the following requirements:
(1)(i) The school must be legally authorized within a State to conduct a course of study leading to one of the following degrees:
(A) Doctor of Medicine.
(B) Doctor of Osteopathic Medicine.
(C) Doctor of Dentistry or equivalent degree.
(D) Bachelor or Master of Science in Pharmacy or equivalent degree.
(E) Doctor of Optometry or equivalent degree.
(F) Doctor of Veterinary Medicine or equivalent degree.
(G) Doctor of Podiatric Medicine or equivalent degree.
(H) Graduate or equivalent degree in Public Health.
(I) Doctor of Chiropractic or equivalent degree.
(J) Doctoral degree of Clinical Psychology.
(K) Masters or doctoral degree in Health Administration.
(ii) For the purposes of this section, the term “State” includes, in addition to the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands, Guam, American Samoa, the Trust Territory of the Pacific Islands (the Republic of Palau), the Republic of the Marshall Islands, and the Federated States of Micronesia.
(2)(i) The school must be accredited by a recognized agency approved for that course of study by the Secretary of Education, as described in paragraph (a)(2)(ii) of this section, except where a school is not eligible for accreditation solely because it is too new. A new school is eligible if the Secretary of Education determines that it can reasonably expect to be accredited before the beginning of the academic year following the normal graduation date of its first entering class. The Secretary of Education makes this determination after consulting with the appropriate accrediting agency and receiving reasonable assurance to that effect.
(ii) The approved accrediting agencies are:
(A) Liaison Committee on Medical Education.
(B) American Osteopathic Association, Bureau of Professional Education.
(C) American Dental Association, Commission on Dental Accreditation.
(D) American Veterinary Medical Association, Council on Education.
(E) American Optometric Association, Council on Optometric Education.
(F) American Podiatric Medical Association, Council on Podiatric Medical Education.
(G) Accreditation Council for Pharmacy Education.
(H) Council on Education for Public Health.
(I) Council on Chiropractic Education, Commission on Accreditation.
(J) Accrediting Commission on Accreditation of Healthcare Management Education.
(K) American Psychological Association, Committee on Accreditation.
(b) If a HEAL school undergoes a change of controlling ownership or form of control, its agreement automatically expires at the time of that change. The school must enter into a new agreement with the Secretary in order to continue its participation in the HEAL program.
When the student completes his or her portion of the student loan application and submits it to the school, the school must do the following:
(a) Accurately and completely fill out its portion of the HEAL application;
(b) Verify, to the best of its ability, the information provided by the student on the HEAL application, including, but not limited to, citizenship status and Social Security number. To comply with this requirement, the school may request that the student provide a certified copy of his or her birth certificate, his or her naturalization papers, and an original Social Security card or copy issued by the Federal Government, or other documentation that the school may require. The school must assure that the applicant's I-151 or I-551 is attached to the application, if the applicant is required to possess such identification by the United States;
(c) Certify that the student is eligible to receive a HEAL loan, according to the requirements of § 681.5;
(d) Review the financial aid transcript from each institution previously attended by the applicant on at least a half-time basis to determine whether the applicant is in default on any loans or owes a refund on any grants. The school may not approve the HEAL application or disburse HEAL funds if the borrower is in default on any loans or owes a refund on any educational grants, unless satisfactory arrangements have been made between the borrower and the affected lender or school to resolve the default or the refund on the grant. If the financial aid transcript has been requested, but has not been received at the time the applicant submits his or her first HEAL application, the school may approve the application and disburse the first HEAL installment prior to receipt of the transcript. Each financial aid transcript must include at least the following data:
(1) Student's name;
(2) Amounts and sources of loans and grants previously received by the student for study at an institution of higher education;
(3) Whether the student is in default on any of these loans, or owes a refund on any grants;
(4) Certification from each institution attended by the student that the student has received no financial aid, if applicable; and
(5) From each institution attended, the signature of an official authorized by the institution to sign such transcripts on behalf of the institution;
(e) State that it has no reason to believe that the borrower may not be willing to repay the HEAL loan;
(f) Make reasonable determinations of the maximum loan amount approvable, based on the student's circumstances. The student applicant determines the amount he or she wishes to borrow, up to this maximum amount. Only then may the school certify an eligible application. In determining the maximum loan amount approvable, the school will calculate the difference between:
(1) The total financial resources available to the applicant for his or her costs of education for the period covered by the proposed HEAL loan, and other student aid that the applicant has received or will receive during the period covered by the proposed HEAL loan. To determine the total financial resources available to the applicant for his or her costs of education for the period covered by the proposed HEAL loan (including familial, spousal, or personal income or other financial assistance that the applicant has received or will receive), the school must consider information provided through one of the national need analysis systems or any other procedure approved by the Secretary of Education, in addition to any other information which the school has regarding the student's financial situation. The school may make adjustments to the need analysis information only when necessary to accurately reflect the applicant's actual resources, and must maintain in the borrower's record documentation to support the basis for any adjustments to the need analysis information; and
(2) The costs reasonably necessary for each student to pursue the same or similar curriculum or program within the same class year at the school for the period covered by the proposed HEAL loan, using a standard student budget. The school must maintain in its general office records the criteria used to develop each standard student budget. Adjustments to the standard student budget may be made only to the extent that they are necessary for the student to complete his or her education, and documentation must be maintained in the borrower's record to support the basis for any adjustments to the standard student budget.
(g) Comply with the requirements of § 681.61.
(a) When a school receives from a HEAL lender a loan disbursement check or draft payable jointly to the school and to one of its students, it must:
(1) If the school receives the instrument after the student is enrolled, obtain the student's endorsement, retain that portion of funds due the school, and disburse the remaining funds to the student.
(2) If the school receives the instrument before the student is enrolled, it must, prior to endorsing the instrument, send the instrument to the student to endorse and return to the school. The school may then retain that portion of funds then due the school but must hold the remaining funds for disbursement to the student at the time of enrollment. However, if the student is unable to meet other educational expenses due before the time of enrollment, the school may obtain the student's endorsement and disburse to the student that portion of funds required to meet these other educational expenses.
(b) If a school determines that a student does not plan to enroll, the school must return a loan disbursement check or draft to the lender within 30 days of this determination.
Each school must notify the holder of a HEAL loan of any change in the student's enrollment status within 30 days following the change in status. Each notice must contain the student's full name under which the loan was received, the student's current name (if different), the student's Social Security number, the date of the change in the enrollment status, or failure to enroll as scheduled for any academic period as a full-time student, the student's latest known permanent and temporary addresses, and other information which the school may decide is necessary to identify or locate the student. If the school does not know the identity of the current holder of the HEAL loan, it must notify the HEAL Program Office of a change in the student's enrollment status. This notification is not required for vacation periods and leaves of absence or other temporary interruptions which do not exceed one academic term.
A participating school must pay that portion of a refund that is allocable to a HEAL loan directly to the original lender (or to a subsequent holder of the loan note, if the school has knowledge of the holder's identity). At the same time, the school must provide to the borrower written notice that it is doing so.
Each school must establish and maintain administrative and fiscal procedures necessary to achieve the following objectives:
(a) Proper and efficient administration of the funds received from students who have HEAL loans;
(b) Protection of the rights of students under the HEAL program;
(c) Protection of the United States from unreasonable risk of loss due to defaults; and
(d) Compliance with applicable requirements for HEAL schools.
(a) In addition to complying with the requirements of section 739(b) of the Act, each school must maintain an accurate, complete, and easily retrievable record with respect to each student who has a HEAL loan. The record must contain all of the following information:
(1) Student's name, address, academic standing and period of attendance;
(2) Name of the HEAL lender, amount of the loan, and the period for which the HEAL loan was intended;
(3) If a noncitizen, documentation of the student's alien registration status;
(4) Amount and source of other financial assistance received by the student during the period for which the HEAL loan was made;
(5) Date the school receives the HEAL check or draft and the date it either gives it to the student or returns it to the lender (if the school is not the lender);
(6) Date the school disburses the loan to a student (if the school is the lender);
(7) Date the school signs the loan check or draft (if the school is a copayee);
(8) Amount of tuition, fees and other charges paid by the student to the school for the academic period covered by the loan and the dates of payment;
(9) Photocopy of each HEAL check or draft received by the student;
(10) Documentation of each entrance interview, including the date of the entrance interview and the signature of the borrower indicating that the entrance interview was conducted;
(11) Documentation of the exit interview, including the date of the exit interview and the signature of the borrower indicating that the exit interview was conducted, or documentation of the date that the school mailed exit interview materials to the borrower if the borrower failed to report for the exit interview;
(12) A photocopy made by the school of the borrower's I-151 or I-551, if the borrower is required to possess such identification by the United States, or other documentation, if obtained by the school, to verify citizenship status and Social Security number (e.g., a certified copy of the borrower's birth certificate or a photocopy made by the school of the borrower's original Social Security card or copy issued by the Federal Government);
(13) Documentation of the calculations made which compare the financial resources of the applicant with the cost of his or her education at the school;
(14) Copy(s) of the borrower's financial aid transcript(s);
(15) The standard budget used for the student, and documentation to support the basis for any deviations made to the standard budget;
(16) Copies of all correspondence between the school and the borrower or between the school and the lender or its assignee regarding the loan;
(17) Copy of each form used by the school in connection with the loan; and
(18) Expected postgraduate destination of borrower.
(b) The school must maintain the record for not less than 5 years following the date the student graduates, withdraws or fails to enroll as a full-time student. The school may store the records in microform or computer format.
(c) The school must comply with the Department's biennial audit requirements of section 705 of the Act.
(d) The school must develop and follow written procedures for the receipt, verification of amount, and disbursement of HEAL checks or drafts. These procedures must be maintained in the school's policies and procedures manuals or other general office records.
A school must submit reports to the Secretary at the times and in the manner the Secretary may reasonably prescribe. The school must retain a copy of each report for not less than 5 years following the report's completion, unless otherwise directed by the Secretary. A school must also make available to a HEAL lender or holder, upon the lender's or holder's request, the name, address, postgraduate destination and other reasonable identifying information for each of the school's students who has a HEAL loan.
For the purposes of audit and examination, a HEAL school must provide the Secretary of Education, the Comptroller General of the United States, and any of their authorized representatives access to the records that the school is required to keep and to any documents and records pertinent to the administration of the HEAL program.
In the event a school ceases to participate in the HEAL program, the school (or its successor, in the case of a school which undergoes a change in ownership) must retain all required HEAL records and provide the Secretary of Education, the Comptroller General of the United States, and any of their authorized representatives access to them.
(a) The Secretary may limit, suspend, or terminate the eligibility under the HEAL program of an otherwise eligible school that violates or fails to comply with any provision of the Act, these regulations, or agreements with the Secretary concerning the HEAL program. Prior to terminating a school's participation in the program, the Secretary will provide the school an opportunity for a hearing in accordance with the procedures under paragraph (b) of this section.
(b)(1) The Secretary will provide any school subject to termination with a written notice, sent by certified mail, specifying his or her intention to terminate the school's participation in the program and stating that the school may request, within 30 days of the receipt of this notice, a formal hearing. If the school requests a hearing, it must, within 90 days of the receipt of the notice, submit material, factual issues in dispute to demonstrate that there is cause for a hearing. These issues must be both substantive and relevant. The hearing will be held in the Washington, DC metropolitan area. The Secretary will deny a hearing if:
(i) The request for a hearing is untimely (i.e., fails to meet the 30-day requirement);
(ii) The school does not provide a statement of material, factual issues in dispute within the 90-day required period; or
(iii) The statement of factual issues in dispute is frivolous or inconsequential.
(2) In the event that the Secretary denies a hearing, the Secretary will send a written denial, by certified mail, to the school setting forth the reasons for denial. If a hearing is denied, or if as a result of the hearing, termination is still determined to be necessary, the school will be terminated from participation in the program. A school will be permitted to reapply for participation in the program when it demonstrates, and the Secretary agrees, that it is in compliance with all HEAL requirements.
(c) This section does not apply to a determination that a HEAL school fails to meet the statutory definition of an “eligible school.”
(d) This section does not apply to administrative action by the Department of Education based on any alleged violation of the Family Educational Rights and Privacy Act of 1974 (section 444 of the General Education Provisions Act, as amended), as governed by 34 CFR part 99.
(a) A HEAL school is required to carry out the following activities for each HEAL applicant or borrower:
(1) Conduct and document an entrance interview with each student (individually or in groups) no later than prior to the loan recipient's first HEAL disbursement in each academic year that the loan recipient obtains a HEAL loan. The school must inform the loan recipient during the entrance interview of his or her rights and responsibilities under a HEAL loan, including the consequences for noncompliance with those responsibilities, and must gather personal information which would assist in locating the loan recipient should he or she depart from the school without receiving an exit interview. A school may meet this requirement through correspondence where the school determines that a face-to-face meeting is impracticable.
(2) Conduct and document an exit interview with each HEAL loan recipient (individually or in groups) within the final academic term of the loan recipient's enrollment prior to his or her anticipated graduation date or other departure date from the school. The school must inform the loan recipient in the exit interview of his or her rights and responsibilities under each HEAL loan, including the consequences for noncompliance with those responsibilities. The school must also collect personal information from the loan recipient which would assist the school or the lender or holder in skiptracing activities and to direct the loan recipient to contact the lender or holder concerning specific repayment terms and options. A copy of the documentation of the exit interview, including the personal information collected for skiptracing activities, and any other information required by the Secretary regarding the exit interview must be sent to the lender or holder of each HEAL loan within 30 days of the exit interview. If the loan recipient departs from the school prior to the anticipated date or does not receive an exit interview, the exit interview information must be mailed to the loan recipient by the school within 30 days of the school's knowledge of the departure or the anticipated departure date, whichever is earlier. The school must request that the loan recipient forward any required information (e.g., skiptracing information, request for deferment, etc.) to the lender or holder. The school must notify the lender or holder of the loan recipient's departure at the same time it mails the exit interview material to the loan recipient.
(3) Verify the accuracy and completeness of information provided by each student on the HEAL loan application, particularly in regard to the HEAL eligibility requirements, by comparing the information with previous loan applications or other records or information provided by the student to the school. Notify the potential lender of any discrepancies which were not resolved between the school and the student.
(4) Develop and implement procedures relating to check receipt and release which keep these functions separate from the application preparation and approval process and assure that the amount of the HEAL loan check(s) does(do) not exceed the approved total amount of the loan and the statutory maximums. Checks must not be cashed without the borrower's personal endorsement. Documentation of these procedures and their usage shall be maintained by the school.
(5) Maintain accurate and complete records on each HEAL borrower and related school activities required by the HEAL program. All HEAL records shall be properly safeguarded and protected from environmental threats and unauthorized intrusion for use and theft.
(6) Maintain documentation of the criteria used to develop the school's standard student budgets in the school's general records, readily available for audit purposes, and maintain in each HEAL borrower's record a copy of the standard budget which was actually used in the determination of the maximum loan amount approvable for the student, as described in § 681.51.
(7) Notify the lender or its assignee of any changes in the student's name, address, status, or other information pertinent to the HEAL loan not more than 30 days after receiving information indicating such a change.
(b) Any school which has information which indicates potential or actual commission of fraud or other offenses against the United States involving these loan funds must promptly provide this information to the appropriate Regional Office of Inspector General for Investigations.
(c) The school will be considered responsible and the Secretary may seek reimbursement from any school for the amount of a loan in default on which the Secretary has paid an insurance claim, if the Secretary finds that the school did not comply with the applicable HEAL statute and regulations, or its written agreement with the Secretary. The Secretary may excuse certain defects if the school satisfies the Secretary that the defect did not contribute to the default or prejudice the Secretary's attempt to collect the loan from the borrower.
(d) A school is authorized to withhold services from a HEAL borrower who is in default on a HEAL loan received while enrolled in that school, except in instances where the borrower has filed for bankruptcy. Such services may include, but are not limited to academic transcripts and alumni services. Defaulted HEAL borrowers who have filed for bankruptcy shall provide court documentation that verifies the filing for bankruptcy upon the request of the school. Schools will also supply this information to the Secretary upon request. All academic and financial aid transcripts that are released on a defaulted HEAL borrower must indicate on the transcript that the borrower is in default on a HEAL loan. It is the responsibility of the borrower to provide the school with documentation from the lender, holder, or Department when a default has been satisfactorily resolved, in order to obtain access to services that are being withheld, or to have the reference to default removed from the academic and financial aid transcripts.
Section 682.410 also issued under 20 U.S.C. 1078, 1078-1, 1078-2, 1078-3, 1080a, 1082, 1087, 1091a, and 1099.
(a) This part governs the following four programs collectively referred to in these regulations as “the Federal Family Education Loan (FFEL) programs,” in which lenders used their own funds prior to July 1, 2010, to make loans to enable a student or his or her parents to pay the costs of the student's attendance at postsecondary schools.
(1) The Federal Stafford Loan (Stafford) Program, which encouraged making loans to undergraduate, graduate, and professional students.
(2) The Federal Supplemental Loans for Students (SLS) Program, as in effect for periods of enrollment that began prior to July 1, 1994, which encouraged making loans to graduate, professional, independent undergraduate, and certain dependent undergraduate students.
(3) The Federal PLUS (PLUS) Program, which encouraged making loans to parents of dependent undergraduate students. Before October 17, 1986, the PLUS Program also provided for making loans to graduate, professional, and independent undergraduate students. Before July 1, 1993, the PLUS Program also provided for making loans to parents of dependent graduate students. The PLUS Program also provided for making loans to graduate and professional students on or after July 1, 2006 and prior to July 1, 2010.
(4) The Federal Consolidation Loan Program (Consolidation Loan Program), which encouraged making loans to borrowers for the purpose of consolidating loans: under the Federal Insured Student Loan (FISL), Stafford loan, SLS, ALAS (as in effect before October 17, 1986), PLUS, Perkins Loan programs, the Health Professions Student Loan (HPSL) including Loans for Disadvantaged Students (LDS) Program authorized by subpart II of part A of Title VII of the Public Health Services Act, Health Education Assistance Loans (HEAL) authorized by subpart I of Part A of Title VII of the Health Services Act, Nursing Student Loan Program loans authorized by subpart II of part B of title VIII of the Public Health Service Act, and existing loans obtained under the Consolidation Loan Program, and William D. Ford Direct Loan (Direct Loan) program loans, if the application for the Consolidation loan was received on or after November 13, 1997 and prior to July 1, 2010.
(b)(1) Except for the loans guaranteed directly by the Secretary described in paragraph (b)(2) of this section, a guaranty agency guarantees a lender against losses due to default by the borrower on a FFEL loan. If the guaranty agency meets certain Federal requirements, the guaranty agency is reimbursed by the Secretary for all or part of the amount of default claims it pays to lenders.
(2)(i) The Secretary guarantees lenders against losses—
(A) Within the Stafford Loan Program, on loans made under Federal Insured Student Loan (FISL) Program;
(B) Within the PLUS Program, on loans made under the Federal PLUS Program;
(C) Within the SLS Program, on loans made under the Federal SLS Program as in effect for periods of enrollment that began prior to July 1, 1994; and
(D) Within the Consolidation Loan Program, on loans made under the Federal Consolidation Loan Program.
(ii) The loan programs listed in paragraph (b)(2)(i) of this section collectively are referred to in these regulations as the “Federal Guaranteed Student Loan (GSL) programs.”
(iii) The Federal GSL programs were authorized to operate in States not served by a guaranty agency program. In addition, the FISL and Federal SLS (as in effect for periods of enrollment that began prior to July 1, 1994) programs were authorized, under limited circumstances, to operate in States in which a guaranty agency program did not serve all eligible students.
The following entities and persons participate in the FFEL programs:
(a) Eligible banks, savings and loan associations, credit unions, pension funds, insurance companies, schools, and State and private nonprofit agencies made loans prior to July 1, 2010.
(b) Institutions of higher education, including most colleges, universities, graduate and professional schools, and many vocational, technical schools participated as schools, enabling an eligible student or his or her parents to obtain a loan to pay for the student's cost of education.
(c) Students who met certain requirements, including enrollment at a participating school, borrowed under the Stafford Loan Program prior to July 1, 2010 and, for periods of enrollment that began prior to July 1, 1994, the SLS program. Parents of eligible dependent undergraduate students borrowed under the PLUS Program prior to July 1, 2010. Borrowers with outstanding Stafford, SLS, FISL, Perkins, HPSL, HEAL, ALAS, PLUS, or Nursing Student Loan Program loans borrowed under the Consolidation Loan Program prior to July 1, 2010. The PLUS Program also provided for making loans to graduate and professional students on or after July 1, 2006 and prior to July 1, 2010.
(a) General. Generally, the borrower is obligated to repay the full amount of the loan, late fees, collection costs chargeable to the borrower, and any interest not payable by the Secretary. The borrower's obligation to repay is cancelled if the borrower dies, becomes totally and permanently disabled, or has that obligation discharged in bankruptcy. A parent borrower's obligation to repay a PLUS loan is cancelled if the student, on whose behalf the parent borrowed, dies. The borrower's or student's obligation to repay all or a portion of his or her loan may be cancelled if the student is unable to complete his or her program of study because the school closed or the borrower's or student's eligibility to borrow was falsely certified by the school. The obligation to repay all or a portion of a loan may be forgiven for Stafford Loan borrowers who enter certain areas of the teaching profession.
(b) Stafford loan repayment. In the case of a subsidized Stafford loan, a borrower is not required to make any principal payments during the time the borrower is in school. The Secretary pays the interest on the borrower's behalf during the time the borrower is in school. When the borrower ceases to be enrolled on at least a half-time basis, a grace period begins during which no principal payments are required, and the Secretary continues to make interest payments on the borrower's behalf. In the case of an unsubsidized Stafford loan, the borrower is responsible for interest during these periods. At the end of the grace period, the repayment period begins. During the repayment period, for the subsidized and unsubsidized Stafford loan, the borrower pays both the principal and the interest accruing on the loan.
(c) SLS loan repayment. Generally, the repayment period for an SLS loan begins immediately on the day of the last disbursement of the loan proceeds by the lender. The first payment of principal and interest on an SLS loan is due from the borrower within 60 days after the loan is fully disbursed unless a borrower who is also a Stafford loan borrower, but who has not yet entered repayment on the Stafford loan, requests that commencement of repayment on the SLS loan be deferred until the borrower's grace period on the Stafford loan expires.
(d) PLUS loan repayment. Generally, the repayment period for a PLUS loan begins on the day the loan is fully disbursed by the lender. The first payment of principal and interest on a PLUS loan is due from the borrower within 60 days after the loan is fully disbursed.
(e) Consolidation loan repayment. Generally, the repayment period for a Consolidation loan begins on the day the loan is disbursed. The first payment of principal and interest on a Consolidation loan is due from the borrower within 60 days after the borrower's liability on all loans being consolidated has been discharged.
(f) Deferment of repayment. Repayment of principal on a FFEL program loan may be deferred under the circumstances described in § 682.210.
(g) Default. If a borrower defaults on a loan, the guarantor reimburses the lender for the amount of its loss. The guarantor then collects the amount owed from the borrower.
(a) Subpart B of this part contains general provisions that are applicable to all participants in the FFEL and Federal GSL programs.
(b) The administration of the FFEL programs by a guaranty agency is subject to subparts C, D, F, and G of this part.
(c) The Federal FFEL and Federal GSL programs are subject to subparts C, F, and G of this part.
(d) Certain requirements applicable to schools under all the FFEL and Federal GSL programs are set forth in subpart F of this part.
(a)(1) The definitions of the following terms used in this part are set forth in the Student Assistance General Provisions, 34 CFR part 668:
(2) The following definitions are set forth in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(3) The definition for cost of attendance is set forth in section 472 of the Act, as amended.
(b) The following definitions also apply to this part:
Act. The Higher Education Act of 1965, as amended, 20 U.S.C. 1071 et seq.
Actual interest rate. The annual interest rate a lender charges on a loan, which may be equal to or less than the applicable interest rate on that loan.
Applicable interest rate. The maximum annual interest rate that a lender may charge under the Act on a loan.
Authority. Any private non-profit or public entity that may issue tax-exempt obligations to obtain funds to be used for the purchase of FFEL loans. The term “Authority” also includes any agency, including a State postsecondary institution or any other instrumentality of a State or local governmental unit, regardless of the designation or primary purpose of that agency, that may issue tax-exempt obligations, any party authorized to issue those obligations on behalf of a governmental agency, and any non-profit organization authorized by law to issue tax-exempt obligations.
Borrower. An individual to whom a FFEL Program loan was made.
Co-Maker: One of two married individuals who jointly borrow a Consolidation loan, each of whom are eligible and who are jointly and severally liable for repayment of the loan. The term co-maker also includes one of two parents who are joint borrowers as previously authorized in the PLUS Program.
Default. The failure of a borrower and endorser, if any, or joint borrowers on a PLUS or Consolidation loan, to make an installment payment when due, or to meet other terms of the promissory note, the Act, or regulations as applicable, if the Secretary or guaranty agency finds it reasonable to conclude that the borrower and endorser, if any, no longer intend to honor the obligation to repay, provided that this failure persists for—
(1) 270 days for a loan repayable in monthly installments; or
(2) 330 days for a loan repayable in less frequent installments.
Disbursement. The transfer of loan proceeds by a lender to a holder, in the case of a Consolidation loan, or to a borrower, a school, or an escrow agent by issuance of an individual check, a master check or by electronic funds transfer that may represent loan amounts for borrowers.
Disposable income. That part of an individual's compensation from an employer and other income from any source, including spousal income, that remains after the deduction of any amounts required by law to be withheld, or any child support or alimony payments that are made under a court order or legally enforceable written agreement. Amounts required by law to be withheld include, but are not limited, to Federal, State, and local taxes, Social Security contributions, and wage garnishment payments.
Endorser. An individual who signs a promissory note and agrees to repay the loan in the event that the borrower does not.
Escrow agent. Any guaranty agency or other eligible lender that receives the proceeds of a FFEL program loan as an agent of an eligible lender for the purpose of transmitting those proceeds to the borrower or the borrower's school.
Estimated financial assistance. (1) The estimated amount of assistance for a period of enrollment that a student (or a parent on behalf of a student) will receive from Federal, State, institutional, or other sources, such as, scholarships, grants, the net earnings from need-based employment, or loans, including but not limited to—
(i) Except as provided in paragraph (2)(iii) of this definition, national service education awards or post-service benefits under title I of the National and Community Service Act of 1990 (AmeriCorps);
(ii) Except as provided in paragraph (2)(vii) of this definition, veterans' education benefits;
(iii) Any educational benefits paid because of enrollment in a postsecondary education institution, or to cover postsecondary education expenses;
(iv) Fellowships or assistantships, except non-need-based employment portions of such awards;
(v) Insurance programs for the student's education; and
(vi) The estimated amount of other Federal student financial aid, including but not limited to a Federal Pell Grant, campus-based aid, and the gross amount (including fees) of subsidized and unsubsidized Federal Stafford Loans or subsidized and unsubsidized Federal Direct Stafford/Ford Loans, and Federal PLUS or Federal Direct PLUS Loans.
(2) Estimated financial assistance does not include—
(i) Those amounts used to replace the expected family contribution, including the amounts of any TEACH Grant, unsubsidized Federal Stafford or Federal Direct Stafford/Ford Loans, Federal PLUS or Federal Direct PLUS Loans, and non-federal non-need-based loans, including private, state-sponsored, and institutional loans. However, if the sum of the amounts received that are being used to replace the student's EFC exceed the EFC, the excess amount must be treated as estimated financial assistance;
(ii) Federal Perkins loan and Federal Work-Study funds that the student has declined;
(iii) For the purpose of determining eligibility for a subsidized Stafford loan, national service education awards or post-service benefits under title I of the National and Community Service Act of 1990 (AmeriCorps);
(iv) Any portion of the estimated financial assistance described in paragraph (1) of this definition that is included in the calculation of the student's expected family contribution (EFC);
(v) Non-need-based employment earnings;
(vi) Assistance not received under a title IV, HEA program, if that assistance is designated to offset all or a portion of a specific amount of the cost of attendance and that component is excluded from the cost of attendance as well. If that assistance is excluded from either estimated financial assistance or cost of attendance, it must be excluded from both;
(vii) Federal veterans' education benefits paid under—
(A) Chapter 103 of title 10, United States Code (Senior Reserve Officers' Training Corps);
(B) Chapter 106A of title 10, United States Code (Educational Assistance for Persons Enlisting for Active Duty);
(C) Chapter 1606 of title 10, United States Code (Selected Reserve Educational Assistance Program);
(D) Chapter 1607 of title 10, United States Code (Educational Assistance Program for Reserve Component Members Supporting Contingency Operations and Certain Other Operations);
(E) Chapter 30 of title 38, United States Code (All-Volunteer Force Educational Assistance Program, also known as the “Montgomery GI Bill—active duty”);
(F) Chapter 31 of title 38, United States Code (Training and Rehabilitation for Veterans with Service-Connected Disabilities);
(G) Chapter 32 of title 38, United States Code (Post-Vietnam Era Veterans' Educational Assistance Program);
(H) Chapter 33 of title 38, United States Code (Post 9/11 Educational Assistance);
(I) Chapter 35 of title 38, United States Code (Survivors' and Dependents' Educational Assistance Program);
(J) Section 903 of the Department of Defense Authorization Act, 1981 (10 U.S.C. 2141 note) (Educational Assistance Pilot Program);
(K) Section 156(b) of the “Joint Resolution making further continuing appropriations and providing for productive employment for the fiscal year 1983, and for other purposes” (42 U.S.C. 402 note) (Restored Entitlement Program for Survivors, also known as “Quayle benefits”);
(L) The provisions of chapter 3 of title 37, United States Code, related to subsistence allowances for members of the Reserve Officers Training Corps; and
(M) Any program that the Secretary may determine is covered by section 480(c)(2) of the HEA; and
(viii) Iraq and Afghanistan Service Grants made under section 420R of the HEA.
Federal GSL programs. The Federal Insured Student Loan Program, the Federal Supplemental Loans for Students Program, the Federal PLUS Program, and the Federal Consolidation Loan Program.
Federal Insured Student Loan Program. The loan program authorized by title IV-B of the Act under which the Secretary directly insures lenders against losses.
Grace period. The period that begins on the day after a Stafford loan borrower ceases to be enrolled as at least a half-time student at an institution of higher education and ends on the day before the repayment period begins. See also “Post-deferment grace period.” For an SLS borrower who also has a Federal Stafford loan on which the borrower has not yet entered repayment, the grace period is an equivalent period after the borrower ceases to be enrolled as at least a half-time student at an institution of higher education.
Guaranty agency. A State or private nonprofit organization that has an agreement with the Secretary under which it will administer a loan guarantee program under the Act.
Holder. An eligible lender owning an FFEL Program loan including a Federal or State agency or an organization or corporation acting on behalf of such an agency and acting as a conservator, liquidator, or receiver of an eligible lender.
Legal guardian. An individual appointed by a court to be a “guardian” of a person and specifically required by the court to use his or her financial resources for the support of that person.
Lender. (1) The term “eligible lender” is defined in section 435(d) of the Act, and in paragraphs (2)-(5) of this definition.
(2) With respect to a National or State chartered bank, a mutual savings bank, a savings and loan association, a stock savings bank, or a credit union—
(i) The phrase “subject to examination and supervision” in section 435(d) of the Act means “subject to examination and supervision in its capacity as a lender”;
(ii) The phrase “does not have as its primary consumer credit function the making or holding of loans made to students under this part” in section 435(d) of the Act means that the lender does not, or in the case of a bank holding company, the company's wholly-owned subsidiaries as a group do not at any time, hold FFEL Program loans that total more than one-half of the lender's or subsidiaries' combined consumer credit loan portfolio, including home mortgages held by the lender or its subsidiaries. For purposes of this paragraph, loans held in trust by a trustee lender are not considered part of the trustee lender's consumer credit function.
(3) A bank that is subject to examination and supervision by an agency of the United States, making student loans as a trustee, may be an eligible lender if it makes loans under an express trust, operated as a lender in the FFEL programs prior to January 1, 1975, and met the requirements of this paragraph prior to July 23, 1992.
(4) The corporate parent or other owner of a school that qualifies as an eligible lender under section 435(d) of the Act is not an eligible lender unless the corporate parent or owner itself qualifies as an eligible lender under section 435(d) of the Act.
(5)(i) The term eligible lender does not include any lender that the Secretary determines, after notice and opportunity for a hearing before a designated Department official, has, directly or through an agent or contractor—
(A) Except as provided in paragraph (5)(ii) of this definition, offered, directly or indirectly, points, premiums, payments (including payments for referrals, finder fees or processing fees), or other inducements to any school, any employee of a school, or any individual or entity in order to secure applications for FFEL loans or FFEL loan volume. This includes but is not limited to—
(1) Payments or offerings of other benefits, including prizes or additional financial aid funds, to a prospective borrower or to a school or school employee in exchange for applying for or accepting a FFEL loan from the lender;
(2) Payments or other benefits, including payments of stock or other securities, tuition payments or reimbursements, to a school, a school employee, any school-affiliated organization, or to any other individual in exchange for FFEL loan applications, application referrals, or a specified volume or dollar amount of loans made, or placement on a school's list of recommended or suggested lenders;
(3) Payments or other benefits provided to a student at a school who acts as the lender's representative to secure FFEL loan applications from individual prospective borrowers, unless the student is also employed by the lender for other purposes and discloses that employment to school administrators and to prospective borrowers;
(4) Payments or other benefits to a loan solicitor or sales representative of a lender who visits schools to solicit individual prospective borrowers to apply for FFEL loans from the lender;
(5) Payment to another lender or any other party, including a school, a school employee, or a school-affiliated organization or its employees, of referral fees, finder fees or processing fees, except those processing fees necessary to comply with Federal or State law;
(6) Compensation to an employee of a school's financial aid office or other employee who has responsibilities with respect to student loans or other financial aid provided by the school or compensation to a school-affiliated organization or its employees, to serve on a lender's advisory board, commission or other group established by the lender, except that the lender may reimburse the employee for reasonable expenses incurred in providing the service;
(7) Payment of conference or training registration, travel, and lodging costs for an employee of a school or school-affiliated organization;
(8) Payment of entertainment expenses, including expenses for private hospitality suites, tickets to shows or sporting events, meals, alcoholic beverages, and any lodging, rental, transportation, and other gratuities related to lender-sponsored activities for employees of a school or a school-affiliated organization;
(9) Philanthropic activities, including providing scholarships, grants, restricted gifts, or financial contributions in exchange for FFEL loan applications or application referrals, or a specified volume or dollar amount of FFEL loans made, or placement on a school's list of recommended or suggested lenders;
(10) Performance of, or payment to another third party to perform, any school function required under title IV, except that the lender may perform entrance counseling and, as provided in § 682.604(a), exit counseling, and may provide services to participating foreign schools at the direction of the Secretary, as a third-party servicer; and
(11) Any type of consulting arrangement or other contract with an employee of a financial aid office at a school, or an employee of a school who otherwise has responsibilities with respect to student loans or other financial aid provided by the school under which the employee would provide services to the lender.
(B) Conducted unsolicited mailings, by postal or electronic means, of student loan application forms to students enrolled in secondary schools or postsecondary institutions or to family members of such students, except to a student or borrower who previously has received a FFEL loan from the lender;
(C) Offered, directly or indirectly, a FFEL loan to a prospective borrower to induce the purchase of a policy of insurance or other product or service by the borrower or other person; or
(D) Engaged in fraudulent or misleading advertising with respect to its FFEL loan activities.
(ii) Notwithstanding paragraph (5)(i) of this definition, a lender, in carrying out its role in the FFEL program and in attempting to provide better service, may provide—
(A) Technical assistance to a school that is comparable to the kinds of technical assistance provided to a school by the Secretary under the Direct Loan program, as identified by the Secretary in a public announcement, such as a notice in the
(B) Support of and participation in a school's or a guaranty agency's student aid and financial literacy-related outreach activities, including in-person entrance and exit counseling, as long as the name of the entity that developed and paid for any materials is provided to the participants and the lender does not promote its student loan or other products;
(C) Meals, refreshments, and receptions that are reasonable in cost and scheduled in conjunction with training, meeting, or conference events if those meals, refreshments, or receptions are open to all training, meeting, or conference attendees;
(D) Toll-free telephone numbers for use by schools or others to obtain information about FFEL loans and free data transmission service for use by schools to electronically submit applicant loan processing information or student status confirmation data;
(E) A reduced origination fee in accordance with § 682.202(c);
(F) A reduced interest rate as provided under the Act;
(G) Payment of Federal default fees in accordance with the Act;
(H) Purchase of a loan made by another lender at a premium;
(I) Other benefits to a borrower under a repayment incentive program that requires, at a minimum, one or more scheduled payments to receive or retain the benefit or under a loan forgiveness program for public service or other targeted purposes approved by the Secretary, provided these benefits are not marketed to secure loan applications or loan guarantees;
(J) Items of nominal value to schools, school-affiliated organizations, and borrowers that are offered as a form of generalized marketing or advertising, or to create good will; and
(K) Other services as identified and approved by the Secretary through a public announcement, such as a notice in the
(iii) For the purposes of this paragraph (5)—
(A) The term “school-affiliated organization” is defined in § 682.200.
(B) The term “applications” includes the Free Application for Federal Student Aid (FAFSA), FFEL loan master promissory notes, and FFEL Consolidation loan application and promissory notes.
(C) The term “other benefits” includes, but is not limited to, preferential rates for or access to the lender's other financial products, information technology equipment, or non-loan processing or non-financial aid-related computer software at below market rental or purchase cost, and printing and distribution of college catalogs and other materials at reduced or no cost.
(6) The term eligible lender does not include any lender that—
(i) Is debarred or suspended, or any of whose principals or affiliates (as those terms are defined in 2 CFR parts 180 and 3485) is debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4;
(ii) Is an affiliate, as defined in 2 CFR parts 180 and 3485, of any person who is debarred or suspended under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; or
(iii) Employs a person who is debarred or suspended under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4, in a capacity that involves the administration or receipt of FFEL Program funds.
(7) An eligible lender may not make or hold a loan as trustee for a school, or for a school-affiliated organization as defined in this section, unless on or before September 30, 2006—
(i) The eligible lender was serving as trustee for the school or school-affiliated organization under a contract entered into and continuing in effect as of that date; and
(ii) The eligible lender held at least one loan in trust on behalf of the school or school-affiliated organization on that date.
(8) As of January 1, 2007, and for loans first disbursed on or after that date under a trustee arrangement, an eligible lender operating as a trustee under a contract entered into on or before September 30, 2006, and which continues in effect with a school or a school-affiliated organization—
(i) Must not—
(A) Make a loan to any undergraduate student;
(B) Make a loan other than a Federal Stafford loan to a graduate or professional student; or
(C) Make a loan to a borrower who is not enrolled at that school;
(ii) Must offer loans that carry an origination fee or an interest rate, or both, that are less than the fee or rate authorized under the provisions of the Act; and
(iii) Must, for any fiscal year beginning on or after July 1, 2006 in which the school engages in activities as an eligible lender, submit an annual compliance audit that satisfies the following requirements:
(A) With regard to a school that is a governmental entity or a nonprofit organization, the audit must be conducted in accordance with § 682.305(c)(2)(v) and chapter 75 of title 31, United States Code, and in addition, during years when the student financial aid cluster (as defined in Office of Management and Budget Circular A-133, Appendix B, Compliance Supplement) is not audited as a “major program” (as defined under 31 U.S.C. 7501) must, without regard to the amount of loans made, include in such audit the school's lending activities as a major program.
(B) With regard to a school that is not a governmental entity or a nonprofit organization, the audit must be conducted annually in accordance with § 682.305(c)(2)(i) through (iii).
(C) With regard to any school, the audit must include a determination that—
(1) The school used all payments and proceeds (i.e., special allowance and interest payments from borrowers, interest subsidy payments, proceeds from the sale or other disposition of loans) from the loans for need-based grant programs;
(2) Those need-based grants supplemented, rather than supplanted, the institution's use of non-Federal funds for such grants; and
(3) The school used no more than a reasonable portion of payments and proceeds from the loans for direct administrative expenses.
Master Promissory Note (MPN). A promissory note under which the borrower may receive loans for a single period of enrollment or multiple periods of enrollment.
Nationwide consumer reporting agency. A consumer reporting agency that compiles and maintains files on consumers on a nationwide basis and as defined in 15 U.S.C. 1681a(p).
Nonsubsidized Stafford loan. A Stafford loan made prior to October 1, 1992 that does not qualify for interest benefits under § 682.301(b) or special allowance payments under § 682.302.
Origination relationship. A special business relationship between a school and a lender in which the lender delegates to the school, or to an entity or individual affiliated with the school, substantial functions or responsibilities normally performed by lenders before making FFEL program loans. In this situation, the school is considered to have “originated” a loan made by the lender.
Origination fee. A fee that the lender is required to pay the Secretary to help defray the Secretary's costs of subsidizing the loan. The lender may pass this fee on to the Stafford loan borrower. The lender must pass this fee on to the SLS or PLUS borrower.
Participating school. A school that has in effect a current agreement with the Secretary under § 682.600.
Period of enrollment. The period for which a Stafford, SLS, or PLUS loan is intended. The period of enrollment must coincide with one or more bona fide academic terms established by the school for which institutional charges are generally assessed (e.g., a semester, trimester, or quarter in weeks of instructional time, an academic year, or the length of the student's program of study in weeks of instructional time). The period of enrollment is also referred to as the loan period.
Post-deferment grace period. For a loan made prior to October 1, 1981, a single period of six consecutive months beginning on the day following the last day of an authorized deferment period.
Repayment period. (1) For a Stafford loan, the period beginning on the date following the expiration of the grace period and ending no later than 10 years, or 25 years under an extended repayment schedule, from the date the first payment of principal is due from the borrower, exclusive of any period of deferment or forbearance.
(2) For unsubsidized Stafford loans, the period that begins on the day after the expiration of the applicable grace period that follows after the student ceases to be enrolled on at least a half-time basis and ending no later than 10 years or 25 years under an extended repayment schedule, from that date, exclusive of any period of deferment or forbearance. However, payments of interest are the responsibility of the borrower during the in-school and grace period, but may be capitalized by the lender.
(3) For SLS loans, the period that begins on the date the loan is disbursed, or if the loan is disbursed in more than one installment, on the date the last disbursement is made and ending no later than 10 years from that date, exclusive of any period of deferment or forbearance. The first payment of principal is due within 60 days after the loan is fully disbursed unless a borrower who is also a Stafford loan borrower but who, has not yet entered repayment on the Stafford loan requests that commencement of repayment on the SLS loan be delayed until the borrower's grace period on the Stafford loan expires. Interest on the loan accrues and is due and payable from the date of the first disbursement of the loan. The borrower is responsible for paying interest on the loan during the grace period and periods of deferment, but the interest may be capitalized by the lender.
(4) For Federal PLUS loans, the period that begins on the date the loan is disbursed, or if the loan is disbursed in more than one installment, on the date the last disbursement is made and ending no later than 10 years, or 25 years under an extended repayment schedule, from that date, exclusive of any period of deferment or forbearance. Interest on the loan accrues and is due and payable from the date of the first disbursement of the loan.
(5) For Federal Consolidation loans, the period that begins on the date the loan is disbursed and ends no later than 10, 12, 15, 20, 25, or 30 years from that date depending upon the sum of the amount of the Consolidation loan, and the unpaid balance on other student loans, exclusive of any period of deferment or forbearance.
Satisfactory repayment arrangement. (1) For purposes of regaining eligibility under the title IV student financial assistance programs, the making of six consecutive, on-time, voluntary full monthly payments on a defaulted loan. A borrower may only obtain the benefit of this paragraph with respect to renewed eligibility once.
(2) The required full monthly payment amount may not be more than is reasonable and affordable based on the borrower's total financial circumstances. Voluntary payments are payments made directly by the borrower, and do not include payments obtained by income tax off-set, garnishment, or income or asset execution. “On-time” means a payment received by the Secretary or a guaranty agency or its agent within 20 days of the scheduled due date.
(3) A borrower has not used the one opportunity to renew eligibility for title IV assistance if the borrower makes six consecutive, on-time, voluntary, full monthly payments under an agreement to rehabilitate a defaulted loan but does not receive additional title IV assistance prior to defaulting on that loan again.
School. (1) An “institution of higher education” as that term is defined in 34 CFR 600.4.
(2) For purposes of an in-school deferment, the term includes an institution of higher education, whether or not it participates in any title IV program or has lost its eligibility to participate in the FFEL program because of a high default rate.
School-affiliated organization. A school-affiliated organization is any organization that is directly or indirectly related to a school and includes, but is not limited to, alumni organizations, foundations, athletic organizations, and social, academic, and professional organizations.
School lender. A school, other than a correspondence school, that has entered into a contract of guarantee under this part with the Secretary or, a similar agreement with a guaranty agency.
Stafford Loan Program. The loan program authorized by Title IV-B of the Act which encourages the making of subsidized and unsubsidized loans to undergraduate, graduate, and professional students and is one of the Federal Family Education Loan programs.
State lender. In any State, a single State agency or private nonprofit agency designated by the State that has entered into a contract of guarantee under this part with the Secretary, or a similar agreement with a guaranty agency.
Subsidized Stafford Loan: A Stafford loan that qualifies for interest benefits under § 682.301(b) and special allowance under § 682.302.
Substantial gainful activity. A level of work performed for pay or profit that involves doing significant physical or mental activities, or a combination of both.
Temporarily totally disabled. The condition of an individual who, though not totally and permanently disabled, is unable to work and earn money or attend school, during a period of at least 60 days needed to recover from injury or illness. With regard to a disabled dependent of a borrower, this term means a spouse or other dependent who, during a period of injury or illness, requires continuous nursing or similar services for a period of at least 90 days.
Third-party servicer. Any State or private, profit or nonprofit organization or any individual that enters into a contract with a lender or guaranty agency to administer, through either manual or automated processing, any aspect of the lender's or guaranty agency's FFEL programs required by any statutory provision of or applicable to Title IV of the HEA, any regulatory provision prescribed under that statutory authority, or any applicable special arrangement, agreement, or limitation entered into under the authority of statutes applicable to Title IV of the HEA that governs the FFEL programs, including, any applicable function described in the definition of third-party servicer in 34 CFR part 668; originating, guaranteeing, monitoring, processing, servicing, or collecting loans; claims submission; or billing for interest benefits and special allowance.
Totally and permanently disabled. The condition of an individual who—
(1) Is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that—
(i) Can be expected to result in death;
(ii) Has lasted for a continuous period of not less than 60 months; or
(iii) Can be expected to last for a continuous period of not less than 60 months; or
(2) Has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected disability.
Unsubsidized Stafford loan. A loan made after October 1, 1992, authorized under section 428H of the Act for borrowers who do not qualify for interest benefits under § 682.301(b) but do qualify for special allowance under § 682.302.
Write-off. Cessation of collection activity on a defaulted FFEL loan due to a determination in accordance with applicable standards that no further collection activity is warranted.
(a) Student Stafford borrower. Except for a refinanced SLS/PLUS loan, a student is eligible to receive a Stafford loan, and an independent undergraduate student, a graduate or professional student, or, subject to paragraph (a)(3) of this section, a dependent undergraduate student, is eligible to receive an unsubsidized Stafford loan, if the student who is enrolled or accepted for enrollment on at least a half-time basis at a participating school meets the requirements for an eligible student under 34 CFR part 668, and—
(1) In the case of an undergraduate student who seeks a Stafford loan or unsubsidized Stafford loan for the cost of attendance at a school that participates in the Pell Grant Program, has received a final determination, or, in the case of a student who has filed an application with the school for a Pell Grant, a preliminary determination, from the school of the student's eligibility or ineligibility for a Pell Grant and, if eligible, has applied for the period of enrollment for which the loan is sought;
(2) In the case of any student who seeks an unsubsidized Stafford loan for the cost of attendance at a school that participates in the Stafford Loan Program, the student must—
(i) Receive a determination of need for a subsidized Stafford loan; and
(ii) If the determination of need is in excess of $200, have made a request to a lender for a subsidized Stafford loan;
(3) For purposes of a dependent undergraduate student's eligibility for an additional unsubsidized Stafford loan amount, as described at § 682.204(d), is a dependent undergraduate student for whom the financial aid administrator determines and documents in the school's file, after review of the family financial information provided by the student and consideration of the student's debt burden, that the student's parents likely will be precluded by exceptional circumstances (e.g., denial of a PLUS loan to a parent based on adverse credit, the student's parent receives only public assistance or disability benefits, is incarcerated, or his or her whereabouts are unknown) from borrowing under the PLUS Program and the student's family is otherwise unable to provide the student's expected family contribution. A parent's refusal to borrow a PLUS loan does not constitute an exceptional circumstance;
(4)(i) Reaffirms any FFEL loan amount on which there has been a total cessation of collection activity, including all principal, interest, collection costs, court costs, attorney fees, and late charges that have accrued on that amount up to the date of reaffirmation.
(ii) For purposes of paragraph (a)(4) of this section, reaffirmation means the acknowledgement of the loan by the borrower in a legally binding manner. The acknowledgement may include, but is not limited to, the borrower—
(A) Signing a new promissory note that includes the same terms and conditions as the original note signed by the borrower or repayment schedule; or
(B) Making a payment on the loan.
(5) The suspension of collection activity has been lifted from any loan on which collection activity had been suspended based on a conditional determination that the borrower was totally and permanently disabled.
(6) In the case of a borrower whose prior loan under title IV of the Act or whose TEACH Grant service obligation was discharged after a final determination of total and permanent disability, the borrower must—
(i) Obtain certification from a physician that the borrower is able to engage in substantial gainful activity;
(ii) Sign a statement acknowledging that the FFEL loan the borrower receives cannot be discharged in the future on the basis of any impairment present when the new loan is made, unless that impairment substantially deteriorates; and
(iii) If a borrower receives a new FFEL loan, other than a Federal Consolidation Loan, within three years of the date that any previous title IV loan or TEACH Grant service obligation was discharged due to a total and permanent disability in accordance with § 682.402(c)(3)(ii), 34 CFR 674.61(b)(3)(i), 34 CFR 685.213, or 34 CFR 686.42(b) based on a discharge request received on or after July 1, 2010, resume repayment on the previously discharged loan in accordance with § 682.402(c)(5), 34 CFR 674.61(b)(5), or 34 CFR 685.213(b)(4), or acknowledge that he or she is once again subject to the terms of the TEACH Grant agreement to serve before receiving the new loan.
(7) In the case of a borrower whose prior loan under title IV of the HEA was conditionally discharged after an initial determination that the borrower was totally and permanently disabled based on a discharge request received prior to July 1, 2010, the borrower must—
(i) Comply with the requirements of paragraphs (a)(6)(i) and (a)(6)(ii) of this section; and
(ii) Sign a statement acknowledging that—
(A) The loan that has been conditionally discharged prior to a final determination of total and permanent disability cannot be discharged in the future on the basis of any impairment present when the borrower applied for a total and permanent disability discharge or when the new loan is made unless that impairment substantially deteriorates; and
(B) Collection activity will resume on any loans in a conditional discharge period.
(8) In the case of any student who seeks a loan but does not have a certificate of graduation from a school providing secondary education or the recognized equivalent of such a certificate, the student meets the requirements under 34 CFR part 668.32(e).
(9) Is not serving in a medical internship or residency program, except for an internship in dentistry.
(b) Student PLUS borrower. A graduate or professional student who is enrolled or accepted for enrollment on at least a half-time basis at a participating school is eligible to receive a PLUS Loan on or after July 1, 2006, if the student—
(1) Meets the requirements for an eligible student under 34 CFR 668;
(2) Meets the requirements of paragraphs (a)(4), (a)(5), (a)(6), (a)(7), (a)(8), and (a)(9) of this section, if applicable;
(3) Has received a determination of his or her annual loan maximum eligibility under the Federal Subsidized and Unsubsidized Stafford Loan Program or under the Federal Direct Subsidized Stafford/Ford Loan Program and Federal Direct Unsubsidized Stafford/Ford Loan Program, as applicable; and
(4) Does not have an adverse credit history in accordance with paragraphs (c)(2)(i) through (c)(2)(v) of this section, or obtains an endorser who has been determined not to have an adverse credit history, as provided for in paragraph (c)(1)(vii) of this section.
(c) Parent PLUS borrower. (1) A parent borrower, is eligible to receive a PLUS Program loan, other than a loan made under § 682.209(e), if the parent—
(i) Is borrowing to pay for the educational costs of a dependent undergraduate student who meets the requirements for an eligible student set forth in 34 CFR part 668;
(ii) Provides his or her and the student's social security number;
(iii) Meets the requirements pertaining to citizenship and residency that apply to the student in 34 CFR 668.33;
(iv) Meets the requirements concerning defaults and overpayments that apply to the student in 34 CFR 668.35 and meets the requirements of judgment liens that apply to the student under 34 CFR 668.32(g)(3);
(v) Except for the completion of a Statement of Selective Service Registration Status, complies with the requirements for submission of a Statement of Educational Purpose that apply to the student in 34 CFR part 668;
(vi) Meets the requirements of paragraphs (a)(4), (a)(5), (a)(6), and (a)(7) of this section, as applicable; and
(vii) In the case of a Federal PLUS loan made on or after July 1, 1993, does not have an adverse credit history or obtains an endorser who has been determined not to have an adverse credit history as provided in paragraph (c)(2)(ii) of this section.
(viii) Has completed repayment of any title IV, HEA program assistance obtained by fraud, if the parent has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance.
(2)(i) For purposes of this section, the lender must obtain a credit report on each applicant from at least one national consumer reporting agency. The credit report must be secured within a timeframe that would ensure the most accurate, current representation of the borrower's credit history before the first day of the period of enrollment for which the loan is intended.
(ii) Unless the lender determines that extenuating circumstances existed, the lender must consider each applicant to have an adverse credit history based on the credit report if—
(A) The applicant is considered 90 or more days delinquent on the repayment of a debt; or
(B) The applicant has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a Title IV debt, during the five years preceding the date of the credit report.
(iii) Nothing in this paragraph precludes the lender from establishing more restrictive credit standards to determine whether the applicant has an adverse credit history.
(iv) The absence of any credit history is not an indication that the applicant has an adverse credit history and is not to be used as a reason to deny a PLUS loan to that applicant.
(v) The lender must retain a record of its basis for determining that extenuating circumstances existed. This record may include, but is not limited to, an updated credit report, a statement from the creditor that the borrower has made satisfactory arrangements to repay the debt, or a satisfactory statement from the borrower explaining any delinquencies with outstanding balances of less than $500.
(3) For purposes of paragraph (c)(1) of this section, a “parent” includes the individuals described in the definition of “parent” in 34 CFR 668.2 and the spouse of a parent who remarried, if that spouse's income and assets would have been taken into account when calculating a dependent student's expected family contribution.
(d) Consolidation program borrower. (1) An individual is eligible to receive a Consolidation loan if the individual—
(i) On the loans being consolidated—
(A) Is, at the time of application for a Consolidation loan—
(1) In a grace period preceding repayment;
(2) In repayment status;
(3) In a default status and has either made satisfactory repayment arrangements as defined in applicable program regulations or has agreed to repay the consolidation loan under the income-sensitive repayment plan described in § 682.209(a)(6)(iii) or the income-based repayment plan described in § 682.215;
(B) Not subject to a judgment secured through litigation, unless the judgment has been vacated;
(C) Not subject to an order for wage garnishment under section 488A of the Act, unless the order has been lifted;
(D) Not in default status resulting from a claim filed under § 682.412.
(ii) Certifies that no other application for a Consolidation loan is pending; and
(iii) Agrees to notify the holder of any changes in address.
(2) A borrower may not consolidate a loan under this section for which the borrower is wholly or partially ineligible.
(e) A borrower's eligibility to receive a Consolidation loan terminates upon receipt of a Consolidation loan except that—
(1) Eligible loans received prior to the date a Consolidation loan was made and loans received during the 180-day period following the date a Consolidation loan was made, may be added to the Consolidation loan based on the borrower's request received by the lender during the 180-day period after the date the Consolidation loan was made;
(2) A borrower who receives an eligible loan before or after the date a Consolidation loan is made may receive a subsequent Consolidation loan;
(3) A Consolidation loan borrower may consolidate an existing Consolidation loan if the borrower has at least one other eligible loan made before or after the existing Consolidation loan that will be consolidated;
(4) If the consolidation loan is in default or has been submitted to the guaranty agency for default aversion, the borrower may obtain a subsequent consolidation loan under the Federal Direct Consolidation Loan Program for purposes of obtaining an income contingent repayment plan or an income-based repayment plan; and
(5) A FFEL borrower may consolidate his or her loans (including a FFEL Consolidation Loan) into the Federal Direct Consolidation Loan Program for the purpose of using—
(i) The Public Service Loan Forgiveness Program; or
(ii) For FFEL Program loans first disbursed on or after October 1, 2008 (including Federal Consolidation Loans that repaid FFEL or Direct Loan program Loans first disbursed on or after October 1, 2008), the no accrual of interest benefit for active duty service members.
The charges that lenders may impose on borrowers, either directly or indirectly, are limited to the following:
(a) Interest. The applicable interest rates for FFEL Program loans are given in paragraphs (a)(1) through (a)(4) and (a)(8) of this section.
(1) Stafford Loan Program. (i) For loans made prior to July 1, 1994, if the borrower, on the date the promissory note evidencing the loan was signed, had an outstanding balance of principal or interest on a previous Stafford loan, the interest rate is the applicable interest rate on that previous Stafford loan.
(ii) If the borrower, on the date the promissory note evidencing the loan was signed, had no outstanding balance on any FFEL Program loan, and the first disbursement was made—
(A) Prior to October 1, 1992, for a loan covering a period of instruction beginning on or after July 1, 1988, the interest rate is 8 percent until 48 months elapse after the repayment period begins, and 10 percent thereafter; or
(B) On or after October 1, 1992, and prior to July 1, 1994, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(1) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(2) 9 percent.
(iii) For a Stafford loan for which the first disbursement was made before October 1, 1992—
(A) If the borrower, on the date the promissory note was signed, had no outstanding balance on a Stafford loan but had an outstanding balance of principal or interest on a PLUS or SLS loan made for a period of enrollment beginning before July 1, 1988, or on a Consolidation loan that repaid a loan made for a period of enrollment beginning before July 1, 1988, the interest rate is 8 percent; or
(B) If the borrower, on the date the promissory note evidencing the loan was signed, had an outstanding balance of principal or interest on a PLUS or SLS loan made for a period of enrollment beginning on or after July 1, 1988, or on a Consolidation loan that repaid a loan made for a period of enrollment beginning on or after July 1, 1988, the interest rate is 8 percent until 48 months elapse after the repayment period begins, and 10 percent thereafter.
(iv) For a Stafford loan for which the first disbursement was made on or after October 1, 1992, but before December 20, 1993, if the borrower, on the date the promissory note evidencing the loan was signed, had no outstanding balance on a Stafford loan but had an outstanding balance of principal or interest on a PLUS, SLS, or Consolidation loan, the interest rate is 8 percent.
(v) For a Stafford loan for which the first disbursement was made on or after December 20, 1993 and prior to July 1, 1994, if the borrower, on the date the promissory note was signed, had no outstanding balance on a Stafford loan but had an outstanding balance of principal or interest on a PLUS, SLS, or Consolidation loan, the interest rate is the rate provided in paragraph (a)(1)(ii)(B) of this section.
(vi) For a Stafford loan for which the first disbursement was made on or after July 1, 1994 and prior to July 1, 1995, for a period of enrollment that included or began on or after July 1, 1994, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10; or
(B) 8.25 percent.
(vii) For a Stafford loan for which the first disbursement was made on or after July 1, 1995 and prior to July 1, 1998 the interest rate is a variable rate applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 2.5 percent during the in-school, grace and deferment period and 3.10 percent during repayment; or
(B) 8.25 percent.
(viii) For a Stafford loan for which the first disbursement was made on or after July 1, 1998, and prior to July 1, 2006, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period plus 1.7 percent during the in-school, grace and deferment periods and 2.3 percent during repayment; or
(B) 8.25 percent.
(ix) For a Stafford loan for which the first disbursement was made on or after July 1, 2006, the interest rate is 6.8 percent.
(x) For a subsidized Stafford loan made to an undergraduate student for which the first disbursement was made on or after:
(A) July 1, 2006 and before July 1, 2008, the interest rate is 6.8 percent on the unpaid principal balance of the loan.
(B) July 1, 2008 and before July 1, 2009, the interest rate is 6 percent on the unpaid principal balance of the loan.
(C) July 1, 2009 and before July 1, 2010, the interest rate is 5.6 percent on the unpaid principal balance of the loan.
(2) PLUS Program. (i) For a combined repayment schedule under § 682.209(d), the interest rate is the weighted average of the rates of all loans included under that schedule.
(ii) For a loan disbursed on or after July 1, 1987 but prior to October 1, 1992, and for any refinanced PLUS loan, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.25 percent; or
(B) 12 percent.
(iii) For a loan disbursed on or after October 1, 1992 and prior to July 1, 1994, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 10 percent.
(iv) For a loan for which the first disbursement was made on or after July 1, 1994 and prior to July 1, 1998, the interest rate is a variable rate applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 9 percent.
(v) For a loan for which the first disbursement was made on or after July 1, 1998, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 9 percent.
(vi)(A) Beginning on July 1, 2001, and prior to July 1, 2006, the interest rate on the loans described in paragraphs (a)(2)(ii) through (iv) of this section is a variable rate applicable to each July 1-June 30, as determined on the preceding June 26, and is equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before such June 26; plus—
(1) 3.25 percent for loans described in paragraph (a)(2)(ii) of this section; or
(2) 3.1 percent for loans described in paragraphs (a)(2)(iii) and (iv) of this section.
(B) The interest rates calculated under paragraph (a)(2)(vi)(A) of this section shall not exceed the limits specified in paragraphs (a)(2)(ii)(B), (a)(2)(iii)(B), and (a)(2)(iv)(B) of this section, as applicable.
(vii) For a PLUS loan first disbursed on or after July 1, 2006, the interest rate is 8.5 percent.
(3) SLS Program. (i) For a combined repayment schedule under § 682.209(d), the interest rate is the weighted average of the rates of all loans included under that schedule.
(ii) For a loan disbursed on or after July 1, 1987 but prior to October 1, 1992, and for any refinance SLS loan, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.25 percent; or
(B) 12 percent.
(iii) For a loan disbursed on or after October 1, 1992, the interest rate is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 52-week Treasury bills auctioned at the final auction prior to the June 1 immediately preceding the July 1-June 30 period, plus 3.10 percent; or
(B) 11 percent.
(iv)(A) Beginning on July 1, 2001, the interest rate on the loans described in paragraphs (a)(3)(ii) and (iii) of this section is a variable rate applicable to each July 1-June 30, as determined on the preceding June 26, and is equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before such June 26; plus—
(1) 3.25 percent for loans described in paragraph (a)(3)(ii) of this section; or
(2) 3.1 percent for loans described in paragraph (a)(3)(iii) of this section.
(B) The interest rates calculated under paragraph (a)(3)(iv)(A) of this section shall not exceed the limits specified in paragraphs (a)(3)(ii)(B) and (a)(3)(iii)(B) of this section, as applicable.
(4) Consolidation Program. (i) A Consolidation Program loan made before July 1, 1994 bears interest at the rate that is the greater of—
(A) The weighted average of interest rates on the loans consolidated, rounded to the nearest whole percent; or
(B) 9 percent.
(ii) A Consolidation loan made on or after July 1, 1994, for which the loan application was received by the lender before November 13, 1997, bears interest at the rate that is equal to the weighted average of interest rates on the loans consolidated, rounded upward to the nearest whole percent.
(iii) For a Consolidation loan for which the loan application was received by the lender on or after November 13, 1997 and before October 1, 1998, the interest rate for the portion of the loan that consolidated loans other than HEAL loans is a variable rate, applicable to each July 1-June 30 period, that equals the lesser of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction held prior to June 1 of each year plus 3.10 percent; or
(B) 8.25 percent.
(iv) For a Consolidation loan for which the application was received by the lender on or after October 1, 1998 and prior to July 1, 2010, the interest rate for the portion of the loan that consolidated loans other than HEAL loans is a fixed rate that is the lesser of—
(A) The weighted average of interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent; or
(B) 8.25 percent.
(v) For a Consolidation loan for which the application was received by the lender on or after November 13, 1997, the annual interest rate applicable to the portion of each consolidation loan that repaid HEAL loans is a variable rate adjusted annually on July 1 and must be equal to the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the quarter ending June 30, plus 3 percent. There is no maximum rate on this portion of the loan.
(5) Actual interest rates under the Stafford loan, SLS, PLUS, and Consolidation Programs. A lender may charge a borrower an actual rate of interest that is less than the applicable interest rate specified in paragraphs (a)(1)-(4) of this section.
(6) Refund of excess interest paid on Stafford loans.
(i) For a loan with an applicable interest rate of 10 percent made prior to July 23, 1992, and for a loan with an applicable interest rate of 10 percent made from July 23, 1992 through September 30, 1992, to a borrower with no outstanding FFEL Program loans—
(A) If during any calendar quarter, the sum of the average of the bond equivalent rates of the 91-day Treasury bills auctioned for that quarter, plus 3.25 percent, is less than 10 percent, the lender shall calculate an adjustment and credit the adjustment as specified under paragraph (a)(6)(i)(B) of this section if the borrower's account is not more than 30 days delinquent on December 31. The amount of the adjustment for a calendar quarter is equal to—
(1) 10 percent minus the sum of the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the applicable quarter plus 3.25 percent;
(2) Multiplied by the average daily principal balance of the loan (not including unearned interest added to principal); and
(3) Divided by 4;
(B) No later than 30 calendar days after the end of the calendar year, the holder of the loan shall credit any amounts computed under paragraph (a)(6)(i)(A) of this section to—
(1) The Secretary, for amounts paid during any period in which the borrower is eligible for interest benefits;
(2) The borrower's account to reduce the outstanding principal balance as of the date the holder adjusts the borrower's account, provided that the borrower's account was not more than 30 days delinquent on that December 31; or
(3) The Secretary, for a borrower who on the last day of the calendar year is delinquent for more than 30 days.
(ii) For a fixed interest rate loan made on or after July 23, 1992 to a borrower with an outstanding FFEL Program loan—
(A) If during any calendar quarter, the sum of the average of the bond equivalent rates of the 91-day Treasury bills auctioned for that quarter, plus 3.10 percent, is less than the applicable interest rate, the lender shall calculate an adjustment and credit the adjustment to reduce the outstanding principal balance of the loan as specified under paragraph (a)(6)(ii)(C) of this section if the borrower's account is not more than 30 days delinquent on December 31. The amount of an adjustment for a calendar quarter is equal to—
(1) The applicable interest rate minus the sum of the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the applicable quarter plus 3.10 percent;
(2) Multiplied by the average daily principal balance of the loan (not including unearned interest added to principal); and
(3) Divided by 4;
(B) For any quarter or portion thereof that the Secretary was obligated to pay interest subsidy on behalf of the borrower, the holder of the loan shall refund to the Secretary, no later than the end of the following quarter, any excess interest calculated in accordance with paragraph (a)(6)(ii)(A) of this section;
(C) For any other quarter, the holder of the loan shall, within 30 days of the end of the calendar year, reduce the borrower's outstanding principal by the amount of excess interest calculated under paragraph (a)(6)(ii)(A) of this section, provided that the borrower's account was not more than 30 days delinquent as of December 31;
(D) For a borrower who on the last day of the calendar year is delinquent for more than 30 days, any excess interest calculated shall be refunded to the Secretary; and
(E) Notwithstanding paragraphs (a)(6)(ii)(B), (C) and (D) of this section, if the loan was disbursed during a quarter, the amount of any adjustment refunded to the Secretary or credited to the borrower for that quarter shall be prorated accordingly.
(7) Conversion to Variable Rate.
(i) A lender or holder shall convert the interest rate on a loan under paragraphs (a)(6)(i) or (ii) of this section to a variable rate.
(ii) The applicable interest rate for each 12-month period beginning on July 1 and ending on June 30 preceding each 12-month period is equal to the sum of—
(A) The bond equivalent rate of the 91-day Treasury bills auctioned at the final auction prior to June 1; and
(B) 3.25 percent in the case of a loan described in paragraph (a)(6)(i) of this section or 3.10 percent in the case of a loan described in paragraph (a)(6)(ii) of this section.
(iii)(A) In connection with the conversion specified in paragraph (a)(7)(i) of this section for any period prior to the conversion for which a rebate has not been provided under paragraph (a)(6) of this section, a lender or holder shall convert the interest rate to a variable rate.
(B) The interest rate for each period shall be reset quarterly and the applicable interest rate for the quarter or portion shall equal the sum of—
(1) The average of the bond equivalent rates of 91-day Treasury bills auctioned for the preceding 3-month period; and
(2) 3.25 percent in the case of loans as specified under paragraph (a)(6)(i) of this section or 3.10 percent in the case of loans as specified under paragraph (a)(6)(ii) of this section.
(iv)(A) The holder of a loan being converted under paragraph (a)(7)(iii)(A) of this section shall complete such conversion on or before January 1, 1995.
(B) The holder shall, not later than 30 days prior to the conversion, provide the borrower with—
(1) A notice informing the borrower that the loan is being converted to a variable interest rate;
(2) A description of the rate to the borrower;
(3) The current interest rate; and
(4) An explanation that the variable rate will provide a substantially equivalent benefit as the adjustment otherwise provided under paragraph (a)(6) of this section.
(v) The notice may be provided as part of the disclosure requirement as specified under § 682.205.
(vi) The interest rate as calculated under this paragraph may not exceed the maximum interest rate applicable to the loan prior to the conversion.
(8) Applicability of the Servicemembers Civil Relief Act (SCRA) (50 U.S.C. 527, App. sec. 207). Notwithstanding paragraphs (a)(1) through (4) of this section, a loan holder must use the official electronic database maintained by the Department of Defense to identify all borrowers with an outstanding loan who are members of the military service, as defined in § 682.208(j)(10) and ensure the interest rate on a borrower's qualified loans with an outstanding balance does not exceed the six percent maximum interest rate under 50 U.S.C. 527, App. section 207(a) on FFEL Program loans made prior to the borrower entering military service status. For purposes of this paragraph (a)(8), the interest rate includes any other charges or fees applied to the loan.
(b) Capitalization. (1) Except as provided in § 682.405(b)(4), a lender may add accrued interest and unpaid insurance premiums or Federal default fees to the borrower's unpaid principal balance in accordance with this section. This increase in the principal balance of a loan is called “capitalization.”
(2) Except as provided in paragraph (b)(4) and (b)(5) of this section, a lender may capitalize interest payable by the borrower that has accrued—
(i) For the period from the date the first disbursement was made to the beginning date of the in-school period or, for a PLUS loan, for the period from the date the first disbursement was made to the date the repayment period begins;
(ii) For the in-school or grace periods, or for a period needed to align repayment of an SLS with a Stafford loan, if capitalization is expressly authorized by the promissory note (or with the written consent of the borrower);
(iii) For a period of authorized deferment;
(iv) For a period of authorized forbearance; or
(v) For the period from the date the first installment payment was due until it was made.
(3) A lender may capitalize accrued interest under paragraphs (b)(2)(ii) through (iv) of this section no more frequently than quarterly. Capitalization is again permitted when repayment is required to begin or resume. A lender may capitalize accrued interest under paragraph (b)(2) (i) and (v) of this section only on the date repayment of principal is scheduled to begin.
(4)(i) For unsubsidized Stafford loans disbursed on or after October 7, 1998 and prior to July 1, 2000, the lender may capitalize the unpaid interest that accrues on the loan according to the requirements of section 428H(e)(2) of the Act.
(ii) For Stafford loans first disbursed on or after July 1, 2000, the lender may capitalize the unpaid interest—
(A) When the loan enters repayment;
(B) At the expiration of a period of authorized deferment;
(C) At the expiration of a period of authorized forbearance; and
(D) When the borrower defaults.
(5) For Consolidation loans, the lender may capitalize interest as provided in paragraphs (b)(2) and (b)(3) of this section, except that the lender may capitalize the unpaid interest for a period of authorized in-school deferment only at the expiration of the deferment.
(6) For any borrower in an in-school or grace period or the period needed to align repayment, deferment, or forbearance status, during which the Secretary does not pay interest benefits and for which the borrower has agreed to make payments of interest, the lender may capitalize past due interest provided that the lender has notified the borrower that the borrower's failure to resolve any delinquency constitutes the borrower's consent to capitalization of delinquent interest and all interest that will accrue through the remainder of that period.
(c) Fees for FFEL Program loans. (1)(i) For Stafford loans first disbursed prior to July 1, 2006, a lender may charge a borrower an origination fee not to exceed 3 percent of the principal amount of the loan.
(ii) For Stafford loans first disbursed on or after July 1, 2006, but before July 1, 2007, a lender may charge a borrower an origination fee not to exceed 2 percent of the principal amount of the loan.
(iii) For Stafford loans first disbursed on or after July 1, 2007, but before July 1, 2008, a lender may charge a borrower an origination fee not to exceed 1.5 percent of the principal amount of the loan.
(iv) For Stafford loans first disbursed on or after July 1, 2008, but before July 1, 2009, a lender may charge a borrower an origination fee not to exceed 1 percent of the principal amount of the loan.
(v) For Stafford loans first disbursed on or after July 1, 2009, but before July 1, 2010, a lender may charge a borrower an origination fee not to exceed .5 percent of the principal amount of the loan.
(vi) Except as provided in paragraph (c)(2) of this section, a lender must charge all borrowers the same origination fee.
(2)(i) A lender may charge a lower origination fee than the amount specified in paragraph (c)(1) of this section to a borrower whose expected family contribution (EFC), used to determine eligibility for the loan, is equal to or less than the maximum qualifying EFC for a Federal Pell Grant at the time the loan is certified or to a borrower who qualifies for a subsidized Stafford loan. A lender must charge all such borrowers the same origination fee.
(ii) With the approval of the Secretary, a lender may use a standard comparable to that defined in paragraph (c)(2)(i) of this section.
(3) If a lender charges a lower origination fee on unsubsidized loans under paragraph (c)(1) or (c)(2) of this section, the lender must charge the same fee on subsidized loans.
(4)(i) For purposes of this paragraph (c), a lender is defined as:
(A) All entities under common ownership, including ownership by a common holding company, that make loans to borrowers in a particular state; and
(B) Any beneficial owner of loans that provides funds to an eligible lender trustee to make loans on the beneficial owner's behalf in a particular state.
(ii) If a lender as defined in paragraph (c)(4)(i) charges a lower origination fee to any borrower in a particular state under paragraphs (c)(1) or (c)(2) of this section, the lender must charge all such borrowers who reside in that state or attend school in that state the same origination fee.
(5) A lender must charge a borrower an origination fee on a PLUS loan of 3 percent of the principal amount of the loan;
(6) A lender must deduct a pro rata portion of the fee (if charged) from each disbursement; and
(7) A lender must refund by a credit against the borrower's loan balance the portion of the origination fee previously deducted from the loan that is attributable to any portion of the loan—
(i) That is returned by a school to a lender in order to comply with the Act or with applicable regulations;
(ii) That is repaid or returned within 120 days of disbursement, unless—
(A) The borrower has no FFEL Program loans in repayment status and has requested, in writing, that the repaid or returned funds be used for a different purpose; or
(B) The borrower has a FFEL Program loan in repayment status, in which case the payment is applied in accordance with § 682.209(b) unless the borrower has requested, in writing, that the repaid or returned funds be applied as a cancellation of all or part of the loan;
(iii) For which a loan check has not been negotiated within 120 days of disbursement; or
(iv) For which loan proceeds disbursed by electronic funds transfer or master check have not been released from the restricted account maintained by the school within 120 days of disbursement.
(d) Insurance premium and Federal default fee. (1) For loans guaranteed prior to July 1, 2006, a lender may charge the borrower the amount of the insurance premium paid by the lender to the guarantor (up to 1 percent of the principal amount of the loan) if that charge is provided for in the promissory note.
(2) For loans guaranteed on or after July 1, 2006 and prior to July 1, 2010, a lender may charge the borrower the amount of the Federal default fee paid by the lender to the guarantor (up to 1 percent of the principal amount of the loan) if that charge is provided for in the promissory note.
(3) If the borrower is charged the insurance premium or the Federal default fee, the amount charged must be deducted proportionately from each disbursement of the borrower's loan proceeds, if the loan is disbursed in more than one installment.
(4) The lender shall refund the insurance premium or Federal default fee paid by the borrower in accordance with the circumstances and procedures applicable to the return of origination fees, as described in paragraph (c)(7) of this section.
(e) Late charge. (1) If authorized by the borrower's promissory note, the lender may require the borrower to pay a late charge under the circumstances described in paragraph (e)(2) of this section. This charge may not exceed six cents for each dollar of each late installment.
(2) The lender may require the borrower to pay a late charge if the borrower fails to pay all or a portion of a required installment payment within 15 days after it is due.
(f) Collection charges. (1) If provided for in the borrower's promissory note, and notwithstanding any provisions of State law, the lender may require that the borrower or any endorser pay costs incurred by the lender or its agents in collecting installments not paid when due, including, but not limited to—
(i) Attorney fees;
(ii) Court costs; and
(iii) Telegrams.
(2) The costs referred to in paragraph (f)(1) of this section may not include routine collection costs associated with preparing letters or notices or with making personal contacts with the borrower (e.g., local and long-distance telephone calls).
(g) Special allowance. Pursuant to § 682.412(c), a lender may charge a borrower the amount of special allowance paid by the Secretary on behalf of the borrower.
(a) Delegation of functions. A school, lender, or guaranty agency may contract or otherwise delegate the performance of its functions under the Act and this part to a servicing agency or other party. This contracting or other delegation of functions does not relieve the school, lender, or guaranty agency of its duty to comply with the requirements of the Act and this part.
(b) Trustee responsibility. A lender that holds a loan in its capacity as a trustee assumes responsibility for complying with all statutory and regulatory requirements imposed on any other holders of a loan.
(a) Stafford Loan Program annual limits. (1) In the case of an undergraduate student who has not successfully completed the first year of a program of undergraduate education, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Direct Subsidized Loan Program may not exceed the following:
(i) $2,625, or, for a loan disbursed on or after July 1, 2007, $3,500, for a program of study of at least a full academic year in length.
(ii) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $3,500, as the—
(iii) For a program of study that is less than a full academic year in length, the amount that is the same ratio to $3,500 as the lesser of the—
(2) In the case of a student who has successfully completed the first year of an undergraduate program but has not successfully completed the second year of an undergraduate program, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Direct Subsidized Loan Program may not exceed the following:
(i) $4,500 for a program whose length is at least a full academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $4,500 as the—
(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Direct Subsidized Loan Program may not exceed the following:
(i) $5,500 for a program whose length is at least an academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $5,500 as the—
(4) In the case of a student who has an associate or baccalaureate degree that is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (a)(3) of this section.
(5) In the case of a graduate or professional student, the total amount the student may borrow for loans made prior to July 1, 2010 for any academic year of study under the Stafford Loan Program, in combination with any amount borrowed under the Direct Subsidized Loan Program, may not exceed $8,500.
(6) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or certificate, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Direct Subsidized Loan Program may not exceed the following:
(i) $2,625 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(ii) $5,500 for coursework necessary for enrollment in a graduate or professional degree or certificate program for a student who has obtained a baccalaureate degree.
(7) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in coursework necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, the total amount the student may borrow for any academic year of study under the Stafford Loan Program in combination with the Direct Subsidized Loan Program may not exceed $5,500.
(8) Except as provided in paragraph (a)(4) of this section, an undergraduate student who is enrolled in a program that is one academic year or less in length may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(1) of this section.
(9) Except as provided in paragraph (a)(4) of this section—
(i) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(1) of this section.
(ii) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(2) of this section.
(b) Stafford Loan Program aggregate limits. The aggregate unpaid principal amount of all Stafford Loan Program loans in combination with loans received by the student under the Direct Subsidized Loan Program, but excluding the amount of capitalized interest may not exceed the following:
(1) $23,000 in the case of any student who has not successfully completed a program of study at the undergraduate level.
(2) $65,500, in the case of a graduate or professional student, including loans for undergraduate study.
(c) Unsubsidized Stafford Loan Program. (1) Except for a dependent undergraduate student who qualifies for additional Unsubsidized Stafford Loan funds because the student's parents are unable to borrow under the PLUS Loan Program, as described in paragraph (d) of this section, the total amount the dependent undergraduate student may borrow for any academic year under the Unsubsidized Stafford Loan Program in combination with the Direct Unsubsidized Loan Program is the same amount determined under paragraph (a) of this section, less any amount received under the Stafford Loan Program or the Direct Subsidized Loan program, plus—
(i) $2,000, for a program of study of at least a full academic year in length.
(ii) For a program of study that is at least one academic year or more in length with less than a full academic year remaining, the amount that is the same ratio to $2,000 as the—
(iii) For a program of study that is less than a full academic year in length, the amount that is the same ratio to $2,000 as the lesser of the—
(2) In the case of an independent undergraduate student, a graduate or professional student, or certain dependent undergraduate students under the conditions specified in § 682.201(a)(3), the total amount the student may borrow for any period of enrollment under the Unsubsidized Stafford Loan and Direct Unsubsidized Loan programs may not exceed the amounts determined under paragraph (a) of this section less any amount received under the Federal Stafford Loan Program or the Direct Subsidized Loan Program, in combination with the amounts determined under paragraph (d) of this section.
(d) Additional eligibility under the Unsubsidized Stafford Loan Program. An independent undergraduate student, graduate or professional student, and certain dependent undergraduate students under the conditions specified in § 682.201(a)(3) may borrow amounts under the Unsubsidized Stafford Loan Program in addition to any amount borrowed under paragraphs (a) and (c) of this section, except as provided in paragraph (d)(9) of this section. The additional amount that such a student may borrow for any academic year of study under the Unsubsidized Stafford Loan Program in combination with the Direct Unsubsidized Loan Program, in addition to the amounts allowed under paragraphs (a) and (c) of this section, except as provided in paragraph (d)(9) of this section for certain dependent undergraduate students—
(1) In the case of a student who has not successfully completed the first year of a program of undergraduate education, may not exceed the following:
(i) $6,000 for a program of study of at least a full academic year.
(ii) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $6,000 as the—
(iii) For a program of study that is less than a full academic year in length, an amount that is the same ratio to $6,000 as the lesser of—
(2) In the case of a student who has completed the first year of a program of undergraduate education but has not successfully completed the second year of a program of undergraduate education may not exceed the following:
(i) $6,000 for a program of study of at least a full academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $6,000 as the—
(3) In the case of a student who has successfully completed the second year of a program of undergraduate education, but has not completed the remainder of the program, may not exceed the following:
(i) $7,000 for a program of study of at least a full academic year.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $7,000 as the—
(4) In the case of a student who has an associate or baccalaureate degree that is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (d)(3) of this section.
(5) In the case of a graduate or professional student, may not exceed $12,000.
(6) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or a certificate may not exceed the following:
(i) $6,000 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(ii) $7,000 for coursework necessary for enrollment in a graduate or professional degree or certificate program for a student who has obtained a baccalaureate degree.
(iii) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in a program necessary for a professional credential or a certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, $7,000.
(7) Except as provided in paragraph (d)(4) of this section, an undergraduate student who is enrolled in a program that is one academic year or less in length may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (d)(1) of this section.
(8) Except as provided in paragraph (d)(4) of this section—
(i) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (d)(1) of this section.
(ii) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (d)(2) of this section.
(9) A dependent undergraduate student who qualifies for the additional Unsubsidized Stafford Loan amounts under this section in accordance with the conditions specified in § 682.201(a)(3) is not eligible to receive the additional Unsubsidized Stafford Loan amounts under paragraph (c)(1)(ii) of this section.
(e) Combined Federal Stafford, SLS and Federal Unsubsidized Stafford Loan Program aggregate limits. The aggregate unpaid principal amount of Stafford Loans, Direct Subsidized Loans, Unsubsidized Stafford Loans, Direct Unsubsidized Loans and SLS Loans, but excluding the amount of capitalized interest, may not exceed the following:
(1) $31,000 for a dependent undergraduate student.
(2) $57,500 for an independent undergraduate student or a dependent undergraduate student under the conditions specified in § 682.201(a)(3).
(3) $138,500 for a graduate or professional student.
(f) SLS Program aggregate limit. The total unpaid principal amount of SLS Program loans made to—
(1) An undergraduate student may not exceed—
(i) $20,000, for loans for which the first disbursement is made prior to July 1, 1993; or
(ii) $23,000, for loans for which the first disbursement was made on or after July 1, 1993; and
(2) A graduate student may not exceed—
(i) $20,000, for loans for which the first disbursement is made prior to July 1, 1993; or
(ii) $73,000, for loans for which the first disbursement was made on or after July 1, 1993 including loans for undergraduate study.
(g) PLUS Program annual limit. The total amount of all PLUS Program loans that a parent or student may borrow for any academic year of study may not exceed the student's cost of education minus other estimated financial assistance for that student.
(h) Minimum loan interval. The annual loan limits applicable to a student apply to the length of the school's academic year.
(i) Treatment of Consolidation loans for purposes of determining loan limits. The percentage of the outstanding balance on a Consolidation loan counted against a borrower's aggregate loan limits under the Stafford loan, Unsubsidized Stafford loan, Direct Stafford loan, Direct Unsubsidized loan, SLS, PLUS, Perkins Loan, or HEAL program must equal the percentage of the original amount of the Consolidation loan attributable to loans made to the borrower under that program.
(j) Maximum loan amounts. In no case may a Stafford, PLUS, or SLS loan amount exceed the student's estimated cost of attendance for the period of enrollment for which the loan is intended, less—
(1) The student's estimated financial assistance for that period; and
(2) The borrower's expected family contribution for that period, in the case of a Stafford loan that is eligible for interest benefits.
(k) In determining a Stafford loan amount in accordance with § 682.204 (a), (c) and (d), the school must use the definition of academic year in 34 CFR 668.3.
(l) Any TEACH Grants that have been converted to Direct Unsubsidized Loans are not counted against annual or any aggregate loan limits under paragraphs (c), (d), and (e) of this section.
(a) Repayment information— (1) Disclosures at or prior to repayment. The lender must disclose the information described in paragraph (a)(2) of this section, in simple and understandable terms, in a statement provided to the borrower at or prior to the beginning of the repayment period. In the case of a Federal Stafford or Federal PLUS loan, the disclosures required by this paragraph must be made not less than 30 days nor more than 150 days before the first payment on the loan is due from the borrower. If the borrower enters the repayment period without the lender's knowledge, the lender must provide the required disclosures to the borrower immediately upon discovering that the borrower has entered the repayment period.
(2) The lender shall provide the borrower with—
(i) The lender's name, a toll-free telephone number accessible from within the United States that the borrower can use to obtain additional loan information, and the address to which correspondence with the lender and payments should be sent;
(ii) The scheduled date the repayment period is to begin, or a deferment under § 682.210(v), if applicable, is to end;
(iii) The estimated balance, including the estimated amount of interest to be capitalized, owed by the borrower as of the date upon which the repayment period is to begin, a deferment under § 682.210(v), if applicable, is to end, or the date of the disclosure, whichever is later;
(iv) The actual interest rate on the loan;
(v) An explanation of any fees that may accrue or be charged to the borrower during the repayment period;
(vi) The borrower's repayment schedule, including the due date of the first installment and the number, amount, and frequency of payments based on the repayment schedule selected by the borrower;
(vii) Except in the case of a Consolidation loan, an explanation of any special options the borrower may have for consolidating or refinancing the loan and of the availability and terms of such other options;
(viii) The estimated total amount of interest to be paid on the loan, assuming that payments are made in accordance with the repayment schedule, and if interest has been paid, the amount of interest paid;
(ix) A statement that the borrower has the right to prepay all or part of the loan at any time, without penalty;
(x) Information on any special loan repayment benefits offered on the loan, including benefits that are contingent on repayment behavior, and any other special loan repayment benefits for which the borrower may be eligible that would reduce the amount or length of repayment; and at the request of the borrower, an explanation of the effect of a reduced interest rate on the borrower's total payoff amount and time for repayment;
(xi) If the lender provides a repayment benefit, any limitations on that benefit, any circumstances in which the borrower could lose that benefit, and whether and how the borrower may regain eligibility for the repayment benefit;
(xii) A description of all the repayment plans available to the borrower and a statement that the borrower may change plans during the repayment period at least annually;
(xiii) A description of the options available to the borrower to avoid or be removed from default, as well as any fees associated with those options; and
(xiv) Any additional resources, including nonprofit organizations, advocates and counselors, including the Department of Education's Student Loan Ombudsman, the lender is aware of where the borrower may obtain additional advice and assistance on loan repayment.
(3) Required disclosures during repayment. In addition to the disclosures required in paragraph (a)(1) of this section, the lender must provide the borrower of a FFEL loan with a bill or statement that corresponds to each payment installment time period in which a payment is due that includes in simple and understandable terms—
(i) The original principal amount of the borrower's loan;
(ii) The borrower's current balance, as of the time of the bill or statement;
(iii) The interest rate on the loan;
(iv) The total amount of interest for the preceding installment paid by the borrower;
(v) The aggregate amount paid by the borrower on the loan, and separately identifying the amount the borrower has paid in interest on the loan, the amount of fees the borrower has paid on the loan, and the amount paid against the balance in principal;
(vi) A description of each fee the borrower has been charged for the most recent preceding installment time period;
(vii) The date by which a payment must be made to avoid additional fees and the amount of that payment and the fees;
(viii) The lender's or servicer's address and toll-free telephone number for repayment options, payments and billing error purposes; and
(ix) A reminder that the borrower may change repayment plans, a list of all of the repayment plans that are available to the borrower, a link to the Department of Education's Web site for repayment plan information, and directions on how the borrower may request a change in repayment plans from the lender.
(4) Required disclosures for borrowers having difficulty making payments. (i) Except as provided in paragraph (a)(4)(ii) of this section, the lender must provide a borrower who has notified the lender that he or she is having difficulty making payments with—
(A) A description of the repayment plans available to the borrower, and how the borrower may request a change in repayment plan;
(B) A description of the requirements for obtaining forbearance on the loan and any costs associated with forbearance; and
(C) A description of the options available to the borrower to avoid default and any fees or costs associated with those options.
(ii) A disclosure under paragraph (a)(4)(i) of this section is not required if the borrower's difficulty has been resolved through contact with the borrower resulting from an earlier disclosure or other communication between the lender and the borrower.
(5) Required disclosures for borrowers who are 60-days delinquent in making payments on a loan. (i) The lender shall provide to a borrower who is 60 days delinquent in making required payments a notice of—
(A) The date on which the loan will default if no payment is made;
(B) The minimum payment the borrower must make, as of the date of the notice, to avoid default, including the payment amount needed to bring the loan current or payment in full;
(C) A description of the options available to the borrower to avoid default, including deferment and forbearance and any fees and costs associated with those options;
(D) Any options for discharging the loan that may be available to the borrower; and
(E) Any additional resources, including nonprofit organizations, advocates and counselors, including the Department of Education's Student Loan Ombudsman, the lender is aware of where the borrower may obtain additional advice and assistance on loan repayment.
(ii) The notice must be sent within five business days of the date the borrower becomes 60 days delinquent, unless the lender has sent such a notice within the previous 120 days.
(b) Exception to disclosure requirement. In the case of a Federal Unsubsidized Stafford loan or a Federal PLUS loan, the lender is not required to provide the information in paragraph (a)(2)(viii) of this section if the lender, instead of that disclosure, provides the borrower with sample projections of the monthly repayment amounts assuming different levels of borrowing and interest accruals resulting from capitalization of interest while the borrower or student on whose behalf the loan is made is in school. Sample projections must disclose the cost to the borrower of principal and interest, interest only, and capitalized interest. The lender may rely on the Stafford and PLUS promissory notes and associated materials approved by the Secretary for purposes of complying with this section.
(c) Borrower may not be charged for disclosures. The lender must provide the information required by this section at no cost to the borrower.
(d) Method of disclosure. Any disclosure of information by a lender under this section may be through written or electronic means.
(e) Notice of availability of income-sensitive and income-based repayment options. (1) At the time of offering a borrower a loan and at the time of offering a borrower repayment options, the lender must provide the borrower with a notice that informs the borrower of the availability of income-sensitive and, except for parent PLUS borrowers and Consolidation Loan borrowers whose Consolidation Loan paid off one or more parent PLUS Loans, income-based repayment plans. This information may be provided in a separate notice or as part of the other disclosures required by this section. The notice must inform the borrower—
(i) That the borrower is eligible for income-sensitive repayment and may be eligible for income-based repayment, including through loan consolidation;
(ii) Of the procedures by which the borrower can elect income-sensitive or income-based repayment; and
(iii) Of where and how the borrower may obtain more information concerning income-sensitive and income-based repayment plans.
(2) The promissory note and associated materials approved by the Secretary satisfy the loan origination notice requirements provided for in paragraph (e)(1) of this section.
(f) Disclosure procedures when a borrower's address is not available. If a lender receives information indicating it does not know the borrower's current address, the lender is excused from providing disclosure information under this section unless it receives communication indicating a valid borrower address before the 241st day of delinquency, at which point the lender must resume providing the installment bill or statement, and any other disclosure information required under this section not previously provided.
(a) The loan servicing process includes reporting to nationwide consumer reporting agencies, responding to borrower inquiries, establishing the terms of repayment, and reporting a borrower's enrollment and loan status information.
(b)(1) An eligible lender of a FFEL loan shall report to each nationwide consumer reporting agency—
(i) The total amount of FFEL loans the lender has made to the borrower, within 90 days of each disbursement;
(ii) The outstanding balance of the loans;
(iii) Information concerning the repayment status of the loan, no less frequently than every 90 days or quarterly after a change in that status from current to delinquent;
(iv) The date the loan is fully repaid by, or on behalf of, the borrower, or discharged by reason of the borrower's death, bankruptcy, or total and permanent disability, within 90 days after that date;
(v) Other information required by law to be reported.
(2) An eligible lender that has acquired a FFEL loan shall report to each nationwide consumer reporting agency the information required by paragraph (b)(1)(ii)-(v) of this section within 90 days of its acquisition of the loan.
(3) Upon receipt of a valid identity theft report as defined in section 603(q)(4) of the Fair Credit Reporting Act (15 U.S.C. 1681a) or notification from a consumer reporting agency that information furnished by the lender is a result of an alleged identity theft as defined in § 682.402(e)(14), an eligible lender shall suspend consumer reporting agency reporting for a period not to exceed 120 days while the lender determines the enforceability of a loan.
(i) If the lender determines that a loan does not qualify for a discharge under § 682.402(e)(1)(i)(C), but is nonetheless unenforceable, the lender must—
(A) Notify the consumer reporting agency of its determination; and
(B) Comply with §§ 682.300(b)(2)(ix) and 682.302(d)(1)(viii).
(ii) [Reserved]
(4) If, within 3 years of the lender's receipt of an identity theft report, the lender receives from the borrower evidence specified in § 682.402(e)(3)(v), the lender may submit a claim and receive interest subsidy and special allowance payments that would have accrued on the loan.
(c)(1) A lender shall respond within 30 days after receipt to any inquiry from a borrower or any endorser on a loan.
(2) When a lender learns that a Stafford loan borrower or a student PLUS loan borrower is no longer enrolled at an institution of higher education on at least a half-time basis, the lender shall promptly contact the borrower in order to establish the terms of repayment.
(3)(i) If the borrower disputes the terms of the loan in writing and the lender does not resolve the dispute, the lender's response must provide the borrower with an appropriate contact at the guaranty agency for the resolution of the dispute.
(ii) If the guaranty agency does not resolve the dispute, the agency's response must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(d) Subject to the rules regarding maximum duration of a repayment period and minimum annual payment described in § 682.209(a)(7), (c), and (h), nothing in this part is intended to limit a lender's discretion in establishing, or, with the borrower's consent, revising a borrower's repayment schedule—
(1) To provide for graduated or income-sensitive repayment terms. The Secretary strongly encourages lenders to provide a graduated or income-sensitive repayment schedule to a borrower providing for at least the payment of interest charges, unless the borrower requests otherwise, in order to make the borrower's repayment burden commensurate with his or her projected ability to pay; or
(2) To provide a single repayment schedule, as authorized and if practicable, for all FFEL program loans to the borrower held by the lender.
(e)(1) If the assignment or transfer of ownership interest of a Stafford, PLUS, SLS, or Consolidation loan is to result in a change in the identity of the party to whom the borrower must send subsequent payments, the assignor and assignee of the loan shall, no later than 45 days from the date the assignee acquires a legally enforceable right to receive payment from the borrower on the assigned loan, provide, either jointly or separately, a notice to the borrower of—
(i) The assignment;
(ii) The identity of the assignee;
(iii) The name and address of the party to whom subsequent payments or communications must be sent;
(iv) The telephone numbers of both the assignor and the assignee;
(v) The effective date of the assignment or transfer of the loan;
(vi) The date, if applicable, on which the current loan servicer will stop accepting payments; and
(vii) The date on which the new loan servicer will begin accepting payments.
(2) If the assignor and assignee separately provide the notice required by paragraph (e)(1) of this section, each notice must indicate that a corresponding notice will be sent by the other party to the assignment.
(3) For purposes of this paragraph, the term “assigned” is defined in § 682.401(b)(8)(ii).
(4) The assignee, or the assignor on behalf of the assignee, shall notify the guaranty agency that guaranteed the loan within 45 days of the date the assignee acquires a legally enforceable right to receive payment from the borrower on the loan of—
(i) The assignment; and
(ii) The name and address of the assignee, and the telephone number of the assignee that can be used to obtain information about the repayment of the loan.
(5) The requirements of this paragraph (e), as to borrower notification, apply if the borrower is in a grace period or has entered the repayment period.
(f)(1) Notwithstanding an error by the school or lender, a lender shall follow the procedures in § 682.412 whenever it receives information that can be substantiated that the borrower, or the student on whose behalf a parent has borrowed, has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance, provided false or erroneous information or took actions that caused the student or borrower—
(i) To be ineligible for all or a portion of a loan made under this part;
(ii) To receive a Stafford loan subject to payment of Federal interest benefits as provided under § 682.301, for which he or she was ineligible; or
(iii) To receive loan proceeds that were not paid to the school or repaid to the lender by or on behalf of a registered student who—
(A) The school notifies the lender under 34 CFR 668.21(a)(2)(ii) has withdrawn or been expelled prior to the first day of classes for the period of enrollment for which the loan was intended; or
(B) Failed to attend school during that period.
(2) For purposes of this section, the term “guaranty agency” in § 682.412(e) refers to the Secretary in the case of a Federal GSL loan.
(g) If, during a period when the borrower is not delinquent, a lender receives information indicating it does not know the borrower's address, it may commence the skip-tracing activities specified in § 682.411(h).
(h) Notifying the borrower about a servicing change. If an FFEL Program loan has not been assigned, but there is a change in the identity of the party to whom the borrower must send subsequent payments or direct any communications concerning the loan, the holder of the loan shall, no later than 45 days after the date of the change, provide notice to the borrower of the name, telephone number, and address of the party to whom subsequent payments or communications must be sent. The requirements of this paragraph apply if the borrower is in a grace period or has entered the repayment period.
(i) A lender shall report enrollment and loan status information, or any Title IV loan-related data required by the Secretary, to the guaranty agency or to the Secretary, as applicable, by the deadline date established by the Secretary.
(j)(1) Effective July 1, 2016, a loan holder is required to use the official electronic database maintained by the Department of Defense, to—
(i) Identify all borrowers who are military servicemembers and who are eligible under § 682.202(a)(8); and
(ii) Confirm the dates of the borrower's military service status and begin, extend, or end, as applicable, the use of the SCRA interest rate limit of six percent.
(2) The loan holder must compare its list of borrowers against the database maintained by the Department of Defense at least monthly to identify servicemembers who are in military service status for the purpose of determining eligibility under § 682.202(a)(8).
(3) A borrower may provide the loan holder with alternative evidence of military service status to demonstrate eligibility if the borrower believes that the information contained in the Department of Defense database is inaccurate or incomplete. Acceptable alternative evidence includes—
(i) A copy of the borrower's military orders; or
(ii) The certification of the borrower's military service from an authorized official using a form approved by the Secretary.
(4)(i) When the loan holder determines that the borrower is eligible under § 682.202(a)(8), the loan holder must ensure the interest rate on the borrower's loan does not exceed the SCRA interest rate limit of six percent.
(ii) The loan holder must apply the SCRA interest rate limit of six percent for the longest eligible period verified with the official electronic database, or alternative evidence of military service status received under paragraph (j)(3) of this section, using the combination of evidence that provides the borrower with the earliest military service start date and the latest military service end date.
(iii) In the case of a reservist, the loan holder must use the reservist's notification date as the start date of the military service period.
(5) When the loan holder applies the SCRA interest rate limit of six percent to a borrower's loan, it must notify the borrower in writing within 30 days that the interest rate on the loan has been reduced to six percent during the borrower's period of military service.
(6)(i) For PLUS loans with an endorser, the loan holder must use the official electronic database to begin, extend, or end, as applicable, the SCRA interest rate limit of six percent on the loan based on the borrower's or endorser's military service status, regardless of whether the loan holder is currently pursuing the endorser for repayment of the loan.
(ii) If both the borrower and the endorser are eligible for the SCRA interest rate limit of six percent on a loan, the loan holder must use the earliest military service start date of either party and the latest military service end date of either party to begin, extend, or end, as applicable, the SCRA interest rate limit.
(7)(i) For joint consolidation loans, the loan holder must use the official electronic database to begin, extend, or end, as applicable, the SCRA interest rate limit of six percent on the loan if either of the borrowers is eligible for the SCRA interest rate limit under § 682.202(a)(8).
(ii) If both borrowers on a joint consolidation loan are eligible for the SCRA interest rate limit of six percent on a loan, the loan holder must use the earliest military service start date of either party and the latest military service end date of either party to begin, extend, or end, as applicable, the SCRA interest rate limit.
(8) If the application of the SCRA interest rate limit of six percent results in an overpayment on a loan that is subsequently paid in full through consolidation, the underlying loan holder must return the overpayment to the holder of the consolidation loan.
(9) For any other circumstances where application of the SCRA interest rate limit of six percent results in an overpayment of the remaining balance on the loan, the loan holder must refund the amount of that overpayment to the borrower.
(10) For purposes of this section, the term “military service” means—
(i) In the case of a servicemember who is a member of the Army, Navy, Air Force, Marine Corps, or Coast Guard—
(A) Active duty, meaning full-time duty in the active military service of the United States. Such term includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. Such term does not include full-time National Guard duty.
(B) In the case of a member of the National Guard, including service under a call to active service, which means service on active duty or full-time National Guard duty, authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days for purposes of responding to a national emergency declared by the President and supported by Federal funds;
(ii) In the case of a servicemember who is a commissioned officer of the Public Health Service or the National Oceanic and Atmospheric Administration, active service; and
(iii) Any period during which a servicemember is absent from duty on account of sickness, wounds, leave, or other lawful cause.
(a) Conversion of a loan to repayment status. (1) For a Consolidation loan, the repayment period begins on the date the loan is disbursed. The first payment is due within 60 days after the date the loan is disbursed.
(2)(i) For a PLUS loan, the repayment period begins on the date of the last disbursement made on the loan. Interest accrues and is due and payable from the date of the first disbursement of the loan. The first payment is due within 60 days after the date the loan is fully disbursed.
(ii) For an SLS loan, the repayment period begins on the date the loan is disbursed, or, if the loan is disbursed in multiple installments, on the date of the last disbursement of the loan. Interest accrues and is due and payable from the date of the first disbursement of the loan. Except as provided in paragraph (a)(2)(iii), (a)(2)(iv), and (a)(2)(v) of this section the first payment is due within 60 days after the date the loan is fully disbursed.
(iii) For an SLS borrower who has not yet entered repayment on a Stafford loan, the borrower may postpone payment, consistent with the grace period on the borrower's Stafford loan.
(iv) If the lender first learns after the fact that an SLS borrower has entered the repayment period, the repayment begins no later than 75 days after the date the lender learns that the borrower has entered the repayment period.
(v) The lender may establish a first payment due date that is no more than an additional 30 days beyond the period specified in paragraphs (a)(2)(i)-(a)(2)(iv) of this section in order for the lender to comply with the required deadline contained in § 682.205(c)(1).
(3)(i) Except as provided in paragraph (a)(4) of this section, for a Stafford loan the repayment period begins—
(A) For a borrower with a loan for which the applicable interest rate is 7 percent per year, not less than 9 nor more than 12 months following the date on which the borrower is no longer enrolled on at least a half-time basis at an eligible school. The length of this grace period is determined by the lender for loans made under the FISL Program, and by the guaranty agency for loans guaranteed by the agency;
(B) For a borrower with a loan for which the initial applicable interest rate is 8 or 9 percent per year, the day after 6 months following the date on which the borrower is no longer enrolled on at least a half-time basis at an institution of higher education;
(C) For a borrower with a loan with a variable interest rate, the day after 6 months following the date on which the borrower is no longer enrolled on at least a half-time basis at an institution of higher education; and
(D) For a borrower with a loan for which the applicable interest rate is fixed at 6.0 percent per year, 5.6 percent per year, or 6.8 percent per year, the day after 6 months following the date on which the borrower is no longer enrolled on at least a half-time basis at an institution of higher education.
(ii) The first payment on a Stafford loan is due on a date established by the lender that is no more than—
(A) 60 days following the first day that the repayment period begins;
(B) 60 days from the expiration of a deferment or forbearance period;
(C) 60 days following the end of the post deferment grace period;
(D) If the lender first learns after the fact that the borrower has entered the repayment period, no later than 75 days after the date the lender learns that the borrower has entered the repayment period; or
(E) An additional 30 days beyond the periods specified in paragraphs (a)(3)(ii)(A)-(a)(3)(ii)(D) of this section in order for the lender to comply with the required deadlines contained in § 682.205(a)(1).
(iii) When determining the date that the student was no longer enrolled on at least a half-time basis, the lender must use a new date it receives from a school, unless the lender has already disclosed repayment terms to the borrower and the new date is within the same month and year as the most recent date reported to the lender.
(4) For a borrower of a Stafford loan who is a correspondence student, the grace period specified in paragraph (a)(3)(i) of this section begins on the earliest of—
(i) The day after the borrower completes the program;
(ii) The day after withdrawal as determined pursuant to 34 CFR 668.22; or
(iii) 60 days following the last day for completing the program as established by the school.
(5) For purposes of establishing the beginning of the repayment period for Stafford and SLS loans, the grace periods referenced in paragraphs (a)(2)(iii) and (a)(3)(i) of this section exclude any period during which a borrower who is a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code is called or ordered to active duty for a period of more than 30 days. Any single excluded period may not exceed three years and includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any Stafford or SLS borrower who is in a grace period when called or ordered to active duty as specified in this paragraph is entitled to a full grace period upon completion of the excluded period.
(6)(i) The repayment schedule may provide for substantially equal installment payments or for installment payments that increase or decrease in amount during the repayment period. If the loan has a variable interest rate that changes annually, the lender may establish a repayment schedule that—
(A) Provides for adjustments of the amount of the installment payment to reflect annual changes in the variable interest rate; or
(B) Contains no provision for an adjustment of the amount of the installment payment to reflect annual changes in the variable interest rate, but requires the lender to grant a forbearance to the borrower (or endorser, if applicable) for a period of up to 3 years of payments in accordance with § 682.211(i)(5) in cases where the effect of a variable interest rate on a standard or graduated repayment schedule would result in a loan not being repaid within the maximum repayment term.
(ii) If a graduated or income-sensitive repayment schedule is established, it may not provide for any single installment that is more than three times greater than any other installment. An agreement as specified in paragraph (c)(1)(ii) of this section is not required if the schedule provides for less than the minimum annual payment amount specified in paragraph (c)(1)(i) of this section.
(iii) Not more than six months prior to the date that the borrower's first payment is due, the lender must offer the borrower a choice of a standard, income-sensitive, income-based, graduated, or, if applicable, an extended repayment schedule.
(iv) Except in the case of an income-based repayment schedule, the repayment schedule must require that each payment equal at least the interest that accrues during the interval between scheduled payments.
(v) The lender shall require the borrower to repay the loan under a standard repayment schedule described in paragraph (a)(6)(vi) of this section if the borrower—
(A) Does not select an income-sensitive, income-based, graduated, or, if applicable, an extended repayment schedule within 45 days after being notified by the lender to choose a repayment schedule;
(B) Chooses an income-sensitive repayment schedule, but does not provide the documentation requested by the lender under paragraph (a)(6)(viii)(C) of this section within the time period specified by the lender; or
(C) Chooses an income-based repayment schedule, but does not provide the income documentation requested by the lender under § 682.215(e)(1)(i) through (e)(1)(iii) within the time period specified by the lender.
(vi) Under a standard repayment schedule, the borrower is scheduled to pay either—
(A) The same amount for each installment payment made during the repayment period, except that the borrower's final payment may be slightly more or less than the other payments; or
(B) An installment amount that will be adjusted to reflect annual changes in the loan's variable interest rate.
(vii) Under a graduated repayment schedule—
(A)(1) The amount of the borrower's installment payment is scheduled to change (usually by increasing) during the course of the repayment period; or
(2) If the loan has a variable interest rate that changes annually, the lender may establish a repayment schedule that may have adjustments in the payment amount as provided under paragraph (a)(6)(i) of this section; and
(B) An agreement as specified in paragraph (c)(1)(ii) of this section is not required if the schedule provides for less than the minimum annual payment amount specified in paragraph (c)(1)(i) of this section.
(viii) Under an income-sensitive repayment schedule—
(A)(1) The amount of the borrower's installment payment is adjusted annually, based on the borrower's expected total monthly gross income received by the borrower from employment and from other sources during the course of the repayment period; or
(2) If the loan has a variable interest rate that changes annually, the lender may establish a repayment schedule that may have adjustments in the payment amount as provided under paragraph (a)(6)(i) of this section; and
(B) In general, the lender shall request the borrower to inform the lender of his or her income no earlier than 90 days prior to the due date of the borrower's initial installment payment and subsequent annual payment adjustment under an income-sensitive repayment schedule. The income information must be sufficient for the lender to make a reasonable determination of what the borrower's payment amount should be. If the lender receives late notification that the borrower has dropped below half-time enrollment status at a school, the lender may request that income information earlier than 90 days prior to the due date of the borrower's initial installment payment;
(C) If the borrower reports income to the lender that the lender considers to be insufficient for establishing monthly installment payments that would repay the loan within the applicable maximum repayment period, the lender shall require the borrower to submit evidence showing the amount of the most recent total monthly gross income received by the borrower from employment and from other sources including, if applicable, pay statements from employers and documentation of any income received by the borrower from other parties;
(D) The lender shall grant a forbearance to the borrower (or endorser, if applicable) for a period of up to 5 years of payments in accordance with § 682.211(i)(5) in cases where the effect of decreased installment amounts paid under an income-sensitive repayment schedule would result in a loan not being repaid within the maximum repayment term; and
(E) The lender shall inform the borrower that the loan must be repaid within the time limits specified under paragraph (a)(7) of this section.
(ix) Under an extended repayment schedule, a new borrower whose total outstanding principal and interest in FFEL loans exceed $30,000 may repay the loan on a fixed annual repayment amount or a graduated repayment amount for a period that may not exceed 25 years. For purposes of this section, a “new borrower” is an individual who has no outstanding principal or interest balance on an FFEL Program loan as of October 7, 1998, or on the date he or she obtains an FFEL Program loan after October 7, 1998.
(x) Under an income-based repayment schedule, the borrower repays the loan in accordance with § 682.215.
(xi) A borrower may request a change in the repayment schedule on a loan. The lender must permit the borrower to change the repayment schedule no less frequently than annually, or at any time in the case of a borrower in an income-based repayment plan.
(xii) For purposes of this section, a lender shall, to the extent practicable require that all FFEL loans owed by a borrower to the lender be combined into one account and repaid under one repayment schedule. In that event, the word “loan” in this section shall mean all of the borrower's loans that were combined by the lender into that account.
(7)(i) Subject to paragraphs (a)(7)(ii) through (iv) of this section, and except as provided in paragraph (a)(6)(ix) a lender shall allow a borrower at least 5 years, but not more than 10 years, or 25 years under an extended repayment plan to repay a Stafford, SLS, or PLUS loan, calculated from the beginning of the repayment period. Except in the case of a FISL loan for a period of enrollment beginning on or after July 1, 1986, the lender shall require a borrower to fully repay a FISL loan within 15 years after it is made.
(ii) If the borrower receives an authorized deferment or is granted forbearance, as described in § 682.210 or § 682.211 respectively, the periods of deferment or forbearance are excluded from determinations of the 5-, 10-, and 15- and 25-year periods, and from the 10-, 12-, 15-, 20-, 25-, and 30-year periods for repayment of a Consolidation loan pursuant to § 682.209(h).
(iii) If the minimum annual repayment required in paragraph (c) of this section would result in complete repayment of the loan in less than 5 years, the borrower is not entitled to the full 5-year period.
(iv) The borrower may, prior to the beginning of the repayment period, request and be granted by the lender a repayment period of less than 5 years. Subject to paragraph (a)(7)(iii) of this section, a borrower who makes such a request may notify the lender at any time to extend the repayment period to a minimum of 5 years.
(8) If, with respect to the aggregate of all loans held by a lender, the total payment made by a borrower for a monthly or similar payment period would not otherwise be a multiple of five dollars, except in the case of payments made under an income-based repayment plan, the lender may round that periodic payment to the next highest whole dollar amount that is a multiple of five dollars.
(b) Payment application and prepayment. (1) Except in the case of payments made under an income-based repayment plan, the lender may credit the entire payment amount first to any late charges accrued or collection costs and then to any outstanding interest and then to outstanding principal.
(2)(i) The borrower may prepay the whole or any part of a loan at any time without penalty.
(ii) If the prepayment amount equals or exceeds the monthly payment amount under the repayment schedule established for the loan, the lender shall apply the prepayment to future installments by advancing the next payment due date, unless the borrower requests otherwise. The lender must either inform the borrower in advance using a prominent statement in the borrower's coupon book or billing statement that any additional full payment amounts submitted without instructions to the lender as to their handling will be applied to future scheduled payments with the borrower's next scheduled payment due date advanced consistent with the number of additional payments received, or provide a notification to the borrower after the payments are received informing the borrower that the payments have been so applied and the date of the borrower's next scheduled payment due date. Information related to next scheduled payment due date need not be provided to borrowers making such prepayments while in an in-school, grace, deferment, or forbearance period when payments are not due.
(c) Minimum annual payment. (1)(i) Subject to paragraph (c)(1)(ii) of this section and except as otherwise provided by a graduated, income-sensitive, extended, or income-based repayment plan selected by the borrower, during each year of the repayment period, a borrower's total payments to all holders of the borrower's FFEL Program loans must total at least $600 or the unpaid balance of all loans, including interest, whichever amount is less.
(ii) If the borrower and the lender agree, the amount paid may be less.
(2) The provisions of paragraphs (c)(1) (i) and (ii) of this section may not result in an extension of the maximum repayment period unless forbearance as described in § 682.211, or deferment described in § 682.210, has been approved.
(d) Combined repayment of a borrower's student PLUS and SLS loans held by a lender. (1) A lender may, at the request of a student borrower, combine the borrower's, student PLUS and SLS loans held by it into a single repayment schedule.
(2) The repayment period on the loans included in the combined repayment schedule must be calculated based on the beginning of repayment of the most recent included loan.
(3) The interest rate on the loans included in the new combined repayment schedule must be the weighted average of the rates of all included loans.
(e) Consolidation loans. (1) For a Consolidation loan, the repayment period begins on the day of disbursement, with the first payment due within 60 days after the date of disbursement.
(2) If the sum of the amount of the Consolidation loan and the unpaid balance on other student loans to the applicant—
(i) Is less than $7,500, the borrower shall repay the Consolidation loan in not more than 10 years;
(ii) Is equal to or greater than $7,500 but less than $10,000, the borrower shall repay the Consolidation loan in not more than 12 years;
(iii) Is equal to or greater than $10,000 but less than $20,000, the borrower shall repay the Consolidation loan in not more than 15 years;
(iv) Is equal to or greater than $20,000 but less than $40,000, the borrower shall repay the Consolidation loan in not more than 20 years;
(v) Is equal to or greater than $40,000 but less than $60,000, the borrower shall repay the Consolidation loan in not more than 25 years; or
(vi) Is equal to or greater than $60,000, the borrower shall repay the Consolidation loan in not more than 30 years.
(3) For the purpose of paragraph (e)(2) of this section, the unpaid balance on other student loans—
(i) May not exceed the amount of the Consolidation loan; and
(ii) With the exception of the defaulted title IV loans on which the borrower has made satisfactory repayment arrangements with the holder of the loan, does not include the unpaid balance on any defaulted loans.
(4) A repayment schedule for a Consolidation loan—
(i) Must be established by the lender;
(ii) Except in the case of an income-based repayment schedule, must require that each payment equal at least the interest that accrues during the interval between scheduled payments.
(5) Upon receipt of the proceeds of a loan made under paragraph (e)(2) of this section, the holder of the underlying loan shall promptly apply the proceeds to discharge fully the borrower's obligation on the underlying loan, and provide the consolidating lender with the holder's written certification that the borrower's obligation on the underlying loan has been fully discharged.
(f) Treatment by a lender of borrowers' title IV, HEA program funds received from schools if the borrower withdraws. (1) A lender shall treat a refund or a return of title IV, HEA program funds under § 668.22 when a student withdraws received by the lender from a school as a credit against the principal amount owed by the borrower on the borrower's loan.
(2)(i) If a lender receives a refund or a return of title IV, HEA program funds under § 668.22 when a student withdraws from a school on a loan that is no longer held by that lender, or that has been discharged by another lender by refinancing or by a Consolidation loan, the lender must transmit the amount of the payment, within 30 days of its receipt, to the lender to whom it assigned the loan, or to the lender that discharged the prior loan, with an explanation of the source of the payment.
(ii) Upon receipt of a refund or a return of title IV, HEA program funds transmitted under paragraph (f)(2)(i) of this section, the holder of the loan promptly must provide written notice to the borrower that the holder has received the return of title IV, HEA program funds.
(g) Any lender holding a loan is subject to all claims and defenses that the borrower could assert against the school with respect to that loan if—
(1) The loan was made by the school or a school-affiliated organization;
(2) The lender who made the loan provided an improper inducement, as described in paragraph (5)(i) of the definition of Lender in § 682.200(b), to the school or any other party in connection with the making of the loan;
(3) The school refers borrowers to the lender; or
(4) The school is affiliated with the lender by common control, contract, or business arrangement.
(a) General. (1)(i) A borrower is entitled to have periodic installment payments of principal deferred during authorized periods after the beginning of the repayment period, pursuant to paragraph (b) and paragraphs (s) through (v) of this section.
(ii) With the exception of a deferment authorized under paragraph (o) of this section, a borrower may continue to receive a specific type of deferment that is limited to a maximum period of time only if the total amount of time that the borrower has received the deferment does not exceed the maximum time period allowed for the deferment.
(2)(i) For a loan made before October 1, 1981, the borrower is also entitled to have periodic installments of principal deferred during the six-month period (post-deferment grace period) that begins after the completion of each deferment period or combination of those periods, except as provided in paragraph (a)(2)(ii) of this section.
(ii) Once a borrower receives a post-deferment grace period following an unemployment deferment, as described in paragraph (b)(1)(v) of this section, the borrower does not qualify for additional post-deferment grace periods following subsequent unemployment deferments.
(3)(i) Interest accrues and is paid by—
(A) The Secretary during the deferment period for a subsidized Stafford loan and for all or a portion of a Consolidation loan that qualifies for interest benefits under § 682.301; or
(B) The borrower during the deferment period and, as applicable, the post-deferment grace period, on all other loans.
(ii) A borrower who is responsible for payment of interest during a deferment period must be notified by the lender, at or before the time the deferment is granted, that the borrower has the option to pay the accruing interest or cancel the deferment and continue paying on the loan. The lender must also provide information, including an example, on the impact of capitalization of accrued, unpaid interest on loan principal, and on the total amount of interest to be paid over the life of the loan.
(4) As a condition for receiving a deferment, except for purposes of paragraphs (c)(1)(ii), (iii), and (iv) of this section, the borrower, or the borrower's representative for purposes of paragraphs (i) and (t) of this section, must request the deferment, and provide the lender with all information and documents required to establish eligibility for a specific type of deferment.
(5) An authorized deferment period begins on the date that the holder determines is the date that the condition entitling the borrower to the deferment first existed, except that an initial unemployment deferment as described in paragraph (h)(2) of this section cannot begin more than 6 months before the date the holder receives a request and documentation required for the deferment.
(6) An authorized deferment period ends on the earlier of—
(i) The date when the condition establishing the borrower's eligibility for the deferment ends;
(ii) Except as provided in paragraph (a)(6)(iv) of this section, the date on which, as certified by an authorized official, the borrower's eligibility for the deferment is expected to end;
(iii) Except as provided in paragraph (a)(6)(iv) of this section, the expiration date of the period covered by any certification required by this section to be obtained for the deferment;
(iv) In the case of an in-school deferment, the student's anticipated graduation date as certified by an authorized official of the school; or
(v) The date when the condition providing the basis for the borrower's eligibility for the deferment has continued to exist for the maximum amount of time allowed for that type of deferment.
(7) A lender may not deny a borrower a deferment to which the borrower is entitled, even though the borrower may be delinquent, but not in default, in making required installment payments. The 270- or 330-day period required to establish default does not run during the deferment and post-deferment grace periods. Unless the lender has granted the borrower forbearance under § 682.211, when the deferment and, if applicable, the post-deferment grace period expire, a borrower resumes any delinquency status that existed when the deferment period began.
(8) A borrower whose loan is in default is not eligible for a deferment on that loan, unless the borrower has made payment arrangements acceptable to the lender prior to the payment of a default claim by a guaranty agency.
(9) The borrower promptly must inform the lender when the condition entitling the borrower to a deferment no longer exists.
(10) Authorized deferments are described in paragraph (b) of this section. Specific requirements for each deferment are set forth in paragraphs (c) through (s) of this section.
(11) If two individuals are jointly liable for repayment of a PLUS loan or a Consolidation loan, the lender shall grant a request for deferment if both individuals simultaneously meet the requirements of this section for receiving the same, or different deferments.
(b) Authorized deferments for borrowers prior to July 1, 1993—(1) For all borrowers who are not new borrowers on or after July 1, 1993. Deferment is authorized for a FFEL borrower during any period when the borrower is—
(i) Except as provided in paragraph (b)(4) of this section, engaged in full-time study at a school in accordance with paragraph (c) of this section;
(ii) Engaged in a course of study under an eligible graduate fellowship program in accordance with paragraph (d) of this section;
(iii) Engaged in a rehabilitation training program for disabled individuals in accordance with paragraph (e) of this section;
(iv) Temporarily totally disabled in accordance with paragraph (f) of this section, or unable to secure employment because the borrower is caring for a spouse or other dependent who is disabled and requires continuous nursing or similar services for up to three years in accordance with paragraph (g) of this section; or
(v) Conscientiously seeking, but unable to find, full-time employment in the United States, for up to two years, in accordance with paragraph (h) of this section.
(2) For all Stafford and SLS borrowers who are not new borrowers on or after July 1, 1993, and for parent PLUS loans made before August 15, 1983. Deferment is authorized during any period when the borrower is—
(i) On active duty status in the United States Armed Forces in accordance with paragraph (i) of this section, or an officer in the Commissioned Corps of the United States Public Health Service in accordance with paragraph (j) of this section, for up to three years (including any period during which the borrower received a deferment authorized under paragraph (b)(3)(ii) of this section);
(ii) A full-time volunteer under the Peace Corps Act, for up to three years, in accordance with paragraph (k) of this section;
(iii) A full-time volunteer under title I of the Domestic Volunteer Service Act of 1973 (ACTION programs), for up to three years, in accordance with paragraph (l) of this section;
(iv) A full-time volunteer for a tax-exempt organization, for up to three years, in accordance with paragraph (m) of this section; or
(v) Engaged in an internship or residency program, in accordance with paragraph (n) of this section, for up to two years (including any period during which the borrower received a deferment authorized under paragraph (b)(3)(iv) of this section).
(3) For new Stafford or SLS borrowers on or after July 1, 1987 but before July 1, 1993. Deferment is authorized—
(i) In accordance with paragraph (o) of this section, if the borrower has been enrolled on at least a half-time basis at an institution of higher education during the six months preceding the beginning of the deferment, for a period of up to six months during which the borrower is—
(A)(1) Pregnant;
(2) Caring for his or her newborn child; or
(3) Caring for a child immediately following the placement of the child with the borrower before or immediately following adoption; and
(B) Not attending a school or gainfully employed;
(ii) During a period when the borrower is on active duty status in the National Oceanic and Atmospheric Administration Corps, for up to three years, in accordance with paragraph (p) of this section, (including any period during which the borrower received a deferment authorized under paragraph (b)(2)(i) of this section);
(iii) During a period of up to three years when the borrower is serving as a full-time teacher in a public or non-profit private elementary or secondary school in a teacher shortage area designated by the Secretary under paragraph (q) of this section;
(iv) During a period when the borrower is engaged in an internship or residency program, for up to two years, in accordance with paragraph (n) of this section, (including any period during which the borrower received a deferment authorized under paragraph (b)(2)(v) of this section); or
(v) When a mother who has preschool-age children (i.e., children who have not enrolled in first grade) and who is earning not more than $1 per hour above the Federal minimum wage, for up to 12 months of employment, and who began that full-time employment within one year of entering or re-entering the work force, in accordance with paragraph (r) of this section. Full-time employment involves at least 30 hours of work a week and it is expected to last at least 3 months.
(4) For new Stafford or SLS borrowers on or after July 1, 1987. Deferment is authorized during periods when the borrower is engaged in at least half-time study at a school in accordance with paragraph (b) of this section.
(5) For new parent PLUS borrowers on or after July 1, 1987 and before July 1, 1993. Deferment is authorized during any period when a student on whose behalf the parent borrower received the loan—
(i) Is not independent as defined in section 480(d) of the Act; and
(ii) Meets the conditions and provides the required documentation, for any of the deferments described in paragraphs (b)(1)(i) through (iii) and (b)(4) of this section.
(6) Definition of a new borrower. For purposes of paragraphs (b)(3), (b)(4), and (b)(5) of this section, a “new borrower” with respect to a loan is a borrower who, on the date he or she signs the promissory note, has no outstanding balance on—
(i) A Stafford, SLS, or PLUS loan made prior to July 1, 1987 for a period of enrollment beginning prior to July 1, 1987; or
(ii) A Consolidation loan that repaid a loan made prior to July 1, 1987 and for a period of enrollment beginning prior to July 1, 1987.
(c) In-school deferment. (1) Except as provided in paragraph (c)(5) of this section, the lender processes a deferment for full-time study or half-time study at a school, when—
(i) The borrower submits a request and supporting documentation for a deferment;
(ii) The lender receives information from the borrower's school about the borrower's eligibility in connection with a new loan;
(iii) The lender receives student status information from the borrower's school, either directly or indirectly, indicating that the borrower's enrollment status supports eligibility for a deferment; or
(iv) The lender confirms a borrower's half-time enrollment status through the use of the National Student Loan Data System if requested to do so by the school the borrower is attending.
(2) The lender must notify the borrower that a deferment has been granted based on paragraphs (c)(1)(ii), (iii), or (iv) of this section and that the borrower has the option to cancel the deferment and continue paying on the loan.
(3) The lender must consider a deferment granted on the basis of a certified loan application or other information certified by the school to cover the period lasting until the anticipated graduation date appearing on the application, and as updated by notice or Student Status Confirmation Report update to the lender from the school or guaranty agency, unless and until it receives notice that the borrower has ceased the level of study (i.e., full-time or half-time) required for the deferment.
(4) In the case of a FFEL borrower, the lender shall treat a certified loan application or other form certified by the school or for multiple holders of a borrower's loans, shared data from the Student Status Confirmation Report, as sufficient documentation for an in-school student deferment for any outstanding FFEL loan previously made to the borrower that is held by the lender.
(5) A borrower serving in a medical internship or residency program, except for an internship in dentistry, is prohibited from receiving or continuing a deferment on a Stafford, or a PLUS (unless based on the dependent's status) SLS, or Consolidation loan under paragraph (c) of this section.
(d) Graduate fellowship deferment. (1) To qualify for a deferment for study in a graduate fellowship program, a borrower shall provide the lender with a statement from an authorized official of the borrower's fellowship program certifying—
(i) That the borrower holds at least a baccalaureate degree conferred by an institution of higher education;
(ii) That the borrower has been accepted or recommended by an institution of higher education for acceptance on a full-time basis into an eligible graduate fellowship program; and
(iii) The borrower's anticipated completion date in the program.
(2) For purposes of paragraph (d)(1) of this section, an eligible graduate fellowship program is a fellowship program that—
(i) Provides sufficient financial support to graduate fellows to allow for full-time study for at least six months;
(ii) Requires a written statement from each applicant explaining the applicant's objectives before the award of that financial support;
(iii) Requires a graduate fellow to submit periodic reports, projects, or evidence of the fellow's progress; and
(iv) In the case of a course of study at a foreign university, accepts the course of study for completion of the fellowship program.
(e) Rehabilitation training program deferment. (1) To qualify for a rehabilitation training program deferment, a borrower shall provide the lender with a statement from an authorized official of the borrower's rehabilitation training program certifying that the borrower is either receiving, or is scheduled to receive, services under an eligible rehabilitation training program for disabled individuals.
(2) For purposes of paragraph (e)(1) of this section, an eligible rehabilitation training program for disabled individuals is a program that—
(i) Is licensed, approved, certified, or otherwise recognized as providing rehabilitation training to disabled individuals by—
(A) A State agency with responsibility for vocational rehabilitation programs;
(B) A State agency with responsibility for drug abuse treatment programs;
(C) A State agency with responsibility for mental health services program;
(D) A State agency with responsibility for alcohol abuse treatment programs; or
(E) The Department of Veterans Affairs; and
(ii) Provides or will provide the borrower with rehabilitation services under a written plan that—
(A) Is individualized to meet the borrower's needs;
(B) Specifies the date on which the services to the borrower are expected to end; and
(C) Is structured in a way that requires a substantial commitment by the borrower to his or her rehabilitation. The Secretary considers a substantial commitment by the borrower to be a commitment of time and effort that normally would prevent an individual from engaging in full-time employment, either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation. For the purpose of this paragraph, full-time employment involves at least 30 hours of work per week and is expected to last at least three months.
(f) Temporary total disability deferment. (1) To qualify for a temporary total disability deferment, a borrower shall provide the lender with a statement from a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the borrower is temporarily totally disabled as defined in § 682.200(b).
(2) A borrower is not considered temporarily totally disabled on the basis of a condition that existed before he or she applied for the loan, unless the condition has substantially deteriorated so as to render the borrower temporarily totally disabled, as substantiated by the statement required under paragraph (f)(1) of this section, after the borrower submitted the loan application.
(3) A lender may not grant a deferment based on a single certification under paragraph (f)(1) of this section beyond the date that is six months after the date of certification.
(g) Dependent's disability deferment. (1) To qualify for a deferment given to a borrower whose spouse or other dependent requires continuous nursing or similar services for a period of at least 90 days, the borrower shall provide the lender with a statement—
(i) From a physician, who is a doctor of medicine or osteopathy and is legally authorized to practice, certifying that the borrower's spouse or dependent requires continuous nursing or similar services for a period of at least 90 days; and
(ii) From the borrower, certifying that the borrower is unable to secure full-time employment because he or she is providing continuous nursing or similar services to the borrower's spouse or other dependent. For the purpose of this paragraph, full-time employment involves at least 30 hours of work per week and is expected to last at least three months.
(2) A lender may not grant a deferment based on a single certification under paragraph (g)(1) of this section beyond the date that is six months after the date of the certification.
(h) Unemployment deferment. (1) A borrower qualifies for an unemployment deferment by providing evidence of eligibility for unemployment benefits to the lender.
(2) A borrower also qualifies for an unemployment deferment by providing to the lender a written certification, or an equivalent as approved by the Secretary, that—
(i) The borrower has registered with a public or private employment agency, if one is available to the borrower within a 50-mile radius of the borrower's current address; and
(ii) For all requests beyond the initial request, the borrower has made at least six diligent attempts during the preceding 6-month period to secure full-time employment.
(3) For purposes of obtaining an unemployment deferment under paragraph (h)(2) of this section, the following rules apply:
(i) A borrower may qualify for an unemployment deferment whether or not the borrower has been previously employed.
(ii) An unemployment deferment is not justified if the borrower refuses to seek or accept employment in kinds of positions or at salary and responsibility levels for which the borrower feels overqualified by virtue of education or previous experience.
(iii) Full-time employment involves at least 30 hours of work a week and is expected to last at least three months.
(iv) The initial period of unemployment deferment may be granted for a period of unemployment beginning up to 6 months before the date the lender receives the borrower's request, and may be granted for up to 6 months after that date.
(4) A lender may not grant an unemployment deferment beyond the date that is 6 months after the date the borrower provides evidence of the borrower's eligibility for unemployment insurance benefits under paragraph (h)(1) of this section or the date the borrower provides the written certification, or an approved equivalent, under paragraph (h)(2) of this section.
(i) Military deferment. (1) To qualify for a military deferment, a borrower or a borrower's representative shall provide the lender with—
(i) A written statement from the borrower's commanding or personnel officer certifying—
(A) That the borrower is on active duty in the Armed Forces of the United States;
(B) The date on which the borrower's service began; and
(C) The date on which the borrower's service is expected to end; or
(ii)(A) A copy of the borrower's official military orders; and
(B) A copy of the borrower's military identification.
(2) For the purpose of this section, the Armed Forces means the Army, Navy, Air Force, Marine Corps, and the Coast Guard.
(3) A borrower enlisted in a reserve component of the Armed Forces may qualify for a military deferment only for service on a full-time basis that is expected to last for a period of at least one year in length, as evidenced by official military orders, unless an order for national mobilization of reservists is issued.
(4) A borrower enlisted in the National Guard qualifies for a military deferment only while the borrower is on active duty status as a member of the U.S. Army or Air Force Reserves, and meets the requirements of paragraph (i)(3) of this section.
(5) A lender that grants a military service deferment based on a request from a borrower's representative must notify the borrower that the deferment has been granted and that the borrower has the option to cancel the deferment and continue to make payments on the loan. The lender may also notify the borrower's representative of the outcome of the deferment request.
(j) Public Health Service deferment. To qualify for a Public Health Service deferment, the borrower shall provide the lender with a statement from an authorized official of the United States Public Health Service (USPHS) certifying—
(1) That the borrower is engaged in full-time service as an officer in the Commissioned Corps of the USPHS;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(k) Peace Corps deferment. (1) To qualify for a deferment for service under the Peace Corps Act, the borrower shall provide the lender with a statement from an authorized official of the Peace Corps certifying—
(i) That the borrower has agreed to serve for a term of at least one year;
(ii) The date on which the borrower's service began; and
(iii) The date on which the borrower's service is expected to end.
(2) The lender must grant a deferment for the borrower's full term of service in the Peace Corps, not to exceed three years.
(l) Full-time volunteer service in the ACTION programs. To qualify for a deferment as a full-time paid volunteer in an ACTION program, the borrower shall provide the lender with a statement from an authorized official of the program certifying—
(1) That the borrower has agreed to serve for a term of at least one year;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(m) Deferment for full-time volunteer service for a tax-exempt organization. To qualify for a deferment as a full-time paid volunteer for a tax-exempt organization, a borrower shall provide the lender with a statement from an authorized official of the volunteer program certifying—
(1) That the borrower—
(i) Serves in an organization that has obtained an exemption from taxation under section 501(c)(3) of the Internal Revenue Code of 1986;
(ii) Provides service to low-income persons and their communities to assist them in eliminating poverty and poverty-related human, social, and environmental conditions;
(iii) Does not receive compensation that exceeds the rate prescribed under section 6 of the Fair Labor Standards Act of 1938 (the Federal minimum wage), except that the tax-exempt organization may provide health, retirement, and other fringe benefits to the volunteer that are substantially equivalent to the benefits offered to other employees of the organization;
(iv) [Reserved]
(v) Has agreed to serve on a full-time basis for a term of at least one year;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(n) Internship or residency deferment. (1) To qualify for an internship or residency deferment under paragraph (b)(3)(iv) of this section, the borrower shall provide the lender with a statement from an authorized official of the organization with which the borrower is undertaking the internship or residency program certifying—
(i) That the internship or residency program is a supervised training program that requires the borrower to hold at least a baccalaureate degree prior to acceptance into the program;
(ii) That, except for a borrower that provides the statement from a State official described in paragraph (n)(2) of this section, the internship or residency program leads to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training;
(iii) That the borrower has been accepted into the internship or residency program; and
(iv) The anticipated dates on which the borrower will begin and complete the internship or residency program, or, in the case of a borrower providing the statement described in paragraph (n)(2) of this section, the anticipated date on which the borrower will begin and complete the minimum period of participation in the internship program that the State requires be completed before an individual may be certified for professional practice or service.
(2) For a borrower who does not provide a statement certifying to the matters set forth in paragraph (n)(1)(ii) of this section to qualify for an internship deferment under paragraph (b)(3)(iv) of this section, the borrower shall provide the lender with a statement from an official of the appropriate State licensing agency certifying that the internship or residency program, or a portion thereof, is required to be completed before the borrower may be certified for professional practice or service.
(o) Parental-leave deferment. (1) To qualify for the parental-leave deferment described in paragraph (b)(3)(i) of this section, the borrower shall provide the lender with—
(i) A statement from an authorized official of a participating school certifying that the borrower was enrolled on at least a half-time basis during the six months preceding the beginning of the deferment period;
(ii) A statement from the borrower certifying that the borrower—
(A) Is pregnant, caring for his or her newborn child, or caring for a child immediately following the placement of the child with the borrower in connection with an adoption;
(B) Is not, and will not be, attending school during the deferment period; and
(C) Is not, and will not be, engaged in full-time employment during the deferment period; and
(iii) A physician's statement demonstrating the existence of the pregnancy, a birth certificate, or a statement from the adoption agency official evidencing a pre-adoption placement.
(2) For purposes of paragraph (o)(1)(ii)(C) of this section, full-time employment involves at least 30 hours of work per week and is expected to last at least three months.
(p) NOAA deferment. To qualify for a National Oceanic and Atmospheric Administration (NOAA) deferment, the borrower shall provide the lender with a statement from an authorized official of the NOAA corps, certifying—
(1) That the borrower is on active duty service in the NOAA corps;
(2) The date on which the borrower's service began; and
(3) The date on which the borrower's service is expected to end.
(q) Targeted teacher deferment. (1) To qualify for a targeted teacher deferment under paragraph (b)(3)(iii) of this section, the borrower, for each school year of service for which a deferment is requested, must provide to the lender—
(i) A statement by the chief administrative officer of the public or nonprofit private elementary or secondary school in which the borrower is teaching, certifying that the borrower is employed as a full-time teacher; and
(ii) A certification that he or she is teaching in a teacher shortage area designated by the Secretary as provided in paragraphs (q) (5) through (7) of this section, as described in paragraph (q)(2) of this section.
(2) In order to satisfy the requirement for certification that a borrower is teaching in a teacher shortage area designated by the Secretary, a borrower must do one of the following:
(i) If the borrower is teaching in a State in which the Chief State School Officer has complied with paragraph (q)(3) of this section and provides an annual listing of designated teacher shortage areas to the State's chief administrative officers whose schools are affected by the Secretary's designations, the borrower may obtain a certification that he or she is teaching in a teacher shortage area from his or her school's chief administrative officer.
(ii) If a borrower is teaching in a State in which the Chief State School Officer has not complied with paragraph (q)(3) of this section or does not provide an annual listing of designated teacher shortage areas to the State's chief administrative officers whose schools are affected by the Secretary's designations, the borrower must obtain certification that he or she is teaching in a teacher shortage area from the Chief State School Officer for the State in which the borrower is teaching.
(3) In the case of a State in which borrowers wish to obtain certifications as provided for in paragraph (q)(2)(i) of this section, the State's Chief State School Officer must first have notified the Secretary, by means of a one-time written assurance, that he or she provides annually to the State's chief administrative officers whose schools are affected by the Secretary's designations and the guaranty agency for that State, a listing of the teacher shortage areas designated by the Secretary as provided for in paragraphs (q) (5) through (7) of this section.
(4) If a borrower who receives a deferment continues to teach in the same teacher shortage area as that in which he or she was teaching when the deferment was originally granted, the borrower shall, at the borrower's request, continue to receive the deferment for those subsequent years, up to the three-year maximum deferment period, even if his or her position does not continue to be within an area designated by the Secretary as a teacher shortage area in those subsequent years. To continue to receive the deferment in a subsequent year under this paragraph, the borrower shall provide the lender with a statement by the chief administrative officer of the public or nonprofit private elementary or secondary school that employs the borrower, certifying that the borrower continues to be employed as a full-time teacher in the same teacher shortage area for which the deferment was received for the previous year.
(5) For purposes of this section a teacher shortage area is—
(i)(A) A geographic region of the State in which there is a shortage of elementary or secondary school teachers; or
(B) A specific grade level or academic, instructional, subject-matter, or discipline classification in which there is a statewide shortage of elementary or secondary school teachers; and
(ii) Designated by the Secretary under paragraphs (q)(6) or (q)(7) of this section.
(6)(i) In order for the Secretary to designate one or more teacher shortage areas in a State for a school year, the Chief State School Officer shall by January 1 of the calendar year in which the school year begins, and in accordance with objective written standards, propose teacher shortage areas to the Secretary for designation. With respect to private nonprofit schools included in the recommendation, the Chief State School Officer shall consult with appropriate officials of the private nonprofit schools in the State prior to submitting the recommendation.
(ii) In identifying teacher shortage areas to propose for designation under paragraph (q)(6)(i) of this section, the Chief State School Officer shall consider data from the school year in which the recommendation is to be made, unless that data is not yet available, in which case he or she may use data from the immediately preceding school year, with respect to—
(A) Teaching positions that are unfilled;
(B) Teaching positions that are filled by teachers who are certified by irregular, provisional, temporary, or emergency certification; and
(C) Teaching positions that are filled by teachers who are certified, but who are teaching in academic subject areas other than their area of preparation.
(iii) If the total number of unduplicated full-time equivalent (FTE) elementary or secondary teaching positions identified under paragraph (q)(6)(ii) of this section in the shortage areas proposed by the State for designation does not exceed 5 percent of the total number of FTE elementary and secondary teaching positions in the State, the Secretary designates those areas as teacher shortage areas.
(iv) If the total number of unduplicated FTE elementary and secondary teaching positions identified under paragraph (q)(6)(ii) of this section in the shortage areas proposed by the State for designation exceeds 5 percent of the total number of elementary and secondary FTE teaching positions in the State, the Chief State School Officer shall submit, with the list of proposed areas, supporting documentation showing the methods used for identifying shortage areas, and an explanation of the reasons why the Secretary should nevertheless designate all of the proposed areas as teacher shortage areas. The explanation must include a ranking of the proposed shortage areas according to priority, to assist the Secretary in determining which areas should be designated. The Secretary, after considering the explanation, determines which shortage areas to designate as teacher shortage areas.
(7) A Chief State School Officer may submit to the Secretary for approval an alternative written procedure to the one described in paragraph (q)(6) of this section, for the Chief State School Officer to use to select the teacher shortage areas recommended to the Secretary for designation, and for the Secretary to use to choose the areas to be designated. If the Secretary approves the proposed alternative procedure, in writing, that procedure, once approved, may be used instead of the procedure described in paragraph (q)(6) of this section for designation of teacher shortage areas in that State.
(8) For purposes of paragraphs (q)(1) through (7) of this section—
(i) The definition of the term school in § 682.200(b) does not apply;
(ii) Elementary school means a day or residential school that provides elementary education, as determined under State law;
(iii) Secondary school means a day or residential school that provides secondary education, as determined under State law. In the absence of applicable State law, the Secretary may determine, with respect to that State, whether the term “secondary school” includes education beyond the twelfth grade;
(iv) Teacher means a professional who provides direct and personal services to students for their educational development through classroom teaching;
(v) Chief State School Officer means the highest ranking educational official for elementary and secondary education for the State;
(vi) School year means the period from July 1 of a calendar year through June 30 of the following calendar year;
(vii) Teacher shortage area means an area of specific grade, subject matter, or discipline classification, or a geographic area in which the Secretary determines that there is an inadequate supply of elementary or secondary school teachers; and
(viii) Full-time equivalent means the standard used by a State in defining full-time employment, but not less than 30 hours per week. For purposes of counting full-time equivalent teacher positions, a teacher working part of his or her total hours in a position that is designated as a teacher shortage area is counted on a pro rata basis corresponding to the percentage of his or her working hours spent in such a position.
(r) Working-mother deferment. (1) To qualify for the working-mother deferment described in paragraph (b)(3)(v) of this section, the borrower shall provide the lender with a statement certifying that she—
(i) Is the mother of a preschool-age child;
(ii) Entered or reentered the workforce not more than one year before the beginning date of the period for which the deferment is being sought;
(iii) Is currently engaged in full-time employment; and
(iv) Does not receive compensation that exceeds $1 per hour above the rate prescribed under section 6 of the Fair Labor Standards Act of 1938 (the Federal minimum wage).
(2) In addition to the certification required under paragraph (r)(1) of this section, the borrower shall provide to the lender documents demonstrating the age of her child (e.g., a birth certificate) and the rate of her compensation (e.g., a pay stub showing her hourly rate of pay).
(3) For purposes of this paragraph—
(i) A preschool-age child is one who has not yet enrolled in first grade or a higher grade in elementary school; and
(ii) Full-time employment involves at least 30 hours of work a week and is expected to last at least 3 months.
(s) Deferments for new borrowers on or after July 1, 1993—(1) General. (i) A new borrower who receives an FFEL Program loan first disbursed on or after July 1, 1993 is entitled to receive deferments under paragraphs (s)(2) through (s)(6) of this section. For purposes of paragraphs (s)(2) through (s)(6) of this section, a “new borrower” is an individual who has no outstanding principal or interest balance on an FFEL Program loan as of July 1, 1993 or on the date he or she obtains a loan on or after July 1, 1993. This term also includes a borrower who obtains a Federal Consolidation Loan on or after July 1, 1993 if the borrower has no other outstanding FFEL Program loan when the Consolidation Loan was made.
(ii) As a condition for receiving a deferment, except for purposes of paragraph (s)(2) of this section, the borrower must request the deferment and provide the lender with all information and documents required to establish eligibility for the deferment.
(iii) After receiving a borrower's written or verbal request, a lender may grant a deferment under paragraphs (s)(3) through (s)(6) of this section if the lender is able to confirm that the borrower has received a deferment on another FFEL loan or on a Direct Loan for the same reason and the same time period. The lender may grant the deferment based on information from the other FFEL loan holder or the Secretary or from an authoritative electronic database maintained or authorized by the Secretary that supports eligibility for the deferment for the same reason and the same time period.
(iv) A lender may rely in good faith on the information it receives under paragraph (s)(1)(iii) of this section when determining a borrower's eligibility for a deferment unless the lender, as of the date of the determination, has information indicating that the borrower does not qualify for the deferment. A lender must resolve any discrepant information before granting a deferment under paragraph (s)(1)(iii) of this section.
(v) A lender that grants a deferment under paragraph (s)(1)(iii) of this section must notify the borrower that the deferment has been granted and that the borrower has the option to pay interest that accrues on an unsubsidized FFEL loan or to cancel the deferment and continue to make payments on the loan.
(2) In-school deferment. An eligible borrower is entitled to a deferment based on the borrower's at least half-time study in accordance with the rules prescribed in § 682.210(c).
(3) Graduate fellowship deferment. An eligible borrower is entitled to a graduate fellowship deferment in accordance with the rules prescribed in § 682.210(d).
(4) Rehabilitation training program deferment. An eligible borrower is entitled to a rehabilitation training program deferment in accordance with the rules prescribed in § 682.210(e).
(5) Unemployment deferment. An eligible borrower is entitled to an unemployment deferment in accordance with the rules prescribed in § 682.210(h) for periods that, collectively, do not exceed 3 years.
(6) Economic hardship deferment. An eligible borrower is entitled to an economic hardship deferment for periods of up to one year at a time that, collectively, do not exceed 3 years (except that a borrower who receives a deferment under paragraph (s)(6)(iv) of this section is entitled to an economic hardship deferment for the lesser of the borrower's full term of service in the Peace Corps or the borrower's remaining period of economic hardship deferment eligibility under the 3-year maximum), if the borrower provides documentation satisfactory to the lender showing that the borrower is within any of the categories described in paragraphs (s)(6)(i) through (s)(6)(iv) of this section.
(i) Has been granted an economic hardship deferment under either the Direct Loan or Federal Perkins Loan Programs for the period of time for which the borrower has requested an economic hardship deferment for his or her FFEL loan.
(ii) Is receiving payment under a Federal or State public assistance program, such as Aid to Families with Dependent Children, Supplemental Security Income, Food Stamps, or State general public assistance.
(iii) Is working full-time and has a monthly income that does not exceed the greater of (as calculated on a monthly basis)—
(A) The minimum wage rate described in section 6 of the Fair Labor Standards Act of 1938; or
(B) An amount equal to 150 percent of the poverty guideline applicable to the borrower's family size as published annually by the Department of Health and Human Services pursuant to 42 U.S.C. 9902(2). If a borrower is not a resident of a State identified in the poverty guidelines, the poverty guideline to be used for the borrower is the poverty guideline (for the relevant family size) used for the 48 contiguous States.
(iv) Is serving as a volunteer in the Peace Corps.
(v) For an initial period of deferment granted under paragraph (s)(6)(iii) of this section, the lender must require the borrower to submit evidence showing the amount of the borrower's monthly income.
(vi) To qualify for a subsequent period of deferment that begins less than one year after the end of a period of deferment under paragraph (s)(6)(iii) of this section, the lender must require the borrower to submit evidence showing the amount of the borrower's monthly income or a copy of the borrower's most recently filed Federal income tax return.
(vii) For purposes of paragraph (s)(6) of this section, a borrower's monthly income is the gross amount of income received by the borrower from employment and from other sources, or one-twelfth of the borrower's adjusted gross income, as recorded on the borrower's most recently filed Federal income tax return.
(viii) For purposes of paragraph (s)(6) of this section, a borrower is considered to be working full-time if the borrower is expected to be employed for at least three consecutive months at 30 hours per week.
(ix) For purposes of paragraph (s)(6)(iii)(B) of this section, family size means the number that is determined by counting the borrower, the borrower's spouse, and the borrower's children, including unborn children who will be born during the period covered by the deferment, if the children receive more than half their support from the borrower. A borrower's family size includes other individuals if, at the time the borrower requests the economic hardship deferment, the other individuals—
(A) Live with the borrower; and
(B) Receive more than half their support from the borrower and will continue to receive this support from the borrower for the year the borrower certifies family size. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.
(t) Military service deferments. (1) A borrower who receives a FFEL Program loan may receive a military service deferment for such loan for any period during which the borrower is—
(i) Serving on active duty during a war or other military operation or national emergency; or
(ii) Performing qualifying National Guard duty during a war or other military operation or national emergency.
(2) For a borrower whose active duty service includes October 1, 2007, or begins on or after that date, the deferment period ends 180 days after the demobilization date for each period of service described in paragraph (t)(1)(i) and (t)(1)(ii) of this section.
(3) Serving on active duty during a war or other military operation or national emergency means service by an individual who is—
(i) A Reserve of an Armed Force ordered to active duty under 10 U.S.C. 12301(a), 12301(g), 12302, 12304 or 12306;
(ii) A retired member of an Armed Force ordered to active duty under 10 U.S.C. 688 for service in connection with a war or other military operation or national emergency, regardless of the location at which such active duty service is performed; or
(iii) Any other member of an Armed Force on active duty in connection with such emergency or subsequent actions or conditions who has been assigned to a duty station at a location other than the location at which member is normally assigned.
(4) Qualifying National Guard duty during a war or other operation or national emergency means service as a member of the National Guard on full-time National Guard duty, as defined in 10 U.S.C. 101(d)(5), under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under 32 U.S.C. 502(f) in connection with a war, other military operation, or national emergency declared by the President and supported by Federal funds.
(5) Payments made by or on behalf of a borrower during a period for which the borrower qualified for a military service deferment are not refunded.
(6) As used in this paragraph—
(i) Active duty means active duty as defined in 10 U.S.C. 101(d)(1) except that it does not include active duty for training or attendance at a service school;
(ii) Military operation means a contingency operation as defined in 10 U.S.C. 101(a)(13); and
(iii) National emergency means the national emergency by reason of certain terrorist attacks declared by the President on September 14, 2001, or subsequent national emergencies declared by the President by reason of terrorist attacks.
(7) To receive a military service deferment, the borrower, or the borrower's representative, must request the deferment and provide the lender with all information and documents required to establish eligibility for the deferment, except that a lender may grant a borrower a military service deferment under the procedures specified in paragraphs (s)(1)(iii) through (s)(1)(v) of this section.
(8) A lender that grants a military service deferment based on a request from a borrower's representative must notify the borrower that the deferment has been granted and that the borrower has the option to cancel the deferment and continue to make payments on the loan. The lender may also notify the borrower's representative of the outcome of the deferment request.
(9) Without supporting documentation, a military service deferment may be granted to an otherwise eligible borrower for a period not to exceed the initial 12 months from the date the qualifying eligible service began based on a request from the borrower or the borrower's representative.
(u) Post-active duty student deferment. (1) Effective October 1, 2007, a borrower who receives a FFEL Program loan and is serving on active duty on that date, or begins serving on or after that date, is entitled to receive a post-active duty student deferment for 13 months following the conclusion of the borrower's active duty military service and any applicable grace period if—
(i) The borrower is a member of the National Guard or other reserve component of the Armed Forces of the United States or a member of such forces in retired status; and
(ii) The borrower was enrolled, on at least a half-time basis, in a program of instruction at an eligible institution at the time, or within six months prior to the time, the borrower was called to active duty.
(2) As used in paragraph (u)(1) of this section, “active duty” means active duty as defined in section 101(d)(1) of title 10, United States Code for at least a 30-day period, except that—
(i) Active duty includes active State duty for members of the National Guard under which a Governor activates National Guard personnel based on State statute or policy and the activities of the National Guard are paid for with State funds;
(ii) Active duty includes full-time National Guard duty under which a Governor is authorized, with the approval of the President or the U.S. Secretary of Defense, to order a member to State active duty and the activities of the National Guard are paid for with Federal funds;
(iii) Active duty does not include active duty for training or attendance at a service school; and
(iv) Active duty does not include employment in a full-time, permanent position in the National Guard unless the borrower employed in such a position is reassigned to active duty under paragraph (u)(2)(i) of this section or full-time National Guard duty under paragraph (u)(2)(ii) of this section.
(3) If the borrower returns to enrolled student status, on at least a half-time basis, during the 13-month deferment period, the deferment expires at the time the borrower returns to enrolled student status, on at least a half-time basis.
(4) If a borrower qualifies for both a military service deferment and a post-active duty student deferment, the 180-day post-demobilization military service deferment period and the 13-month post-active duty student deferment period apply concurrently.
(5) To receive a post-active duty student deferment, the borrower must request the deferment and provide the lender with all information and documents required to establish eligibility for the deferment, except that a lender may grant a borrower a post-active duty student deferment under the procedures specified in paragraphs (s)(1)(iii) through (s)(1)(v) of this section.
(v) In-school deferments for PLUS loan borrowers with loans first disbursed on or after July 1, 2008. (1)(i) A student PLUS borrower is entitled to a deferment on a PLUS loan first disbursed on or after July 1, 2008 during the 6-month period that begins on the day after the student ceases to be enrolled on at least a half-time basis at an eligible institution.
(ii) If a lender grants an in-school deferment to a student PLUS borrower based on § 682.210(c)(1)(ii), (iii), or (iv), the deferment period for a PLUS loan first disbursed on or after July 1, 2008 includes the 6-month post-enrollment period described in paragraph (v)(1)(i) of this section. The notice required by § 682.210(c)(2) must inform the borrower that the in-school deferment on a PLUS loan first disbursed on or after July 1, 2008 will end six months after the day the borrower ceases to be enrolled on at least a half-time basis.
(2) Upon the request of the borrower, an eligible parent PLUS borrower must be granted a deferment on a PLUS loan first disbursed on or after July 1, 2008—
(i) During the period when the student on whose behalf the loan was obtained is enrolled at an eligible institution on at least a half-time basis; and
(ii) During the 6-month period that begins on the later of the day after the student on whose behalf the loan was obtained ceases to be enrolled on at least a half-time basis or, if the parent borrower is also a student, the day after the parent borrower ceases to be enrolled on at least a half-time basis.
(a)(1) The Secretary encourages a lender to grant forbearance for the benefit of a borrower or endorser in order to prevent the borrower or endorser from defaulting on the borrower's or endorser's repayment obligation, or to permit the borrower or endorser to resume honoring that obligation after default. Forbearance means permitting the temporary cessation of payments, allowing an extension of time for making payments, or temporarily accepting smaller payments than previously were scheduled.
(2) Subject to paragraph (g) of this section, a lender may grant forbearance of payments of principal and interest under paragraphs (b), (c), and (d) of this section only if—
(i) The lender reasonably believes, and documents in the borrower's file, that the borrower or endorser intends to repay the loan but, due to poor health or other acceptable reasons, is currently unable to make scheduled payments; or
(ii) The borrower's payments of principal are deferred under § 682.210 and the Secretary does not pay interest benefits on behalf of the borrower under § 682.301.
(3) If two individuals are jointly liable for repayment of a PLUS loan or a Consolidation loan, the lender may grant forbearance on repayment of the loan only if the ability of both individuals to make scheduled payments has been impaired based on the same or differing conditions.
(4) Except as provided in paragraph (f)(11) of this section, if payments of interest are forborne, they may be capitalized as provided in § 682.202(b).
(b) A lender may grant forbearance if—
(1) The lender and the borrower or endorser agree to the terms of the forbearance and, unless the agreement was in writing, the lender sends, within 30 days, a notice to the borrower or endorser confirming the terms of the forbearance and records the terms of the forbearance in the borrower's file; or
(2) In the case of forbearance of interest during a period of deferment, if the lender informs the borrower at the time the deferment is granted that interest payments are to be forborne.
(c) Except as provided in paragraph (d)(2) of this section, a lender may grant forbearance for a period of up to one year at a time if both the borrower or endorser and an authorized official of the lender agree to the terms of the forbearance. If the borrower or endorser requests the forbearance orally and the lender and the borrower or endorser agree to the terms of the forbearance orally, the lender must notify the borrower or endorser of the terms within 30 days of that agreement.
(d)(1) A guaranty agency may authorize a lender to grant forbearance to permit a borrower or endorser to resume honoring the agreement to repay the debt after default but prior to claim payment. The forbearance agreement in this situation must include a new agreement to repay the debt signed by the borrower or endorser or a written or oral affirmation of the borrower's or endorser's obligation to repay the debt.
(2) If the forbearance is based on the borrower's or endorser's oral request and affirmation of the obligation to repay the debt—
(i) The forbearance period is limited to a period of 120 days;
(ii) Such a forbearance cannot be granted consecutively;
(iii) The lender must orally review with the borrower the terms and conditions of the forbearance, including the consequences of interest capitalization, and all other repayment options available to the borrower; and
(iv) The lender must—
(A) Send a notice to the borrower or endorser, as provided in paragraph (c) of this section, that confirms the terms of the forbearance and the borrower's or endorser's affirmation of the obligation to repay the debt, and includes information on all other repayment options available to the borrower, and
(B) Retain a record of the terms of the forbearance and affirmation in the borrower's or endorser's file.
(3) For purposes of this section, an “affirmation” means an acknowledgement of the loan by the borrower or endorser in a legally binding manner. The form of the affirmation may include, but is not limited to, the borrower's or endorser's—
(i) New signed repayment agreement or schedule, or another form of signed agreement to repay the debt;
(ii) Oral acknowledgment and agreement to repay the debt documented by the lender in the borrower's or endorser's file and confirmed by the lender in a notice to the borrower; or
(iii) A payment made on the loan by the borrower or endorser.
(e)(1) At the time of granting a borrower or endorser a forbearance, the lender must provide the borrower or endorser with information to assist the borrower or endorser in understanding the impact of capitalization of interest on the loan principal and total interest to be paid over the life of the loan; and
(2) At least once every 180 days during the period of forbearance, the lender must contact the borrower or endorser to inform the borrower or endorser of—
(i) The outstanding obligation to repay;
(ii) The amount of the unpaid principal balance and any unpaid interest that has accrued on the loan since the last notice provided to the borrower or endorser under this paragraph;
(iii) The fact that interest will accrue on the loan for the full term of the forbearance;
(iv) The amount of interest that will be capitalized, as of the date of the notice, and the date capitalization will occur;
(v) The option of the borrower or endorser to pay the interest that has accrued before the interest is capitalized; and
(vi) The borrower's or endorser's option to discontinue the forbearance at any time.
(f) A lender may grant forbearance, upon notice to the borrower or if applicable, the endorser, with respect to payments of interest and principal that are overdue or would be due—
(1) For a properly granted period of deferment for which the lender learns the borrower did not qualify;
(2) Upon the beginning of an authorized deferment period under § 682.210, or an authorized period of forbearance;
(3) For the period beginning when the borrower entered repayment without the lender's knowledge until the first payment due date was established;
(4) For the period prior to the borrower's filing of a bankruptcy petition as provided in § 682.402(f);
(5) For the periods described in § 682.402(c) in regard to the borrower's total and permanent disability;
(6) Upon receipt of a valid identity theft report as defined in section 603(q)(4) of the Fair Credit Reporting Act (15 U.S.C. 1681a) or notification from a consumer reporting agency that information furnished by the lender is a result of an alleged identity theft as defined in § 682.402(e)(14), for a period not to exceed 120 days necessary for the lender to determine the enforceability of the loan. If the lender determines that the loan does not qualify for discharge under § 682.402(e)(1)(i)(C), but is nonetheless unenforceable, the lender must comply with §§ 682.300(b)(2)(ix) and 682.302(d)(1)(viii).
(7) For a period not to exceed an additional 60 days after the lender has suspended collection activity for the initial 60-day period required pursuant to § 682.211(i)(6) and § 682.402(b)(3), when the lender receives reliable information that the borrower (or student on whose behalf a parent has borrowed a PLUS Loan) has died;
(8) For periods necessary for the Secretary or guaranty agency to determine the borrower's eligibility for discharge of the loan because of an unpaid refund, attendance at a closed school or false certification of loan eligibility, pursuant to § 682.402(d) or (e), or the borrower's or, if applicable, endorser's bankruptcy, pursuant to § 682.402(f);
(9) For a period of delinquency at the time a loan is sold or transferred, if the borrower or endorser is less than 60 days delinquent on the loan at the time of sale or transfer;
(10) For a period of delinquency that may remain after a borrower ends a period of deferment or mandatory forbearance until the next due date, which can be no later than 60 days after the period ends;
(11) For a period not to exceed 60 days necessary for the lender to collect and process documentation supporting the borrower's request for a deferment, forbearance, change in repayment plan, or consolidation loan. Interest that accrues during this period is not capitalized;
(12) For a period not to exceed 3 months when the lender determines that a borrower's ability to make payments has been adversely affected by a natural disaster, a local or national emergency as declared by the appropriate government agency, or a military mobilization;
(13) For a period not to exceed 60 days necessary for the lender to collect and process documentation supporting the borrower's eligibility for loan forgiveness under the income-based repayment program. The lender must notify the borrower that the requirement to make payments on the loans for which forgiveness was requested has been suspended pending approval of the forgiveness by the guaranty agency;
(14) For a period of delinquency at the time a borrower makes a change to the repayment plan; or
(15) For PLUS loans first disbursed before July 1, 2008, to align repayment with a borrower's PLUS loans that were first disbursed on or after July 1, 2008, or with Stafford Loans that are subject to a grace period under § 682.209(a)(3). The notice specified in paragraph (f) introductory text of this section must inform the borrower that the borrower has the option to cancel the forbearance and continue paying on the loan; or
(16) For the periods described in § 682.215(e)(9) in regard to the income-based repayment plan.
(g) In granting a forbearance under this section, except for a forbearance under paragraph (i)(5) of this section, a lender shall grant a temporary cessation of payments, unless the borrower chooses another form of forbearance subject to paragraph (a)(1) of this section.
(h) Mandatory forbearance—(1) Medical or dental interns or residents. Upon receipt of a request and sufficient supporting documentation, as described in § 682.210(n), from a borrower serving in a medical or dental internship or residency program, a lender shall grant forbearance to the borrower in yearly increments (or a lesser period equal to the actual period during which the borrower is eligible) if the borrower has exhausted his or her eligibility for a deferment under § 682.210(n), or the borrower's promissory note does not provide for such a deferment—
(i) For the length of time remaining in the borrower's medical or dental internship or residency that must be successfully completed before the borrower may begin professional practice or service; or
(ii) For the length of time that the borrower is serving in a medical or dental internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training.
(2) Borrowers who are not medical or dental interns or residents, and endorsers. Upon receipt of a request and sufficient supporting documentation from an endorser (if applicable), or from a borrower (other than a borrower who is serving in a medical or dental internship or residency described in paragraph (h)(1) of this section), a lender shall grant forbearance—
(i) In increments up to one year, for periods that collectively do not exceed three years, if—
(A) The borrower or endorser is currently obligated to make payments on Title IV loans; and
(B) The amount of those payments each month (or a proportional share if the payments are due less frequently than monthly) is collectively equal to or greater than 20 percent of the borrower's or endorser's total monthly income;
(ii) In yearly increments (or a lesser period equal to the actual period during which the borrower is eligible) for as long as a borrower—
(A) Is serving in a national service position for which the borrower receives a national service educational award under the National and Community Service Trust Act of 1993;
(B) Is performing the type of service that would qualify the borrower for a partial repayment of his or her loan under the Student Loan Repayment Programs administered by the Department of Defense under 10 U.S.C. 2171, 2173, 2174 or any other student loan repayment programs administered by the Department of Defense; or
(C) Is performing the type of service that would qualify the borrower for loan forgiveness and associated forbearance under the requirements of the teacher loan forgiveness program in § 682.216; and
(iii) In yearly increments (or a lesser period equal to the actual period for which the borrower is eligible) when a member of the National Guard who qualifies for a post-active duty student deferment, but does not qualify for a military service deferment or other deferment, is engaged in active State duty as defined in § 682.210(u)(2)(i) and (ii) for a period of more than 30 consecutive days, beginning—
(A) On the day after the grace period expires for a Stafford loan that has not entered repayment; or
(B) On the day after the borrower ceases at least half-time enrollment, for a FFEL loan in repayment.
(3) Forbearance agreement. After the lender determines the borrower's or endorser's eligibility, and the lender and the borrower or endorser agree to the terms of the forbearance granted under this section, the lender sends, within 30 days, a notice to the borrower or endorser confirming the terms of the forbearance and records the terms of the forbearance in the borrower's file.
(4) Documentation. (i) Before granting a forbearance to a borrower or endorser under paragraph (h)(2)(i) of this section, the lender shall require the borrower or endorser to submit at least the following documentation:
(A) Evidence showing the amount of the most recent total monthly gross income received by the borrower or endorser from employment and from other sources; and
(B) Evidence showing the amount of the monthly payments owed by the borrower or endorser to other entities for the most recent month for the borrower's or endorser's Title IV loans.
(ii) Before granting a forbearance to a borrower or endorser under paragraph (h)(2)(ii)(B) of this section, the lender shall require the borrower or endorser to submit documentation showing the beginning and ending dates that the Department of Defense considers the borrower to be eligible for a partial repayment of his or her loan under the Student Loan Repayment Programs.
(iii) Before granting a forbearance to a borrower under paragraph (h)(2)(ii)(C) of this section, the lender must require the borrower to—
(A) Submit documentation for the period of the annual forbearance request showing the beginning and anticipated ending dates that the borrower is expected to perform, for that year, the type of service described in § 682.216(c); and
(B) Certify the borrower's intent to satisfy the requirements of § 682.216(c).
(i) Mandatory administrative forbearance. (1) The lender shall grant a mandatory administrative forbearance for the periods specified in paragraph (i)(2) of this section until the lender is notified by the Secretary or a guaranty agency that the forbearance period no longer applies. The lender may not require a borrower who is eligible for a forbearance under paragraph (i)(2)(ii) of this section to submit a request or supporting documentation, but shall require a borrower (or endorser, if applicable) who requests forbearance because of a military mobilization to provide documentation showing that he or she is subject to a military mobilization as described in paragraph (i)(4) of this section.
(2) The lender is not required to notify the borrower (or endorser, if applicable) at the time the forbearance is granted, but shall grant a forbearance to a borrower or endorser during a period, and the 30 days following the period, when the lender is notified by the Secretary that—
(i) Exceptional circumstances exist, such as a local or national emergency or military mobilization; or
(ii) The geographical area in which the borrower or endorser resides has been designated a disaster area by the president of the United States or Mexico, the Prime Minister of Canada, or by a Governor of a State.
(3) As soon as feasible, or by the date specified by the Secretary, the lender shall notify the borrower (or endorser, if applicable) that the lender has granted a forbearance and the date that payments should resume. The lender's notification shall state that the borrower or endorser—
(i) May decline the forbearance and continue to be obligated to make scheduled payments; or
(ii) Consents to making payments in accordance with the lender's notification if the forbearance is not declined.
(4) For purposes of paragraph (i)(2)(i) of this section, the term “military mobilization” shall mean a situation in which the Department of Defense orders members of the National Guard or Reserves to active duty under sections 688, 12301(a), 12301(g), 12302, 12304, and 12306 of title 10, United States Code. This term also includes the assignment of other members of the Armed Forces to duty stations at locations other than the locations at which they were normally assigned, only if the military mobilization involved the activation of the National Guard or Reserves.
(5) The lender shall grant a mandatory administrative forbearance to a borrower (or endorser, if applicable) during a period when the borrower (or endorser, if applicable) is making payments for a period of—
(i) Up to 3 years of payments in cases where the effect of a variable interest rate on a standard or graduated repayment schedule would result in a loan not being repaid within the maximum repayment term; or
(ii) Up to 5 years of payments in cases where the effect of decreased installment amounts paid under an income-sensitive repayment schedule would result in the loan not being repaid within the maximum repayment term.
(6) The lender shall grant a mandatory administrative forbearance to a borrower for a period not to exceed 60 days after the lender receives reliable information indicating that the borrower (or student in the case of a PLUS loan) has died, until the lender receives documentation of death pursuant to § 682.402(b)(3).
(7) The lender must grant a mandatory administrative forbearance to a borrower upon being notified by the Secretary that the borrower has made a borrower defense claim related to a loan that the borrower intends to consolidate into the Direct Loan Program for the purpose of seeking relief in accordance with § 685.212(k). The mandatory administrative forbearance shall be granted in yearly increments or for a period designated by the Secretary until the loan is consolidated or until the lender is notified by the Secretary to discontinue the forbearance.
(a) No points, premiums, payments, or additional interest of any kind may be paid or otherwise extended to any eligible lender or other party in order to—
(1) Secure funds for making loans; or
(2) Induce a lender to make loans to either the students or the parents of students of a particular school or particular category of students or their parents.
(b) The following are examples of transactions that, if entered into for the purposes described in paragraph (a) of this section, are prohibited:
(1) Cash payments by or on behalf of a school made to a lender or other party.
(2) The maintaining of a compensating balance by or on behalf of a school with a lender.
(3) Payments by or on behalf of a school to a lender of servicing costs on loans that the school does not own.
(4) Payments by or on behalf of a school to a lender of unreasonably high servicing costs on loans that the school does own.
(5) Purchase by or on behalf of a school of stock of the lender.
(6) Payments ostensibly made for other purposes.
(c) Except when purchased by an agency of any State functioning as a secondary market or in any other circumstances approved by the Secretary, notes, or any interest in notes, may not be sold or otherwise transferred at discount if the underlying loans were made—
(1) By a school; or
(2) To students or parents of students attending a school by a lender having common ownership with that school.
(d) Except to secure a loan from an agency of a State functioning as a secondary market or in other circumstances approved by the Secretary, a school or lender (with respect to a loan made to a student, or a parent of a student, attending a school having common ownership with that lender), may not use a loan made under the FFEL programs as collateral for any loan bearing aggregate interest and other charges in excess of the sum of the interest rate applicable to the loan plus the rate of the most recently prescribed special allowance under § 682.302.
(e) The prohibitions described in paragraphs (a), (b), (c), and (d) of this section apply to any school, lender, or other party that would participate in a proscribed transaction.
(f) This section does not preclude a buyer of loans made by a school from obtaining from the loan seller a warranty that—
(1) Covers future reductions by the Secretary or a guaranty agency in computing the amount of loss payable on default claims filed on the loans, if the reductions are attributable to an act, or failure to act, on the part of the seller or previous holder; and
(2) Does not cover matters for which a purchaser is charged with responsibility under this part, such as due diligence in collecting loans.
(g) Section 490(c) of the Act provides that any person who knowingly and willfully makes an unlawful payment to an eligible lender as an inducement to make, or to acquire by assignment, a FFEL loan shall, upon conviction thereof, be fined not more than $10,000 or imprisoned not more than one year, or both.
(h) A school may, at its option, make available a list of recommended or suggested lenders, in print or any other medium or form, for use by the school's students or their parents provided that such list complies with the requirements in 34 CFR 601.10 and 668.14(a)(28).
For purposes of the calculations required by this part, a lender may not use the Rule of 78s to calculate the outstanding principal balance of a loan, except for a loan made to a borrower who entered repayment before June 26, 1987 and who was informed in the promissory note that interest on the loan would be calculated using the Rule of 78s. For those loans, the Rule of 78s must be used for the life of the loan.
(a) Definitions. As used in this section—
(1) Adjusted gross income (AGI) means the borrower's adjusted gross income as reported to the Internal Revenue Service. For a married borrower filing jointly, AGI includes both the borrower's and spouse's income. For a married borrower filing separately, AGI includes only the borrower's income.
(2) Eligible loan means any outstanding loan made to a borrower under the FFEL and Direct Loan programs except for a defaulted loan, a FFEL or Direct PLUS Loan made to a parent borrower, or a FFEL or Direct Consolidation Loan that repaid a FFEL or Direct PLUS Loan made to a parent borrower.
(3) Family size means the number of individuals that is determined by adding together—
(i) The borrower;
(ii) The borrower's spouse, for a married borrower filing a joint Federal income tax return;
(iii) The borrower's children, including unborn children who will be born during the year the borrower certifies family size, if the children receive more than half their support from the borrower and are not included in the family size for any other borrower except the borrower's spouse who filed jointly with the borrower; and
(iv) Other individuals if, at the time the borrower certifies family size, the other individuals live with the borrower and receive more than half their support from the borrower and will continue to receive this support from the borrower for the year for which the borrower certifies family size.
(4) Partial financial hardship means a circumstance in which—
(i) For an unmarried borrower or a married borrower who files an individual Federal tax return, the annual amount due on all of the borrower's eligible loans, as calculated under a standard repayment plan based on a 10-year repayment period, using the greater of the amount due at the time the borrower initially entered repayment or at the time the borrower elects the income-based repayment plan, exceeds 15 percent of the difference between the borrower's AGI and 150 percent of the poverty guideline for the borrower's family size; or
(ii) For a married borrower who files a joint Federal tax return with his or her spouse, the annual amount due on all of the borrower's eligible loans and, if applicable, the spouse's eligible loans, as calculated under a standard repayment plan based on a 10-year repayment period, using the greater of the amount due at the time the loans initially entered repayment or at the time the borrower or spouse elects the income-based repayment plan, exceeds 15 percent of the difference between the borrower's and spouse's AGI, and 150 percent of the poverty guideline for the borrower's family size.
(5) Poverty guideline refers to the income categorized by State and family size in the poverty guidelines published annually by the United States Department of Health and Human Services pursuant to 42 U.S.C. 9902(2). If a borrower is not a resident of a State identified in the poverty guidelines, the poverty guideline to be used for the borrower is the poverty guideline (for the relevant family size) used for the 48 contiguous States.
(b) Repayment plan. (1) A borrower may elect the income-based repayment plan only if the borrower has a partial financial hardship. The borrower's aggregate monthly loan payments are limited to no more than 15 percent of the amount by which the borrower's AGI exceeds 150 percent of the poverty line income applicable to the borrower's family size, divided by 12. The loan holder adjusts the calculated monthly payment if—
(i) Except for borrowers provided for in paragraph (b)(1)(ii) of this section, the total amount of the borrower's eligible loans includes loans not held by the loan holder, in which case the loan holder determines the borrower's adjusted monthly payment by multiplying the calculated payment by the percentage of the total outstanding principal amount of the borrower's eligible loans that are held by the loan holder;
(ii) Both the borrower and the borrower's spouse have eligible loans and filed a joint Federal tax return, in which case the loan holder determines—
(A) Each borrower's percentage of the couple's total eligible loan debt;
(B) The adjusted monthly payment for each borrower by multiplying the calculated payment by the percentage determined in paragraph (b)(1)(ii)(A) of this section; and
(C) If the borrower's loans are held by multiple holders, the borrower's adjusted monthly payment by multiplying the payment determined in paragraph (b)(1)(ii)(B) of this section by the percentage of the total outstanding principal amount of the borrower's eligible loans that are held by the loan holder;
(iii) The calculated amount under paragraph (b)(1), (b)(1)(i), or (b)(1)(ii) of this section is less than $5.00, in which case the borrower's monthly payment is $0.00; or
(iv) The calculated amount under paragraph (b)(1), (b)(1)(i), or (b)(1)(ii) of this section is equal to or greater than $5.00 but less than $10.00, in which case the borrower's monthly payment is $10.00.
(2) A borrower with eligible loans held by two or more loan holders must request income-based repayment from each loan holder if the borrower wants to repay all of his or her eligible loans under the income-based repayment plan. Each loan holder must apply the payment calculation rules in paragraphs (b)(1)(iii) and (iv) of this section to loans they hold.
(3) If a borrower elects the income-based repayment plan on or after July 1, 2013, the loan holder must, unless the borrower has some loans that are eligible for repayment under the income-based repayment plan and other loans that are not eligible for repayment under that plan, require that all eligible loans owed by the borrower to that holder be repaid under the income-based repayment plan.
(4) If the borrower's monthly payment amount is not sufficient to pay the accrued interest on the borrower's subsidized Stafford Loans or the subsidized portion of the borrower's Federal Consolidation loan, the Secretary pays to the holder the remaining accrued interest for a period not to exceed three consecutive years from the established repayment period start date on each loan repaid under the income-based repayment plan. On a Consolidation Loan that repays loans on which the Secretary has paid accrued interest under this section, the three-year period includes the period for which the Secretary paid accrued interest on the underlying loans. The three-year period does not include any period during which the borrower receives an economic hardship deferment.
(5) Except as provided in paragraph (b)(4) of this section, accrued interest is capitalized at the time the borrower chooses to leave the income-based repayment plan or no longer has a partial financial hardship.
(6) If the borrower's monthly payment amount is not sufficient to pay any principal due, the payment of that principal is postponed until the borrower chooses to leave the income-based repayment plan or no longer has a partial financial hardship.
(7) The special allowance payment to a lender during the period in which the borrower has a partial financial hardship under the income-based repayment plan is calculated on the principal balance of the loan and any accrued interest unpaid by the borrower.
(8) The repayment period for a borrower under the income-based repayment plan may be greater than 10 years.
(c) Payment application and prepayment. (1) The loan holder shall apply any payment made under the income-based repayment plan in the following order:
(i) Accrued interest.
(ii) Collection costs.
(iii) Late charges.
(iv) Loan principal.
(2) The borrower may prepay the whole or any part of a loan at any time without penalty.
(3) If the prepayment amount equals or exceeds a monthly payment amount of $10.00 or more under the repayment schedule established for the loan, the loan holder shall apply the prepayment consistent with the requirements of § 682.209(b)(2)(ii).
(4) If the prepayment amount exceeds the monthly payment amount of $0.00 under the repayment schedule established for the loan, the loan holder shall apply the prepayment consistent with the requirements of paragraph (c)(1) of this section.
(d) Changes in the payment amount. (1) If a borrower no longer has a partial financial hardship, the borrower may continue to make payments under the income-based repayment plan but the loan holder must recalculate the borrower's monthly payment. The loan holder also recalculates the monthly payment for a borrower who chooses to stop making income-based payments. In either case, as a result of the recalculation—
(i) The maximum monthly amount that the loan holder requires the borrower to repay is the amount the borrower would have paid under the FFEL standard repayment plan based on a 10-year repayment period using the amount of the borrower's eligible loans that was outstanding at the time the borrower began repayment on the loans with that holder under the income-based repayment plan; and
(ii) The borrower's repayment period based on the recalculated payment amount may exceed 10 years.
(2) If a borrower no longer wishes to pay under the income-based repayment plan, the borrower must pay under the FFEL standard repayment plan and the loan holder recalculates the borrower's monthly payment based on—
(i) Except as provided in paragraph (d)(2)(ii) of this section, the time remaining under the maximum 10-year repayment period and the amount of the borrower's loans that was outstanding at the time the borrower discontinued paying under the income-based repayment plan; or
(ii) For a Consolidation Loan, the time remaining under the applicable repayment period as initially determined under § 682.209(h)(2) and the total amount of that loan that was outstanding at the time the borrower discontinued paying under the income-based repayment plan.
(3) A borrower who no longer wishes to repay under the income-based repayment plan and who is required to repay under the FFEL standard repayment plan in accordance with paragraph (d)(2) of this section may request a change to a different repayment plan after making one monthly payment under the FFEL standard repayment plan. For this purpose, a monthly payment may include one payment made under a forbearance that provides for temporarily accepting smaller payments than previously scheduled, in accordance with § 682.211(a)(1).
(e) Eligibility documentation, verification, and notifications. (1) The loan holder determines whether a borrower has a partial financial hardship to qualify for the income-based repayment plan for the year the borrower elects the plan and for each subsequent year that the borrower remains on the plan. To make this determination, the loan holder requires the borrower to—
(i) Provide documentation, acceptable to the loan holder, of the borrower's AGI;
(ii) If the borrower's AGI is not available, or the loan holder believes that the borrower's reported AGI does not reasonably reflect the borrower's current income, provide other documentation to verify income;
(iii) If the spouse of a married borrower who files a joint Federal tax return has eligible loans and the loan holder does not hold at least one of the spouse's eligible loans—
(A) Ensure that the borrower's spouse has provided consent for the loan holder to obtain information about the spouse's eligible loans from the National Student Loan Data System; or
(B) Provide other documentation, acceptable to the loan holder, of the spouse's eligible loan information; and
(iv) Annually certify the borrower's family size. If the borrower fails to certify family size, the loan holder must assume a family size of one for that year.
(2) After making a determination that a borrower has a partial financial hardship to qualify for the income-based repayment plan for the year the borrower initially elects the plan and for any subsequent year that the borrower has a partial financial hardship, the loan holder must send the borrower a written notification that provides the borrower with—
(i) The borrower's scheduled monthly payment amount, as calculated under paragraph (b)(1) of this section, and the time period during which this scheduled monthly payment amount will apply (annual payment period);
(ii) Information about the requirement for the borrower to annually provide the information described in paragraph (e)(1) of this section, if the borrower chooses to remain on the income-based repayment plan after the initial year on the plan, and an explanation that the borrower will be notified in advance of the date by which the loan holder must receive this information;
(iii) An explanation of the consequences, as described in paragraphs (e)(1)(iv) and (e)(7) of this section, if the borrower does not provide the required information;
(iv) An explanation of the consequences if the borrower no longer wishes to repay under the income-based repayment plan; and
(v) Information about the borrower's option to request, at any time during the borrower's current annual payment period, that the loan holder recalculate the borrower's monthly payment amount if the borrower's financial circumstances have changed and the income amount that was used to calculate the borrower's current monthly payment no longer reflects the borrower's current income. If the loan holder recalculates the borrower's monthly payment amount based on the borrower's request, the loan holder must send the borrower a written notification that includes the information described in paragraphs (e)(2)(i) through (e)(2)(v) of this section.
(3) For each subsequent year that a borrower who currently has a partial financial hardship remains on the income-based repayment plan, the loan holder must notify the borrower in writing of the requirements in paragraph (e)(1) of this section no later than 60 days and no earlier than 90 days prior to the date specified in paragraph (e)(3)(i) of this section. The notification must provide the borrower with—
(i) The date, no earlier than 35 days before the end of the borrower's annual payment period, by which the loan holder must receive all of the information described in paragraph (e)(1) of this section (annual deadline); and
(ii) The consequences if the loan holder does not receive the information within 10 days following the annual deadline specified in the notice, including the borrower's new monthly payment amount as determined under paragraph (d)(1) of this section, the effective date for the recalculated monthly payment amount, and the fact that unpaid accrued interest will be capitalized at the end of the borrower's current annual payment period in accordance with paragraph (b)(5) of this section.
(4) Each time a loan holder makes a determination that a borrower no longer has a partial financial hardship for a subsequent year that the borrower wishes to remain on the plan, the loan holder must send the borrower a written notification that provides the borrower with—
(i) The borrower's recalculated monthly payment amount, as determined in accordance with paragraph (d)(1) of this section;
(ii) An explanation that unpaid accrued interest will be capitalized in accordance with paragraph (b)(5) of this section; and
(iii) Information about the borrower's option to request, at any time, that the loan holder redetermine whether the borrower has a partial financial hardship, if the borrower's financial circumstances have changed and the income amount used to determine that the borrower no longer has a partial financial hardship does not reflect the borrower's current income, and an explanation that the borrower will be notified annually of this option. If the loan holder determines that the borrower again has a partial financial hardship, the loan holder must recalculate the borrower's monthly payment in accordance with paragraph (b)(1) of this section and send the borrower a written notification that includes the information described in paragraphs (e)(2)(i) through (e)(2)(v) of this section.
(5) For each subsequent year that a borrower who does not currently have a partial financial hardship remains on the income-based repayment plan, the loan holder must send the borrower a written notification that includes the information described in paragraph (e)(4)(iii) of this section.
(6) If a borrower who is currently repaying under another repayment plan selects the income-based repayment plan but does not provide the documentation described in paragraphs (e)(1)(i) through (e)(1)(iii) of this section, or if the loan holder determines that the borrower does not have a partial financial hardship, the borrower remains on his or her current repayment plan.
(7) The loan holder designates the repayment option described in paragraph (d)(1) of this section if a borrower who is currently repaying under the income-based repayment plan remains on the plan for a subsequent year but the loan holder does not receive the information described in paragraphs (e)(1)(i) through (e)(1)(iii) of this section within 10 days of the specified annual deadline, unless the loan holder is able to determine the borrower's new monthly payment amount before the end of the borrower's current annual payment period.
(8) If the loan holder receives the information described in paragraphs (e)(1)(i) through (e)(1)(iii) of this section within 10 days of the specified annual deadline—
(i) The loan holder must promptly determine the borrower's new monthly payment amount.
(ii) If the loan holder does not determine the new monthly payment amount by the end of the borrower's current annual payment period, the loan holder must prevent the borrower's monthly payment amount from being recalculated in accordance with paragraph (d)(1) of this section and maintain the borrower's current scheduled monthly payment amount until the loan holder determines the new monthly payment amount.
(A) If the new monthly payment amount is less than the borrower's previously calculated income-based monthly payment amount, the loan holder must make the appropriate adjustment to the borrower's account to reflect any payments at the previously calculated amount that the borrower made after the end of the most recent annual payment period. Notwithstanding the requirements of § 682.209(b)(2)(ii), unless the borrower requests otherwise the loan holder applies the excess payment amounts made after the end of the most recent annual payment period in accordance with the requirements of paragraph (c)(1) of this section.
(B) If the new monthly payment amount is equal to or greater than the borrower's previously calculated income-based monthly payment amount, the loan holder does not make any adjustments to the borrower's account.
(iii) The new annual payment period begins on the day after the end of the most recent annual payment period.
(9) If the loan holder receives the documentation described in paragraphs (e)(1)(i) through (e)(1)(iii) of this section more than 10 days after the specified annual deadline and the borrower's monthly payment amount is recalculated in accordance with paragraph (d)(1) of this section, the loan holder may grant forbearance with respect to payments that are overdue or would be due at the time the new calculated income-based monthly payment amount is determined, if the new monthly payment amount is $0.00 or is less than the borrower's previously calculated income-based monthly payment amount. Interest that accrues during the portion of this forbearance period that covers payments that are overdue after the end of the prior annual payment period is not capitalized.
(f) Loan forgiveness. (1) To qualify for loan forgiveness after 25 years, the borrower must have participated in the income-based repayment plan and satisfied at least one of the following conditions during that period—
(i) Made reduced monthly payments under a partial financial hardship as provided in paragraph (b)(1) of this section, including a monthly payment amount of $0.00, as provided in paragraph (b)(1)(iii) of this section;
(ii) Made reduced monthly payments after the borrower no longer had a partial financial hardship or stopped making income-based payments as provided in paragraph (d)(1) of this section;
(iii) Made monthly payments under any repayment plan, that were not less than the amount required under the FFEL standard repayment plan described in § 682.209(a)(6)(vi) with a 10-year repayment period for the amount of the borrower's loans that were outstanding at the time the loans initially entered repayment;
(iv) Made monthly payments under the FFEL standard repayment plan described in § 682.209(a)(6)(vi) based on a 10-year repayment period; or
(v) Received an economic hardship deferment on eligible FFEL loans.
(2) As provided under paragraph (f)(4) of this section, the Secretary repays any outstanding balance of principal and accrued interest on FFEL loans for which the borrower qualifies for forgiveness if the guaranty agency determines that—
(i) The borrower made monthly payments under one or more of the repayment plans described in paragraph (f)(1) of this section, including a monthly amount of $0.00 as provided in paragraph (b)(1)(ii) of this section; and
(ii)(A) The borrower made those monthly payments each year for a 25-year period; or
(B) Through a combination of monthly payments and economic hardship deferments, the borrower made the equivalent of 25 years of payments.
(3) For a borrower who qualifies for the income-based repayment plan, the beginning date for the 25-year period is—
(i) For a borrower who has an eligible FFEL Consolidation Loan, the date the borrower made a payment or received an economic hardship deferment on that loan, before the date the borrower qualified for income-based repayment. The beginning date is the date the borrower made the payment or received the deferment, but no earlier than July 1, 2009;
(ii) For a borrower who has one or more other eligible FFEL loans, the date the borrower made a payment or received an economic hardship deferment on that loan. The beginning date is the date the borrower made that payment or received the deferment on that loan, but no earlier than July 1, 2009;
(iii) For a borrower who did not make a payment or receive an economic hardship deferment on the loan under paragraph (f)(3)(i) or (ii) of this section, the date the borrower made a payment under the income-based repayment plan on the loan; or
(iv) If the borrower consolidates his or her eligible loans, the date the borrower made a payment on the FFEL Consolidation Loan that met the conditions in paragraph (f)(1) of this section.
(4) If a borrower satisfies the loan forgiveness requirements, the Secretary repays the outstanding balance and accrued interest on the FFEL Consolidation Loan described in paragraph (f)(3)(i), (iii), or (iv) of this section or other eligible FFEL loans described in paragraph (f)(3)(ii) or (iv) of this section.
(5) Any payments made on a defaulted loan are not made under a qualifying repayment plan and are not counted toward the 25-year forgiveness period.
(g) Loan forgiveness processing and payment. (1) The loan holder determines when a borrower has met the loan forgiveness requirements under paragraph (f) of this section and does not require the borrower to submit a request for loan forgiveness. No later than six months prior to the anticipated date that the borrower will meet the loan forgiveness requirements, the loan holder must send the borrower a written notice that includes—
(i) An explanation that the borrower is approaching the date that he or she is expected to meet the requirements to receive loan forgiveness;
(ii) A reminder that the borrower must continue to make the borrower's scheduled monthly payments; and
(iii) General information on the current treatment of the forgiveness amount for tax purposes, and instructions for the borrower to contact the Internal Revenue Service for more information.
(2) No later than 60 days after the loan holder determines that a borrower qualifies for loan forgiveness, the loan holder must request payment from the guaranty agency.
(3) If the loan holder requests payment from the guaranty agency later than the period specified in paragraph (g)(2) of this section, interest that accrues on the discharged amount after the expiration of the 60-day filing period is ineligible for reimbursement by the Secretary, and the holder must repay all interest and special allowance received on the discharged amount for periods after the expiration of the 60-day filing period. The holder cannot collect from the borrower any interest that is not paid by the Secretary under this paragraph.
(4)(i) Within 45 days of receiving the holder's request for payment, the guaranty agency must determine if the borrower meets the eligibility requirements for loan forgiveness under this section and must notify the holder of its determination.
(ii) If the guaranty agency approves the loan forgiveness, it must, within the same 45-day period required under paragraph (g)(4)(i) of this section, pay the holder the amount of the forgiveness.
(5) After being notified by the guaranty agency of its determination of the eligibility of the borrower for loan forgiveness, the holder must, within 30 days—
(i) Inform the borrower of the determination and, if appropriate, that the borrower's repayment obligation on the loans is satisfied; and
(ii) Provide the borrower with the information described in paragraph (g)(1)(iii) of this section.
(6)(i) The holder must apply the payment from the guaranty agency under paragraph (g)(4)(ii) of this section to satisfy the outstanding balance on those loans subject to income-based forgiveness; or
(ii) If the forgiveness amount exceeds the outstanding balance on the eligible loans subject to forgiveness, the loan holder must refund the excess amount to the guaranty agency.
(7) If the guaranty agency does not pay the forgiveness claim, the lender will continue the borrower in repayment on the loan. The lender is deemed to have exercised forbearance of both principal and interest from the date the borrower's repayment obligation was suspended until a new payment due date is established. Unless the denial of the forgiveness claim was due to an error by the lender, the lender may capitalize any interest accrued and not paid during this period, in accordance with § 682.202(b).
(8) The loan holder must promptly return to the sender any payment received on a loan after the guaranty agency pays the loan holder the amount of loan forgiveness.
(a) General. (1) The teacher loan forgiveness program is intended to encourage individuals to enter and continue in the teaching profession. For new borrowers, the Secretary repays the amount specified in this paragraph on the borrower's subsidized and unsubsidized Federal Stafford Loans, Direct Subsidized Loans, Direct Unsubsidized Loans, and in certain cases, Federal Consolidation Loans or Direct Consolidation Loans. The forgiveness program is only available to a borrower who has no outstanding loan balance under the FFEL Program or the Direct Loan Program on October 1, 1998 or who has no outstanding loan balance on the date he or she obtains a loan after October 1, 1998.
(2)(i) The borrower must have been employed at an eligible elementary or secondary school that serves low-income families or by an educational service agency that serves low-income families as a full-time teacher for five consecutive complete academic years. The required five years of teaching may include any combination of qualifying teaching service at an eligible elementary or secondary school or an eligible educational service agency.
(ii) Teaching at an eligible elementary or secondary school may be counted toward the required five consecutive complete academic years only if at least one year of teaching was after the 1997-1998 academic year.
(iii) Teaching for an educational service agency may be counted toward the required five consecutive complete academic years only if the consecutive five-year period includes qualifying service at an eligible educational service agency performed after the 2007-2008 academic year.
(3) All borrowers eligible for teacher loan forgiveness may receive loan forgiveness of up to a combined total of $5,000 on the borrower's eligible FFEL and Direct Loan Program loans.
(4) A borrower may receive loan forgiveness of up to a combined total of $17,500 on the borrower's eligible FFEL and Direct Loan Program loans if the borrower was employed for five consecutive years—
(i) At an eligible secondary school as a highly qualified mathematics or science teacher, or for an eligible educational service agency as a highly qualified teacher of mathematics or science to secondary school students; or
(ii) At an eligible elementary or secondary school or educational service agency as a special education teacher.
(5) The loan for which the borrower is seeking forgiveness must have been made prior to the end of the borrower's fifth year of qualifying teaching service.
(b) Definitions. The following definitions apply to this section:
Academic year means one complete school year at the same school, or two complete and consecutive half years at different schools, or two complete and consecutive half years from different school years at either the same school or different schools. Half years exclude summer sessions and generally fall within a twelve-month period. For schools that have a year-round program of instruction, a minimum of nine months is considered an academic year.
Educational service agency means a regional public multiservice agency authorized by State statute to develop, manage, and provide services or programs to local educational agencies, as defined in section 9101 of the Elementary and Secondary Education Act of 1965, as amended.
Elementary school means a public or nonprofit private school that provides elementary education as determined by State law or the Secretary if that school is not in a State.
Full-time means the standard used by a State in defining full-time employment as a teacher. For a borrower teaching in more than one school, the determination of full-time is based on the combination of all qualifying employment.
Highly qualified means highly qualified as defined in section 9101 of the Elementary and Secondary Education Act of 1965, as amended.
Secondary school means a public or nonprofit private school that provides secondary education as determined by State law or the Secretary if the school is not in a State.
Teacher means a person who provides direct classroom teaching or classroom-type teaching in a non-classroom setting, including Special Education teachers.
(c) Borrower eligibility. (1) A borrower who has been employed at an elementary or secondary school or for an educational service agency as a full-time teacher for five consecutive complete academic years may obtain loan forgiveness under this program if the elementary or secondary school or educational service agency—
(i) Is in a school district that qualifies for funds under title I of the Elementary and Secondary Education Act of 1965, as amended;
(ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's or educational service agency's total enrollment is made up of children who qualify for services provided under title I; and
(iii) Is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. If this directory is not available before May 1 of any year, the previous year's directory may be used.
(2) The Secretary considers all elementary and secondary schools operated by the Bureau of Indian Education (BIE) or operated on Indian reservations by Indian tribal groups under contract with the BIE to qualify as schools serving low-income students.
(3) If the school or educational service agency at which the borrower is employed meets the requirements specified in paragraph (c)(1) of this section for at least one year of the borrower's five consecutive complete academic years of teaching and fails to meet those requirements in subsequent years, those subsequent years of teaching qualify for purposes of this section for that borrower.
(4) In the case of a borrower whose five consecutive complete years of qualifying teaching service began before October 30, 2004, the borrower—
(i) May receive up to $5,000 of loan forgiveness if the borrower—
(A) Demonstrated knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum, as certified by the chief administrative officer of the eligible elementary school or educational service agency where the borrower was employed; or
(B) Taught in a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the eligible secondary school or educational service agency where the borrower was employed.
(ii) May receive up to $17,500 of loan forgiveness if the borrower—
(A) Taught mathematics or science on a full-time basis at an eligible secondary school, or taught mathematics or science to secondary school students on a full-time basis for an eligible educational service agency, and was a highly qualified mathematics or science teacher; or
(B) Taught as a special education teacher on a full-time basis to children with disabilities at an eligible elementary or secondary school or an educational service agency and was a highly qualified special education teacher whose special education training corresponded to the children's disabilities and who has demonstrated knowledge and teaching skills in the content areas of the elementary or secondary school curriculum.
(iii) Teaching service performed for an eligible educational service agency may be counted toward the required five years of teaching only if the consecutive five-year period includes qualifying service at an eligible educational service agency performed after the 2007-2008 academic year.
(5) In the case of a borrower whose five consecutive years of qualifying teaching service began on or after October 30, 2004, the borrower—
(i) May receive up to $5,000 of loan forgiveness if the borrower taught full time at an eligible elementary or secondary school or for an educational service agency and was a highly qualified elementary or secondary school teacher.
(ii) May receive up to $17,500 of loan forgiveness if the borrower—
(A) Taught mathematics or science on a full-time basis at an eligible secondary school, or taught mathematics or science on a full-time basis to secondary school students for an eligible educational service agency, and was a highly qualified mathematics or science teacher; or
(B) Taught as a special education teacher on a full-time basis to children with disabilities at an eligible elementary or secondary school or for an educational service agency and was a highly qualified special education teacher whose special education training corresponded to the children's disabilities and who has demonstrated knowledge and teaching skills in the content areas of the elementary or secondary school curriculum.
(iii) Teaching service performed for an eligible educational service agency may be counted toward the required five years of teaching only if the consecutive five-year period includes qualifying service at an eligible educational service agency performed after the 2007-2008 academic year.
(6) To qualify for loan forgiveness as a highly qualified teacher, the teacher must have been a highly qualified teacher for all five years of eligible teaching service.
(7) For teacher loan forgiveness applications received by the loan holder on or after July 1, 2006, a teacher in a private, non-profit elementary or secondary school who is exempt from State certification requirements (unless otherwise applicable under State law) may qualify for loan forgiveness under paragraphs (c)(3)(ii) or (c)(4) of this section if—
(i) The private school teacher is permitted to and does satisfy rigorous subject knowledge and skills tests by taking competency tests in applicable grade levels and subject areas;
(ii) The competency tests are recognized by 5 or more States for the purposes of fulfilling the highly qualified teacher requirements under section 9101 of the Elementary and Secondary Education Act of 1965; and
(iii) The private school teacher achieves a score on each test that equals or exceeds the average passing score for those 5 states.
(8) The academic year may be counted as one of the borrower's five consecutive complete academic years if the borrower completes at least one-half of the academic year and the borrower's employer considers the borrower to have fulfilled his or her contract requirements for the academic year for the purposes of salary increases, tenure, and retirement if the borrower is unable to complete an academic year due to—
(i) A return to postsecondary education, on at least a half-time basis, that is directly related to the performance of the service described in this section;
(ii) A condition that is covered under the Family and Medical Leave Act of 1993 (FMLA) (29 U.S.C. 2601, et seq.); or
(iii) A call or order to active duty status for more than 30 days as a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code.
(9) A borrower's period of postsecondary education, qualifying FMLA condition, or military active duty as described in paragraph (c)(7) of this section, including the time necessary for the borrower to resume qualifying teaching no later than the beginning of the next regularly scheduled academic year, does not constitute a break in the required five consecutive years of qualifying teaching service.
(10) A borrower who was employed as a teacher at more than one qualifying school, for more than one qualifying educational service agency, or at a combination of both during an academic year and demonstrates that the combined teaching was the equivalent of full-time, as supported by the certification of one or more of the chief administrative officers of the schools or educational service agencies involved, is considered to have completed one academic year of qualifying teaching.
(11) A borrower is not eligible for teacher loan forgiveness on a defaulted loan unless the borrower has made satisfactory repayment arrangements to re-establish title IV eligibility, as defined in § 682.200.
(12) A borrower may not receive loan forgiveness for the same qualifying teaching service under this section if the borrower receives a benefit for the same teaching service under—
(i) Subtitle D of title I of the National and Community Service Act of 1990;
(ii) 34 CFR 685.219; or
(iii) Section 428K of the Act.
(d) Forgiveness amount. (1) A qualified borrower is eligible for forgiveness of up to $5,000, or up to $17,500 if the borrower meets the requirements of paragraph (c)(4)(ii) or (c)(5)(ii) of this section. The forgiveness amount is deducted from the aggregate amount of the borrower's subsidized or unsubsidized Federal Stafford or Federal Consolidation Loan obligation that is outstanding after the borrower completes his or her fifth consecutive complete academic year of teaching as described in paragraph (c) of this section. Only the outstanding portion of the consolidation loan that was used to repay an eligible subsidized or unsubsidized Federal Stafford Loan, an eligible Direct Subsidized Loan, or an eligible Direct Unsubsidized Loan qualifies for loan forgiveness under this section.
(2) A borrower may not receive more than a total of $5,000, or $17,500 if the borrower meets the requirements of paragraph (c)(4)(ii) or (c)(5)(ii) of this section, in loan forgiveness for outstanding principal and accrued interest under both this section and under section 34 CFR 685.217.
(3) The holder does not refund payments that were received from or on behalf of a borrower who qualifies for loan forgiveness under this section.
(e) Authorized forbearance during qualifying teaching service and forgiveness processing. (1) A holder grants a forbearance—
(i) Under § 682.211(h)(2)(ii)(C) and (h)(4)(iii), in annual increments for each of the years of qualifying teaching service, if the holder believes, at the time of the borrower's annual request, that the expected cancellation amount will satisfy the anticipated remaining outstanding balance on the loan at the time of the expected cancellation;
(ii) For a period not to exceed 60 days while the holder is awaiting a completed teacher loan forgiveness application from the borrower; and
(iii) For the period beginning on the date the holder receives a completed loan forgiveness application to the date the holder receives either a denial of the request or the loan forgiveness amount from the guaranty agency, in accordance with paragraph (f) of this section.
(2) At the conclusion of a forbearance authorized under paragraph (e)(1) of this section, the holder must resume collection activities and may capitalize any interest accrued and not paid during the forbearance period in accordance with § 682.202(b).
(3) Nothing in paragraph (e) of this section restricts holders from offering other forbearance options to borrowers who do not meet the requirements of paragraph (e)(1)(i) of this section.
(f) Application and processing. (1) A borrower, after completing the qualifying teaching service, requests loan forgiveness from the holder of the loan on a form approved by the Secretary.
(2)(i) The holder must file a request for payment with the guaranty agency on a teacher loan forgiveness amount no later than 60 days after the receipt, from the borrower, of a completed teacher loan forgiveness application.
(ii) When filing a request for payment on a teacher loan forgiveness, the holder must provide the guaranty agency with the completed loan forgiveness application submitted by the borrower and any required supporting documentation.
(iii) If the holder files a request for payment later than 60 days after the receipt of the completed teacher loan forgiveness application form, interest that accrued on the loan forgiveness amount after the expiration of the 60-day filing period is ineligible for reimbursement by the Secretary, and the holder must repay all interest and special allowance received on the loan forgiveness amount for periods after the expiration of the 60-day filing period. The holder cannot collect from the borrower any interest that is not paid by the Secretary under this paragraph.
(3)(i) Within 45 days of receiving the holder's request for payment, the guaranty agency must determine if the borrower meets the eligibility requirements for loan forgiveness under this section and must notify the holder of its determination of the borrower's eligibility for loan forgiveness under this section.
(ii) If the guaranty agency approves the loan forgiveness, it must, within the same 45-day period, pay the holder the amount of the laon forgiveness, up to $17,500, subject to paragraphs (c)(11), (d)(1), (d)(2) and (f)(2)(iii) of this section.
(4) After being notified by the guaranty agency of its determination of the eligibility of the borrower for the loan forgiveness, the holder must, within 30 days, inform the borrower of the determination. If the loan forgiveness is approved, the holder must also provide the borrower with information regarding any new repayment terms of remaining loan balances.
(5) Unless otherwise instructed by the borrower, the holder must apply the proceeds of the teacher forgiveness first to any outstanding unsubsidized Federal Stafford loan balances, next to any outstanding subsidized Federal Stafford loan balances, then to any eligible outstanding Federal Consolidation loan balances.
(g) Claims for reimbursement from the Secretary on loans held by guaranty agencies. In the case of a teacher loan forgiveness applied to a defaulted loan held by the guaranty agency, the Secretary pays the guaranty agency a percentage of the amount forgiven that is equal to the complement of the reinsurance percentage paid on the loan. The payment of up to $5,000, or up to $17,500, may also include interest that accrues on the forgiveness amount during the period from the date on which the guaranty agency received payment from the Secretary on a default claim to the date on which the guaranty agency determines that the borrower is eligible for the teacher loan forgiveness.
(a) General. The Secretary pays a lender, on behalf of a borrower, a portion of the interest on a subsidized Stafford loan and on all or a portion of a qualifying Consolidation loan that meets the requirements under § 682.301. This payment is known as interest benefits.
(b) Covered interest. (1) The Secretary pays a lender the interest that accrues on an eligible Stafford loan—
(i) During all periods prior to the beginning of the repayment period, except as provided in paragraphs (b)(2) and (c) of this section.
(ii) During any period when the borrower has an authorized deferment, and, if applicable, a post-deferment grace period;
(iii) During the repayment period for loans described in paragraph (d)(2) of this section; and
(iv) During a period that does not exceed three consecutive years from the established repayment period start date on each loan under the income-based repayment plan and that excludes any period during which the borrower receives an economic hardship deferment, if the borrower's monthly payment amount under the plan is not sufficient to pay the accrued interest on the borrower's loan or on the qualifying portion of the borrower's Consolidation Loan.
(2) The Secretary's obligation to pay interest benefits on an otherwise eligible loan terminates on the earliest of—
(i) The date the borrower's loan is repaid;
(ii) The date the disbursement check is returned uncashed to the lender, or the 120th day after the date of that disbursement if—
(A) The check for the disbursement has not been cashed on or before that date; or
(B) The proceeds of the disbursement made by electronic funds transfer or master check have not been released from the account maintained by the school on or before that date;
(iii) The date of default by the borrower;
(iv) The date the lender receives payment of a claim for loss on the loan;
(v) The date the borrower's loan is discharged in bankruptcy;
(vi) The date the lender determines that the borrower has died or has become totally and permanently disabled;
(vii) The date the loan ceases to be guaranteed or ceases to be eligible for reinsurance under this part, with respect to that portion of the loan that ceases to be guaranteed or reinsured, regardless of whether the lender has filed a claim for loss on the loan with the guarantor;
(viii) The date the lender determines that the borrower is eligible for loan discharge under § 682.402(d), (e), or (l);
(ix) The date on which the lender determines the loan is legally unenforceable based on the receipt of an identity theft report under § 682.208(b)(3); or
(x) The date the borrower's payment under the income-based repayment plan is sufficient to pay the accrued interest on the borrower's loan or the qualifying portion of the borrower's Consolidation Loan.
(3) Section 682.412 sets forth circumstances under which a lender may be required to repay interest benefits received on a loan guaranteed by a guaranty agency.
(c) Interest not covered. The Secretary does not pay—
(1) Interest for which the borrower is not otherwise liable; or
(2) Interest paid on behalf of the borrower by a guaranty agency.
(d) Rate. (1) Except as provided in paragraph (d)(2) of this section, the Secretary pays the lender at the actual interest rate on a loan provided that the actual interest rate does not exceed the applicable interest rate.
(2) For a loan disbursed prior to December 15, 1968, or subject to a binding commitment made prior to that date, the Secretary pays an amount during the repayment period equivalent to 3 percent per year of the unpaid principal amount of the loan.
(a) General. (1) To qualify for benefits on a Stafford loan, a borrower must demonstrate financial need in accordance with Part F of the Act.
(2) A Consolidation loan borrower qualifies for interest benefits during authorized periods of deferment on the portion of the loan that does not represent HEAL loans if the loan application was received by the lender—
(i) On or after January 1, 1993 but prior to August 10, 1993;
(ii) On or after August 10, 1993, but prior to November 13, 1997 if the loan consolidates only subsidized Stafford loans; and
(iii) On or after November 13, 1997, for the portion of the loan that repaid subsidized FFEL loans and Direct Subsidized Loans.
(b) Application for interest benefits. To apply for interest benefits on a Stafford loan, the student, or the school at the direction of the student, must submit a statement to the lender pursuant to § 682.603. The student must qualify for interest benefits if the eligible institution has determined and documented the student's amount of need for a loan based on the student's estimated cost of attendance, estimated financial assistance, and expected family contribution as determined under part F of the Act.
(a) General. The Secretary pays a special allowance to a lender on an eligible FFEL loan. The special allowance is a percentage of the average unpaid principal balance of a loan, including capitalized interest computed in accordance with paragraphs (c) and (f) of this section. Special allowance is also paid on the unpaid accrued interest of a loan covered by § 682.215(b)(7) computed in the same manner as in paragraphs (c) and (f), as applicable, except for this purpose the applicable interest rate shall be deemed to be zero.
(b) Eligible loans. (1) Except for non-subsidized Federal Stafford loans disbursed on or after October 1, 1981, for periods of enrollment beginning prior to October 1, 1992, or as provided in paragraphs (b)(2), (b)(3), or (e)(1) of this section, FFEL loans that otherwise meet program requirements are eligible for special allowance payments.
(2) For a loan made under the Federal SLS or Federal PLUS Program on or after July 1, 1987 and prior to July 1, 1994, and for any Federal PLUS loan made on or after July 1, 1998 or on or after January 1, 2000 for any period prior to April 1, 2006, or under § 682.209(e) or (f), no special allowance is paid for any period for which the interest rate calculated prior to applying the interest rate maximum for that loan does not exceed—
(i) 12 percent in the case of a Federal SLS or PLUS loan made prior to October 1, 1992;
(ii) 11 percent in the case of a Federal SLS loan made on or after October 1, 1992;
(iii) 10 percent in the case of a Federal PLUS loan made on or after October 1, 1992; or
(iv) 9 percent in the case of a Federal PLUS loan made on or after July 1, 1998.
(3) In the case of a subsidized Stafford loan disbursed on or after October 1, 1992 and prior to July 1, 2010, the Secretary does not pay special allowance on a disbursement if—
(i) The disbursement check is returned uncashed to the lender or the lender is notified that the disbursement made by electronic funds transfer or master check will not be released from the restricted account maintained by the school; or
(ii) The check for the disbursement has not been negotiated before the 120th day after the date of disbursement or the disbursement made by electronic funds transfer or master check has not been released from the restricted account maintained by the school before that date.
(c) Rate. (1) Except as provided in paragraph (c)(2), (c)(3), or (e) of this section, the special allowance rate for an eligible loan during a 3-month period is calculated by—
(i) Determining the average of the bond equivalent rates of—
(A) The quotes of the 3-month commercial paper (financial) rates in effect for each of the days in such quarter as reported by the Federal Reserve in Publication H-15 (or its successor) for such 3-month period for a loan for which the first disbursement is made on or after January 1, 2000; or
(B) The 91-day Treasury bills auctioned during the 3-month period for a loan for which the first disbursement is made prior to January 1, 2000;
(ii) Subtracting the applicable interest rate for that loan;
(iii) Adding—
(A)(1) 2.34 percent to the resulting percentage for a Federal Stafford loan for which the first disbursement is made on or after January 1, 2000;
(2) 2.64 percent to the resulting percentage for a Federal PLUS loan for which the first disbursement is made on or after January 1, 2000;
(3) 2.64 percent to the resulting percentage for a Federal Consolidation Loan that was made based on an application received by the lender on or after January 1, 2000;
(4) 1.74 percent to the resulting percentage for a Federal Stafford loan for which the first disbursement is made on or after January 1, 2000 during the borrower's in-school, grace, and authorized period of deferment;
(5) 2.8 percent to the resulting percentage for a Federal Stafford loan for which the first disbursement is made on or after July 1, 1998 and prior to January 1, 2000;
(6) 2.2 percent to the resulting percentage for a Federal Stafford loan for which the first disbursement is made on or after July 1, 1998 and prior to January 1, 2000, during the borrower's in-school, grace, and authorized period of deferment;
(7) 2.5 percent to the resulting percentage for a Federal Stafford loan for which the first disbursement is made on or after July 1, 1995 and prior to July 1, 1998 for interest that accrues during the borrower's in-school, grace, and authorized period of deferment;
(B) 3.1 percent to the resulting percentage for—
(1) A Federal Stafford Loan made on or after October 1, 1992 and prior to July 1, 1998, except as provided in paragraph (c)(1)(iii)(A)(7) of this section;
(2) A Federal SLS Loan made on or after October 1, 1992;
(3) A Federal PLUS Loan made on or after October 1, 1992 and prior to July 1, 1998;
(4) A Federal PLUS Loan made on or after July 1, 1998 and prior to October 1, 1998, except that no special allowance shall be paid any quarter unless the rate determined under § 682.202(a)(2)(v)(A) exceeds 9 percent;
(5) A Federal PLUS loan made on or after October 1, 1998 and prior to January 1, 2000, except that no special allowance shall be paid during any quarter unless the rate determined under § 682.202(a)(2)(v)(A) exceeds 9 percent;
(6) A Federal Consolidation Loan for which the application was received by the lender prior to January 1, 2000, except that no special allowance shall be paid during any quarter on a loan for which the application was received on or after October 1, 1998 unless the average of the bond equivalent rate of the 91-day Treasury bills auctioned during that quarter, plus 3.1 percent, exceeds the rate determined under Section 682.202(a)(4)(iv);
(C) 3.25 percent to the resulting percentage, for a loan made on or after November 16, 1986, but prior to October 1, 1992;
(D) 3.25 percent to the resulting percentage, for a loan made on or after October 17, 1986 but prior to November 16, 1986, for a period of enrollment beginning on or after November 16, 1986;
(E) 3.5 percent to the resulting percentage, for a loan made prior to October 17, 1986, or a loan described in paragraph (c)(2) of this section; or
(F) 3.5 percent to the resulting percentage, for a loan made on or after October 17, 1986 but prior to November 16, 1986, for a period of enrollment beginning prior to November 16, 1986;
(iv) Rounding the result upward to the nearest one-eighth of 1 percent, for a loan made prior to October 1, 1981; and
(v) Dividing the resulting percentage by 4.
(2) The special allowance rate determined under paragraph (c)(1)(iii)(E) of this section applies to loans made or purchased from funds obtained from the issuance of an obligation of the—
(i) Maine Educational Loan Marketing Corporation to the Student Loan Marketing Association pursuant to an agreement entered into on January 31, 1984; or
(ii) South Carolina Student Loan Corporation to the South Carolina National Bank pursuant to an agreement entered into on July 30, 1986.
(3)(i) Subject to paragraphs (c)(3)(iii), (c)(3)(iv), and (e) of this section, the special allowance rate is that provided in paragraph (c)(3)(ii) of this section for a loan made or guaranteed on or after October 1, 1980 that was made or purchased with funds obtained by the holder from—
(A) The proceeds of tax-exempt obligations originally issued prior to October 1, 1993;
(B) Collections or payments by a guarantor on a loan that was made or purchased with funds obtained by the holder from obligations described in paragraph (c)(3)(i)(A) of this section;
(C) Interest benefits or special allowance payments on a loan that was made or purchased with funds obtained by the holder from obligations described in paragraph (c)(3)(i)(A) of this section;
(D) The sale of a loan that was made or purchased with funds obtained by the holders from obligations described in paragraph (c)(3)(i)(A) of this section; or
(E) The investment of the proceeds of obligations described in paragraph (c)(3)(i)(A) of this section.
(ii) The special allowance rate for a loan described in paragraph (c)(3)(i) is one-half of the rate calculated under paragraph (c)(1) of this section, except that in applying paragraph (c)(1)(iii), 3.5 percent is substituted for the percentages specified therein.
(iii) The special allowance rate applicable to loans described in paragraph (c)(3)(i) of this section that are made prior to October 1, 1992, may not be less than—
(A) 2.5 percent per year on eligible loans for which the applicable interest rate is 7 percent;
(B) 1.5 percent per year on eligible loans for which the applicable interest rate is 8 percent; or
(C) One-half of 1 percent per year on eligible loans for which the applicable rate is 9 percent.
(iv) The special allowance rate applicable to loans described in paragraph (c)(3)(i) of this section that are made on or after October 1, 1992, may not be less than 9.5 percent minus the applicable interest rate.
(4) Loans made or purchased with funds obtained by the holder from the issuance of tax-exempt obligations originally issued on or after October 1, 1993, and loans made with funds derived from default reimbursement collections, interest, or other income related to eligible loans made or purchased with those tax-exempt funds, do not qualify for the minimum special allowance rate specified in paragraph (c)(3)(iii) or (iv) of this section, and are not subject to the 50 percent limitation on the maximum rate otherwise applicable to loans made with tax-exempt funds.
(5) For purposes of paragraphs (c)(3) and (c)(4), a loan is purchased with funds described in those paragraphs when the loan is refinanced in consideration of those funds.
(d) Termination of special allowance payments on a loan. (1) The Secretary's obligation to pay special allowance on a loan terminates on the earliest of—
(i) The date a borrower's loan is repaid;
(ii) The date a borrower's loan check is returned uncashed to the lender;
(iii) The date a lender receives payment on a claim for loss on the loan;
(iv) The date a loan ceases to be guaranteed or ceases to be eligible for reinsurance under this part, with respect to that portion of the loan that ceases to be guaranteed or reinsured, regardless of whether the lender has filed a claim for loss on the loan with the guarantor;
(v) The 60th day after the borrower's default on the loan, unless the lender files a claim for loss on the loan with the guarantor together with all required documentation, on or before the 60th day;
(vi) The 120th day after the date of disbursement, if—
(A) The loan check has not been cashed on or before that date; or
(B) The loan proceeds disbursed by electronic funds transfer or master check have not been released from the restricted account maintained by the school on or before that date;
(vii) The 30th day after the date the lender received a returned claim from the guaranty agency on a loan submitted by the deadline specified in (d)(1)(v) of this section for loss on the loan to the lender due solely to inadequate documentation unless the lender files a claim for loss on the loan with the guarantor, together with all required documentation, prior to the 30th day; or
(viii) The date on which the lender determines the loan is legally unenforceable based on the receipt of an identity theft report under § 682.208(b)(3).
(2) In the case of a loan disbursed on or after October 1, 1992 and prior to July 1, 2010, the Secretary does not pay special allowance on a loan if—
(i) The disbursement check is returned uncashed to the lender or the lender is notified that the disbursement made by electronic funds transfer or master check will not be released from the account maintained by the school; or
(ii) The check for the disbursement has not been negotiated before the 120th day after the date of disbursement or the disbursement made by electronic funds transfer or master check has not been released from the account maintained by the school before that date.
(3) Section 682.413 sets forth the circumstances under which a lender may be required to repay the special allowance received on a loan guaranteed by a guaranty agency.
(e) Limits on special allowance payments on loans made or purchased with funds derived from tax-exempt obligations—(1) General. (i) The Secretary pays a special allowance on a loan described in paragraph (c)(3) or (c)(4) of this section that is held by or on behalf of an Authority only if the loan meets the requirements of section 438(e) of the Act.
(ii) The Secretary pays a special allowance at the rate prescribed in paragraph (c)(1) or (c)(3) of this section on a loan described in paragraph (c)(3)(i) of this section that is held by or on behalf of an Authority in accordance with paragraphs (e)(2) through (e)(5) of this section, as applicable. References to “loan” or “loans” in paragraphs (e)(2) through (e)(5) include only loans described in paragraph (c)(3)(i).
(2) Effect of Refinancing on Special Allowance Payments. Except as provided in paragraphs (e)(3) through (e)(5) of this section—
(i) The Secretary pays a special allowance at the rate prescribed in paragraph (c)(3) of this section to an Authority that holds a legal or equitable interest in the loan that is pledged or otherwise transferred in consideration of—
(A) Funds listed in paragraph (c)(3)(i) of this section;
(B) Proceeds of a tax-exempt refunding obligation that refinances a debt that—
(1) Was first incurred pursuant to a tax-exempt obligation originally issued prior to October 1, 1993;
(2) Has been financed continuously by tax-exempt obligation.
(ii) The Secretary pays a special allowance to an Authority that holds a legal or equitable interest in the loan that is pledged or otherwise transferred in consideration of funds other than those specified in paragraph (e)(2)(i) of this section either—
(A) At the rate prescribed in paragraph (c)(1) of this section, if—
(1) The prior tax-exempt obligation is retired; or
(2) The prior tax-exempt obligation is defeased by means of obligations that the Authority certifies in writing to the Secretary bears a yield that does not exceed the yield restrictions of section 148 of the Internal Revenue Code and the regulations thereunder, or
(B) At the rate prescribed in paragraph (c)(3) of this section.
(3) Loans affected by transactions or events after September 30, 2004. The Secretary pays a special allowance to an Authority at the rate prescribed in paragraph (c)(1) of this section if, after September 30, 2004—
(i) The loan is refinanced with funds other than those listed in paragraph (e)(2)(i) of this section;
(ii) The loan is sold or transferred to any other holder; or
(iii)(A) The loan is financed by a tax-exempt obligation included in the sources in paragraph (e)(2)(i), and
(B) That obligation matures, is refunded, is defeased, or is retired, whichever occurs earliest.
(4) Loans Affected by Transactions After February 7, 2006. Except as provided in paragraph (e)(5) or (f) of this section, the Secretary pays a special allowance at the rate prescribed in paragraph (c)(1) of this section on any loan—
(i) That was made or purchased on or after February 8, 2006, or
(ii) That was not earning, on February 8, 2006, a quarterly rate of special allowance determined under paragraph (c)(3) of this section.
(5) Loans affected by transactions after December 30, 2010. (i) The Secretary pays a special allowance to a holder described in paragraph (e)(5)(ii) of this section at the rate prescribed in paragraph (c)(3) of this section only on a loan—
(A) That was made or purchased prior to December 31, 2010, or
(B) That was earning, before December 31, 2010, a quarterly rate of special allowance determined under paragraph (c)(3) of this section.
(ii) A holder for purposes of this paragraph is an entity that—
(A) On February 8, 2006 and during the quarter for which special allowance is determined under this paragraph—
(1) Is a unit of State or local government or a private nonprofit entity, and
(2) Is not owned or controlled by, or under common ownership or control by, a for-profit entity; and
(B) In the most recent quarterly special allowance payment prior to September 30, 2005, held, directly or through any subsidiary, affiliate, or trustee, a total unpaid balance of principal of $100,000,000 or less for which special allowance was determined and paid under paragraph (c)(3) of this section.
(f) Special allowance rates for loans made on or after October 1, 2007. With respect to any loan for which the first disbursement of principal is made on or after October 1, 2007, other than a loan described in paragraph (e)(5) of this section, the special allowance rate for an eligible loan made during a 3-month period is calculated according to the formulas described in paragraphs (f)(1) and (f)(2) of this section.
(1) Except as provided in paragraph (f)(2) of this section, the special allowance formula shall be computed by—
(i) Determining the average of the bond equivalent rates of the quotes of the 3-month commercial paper (financial) rates in effect for each of the days in such quarter as reported by the Federal Reserve in Publication H-15 (or its successor) for such 3-month period;
(ii) Subtracting the applicable interest rate for that loan;
(iii) Adding—
(A) 1.79 percent to the resulting percentage for a Federal Stafford loan;
(B) 1.19 percent to the resulting percentage for a Federal Stafford Loan during the borrower's in-school period, grace period and authorized period of deferment;
(C) 1.79 percent to the resulting percentage for a Federal PLUS loan; and
(D) 2.09 percent to the resulting percentage for a Federal Consolidation loan; and
(iv) Dividing the resulting percentage by 4.
(2) For loans held by an eligible not-for-profit holder as defined in paragraph (f)(3) of this section, the special allowance formula shall be computed by—
(i) Determining the average of the bond equivalent rates of the quotes of the 3-month commercial paper (financial) rates in effect for each of the days in such quarter as reported by the Federal Reserve in Publication H-15 (or its successor) for such 3-month period;
(ii) Subtracting the applicable interest rate for that loan;
(iii) Adding—
(A) 1.94 percent to the resulting percentage for a Federal Stafford loan;
(B) 1.34 percent to the resulting percentage for a Federal Stafford Loan during the borrower's in-school period, grace period and authorized period of deferment;
(C) 1.94 percent to the resulting percentage for a Federal PLUS loan; and
(D) 2.24 percent to the resulting percentage for a Federal Consolidation loan; and
(iv) Dividing the resulting percentage by 4.
(3) Eligible Not-for-Profit Holder. (i) For purposes of this section, the term “eligible not-for-profit holder” means an eligible lender under section 435(d) of the Act (except an eligible institution) that requests special allowance payments from the Secretary and that is—
(A) A State, or a political subdivision, authority, agency, or other instrumentality thereof, including such entities that are eligible to issue bonds described in 26 CFR 1.103-1, or section 144(b) of the Internal Revenue Code of 1986;
(B) An entity described in section 150(d)(2) of the Internal Revenue Code of 1986 that has not made the election described in section 150(d)(3) of that Code;
(C) An entity described in section 501(c)(3) of the Internal Revenue Code of 1986; or
(D) A trustee acting as an eligible lender on behalf of an entity that is not an eligible institution and that is a State or non-profit entity or a special purpose entity for a State or non-profit entity.
(ii) For purposes of paragraph (f)(3) of this section—
(A) The term “State or non-profit entity” means an entity described in paragraph (f)(3)(i)(A), (f)(3)(i)(B), or (f)(3)(i)(C) of this section, regardless of whether such entity is an eligible lender under section 435(d) of that Act.
(B) The term “special purpose entity” means an entity established for the limited purpose of financing the acquisition of loans from or at the direction of a State or non-profit entity, or servicing and collecting such loans, and that is—
(1) An entity established by such State or non-profit entity, or
(2) An entity established by an entity described in paragraph (f)(3)(ii)(B)(1) of this section.
(C) A special purpose entity is a “related special purpose entity” with respect to a State or non-profit entity if it holds any interest in loans acquired from or at the direction of that State or non-profit entity or from a special purpose entity established by that State or non-profit entity.
(iii) An entity that otherwise qualifies under paragraph (f)(3)(i) of this section shall not be considered an eligible not-for-profit holder unless such entity—
(A) Was a State or non-profit entity and an eligible lender under section 435(d) of the Act, other than a school lender, and on or before September 27, 2007 had made or acquired a FFEL loan, unless the State waives this requirement under paragraph (f)(3)(iv) of this section; or
(B) Is acting as an eligible lender trustee on behalf of a State or non-profit entity that was the sole beneficial owner of a loan eligible for a special allowance payment on September 27, 2007.
(iv) Subject to the provisions of section 435(d)(1)(D) of the Act, a State may waive the requirement of paragraph (f)(3)(iii)(A) of this section to identify a new eligible not-for-profit holder pursuant to a written application filed in accordance with paragraph (f)(3)(x) of this section, for the purposes of carrying out a public purpose of the State, except that a State may not designate a trustee for this purpose.
(v) A State or non-profit entity, and a trustee to the extent acting on behalf of such an entity or its related special purpose entity, shall not be an eligible not-for-profit holder if the State or non-profit entity or its related special purpose entity is owned or controlled, in whole or in part, by a for-profit entity. For purposes of this paragraph, a for-profit entity has ownership and control of a State or non-profit entity, or its related special purpose entity, if—
(A) The for-profit entity is a member or shareholder of a State or non-profit entity or related special purpose entity that is a membership or stock corporation, and the for-profit entity has sufficient power to control the State or non-profit entity or its special purpose entity;
(B) The for-profit-entity employs or appoints individuals that together constitute a majority of the State, non-profit, or special purpose entity's board of trustees or directors, or a majority of such board's audit committee, executive committee, or compensation committee; or
(C) For a State, non-profit, or special purpose entity that has no board of trustees or directors and associated committees of such, the for-profit entity is authorized by law, agreement, or otherwise to approve decisions by the entity regarding its audits, investments, hiring, retention, or compensation of officials, unless the Secretary determines that the particular authority to approve such decisions is not likely to affect the integrity of those decisions.
(vi) For purposes of paragraph (f)(3) of this section—
(A) A for-profit entity has sufficient power to control a State or non-profit entity or its related special purpose entity, if it possesses directly, or represents, either alone or together with other persons, under a voting trust, power of attorney, proxy, or similar agreement, one or more persons who hold, individually or in combination with the other person represented or the persons representing them, a sufficient voting percentage of the membership interests or voting securities to direct or cause the direction of the management and policies of the State or non-profit entity or its related special purpose entity.
(B) An individual is deemed to be employed or appointed by a for-profit entity if the for-profit entity employs a family member, as defined in § 600.21(f), of that individual, unless the Secretary determines that the particular nature of the family member's employment is not likely to affect the integrity of decisions made by the board or committee member.
(C) “Beneficial owner” (including “beneficial ownership” and “owner of a beneficial interest”) means the entity that has those rights with respect to the loan or income from the loan that are the normal incidents of ownership, including the right to receive, possess, use, and sell or otherwise exercise control over the loan and the income from the loan, subject to any rights granted and limitations imposed in connection with or related to the granting of a security interest described in paragraph (f)(3)(ix) of this section, and subject to any limitations on such rights under the Act as a result of such entity not qualifying as an eligible lender or holder under the Act.
(D) “Sole owner” means the entity that has all the rights described in paragraph (f)(3)(vi)(C) of this section, which may be subject to the rights and limitations described in paragraph (f)(3)(vi)(C), to the exclusion of any other entity, with respect both to a loan and the income from a loan.
(vii)(A) No State or non-profit entity, and no trustee to the extent acting on behalf of such a State or non-profit entity or its related special purpose entity, shall be an eligible not-for-profit holder with respect to any loan or income from any loan on which payment is claimed at the rate established under paragraph (f)(2) of this section, unless such State or non-profit entity or its related special purpose entity is the sole owner of the beneficial interest in such loan and the income from such loan.
(B) A State or non-profit entity that had sole ownership of the beneficial interest in a loan and the income from such loan is considered to retain that sole ownership for purposes of paragraph (f)(3)(vii)(A) of this section if such entity transferred beneficial interest in the loan to its related special purpose entity and no party other than that State or non-profit entity or its related special purpose entity owns any beneficial interest or residual ownership interest in the loan or income from the loan.
(viii)(A) A trustee described in paragraph (f)(3)(i)(D) of this section shall not receive compensation as consideration for acting as an eligible lender on behalf of a State or non-profit entity or its related special purpose entity in excess of reasonable and customary fees paid for providing the particular service or services that the trustee undertakes to provide to such entity.
(B) Fees are reasonable and customary for purposes of paragraph (f)(3)(viii) of this section, if they do not exceed the amounts received by the trustee for similar services with regard to similar portfolios of loans of that State or non-profit entity or its related special purpose entity that are not eligible to receive special allowance at the rate established under paragraph (f)(2) of this section, or if they do not exceed an amount as determined by such other method requested by the State or non-profit entity that the Secretary considers reliable.
(C) Loans owned by the State or non-profit entity or a related special purpose entity for which the trustee receives fees in excess of the amount permitted by paragraph (f)(3)(viii) of this section cease to qualify for a special allowance payment at the rate prescribed under paragraph (f)(2) of this section.
(ix) For purposes of paragraph (f)(3) of this section, if a State or non-profit entity, its related special purpose entity, or a trustee acting on behalf of any of these entities, grants a security interest in, or otherwise pledges as collateral, a loan, or the income from a loan, to secure a debt obligation for which such State or non-profit entity, or its related special purpose entity, is the issuer of that debt obligation, none of these entities shall, by such action—
(A) Be deemed to be owned or controlled, in whole or in part, by a for-profit entity; or
(B) Lose its status as the sole owner of a beneficial interest in a loan and the income from a loan.
(x) Not-for-Profit Holder Eligibility Determination. A State or non-profit entity that seeks to qualify as an eligible not-for-profit holder, either in its own right or through a trust agreement with an eligible lender trustee, must provide to the Secretary—
(A) A certification on the State or non-profit entity's letterhead signed by the State or non-profit entity's Chief Executive Officer (CEO) which—
(1) States the basis upon which the entity qualifies as a State or non-profit entity;
(2) Includes documentation establishing its status as a State or non-profit entity;
(3) Includes the name and lender identification number(s) of the entities for which designation is being certified;
(4) Includes the name of any related special purpose entities that hold any interest in any loan on which special allowance is claimed under paragraph (f)(2)of this section, describes the role of such entity with respect to the loans, and provides with respect to that entity the certifications and documentation described in paragraph (f)(3)(x)(A) and (B) of this section; and
(5) For an entity establishing status under section 150(d) of the Internal Revenue Code of 1986, includes copies of the requests of the State or political subdivision or subdivisions thereof or requirements described in section 150(d)(2) of the Internal Revenue Code and the CEO's additional certification that the entity has not elected under section 150(d)(3) of the Internal Revenue Code to cease its status as a qualified scholarship funding corporation.
(B) A separately submitted certification or opinion by the State or non-profit entity's external legal counsel or the office of the attorney general of the State, with supporting documentation that shows that the State or non-profit entity—
(1) Is constituted a State entity by operation of specific State law;
(2) Has been designated by the State or one or more political subdivisions of the State to serve as a qualified scholarship funding corporation under section 150(d) of the Internal Revenue Code, has not made the election described under section 150(d)(3) of the Internal Revenue Code, and is incorporated under State law as a not-for-profit organization;
(3) Is incorporated under State law as a not-for-profit organization or is an entity described in section 501(c)(3) of the Internal Revenue Code; or
(4) Has in effect a relationship with an eligible lender under which the lender is acting as trustee on behalf of the State or non-profit entity.
(xi) Annual Certification by Eligible Not-for-Profit Holder. A State or non-profit entity that seeks to retain its eligibility as an eligible not-for-profit holder, either in its own right or through a trust agreement with an eligible lender trustee, must annually provide to the Secretary—
(A) A certification on the State or non-profit entity's letterhead signed by the State or non-profit entity's Chief Executive Officer (CEO) which—
(1) Includes the name and lender identification number(s) of the entities for which designation is being recertified;
(2) States that the State or non-profit entity has not altered its status as a State or non-profit entity since its prior certification to the Secretary, or, if it has altered its status, describes any such alterations; and
(3) States that the State or non-profit entity continues to satisfy the requirements of an eligible not-for-profit holder, either in its own right or through a trust agreement with an eligible lender trustee; and
(B) A copy of its IRS Form 990, if applicable, and that of any related special purpose entity that holds an interest in loans on which it seeks to claim special allowance at the rate provided under paragraph (f)(2) of this section, at the same time these returns are filed with the Internal Revenue Service.
(xii) Not-for-Profit Holder Change of Status. Within 10 business days of becoming aware of the occurrence of a change that may result in a State or non-profit entity that has been designated an eligible not-for-profit holder, either directly or through an eligible lender trustee, losing that eligibility, the State or non-profit entity must—
(A) Submit details of the change to the Secretary; and
(B) Cease billing for special allowance at the rate established under paragraph (f)(2) of this section for the period from the date of the change that may result in it no longer being eligible for the rate established under paragraph (f)(2) of this section to the date of the Secretary's determination that such entity has not lost its eligibility as a result of such change; provided, however, that in the quarter following the Secretary's determination that such eligible not-for-profit holder has not lost its eligibility, the eligible not-for-profit holder may submit a billing for special allowance during the period from the date of the change to the date of the Secretary's determination equal to the difference between special allowance at the rate established under paragraph (f)(2) of this section and the amount it actually billed at the rate established under paragraph (f)(1) of this section.
(xiii) In the case of a loan for which the special allowance payment is calculated under paragraph (f)(2) of this section and that is sold by the eligible not-for-profit holder holding the loan to an entity that is not an eligible not-for-profit holder, the special allowance payment for such loan shall, beginning on the date of the sale, no longer be calculated under paragraph (f)(2) and shall be calculated under paragraph (f)(1) of this section instead.
(4) In the case of a loan for which the special allowance payment is calculated under paragraph (f)(2) of this section and that is sold by the eligible not-for-profit holder holding the loan to an entity that is not an eligible not-for-profit holder, the special allowance payment for such loan shall, beginning on the date of the sale, no longer be calculated under paragraph (f)(2) and shall be calculated under paragraph (f)(1) of this section instead.
(g) For purposes of this section—
(1) A tax-exempt obligation is an obligation the income of which is exempt from taxation under the Internal Revenue Code of 1986 (26 U.S.C.);
(2) The date on which an obligation is considered to be “originally issued” is determined under § 682.302(f)(2)(i) or (ii), as applicable.
(i) An obligation issued to obtain funds to make loans, or to purchase a legal or equitable interest in loans, including by pledge as collateral for that obligation, is considered to be originally issued on the date issued.
(ii) A tax-exempt obligation that refunds, or is one of a series of tax-exempt refundings with respect to a tax-exempt obligation described in § 682.302(f)(2)(i), is considered to be originally issued on the date on which the obligation described in § 682.302(f)(2)(i) was issued.
(3) A loan is refinanced when an Authority that has pledged the loan as collateral for an obligation of that Authority retains an interest in the loan, but causes the loan to be released from the lien of that obligation and pledged as collateral for a different obligation of that Authority.
(4) References to an Authority include a successor entity that may not qualify as an Authority under § 682.200(b).
(h) Calculation of special allowance payments for loans subject to the Servicemembers Civil Relief Act (50 U.S.C. 527, App. sec. 207). For FFEL Program loans first disbursed on or after July 1, 2008 that are subject to the interest rate limit under the Servicemembers Civil Relief Act, special allowance is calculated in accordance with paragraphs (c) and (f) of this section, except the applicable interest rate for this purpose shall be 6 percent.
(a) General. The Secretary pays a lender interest benefits and special allowance on eligible loans on a quarterly basis. These calendar quarters end on March 31, June 30, September 30, and December 31 of each year. A lender may use either the average daily balance method or the actual accrual method to determine the amount of interest benefits payable on a lender's loans. A lender shall use the average daily balance method to determine the balance on which the Secretary computes the amount of special allowance payable on its loans.
(b) Average daily balance method for interest benefits. (1) Under this method, the lender adds the unpaid principal balance outstanding on all loans qualifying for interest benefits at each actual interest rate for each day of the quarter, divides the sum by the number of days in the quarter, and rounds the result to the nearest whole dollar. The resulting figure is the average daily balance for qualified loans outstanding at each actual interest rate.
(2) The Secretary computes the interest benefits due on all qualified loans at each actual interest rate by multiplying the average daily balance thereof by the actual interest rate, multiplying this result by the number of days in the quarter, and then dividing this result by the actual number of days in the year.
(c) Actual accrual method for interest benefits. (1) Under this method, the lender computes the total unpaid principal balance outstanding on all qualified loans at each actual interest rate on each day of the quarter, multiplies this result by the actual interest rate, and divides this result by the actual number of days in the year, or, alternatively, 365.25 days. A lender who chooses to divide by 365.25 days must do so for four consecutive years.
(2) The interest benefits due for a quarter equal the sum of the daily interest benefits due, computed under paragraph (c)(1) of this section, for each day of the quarter.
(d) Average daily balance method for special allowance. (1) To compute the average daily balance outstanding for purposes of special allowance, the lender adds the unpaid principal balance outstanding on all qualified loans at each applicable interest rate for each day of the quarter, divides this sum by the number of days in the quarter, and rounds the result to the nearest whole dollar. The resulting figure is the average daily balance for the quarter for qualifying loans at each applicable interest rate.
(2) To compute the average daily balance of unpaid accrued interest for purposes of special allowance on loans covered by § 682.215(b)(7), the lender adds the unpaid accrued interest on such loans for each eligible day of the quarter, divides this sum by the number of days in the quarter, and rounds the result to the nearest whole dollar. The resulting figure is the average daily balance for the quarter for qualifying loans at the applicable interest rate.
(3) The Secretary computes the special allowance payable to a lender based upon the average daily balance computed by the lender under paragraphs (d)(1) and (2) of this section.
(a) General. (1) If a lender owes origination fees or loan fees under paragraph (a) of this section, it must submit quarterly reports to the Secretary on a form provided or prescribed by the Secretary, even if the lender is not owed, or does not wish to receive, interest benefits or special allowance from the Secretary.
(2) The lender shall report, on the quarterly report required by paragraph (a)(1) of this section, the amount of origination fees it was authorized to collect and the amount of those fees refunded to borrowers during the quarter covered by the report.
(3)(i)(A) The Secretary reduces the amount of interest benefits and special allowance payable to the lender by—
(1) The amount of origination fees the lender was authorized to collect during the quarter under § 682.202(c), whether or not the lender actually collected that amount; and
(2) The amount of lender fees payable under paragraph (a)(3)(ii) of this section; and
(3) The amount of excess interest, as calculated in accordance with paragraph (d) of this section.
(B) The Secretary increases the amount of interest benefits and special allowance payable to the lender by the amount of origination fees refunded to borrowers during the quarter under § 682.202(c).
(ii)(A) For any FFEL loan made on or after October 1, 1993, a lender shall pay the Secretary a loan fee equal to 0.50% of the principal amount of the loan.
(B) For any FFEL loan made on or after October 1, 2007 and prior to July 1, 2010, a lender shall pay the Secretary a loan fee equal to 1.0 percent of the principal amount of the loan.
(iii) The Secretary collects from an originating lender the amount of origination fees the originating lender was authorized to collect from borrowers during the quarter whether or not the originating lender actually collected those fees. The Secretary also collects the fees the originating lender is required to pay under paragraph (a)(3)(ii) of this section. Generally, the Secretary collects the fees from the originating lender by offsetting the amount of interest benefits and special allowance payable to the originating lender in a quarter, and, if necessary, the amount of interest benefits and special allowance payable in subsequent quarters may be offset until the total amount of fees has been recovered.
(iv) If the full amount of the fees cannot be collected within two quarters by reducing interest and special allowance payable to the originating lender, the Secretary may collect the unpaid amount directly from the originating lender.
(v) If the full amount of the fees cannot be collected within two quarters from the originating lender in accordance with paragraphs (a)(3)(iii) and (iv) of this section and if the originating lender has transferred the loan to a subsequent holder, the Secretary may, following written notice, collect the unpaid amount from the holder by using the same steps described in paragraphs (a)(3)(iii) and (iv) of this section, with the term “holder” substituting for the term “originating lender”.
(4) If an originating lender sells or otherwise transfers a loan to a new holder, the originating lender remains liable to the Secretary for payment of the origination fees. The Secretary will not pay interest benefits or special allowance to the new holder or pay reinsurance to the guaranty agency until the origination fees are paid to the Secretary.
(b) Penalty interest. (1)(i) If the Secretary does not pay interest benefits or the special allowance within 30 days after the Secretary receives an accurate, timely, and complete request for payment from a lender, the Secretary pays the lender penalty interest.
(ii) The payment of interest benefits or special allowance is deemed to occur, for purposes of this paragraph, when the Secretary—
(A) Authorizes the Treasury Department to pay the lender;
(B) Credits the payment due the lender against a debt that the Secretary determines is owed the Secretary by the lender; or
(C) Authorizes the Treasury Department to pay the amount due by the lender to another Federal agency for credit against a debt that the Federal agency has determined the lender owes.
(2) Penalty interest is an amount that accrues daily on interest benefits and special allowance due to the lender. The penalty interest is computed by—
(i) Multiplying the daily interest rate applicable to loans on which payment for interest benefits was requested, by the amount of interest benefits due on those loans for each interest rate;
(ii) Multiplying the daily special allowance rate applicable to loans on which special allowance was requested by the amount of special allowance due on those loans for each interest rate and special allowance category;
(iii) Adding the results of paragraphs (b)(2)(i) and (ii) of this section to determine the gross penalty interest to be paid for each day that penalty interest is due;
(iv) Dividing the results of paragraph (b)(2)(iii) of this section by the gross amount of interest benefits and special allowance due to obtain the average penalty interest rate;
(v) Multiplying the rate obtained in paragraph (b)(2)(iv) of this section by the total amount of reduction to gross interest benefits and special allowance due (e.g., origination fees or other debts owed to the Federal Government);
(vi) Subtracting the amount calculated in paragraph (b)(2)(v) of this section from the amount calculated under paragraph (b)(2)(iii) of this section to obtain the net amount of penalty interest due per day; and
(vii) Multiplying the amount calculated in paragraph (b)(2)(vi) of this section by the number of days calculated under paragraph (b)(3) of this section.
(3) The Secretary pays penalty interest for the period—
(i) Beginning on the later of—
(A) The 31st day after the final day of the quarter covered by the request for payment; or
(B) The 31st day after the Secretary's receipt of an accurate, timely, and complete request for payment from the lender; and
(ii) Ending on the day the Secretary pays the interest benefits and the special allowance at issue, in accordance with paragraph (b)(1)(ii) of this section.
(4) A request for interest benefits and special allowance is considered timely only if it is received by the Secretary within 90 days following the end of the quarter to which the request pertains.
(5) A request for interest benefits and special allowance is not considered accurate and complete if it—
(i) Requests payments to which the lender is not entitled under §§ 682.300 through 682.302;
(ii) Includes loans that the Secretary, in writing, has directed that the lender exclude from the request;
(iii) Does not contain all information required by the Secretary or contains conflicting information; or
(iv) Is not provided and certified on the form and in the manner prescribed by the Secretary.
(c) Independent audits. (1)(i) A lender holding more than $5 million in FFEL loans during its fiscal year must submit an independent annual compliance audit for that year, conducted by a qualified independent organization or person.
(ii) The Secretary may, following written notice, suspend the payment of interest benefits and special allowance to a lender that does not submit its audit within the time period prescribed in paragraph (c)(2) of this section.
(2) The audit required under paragraph (c)(1) of this section must—
(i) Examine the lender's compliance with the Act and applicable regulations;
(ii) Examine the lender's financial management of its FFEL program activities;
(iii) Be conducted in accordance with the standards for audits issued by the United States General Accounting Office's (GAO's) Government Auditing Standards. Procedures for audits are contained in an audit guide developed by and available from the Office of the Inspector General of the Department;
(iv) Be conducted at least annually and be submitted to the Secretary within six months of the end of the audit period. The initial audit must be of the lender's first fiscal year that begins after July 23, 1992, and must be submitted within six months of the end of the audit period. Each subsequent audit must cover the lender's activities for the period beginning no later than the end of the period covered by the preceding audit; and
(v) A lender must conduct the audit required by this paragraph in accordance with 31 U.S.C. 7502 and 2 CFR part 200, subpart F—Audit Requirements.
(3) The Secretary may determine that a lender has met the requirements of paragraph (c) of this section if the lender has been audited in accordance with 31 U.S.C. 7502 for other purposes, the lender submits the results of the audit to the Office of Inspector General, and the Secretary determines that the audit meets the requirements of this paragraph.
(d) Recovery of excess interest paid by the Secretary. (1) For any loan for which the first disbursement of principal is made on or after April 1, 2006, the Secretary collects the amount of excess interest paid to a lender on a quarterly basis when the applicable interest rate on a loan for each quarter exceeds the special allowance support level in paragraph (d)(2) of this section for the loan. Excess interest is calculated and recovered each quarter by subtracting the special allowance support level from the applicable interest rate, multiplying the result by the average daily principal balance of the loan (not including unearned interest added to principal) during the quarter, and dividing by four.
(2) The term special allowance support level means a number expressed as a percentage equal to the sum of—
(i) The average of the bond equivalent rates of the quotes of the 3-month commercial paper (financial) rates in effect for each of the days in such quarter as reported by the Federal Reserve in Publication H-15 (or its successor) for such 3-month period; plus
(ii) 2.34 percent for a Federal Stafford loan in repayment;
(iii) 1.74 percent for a Federal Stafford loan during the in-school, grace, and deferment periods; or
(iv) 2.64 percent for a Federal PLUS or Consolidation Loan.
(a) The Secretary enters into agreements with a guaranty agency whose loan guarantee program meets the requirements of this subpart. The agreements enable the guaranty agency to participate in the FFEL programs and to receive the various payments and benefits related to that participation.
(b) There are four agreements:
(1) Basic program agreement. In order to participate in the FFEL programs, a guaranty agency must have a basic program agreement. Under this agreement—
(i) Borrowers whose Stafford or Consolidation loans are guaranteed by the agency may qualify for interest benefits that are paid to the lender on the borrower's behalf under § 682.301; and
(ii) Lenders under the guaranty agency program may receive special allowance payments from the Secretary and have death, disability, bankruptcy, closed school and false certification discharge claims paid by the Secretary through the guaranty agency.
(2) Federal advances for claim payments agreement. A guaranty agency must have an agreement for Federal advances for claim payments to receive and use Federal advances to pay default claims.
(3) Reinsurance agreement. A guaranty agency must have a reinsurance agreement to receive reimbursement from the Secretary for its losses on default claims.
(4) Loan Rehabilitation Agreement. A guaranty agency must have an agreement for rehabilitating a loan for which the Secretary has made a reinsurance payment under section 428(c)(1) of the Act.
(c) The Secretary's execution of an agreement does not indicate acceptance of any current or past standards or procedures used by the agency.
(d) All of the agreements are subject to subsequent changes in the Act, in other applicable Federal statutes, and in regulations that apply to the FFEL programs.
(a) General. In order to participate in the FFEL programs, a guaranty agency shall enter into a basic agreement with the Secretary.
(b) Terms of agreement. In the basic agreement, the guaranty agency shall agree to ensure that its loan guarantee program meets the following requirements at all times:
(1) Reinstatement of borrower eligibility. Except as provided in § 668.35(b) for a borrower with a defaulted loan on which a judgment has been obtained and § 668.35(i) for a borrower who fraudulently obtained title IV, HEA program assistance, reinstatement of Title IV eligibility for a borrower with a defaulted loan must be in accordance with this paragraph (b)(1). For a borrower's loans held by a guaranty agency on which a reinsurance claim has been paid by the Secretary, the guaranty agency must afford a defaulted borrower, upon the borrower's request, renewed eligibility for Title IV assistance once the borrower has made satisfactory repayment arrangements as that term is defined in § 682.200.
(i) For purposes of this section, the determination of reasonable and affordable must—
(A) Include consideration of the borrower's and spouse's disposable income and necessary expenses including, but not limited to, housing, utilities, food, medical costs, dependent care costs, work-related expenses and other Title IV repayment;
(B) Not be a required minimum payment amount, e.g. $50, if the agency determines that a smaller amount is reasonable and affordable based on the borrower's total financial circumstances. The agency must include documentation in the borrower's file of the basis for the determination, if the monthly reasonable and affordable payment established under this section is less than $50.00 or the monthly accrued interest on the loan, whichever is greater.
(C) Be based on the documentation provided by the borrower or other sources including, but not limited to—
(1) Evidence of current income (e.g. proof of welfare benefits, Social Security benefits, Supplemental Security Income, Workers' Compensation, child support, veterans' benefits, two most recent pay stubs, most recent copy of U.S. income tax return, State Department of Labor reports);
(2) Evidence of current expenses (e.g. a copy of the borrower's monthly household budget, on a form provided by the guaranty agency); and
(3) A statement of the unpaid balance on all FFEL loans held by other holders.
(ii) A borrower may request that the monthly payment amount be adjusted due to a change in the borrower's total financial circumstances upon providing the documentation specified in paragraph (b)(4)(i)(C) of this section.
(iii) A guaranty agency must provide the borrower with a written statement of the reasonable and affordable payment amount required for the reinstatement of the borrower's eligibility for Title IV student assistance, and provide the borrower with an opportunity to object to those terms.
(iv) A guaranty agency must provide the borrower with written information regarding the possibility of loan rehabilitation if the borrower makes three additional reasonable and affordable monthly payments after making payments to regain eligibility for Title IV assistance and the consequences of loan rehabilitation.
(v) A guaranty agency must inform the borrower that he or she may only obtain reinstatement of borrower eligibility under this section once.
(2) Lender eligibility. (i) An eligible lender may participate in the program of the agency under reasonable criteria established by the guaranty agency except to the extent that—
(A) The lender's eligibility has been limited, suspended, or terminated by the Secretary under subpart G of this part or by the agency under standards and procedures that are substantially the same as those in subpart G of this part; or
(B) The lender is disqualified by the Secretary under sections 432(h)(1), 432(h)(2), 435(d)(3), or 435(d)(5) of the Act or § 682.712; or
(C) There is a State constitutional prohibition affecting the lender's eligibility.
(ii) The agency may not guarantee a loan made by a school lender that is not located in the geographical area that the agency serves.
(iii) The guaranty agency may refuse to guarantee loans made by a school on behalf of students not attending that school.
(iv) The guaranty agency may, in determining whether to enter into a guarantee agreement with a lender, consider whether the lender has had prior experience in a similar Federal, State, or private nonprofit student loan program and the amount and percentage of loans that are currently delinquent or in default under that program.
(3) Insurance premiums and Federal default fees. (i) Except for a Consolidation Loan or refinanced SLS or PLUS loans, a guaranty agency:
(A) May charge the lender an insurance premium for Stafford, SLS, or PLUS loans it guarantees prior to July 1, 2006; and
(B) Must collect, either from the lender or by payment from any other non-Federal source, a Federal default fee for any Stafford or PLUS loans it guarantees on or after July 1, 2006, to be deposited into the Federal Fund under § 682.419.
(ii) The guaranty agency may not use the Federal default fee for incentive payments to lenders, and may only use the insurance premium or the Federal default fee for costs incurred in guaranteeing loans or in the administration of the agency's loan guarantee program, as specified in § 682.410(a)(2) or § 682.419(c).
(iii) If a lender charges the borrower an insurance premium or Federal default fee, the lender must deduct the charge proportionately from each disbursement of the borrower's loan proceeds.
(iv) The amount of the insurance premium or Federal default fee, as applicable—
(A) May not exceed 3 percent of the principal balance for a loan disbursed on or before June 30, 1994;
(B) May not exceed 1 percent of the principal balance for a loan disbursed on or after July 1, 1994;
(C) Shall be 1 percent of the principal balance of a loan guaranteed on or after July 1, 2006 and prior to July 1, 2010.
(v) If the circumstances specified in paragraph (vi) exist, the guaranty agency shall refund to the lender any insurance premium or Federal default fee paid by the lender.
(vi) The lender shall refund to the borrower by a credit against the borrower's loan balance the insurance premium or Federal default fee paid by the borrower on a loan under the following circumstances:
(A) The insurance premium or Federal default fee attributable to each disbursement of a loan must be refunded if the loan check is returned uncashed to the lender.
(B) The insurance premium or Federal default fee, or an appropriate prorated amount of the premium or fee, must be refunded by application to the borrower's loan balance if—
(1) The loan or a portion of the loan is returned by the school to the lender in order to comply with the Act or with applicable regulations;
(2) Within 120 days of disbursement, the loan or a portion of the loan is repaid or returned, unless—
(i) The borrower has no FFEL Program loans in repayment status and has requested, in writing, that the repaid or returned funds be used for a different purpose; or
(ii) The borrower has a FFEL Program loan in repayment status, in which case the payment is applied in accordance with § 682.209(b) unless the borrower has requested, in writing, that the repaid or returned funds be applied as a cancellation of all or part of the loan;
(3) Within 120 days of disbursement, the loan check has not been negotiated; or
(4) Within 120 days of disbursement, the loan proceeds disbursed by electronic funds transfer or master check have not been released from the restricted account maintained by the school.
(4) Inquiries. The agency must be able to receive and respond to written, electronic, and telephone inquiries.
(5) Guaranty liability. The guaranty agency shall guarantee—
(i) 100 percent of the unpaid principal balance of each loan guaranteed for loans disbursed before October 1, 1993;
(ii) Not more than 98 percent of the unpaid principal balance of each loan guaranteed for loans first disbursed on or after October 1, 1993 and before July 1, 2006; and
(iii) Not more than 97 percent of the unpaid principal balance of each loan guaranteed for loans first disbursed on or after July 1, 2006.
(6) Guaranty agency verification of default data. A guaranty agency must meet the requirements and deadlines provided for it in subpart M and N of 34 CFR part 668 for the cohort default rate process.
(7) Guaranty agency administration. In the case of a State loan guarantee program administered by a State government, the program must be administered by a single State agency, or by one or more private nonprofit institutions or organizations under the supervision of a single State agency. For this purpose, “supervision” includes, but is not limited to, setting policies and procedures, and having full responsibility for the operation of the program.
(8) Loan assignment. (i) Except as provided in paragraph (b)(8)(iii) of this section, the guaranty agency must allow a loan to be assigned only if the loan is fully disbursed and is assigned to—
(A) An eligible lender;
(B) A guaranty agency, in the case of a borrower's default, death, total and permanent disability, or filing of a bankruptcy petition, or for other circumstances approved by the Secretary, such as a loan made for attendance at a school that closed or a false certification claim;
(C) An educational institution, whether or not it is an eligible lender, in connection with the institution's repayment to the agency or to the Secretary of a guarantee or a reinsurance claim payment made on a loan that was ineligible for the payment;
(D) A Federal or State agency or an organization or corporation acting on behalf of such an agency and acting as a conservator, liquidator, or receiver of an eligible lender; or
(E) The Secretary.
(ii) For the purpose of this paragraph, “assigned” means any kind of transfer of an interest in the loan, including a pledge of such an interest as security.
(iii) The guaranty agency must allow a loan to be assigned under paragraph (b)(8)(i) of this section, following the first disbursement of the loan if the assignment does not result in a change in the identity of the party to whom payments must be made.
(9) Transfer of guarantees. Except in the case of a transfer of guarantee requested by a borrower seeking a transfer to secure a single guarantor, the guaranty agency may transfer its guarantee obligation on a loan to another guaranty agency, only with the approval of the Secretary, the transferee agency, and the holder of the loan.
(10) Standards and procedures. (i) The guaranty agency shall establish, disseminate to concerned parties, and enforce standards and procedures for—
(A) Ensuring that all lenders in its program meet the definition of “eligible lender” in section 435(d) of the Act and have a written lender agreement with the agency;
(B) Lender participation in its program;
(C) Limitation, suspension, termination of lender participation;
(D) Emergency action against a participating lender;
(E) The exercise of due diligence by lenders in making, servicing, and collecting loans; and
(F) The timely filing by lenders of default, death, disability, bankruptcy, closed school, false certification unpaid refunds, identity theft, and ineligible loan claims.
(ii) The guaranty agency shall ensure that its program and all participants in its program at all times meet the requirements of subparts B, C, D, and F of this part.
(11) Monitoring student enrollment. The guaranty agency shall monitor the enrollment status of a FFEL program borrower or student on whose behalf a parent has borrowed that includes, at a minimum, reporting to the current holder of the loan within 35 days of any change in the student's enrollment status reported that triggers—
(i) The beginning of the borrower's grace period; or
(ii) The beginning or resumption of the borrower's immediate obligation to make scheduled payments.
(12) Submission of interest and special allowance information. Upon the Secretary's request, the guaranty agency shall submit, or require its lenders to submit, information that the Secretary deems necessary for determining the amount of interest benefits and special allowance payable on the agency's guaranteed loans.
(13) Submission of information for reports. The guaranty agency shall require lenders to submit to the agency the information necessary for the agency to complete the reports required by § 682.414(b).
(14) Guaranty agency transfer of information. (i) A guaranty agency from which another guaranty agency requests information regarding Stafford and SLS loans made after January 1, 1987, to students who are residents of the State for which the requesting agency is the principal guaranty agency shall provide—
(A) The name and social security number of the student; and
(B) The annual loan amount and the cumulative amount borrowed by the student in loans under the Stafford and SLS programs guaranteed by the responding agency.
(ii) The reasonable costs incurred by an agency in fulfilling a request for information made under paragraph (b)(14)(i) of this section must be paid by the guaranty agency making the request.
(15) Information on defaults. The guaranty agency shall, upon the request of a school, furnish information with respect to students, including the names and addresses of such students, who were enrolled at that school and who are in default on the repayment of any loan guaranteed by that agency.
(16) Information on loan sales or transfers. The guaranty agency must, upon the request of a school, furnish to the school last attended by the student, information with respect to the sale or transfer of a borrower's loan prior to the beginning of the repayment period, including—
(i) Notice of assignment;
(ii) The identity of the assignee;
(iii) The name and address of the party by which contact may be made with the holder concerning repayment of the loan; and
(iv) The telephone number of the assignee or, if the assignee uses a lender servicer, another appropriate number for borrower inquiries.
(17) Third-party servicers. The guaranty agency may not enter into a contract with a third-party servicer that the Secretary has determined does not meet the financial and compliance standards under § 682.416. The guaranty agency shall provide the Secretary with the name and address of any third-party servicer with which the agency enters into a contract and, upon request by the Secretary, a copy of that contract.
(18) Consolidation of defaulted FFEL loans. (i) A guaranty agency may charge collection costs in an amount not to exceed 18.5 percent of the outstanding principal and interest on a defaulted FFEL Program loan that is paid off by a Direct Consolidation loan.
(ii) On or after October 1, 2006, when returning proceeds to the Secretary from the consolidation of a defaulted loan, a guaranty agency that charged the borrower collection costs must remit an amount that equals the lesser of the actual collection costs charged or 8.5 percent of the outstanding principal and interest of the loan.
(iii) On or after October 1, 2009, when returning proceeds to the Secretary from the consolidation of a defaulted loan that is paid off with excess consolidation proceeds as defined in paragraph (b)(18)(iv) of this section, a guaranty agency must remit the entire amount of collection costs repaid through the consolidation loan.
(iv) The term excess consolidation proceeds means, for any Federal fiscal year beginning on or after October 1, 2009, the amount of Consolidation Loan proceeds received for defaulted loans under the FFEL Program that exceed 45 percent of the agency's total collections on defaulted loans in that Federal fiscal year.
(19) Change in agency's records system. The agency shall provide written notification to the Secretary at least 30 days prior to placing its new guarantees or converting the records relating to its existing guaranty portfolio to an information or computer system that is owned by, or otherwise under the control of, an entity that is different than the party that owns or controls the agency's existing information or computer system. If the agency is soliciting bids from third parties with respect to a proposed conversion, the agency shall provide written notice to the Secretary as soon as the solicitation begins. The notification described in this paragraph must include a concise description of the agency's conversion project and the actual or estimated cost of the project.
(20) Plans to Reduce Consolidation of defaulted loans. A guaranty agency shall establish and submit to the Secretary for approval, procedures to ensure that consolidation loans are not an excessive proportion of the guaranty agency's recoveries on defaulted loans.
(c) Review of forms and procedures. (1) The guaranty agency shall submit to the Secretary its write-off criteria and procedures. The agency may not use these materials until the Secretary approves them.
(2) The guaranty agency shall promptly submit to the Secretary its regulations, statements of procedures and standards, agreements, and other materials that substantially affect the operation of the agency's program, and any proposed changes to those materials. Except as provided in paragraph (c)(1) of this section, the agency may use these materials unless and until the Secretary disapproves them.
(3) The guaranty agency must use common application forms, promissory notes, Master Promissory Notes (MPN), and other common forms approved by the Secretary. Each loan made under an MPN is enforceable in accordance with the terms of the MPN and is eligible for claim payment based on a true and exact copy of such MPN.
(4) The guaranty agency must develop and implement appropriate procedures that provide for the granting of a student deferment as specified in § 682.210(a)(6)(iv) and (c)(3) and require their lenders to use these procedures.
(5) The guaranty agency shall ensure that all program materials meet the requirements of Federal and State law, including, but not limited to, the Act and the regulations in this part and part 668.
(d) College Access Initiative. (1) A guaranty agency shall establish a plan to promote access to postsecondary education by—
(i) Providing the Secretary and the public with information on Internet web links and a comprehensive listing of postsecondary education opportunities, programs, publications and other services available in the State, or States for which the guaranty agency serves as the designated guaranty agency;
(ii) Promoting and publicizing information for students and traditionally underrepresented populations on college planning, career preparation, and paying for college in coordination with other entities that provide or distribute such information in the State, or States for which the guaranty agency serves as the designated guaranty agency;
(2) The activities required by this section may be funded from the guaranty agency's Operating Fund in accordance with § 682.423(c)(1)(vii) or from funds remaining in restricted accounts established pursuant to section 422(h)(4) of the Act.
(3) The guaranty agency shall ensure that the information required by this subsection is available to the public by November 5, 2006 and is—
(i) Free of charge; and
(ii) Available in print.
(e)(1) A guaranty agency must work with schools that participated in its program to develop and make available high-quality educational materials and programs that provide training to students and their families in budgeting and financial management, including debt management and other aspects of financial literacy, such as the cost of using high-interest loans to pay for postsecondary education, and how budgeting and financial management relate to the title IV student loan programs.
(2) The materials and programs described in paragraph (e)(1) of this section must be in formats that are simple and understandable to students and their families, and must be made available to students and their families by the guaranty agency before, during, and after a student's enrollment at an institution of higher education.
(3) A guaranty agency may provide similar programs and materials to an institution that participates only in the William D. Ford Federal Direct Loan Program.
(4) A lender or loan servicer may also provide an institution with outreach and financial literacy information consistent with the requirements of paragraphs (e)(1) and (2) of this section.
(a) General. (1) Rules governing the payment of claims based on filing for relief in bankruptcy, and discharge of loans due to death, total and permanent disability, attendance at a school that closes, false certification by a school of a borrower's eligibility for a loan, and unpaid refunds by a school are set forth in this section.
(2) If a Consolidation loan was obtained jointly by a married couple, the amount of the Consolidation loan that is discharged if one of the borrowers dies or becomes totally and permanently disabled is equal to the portion of the outstanding balance of the Consolidation loan, as of the date the borrower died or became totally and permanently disabled, attributable to any of that borrower's loans that would have been eligible for discharge.
(3) If a PLUS loan was obtained by two parents as co-makers, and only one of the borrowers dies, becomes totally and permanently disabled, has collection of his or her loan obligation stayed by a bankruptcy filing, or has that obligation discharged in bankruptcy, the other borrower remains obligated to repay the loan unless that borrower would qualify for discharge of the loan under these regulations.
(4) Except for a borrower's loan obligation discharged by the Secretary under the false certification discharge provision of paragraphs (e)(1)(ii) or (iii) of this section, a loan qualifies for payment under this section and as provided in paragraph (h)(1)(iv) of this section, only to the extent that the loan is legally enforceable under applicable law by the holder of the loan.
(5) For purposes of this section—
(i) The legal enforceability of a loan is conclusively determined on the basis of a ruling by a court or administrative tribunal of competent jurisdiction with respect to that loan, or a ruling with respect to another loan in a judgment that collaterally estops the holder from contesting the enforceability of the loan;
(ii) A loan is conclusively determined to be legally unenforceable to the extent that the guarantor determines, pursuant to an objection presented in a proceeding conducted in connection with consumer reporting agency reporting, tax refund offset, wage garnishment, or in any other administrative proceeding, that the loan is not legally enforceable; and
(iii) If an objection has been raised by the borrower or another party about the legal enforceability of the loan and no determination has been made under paragraph (a)(5) (i) or (ii) of this section, the Secretary may authorize the payment of a claim under this section under conditions the Secretary considers appropriate. If the Secretary determines in that or any other case that a claim was paid under this section with respect to a loan that was not a legally enforceable obligation of the borrower, the recipient of that payment must refund that amount of the payment to the Secretary.
(b) Death. (1) If an individual borrower dies, or the student for whom a parent received a PLUS loan dies, the obligation of the borrower and any endorser to make any further payments on the loan is discharged.
(2)(i) A discharge of a loan based on the death of the borrower (or student in the case of a PLUS loan) must be based on—
(A) An original or certified copy of the death certificate;
(B) An accurate and complete photocopy of the original or certified copy of the death certificate;
(C) An accurate and complete original or certified copy of the death certificate that is scanned and submitted electronically or sent by facsimile transmission; or
(D) Verification of the borrower's or student's death through an authoritative Federal or State electronic database approved for use by the Secretary.
(ii) Under exceptional circumstances and on a case-by-case basis, the chief executive officer of the guaranty agency may approve a discharge based upon other reliable documentation of the borrower's or student's death.
(3) After receiving reliable information indicating that the borrower (or student) has died, the lender must suspend any collection activity against the borrower and any endorser for up to 60 days and promptly request the documentation described in paragraph (b)(2) of this section. If additional time is required to obtain the documentation, the period of suspension of collection activity may be extended up to an additional 60 days. If the lender is not able to obtain an original or certified copy of the death certificate, or an accurate and complete photocopy of the original or certified copy of the death certificate or other documentation acceptable to the guaranty agency, under the provisions of paragraph (b)(2) of this section, during the period of suspension, the lender must resume collection activity from the point that it had been discontinued. The lender is deemed to have exercised forbearance as to repayment of the loan during the period when collection activity was suspended.
(4) Once the lender has determined under paragraph (b)(2) of this section that the borrower (or student) has died, the lender may not attempt to collect on the loan from the borrower's estate or from any endorser.
(5) The lender shall return to the sender any payments received from the estate or paid on behalf of the borrower after the date of the borrower's (or student's) death.
(6) In the case of a Federal Consolidation Loan that includes a Federal PLUS or Direct PLUS loan borrowed for a dependent who has died, the obligation of the borrower or any endorser to make any further payments on the portion of the outstanding balance of the Consolidation Loan attributable to the Federal PLUS or Direct PLUS loan is discharged as of the date of the dependent's death.
(c)(1) Total and permanent disability. (i) A borrower's loan is discharged if the borrower becomes totally and permanently disabled, as defined in § 682.200(b), and satisfies the eligibility requirements in this section.
(ii) For a borrower who becomes totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b), the borrower's loan discharge application is processed in accordance with paragraphs (c)(2) through (c)(8) of this section.
(iii) For a veteran who is totally and permanently disabled as described in paragraph (2) of the definition of that term in § 682.200(b), the veteran's loan discharge application is processed in accordance with paragraph (c)(9) of this section.
(iv) For purposes of this paragraph (c)—
(A) A borrower's representative or a veteran's representative is a member of the borrower's family, the borrower's attorney, or another individual authorized to act on behalf of the borrower in connection with the borrower's total and permanent disability discharge application. References to a “borrower” or a “veteran” include, if applicable, the borrower's representative or the veteran's representative for purposes of applying for a total and permanent disability discharge, providing notifications or information to the Secretary, and receiving notifications from the Secretary;
(B) References to “the lender” mean the guaranty agency if the guaranty agency is the holder of the loan at the time the borrower applies for a total and permanent disability discharge, except that the total and permanent disability discharge claim filing requirements applicable to a lender do not apply to the guaranty agency; and
(C) References to “the applicable guaranty agency” mean the guaranty agency that guarantees the loan.
(2) Discharge application process for a borrower who is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b). (i) If the borrower notifies the lender that the borrower claims to be totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b), the lender must direct the borrower to notify the Secretary of the borrower's intent to submit an application for total and permanent disability discharge and provide the borrower with the information needed for the borrower to notify the Secretary.
(ii) If the borrower notifies the Secretary of the borrower's intent to apply for a total and permanent disability discharge, the Secretary—
(A) Provides the borrower with information needed for the borrower to apply for a total and permanent disability discharge;
(B) Identifies all title IV loans owed by the borrower and notifies the lenders of the borrower's intent to apply for a total and permanent disability discharge;
(C) Directs the lenders to suspend efforts to collect from the borrower for a period not to exceed 120 days; and
(D) Informs the borrower that the suspension of collection activity described in paragraph (c)(2)(ii)(C) of this section will end after 120 days and collection will resume on the loans if the borrower does not submit a total and permanent disability discharge application to the Secretary within that time;
(iii) If the borrower fails to submit an application for a total and permanent disability discharge to the Secretary within 120 days, collection resumes on the borrower's title IV loans, and the lender is deemed to have exercised forbearance of principal and interest from the date it suspended collection activity. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period, except that if the lender is a guaranty agency it may not capitalize accrued interest.
(iv) The borrower must submit to the Secretary an application for a total and permanent disability discharge on a form approved by the Secretary. The application must contain—
(A) A certification by a physician, who is a doctor of medicine or osteopathy legally authorized to practice in a State, that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b);
(B) A certification by a nurse practitioner or physician assistant licensed by a State, or a licensed or certified psychologist at the independent practice level, that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b); or
(C) An SSA Benefit Planning Query (BPQY) or an SSA notice of award or other documentation deemed acceptable by the Secretary, indicating that—
(1) The borrower qualifies for Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) based on disability and the borrower's next continuing disability has been scheduled between 5 and 7 years;
(2) The borrower qualifies for SSDI benefits or SSI based on disability and the borrower's next continuing disability review has been scheduled at 3 years;
(3) The borrower has an established onset date for SSDI or SSI of at least 5 years prior or has been receiving SSDI benefits or SSI based on disability for at least 5 years prior to the application for a disability discharge;
(4) The borrower qualifies for SSDI benefits or SSI based on a compassionate allowance; or
(5) For a borrower who is currently receiving SSA retirement benefits, documentation that, prior to the borrower qualifying for SSA retirement benefits, the borrower met any of the requirements in paragraph (c)(2)(iv)(C) of this section.
(v) The borrower must submit the application described in paragraph (c)(2)(iv) of this section to the Secretary within 90 days of the date the physician, nurse practitioner, physician assistant, or psychologist certifies the application, if applicable.
(vi) After the Secretary receives the application described in paragraph (c)(2)(iv) of this section, the Secretary notifies the holders of the borrower's title IV loans that the Secretary has received a total and permanent disability discharge application from the borrower. The holders of the loans must notify the applicable guaranty agency that the total and permanent disability discharge application has been received.
(vii) If the application is incomplete, the Secretary notifies the borrower of the missing information and requests the missing information from the borrower or the physician, nurse practitioner, physician assistant, or psychologist who provided the certification, as appropriate. The Secretary does not make a determination of eligibility until the application is complete.
(viii) The lender notification described in paragraph (c)(2)(vi) of this section directs the borrower's loan holders to suspend collection activity or maintain the suspension of collection activity on the borrower's title IV loans.
(ix) After the Secretary receives the disability discharge application, the Secretary sends a notice to the borrower that—
(A) States that the application will be reviewed by the Secretary;
(B) Informs the borrower that the borrower's lenders will suspend collection activity or maintain the suspension of collection activity on the borrower's title IV loans while the Secretary reviews the borrower's application for a discharge; and
(C) Explains the process for the Secretary's review of total and permanent disability discharge applications.
(3) Secretary's review of total and permanent disability discharge application. (i) If, after reviewing the borrower's completed application, the Secretary determines that the data described in paragraph (c)(2)(iv) of this section supports the conclusion that the borrower is totally and permanently disabled, as described in paragraph (1) of the definition of that term in § 682.200(b), the borrower is considered totally and permanently disabled—
(A) As of the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's application; or
(B) As of the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section.
(ii) If the Secretary determines that the borrower's application does not support the conclusion that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b) the Secretary may require the borrower to submit additional medical evidence. As part of the Secretary's review of the borrower's discharge application, the Secretary may require and arrange for an additional review of the borrower's condition by an independent physician or other medical professional identified by the Secretary at no expense to the borrower.
(iii) After determining that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b), the Secretary notifies the borrower and the borrower's lenders that the application for a disability discharge has been approved. With this notification, the Secretary provides the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's loan discharge application or the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section and directs each lender to submit a disability claim to the guaranty agency so the loan can be assigned to the Secretary. The Secretary returns any payment received by the Secretary after the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's loan discharge application or received the SSA data described in paragraph (c)(2)(iv)(C) of this section to the person who made the payment.
(iv) After the loan is assigned, the Secretary discharges the borrower's obligation to make further payments on the loan and notifies the borrower and the lender that the loan has been discharged. The notification to the borrower explains the terms and conditions under which the borrower's obligation to repay the loan will be reinstated, as specified in paragraph (c)(6)(i) of this section.
(v) If the Secretary determines that the physician, nurse practitioner, physician assistant, or psychologist certification or SSA data described in paragraph (c)(2)(iv)(C) of this section does not support the conclusion that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 682.200(b), the Secretary notifies the borrower and the lender that the application for a disability discharge has been denied. The notification includes—
(A) The reason or reasons for the denial;
(B) A statement that the loan is due and payable to the lender under the terms of the promissory note and that the loan will return to the status that would have existed had the total and permanent disability discharge application not been received;
(C) A statement that the lender will notify the borrower of the date the borrower must resume making payments on the loan;
(D) An explanation that the borrower is not required to submit a new total and permanent disability discharge application if the borrower requests that the Secretary re-evaluate the application for discharge by providing, within 12 months of the date of the notification, additional information that supports the borrower's eligibility for discharge; and
(E) An explanation that if the borrower does not request re-evaluation of the borrower's prior discharge application within 12 months of the date of the notification, the borrower must submit a new total and permanent disability discharge application to the Secretary if the borrower wishes the Secretary to re-evaluate the borrower's eligibility for a total and permanent disability discharge.
(vi) If the borrower requests re-evaluation in accordance with paragraph (c)(3)(v)(D) of this section or submits a new total and permanent disability discharge application in accordance with paragraph (c)(3)(v)(E) of this section, the request must include new information regarding the borrower's disabling condition that was not provided to the Secretary in connection with the prior application at the time the Secretary reviewed the borrower's initial application for a total and permanent disability discharge.
(4) Treatment of disbursements made during the period from the date of the physician, nurse practitioner, physician assistant, or psychologist certification or the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section until the date of discharge. If a borrower received a title IV loan or TEACH Grant before the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's discharge application or before the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section and a disbursement of that loan or grant is made during the period from the date of the physician, nurse practitioner, physician assistant, or psychologist certification or the Secretary's receipt of the SSA data described in paragraph (c)(2)(iv)(C) of this section until the date the Secretary grants a discharge under this section, the processing of the borrower's loan discharge request will be suspended until the borrower ensures that the full amount of the disbursement has been returned to the loan holder or to the Secretary, as applicable.
(5) Receipt of new title IV loans or TEACH Grants after the date of the physician, nurse practitioner, physician assistant, or psychologist certification or after the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section. If a borrower receives a disbursement of a new title IV loan or receives a new TEACH Grant made on or after the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's discharge application or the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section and before the date the Secretary grants a discharge under this section, the Secretary denies the borrower's discharge request and collection resumes on the borrower's loans.
(6) Conditions for reinstatement of a loan after a total and permanent disability discharge. (i) The Secretary reinstates the borrower's obligation to repay a loan that was discharged in accordance with (c)(3)(iii) of this section if, within 3 years after the date the Secretary granted the discharge, the borrower receives a new TEACH Grant or a new loan under the Direct Loan Program, except for a Direct Consolidation Loan that includes loans that were not discharged.
(ii) If the borrower's obligation to repay a loan is reinstated, the Secretary—
(A) Notifies the borrower that the borrower's obligation to repay the loan has been reinstated;
(B) Returns the loan to the status that would have existed if the total and permanent disability discharge application had not been received; and
(C) Does not require the borrower to pay interest on the loan for the period from the date the loan was discharged until the date the borrower's obligation to repay the loan was reinstated.
(iii) The Secretary's notification under paragraph (c)(6)(ii)(A) of this section will include—
(A) The reason or reasons for the reinstatement;
(B) An explanation that the first payment due date on the loan following reinstatement will be no earlier than 90 days after the date of the notification of reinstatement; and
(C) Information on how the borrower may contact the Secretary if the borrower has questions about the reinstatement or believes that the obligation to repay the loan was reinstated based on incorrect information.
(7) Lender and guaranty agency actions. (i) If the Secretary approves the borrower's total and permanent disability discharge application—
(A) The lender must submit a disability claim to the guaranty agency, in accordance with paragraph (g)(1) of this section;
(B) If the claim satisfies the requirements of paragraph (g)(1) of this section and § 682.406, the guaranty agency must pay the claim submitted by the lender;
(C) After receiving a claim payment from the guaranty agency, the lender must return to the sender any payments received by the lender after the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's loan discharge application or after the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section as well as any payments received after claim payment from or on behalf of the borrower;
(D) The Secretary reimburses the guaranty agency for a disability claim paid to the lender after the agency pays the claim to the lender; and
(E) The guaranty agency must assign the loan to the Secretary within 45 days of the date the guaranty agency pays the disability claim and receives the reimbursement payment, or within 45 days of the date the guaranty agency receives the notice described in paragraph (c)(3)(iii) of this section if a guaranty agency is the lender.
(ii) If the Secretary does not approve the borrower's total and permanent disability discharge request, the lender must resume collection of the loan and is deemed to have exercised forbearance of payment of both principal and interest from the date collection activity was suspended. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period, except if the lender is a guaranty agency it may not capitalize accrued interest.
(8) Lender and guaranty agency actions. (i) If the Secretary approves the borrower's total and permanent disability discharge application—
(A) The lender must submit a disability claim to the guaranty agency, in accordance with paragraph (g)(1) of this section;
(B) If the claim satisfies the requirements of paragraph (g)(1) of this section and § 682.406, the guaranty agency must pay the claim submitted by the lender;
(C) After receiving a claim payment from the guaranty agency, the lender must return to the sender any payments received by the lender after the date the physician certified the borrower's loan discharge application or after the date the Secretary received the SSA notice of award for SSDI or SSI benefits as well as any payments received after claim payment from or on behalf of the borrower;
(D) The Secretary reimburses the guaranty agency for a disability claim paid to the lender after the agency pays the claim to the lender; and
(E) The guaranty agency must assign the loan to the Secretary within 45 days of the date the guaranty agency pays the disability claim and receives the reimbursement payment, or within 45 days of the date the guaranty agency receives the notice described in paragraph (c)(3)(iii) of this section if a guaranty agency is the lender.
(ii) If the Secretary does not approve the borrower's total and permanent disability discharge request, the lender must resume collection of the loan and is deemed to have exercised forbearance of payment of both principal and interest from the date collection activity was suspended. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period, except if the lender is a guaranty agency it may not capitalize accrued interest.
(9) Discharge without an application. The Secretary will discharge a loan under this section without an application or any additional documentation from the borrower if the Secretary—
(i) Obtains data from the Department of Veterans Affairs (VA) showing that the borrower is unemployable due to a service-connected disability; or
(ii) Obtains data from the Social Security Administration (SSA) described in paragraph (c)(2)(iv)(C) of this section.
(10) Notifications and return of payments. (i) After determining that a borrower qualifies for a total and permanent disability discharge under paragraph (c)(9) of this section, the Secretary sends a notification to the borrower informing the borrower that the Secretary will discharge the borrower's title IV loans unless the borrower notifies the Secretary, by a date specified in the Secretary's notification, that the borrower does not wish to receive the loan discharge.
(ii) Unless the borrower notifies the Secretary that the borrower does not wish to receive the discharge, the Secretary notifies the borrower's loan holders that the borrower has been approved for a disability discharge. With this notification the Secretary provides the effective date of the determination by VA or the date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section and directs the holder of each FFEL Program loan made to the borrower to submit a disability claim to the guaranty agency in accordance with paragraph (g)(1) of this section.
(iii) If the claim meets the requirements of paragraph (g)(1) of this section and § 682.406, the guaranty agency pays the claim and must—
(A) Discharge the loan, in the case of a discharge based on data from VA; or
(B) Assign the loan to the Secretary, in the case of a discharge based on data from the SSA.
(iv) The Secretary reimburses the guaranty agency for a disability claim after the agency pays the claim to the lender.
(v) Upon receipt of the claim payment from the guaranty agency, the loan holder returns to the person who made the payments any payments received on or after—
(A) The effective date of the determination by VA that the borrower is unemployable due to a service-connected disability; or
(B) The date the Secretary received the SSA data described in paragraph (c)(2)(iv)(C) of this section.
(vi) For a loan that is assigned to the Secretary for discharge based on data from the SSA, the Secretary discharges the loan in accordance with paragraph (c)(3)(iv) of this section.
(vii) If the borrower notifies the Secretary that they do not wish to receive the discharge, the borrower will remain responsible for repayment of the borrower's loans in accordance with the terms and conditions of the promissory notes that the borrower signed.
(d) Closed school—(1) General. (i) The Secretary reimburses the holder of a loan received by a borrower on or after January 1, 1986, and discharges the borrower's obligation with respect to the loan in accordance with the provisions of paragraph (d) of this section, if the borrower (or the student for whom a parent received a PLUS loan) could not complete the program of study for which the loan was intended because the school at which the borrower (or student) was enrolled closed, or the borrower (or student) withdrew from the school not more than 180 days prior to the date the school closed. The Secretary may extend the 180-day period if the Secretary determines that exceptional circumstances, as described in paragraph (d)(9) of this section, justify an extension.
(ii) For purposes of the closed school discharge authorized by this section—
(A) If a school has closed, the school's closure date is the earlier of: the date, determined by the Secretary, that the school ceased to provide educational instruction in programs in which most students at the school were enrolled, or a date determined by the Secretary that reflects when the school ceased to provide educational instruction for all of its students;
(B) The term “borrower” includes all endorsers on a loan;
(C) A “school” means a school's main campus or any location or branch of the main campus, regardless of whether the school or its location or branch is considered title IV eligible, and
(D) “Program” means the credential defined by the level and Classification of Instructional Program code in which a student is enrolled, except that the Secretary may define a borrower's program as multiple levels or Classification of Instructional Program codes if—
(1) The enrollment occurred at the same school in closely proximate periods;
(2) The school granted a credential in a program while the student was enrolled in a different program; or
(3) The programs must be taken in a set order or were presented as necessary for borrowers to complete in order to succeed in the relevant field of employment
(2) Relief available pursuant to discharge. (i) Discharge under this paragraph (d) relieves the borrower of any existing or past obligation to repay the loan and any charges imposed or costs incurred by the holder with respect to the loan that the borrower is or was otherwise obligated to pay.
(ii) A discharge of a loan under this paragraph (d) qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on a loan obligation discharged under this paragraph (d).
(iii) A borrower who has defaulted on a loan discharged under this paragraph (d) is not regarded as in default on the loan after discharge, and is eligible to receive assistance under the title IV, HEA programs.
(iv) A discharge of a loan under this paragraph (d) must be reported by the loan holder to all consumer reporting agencies to which the holder previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(3) Borrower qualification for discharge. Except as provided in paragraph (d)(8) of this section, to qualify for a discharge of a loan under this paragraph (d), a borrower must submit a completed closed school discharge application on a form approved by the Secretary and the factual assertions in the application must be true and must be made under penalty of perjury. The application explains the procedures and eligibility criteria for obtaining a discharge and requires the borrower to state that the borrower (or the student on whose behalf a parent borrowed)—
(i) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986, to attend a school;
(ii) Did not complete the program of study at that school because the school closed while the student was enrolled, or the student withdrew from the school not more than 180 calendar days before the school closed. The Secretary may extend the 180-day period if the Secretary determines that exceptional circumstances, as described in paragraph (d)(9) of this section, justify an extension;
(iii) On or after July 1, 2023, state that the borrower did not complete the program at another branch or location of the school or through a teach-out agreement at another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency; and
(iv) State that the borrower (or student)—
(A) Agrees to provide to the Secretary or the Secretary's designee upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(B) Agrees to cooperate with the Secretary or the Secretary's designee in enforcement actions in accordance with paragraph (d)(4) of this section and to transfer any right to recovery against a third party to the Secretary in accordance with paragraph (d)(5) of this section.
(4) Cooperation by borrower in enforcement actions. (i) In any judicial or administrative proceeding brought by the Secretary or the Secretary's designee to recover for amounts discharged under paragraph (d) of this section or to take other enforcement action with respect to the conduct on which those claims were based, a borrower who requests or receives a discharge under paragraph (d) of this section must cooperate with the Secretary or the Secretary's designee. At the request of the Secretary or the Secretary's designee, and upon the Secretary's or the Secretary's designee's tendering to the borrower the fees and costs as are customarily provided in litigation to reimburse witnesses, the borrower shall—
(A) Provide testimony regarding any representation made by the borrower to support a request for discharge; and
(B) Produce any documentation reasonably available to the borrower with respect to those representations and any sworn statement required by the Secretary with respect to those representations and documents.
(ii) The Secretary revokes the discharge, or denies the request for discharge, of a borrower who—
(A) Fails to provide testimony, sworn statements, or documentation to support material representations made by the borrower to obtain the discharge; or
(B) Provides testimony, a sworn statement, or documentation that does not support the material representations made by the borrower to obtain the discharge.
(5) Transfer to the Secretary of borrower's right of recovery against third parties. (i) Upon discharge under paragraph (d) of this section, the borrower is deemed to have assigned to and relinquished in favor of the Secretary any right to a loan refund (up to the amount discharged) that the borrower (or student) may have by contract or applicable law with respect to the loan or the enrollment agreement for the program for which the loan was received, against the school, its principals, affiliates and their successors, its sureties, and any private fund, including the portion of a public fund that represents funds received from a private party.
(ii) The provisions of paragraph (d) of this section apply notwithstanding any provision of State law that would otherwise restrict transfer of such rights by the borrower (or student), limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(iii) Nothing in this section shall be construed as limiting or foreclosing the borrower's (or student's) right to pursue legal and equitable relief regarding disputes arising from matters otherwise unrelated to the loan discharged.
(6) Guaranty agency responsibilities—(i) Procedures applicable if a school closed on or after January 1, 1986, but prior to June 13, 1994. (A) If a borrower received a loan for attendance at a school with a closure date on or after January 1, 1986, but prior to June 13, 1994, the loan may be discharged in accordance with the procedures specified in paragraph (d)(6)(i) of this section.
(B) If a loan subject to paragraph (d) of this section was discharged in part in accordance with the Secretary's “Closed School Policy” as authorized by section IV of Bulletin 89-G-159, the guaranty agency shall initiate the discharge of the remaining balance of the loan not later than August 13, 1994.
(C) A guaranty agency shall review its records and identify all schools that appear to have closed on or after January 1, 1986 and prior to June 13, 1994, and shall identify the loans made to any borrower (or student) who appears to have been enrolled at the school on the school closure date or who withdrew not more than 120 days prior to the closure date.
(D) A guaranty agency shall notify the Secretary immediately if it determines that a school not previously known to have closed appears to have closed, and, within 30 days of making that determination, notify all lenders participating in its program to suspend collection efforts against individuals with respect to loans made for attendance at the closed school, if the student to whom (or on whose behalf) a loan was made, appears to have been enrolled at the school on the closing date, or withdrew not more than 120 days prior to the date the school appears to have closed. Within 30 days after receiving confirmation of the date of a school's closure from the Secretary, the agency shall—
(1) Notify all lenders participating in its program to mail a discharge application explaining the procedures and eligibility criteria for obtaining a discharge and an explanation of the information that must be included in the sworn statement (which may be combined) to all borrowers who may be eligible for a closed school discharge; and
(2) Review the records of loans that it holds, identify the loans made to any borrower (or student) who appears to have been enrolled at the school on the school closure date or who withdrew not more than 120 days prior to the closure date, and mail a discharge application and an explanation of the information that must be included in the sworn statement (which may be combined) to the borrower. The application shall inform the borrower of the procedures and eligibility criteria for obtaining a discharge.
(E) If a loan identified under paragraph (d)(6)(i)(D)(2) of this section is held by the guaranty agency as a defaulted loan and the borrower's current address is known, the guaranty agency shall immediately suspend any efforts to collect from the borrower on any loan received for the program of study for which the loan was made (but may continue to receive borrower payments), and notify the borrower that the agency will provide additional information about the procedures for requesting a discharge after the agency has received confirmation from the Secretary that the school had closed.
(F) If a loan identified under paragraph (d)(6)(i)(D)(2) of this section is held by the guaranty agency as a defaulted loan and the borrower's current address is unknown, the agency shall, by June 13, 1995, further refine the list of borrowers whose loans are potentially subject to discharge under paragraph (d) of this section by consulting with representatives of the closed school, the school's licensing agency, accrediting agency, and other appropriate parties. Upon learning the new address of a borrower who would still be considered potentially eligible for a discharge, the guaranty agency shall, within 30 days after learning the borrower's new address, mail to the borrower a discharge application that meets the requirements of paragraph (d)(6)(i)(E) of this section.
(G) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(i)(E) or (F) of this section has satisfied all of the conditions required for a discharge, the agency shall notify the borrower in writing of that determination within 30 days after making that determination.
(H) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(i)(E) or (F) of this section does not qualify for a discharge, the agency shall notify the borrower in writing of that determination and the reasons for it within 30 days after the date the agency—
(1) Made that determination based on information available to the guaranty agency;
(2) Was notified by the Secretary that the school had not closed;
(3) Was notified by the Secretary that the school had closed on a date that was more than 120 days after the borrower (or student) withdrew from the school;
(4) Was notified by the Secretary that the borrower (or student) was ineligible for a closed school discharge for other reasons; or
(5) Received the borrower's completed application and sworn statement.
(I) If a borrower described in paragraph (d)(6)(i)(E) or (F) of this section fails to submit the written request and sworn statement described in paragraph (d)(3) of this section within 60 days of being notified of that option, the guaranty agency shall resume collection and shall be deemed to have exercised forbearance of payment of principal and interest from the date it suspended collection activity. The agency may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(J) A borrower's request for discharge may not be denied solely on the basis of failing to meet any time limits set by the lender, guaranty agency, or the Secretary.
(ii) Procedures applicable if a school closed on or after June 13, 1994. (A) A guaranty agency shall notify the Secretary immediately whenever it becomes aware of reliable information indicating a school may have closed. The designated guaranty agency in the state in which the school is located shall promptly investigate whether the school has closed and, within 30 days after receiving information indicating that the school may have closed, report the results of its investigation to the Secretary concerning the date of the school's closure and whether a teach-out of the closed school's program was made available to students.
(B) If a guaranty agency determines that a school appears to have closed, it shall, within 30 days of making that determination, notify all lenders participating in its program to suspend collection efforts against individuals with respect to loans made for attendance at the closed school, if the student to whom (or on whose behalf) a loan was made, appears to have been enrolled at the school on the closing date, or withdrew not more than 180 days prior to the date the school appears to have closed. Within 30 days after receiving confirmation of the date of a school's closure from the Secretary, the agency shall—
(1) Notify all lenders participating in its program to mail a discharge application explaining the procedures and eligibility criteria for obtaining a discharge and an explanation of the information that must be included in the application to all borrowers who may be eligible for a closed school discharge; and
(2) Review the records of loans that it holds, identify the loans made to any borrower (or student) who appears to have been enrolled at the school on the school closure date or who withdrew not more than 180 days prior to the closure date, and mail a discharge application and an explanation of the information that must be included in the application to the borrower. The application shall inform the borrower of the procedures and eligibility criteria for obtaining a discharge.
(C) If a loan identified under paragraph (d)(6)(ii)(B)(2) of this section is held by the guaranty agency as a defaulted loan and the borrower's current address is known, the guaranty agency shall immediately suspend any efforts to collect from the borrower on any loan received for the program of study for which the loan was made (but may continue to receive borrower payments), and notify the borrower that the agency will provide additional information about the procedures for requesting a discharge after the agency has received confirmation from the Secretary that the school had closed.
(D) If a loan identified under paragraph (d)(6)(ii)(B)(2) of this section is held by the guaranty agency as a defaulted loan and the borrower's current address is unknown, the agency shall, within one year after identifying the borrower, attempt to locate the borrower and further determine the borrower's potential eligibility for a discharge under paragraph (d) of this section by consulting with representatives of the closed school, the school's licensing agency, accrediting agency, and other appropriate parties. Upon learning the new address of a borrower who would still be considered potentially eligible for a discharge, the guaranty agency shall, within 30 days after learning the borrower's new address, mail to the borrower a discharge application that meets the requirements of paragraph (d)(6)(ii)(B) of this section.
(E) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(ii)(C) or (D) of this section has satisfied all of the conditions required for a discharge, the agency shall notify the borrower in writing of that determination within 30 days after making that determination.
(F) If the guaranty agency determines that a borrower identified in paragraph (d)(6)(ii)(C) or (D) of this section does not qualify for a discharge, the agency shall notify the borrower in writing of that determination and the reasons for it, the opportunity for review by the Secretary, and how to request such a review within 30 days after the date the agency—
(1) Made that determination based on information available to the guaranty agency;
(2) Was notified by the Secretary that the school had not closed;
(3) Was notified by the Secretary that the school had closed on a date that was more than 120 days after the borrower (or student) withdrew from the school;
(4) Was notified by the Secretary that the borrower (or student) was ineligible for a closed school discharge for other reasons; or
(5) Received the borrower's completed application.
(G) Upon receipt of a closed school discharge claim filed by a lender, the agency shall review the borrower's completed application in light of information available from the records of the agency and from other sources, including other guaranty agencies, state authorities, and cognizant accrediting associations, and shall take the following actions—
(1) If the agency determines that the borrower satisfies the requirements for discharge under paragraph (d) of this section, it shall pay the claim in accordance with § 682.402(h) not later than 90 days after the agency received the claim; or
(2) If the agency determines that the borrower does not qualify for a discharge, the agency shall, not later than 90 days after the agency received the claim, return the claim to the lender with an explanation of the reasons for its determination.
(H) If a borrower described in paragraph (d)(6)(ii)(E) or (F) of this section fails to submit the completed application within 90 days of being notified of that option, the lender or guaranty agency shall resume collection.
(I) Upon resuming collection on any affected loan, the lender or guaranty agency provides the borrower another discharge application and an explanation of the requirements and procedures for obtaining a discharge.
(J) A borrower's request for discharge may not be denied solely on the basis of failing to meet any time limits set by the lender, guaranty agency, or the Secretary.
(K)(1) Within 30 days after receiving the borrower's request for review under paragraph (d)(6)(ii)(F) of this section, the agency shall forward the borrower's discharge request and all relevant documentation to the Secretary for review.
(2) The Secretary notifies the agency and the borrower of the determination upon review. If the Secretary determines that the borrower is not eligible for a discharge under paragraph (d) of this section, within 30 days after being so informed, the agency shall take the actions described in paragraph (d)(6)(ii)(H) or (I) of this section, as applicable.
(3) If the Secretary determines that the borrower meets the requirements for a discharge under paragraph (d) of this section, the agency shall, within 30 days after being so informed, take actions required under paragraphs (d)(6)(ii)(E) and (d)(6)(ii)(G)(1) of this section, and the lender shall take the actions described in paragraph (d)(7)(iv) of this section, as applicable.
(7) Lender responsibilities. (i) A lender shall comply with the requirements prescribed in paragraph (d) of this section. In the absence of specific instructions from a guaranty agency or the Secretary, if a lender receives information from a source it believes to be reliable indicating that an existing or former borrower may be eligible for a loan discharge under paragraph (d) of this section, the lender shall immediately notify the guaranty agency, and suspend any efforts to collect from the borrower on any loan received for the program of study for which the loan was made (but may continue to receive borrower payments).
(ii) If the borrower fails to submit a completed application described in paragraph (d)(3) of this section within 90 days of being notified of that option, the lender shall resume collection and shall be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period. Upon resuming collection, the lender provides the borrower with another discharge application and an explanation of the requirements and procedures for obtaining a discharge.
(iii) The lender shall file a closed school claim with the guaranty agency in accordance with § 682.402(g) no later than 60 days after the lender receives a completed application described in paragraph (d)(3) of this section from the borrower, or notification from the agency that the Secretary approved the borrower's appeal in accordance with paragraph (d)(6)(ii)(K)(3) of this section.
(iv) Within 30 days after receiving reimbursement from the guaranty agency for a closed school claim, the lender shall notify the borrower that the loan obligation has been discharged, and request that all consumer reporting agencies to which it previously reported the status of the loan delete all adverse credit history assigned to the loan.
(v) Within 30 days after being notified by the guaranty agency that the borrower's request for a closed school discharge has been denied, the lender shall resume collection and notify the borrower of the reasons for the denial. The lender shall be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity, and may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(8) Discharge without an application. (i) A borrower's obligation to repay a FFEL Program loan will be discharged without an application from the borrower if the—
(A) Borrower received a discharge on a loan pursuant to § 674.33(g) of this chapter under the Federal Perkins Loan Program, or § 685.214 of this chapter under the William D. Ford Federal Direct Loan Program; or
(B) The Secretary or the guaranty agency, with the Secretary's permission, determines that the borrower qualifies for a discharge under sections (d)(3)(i), (ii) and (iii) based on information in the Secretary or guaranty agency's possession. The Secretary or guaranty agency discharges the loan without an application or any statement from the borrower 1 year after the institution's closure date if the borrower did not complete the program at another branch or location of the school or through a teach-out agreement at another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency.
(ii) If the borrower accepts but does not complete a continuation of the program at another branch of location of the school or a teach-out agreement at another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency, then the Secretary or guaranty agency discharges the loan 1 year after the borrower's last date of attendance in the teach-out program.
(9) Exceptional circumstances. For purposes of this section, exceptional circumstances include, but are not limited to—
(i) The revocation or withdrawal by an accrediting agency of the school's institutional accreditation;
(ii) The school is or was placed on probation or issued a show-cause order, or placed on an accreditation status that poses an equivalent or greater risk to its accreditation, by its accrediting agency for failing to meet one or more of the agency's standards;
(iii) The revocation or withdrawal by the State authorization or licensing authority to operate or to award academic credentials in the State;
(iv) The termination by the Department of the school's participation in a title IV, HEA program;
(v) A finding by a State or Federal government agency that the school violated State or Federal law related to education or services to students;
(vi) A State or Federal court judgment that a School violated State or Federal law related to education or services to students;
(vii) The teach-out of the student's educational program exceeds the 180-day look back period for a closed school discharge;
(viii) The school responsible for the teach-out of the student's educational program fails to perform the material terms of the teach-out plan or agreement, such that the student does not have a reasonable opportunity to complete his or her program of study;
(ix) The school discontinued a significant share of its academic programs.
(x) The school permanently closed all or most of its ground-based or in-person locations while maintaining online programs.
(xi) The school was placed on the heightened cash monitoring payment method as defined in § 668.162(d)(2).
(e) False certification by a school of a student's eligibility to borrow and unauthorized disbursements—(1) General. (i) The Secretary reimburses the holder of a loan received by a borrower on or after January 1, 1986, and discharges a current or former borrower's obligation with respect to the loan in accordance with the provisions of this paragraph (e), if the borrower's (or the student for whom a parent received a PLUS loan) eligibility to receive the loan was falsely certified by an eligible school. On or after July 1, 2006, the Secretary reimburses the holder of a loan, and discharges a borrower's obligation with respect to the loan in accordance with the provisions of this paragraph (e), if the borrower's eligibility to receive the loan was falsely certified as a result of a crime of identity theft. For purposes of a false certification discharge, the term “borrower” includes all endorsers on a loan.
(ii) A student's or other individual's eligibility to borrow will be considered to have been falsely certified by the school if the school—
(A) Certified the eligibility for a FFEL Program loan of a student who—
(1) Reported not having a high school diploma or its equivalent; and
(2) Did not satisfy the alternative to graduation from high school requirements in 34 CFR 668.32(e) and section 484(d) of the Act that were in effect at the time the loan was certified, as applicable;
(B) Certified the eligibility of a student who is not a high school graduate based on—
(1) A high school graduation status falsified by the school; or
(2) A high school diploma falsified by the school or a third party to which the school referred the borrower;
(C) Certified the eligibility of the student who, because of a physical or mental condition, age, criminal record, or other reason accepted by the Secretary, would not meet State requirements for employment (in the student's State of residence when the loan was certified) in the occupation for which the training program supported by the loan was intended;
(D) Signed the borrower's name without authorization by the borrower on the loan application or promissory note; or
(E) Certified the eligibility of an individual for a FFEL Program loan as a result of the crime of identity theft committed against the individual, as that crime is defined in paragraph (e)(14) of this section.
(iii) The Secretary discharges the obligation of a borrower with respect to a loan disbursement for which the school, without the borrower's authorization, endorsed the borrower's loan check or authorization for electronic funds transfer, unless the student for whom the loan was made received the proceeds of the loan either by actual delivery of the loan funds or by a credit in the amount of the contested disbursement applied to charges owed to the school for that portion of the educational program completed by the student. However, the Secretary does not reimburse the lender with respect to any amount disbursed by means of a check bearing an unauthorized endorsement unless the school also executed the application or promissory note for that loan for the named borrower without that individual's consent.
(iv) If a loan was made as a result of the crime of identity theft that was committed by an employee or agent of the lender, or if at the time the loan was made, an employee or agent of the lender knew of the identity theft of the individual named as the borrower—
(A) The Secretary does not pay reinsurance, and does not reimburse the holder, for any amount disbursed on the loan; and
(B) Any amounts received by a holder as interest benefits and special allowance payments with respect to the loan must be refunded to the Secretary, as provided in paragraphs (e)(8)(ii)(B)(4) and (e)(10)(ii)(D) of this section.
(2) Relief available pursuant to discharge. (i) Discharge under paragraph (e)(1)(i) of this section relieves the borrower of an existing or past obligation to repay the loan certified by the school, and any charges imposed or costs incurred by the holder with respect to the loan that the borrower is, or was, otherwise obligated to pay.
(ii) A discharge of a loan under paragraph (e) of this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on a loan obligation discharged under paragraph (e) of this section.
(iii) A borrower who has defaulted on a loan discharged under paragraph (e) of this section is not regarded as in default on the loan after discharge, and is eligible to receive assistance under the Title IV, HEA programs.
(iv) A discharge of a loan under paragraph (e) of this section is reported by the loan holder to all credit reporting agencies to which the holder previously reported the status of the loan, so as to delete all adverse or inaccurate credit history assigned to the loan.
(v) Discharge under paragraph (e)(1)(iii) of this section qualifies the borrower for relief only with respect to the amount of the disbursement discharged.
(3) Borrower qualification for discharge. Except as provided in paragraph (e)(15) of this section, to qualify for a discharge of a loan under this paragraph (e), the borrower must submit to the holder of the loan an application for discharge on a form approved by the Secretary. The application need not be notarized, but must be made by the borrower under penalty of perjury, and, in the application, the borrower must—
(i) State whether the student has made a claim with respect to the school's false certification with any third party, such as the holder of a performance bond or a tuition recovery program, and if so, the amount of any payment received by the borrower (or student) or credited to the borrower's loan obligation;
(ii) In the case of a borrower requesting a discharge based on not having had a high school diploma and not having met the alternative to graduation from high school eligibility requirements in 34 CFR 668.32(e) and under section 484(d) of the Act applicable when the loan was certified, and the school or a third party to which the school referred the borrower falsified the student's high school diploma, the borrower must state in the application that the borrower (or the student for whom a parent received a PLUS loan)—
(A) Received, on or after January 1, 1986, the proceeds of any disbursement of a loan disbursed, in whole or in part, on or after January 1, 1986, to attend a school;
(B) Reported not having a valid high school diploma or its equivalent when the loan was certified; and
(C) Did not satisfy the alternative to graduation from high school statutory or regulatory eligibility requirements identified on the application form and applicable when the loan was certified.
(iii) In the case of a borrower requesting a discharge based on a condition that would disqualify the borrower from employment in the occupation that the training program for which the borrower received the loan was intended, the borrower must state in the application that the borrower (or student for whom a parent received a PLUS loan) did not meet State requirements for employment in the student's State of residence in the occupation that the training program for which the borrower received the loan was intended because of a physical or mental condition, age, criminal record, or other reason accepted by the Secretary.
(iv) In the case of a borrower requesting a discharge because the school signed the borrower's name on the loan application or promissory note without the borrower's authorization state that he or she did not sign the document in question or authorize the school to do so.
(v) In the case of a borrower requesting a discharge because the school, without authorization of the borrower, endorsed the borrower's name on the loan check or signed the authorization for electronic funds transfer or master check, the borrower must—
(A) State that he or she did not endorse the loan check or sign the authorization for electronic funds transfer or master check, or authorize the school to do so; and
(B) State that the proceeds of the contested disbursement were not received either through actual delivery of the loan funds or by a credit in the amount of the contested disbursement applied to charges owed to the school for that portion of the educational program completed by the student.
(vi) In the case of an individual whose eligibility to borrow was falsely certified because he or she was a victim of the crime of identity theft and is requesting a discharge—
(A) Certify that the individual did not sign the promissory note, or that any other means of identification used to obtain the loan was used without the authorization of the individual claiming relief;
(B) Certify that the individual did not receive or benefit from the proceeds of the loan with knowledge that the loan had been made without the authorization of the individual; and
(C) Provide a statement of facts and supporting evidence that demonstrate, to the satisfaction of the Secretary, that the individual's eligibility for the loan in question was falsely certified as a result of identity theft committed against that individual. Supporting evidence may include—
(1) A judicial determination of identity theft relating to the individual;
(2) A Federal Trade Commission identity theft affidavit;
(3) A police report alleging identity theft relating to the individual;
(4) Documentation of a dispute of the validity of the loan due to identity theft filed with at least three major consumer reporting agencies; and
(5) Other evidence acceptable to the Secretary.
(vii) That the borrower agrees to provide upon request by the Secretary or the Secretary's designee, other documentation reasonably available to the borrower, that demonstrates, to the satisfaction of the Secretary or the Secretary's designee, that the student meets the qualifications in this paragraph (e); and
(viii) That the borrower agrees to cooperate with the Secretary or the Secretary's designee in enforcement actions in accordance with paragraph (e)(4) of this section, and to transfer any right to recovery against a third party in accordance with paragraph (e)(5) of this section.
(4) Cooperation by borrower in enforcement actions. (i) In any judicial or administrative proceeding brought by the Secretary or the Secretary's designee to recover for amounts discharged under paragraph (e) of this section or to take other enforcement action with respect to the conduct on which those claims were based, a borrower who requests or receives a discharge under paragraph (e) of this section must cooperate with the Secretary or the Secretary's designee. At the request of the Secretary or the Secretary's designee, and upon the Secretary's or the Secretary's designee's tendering to the borrower the fees and costs as are customarily provided in litigation to reimburse witnesses, the borrower shall—
(A) Provide testimony regarding any representation made by the borrower to support a request for discharge; and
(B) Produce any documentation reasonably available to the borrower with respect to those representations and any sworn statement required by the Secretary with respect to those representations and documents.
(ii) The Secretary revokes the discharge, or denies the request for discharge, of a borrower who—
(A) Fails to provide testimony, sworn statements, or documentation to support material representations made by the borrower to obtain the discharge; or
(B) Provides testimony, a sworn statement, or documentation that does not support the material representations made by the borrower to obtain the discharge.
(5) Transfer to the Secretary of borrower's right of recovery against third parties. (i) Upon discharge under paragraph (e) of this section, the borrower is deemed to have assigned to and relinquished in favor of the Secretary any right to a loan refund (up to the amount discharged) that the borrower (or student) may have by contract or applicable law with respect to the loan or the enrollment agreement for the program for which the loan was received, against the school, its principals, affiliates and their successors, its sureties, and any private fund, including the portion of a public fund that represents funds received from a private party.
(ii) The provisions of paragraph (e) of this section apply notwithstanding any provision of state law that would otherwise restrict transfer of such rights by the borrower (or student), limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(iii) Nothing in this section shall be construed as limiting or foreclosing the borrower's (or student's) right to pursue legal and equitable relief regarding disputes arising from matters otherwise unrelated to the loan discharged.
(6) Discharge procedures—general. (i) If the holder of the borrower's loan determines that a borrower's FFEL Program loan may be eligible for a discharge under this section, the holder provides the borrower the application described in paragraph (e)(3) of this section and an explanation of the qualifications and procedures for obtaining a discharge. The holder also promptly suspends any efforts to collect from the borrower on any affected loan. The holder may continue to receive borrower payments.
(ii) If the borrower fails to submit the application for discharge and supporting information described in paragraph (e)(3) of this section within 60 days of the holder providing the application, the holder resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended.
(iii) If the borrower submits an application for discharge that the holder determines is incomplete, the holder notifies the borrower of that determination and allows the borrower an additional 30-days to amend their application and provide supplemental information. If the borrower does not amend their application within 30 days of receiving the notification from the holder the borrower's application is closed as incomplete and the holder resumes collection of the loan and grants forbearance of principal and interest for the period in which collection activity was suspended.
(iv) If the borrower submits a complete application described in paragraph (e)(3) of this section, the holder files a claim with the guaranty agency no later than 60 days after the holder receives the borrower's complete application.
(v) The guaranty agency determines whether the available evidence supports the claim for discharge. Available evidence includes evidence provided by the borrower and any other relevant information from the guaranty agency's records or gathered by the guaranty agency from other sources, including the Secretary, other guaranty agencies, Federal agencies, State authorities, test publishers, independent test administrators, school records, and cognizant accrediting associations.
(vi) The guaranty agency issues a decision that explains the reasons for any adverse determination on the application, describes the evidence on which the decision was made, and provides the borrower, upon request, copies of the evidence. The guaranty agency considers any response from the borrower and any additional information from the borrower and notifies the borrower whether the determination is changed.
(vii) If the guaranty agency determines that the borrower meets the applicable requirements for a discharge under this paragraph (e), the guaranty agency notifies the borrower in writing of that determination.
(viii) If the guaranty agency determines that the borrower does not qualify for a discharge, the guaranty agency notifies the borrower in writing of that determination and the reasons for the determination.
(ix) If the guaranty agency determines that the borrower does not qualify for a discharge, the borrower may request that the Secretary review the guaranty agency's decision.
(x) A borrower is not precluded from re-applying for a discharge under this paragraph (e) if the discharge request is closed as incomplete, or if the guaranty agency or Secretary determines that the borrower does not qualify for a discharge if the borrower provides additional supporting evidence.
(7) Guaranty agency responsibilities—general. (i) A guaranty agency will notify the Secretary immediately whenever it becomes aware of reliable information indicating that a school may have falsely certified a student's eligibility or caused an unauthorized disbursement of loan proceeds, as described in paragraph (e)(3) of this section. The designated guaranty agency in the State in which the school is located will promptly investigate whether the school has falsely certified a student's eligibility and, within 30 days after receiving information indicating that the school may have done so, report the results of its preliminary investigation to the Secretary.
(ii) If the guaranty agency receives information it believes to be reliable indicating that a borrower whose loan is held by the agency may be eligible for a discharge under this paragraph (e), the agency will immediately suspend any efforts to collect from the borrower on any loan received for the program of study for which the loan was made (but may continue to receive borrower payments) and inform the borrower of the procedures for requesting a discharge.
(iii) If the borrower fails to submit the Secretary's approved application described in paragraph (e)(3) of this section within 60 days of being notified of that option, the guaranty agency will resume collection and will be deemed to have exercised forbearance of payment of principal and interest from the date it suspended collection activity.
(iv) If the borrower submits an application for discharge that the guaranty agency determines is incomplete, the guaranty agency notifies the borrower of that determination and allows the borrower an additional 30-days to amend their application and provide supplemental information. If the borrower does not amend their application within 30 days of receiving the notification from the guaranty agency the borrower's application is closed as incomplete and the guaranty agency resumes collection of the loan and grants forbearance of principal and interest for the period in which collection activity was suspended.
(v) Upon receipt of a discharge claim filed by a lender or a complete application submitted by a borrower with respect to a loan held by the guaranty agency, the agency will have up to 90 days to determine whether the discharge should be granted. The agency will review the borrower's application in light of information available from the records of the agency and from other sources, including other guaranty agencies, State authorities, and cognizant accrediting associations.
(vi) A borrower's application for discharge may not be denied solely on the basis of failing to meet any time limits set by the lender, the Secretary or the guaranty agency.
(8) Guaranty agency responsibilities with respect to a claim filed by a lender. (i) The agency will evaluate the borrower's application and consider relevant information it possesses and information available from other sources, and follow the procedures described in this paragraph (e)(8).
(ii) If the agency determines that the borrower satisfies the requirements for discharge under this paragraph (e), it will, not later than 30 days after the agency makes that determination, pay the claim in accordance with paragraph (h) of this section and—
(A) Notify the borrower that his or her liability with respect to the amount of the loan has been discharged, and that the lender has been informed of the actions required under paragraph (e)(8)(ii)(C) of this section;
(B) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount; and
(C) Notify the lender that the borrower's liability with respect to the amount of the loan has been discharged, and that the lender must—
(1) Immediately terminate any collection efforts against the borrower with respect to the discharged loan amount and any charges imposed or costs incurred by the lender related to the discharged loan amount that the borrower is, or was, otherwise obligated to pay; and
(2) Within 30 days, report to all credit reporting agencies to which the lender previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan; and
(D) Within 30 days, demand payment in full from the perpetrator of the identity theft committed against the individual, and if payment is not received, pursue collection action thereafter against the perpetrator.
(iii) If the agency determines that the borrower does not qualify for a discharge, it will, within 30 days after making that determination—
(A) Notify the lender that the borrower's liability on the loan is not discharged and that, depending on the borrower's decision under paragraph (e)(8)(iii)(B) of this section, the loan will either be returned to the lender or paid as a default claim; and
(B) Notify the borrower that the borrower does not qualify for discharge and state the reasons for that conclusion. The agency will advise the borrower that he or she remains obligated to repay the loan and warn the borrower of the consequences of default, and explain that the borrower will be considered to be in default on the loan unless the borrower submits a written statement to the agency within 30 days stating that the borrower—
(1) Acknowledges the debt and, if payments are due, will begin or resume making those payments to the lender; or
(2) Requests the Secretary to review the agency's decision.
(iv) Within 30 days after receiving the borrower's written statement described in paragraph (e)(8)(iii)(B)(1) of this section, the agency will return the claim file to the lender and notify the lender to resume collection efforts if payments are due.
(v) Within 30 days after receiving the borrower's request for review by the Secretary, the agency will forward the claim file to the Secretary for his review and take the actions required under paragraph (e)(12) of this section.
(vi) The agency will pay a default claim to the lender within 30 days after the borrower fails to return either of the written statements described in paragraph (e)(8)(iii)(B) of this section.
(9) Guaranty agency responsibilities with respect to a claim filed by a lender based only on the borrower's assertion that he or she did not sign the loan check or the authorization for the release of loan funds via electronic funds transfer or master check. (i) The agency will evaluate the borrower's request and consider relevant information it possesses and information available from other sources, and follow the procedures described in this paragraph (e)(9).
(ii) If the agency determines that a borrower who asserts that he or she did not endorse the loan check satisfies the requirements for discharge under paragraph (e)(3)(v) of this section, it will, within 30 days after making that determination—
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged, and that the lender has been informed of the actions required under paragraph (e)(9)(ii)(B) of this section;
(B) Notify the lender that the borrower's liability with respect to the amount of the contested disbursement of the loan has been discharged, and that the lender must—
(1) Immediately terminate any collection efforts against the borrower with respect to the discharged loan amount and any charges imposed or costs incurred by the lender related to the discharged loan amount that the borrower is, or was, otherwise obligated to pay;
(2) Within 30 days, report to all credit reporting agencies to which the lender previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan;
(3) Refund to the borrower, within 30 days, all amounts paid by the borrower with respect to the loan disbursement that was discharged, including any charges imposed or costs incurred by the lender related to the discharged loan amount; and
(4) Refund to the Secretary, within 30 days, all interest benefits and special allowance payments received from the Secretary with respect to the loan disbursement that was discharged; and
(C) Transfer to the lender the borrower's written assignment of any rights the borrower may have against third parties with respect to a loan disbursement that was discharged because the borrower did not sign the loan check.
(iii) If the agency determines that a borrower who asserts that he or she did not sign the electronic funds transfer or master check authorization satisfies the requirements for discharge under paragraph (e)(3)(v) of this section, it will, within 30 days after making that determination, pay the claim in accordance with paragraph (h) of this section and—
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged, and that the lender has been informed of the actions required under paragraph (e)(9)(iii)(C) of this section;
(B) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount; and
(C) Notify the lender that the borrower's liability with respect to the contested disbursement of the loan has been discharged, and that the lender must—
(1) Immediately terminate any collection efforts against the borrower with respect to the discharged loan amount and any charges imposed or costs incurred by the lender related to the discharged loan amount that the borrower is, or was, otherwise obligated to pay; and
(2) Within 30 days, report to all credit reporting agencies to which the lender previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(iv) If the agency determines that the borrower does not qualify for a discharge, it will, within 30 days after making that determination—
(A) Notify the lender that the borrower's liability on the loan is not discharged and that, depending on the borrower's decision under paragraph (e)(9)(iv)(B) of this section, the loan will either be returned to the lender or paid as a default claim; and
(B) Notify the borrower that the borrower does not qualify for discharge and state the reasons for that conclusion. The agency will advise the borrower that he or she remains obligated to repay the loan and warn the borrower of the consequences of default, and explain that the borrower will be considered to be in default on the loan unless the borrower submits a written statement to the agency within 30 days stating that the borrower—
(1) Acknowledges the debt and, if payments are due, will begin or resume making those payments to the lender; or
(2) Requests the Secretary to review the agency's decision.
(v) Within 30 days after receiving the borrower's written statement described in paragraph (e)(9)(iv)(B)(1) of this section, the agency will return the claim file to the lender and notify the lender to resume collection efforts if payments are due.
(vi) Within 30 days after receiving the borrower's request for review by the Secretary, the agency will forward the claim file to the Secretary for his review and take the actions required under paragraph (e)(12) of this section.
(vii) The agency will pay a default claim to the lender within 30 days after the borrower fails to return either of the written statements described in paragraph (e)(9)(iv)(B) of this section.
(10) Guaranty agency responsibilities in the case of a loan held by the agency for which a discharge request is submitted by a borrower. (i) The agency will evaluate the borrower's application and consider relevant information it possesses and information available from other sources, and follow the procedures described in this paragraph (e)(10).
(ii) If the agency determines that the borrower satisfies the requirements for discharge under paragraph (e)(3) of this section, it will immediately terminate any collection efforts against the borrower with respect to the discharged loan amount and any charges imposed or costs incurred by the agency related to the discharged loan amount that the borrower is, or was otherwise obligated to pay and, not later than 30 days after the agency makes the determination that the borrower satisfies the requirements for discharge—
(A) Notify the borrower that his or her liability with respect to the amount of the loan has been discharged;
(B) Report to all credit reporting agencies to which the agency previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan;
(C) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount; and
(D) Within 30 days, demand payment in full from the perpetrator of the identity theft committed against the individual, and if payment is not received, pursue collection action thereafter against the perpetrator.
(iii) If the agency determines that the borrower does not qualify for a discharge, it will, within 30 days after making that determination, notify the borrower that the borrower's liability with respect to the amount of the loan is not discharged, state the reasons for that conclusion, and if the borrower is not then making payments in accordance with a repayment arrangement with the agency on the loan, advise the borrower of the consequences of continued failure to reach such an arrangement, and that collection action will resume on the loan unless within 30 days the borrower—
(A) Acknowledges the debt and, if payments are due, reaches a satisfactory arrangement to repay the loan or resumes making payments under such an arrangement to the agency; or
(B) Requests the Secretary to review the agency's decision.
(iv) Within 30 days after receiving the borrower's request for review by the Secretary, the agency will forward the borrower's discharge request and all relevant documentation to the Secretary for his review and take the actions required under paragraph (e)(12) of this section.
(v) The agency will resume collection action if within 30 days of giving notice of its determination the borrower fails to seek review by the Secretary or agree to repay the loan.
(11) Guaranty agency responsibilities in the case of a loan held by the agency for which a discharge request is submitted by a borrower based only on the borrower's assertion that he or she did not sign the loan check or the authorization for the release of loan proceeds via electronic funds transfer or master check. (i) The agency will evaluate the borrower's application and consider relevant information it possesses and information available from other sources, and follow the procedures described in this paragraph (e)(11).
(ii) If the agency determines that a borrower who asserts that he or she did not endorse the loan check satisfies the requirements for discharge under paragraph (e)(3)(v) of this section, it will refund to the Secretary the amount of reinsurance payment received with respect to the amount discharged on that loan less any repayments made by the lender under paragraph (e)(11)(ii)(D)(2) of this section, and within 30 days after making that determination—
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged;
(B) Report to all credit reporting agencies to which the agency previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan;
(C) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount;
(D) Notify the lender to whom a claim payment was made that the lender must refund to the Secretary, within 30 days—
(1) All interest benefits and special allowance payments received from the Secretary with respect to the loan disbursement that was discharged; and
(2) The amount of the borrower's payments that were refunded to the borrower by the guaranty agency under paragraph (e)(11)(ii)(C) of this section that represent borrower payments previously paid to the lender with respect to the loan disbursement that was discharged;
(E) Notify the lender to whom a claim payment was made that the lender must, within 30 days, reimburse the agency for the amount of the loan that was discharged, minus the amount of borrower payments made to the lender that were refunded to the borrower by the guaranty agency under paragraph (e)(11)(ii)(C) of this section; and
(F) Transfer to the lender the borrower's written assignment of any rights the borrower may have against third parties with respect to the loan disbursement that was discharged.
(iii) In the case of a borrower who requests a discharge because he or she did not sign the electronic funds transfer or master check authorization, if the agency determines that the borrower meets the conditions for discharge, it will immediately terminate any collection efforts against the borrower with respect to the discharged loan amount and any charges imposed or costs incurred by the agency related to the discharged loan amount that the borrower is, or was, otherwise obligated to pay, and within 30 days after making that determination—
(A) Notify the borrower that his or her liability with respect to the amount of the contested disbursement of the loan has been discharged;
(B) Refund to the borrower all amounts paid by the borrower to the lender or the agency with respect to the discharged loan amount, including any late fees or collection charges imposed by the lender or agency related to the discharged loan amount; and
(C) Report to all credit reporting agencies to which the lender previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(iv) The agency will take the actions required under paragraphs (e)(10)(iii) through (v) of this section if the agency determines that the borrower does not qualify for a discharge.
(12) Guaranty agency responsibilities if a borrower requests a review by the Secretary. (i) Within 30 days after receiving the borrower's request for review under paragraph (e)(8)(iii)(B)(2), (e)(9)(iv)(B)(2), (e)(10)(iii)(B), or (e)(11)(iv) of this section, the agency will forward the borrower's discharge application and all relevant documentation to the Secretary for review.
(ii) The Secretary notifies the agency and the borrower of a determination on review. If the Secretary determines that the borrower is not eligible for a discharge under this paragraph (e), within 30 days after being so informed, the agency will take the actions described in paragraphs (e)(9)(iv) through (vii) or (e)(10)(iii) through (v) of this section, as applicable.
(iii) If the Secretary determines that the borrower meets the requirements for a discharge under paragraph (e) of this section, the agency will, within 30 days after being so informed, take the actions required under paragraph (e)(8)(ii), (e)(9)(ii) or (iii), (e)(10)(ii), or (e)(11)(ii) or (iii) of this section, as applicable.
(13) Lender responsibilities. (i) If the lender is notified by a guaranty agency or the Secretary, or receives information it believes to be reliable from another source indicating that a current or former borrower may be eligible for a discharge under this paragraph (e), the lender will immediately suspend any efforts to collect from the borrower on any loan received for the program of study for which the loan was made (but may continue to receive borrower payments) and, within 30 days of receiving the information or notification, inform the borrower of the procedures for requesting a discharge.
(ii) If the borrower fails to submit the Secretary's approved application within 60 days of being notified of that option, the lender will resume collection and will be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity on the loan. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(iii) If the borrower submits an application for discharge that the lender determines is incomplete, the lender notifies the borrower of that determination and allows the borrower an additional 30-days to amend their application and provide supplemental information. If the borrower does not amend their application within 30 days of receiving the notification from the lender the borrower's application is closed as incomplete and the lender resumes collection of the loan and grants forbearance of principal and interest for the period in which collection activity was suspended.
(iv) The lender will file a claim with the guaranty agency in accordance with paragraph (g) of this section no later than 60 days after the lender receives the borrower's complete application described in paragraph (e)(3) of this section. If a lender receives a payment made by or on behalf of the borrower on the loan after the lender files a claim on the loan with the guaranty agency, the lender will forward the payment to the guaranty agency within 30 days of its receipt. The lender will assist the guaranty agency and the borrower in determining whether the borrower is eligible for discharge of the loan.
(v) The lender will comply with all instructions received from the Secretary or a guaranty agency with respect to loan discharges under this paragraph (e).
(vi) The lender will review a claim that the borrower did not endorse and did not receive the proceeds of a loan check. The lender will take the actions required under paragraphs (e)(9)(ii)(A) and (B) of this section if it determines that the borrower did not endorse the loan check, unless the lender secures persuasive evidence that the proceeds of the loan were received by the borrower or the student for whom the loan was made, as provided in paragraph (e)(1)(iii) of this section. If the lender determines that the loan check was properly endorsed or the proceeds were received by the borrower or student, the lender may consider the borrower's objection to repayment as a statement of intention not to repay the loan and may file a claim with the guaranty agency for reimbursement on that ground but will not report the loan to consumer reporting agencies as in default until the guaranty agency, or, as applicable, the Secretary, reviews the claim for relief. By filing such a claim, the lender will be deemed to have agreed to the following—
(A) If the guarantor or the Secretary determines that the borrower endorsed the loan check or the proceeds of the loan were received by the borrower or the student, any failure to satisfy due diligence requirements by the lender prior to the filing of the claim that would have resulted in the loss of reinsurance on the loan in the event of default will be waived by the Secretary; and
(B) If the guarantor or the Secretary determines that the borrower did not endorse the loan check and that the proceeds of the loan were not received by the borrower or the student, the lender will comply with the requirements specified in paragraph (e)(9)(ii)(B) of this section.
(vii) Within 30 days after being notified by the guaranty agency that the borrower's request for a discharge has been denied, the lender will notify the borrower of the reasons for the denial and, if payments are due, resume collection against the borrower. The lender will be deemed to have exercised forbearance of payment of principal and interest from the date the lender suspended collection activity, and may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during that period.
(14) Definition of identity theft. (i) For purposes of this section, identity theft is defined as the unauthorized use of the identifying information of another individual that is punishable under 18 U.S.C. 1028, 1028A, 1029, or 1030, or substantially comparable State or local law.
(ii) Identifying information includes, but is not limited to—
(A) Name, Social Security number, date of birth, official State or government issued driver's license or identification number, alien registration number, government passport number, and employer or taxpayer identification number;
(B) Unique biometric data, such as fingerprints, voiceprint, retina or iris image, or unique physical representation;
(C) Unique electronic identification number, address, or routing code; or
(D) Telecommunication identifying information or access device (as defined in 18 U.S.C. 1029(e)).
(15) Discharge without an application. A borrower's obligation to repay all or a portion of an FFEL Program loan may be discharged without an application from the borrower if the Secretary, or the guaranty agency with the Secretary's permission, determines based on information in the Secretary's or the guaranty agency's possession that the borrower qualifies for a discharge. Such information includes, but is not limited to, evidence that the school has falsified the Satisfactory Academic Progress of its students, as described in § 668.34 of this chapter.
(16) Application for a group discharge from a State Attorney General or nonprofit legal services representative. A State Attorney General or nonprofit legal services representative may submit to the Secretary an application for a group discharge under this section.
(f) Bankruptcy—(1) General. If a borrower files a petition for relief under the Bankruptcy Code, the Secretary reimburses the holder of the loan for unpaid principal and interest on the loan in accordance with paragraphs (h) through (k) of this section.
(2) Suspension of collection activity. (i) If the lender is notified that a borrower has filed a petition for relief in bankruptcy, the lender must immediately suspend any collection efforts outside the bankruptcy proceeding against the borrower and—
(A) Must suspend any collection efforts against any co-maker or endorser if the borrower has filed for relief under Chapters 12 or 13 of the Bankruptcy Code; or
(B) May suspend any collection efforts against any co-maker or endorser if the borrower has filed for relief under Chapters 7 or 11 of the Bankruptcy Code.
(ii) If the lender is notified that a co-maker or endorser has filed a petition for relief in bankruptcy, the lender must immediately suspend any collection efforts outside the bankruptcy proceeding against the co-maker or endorser and—
(A) Must suspend collection efforts against the borrower and any other parties to the note if the co-maker or endorser has filed for relief under Chapters 12 or 13 of the Bankruptcy Code; or
(B) May suspend any collection efforts against the borrower and any other parties to the note if the co-maker or endorser has filed for relief under Chapters 7 or 11 of the Bankruptcy Code.
(3) Determination of filing. The lender must determine that a borrower has filed a petition for relief in bankruptcy on the basis of receiving a notice of the first meeting of creditors or other proof of filing provided by the debtor's attorney or the bankruptcy court.
(4) Proof of claim. (i) Except as provided in paragraph (f)(4)(ii) of this section, the holder of the loan shall file a proof of claim with the bankruptcy court within—
(A) 30 days after the holder receives a notice of first meeting of creditors unless, in the case of a proceeding under chapter 7, the notice states that the borrower has no assets; or
(B) 30 days after the holder receives a notice from the court stating that a chapter 7 no-asset case has been converted to an asset case.
(ii) A guaranty agency that is a state guaranty agency, and on that basis may assert immunity from suit in bankruptcy court, and that does not assign any loans affected by a bankruptcy filing to another guaranty agency—
(A) Is not required to file a proof of claim on a loan already held by the guaranty agency; and
(B) May direct lenders not to file proofs of claim on loans guaranteed by that agency.
(5) Filing of bankruptcy claim with the guaranty agency. (i) The lender shall file a bankruptcy claim on the loan with the guaranty agency in accordance with paragraph (g) of this section, if—
(A) The borrower has filed a petition for relief under chapters 12 or 13 of the Bankruptcy Code; or
(B) The borrower has filed a petition for relief under chapters 7 or 11 of the Bankruptcy Code before October 8, 1998 and the loan has been in repayment for more than seven years (exclusive of any applicable suspension of the repayment period) from the due date of the first payment until the date of the filing of the petition for relief; or
(C) The borrower has begun an action to have the loan obligation determined to be dischargeable on grounds of undue hardship.
(ii) In cases not described in paragraph (f)(5)(i) of this section, the lender shall continue to hold the loan notwithstanding the bankruptcy proceeding. Once the bankruptcy proceeding is completed or dismissed, the lender shall treat the loan as if the lender had exercised forbearance as to repayment of principal and interest accrued from the date of the borrower's filing of the bankruptcy petition until the date the lender is notified that the bankruptcy proceeding is completed or dismissed.
(g) Claim procedures for a loan held by a lender—(1) Documentation. A lender shall provide the guaranty agency with the following documentation when filing a death, disability, closed school, false certification, or bankruptcy claim:
(i) The original or a true and exact copy of the promissory note.
(ii) The loan application, if a separate loan application was provided to the lender.
(iii) In the case of a death claim, an original or certified death certificate, or other documentation supporting the discharge request that formed the basis for the determination of death.
(iv) In the case of a disability claim, a copy of the notification described in paragraph (c)(3)(iii) or (c)(9)(ix) of this section in which the Secretary notifies the lender that the borrower is totally and permanently disabled.
(v) In the case of a bankruptcy claim—
(A) Evidence that a bankruptcy petition has been filed, all pertinent documents sent to or received from the bankruptcy court by the lender, and an assignment to the guaranty agency of any proof of claim filed by the lender regarding the loan; and
(B) A statement of any facts of which the lender is aware that may form the basis for an objection or exception to the discharge of the borrower's loan obligation in bankruptcy and all documents supporting those facts.
(vi) In the case of a closed school claim, the documentation described in paragraph (d)(3) of this section, or any other documentation as the Secretary may require;
(vii) In the case of a false certification claim, the documentation described in paragraph (e)(3) of this section.
(2) Filing deadlines. A lender shall file a death, disability, closed school, false certification, or bankruptcy claim within the following periods:
(i) Within 60 days of the date on which the lender determines that a borrower (or the student on whose behalf a parent obtained a PLUS loan) has died.
(ii) Within 60 days of the date the lender received notification from the Secretary that the borrower is totally and permanently disabled, in accordance with paragraphs (c)(3)(iii) or (c)(9)(ix) of this section.
(iii) In the case of a closed school claim, the lender shall file a claim with the guaranty agency no later than 60 days after the borrower submits to the lender the written request and sworn statement described in paragraph (d)(3) of this section or after the lender is notified by the Secretary or the Secretary's designee or by the guaranty agency to do so.
(iv) In the case of a false certification claim, the lender shall file a claim with the guaranty agency no later than 60 days after the borrower submits to the lender the written request and sworn statement described in paragraph (e)(3) of this section or after the lender is notified by the Secretary or the Secretary's designee or by the guaranty agency to do so.
(v) A lender shall file a bankruptcy claim with the guaranty agency by the earlier of—
(A) 30 days after the date on which the lender receives notice of the first meeting of creditors or other information described in paragraph (f)(3) of this section; or
(B) 15 days after the lender is served with a complaint or motion to have the loan determined to be dischargeable on grounds of undue hardship, or, if the lender secures an extension of time within which an answer may be filed, 25 days before the expiration of that extended period, whichever is later.
(h) Payment of death, disability, closed school, false certification, and bankruptcy claims by the guaranty agency—(1) General. (i) Except as provided in paragraph (h)(1)(v) of this section, the guaranty agency shall review a death, disability, bankruptcy, closed school, or false certification claim promptly and shall pay the lender on an approved claim the amount of loss in accordance with paragraphs (h)(2) and (h)(3) of this section—
(A) Not later than 45 days after the claim was filed by the lender for death, disability, and bankruptcy claims; and
(B) Not later than 90 days after the claim was filed by the lender for closed school or false certification claims.
(ii) In the case of a bankruptcy claim, the guaranty agency shall, upon receipt of the claim from the lender, immediately take those actions required under paragraph (i) of this section to oppose the discharge of the loan by the bankruptcy court.
(iii) In the case of a closed school claim or a false certification claim based on the determination that the borrower did not sign the loan application, the promissory note, or the authorization for the electronic transfer of loan funds, or that the school failed to test, or improperly tested, the student's ability to benefit, the guaranty agency shall document its determination that the borrower is eligible for discharge under paragraphs (d) or (e) of this section and pay the borrower or the holder the amount determined under paragraph (h)(2) of this section.
(iv) In reviewing a claim under this section, the issue of confirmation of subsequent loans under an MPN will not be reviewed and a claim will not be denied based on the absence of any evidence relating to confirmation in a particular loan file. However, if a court rules that a loan is unenforceable solely because of the lack of evidence of the confirmation process or processes, insurance benefits must be repaid.
(v) In the case of a disability claim based on a veteran's discharge application processed in accordance with paragraph (c)(9) of this section, the guaranty agency must review the claim promptly and not later than 45 days after the claim was filed by the lender pay the claim or return the claim to the lender in accordance with paragraph (c)(9)(xi)(B) of this section.
(2)(i) The amount of loss payable—
(A) On a death or disability claim is equal to the sum of the remaining principal balance and interest accrued on the loan, collection costs incurred by the lender and applied to the borrower's account within 30 days of the date those costs were actually incurred, and unpaid interest up to the date the lender should have filed the claim.
(B) On a bankruptcy claim is equal to the unpaid balance of principal and interest determined in accordance with paragraph (h)(3) of this section.
(ii) The amount of loss payable to a lender on a closed school claim or on a false certification claim is equal to the sum of the remaining principal balance and interest accrued on the loan, collection costs incurred by the lender and applied to the borrower's account within 30 days of the date those costs were actually incurred, and unpaid interest determined in accordance with paragraph (h)(3) of this section.
(iii) In the case of a closed school or false certification claim filed by a lender on an outstanding loan owed by the borrower, on the same date that the agency pays a claim to the lender, the agency shall pay the borrower an amount equal to the amount paid on the loan by or on behalf of the borrower, less any school tuition refunds or payments received by the holder or the borrower from a tuition recovery fund, performance bond, or other third-party source.
(iv) In the case of a claim filed by a lender based on a request received from a borrower whose loan had been repaid in full by, or on behalf of the borrower to the lender, on the same date that the agency notifies the lender that the borrower is eligible for a closed school or false certification discharge, the agency shall pay the borrower an amount equal to the amount paid on the loan by or on behalf of the borrower, less any school tuition refunds or payments received by the holder or the borrower from a tuition recovery fund, performance bond, or other third-party source.
(v) In the case of a loan that has been included in a Consolidation Loan, the agency shall pay to the holder of the borrower's Consolidation Loan, an amount equal to—
(A) The amount paid on the loan by or on behalf of the borrower at the time the loan was paid through consolidation;
(B) The amount paid by the consolidating lender to the holder of the loan when it was repaid through consolidation; minus
(C) Any school tuition refunds or payments received by the holder or the borrower from a tuition recovery fund, performance bond, or other third-party source if those refunds or payments were—
(1) Received by the borrower or received by the holder and applied to the borrower's loan balance before the date the loan was repaid through consolidation; or
(2) Received by the borrower or received by the Consolidation Loan holder on or after the date the consolidating lender made a payment to the former holder to discharge the borrower's obligation to that former holder.
(3) Payment of interest. If the guarantee covers unpaid interest, the amount payable on an approved claim includes the unpaid interest that accrues during the following periods:
(i) During the period before the claim is filed, not to exceed the period provided for in paragraph (g)(2) of this section for filing the claim.
(ii) During a period not to exceed 30 days following the receipt date by the lender of a claim returned by the guaranty agency for additional documentation necessary for the claim to be approved by the guaranty agency.
(iii) During the period required by the guaranty agency to approve the claim and to authorize payment or to return the claim to the lender for additional documentation not to exceed—
(A) 45 days for death, disability, or bankruptcy claims; or
(B) 90 days for closed school or false certification claims.
(i) Guaranty agency participation in bankruptcy proceedings—(1) Undue hardship claims. (i) In response to a petition filed prior to October 8, 1998 with regard to any bankruptcy proceeding by the borrower for discharge under 11 U.S.C. 523(a)(8) on the grounds of undue hardship, the guaranty agency must, on the basis of reasonably available information, determine whether the first payment on the loan was due more than 7 years (exclusive of any applicable suspension of the repayment period) before the filing of that petition and, if so, process the claim.
(ii) In all other cases, the guaranty agency must determine whether repayment under either the current repayment schedule or any adjusted schedule authorized under this part would impose an undue hardship on the borrower and his or her dependents.
(iii) If the guaranty agency determines that repayment would not constitute an undue hardship, the guaranty agency must then determine whether the expected costs of opposing the discharge petition would exceed one-third of the total amount owed on the loan, including principal, interest, late charges, and collection costs. If the guaranty agency has determined that the expected costs of opposing the discharge petition will exceed one-third of the total amount of the loan, it may, but is not required to, engage in the activities described in paragraph (i)(1)(iv) of this section.
(iv) The guaranty agency must use diligence and may assert any defense consistent with its status under applicable law to avoid discharge of the loan. Unless discharge would be more effectively opposed by not taking the following actions, the agency must—
(A) Oppose the borrower's petition for a determination of dischargeability; and
(B) If the borrower is in default on the loan, seek a judgment for the amount owed on the loan.
(v) In opposing a petition for a determination of dischargeability on the grounds of undue hardship, a guaranty agency may agree to discharge of a portion of the amount owed on a loan if it reasonably determines that the agreement is necessary in order to obtain a judgment on the remainder of the loan.
(2) Response by a guaranty agency to plans proposed under Chapters 11, 12, and 13. The guaranty agency shall take the following actions when a petition for relief in bankruptcy under Chapters 11, 12, or 13 is filed:
(i) The agency is not required to respond to a proposed plan that—
(A) Provides for repayment of the full outstanding balance of the loan;
(B) Makes no provision with regard to the loan or to general unsecured claims.
(ii) In any other case, the agency shall determine, based on a review of its own records and documents filed by the debtor in the bankruptcy proceeding—
(A) What part of the loan obligation will be discharged under the plan as proposed;
(B) Whether the plan itself or the classification of the loan under the plan meets the requirements of 11 U.S.C. 1129, 1225, or 1325, as applicable; and
(C) Whether grounds exist under 11 U.S.C. 1112, 1208, or 1307, as applicable, to move for conversion or dismissal of the case.
(iii) If the agency determines that grounds exist to challenge the proposed plan, the agency shall, as appropriate, object to the plan or move to dismiss the case, if—
(A) The costs of litigation of these actions are not reasonably expected to exceed one-third of the amount of the loan to be discharged under the plan; and
(B) With respect to an objection under 11 U.S.C. 1325, the additional amount that may be recovered under the plan if an objection is successful can reasonably be expected to equal or exceed the cost of litigating the objection.
(iv) The agency shall monitor the debtor's performance under a confirmed plan. If the debtor fails to make payments required under the plan or seeks but does not demonstrate entitlement to discharge under 11 U.S.C. 1328(b), the agency shall oppose any requested discharge or move to dismiss the case if the costs of litigation together with the costs incurred for objections to the plan are not reasonably expected to exceed one-third of the amount of the loan to be discharged under the plan.
(j) Mandatory purchase by a lender of a loan subject to a bankruptcy claim. (1) The lender shall repurchase from the guaranty agency a loan held by the agency pursuant to a bankruptcy claim paid to that lender, unless the guaranty agency sells the loan to another lender, promptly after the earliest of the following events:
(i) The entry of an order denying or revoking discharge or dismissing a proceeding under any chapter.
(ii) A ruling in a proceeding under chapter 7 or 11 that the loan is not dischargeable under 11 U.S.C. 523(a)(8) or other applicable law.
(iii) The entry of an order granting discharge under chapter 12 or 13, or confirming a plan of arrangement under chapter 11, unless the court determined that the loan is dischargeable under 11 U.S.C. 523(a)(8) on grounds of undue hardship.
(2) The lender may capitalize all outstanding interest accrued on a loan purchased under paragraph (j) of this section to cover any periods of delinquency prior to the bankruptcy action through the date the lender purchases the loan and receives the supporting loan documentation from the guaranty agency.
(k) Claims for reimbursement from the Secretary on loans held by guarantee agencies. (1)(i) The Secretary reimburses the guaranty agency for its losses on bankruptcy claims paid to lenders after—
(A) A determination by the court that the loan is dischargeable under 11 U.S.C. 523(a)(8) with respect to a proceeding initiated under chapter 7 or chapter 11; or
(B) With respect to any other loan, after the agency pays the claim to the lender.
(ii) The guaranty agency shall refund to the Secretary the full amount of reimbursement received from the Secretary on a loan that a lender repurchases under this section.
(2) The Secretary pays a death, disability, bankruptcy, closed school, or false certification claim in an amount determined under § 682.402(k)(5) on a loan held by a guaranty agency after the agency has paid a default claim to the lender thereon and received payment under its reinsurance agreement. The Secretary reimburses the guaranty agency only if—
(i) The Secretary determines that the borrower (or each of the co-makers of a PLUS loan) has become totally and permanently disabled since applying for the loan, or the guaranty agency determines that the borrower (or the student for whom a parent obtained a PLUS loan or each of the co-makers of a PLUS loan) has died, or has filed for relief in bankruptcy, in accordance with the procedures in paragraph (b), (c), or (f) of this section, or the student was unable to complete an educational program because the school closed, or the borrower's eligibility to borrow (or the student's eligibility in the case of a PLUS loan) was falsely certified by an eligible school. For purposes of this paragraph, references to the “lender” and “guaranty agency” in paragraphs (b) through (f) of this section mean the guaranty agency and the Secretary respectively;
(ii) In the case of a Stafford, SLS, or PLUS loan, the Secretary determines that the borrower (or each of the co-makers of a PLUS loan) has become totally and permanently disabled since applying for the loan, the guaranty agency determines that the borrower (or the student for whom a parent obtained a PLUS loan, or each of the co-makers of a PLUS loan) has died, or has filed the petition for relief in bankruptcy within 10 years of the date the borrower entered repayment, exclusive of periods of deferment or periods of forbearance granted by the lender that extended the 10-year maximum repayment period, or the borrower (or the student for whom a parent received a PLUS loan) was unable to complete an educational program because the school closed, or the borrower's eligibility to borrow (or the student's eligibility in the case of a PLUS loan) was falsely certified by an eligible school;
(iii) In the case of a Consolidation loan, the borrower (or one of the co-makers) has died, is determined by the Secretary to be totally and permanently disabled under § 682.402(c), or has filed the petition for relief in bankruptcy within the maximum repayment period described in § 682.209(h)(2), exclusive of periods of deferment or periods of forbearance granted by the lender that extended the maximum repayment period;
(iv) The guaranty agency has not written off the loan in accordance with the procedures established by the agency under § 682.410(b)(6)(x), except for closed school and false certification discharges; and
(v) The guaranty agency has exercised due diligence in the collection of the loan in accordance with the procedures established by the agency under § 682.410(b)(6)(x), until the borrower (or the student for whom a parent obtained a PLUS loan, or each of the co-makers of a PLUS loan) has died, or the borrower (or each of the co-makers of a PLUS loan) has become totally and permanently disabled or filed a Chapter 12 or Chapter 13 petition, or had the loan discharged in bankruptcy, or for closed school and false certification claims, the guaranty agency receives a request for discharge from the borrower or another party.
(3) [Reserved]
(4) Within 30 days of receiving reimbursement for a closed school or false certification claim, the guaranty agency shall pay—
(i) The borrower an amount equal to the amount paid on the loan by or on behalf of the borrower, less any school tuition refunds or payments received by the holder, guaranty agency, or the borrower from a tuition recovery fund, performance bond, or other third-party source; or
(ii) The amount determined under paragraph (h)(2)(iv) of this section to the holder of the borrower's Consolidation Loan.
(5) The Secretary pays the guaranty agency a percentage of the outstanding principal and interest that is equal to the complement of the reinsurance percentage paid on the loan. This interest includes interest that accrues during—
(i) For death or bankruptcy claims, the shorter of 60 days or the period from the date the guaranty agency determines that the borrower (or the student for whom a parent obtained a PLUS loan, or each of the co-makers of a PLUS loan) died, or filed a petition for relief in bankruptcy until the Secretary authorizes payment;
(ii) For disability claims, the shorter of 60 days or the period from the date the Secretary makes a determination that the borrower became totally and permanently disabled until the Secretary authorizes payment; or
(iii) For closed school or false certification claims, the period from the date on which the guaranty agency received payment from the Secretary on a default claim to the date on which the Secretary authorizes payment of the closed school or false certification claim.
(l) Unpaid refund discharge—(1) Unpaid refunds in closed school situations. In the case of a school that has closed, the Secretary reimburses the guarantor of a loan and discharges a former or current borrower's (and any endorser's) obligation to repay that portion of an FFEL Program loan (disbursed, in whole or in part on or after January 1, 1986) equal to the refund that should have been made by the school under applicable Federal law and regulations, including this section. Any accrued interest and other charges (late charges, collection costs, origination fees, and insurance premiums or Federal default fees) associated with the unpaid refund are also discharged.
(2) Unpaid refunds in open school situations. In the case of a school that is open, the guarantor discharges a former or current borrower's (and any endorser's) obligation to repay that portion of an FFEL loan (disbursed, in whole or in part, on or after January 1, 1986) equal to the amount of the refund that should have been made by the school under applicable Federal law and regulations, including this section, if—
(i) The borrower (or the student on whose behalf a parent borrowed) is not attending the school that owes the refund; and
(ii) The guarantor receives documentation regarding the refund and the borrower and guarantor have been unable to resolve the unpaid refund within 120 days from the date the guarantor receivesa complete application in accordance with paragraph (l)(4) of this section. Any accrued interest and other charges (late charges, collection costs, origination fees, and insurance premiums or Federal default fees) associated with the amount of the unpaid refund amount are also discharged.
(3) Relief to borrower (and any endorser) following discharge. (i) If a borrower receives a discharge of a portion of a loan under this section, the borrower is reimbursed for any amounts paid in excess of the remaining balance of the loan (including accrued interest, late charges, collection costs, origination fees, and insurance premiums or Federal default fees) owed by the borrower at the time of discharge.
(ii) The holder of the loan reports the discharge of a portion of a loan under this section to all credit reporting agencies to which the holder of the loan previously reported the status of the loan.
(4) Borrower qualification for discharge. To receive a discharge of a portion of a loan under this section, a borrower must submit a written application to the holder or guaranty agency except as provided in paragraph (l)(5)(iv) of this section. The application requests the information required to calculate the amount of the discharge and requires the borrower to sign a statement swearing to the accuracy of the information in the application. The statement need not be notarized but must be made by the borrower under penalty of perjury. In the statement, the borrower must—
(i) State that the borrower (or the student on whose behalf a parent borrowed)—
(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986 to attend a school;
(B) Did not attend, withdrew, or was terminated from the school within a timeframe that entitled the borrower to a refund; and
(C) Did not receive the benefit of a refund to which the borrower was entitled either from the school or from a third party, such as a holder of a performance bond or a tuition recovery program.
(ii) State whether the borrower has any other application for discharge pending for this loan; and
(iii) State that the borrower—
(A) Agrees to provide upon request by the Secretary or the Secretary's designee other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for an unpaid refund discharge under this section; and
(B) Agrees to cooperate with the Secretary or the Secretary's designee in enforcement actions in accordance with paragraph (e) of this section and to transfer any right to recovery against a third party to the Secretary in accordance with paragraph (d) of this section.
(5) Unpaid refund discharge procedures. (i) Except for the requirements of paragraph (l)(5)(iv) of this section related to an open school, if the holder or guaranty agency learns that a school did not pay a refund of loan proceeds owed under applicable law and regulations, the holder or the guaranty agency sends the borrower a discharge application and an explanation of the qualifications and procedures for obtaining a discharge. The holder of the loan also promptly suspends any efforts to collect from the borrower on any affected loan.
(ii) If the borrower returns the application, specified in paragraph (l)(4) of this section, the holder or the guaranty agency must review the application to determine whether the application appears to be complete. In the case of a loan held by a lender, once the lender determines that the application appears complete, it must provide the application and all pertinent information to the guaranty agency including, if available, the borrower's last date of attendance. If the borrower returns the application within 60 days, the lender must extend the period during which efforts to collect on the affected loan are suspended to the date the lender receives either a denial of the request or the unpaid refund amount from the guaranty agency. At the conclusion of the period during which the collection activity was suspended, the lender may capitalize any interest accrued and not paid during that period in accordance with § 682.202(b).
(iii) If the borrower fails to return the application within 60 days, the holder of the loan resumes collection efforts and grants forbearance of principal and interest for the period during which the collection activity was suspended. The holder may capitalize any interest accrued and not paid during that period in accordance with § 682.202(b).
(iv) The guaranty agency may, with the approval of the Secretary, discharge a portion of a loan under this section without an application if the guaranty agency determines, based on information in the guaranty agency's possession, that the borrower qualifies for a discharge.
(v) If the holder of the loan or the guaranty agency determines that the information contained in its files conflicts with the information provided by the borrower, the guaranty agency must use the most reliable information available to it to determine eligibility for and the appropriate payment of the refund amount.
(vi) If the holder of the loan is the guaranty agency and the agency determines that the borrower qualifies for a discharge of an unpaid refund, the guaranty agency must suspend any efforts to collect on the affected loan and, within 30 days of its determination, discharge the appropriate amount and inform the borrower of its determination. Absent documentation of the exact amount of refund due the borrower, the guaranty agency must calculate the amount of the unpaid refund using the unpaid refund calculation defined in paragraph (o) of this section.
(vii) If the guaranty agency determines that a borrower does not qualify for an unpaid refund discharge, (or, if the holder is the lender and is informed by the guarantor that the borrower does not qualify for a discharge)—
(A) Within 30 days of the guarantor's determination, the agency must notify the borrower in writing of the reason for the determination and of the borrower's right to request a review of the agency's determination. The guaranty agency must make a determination within 30 days of the borrower's submission of additional documentation supporting the borrower's eligibility that was not considered in any prior determination. During the review period, collection activities must be suspended; and
(B) The holder must resume collection if the determination remains unchanged and grant forbearance of principal and interest for any period during which collection activity was suspended under this section. The holder may capitalize any interest accrued and not paid during these periods in accordance with § 682.202(b).
(viii) If the guaranty agency determines that a current or former borrower at an open school may be eligible for a discharge under this section, the guaranty agency must notify the lender and the school of the unpaid refund allegation. The notice to the school must include all pertinent facts available to the guaranty agency regarding the alleged unpaid refund. The school must, no later than 60 days after receiving the notice, provide the guaranty agency with documentation demonstrating, to the satisfaction of the guarantor, that the alleged unpaid refund was either paid or not required to be paid.
(ix) In the case of a school that does not make a refund or provide sufficient documentation demonstrating the refund was either paid or was not required, within 60 days of its receipt of the allegation notice from the guaranty agency, relief is provided to the borrower (and any endorser) if the guaranty agency determines the relief is appropriate. The agency must forward documentation of the school's failure to pay the unpaid refund to the Secretary.
(m) Unpaid refund discharge procedures for a loan held by a lender. In the case of an unpaid refund discharge request, the lender must provide the guaranty agency with documentation related to the borrower's qualification for discharge as specified in paragraph (l)(4) of this section.
(n) Payment of an unpaid refund discharge request by a guaranty agency—(1) General. The guaranty agency must review an unpaid refund discharge request promptly and must pay the lender the amount of loss as defined in paragraphs (l)(1) and (l)(2) of this section, related to the unpaid refund not later than 45 days after a properly filed request is made.
(2) Determination of the unpaid refund discharge amount to the lender. The amount of loss payable to a lender on an unpaid refund includes that portion of an FFEL Program loan equal to the amount of the refund required under applicable Federal law and regulations, including this section, and including any accrued interest and other charges (late charges, collection costs, origination fees, and insurance premiums or Federal default fees) associated with the unpaid refund.
(o)(1) Determination of amount eligible for discharge. The guaranty agency determines the amount eligible for discharge based on information showing the refund amount or by applying the appropriate refund formula to information that the borrower provides or that is otherwise available to the guaranty agency. For purposes of this section, all unpaid refunds are considered to be attributed to loan proceeds.
(2) If the information in paragraph (o)(1) of this section is not available, the guaranty agency uses the following formulas to determine the amount eligible for discharge:
(i) In the case of a student who fails to attend or whose withdrawal or termination date is before October 7, 2000 and who completes less than 60 percent of the loan period, the guaranty agency discharges the lesser of the institutional charges unearned or the loan amount. The guaranty agency determines the amount of the institutional charges unearned by—
(A) Calculating the ratio of the amount of time in the loan period after the student's last day of attendance to the actual length of the loan period; and
(B) Multiplying the resulting factor by the institutional charges assessed the student for the loan period.
(ii) In the case of a student who fails to attend or whose withdrawal or termination date is on or after October 7, 2000 and who completes less than 60 percent of the loan period, the guaranty agency discharges the loan amount unearned. The guaranty agency determines the loan amount unearned by—
(A) Calculating the ratio of the amount of time remaining in the loan period after the student's last day of attendance to the actual length of the loan period; and
(B) Multiplying the resulting factor by the total amount of title IV grants and loans received by the student, or if unknown, the loan amount.
(iii) In the case of a student who completes 60 percent or more of the loan period, the guaranty agency does not discharge any amount because a student who completes 60 percent or more of the loan period is not entitled to a refund.
(p) Requests for reimbursement from the Secretary on loans held by guaranty agencies. The Secretary reimburses the guaranty agency for its losses on unpaid refund request payments to lenders or borrowers in an amount that is equal to the amount specified in paragraph (n)(2) of this section.
(q) Payments received after the guaranty agency's payment of an unpaid refund request. (1) The holder must promptly return to the sender any payment on a fully discharged loan, received after the guaranty agency pays an unpaid refund request unless the sender is required to pay (as in the case of a tuition recovery fund) in which case, the payment amount must be forwarded to the Secretary. At the same time that the holder returns the payment, it must notify the borrower that there is no obligation to repay a loan fully discharged.
(2) If the holder has returned a payment to the borrower, or the borrower's representative, with the notice described in paragraph (q)(1) of this section, and the borrower (or representative) continues to send payments to the holder, the holder must remit all of those payments to the Secretary.
(3) If the loan has not been fully discharged, payments must be applied to the remaining debt.
(r) Payments received after the Secretary's payment of a death, disability, closed school, false certification, or bankruptcy claim. (1) If the guaranty agency receives any payments from or on behalf of the borrower on or attributable to a loan that has been discharged in bankruptcy on which the Secretary previously paid a bankruptcy claim, the guaranty agency must return 100 percent of these payments to the sender. The guaranty agency must promptly return, to the sender, any payment on a cancelled or discharged loan made by the sender and received after the Secretary pays a closed school or false certification claim. At the same time that the agency returns the payment, it must notify the borrower that there is no obligation to repay a loan discharged on the basis of death, bankruptcy, false certification, or closing of the school.
(2) If the guaranty agency receives any payments from or on behalf of the borrower on or attributable to a loan that has been assigned to the Secretary based on the determination that the borrower is eligible for a total and permanent disability discharge, the guaranty agency must promptly return these payments to the sender. At the same time that the agency returns the payments, it must notify the borrower that there is no obligation to make payments on the loan after it has been discharged due to a total and permanent disability, unless the loan is reinstated in accordance with paragraph (c) of this section, or the Secretary directs the borrower otherwise.
(3) When the Secretary discharges the loan, the Secretary returns to the sender any payments received by the Secretary on the loan after the date the borrower became totally and permanently disabled.
(4) The guaranty agency shall remit to the Secretary all payments received from a tuition recovery fund, performance bond, or other third party with respect to a loan on which the Secretary previously paid a closed school or false certification claim.
(5) If the guaranty agency has returned a payment to the borrower, or the borrower's representative, with the notice described in paragraphs (r)(1) or (r)(2) of this section, and the borrower (or representative) continues to send payments to the guaranty agency, the agency must remit all of those payments to the Secretary.
(s) Applicable suspension of the repayment period. For purposes of this section and 11 U.S.C. 523(a)(8)(A) with respect to loans guaranteed under the FFEL Program, an applicable suspension of the repayment period—
(1) Includes any period during which the lender does not require the borrower to make a payment on the loan.
(2) Begins on the date on which the borrower qualifies for the requested deferment as provided in § 682.210(a)(5) or the lender grants the requested forbearance;
(3) Closes on the later of the date on which—
(i) The condition for which the requested deferment or forbearance was received ends; or
(ii) The lender receives notice of the end of the condition for which the requested deferment or forbearance was received, if the condition ended earlier than represented by the borrower at the time of the request and the borrower did not notify timely the lender of the date on which the condition actually ended;
(4) Includes the period between the end of the borrower's grace period and the first payment due date established by the lender in the case of a borrower who entered repayment without the knowledge of the lender;
(5) Includes the period between the filing of the petition for relief and the date on which the proceeding is completed or dismissed, unless payments have been made during that period in amounts sufficient to meet the amount owed under the repayment schedule in effect when the petition was filed.
(a) General. (1) The Secretary may enter into a reinsurance agreement with a guaranty agency that has a basic program agreement. Except as provided in paragraph (b) of this section, under a reinsurance agreement, the Secretary reimburses the guaranty agency for—
(i) 95 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1998;
(ii) 98 percent of its losses on default claim payments to lenders for loans for which the first disbursement is made on or after October 1, 1993, and before October 1, 1998; or
(iii) 100 percent of its losses on default claim payments to lenders—
(A) For loans for which the first disbursement is made prior to October 1, 1993;
(B) For loans made under an approved lender-of-last-resort program;
(C) For loans transferred under a plan approved by the Secretary from an insolvent guaranty agency or a guaranty agency that withdraws its participation in the FFEL Program;
(D) For loans that meet the definition of exempt claims in paragraph (a)(2)(iii) of this section;
(E) For a guaranty agency that entered into a basic program agreement under section 428(b) of the Act after September 30, 1976, or was not actively carrying on a loan guarantee program covered by a basic program agreement on October 1, 1976 for five consecutive fiscal years beginning with the first year of its operation.
(2) For purposes of this section—
(i) Losses means the amount of unpaid principal and accrued interest the agency paid on a default claim filed by a lender on a reinsured loan, minus payments made by or on behalf of the borrower after default but before the Secretary reimburses the agency;
(ii) Default aversion assistance means the activities of a guaranty agency that are designed to prevent a default by a borrower who is at least 60 days delinquent and that are directly related to providing collection assistance to the lender.
(iii) Exempt claims means claims with respect to loans for which it is determined that the borrower (or student on whose behalf a parent has borrowed), without the lender's or the institution's knowledge at the time the loan was made, provided false or erroneous information or took actions that caused the borrower or the student to be ineligible for all of a portion of the loan or for interest benefits on the loan.
(3) A guaranty agency's loss on a loan that was outstanding when a reinsurance agreement was executed is covered by the reinsurance agreement only if the default on the loan occurs after the effective date of the agreement.
(4) If a lender has requested default aversion assistance as described in paragraph (a)(2)(ii) of this section, the agency must, upon request of the school at which the borrower received the loan, notify the school of the lender's request. The guaranty agency may not charge the school or the school's agent for providing this notification and must accept a blanket request from the school to be notified whenever any of the school's current or former students are the subject of a default aversion assistance request. The agency must notify schools annually of the option to make this blanket request.
(b) Reduction in reinsurance rate. (1) If the total of reinsurance claims paid by the Secretary to a guaranty agency during any fiscal year reaches 5 percent of the amount of loans in repayment at the end of the preceding fiscal year, the Secretary's reinsurance payment on a default claim subsequently paid by the guaranty agency during that fiscal year equals—
(i) 90 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made before October 1, 1993 or transferred under a plan approved by the Secretary from an insolvent guaranty agency or a guaranty agency that withdraws its participation in the FFEL Program;
(ii) 88 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1993, and before October 1, 1998; or
(iii) 85 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1998.
(2) If the total of reinsurance claims paid by the Secretary to a guaranty agency during any fiscal year reaches 9 percent of the amount of loans in repayment at the end of the preceding fiscal year, the Secretary's reinsurance payment on a default claim subsequently paid by the guaranty agency during that fiscal year equals—
(i) 80 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made before October 1, 1993 or transferred under a plan approved by the Secretary from an insolvent guaranty agency or a guaranty agency that withdraws its participation in the FFEL Program;
(ii) 78 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1993, and before October 1, 1998; or
(iii) 75 percent of its losses on default claim payments to lenders on loans for which the first disbursement is made on or after October 1, 1998.
(3) For purposes of this section, the total of reinsurance claims paid by the Secretary to a guaranty agency during any fiscal year does not include amounts paid on claims by the guaranty agency—
(i) On loans considered in default under § 682.412(e);
(ii) Under a policy established by the agency that addresses instances in which, for a non-school originated loan, a lender learns that the school terminated its teaching activities while a student was enrolled during the academic period covered by the loan;
(iii) That were filed by lenders at the direction of the Secretary; or
(iv) On loans made under a guaranty agency's approved lender-of-last-resort program.
(4) For purposes of this section, amount of loans in repayment means—
(i) The sum of—
(A) The original principal amount of all loans guaranteed by the agency; and
(B) The original principal amount of any loans on which the guarantee was transferred to the agency from another agency;
(ii) Minus the original principal amount of all loans on which—
(A) The loan guarantee was canceled;
(B) The loan guarantee was transferred to another agency;
(C) The borrower has not yet reached the repayment period;
(D) Payment in full has been made by the borrower;
(E) The borrower was in deferment status at the time repayment was scheduled to begin and remains in deferment status;
(F) Reinsurance coverage has been lost and cannot be regained; and
(G) The agency paid claims, excluding the amount of those claims—
(1) Paid under § 682.412(e);
(2) Paid under a policy established by the agency that addresses the condition identified in paragraph (b)(3)(ii) of this section; or
(3) Paid at the direction of the Secretary.
(c) Submission of reinsurance rate base data. The guaranty agency shall submit to the Secretary the quarterly report required by the Secretary for the previous quarter ending September 30 containing complete and accurate data in order for the Secretary to calculate the amount of loans in repayment at the end of the preceding fiscal year. The Secretary does not pay a reinsurance claim to the guaranty agency after the date the guarterly report is due until the quaranty agency submits a complete and accurate report.
(d) Reinsurance fee. (1) Except for loans that were refinanced pursuant to section 428B(e)(2) and (3) of the Act, and all loans guaranteed on or after October 1, 1993, a guaranty agency shall pay to the Secretary during each fiscal year in quarterly installments a reinsurance fee equal to—
(i) 0.25 percent of the total principal amount of the Stafford, SLS, and PLUS loans on which guarantees were issued by that agency during that fiscal year; or
(ii) 0.5 percent of the total principal amount of the Stafford, SLS, and PLUS loans on which guarantees were issued by that agency during that fiscal year if the agency's reinsurance claims paid reach the amount described in paragraph (b)(1) of this section at any time during that fiscal year.
(2) The agency that is the original guarantor of a loan shall pay the reinsurance fee to the Secretary even if the guaranty agency transfers its guarantee obligation on the loan to another guaranty agency.
(3) The guaranty agency shall pay the reinsurance fee required by paragraph (d)(1) of this section due the Secretary for each calendar quarter ending March 31, June 30, September 30, and December 31, within 90 days after the end of the applicable quarter or within 30 days after receiving written notice from the Secretary that the fees are due, whichever is earlier.
(e) Initiation or extension of agreements. In deciding whether to enter into or extend a reinsurance agreement, or, if an agreement has been terminated, whether to enter into a new agreement, the Secretary considers the adequacy of—
(1) Efforts by the guaranty agency and the lenders to which it provides guarantees to collect outstanding loans as required by § 682.410(b) (6) or (7), and § 682.411;
(2) Efforts by the guaranty agency to make FFEL loans available to all eligible borrowers; and
(3) Other relevant aspects of the guaranty agency's program operations.
(f) Application of borrower payments. A payment made to a guaranty agency by a borrower on a defaulted loan must be applied first to the collection costs incurred to collect that amount and then to other incidental charges, such as late charges, then to accrued interest and then to principal.
(g) Share of borrower payments returned to the Secretary. (1) After an agency pays a default claim to a holder using assets of the Federal Fund, the agency must pay to the Secretary the portion of payments received on those defaulted loans remaining after—
(i) The agency deposits into the Federal Fund the amount of those payments equal to the applicable complement of the reinsurance percentage that was in effect at the time the claim was paid; and
(ii) The agency has deducted an amount equal to—
(A) 30 percent of borrower payments received before October 1, 1993;
(B) 27 percent of borrower payments received on or after October 1, 1993, and before October 1, 1998;
(C) 24 percent of borrower payments received on or after October 1, 1998, and before October 1, 2003; and
(D) 23 percent of borrower payments received on or after October 1, 2003.
(E) 16 percent of borrower payments received on or after October 1, 2007.
(2) Unless the Secretary approves otherwise, the guaranty agency must pay to the Secretary the Secretary's share of borrower payments within 45 days of its receipt of the payments.
(h) Account maintenance fee. A guaranty agency is paid an account maintenance fee based on the original principal amount of outstanding FFEL Program loans insured by the agency. For fiscal years 1999 and 2000, the fee is 0.12 percent of the original principal amount of outstanding loans. For fiscal years 2000 through 2007, the fee is 0.10 percent of the original principal amount of outstanding loans. After fiscal year 2007, the fee is 0.06 percent of the original principal amount of outstanding loans.
(i) Loan processing and issuance fee. A guaranty agency is paid a loan processing and issuance fee based on the principal amount of FFEL Program loans originated during a fiscal year that are insured by the agency. The fee is paid quarterly. No payment is made for loans for which the disbursement checks have not been cashed or for which electronic funds transfers have not been completed. For fiscal years 1999 through 2003, the fee is 0.65 percent of the principal amount of loans originated. Beginning October 1, 2003, the fee is 0.40 percent.
(j) Default aversion fee—(1) General. If a guaranty agency performs default aversion activities on a delinquent loan in response to a lender's request for default aversion assistance on that loan, the agency receives a default aversion fee. The fee may not be paid more than once on any loan. The lender's request for assistance must be submitted to the guaranty agency no earlier than the 60th day and no later than the 120th day of the borrower's delinquency. A guaranty agency may not restrict a lender's choice of the date during this period on which the lender submits a request for default aversion assistance.
(2) Amount of fees transferred. No more frequently than monthly, a guaranty agency may transfer default aversion fees from the Federal Fund to its Operating Fund. The amount of the fees that may be transferred is equal to—
(i) One percent of the unpaid principal and accrued interest owed on loans that were submitted by lenders to the agency for default aversion assistance; minus
(ii) One percent of the unpaid principal and accrued interest owed by borrowers on default claims that—
(A) Were paid by the agency for the same time period for which the agency transferred default aversion fees from its Federal Fund; and
(B) For which default aversion fees have been received by the agency.
(3) Calculation of fee. (i) For purposes of calculating the one percent default aversion fee described in paragraph (j)(2)(i) of this section, the agency must use the total unpaid principal and accrued interest owed by the borrower as of the date the default aversion assistance request is submitted by the lender.
(ii) For purposes of paragraph (j)(2)(ii) of this section, the agency must use the total unpaid principal and accrued interest owed by the borrower as of the date the agency paid the default claim.
(4) Prohibition against conflicts. If a guaranty agency contracts with an outside entity to perform any default aversion activities, that outside entity may not—
(i) Hold or service the loan; or
(ii) Perform collection activities on the loan in the event of default within 3 years of the claim payment date.
(k) Other terms. The reinsurance agreement contains other terms and conditions that the Secretary finds necessary to—
(1) Promote the purposes of the FFEL programs and to protect the United States from unreasonable risks of loss;
(2) Ensure proper and efficient administration of the loan guarantee program; and
(3) Ensure that due diligence will be exercised in the collection of loans.
(a) General. (1) A guaranty agency that has a basic program agreement must enter into a loan rehabilitation agreement with the Secretary. The guaranty agency must establish a loan rehabilitation program for all borrowers with an enforceable promissory note for the purpose of rehabilitating defaulted loans, except for loans for which a judgment has been obtained, loans on which a default claim was filed under § 682.412, and loans on which the borrower has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance, so that the loan may be purchased, if practicable, by an eligible lender and removed from default status.
(2) A loan is considered to be rehabilitated only after—
(i) The borrower has made and the guaranty agency has received nine of the ten qualifying payments required under a monthly repayment agreement.
(A) A qualifying payment is—
(1) Made voluntarily;
(2) In the full amount required; and
(3) Received within 20 days of the due date for the payment, and
(B) All nine payments are received within a 10-month period that begins with the month in which the first required due date falls and ends with the ninth consecutive calendar month following that month, and
(ii) The loan has been sold to an eligible lender or assigned to the Secretary.
(3)(i) If a borrower's loan is being collected by administrative wage garnishment while the borrower is also making monthly payments on the same loan under a loan rehabilitation agreement, the guaranty agency must continue collecting the loan by administrative wage garnishment until the borrower makes five qualifying monthly payments under the rehabilitation agreement, unless the guaranty agency is otherwise precluded from doing so under § 682.410(b)(9).
(ii) After the borrower makes the fifth qualifying monthly payment, the guaranty agency must, unless otherwise directed by the borrower, suspend the garnishment order issued to the borrower's employer.
(iii) A borrower may only obtain the benefit of a suspension of administrative wage garnishment while also attempting to rehabilitate a defaulted loan once.
(4) After the loan has been rehabilitated, the borrower regains all benefits of the program, including any remaining deferment eligibility under section 428(b)(1)(M) of the Act, from the date of the rehabilitation. Effective for any loan that is rehabilitated on or after August 14, 2008, the borrower cannot rehabilitate the loan again if the loan returns to default status following the rehabilitation.
(b) Terms of agreement. In the loan rehabilitation agreement, the guaranty agency agrees to ensure that its loan rehabilitation program meets the following requirements at all times:
(1) A borrower may request rehabilitation of the borrower's defaulted loan held by the guaranty agency. In order to be eligible for rehabilitation of the loan, the borrower must voluntarily make at least 9 of the 10 payments required under a monthly repayment agreement.
(i) Each payment must be—
(A) Made voluntarily;
(B) For the full amount required;
(C) Received within 20 days of the due date for the payment; and
(D) Reasonable and affordable.
(ii) All 9 payments must be received within a 10-month period that begins with the month in which the first required due date falls and ends with the ninth consecutive calendar month following that month.
(iii) The guaranty agency initially considers the borrower's reasonable and affordable payment amount to be an amount equal to 15 percent of the amount by which the borrower's Adjusted Gross Income (AGI) exceeds 150 percent of the poverty guideline amount applicable to the borrower's family size and State, divided by 12, except that if this amount is less than $5, the borrower's monthly rehabilitation payment is $5.
(iv) The guaranty agency or its agents may calculate the payment amount based on information provided orally by the borrower or the borrower's representative and provide the borrower with a rehabilitation agreement using that amount. The guaranty agency must request documentation from the borrower to confirm the borrower's AGI and family size. If the borrower does not provide the guaranty agency or its agents with any documentation requested by the guaranty agency to calculate or confirm the reasonable and affordable payment amount, within a reasonable time deadline set by the guaranty agency or its agent, the rehabilitation agreement provided is null and void.
(v) The reasonable and affordable payment amount calculated under this section must not be—
(A) A required minimum loan payment amount (e.g., $50) if the agency determines that a smaller amount is reasonable and affordable;
(B) A percentage of the borrower's total loan balance; or
(C) Based on other criteria unrelated to the borrower's total financial circumstances.
(vi) Within 15 business days of its determination of the borrower's loan rehabilitation payment amount, the guaranty agency must provide the borrower with a written rehabilitation agreement which includes the borrower's payment amount calculated under paragraph (b)(1)(iii), a prominent statement that the borrower may object orally or in writing to the payment amount, with the method and timeframe for raising such an objection, and an explanation of any other terms and conditions applicable to the required series of payments that must be made before the borrower's account can be considered for repurchase by an eligible lender or assignment to the Secretary (i.e., rehabilitated). To accept the agreement, the borrower must sign and return the agreement or accept the agreement electronically under a process provided by the agency. The agency may not impose any conditions unrelated to the amount or timing of the rehabilitation payments in the rehabilitation agreement. The written rehabilitation agreement must inform the borrower—
(A) Of the effects of having the loans rehabilitated (e.g., removal of the record of default from the borrower's credit history and return to normal repayment);
(B) Of the amount of any collection costs to be added to the unpaid principal of the loan when the loan is sold to an eligible lender or assigned to the Secretary, which may not exceed 16 percent of the unpaid principal and accrued interest on the loan at the time of the sale or assignment; and
(C) That the rehabilitation agreement is null and void if the borrower fails to provide the documentation required to confirm the monthly payment calculated under paragraph (b)(1)(iii) of this section.
(vii) If the borrower objects to the monthly payment amount determined under paragraph (b)(1)(iii) of this section, the guaranty agency or its agents must recalculate the payment amount based solely on information provided on a form approved by the Secretary and, if requested, supporting documentation from the borrower and other sources, and must consider—
(A) The borrower's, and if applicable, the spouse's current disposable income, including public assistance payments, and other income received by the borrower and the spouse, such as welfare benefits, Social Security benefits, Supplemental Security Income, and workers' compensation. Spousal income is not considered if the spouse does not contribute to the borrower's household income;
(B) Family size as defined in § 682.215(a)(3); and
(C) Reasonable and necessary expenses, which include—
(1) Food;
(2) Housing;
(3) Utilities;
(4) Basic communication expenses;
(5) Necessary medical and dental costs;
(6) Necessary insurance costs;
(7) Transportation costs;
(8) Dependent care and other work-related expenses;
(9) Legally required child and spousal support;
(10) Other title IV and non-title IV student loan payments; and
(11) Other expenses approved by the Secretary.
(viii) The guaranty agency must provide the borrower with a new written rehabilitation agreement confirming the borrower's recalculated reasonable and affordable payment amount within the timeframe specified in paragraph (b)(1)(vii) of this section. To accept the agreement, the borrower must sign and return the agreement or accept the agreement electronically under a process provided by the agency.
(ix) The agency must include any payment made under § 682.401(b)(1) in determining whether the 9 out of 10 payments required under paragraph (b)(1) of this section have been made.
(x) A borrower may request that the monthly payment amount be adjusted due to a change in the borrower's total financial circumstances only upon providing the documentation specified in paragraph (b)(1)(vii) of this section.
(xi) Except as provided in paragraph (c) of this section, during the rehabilitation period, the guaranty agency must limit contact with the borrower on the loan being rehabilitated to collection activities that are required by law or regulation and to communications that support the rehabilitation.
(2)(i) For the purposes of this section, payment in the full amount required means payment of an amount that is reasonable and affordable, based on the borrower's total financial circumstances, as agreed to by the borrower and the agency. Voluntary payments are those made directly by the borrower and do not include payments obtained by Federal offset, garnishment, income or asset execution, or after a judgment has been entered on a loan. A guaranty agency must attempt to secure a lender to purchase the loan at the end of the 9- or 10-month payment period as applicable.
(ii) If the guaranty agency has been unable to sell the loan, the guaranty agency must assign the loan to the Secretary.
(3) Upon the sale of a rehabilitated loan to an eligible lender or assignment to the Secretary—
(i) The guaranty agency must, within 45 days of the sale or assignment—
(A) Provide notice to the prior holder of such sale or assignment, and
(B) Request that any consumer reporting agency to which the default was reported remove the record of default from the borrower's credit history.
(ii) The prior holder of the loan must, within 30 days of receiving the notification from the guaranty agency, request that any consumer reporting agency to which the default claim payment or other equivalent record was reported remove such record from the borrower's credit history.
(4)(i) An eligible lender purchasing a rehabilitated loan must establish a repayment schedule that meets the same requirements that are applicable to other FFEL Program loans of the same loan type as the rehabilitated loan and must permit the borrower to choose any statutorily available repayment plan for that loan type. The lender must treat the first payment made under the nine payments as the first payment under the applicable maximum repayment term, as defined under § 682.209(a) or (e). For Consolidation loans, the maximum repayment term is based on the balance outstanding at the time of loan rehabilitation.
(ii) The lender must not consider the purchase of a rehabilitated loan as entry into repayment or resumption of repayment for the purposes of interest capitalization under § 682.202(b).
(c) A guaranty agency must make available to the borrower—
(1) During the loan rehabilitation period, information about repayment plans, including the income-based repayment plan, that may be available to the borrower upon rehabilitating the defaulted loan and how the borrower can select a repayment plan after the loan is purchased by an eligible lender or assigned to the Secretary; and
(2) After the successful completion of the loan rehabilitation period, financial and economic education materials, including debt management information.
(a) A guaranty agency may make a claim payment from the Federal Fund and receive a reinsurance payment on a loan only if—
(1) The lender exercised due diligence in making, disbursing, and servicing the loan as prescribed by the rules of the agency;
(2) With respect to the reinsurance payment on the portion of a loan represented by a single disbursement of loan proceeds—
(i) The check for the disbursement was cashed within 120 days after disbursement; or
(ii) The proceeds of the disbursement made by electronic funds transfer or master check have been released from the restricted account maintained by the school within 120 days after disbursement;
(3) The lender provided an accurate collection history and an accurate payment history to the guaranty agency with the default claim filed on the loan showing that the lender exercised due diligence in collecting the loan through collection efforts meeting the requirements of § 682.411, including collection efforts against each endorser;
(4) The loan was in default before the agency paid a default claim filed thereon;
(5) The lender filed a default claim thereon with the guaranty agency within 90 days of default;
(6) The lender resubmitted a properly documented default claim to the guaranty agency not later than 60 days from the date the agency had returned that claim due solely to inadequate documentation, except that interest accruing beyond the 30th day after the date the guaranty agency returned the claim is not reinsured unless the lender files a claim for loss on the loan with the guarantor together with all required documentation, prior to the 30th day;
(7) The lender satisfied all conditions of guarantee coverage set by the agency, unless the agency reinstated guarantee coverage on the loan following the lender's failure to satisfy such a condition pursuant to written policies and procedures established by the agency;
(8) The agency paid or returned to the lender for additional documentation a default claim thereon filed by the lender within 90 days of the date the lender filed the claim or, if applicable, the additional documentation, except that interest accruing beyond the 60th day after the date the lender originally filed the claim is not reinsured;
(9) The agency submitted a request for the payment on a form required by the Secretary no later than 30 days following payment of a default claim to the lender;
(10) The loan was legally enforceable by the lender when the agency paid a claim on the loan to the lender;
(11) The agency exercised due diligence in collection of the loan in accordance with § 682.410(b)(6);
(12) The agency and lender, if applicable, complied with all other Federal requirements with respect to the loan including—
(i) Payment of origination fees;
(ii) For Consolidation loans disbursed on or after October 1, 1993, and prior to October 1, 1998, payment on a monthly basis, of an interest payment rebate fee calculated on an annual basis and equal to 1.05 percent of the unpaid principal and accrued interest on the loan;
(iii) For Consolidation loans for which the application was received by the lender on or after October 1, 1998 and prior to February 1, 1999, payment on a monthly basis, of an interest payment rebate fee calculated on an annual basis and equal to 0.62 percent of the unpaid principal and accrued interest on the loan;
(iv) For Consolidation loans disbursed on or after February 1, 1999 and prior to July 1, 2010, payment of an interest payment rebate fee in accordance with paragraph (a)(12)(ii) of this section; and
(v) Compliance with all default aversion assistance requirements in § 682.404(a)(2)(ii).
(13) The agency assigns the loan to the Secretary, if so directed, in accordance with the requirements of § 682.409; and
(14) The guaranty agency certifies to the Secretary that diligent attempts have been made by the lender and the guaranty agency under § 682.411(h) to locate the borrower through the use of effective skip-tracing techniques, including contact with the schools the student attended.
(b) Notwithstanding paragraph (a) of this section, the Secretary may waive his right to refuse to make or require repayment of a reinsurance payment if, in the Secretary's judgment, the best interests of the United States so require. The Secretary's waiver policy for violations of paragraph (a)(3) or (a)(5) of this section is set forth in appendix D to this part.
(c) In evaluating a claim for insurance or reinsurance, the issue of confirmation of subsequent loans under an MPN will not be reviewed and a claim will not be denied based on the absence of any evidence relating to confirmation in a particular loan file. However, if a court rules that a loan is unenforceable solely because of the lack of evidence of a confirmation process or processes, insurance and reinsurance benefits must be repaid.
(d) A guaranty agency may not make a claim payment from the Federal Fund or receive a reinsurance payment on a loan if the agency determines or is notified by the Secretary that the lender offered or provided an improper inducement as described in paragraph (5)(i) of the definition of lender in § 682.200(b).
(a) Definition of terms. As used in this section—
(1) Eligible public servant means an individual who—
(i) Served as a police officer, firefighter, other safety or rescue personnel, or as a member of the Armed Forces; and
(ii)(A) Died due to injuries suffered in the terrorist attacks on September 11, 2001; or
(B) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(2) Eligible victim means an individual who died due to injuries suffered in the terrorist attacks on September 11, 2001 or became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(3) Eligible parent means the parent of an eligible victim if—
(i) The parent owes a FFEL PLUS Loan incurred on behalf of an eligible victim; or
(ii) The parent owes a FFEL Consolidation Loan that was used to repay a FFEL or Direct Loan PLUS Loan incurred on behalf of an eligible victim.
(4) Died due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001, and the individual died as a direct result of these crashes.
(5) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001 and the individual became permanently and totally disabled as a direct result of these crashes.
(i) An individual is considered permanently and totally disabled if—
(A) The disability is the result of a physical injury to the individual that was treated by a medical professional within 72 hours of the injury having been sustained or within 72 hours of the rescue;
(B) The physical injury that caused the disability is verified by contemporaneous medical records created by or at the direction of the medical professional who provided the medical care; and
(C) The individual is unable to work and earn money due to the disability and the disability is expected to continue indefinitely or result in death.
(ii) If the injuries suffered due to the terrorist-related aircraft crashes did not make the individual permanently and totally disabled at the time of or in the immediate aftermath of the attacks, the individual may be considered to be permanently and totally disabled for purposes of this section if the individual's medical condition has deteriorated to the extent that the individual is permanently and totally disabled.
(6) Immediate aftermath means, except in the case of an eligible public servant, the period of time from the aircraft crashes until 12 hours after the crashes. With respect to eligible public servants, the immediate aftermath includes the period of time from the aircraft crashes until 96 hours after the crashes.
(7) Present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site means physically present at the time of the terrorist-related aircraft crashes or in the immediate aftermath—
(i) In the buildings portions of the buildings that were destroyed as a result of the terrorist-related aircraft crashes;
(ii) In any area contiguous to the crash site that was sufficiently close to the site that there was a demonstrable risk of physical harm resulting from the impact of the aircraft or any subsequent fire, explosions, or building collapses. Generally, this includes the immediate area in which the impact occurred, fire occurred, portions of buildings fell, or debris fell upon and injured persons; or
(iii) On board American Airlines flights 11 or 77 or United Airlines flights 93 or 175 on September 11, 2001.
(b) September 11 survivors discharge. (1) The obligation of a borrower and any endorser to make any further payments on an eligible FFEL Program Loan is discharged if the borrower was, at the time of the terrorist attacks on September 11, 2001, and currently is, the spouse of an eligible public servant, unless the eligible public servant has died. If the eligible public servant has died, the borrower must have been the spouse of the eligible public servant at the time of the terrorist attacks on September 11, 2001 and until the date the eligible public servant died.
(2) The obligation of a borrower to make any further payments towards the portion of a joint FFEL Consolidation Loan incurred on behalf of an eligible victim is discharged if the borrower was, at the time of the terrorist attacks on September 11, 2001, and currently is, the spouse of an eligible victim, unless the eligible victim has died. If the eligible victim has died, the borrower must have been the spouse of the eligible victim at the time of the terrorist attacks on September 11, 2001 and until the date the eligible victim died.
(3) If the borrower is an eligible parent—
(i) The obligation of a borrower and any endorser to make any further payments on a FFEL PLUS Loan incurred on behalf of an eligible victim is discharged.
(ii) The obligation of the borrower to make any further payments towards the portion of a FFEL Consolidation Loan that repaid a FFEL or Direct Loan PLUS Loan incurred on behalf of an eligible victim is discharged.
(4) The parent of an eligible public servant may qualify for a discharge of a FFEL PLUS loan incurred on behalf of the eligible public servant, or the portion of a FFEL Consolidation Loan that repaid a FFEL or Direct PLUS Loan incurred on behalf of the eligible public servant, under the procedures, eligibility criteria, and documentation requirements described in this section for an eligible parent applying for a discharge of a loan incurred on behalf of an eligible victim.
(c) Applying for discharge. (1) In accordance with the procedures in paragraphs (c)(2) through (c)(13) of this section, a discharge may be granted on—
(i) A FFEL Program Loan owed by the spouse of an eligible public servant;
(ii) A FFEL PLUS Loan incurred on behalf of an eligible victim;
(iii) The portion of a FFEL Consolidation Loan that repaid a PLUS loan incurred on behalf of an eligible victim; and
(iv) The portion of a joint Consolidation Loan incurred on behalf of an eligible victim.
(2) After being notified by the borrower that the borrower claims to qualify for a discharge under this section, the lender shall suspend collection activity on the borrower's eligible FFEL Program Loan and promptly request that the borrower submit a request for discharge on a form approved by the Secretary.
(3) If the lender determines that the borrower does not qualify for a discharge under this section, or the lender does not receive the completed discharge request form from the borrower within 60 days of the borrower notifying the lender that the borrower claims to qualify for a discharge, the lender shall resume collection and shall be deemed to have exercised forbearance of payment of both principal and interest from the date the lender was notified by the borrower. The lender must notify the borrower that the application for the discharge has been denied, provide the basis for the denial, and inform the borrower that the lender will resume collection on the loan. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during this period.
(4) If the lender determines that the borrower qualifies for a discharge under this section, the lender shall provide the guaranty agency with the following documentation—
(i) The loan application, if a separate loan application was provided to the lender; and
(ii) The completed discharge form, and all accompanying documentation supporting the discharge request that formed the basis for the determination that the borrower qualifies for a discharge.
(5) The lender must file a discharge claim within 60 days of the date on which the lender determines that the borrower qualifies for a discharge.
(6) The guaranty agency must review a discharge claim under this section promptly.
(7) If the guaranty agency determines that the borrower does not qualify for a discharge under this section, the guaranty agency must return the claim to the lender with an explanation of the basis for the agency's denial of the claim. Upon receipt of the returned claim, the lender must notify the borrower that the application for the discharge has been denied, provide the basis for the denial, and inform the borrower that the lender will resume collection on the loan. The lender is deemed to have exercised forbearance of both principal and interest from the date collection activity was suspended until the next payment due date. The lender may capitalize, in accordance with § 682.202(b), any interest accrued and not paid during this period.
(8) If the guaranty agency determines that the borrower qualifies for a discharge, the guaranty agency pays the lender on an approved claim the amount of loss required under paragraph (c)(9) of this section. The guaranty agency shall pay the claim not later than 90 days after the claim was filed by the lender.
(9) The amount of loss payable on a discharge claim is—
(i) An amount equal to the sum of the remaining principal balance and interest accrued on the loan, unpaid collection costs incurred by the lender and applied to the borrower's account within 30 days of the date those costs were actually incurred, and unpaid interest up to the date the lender should have filed the claim; or
(ii) In the case of a partial discharge of a Consolidation Loan, the amount specified in paragraph (c)(9)(i) of this section for the portion of the Consolidation Loan incurred on behalf of the eligible victim.
(10) The amount payable on an approved claim includes the unpaid interest that accrues during the following periods:
(i) During the period before the claim is filed, not to exceed 60 days from the date the lender determines that the borrower qualifies for a discharge under this section.
(ii) During a period not to exceed 30 days following the date the lender receives a claim returned by the guaranty agency for additional documentation necessary for the claim to be approved by the guaranty agency.
(iii) During the period required by the guaranty agency to approve the claim and to authorize payment or to return the claim to the lender for additional documentation, not to exceed 90 days.
(11) After being notified that the guaranty agency has paid a discharge claim, the lender shall notify the borrower that the loan has been discharged or, in the case of a partial discharge of a Consolidation Loan, partially discharged. Except in the case of a partial discharge of a Consolidation Loan, the lender shall return to the sender any payments received by the lender after the date the guaranty agency paid the discharge claim.
(12) The Secretary reimburses the guaranty agency for a discharge claim paid to the lender under this section after the agency pays the lender. Any failure by the lender to satisfy due diligence requirements prior to the filing of the claim that would have resulted in the loss of reinsurance on the loan in the event of default are waived by the Secretary, provided the loan was held by an eligible loan holder at all times.
(13) Except in the case of a partial discharge of a Consolidation Loan, the guaranty agency shall promptly return to the sender any payment on a discharged loan made by the sender and received after the Secretary pays a discharge claim. At the same time that the agency returns the payment it shall notify the borrower that the loan has been discharged and that there is no further obligation to repay the loan.
(14) A FFEL Program Loan owed by an eligible public servant or an eligible victim may be discharged under the procedures in § 682.402 for a discharge based on the death or total and permanent disability of the eligible public servant or eligible victim.
(d) Documentation that an eligible public servant or eligible victim died due to injuries suffered in the terrorist attacks on September 11, 2001. (1) Documentation that an eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) A certification from an authorized official that the individual was a member of the Armed Forces, or was employed as a police officer, firefighter, or other safety or rescue personnel, and was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes; and
(ii) The inclusion of the individual on an official list of the individuals who died in the terrorist attacks on September 11, 2001.
(2) If the individual is not included on an official list of the individuals who died in the terrorist attacks on September 11, 2001, the borrower must provide—
(i) The certification described in paragraph (d)(1)(i) of this section;
(ii) An original or certified copy of the individual's death certificate; and
(iii) A certification from a physician or a medical examiner that the individual died due to injuries suffered in the terrorist attacks on September 11, 2001.
(3) If the individual owed a FFEL Program Loan, a Direct Loan, or a Perkins Loan at the time of the terrorist attacks, documentation that the individual's loans were discharged by the lender, the Secretary, or the institution due to death may be substituted for the original or certified copy of a death certificate.
(4) Documentation that an eligible victim died due to injuries suffered in the terrorist attacks on September 11, 2001 is the inclusion of the individual on an official list of the individuals who died in the terrorist attacks on September 11, 2001.
(5) If the eligible victim is not included on an official list of the individuals who died in the terrorist attacks on September 11, 2001, the borrower must provide—
(i) The documentation described in paragraphs (d)(2)(ii) or (d)(3), and (d)(2)(iii) of this section; and
(ii) A certification signed by the borrower that the eligible victim was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes.
(6) If the borrower is the spouse of an eligible public servant, and has been granted a discharge on a Perkins Loan, a Direct Loan, or a FFEL Program Loan held by another FFEL lender because the eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraphs (d)(1) through (d)(3) of this section.
(7) If the borrower is the spouse or parent of an eligible victim, and has been granted a discharge on a Direct Loan or on a FFEL Program Loan held by another FFEL lender because the eligible victim died due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraphs (d)(4) and (d)(5) of this section.
(8) Under exceptional circumstances and on a case-by-case basis, the determination that an eligible public servant or an eligible victim died due to injuries suffered in the terrorist attacks on September 11, 2001 may be based on other reliable documentation approved by the chief executive officer of the guaranty agency.
(e) Documentation that an eligible public servant or eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001. (1) Documentation that an eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) A certification from an authorized official that the individual was a member of the Armed Forces or was employed as a police officer, firefighter or other safety or rescue personnel, and was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes;
(ii) Copies of contemporaneous medical records created by or at the direction of a medical professional who provided medical care to the individual within 72 hours of the injury having been sustained or within 24 hours of the rescue; and
(iii) A certification by a physician, who is a doctor of medicine or osteopathy and legally authorized to practice in a state, that the individual became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(2) Documentation that an eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) The documentation described in paragraphs (e)(1)(ii) and (e)(1)(iii) of this section; and
(ii) A certification signed by the borrower that the eligible victim was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes.
(3) If the borrower is the spouse of an eligible public servant, and has been granted a discharge on a Perkins Loan, a Direct Loan, or a FFEL Program Loan held by another FFEL lender because the eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraph (e)(1) of this section.
(4) If the borrower is the spouse or parent of an eligible victim, and has been granted a discharge on a Direct Loan or on a FFEL Program Loan held by another FFEL lender because the eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraph (e)(2) of this section.
(f) Additional information. (1) A lender or guaranty agency may require the borrower to submit additional information that the lender or guaranty agency deems necessary to determine the borrower's eligibility for a discharge under this section.
(2) To establish that the eligible public servant or eligible victim was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site, such additional information may include but is not limited to—
(i) Records of employment;
(ii) Contemporaneous records of a federal, state, city, or local government agency;
(iii) An affidavit or declaration of the eligible public servant's or eligible victim's employer; and
(iv) A sworn statement (or an unsworn statement complying with 28 U.S.C. 1746) regarding the presence of the eligible public servant or eligible victim at the site.
(3) To establish that the disability of the eligible public servant or eligible victim is due to injuries suffered in the terrorist attacks on September 11, 2001, such additional information may include but is not limited to—
(i) Contemporaneous medical records of hospitals, clinics, physicians, or other licensed medical personnel;
(ii) Registries maintained by federal, state, or local governments; or
(iii) Records of all continuing medical treatment.
(4) To establish the borrower's relationship to the eligible public servant or eligible victim, such additional information may include but is not limited to—
(i) Copies of relevant legal records including court orders, letters of testamentary or similar documentation;
(ii) Copies of wills, trusts, or other testamentary documents; or
(iii) Copies of approved joint Consolidation Loan applications or approved FFEL or Direct Loan PLUS loan applications.
(g) Limitations on discharge. (1) Only outstanding Federal SLS Loans, Federal Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans for which amounts were owed on September 11, 2001, or outstanding Federal Consolidation Loans incurred to pay off loan amounts that were owed on September 11, 2001, are eligible for discharge under this section.
(2)(i) Eligibility for a discharge under this section does not qualify a borrower for a refund of any payments made on the borrower's loan prior to the date the loan was discharged.
(ii) A borrower may apply for a partial discharge of a joint Consolidation loan due to death or total and permanent disability under the procedures in § 682.402(b) or (c). If the borrower is granted a partial discharge under the procedures in § 682.402(b) or (c) the borrower may qualify for a refund of payments in accordance with § 682.402(b)(5) or § 682.402(c)(1)(i).
(iii) A borrower may apply for a discharge of a PLUS loan due to the death of the student for whom the borrower received the PLUS loan under the procedures in § 682.402(b). If a borrower is granted a discharge under the procedures in § 682.402(b), the borrower may qualify for a refund of payments in accordance with § 682.402(b)(5).
(3) A determination by a lender or a guaranty agency that an eligible public servant or an eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 for purposes of this section does not qualify the eligible public servant or the eligible victim for a discharge based on a total and permanent disability under § 682.402.
(4) The spouse of an eligible public servant or eligible victim may not receive a discharge under this section if the eligible public servant or eligible victim has been identified as a participant or conspirator in the terrorist-related aircraft crashes on September 11, 2001. An eligible parent may not receive a discharge on a FFEL PLUS Loan or on a Consolidation Loan that was used to repay a FFEL or Direct Loan PLUS Loan incurred on behalf of an individual who has been identified as a participant or conspirator in the terrorist-related aircraft crashes on September 11, 2001.
(a)(1) If the Secretary determines that action is necessary to protect the Federal fiscal interest, the Secretary directs a guaranty agency to promptly assign to the Secretary any loans held by the agency on which the agency has received payment under § 682.402(f), 682.402(k), or 682.404. The collection of unpaid loans owed by Federal employees by Federal salary offset is, among other things, deemed to be in the Federal fiscal interest. Unless the Secretary notifies an agency, in writing, that other loans must be assigned to the Secretary, an agency must assign any loan that meets all of the following criteria as of April 15 of each year:
(i) The unpaid principal balance is at least $100.
(ii) For each of the two fiscal years following the fiscal year in which these regulations are effective, the loan, and any other loans held by the agency for that borrower, have been held by the agency for at least four years; for any subsequent fiscal year such loan must have been held by the agency for at least five years.
(iii) A payment has not been received on the loan in the last year.
(iv) A judgment has not been entered on the loan against the borrower.
(2) If the agency fails to meet a fiscal year recovery rate standard under paragraph (a)(2)(ii) of this section for a loan type, and the Secretary determines that additional assignments are necessary to protect the Federal fiscal interest, the Secretary may require the agency to assign in addition to those loans described in paragraph (a)(1) of this section, loans in amounts needed to satisfy the requirements of paragraph (a)(2)(iii) or (a)(3)(i) of this section.
(i) Calculation of fiscal year loan type recovery rate. A fiscal year loan type recovery rate for an agency is determined by dividing the amount collected on defaulted loans, including collections by Federal Income Tax Refund Offset, for each loan program (i.e., the Stafford, PLUS, SLS, and Consolidation loan programs) by the agency for loans of that program (including payments received by the agency on loans under §§ 682.401(b)(1) and 682.409 and the amounts of any loans purchased from the guaranty agency by an eligible lender) during the most recent fiscal year for which data are available by the total of principal and interest owed to an agency on defaulted loans for each loan program at the beginning of the same fiscal year, less accounts permanently assigned to the Secretary through the most recent fiscal year.
(ii) Fiscal year loan type recovery rates standards. (A) If, in each of the two fiscal years following the fiscal year in which these regulations are effective, the fiscal year loan type recovery rate for a loan program for an agency is below 80 percent of the average recovery rate of all active guaranty agencies in each of the same two fiscal years for that program type, and the Secretary determines that additional assignments are necessary to protect the Federal fiscal interest, the Secretary may require the agency to make additional assignments in accordance with paragraph (a)(2)(iii) of this section.
(B) In any subsequent fiscal year the loan type recovery rate standard for a loan program must be 90 percent of the average recovery rate of all active guaranty agencies.
(iii) Non-achievement of loan type recovery rate standards. (A) Unless the Secretary determines under paragraph (a)(2)(iv) of this section that protection of the Federal fiscal interest requires that a lesser amount be assigned, upon notice from the Secretary, an agency with a fiscal year loan type recovery rate described in paragraph (a)(2)(ii) of this section must promptly assign to the Secretary a sufficient amount of defaulted loans, in addition to loans to be assigned in accordance with paragraph (a)(1) of this section, to cause the fiscal year loan type recovery rate of the agency that fiscal year to equal or exceed the average rate of all agencies described in paragraph (a)(2)(ii) of this section when recalculated to exclude from the denominator of the agency's fiscal year loan type recovery rate the amount of these additional loans.
(B) The Secretary, in consultation with the guaranty agency, may require the amount of loans to be assigned under paragraph (a)(2) of this section to include particular categories of loans that share characteristics that make the performance of the agency fall below the appropriate percentage of the loan type recovery rate as described in paragraph (a)(2)(ii) of this section.
(iv) Calculation of loan type recovery rate standards. The Secretary, within 30 days after the date for submission of the second quarterly report from all agencies, makes available to all agencies a mid-year report, showing the recovery rate for each agency and the average recovery rate of all active guaranty agencies for each loan type. In addition, the Secretary, within 120 days after the beginning of each fiscal year, makes available a final report showing those rates and the average rate for each loan type for the preceding fiscal year.
(3)(i) Determination that the protection of the Federal fiscal interest requires assignments. Upon petition by an agency submitted within 45 days of the notice required by paragraph (a)(2)(iii)(A) of this section, the Secretary may determine that protection of the Federal fiscal interest does not require assignment of all loans described in paragraph (a)(1) of this section or of loans in the full amount described in paragraph (a)(2)(iii) of this section only after review of the agency's petition. In making this determination, the Secretary considers all relevant information available to him (including any information and documentation obtained by the Secretary in reviews of the agency or submitted to the Secretary by the agency) as follows:
(A) For each of the two fiscal years following the fiscal year in which these regulations are effective, the Secretary considers information presented by an agency with a fiscal year loan type recovery rate above the average rate of all active agencies to demonstrate that the protection of the Federal fiscal interest will be served if any amounts of loans of the loan type required to be assigned to the Secretary under paragraph (a)(1) of this section are retained by that agency. For any subsequent fiscal year, the Secretary considers information presented by an agency with a fiscal year recovery rate 10 percent above the average rate of all active agencies.
(B) The Secretary considers information presented by an agency that is required to assign loans under paragraph (a)(2) of this section to demonstrate that the protection of the Federal fiscal interest will be served if the agency demonstrates that its compliance with §§ 682.401(b)(1) and 682.405 has reduced substantially its fiscal year loan type recovery rate or rates or if the agency is not required to assign amounts of loans that would otherwise have to be assigned.
(C) The information provided by an agency pursuant to paragraphs (a)(3)(i)(A) and (B) of this section may include, but is not limited to the following:
(1) The fiscal year loan type recovery rate within such school sectors as the Secretary may designate for the agency, and for all agencies.
(2) The fiscal year loan type recovery rate for loans for the agency and for all agencies categorized by age of the loans as the Secretary may determine.
(3) The performance of the agency, and all agencies, in default aversion.
(4) The agency's performance on judgment enforcement.
(5) The existence and use of any state or guaranty agency-specific collection tools.
(6) The agency's level of compliance with §§ 682.409 and 682.410(b)(6).
(7) Other factors that may affect loan repayment such as State or regional unemployment and natural disasters.
(ii) Denial of an agency's petition. If the Secretary does not accept the agency's petition, the Secretary provides, in writing, to the agency the Secretary's reasons for concluding that the Federal fiscal interest is best protected by requiring the assignment.
(b)(1) A guaranty agency that assigns a defaulted loan to the Secretary under this section thereby releases all rights and title to that loan. The Secretary does not pay the guaranty agency any compensation for a loan assigned under this section.
(2) The guaranty agency does not share in any amounts received by the Secretary on a loan assigned under this section, regardless of the reinsurance percentage paid on the loan or the agency's previous collection costs.
(c)(1) A guaranty agency must assign a loan to the Secretary under this section at the time, in the manner, and with the information and documentation that the Secretary requires. The agency must submit this information and documentation in the form (including magnetic media) and format specified by the Secretary.
(2) The guaranty agency must execute an assignment to the United States of America of all right, title, and interest in the promissory note or judgment evidencing a loan assigned under this section. If more than one loan is made under an MPN, the assignment of the note only applies to the loan or loans being assigned to the Secretary.
(3) If the agency does not provide the required information and documentation in the form and format required by the Secretary, the Secretary may, at his option—
(i) Allow the agency to revise the agency's submission to include the required information and documentation in the specified form and format;
(ii) In the case of an improperly formatted computer tape, reformat the tape and assess the cost of the activity against the agency;
(iii) Reorganize the material submitted and assess the cost of that activity against the agency; or
(iv) Obtain from other agency records and add to the agency's submission any information from the original submission, and assess the cost of that activity against the agency.
(4) For each loan assigned, the agency shall submit to the Secretary the following documents associated for each loan, assembled in the order listed below:
(i) The original or a true and exact copy of the promissory note.
(ii) Any documentation of a judgment entered on the loan.
(iii) A written assignment of the loan or judgment, unless this assignment is affixed to the promissory note.
(iv) The loan application, if a separate application was provided to the lender.
(v) A payment history for the loan, as described in § 682.414(a)(1)(ii)(C).
(vi) A collection history for the loan, as described in § 682.414(a)(1)(ii)(D).
(vii) The record of the lender's disbursement of Stafford and PLUS loan funds to the school for delivery to the borrower.
(viii) If the MPN or promissory note was signed electronically, the name and location of the entity in possession of the original electronic MPN or promissory note.
(5) The agency may submit copies of required documents in lieu of originals.
(6) The Secretary may accept the assignment of a loan without all of the documents listed in paragraph (c)(4) of this section. If directed to do so, the agency must retain these documents for submission to the Secretary at some future date.
(d)(1) If the Secretary determines that the agency has not submitted a document or record required by paragraph (c) of this section, and the Secretary decides to allow the agency an additional opportunity to submit the omitted document under paragraph (c)(3)(i) of this section, the Secretary notifies the agency and provides a reasonable period of time for the agency to submit the omitted record or document.
(2) If the omitted document is not submitted within the time specified by the Secretary, the Secretary determines whether that omission impairs the Secretary's ability to collect the loan.
(3) If the Secretary determines that the ability to collect the loan has been impaired under paragraph (d)(2) of this section, the Secretary assesses the agency the amount paid to the agency under the reinsurance agreement and accrued interest at the rate applicable to the borrower under § 682.410(b)(3).
(4) The Secretary reassigns to the agency that portion of the loan determined to be unenforceable by the Department.
(a) Fiscal requirements—(1) Reserve fund assets. A guaranty agency shall establish and maintain a reserve fund to be used solely for its activities as a guaranty agency under the FFEL Program (“guaranty activities”). The guaranty agency shall credit to the reserve fund—
(i) The total amount of insurance premiums and Federal default fees collected;
(ii) Funds received from a State for the agency's guaranty activities, including matching funds under section 422(a) of the Act;
(iii) Federal advances obtained under sections 422(a) and (c) of the Act;
(iv) Federal payments for default, bankruptcy, death, disability, closed schools, and false certification claims;
(v) Supplemental preclaims assistance payments;
(vi) Transitional support payments received under section 458(a) of the Act;
(vii) Funds collected by the guaranty agency on FFEL Program loans on which a claim has been paid;
(viii) Investment earnings on the reserve fund; and
(ix) Other funds received by the guaranty agency from any source for the agency's guaranty activities.
(2) Uses of reserve fund assets. A guaranty agency may use the assets of the reserve fund established under paragraph (a)(1) of this section to pay only—
(i) Insurance claims;
(ii) Costs that are reasonable, as defined under § 682.410(a)(11)(iii), and that are ordinary and necessary for the agency to fulfill its responsibilities under the HEA, including costs of collecting loans, providing default aversion assistance, monitoring enrollment and repayment status, and carrying out any other guaranty activities. Those costs must be—
(A) Allocable to the FFEL Program;
(B) Not higher than the agency would incur under established policies, regulations, and procedures that apply to any comparable non-Federal activities of the guaranty agency;
(C) Not included as a cost or used to meet cost sharing or matching requirements of any other federally supported activity, except as specifically provided by Federal law;
(D) Net of all applicable credits; and
(E) Documented in accordance with applicable legal and accounting standards;
(iii) The Secretary's equitable share of collections;
(iv) Federal advances and other funds owed to the Secretary;
(v) Reinsurance fees;
(vi) Insurance premiums and Federal default fees related to cancelled loans;
(vii) Borrower refunds, including those arising out of student or other borrower claims and defenses;
(viii) (A) The repayment, on or after December 29, 1993, of amounts credited under paragraphs (a)(1)(ii) or (a)(1)(ix) of this section, if the agency provides the Secretary 30 days prior notice of the repayment and demonstrates that—
(1) These amounts were originally received by the agency under appropriate contemporaneous documentation specifying that receipt was on a temporary basis only;
(2) The objective for which these amounts were originally received by the agency has been fully achieved; and
(3) Repayment of these amounts would not cause the agency to fail to comply with the minimum reserve levels provided by paragraph (a)(10) of this section, except that the Secretary may, for good cause, provide written permission for a payment that meets the other requirements of this paragraph (a)(2)(ix)(A).
(B) The repayment, prior to December 29, 1993, of amounts credited under paragraphs (a)(1)(ii) or (a)(1)(ix) of this section, if the agency demonstrates that—
(1) These amounts were originally received by the agency under appropriate contemporaneous documentation that receipt was on a temporary basis only; and
(2) The objective for which these amounts were originally received by the agency has been fully achieved.
(ix) Any other costs or payments ordinary and necessary to perform functions directly related to the agency's responsibilities under the HEA and for their proper and efficient administration;
(x) Notwithstanding any other provision of this section, any other payment that was allowed by law or regulation at the time it was made, if the agency acted in good faith when it made the payment or the agency would otherwise be unfairly prejudiced by the nonallowability of the payment at a later time; and
(xi) Any other amounts authorized or directed by the Secretary.
(3) Accounting basis. Except as approved by the Secretary, a guaranty agency shall credit the items listed in paragraph (a)(1) of this section to its reserve fund upon their receipt, without any deferral for accounting purposes, and shall deduct the items listed in paragraph (a)(2) of this section from its reserve fund upon their payment, without any accrual for accounting purposes.
(4) Accounting records. (i) The accounting records of a guaranty agency must reflect the correct amount of sources and uses of funds under paragraph (a) of this section.
(ii) A guaranty agency may reverse prior credits to its reserve fund if—
(A) The agency gives the Secretary prior notice setting forth a detailed justification for the action;
(B) The Secretary determines that such credits were made erroneously and in good faith; and
(C) The Secretary determines that the action would not unfairly prejudice other parties.
(iii) A guaranty agency shall correct any other errors in its accounting or reporting as soon as practicable after the errors become known to the agency.
(iv) If a general reconstruction of a guaranty agency's historical accounting records is necessary to make a change under paragraphs (a)(4)(ii) and (a)(4)(iii) of this section or any other retroactive change to its accounting records, the agency may make this reconstruction only upon prior approval by the Secretary and without any deduction from its reserve fund for the cost of the reconstruction.
(5) Investments. The guaranty agency shall exercise the level of care required of a fiduciary charged with the duty of investing the money of others when it invests the assets of the reserve fund described in paragraph (a)(1) of this section. It may invest these assets only in low-risk securities, such as obligations issued or guaranteed by the United States or a State.
(6) Development of assets. (i) If the guaranty agency uses in a substantial way for purposes other than the agency's guaranty activities any funds required to be credited to the reserve fund under paragraph (a)(1) of this section or any assets derived from the reserve fund to develop an asset of any kind and does not in good faith allocate a portion of the cost of developing and maintaining the developed asset to funds other than the reserve fund, the Secretary may require the agency to—
(A) Correct this allocation under paragraph (a)(4)(iii) of this section; or
(B) Correct the recorded ownership of the asset under paragraph (a)(4)(iii) of this section so that—
(1) If, in a transaction with an unrelated third party, the agency sells or otherwise derives revenue from uses of the asset that are unrelated to the agency's guaranty activities, the agency promptly shall deposit into the reserve fund described in paragraph (a)(1) of this section a percentage of the sale proceeds or revenue equal to the fair percentage of the total development cost of the asset paid with the reserve fund monies or provided by assets derived from the reserve fund; or
(2) If the agency otherwise converts the asset, in whole or in part, to a use unrelated to its guaranty activities, the agency promptly shall deposit into the reserve fund described in paragraph (a)(1) of this section a fair percentage of the fair market value or, in the case of a temporary conversion, the rental value of the portion of the asset employed for the unrelated use.
(ii) If the agency uses funds or assets described in paragraph (a)(6)(i) of this section in the manner described in that paragraph and makes a cost and maintenance allocation erroneously and in good faith, it shall correct the allocation under paragraph (a)(4)(iii) of this section.
(7) Third-party claims. If the guaranty agency has any claim against any other party to recover funds or other assets for the reserve fund, the claim is the property of the United States.
(8) Related-party transactions. All transactions between a guaranty agency and a related organization or other person that involve funds required to be credited to the agency's reserve fund under paragraph (a)(1) of this section or assets derived from the reserve fund must be on terms that are not less advantageous to the reserve fund than would have been negotiated on an arm's-length basis by unrelated parties.
(9) Scope of definition. The provisions of this § 682.410(a) define reserve funds and assets for purposes of sections 422 and 428 of the Act. These provisions do not, however, affect the Secretary's authority to use all funds and assets of the agency pursuant to section 428(c)(9)(F)(vi) of the Act.
(10) Minimum reserve fund level. The guaranty agency must maintain a current minimum reserve level of not less than—
(i) .5 percent of the amount of loans outstanding, for the fiscal year of the agency that begins in calendar year 1993;
(ii) .7 percent of the amount of loans outstanding, for the fiscal year of the agency that begins in calendar year 1994;
(iii) .9 percent of the amount of loans outstanding, for the fiscal year of the agency that begins in calendar year 1995; and
(iv) 1.1 percent of the amount of loans outstanding, for each fiscal year of the agency that begins on or after January 1, 1996.
(11) Definitions. For purposes of this section—
(i) Reserve fund level means—
(A) The total of reserve fund assets as defined in paragraph (a)(1) of this section;
(B) Minus the total amount of the reserve fund assets used in accordance with paragraphs (a)(2) and (a)(3) of this section; and
(ii) Amount of loans outstanding means—
(A) The sum of—
(1) The original principal amount of all loans guaranteed by the agency; and
(2) The original principal amount of any loans on which the guarantee was transferred to the agency from another guarantor, excluding loan guarantees transferred to another agency pursuant to a plan of the Secretary in response to the insolvency of the agency;
(B) Minus the original principal amount of all loans on which—
(1) The loan guarantee was cancelled;
(2) The loan guarantee was transferred to another agency;
(3) Payment in full has been made by the borrower;
(4) Reinsurance coverage has been lost and cannot be regained; and
(5) The agency paid claims.
(iii) Reasonable cost means a cost that, in its nature and amount, does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The burden of proof is upon the guaranty agency, as a fiduciary under its agreements with the Secretary, to establish that costs are reasonable. In determining reasonableness of a given cost, consideration must be given to—
(A) Whether the cost is of a type generally recognized as ordinary and necessary for the proper and efficient performance and administration of the guaranty agency's responsibilities under the HEA;
(B) The restraints or requirements imposed by factors such as sound business practices, arms-length bargaining, Federal, State, and other laws and regulations, and the terms and conditions of the guaranty agency's agreements with the Secretary; and
(C) Market prices of comparable goods or services.
(b) Administrative requirements—(1) Independent audits. The guaranty agency shall arrange for an independent financial and compliance audit of the agency's FFEL program as follows:
(i) [Reserved]
(ii) A guaranty agency must conduct an audit in accordance with 31 U.S.C. 7502 and 2 CFR part 200, subpart F—Audit Requirements.
(2) Collection charges. (i) Whether or not provided for in the borrower's promissory note and subject to any limitation on the amount of those costs in that note, the guaranty agency may charge a borrower an amount equal to the reasonable costs incurred by the agency in collecting a loan on which the agency has paid a default or bankruptcy claim unless, within the 60-day period after the guaranty agency sends the initial notice described in paragraph (b)(6)(ii) of this section, the borrower enters into an acceptable repayment agreement, including a rehabilitation agreement, and honors that agreement, in which case the guaranty agency must not charge a borrower any collection costs.
(ii) An acceptable repayment agreement may include an agreement described in § 682.200(b) (Satisfactory repayment arrangement), § 682.405, or paragraph (b)(5)(ii)(D) of this section. An acceptable repayment agreement constitutes a repayment arrangement or agreement on repayment terms satisfactory to the guaranty agency, under this section.
(iii) The costs under this paragraph (b)(2) include, but are not limited to, all attorneys' fees, collection agency charges, and court costs. Except as provided in §§ 682.401(b)(18)(i) and 682.405(b)(1)(vi)(B), the amount charged a borrower must equal the lesser of—
(A) The amount the same borrower would be charged for the cost of collection under the formula in 34 CFR 30.60; or
(B) The amount the same borrower would be charged for the cost of collection if the loan was held by the U.S. Department of Education.
(3) Interest charged by guaranty agencies. (i) Except as provided in paragraph (b)(3)(ii) of this section, the guaranty agency shall charge the borrower interest on the amount owed by the borrower after the capitalization required under paragraph (b)(4) of this section has occurred at a rate that is the greater of—
(A) The rate established by the terms of the borrower's original promissory note; or
(B) In the case of a loan for which a judgment has been obtained, the rate provided for by State law.
(ii) If the guaranty agency determines that the borrower is eligible for the interest rate limit of six percent under § 682.202(a)(8), the interest rate described in paragraph (b)(3)(i) shall not exceed six percent.
(4) Capitalization of unpaid interest. The guaranty agency shall capitalize any unpaid interest due the lender from the borrower at the time the agency pays a default claim to the lender, but shall not capitalize any unpaid interest thereafter.
(5) Reports to consumer reporting agencies. (i) After the completion of the procedures in paragraph (b)(5)(ii) of this section, the guaranty agency shall, after it has paid a default claim, report promptly, but not less than sixty days after completion of the procedures in paragraph (b)(6)(ii) of this section, and on a regular basis, to all nationwide consumer reporting agencies—
(A) The total amount of loans made to the borrower and the remaining balance of those loans;
(B) The date of default;
(C) Information concerning collection of the loan, including the repayment status of the loan;
(D) Any changes or corrections in the information reported by the agency that result from information received after the initial report; and
(E) The date the loan is fully repaid by or on behalf of the borrower or discharged by reason of the borrower's death, bankruptcy, total and permanent disability, or closed school or false certification.
(ii) The guaranty agency, after it pays a default claim on a loan but before it reports the default to a consumer reporting agency or assesses collection costs against a borrower, shall, within the timeframe specified in paragraph (b)(6)(ii) of this section, provide the borrower with—
(A) Written notice that meets the requirements of paragraph (b)(5)(vi) of this section regarding the proposed actions;
(B) An opportunity to inspect and copy agency records pertaining to the loan obligation;
(C) An opportunity for an administrative review of the legal enforceability or past-due status of the loan obligation; and
(D) An opportunity to enter into a repayment agreement on terms satisfactory to the agency.
(iii) The procedures set forth in 34 CFR 30.20-30.33 (administrative offset) satisfy the requirements of paragraph (b)(5)(ii) of this section.
(iv)(A) In response to a request submitted by a borrower, after the deadlines established under agency rules, for access to records, an administrative review, or for an opportunity to enter into a repayment agreement, the agency shall provide the requested relief but may continue reporting the debt to consumer reporting agencies until it determines that the borrower has demonstrated that the loan obligation is not legally enforceable or that alternative repayment arrangements satisfactory to the agency have been made with the borrower.
(B) The deadline established by the agency for requesting administrative review under paragraph (b)(5)(ii)(C) of this section must allow the borrower at least 60 days from the date the notice described in paragraph (b)(5)(ii)(A) of this section is sent to request that review.
(v) An agency may not permit an employee, official, or agent to conduct the administrative review required under this paragraph if that individual is—
(A) Employed in an organizational component of the agency or its agent that is charged with collection of loan obligations; or
(B) Compensated on the basis of collections on loan obligations.
(vi) The notice sent by the agency under paragraph (b)(5)(ii)(A) of this section must—
(A) Advise the borrower that the agency has paid a default claim filed by the lender and has taken assignment of the loan;
(B) Identify the lender that made the loan and the school for attendance at which the loan was made;
(C) State the outstanding principal, accrued interest, and any other charges then owing on the loan;
(D) Demand that the borrower immediately begin repayment of the loan;
(E) Explain the rate of interest that will accrue on the loan, that all costs incurred to collect the loan will be charged to the borrower, the authority for assessing these costs, and the manner in which the agency will calculate the amount of these costs;
(F) Notify the borrower that the agency will report the default to all nationwide consumer reporting agencies to the detriment of the borrower's credit rating;
(G) Explain the opportunities available to the borrower under agency rules to request access to the agency's records on the loan, to request an administrative review of the legal enforceability or past-due status of the loan, and to reach an agreement on repayment terms satisfactory to the agency to prevent the agency from reporting the loan as defaulted to consumer reporting agencies and provide deadlines and method for requesting this relief;
(H) Unless the agency uses a separate notice to advise the borrower regarding other proposed enforcement actions, describe specifically any other enforcement action, such as offset against Federal or state income tax refunds or wage garnishment that the agency intends to use to collect the debt, and explain the procedures available to the borrower prior to those other enforcement actions for access to records, for an administrative review, or for agreement to alternative repayment terms;
(I) Describe the grounds on which the borrower may object that the loan obligation as stated in the notice is not a legally enforceable debt owed by the borrower;
(J) Describe any appeal rights available to the borrower from an adverse decision on administrative review of the loan obligation;
(K) Describe any right to judicial review of an adverse decision by the agency regarding the legal enforceability or past-due status of the loan obligation;
(L) Describe the collection actions that the agency may take in the future if those presently proposed do not result in repayment of the loan obligation, including the filing of a lawsuit against the borrower by the agency and assignment of the loan to the Secretary for the filing of a lawsuit against the borrower by the Federal Government; and
(M) Inform the borrower of the options that are available to the borrower to remove the loan from default, including an explanation of the fees and conditions associated with each option.
(vii) As part of the guaranty agency's response to a borrower who appeals an adverse decision resulting from the agency's administrative review of the loan obligation, the agency must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(6) Collection efforts on defaulted loans. (i) A guaranty agency must engage in reasonable and documented collection activities on a loan on which it pays a default claim filed by a lender. For a non-paying borrower, the agency must perform at least one activity every 180 days to collect the debt, locate the borrower (if necessary), or determine if the borrower has the means to repay the debt.
(ii) Within 45 days after paying a lender's default claim, the agency must send a notice to the borrower that contains the information described in paragraph (b)(5)(ii) of this section. During this time period, the agency also must notify the borrower, either in the notice containing the information described in paragraph (b)(5)(ii) of this section, or in a separate notice, that if he or she does not make repayment arrangements acceptable to the agency, the agency will promptly initiate procedures to collect the debt. The agency's notification to the borrower must state that the agency may administratively garnish the borrower's wages, file a civil suit to compel repayment, offset the borrower's State and Federal income tax refunds and other payments made by the Federal Government to the borrower, assign the loan to the Secretary in accordance with § 682.409, and take other lawful collection means to collect the debt, at the discretion of the agency. The agency's notification must include a statement that borrowers may have certain legal rights in the collection of debts, and that borrowers may wish to contact counselors or lawyers regarding those rights.
(iii) Within a reasonable time after all of the information described in paragraph (b)(6)(ii) of this section has been sent, the agency must send at least one notice informing the borrower that the default has been reported to all nationwide consumer reporting agencies and that the borrower's credit rating may thereby have been damaged.
(iv) The agency must send a notice informing the borrower of the options that are available to remove the loan from default, including an explanation of the fees and conditions associated with each option. This notice must be sent within a reasonable time after the end of the period for requesting an administrative review as specified in paragraph (b)(5)(iv)(B) of this section or, if the borrower has requested an administrative review, within a reasonable time following the conclusion of the administrative review.
(v) A guaranty agency must attempt an annual Federal offset against all eligible borrowers. If an agency initiates proceedings to offset a borrower's State or Federal income tax refunds and other payments made by the Federal Government to the borrower, it may not initiate those proceedings sooner than 60 days after sending the notice described in paragraph (b)(5)(ii)(A) of this section.
(vi) A guaranty agency must initiate administrative wage garnishment proceedings against all eligible borrowers, except as provided in paragraph (b)(6)(vii) of this section, by following the procedures described in paragraph (b)(9) of this section.
(vii) A guaranty agency may file a civil suit against a borrower to compel repayment only if the borrower has no wages that can be garnished under paragraph (b)(9) of this section, or the agency determines that the borrower has sufficient attachable assets or income that is not subject to administrative wage garnishment that can be used to repay the debt, and the use of litigation would be more effective in collection of the debt.
(viii) Upon notification by the Secretary that the borrower has made a borrower defense claim related to a loan that the borrower intends to consolidate into the Direct Loan Program for the purpose of seeking relief in accordance with § 685.212(k), the guaranty agency must suspend all collection activities on the affected loan for the period designated by the Secretary.
(7) Special conditions for agency payment of a claim. (i) A guaranty agency may adopt a policy under which it pays a claim to a lender on a loan under the condition described in § 682.404(b)(3)(ii).
(ii) Upon the payment of a claim under a policy described in paragraph (b)(7)(i) of this section, the guaranty agency shall—
(A) Perform the loan servicing functions required of a lender under § 682.208, except that the agency is not required to follow the consumer reporting agency reporting requirements of that section;
(B) Perform the functions of the lender during the repayment period of the loan, as required under § 682.209;
(C) If the borrower is delinquent in repaying the loan at the time the agency pays a claim thereon to the lender or becomes delinquent while the agency holds the loan, exercise due diligence in accordance with § 682.411 in attempting to collect the loan from the borrower and any endorser or co-maker; and
(D) After the date of default on the loan, if any, comply with paragraph (b)(6) of this section with respect to collection activities on the loan, with the date of default treated as the claim payment date for purposes of those paragraphs.
(8) Preemption of State law. The provisions of paragraphs (b)(2), (5), and (6) of this section preempt any State law, including State statutes, regulations, or rules, that would conflict with or hinder satisfaction of the requirements of these provisions.
(9) Administrative garnishment. (i) If a guaranty agency decides to garnish the disposable pay of a borrower who is not making payments on a loan held by the agency, on which the Secretary has paid a reinsurance claim, it must do so in accordance with the following procedures:
(A) At least 30 days before the initiation of garnishment proceedings, the guaranty agency must mail to the borrower's last known address, a written notice described in paragraph (b)(9)(i)(B) of this section.
(B) The notice must describe—
(1) The nature and amount of the debt;
(2) The intention of the agency to collect the debt through deductions from disposable pay;
(3) An explanation of the borrower's rights;
(4) The deadlines by which a borrower must exercise those rights; and
(5) The consequences of failure to exercise those rights in a timely manner.
(C) The guaranty agency must offer the borrower an opportunity to inspect and copy agency records related to the debt.
(D) The guaranty agency must offer the borrower an opportunity to enter into a written repayment agreement with the agency under terms agreeable to the agency.
(E)(1) The guaranty agency must offer the borrower an opportunity for a hearing in accordance with paragraphs (b)(9)(i)(F) through (J) of this section and other guidance provided by the Secretary, for any objection regarding the existence, amount, or enforceability of the debt, and any objection that withholding from the borrower's disposable pay in the amount or at the rate proposed in the notice would cause financial hardship to the borrower.
(2) The borrower must request a hearing in writing. At the borrower's option, the hearing may be oral or written. The time and location of the hearing is established by the guaranty agency. An oral hearing may, at the borrower's option, be conducted either in-person or by telephone conference. The agency notifies the borrower of the process for arranging the time and location of an oral hearing. All telephonic charges are the responsibility of the agency. All travel expenses incurred by the borrower in connection with an in-person oral hearing are the responsibility of the borrower.
(F)(1) If the borrower submits a written request for a hearing on the existence, amount, or enforceability of the debt—
(i) The guaranty agency must provide evidence of the existence of the debt. If the agency provides evidence of the existence of the debt, the borrower must prove by the preponderance of the evidence that no debt exists, the debt is not enforceable under applicable law, the amount the guaranty agency claims the borrower owes is incorrect, including that any amount of collection costs assessed to the borrower exceeds the limits established under § 682.410(b)(2), or the debt is not delinquent; and
(ii) The borrower may raise any of the objections described in paragraph (b)(9)(i)(F)(1)(i) of this section not raised in the written request, but must do so before a hearing is completed. For purposes of this paragraph, a hearing is completed when the record is closed and the hearing official notifies the parties that no additional evidence or objections will be accepted.
(2) If the borrower submits a written request for a hearing on an objection that withholding in the amount or at the rate that the agency proposed in its notice would cause financial hardship to the borrower and the borrower's spouse and dependents—
(i) The borrower bears the burden of proving the claim of financial hardship by a preponderance of the credible evidence by providing credible documentation that the amount of wages proposed in the notice would leave the borrower unable to meet basic living expenses of the borrower, the borrower's spouse, and the borrower's dependents. The documentation must show the amount of the costs incurred for basic living expenses and the income available from any source to meet those expenses;
(ii) The borrower's claim of financial hardship must be evaluated by comparing the amounts that the borrower proves are being incurred for basic living expenses against the amounts spent for basic living expenses by families of the same size as the borrower's. For the purposes of this section, the standards published by the Internal Revenue Service under 26 U.S.C. 7122(d)(2) (the ”Collection Financial Standards”) establish the average amounts spent for basic living expenses for families of the same size as the borrower's family;
(iii) The amount that the borrower proves is incurred for a type of basic living expense is considered to be reasonable to the extent that the amount does not exceed the amount spent for that expense by families of the same size according to the Collection Financial Standards. If the borrower claims an amount for any basic living expense that exceeds the amount in the Collection Financial Standards, the borrower must prove that the amount claimed is reasonable and necessary;
(iv) If the borrower's objection to the rate or amount proposed in the notice is upheld in part, the garnishment must be ordered at a lesser rate or amount, that is determined will allow the borrower to meet basic living expenses proven to be reasonable and necessary. If this financial hardship determination is made after a garnishment order is already in effect, the guaranty agency must notify the borrower's employer of any change required by the determination in the amount to be withheld or the rate of withholding under that order; and
(v) A determination by a hearing official that financial hardship would result from garnishment is effective for a period not longer than six months after the date of the finding. After this period, the guaranty agency may require the borrower to submit current information regarding the borrower's family income and living expenses. If the borrower fails to submit current information within 30 days of this request, or the guaranty agency concludes from a review of the available evidence that garnishment should now begin or the rate or the amount of an outstanding withholding should be increased, the guaranty agency must notify the borrower and provide the borrower with an opportunity to contest the determination and obtain a hearing on the objection under the procedures in paragraph (b)(9)(i) of this section.
(G) If the borrower's written request for a hearing is received by the guaranty agency on or before the 30th day following the date of the notice described in paragraph (b)(9)(i)(B) of this section, the guaranty agency may not issue a withholding order until the borrower has been provided the requested hearing and a decision has been rendered. The guaranty agency must provide a hearing to the borrower in sufficient time to permit a decision, in accordance with the procedures that the agency may prescribe, to be rendered within 60 days.
(H) If the borrower's written request for a hearing is received by the guaranty agency after the 30th day following the date of the notice described in paragraph (b)(9)(i)(B) of this section, the guaranty agency must provide a hearing to the borrower in sufficient time that a decision, in accordance with the procedures that the agency may prescribe, may be rendered within 60 days, but may not delay issuance of a withholding order unless the agency determines that the delay in filing the request was caused by factors over which the borrower had no control, or the agency receives information that the agency believes justifies a delay or cancellation of the withholding order. If a decision is not rendered within 60 days following receipt of a borrower's written request for a hearing, the guaranty agency must suspend the order beginning on the 61st day after the hearing request was received until a hearing is provided and a decision is rendered.
(I) The hearing official appointed by the agency to conduct the hearing may be any qualified individual, including an administrative law judge. Under no circumstance may the hearing official be under the supervision or control of the head of the guaranty agency or of a third-party servicer or collection contractor employed by the agency. Payment of compensation by the guaranty agency, third-party servicer, or collection contractor employed by the agency to the hearing official for service as a hearing official does not constitute impermissible supervision or control under this paragraph. The guaranty agency must ensure that, except as needed to arrange for administrative matters pertaining to the hearing, including the type of hearing requested by the borrower, the time, place, and manner of conducting an oral hearing, and post-hearing matters such as issuance of a hearing decision, all oral communications between the hearing official and any representative of the guaranty agency or with the borrower are made within the hearing of the other party, and that copies of any written communication with either party are promptly provided to the other party. This paragraph does not preclude a hearing in the absence of one of the parties if the borrower is given proper notice of the hearing, both parties have agreed on the time, place, and manner of the hearing, and one of the parties fails to attend.
(J) The hearing official must conduct any hearing as an informal proceeding, require witnesses in an oral hearing to testify under oath or affirmation, and maintain a summary record of any hearing. The hearing official must issue a final written decision at the earliest practicable date, but not later than 60 days after the guaranty agency's receipt of the borrower's hearing request. However—
(1) The borrower may request an extension of that deadline for a reasonable period, as determined by the hearing official, for the purpose of submitting additional evidence or raising a new objection described in paragraph (b)(9)(i)(F)(1)(ii) of this section; and
(2) The agency may request, and the hearing official must grant, a reasonable extension of time sufficient to enable the guaranty agency to evaluate and respond to any such additional evidence or any objections raised pursuant to paragraph (b)(9)(i)(F)(1)(ii) of this section.
(K) An employer served with a garnishment order from the guaranty agency with respect to a borrower whose wages are not then subject to a withholding order of any kind must deduct and pay to the agency from a borrower's disposable pay an amount that does not exceed the smallest of—
(1) The amount specified in the guaranty agency order;
(2) The amount permitted by section 488A(a)(1) of the Act, which is 15 percent of the borrower's disposable pay; or
(3) The amount permitted by 15 U.S.C. 1673(a)(2), which is the amount by which the borrower's disposable pay exceeds 30 times the minimum wage.
(L) If a borrower's pay is subject to more than one garnishment order—
(1) Unless other Federal law requires a different priority, the employer must pay the agency the amount calculated under paragraph (b)(9)(i)(K) of this section before the employer complies with any later garnishment orders, except a family support withholding order;
(2) If an employer is withholding from a borrower's pay based on a garnishment order served on the employer before the guaranty agency's order, or if a withholding order for family support is served on an employer at any time, the employer must comply with the agency's garnishment order by withholding an amount that is the lesser of—
(i) The amount specified in the guaranty agency order; or
(ii) The amount calculated under paragraph (b)(9)(i)(L)(3) of this section less the amount or amounts withheld under the garnishment order or orders that have priority over the agency's order; and
(3) The cumulative withholding for all garnishment orders issued by guaranty agencies may not exceed, for an individual borrower, the amount permitted by 15 U.S.C. 1673, which is the lesser of 25 percent of the borrower's disposable pay or the amount by which the borrower's disposable pay exceeds 30 times the minimum wage. If a borrower owes debts to one or more guaranty agencies, each agency may issue a garnishment order to enforce each of those debts, but no single agency may order a total amount exceeding 15 percent of the disposable pay of a borrower to be withheld. The employer must honor these orders as provided in paragraphs (b)(9)(i)(L)(1) and (2) of this section.
(M) Notwithstanding paragraphs (b)(9)(i)(K) and (L) of this section, an employer may withhold and pay a greater amount than required under the order if the borrower gives the employer written consent.
(N) A borrower may, at any time, raise an objection to the amount or the rate of withholding specified in the guaranty agency's order to the borrower's employer on the ground of financial hardship. However, the guaranty agency is not required to consider such an objection and provide the borrower with a hearing until at least six months after the agency issued the most recent garnishment order, either one for which the borrower did not request a hearing or one that was issued after a hardship-related hearing determination. The agency may provide a hearing in extraordinary circumstances earlier than six months if the borrower's request for review shows that the borrower's financial circumstances have substantially changed after the garnishment notice because of an event such as injury, divorce, or catastrophic illness.
(O) A garnishment order is effective until the guaranty agency rescinds the order or the agency has fully recovered the amounts owed by the borrower, including interest, late fees, and collections costs. If an employer is unable to honor a garnishment order because the amount available for garnishment is insufficient to pay any portion of the amount stated in the order, the employer must notify the agency and comply with the order when sufficient disposable pay is available. Upon full recovery of the debt, the agency must send the borrower's employer notification to stop wage withholding.
(P) The guaranty agency must sue any employer for any amount that the employer, after receipt of the withholding order provided by the agency under paragraph (b)(9)(i)(R) of this section, fails to withhold from wages owed and payable to an employee under the employer's normal pay and disbursement cycle.
(Q) The guaranty agency may not garnish the wages of a borrower whom it knows has been involuntarily separated from employment until the borrower has been reemployed continuously for at least 12 months. The borrower has the burden of informing the guaranty agency of the circumstances surrounding the borrower's involuntary separation from employment.
(R) Unless the guaranty agency receives information that the agency believes justifies a delay or cancellation of the withholding order, it must send a withholding order to the employer within 20 days after the borrower fails to make a timely request for a hearing, or, if a timely request for a hearing is made by the borrower, within 20 days after a final decision is made by the agency to proceed with garnishment.
(S) The notice given to the employer under paragraph (b)(9)(i)(R) of this section must contain only the information as may be necessary for the employer to comply with the withholding order and to ensure proper credit for payments received. At a minimum, the notice given to the employer includes the borrower's name, address, and Social Security Number, as well as instructions for withholding and information as to where the employer must send payments.
(T)(1) A guaranty agency may use a third-party servicer or collection contractor to perform administrative activities associated with administrative wage garnishment, but may not allow such a party to conduct required hearings or to determine that a withholding order is to be issued. Subject to the limitations of paragraphs (b)(9)(i)(T)(2) and (3) of this section, administrative activities associated with administrative wage garnishment may include but are not limited to—
(i) Identifying to the agency suitable candidates for wage garnishment pursuant to agency standards;
(ii) Obtaining employment information for the purposes of garnishment;
(iii) Sending candidates selected for garnishment by the agency notices prescribed by the agency;
(iv) Negotiating alternative repayment arrangements with borrowers;
(v) Responding to inquiries from notified borrowers;
(vi) Receiving garnishment payments on behalf of the agency;
(vii) Arranging for the retention of hearing officials and for the conduct of hearings on behalf of the agency;
(viii) Providing information to borrowers or hearing officials on the process or conduct of hearings; and
(ix) Sending garnishment orders and other communications to employers on behalf of the agency.
(2) Only an authorized official of the agency may determine that an individual withholding order is to be issued. The guarantor must record the official's determination for each order it issues, including any order which it causes to be prepared or mailed by a third-party servicer or collection contractor. The guarantor must evidence the official's approval, either by including the official's signature on the order or, if the agency uses a form of withholding order that does not provide for execution by signature, by retaining in the agency's records the identity of the approving official, the date of the approval, the amount or rate of the order, the name and address of the employer to whom the order was issued, and the debt for which the order was issued.
(3) The withholding order must identify the guaranty agency as the holder of the debt, as the issuer of the order, and as the sole party legally authorized to issue the withholding order. If a guaranty agency uses a third-party servicer or collection contractor to prepare and mail a withholding order that includes the name of the servicer or contractor that prepared or mailed the order, the guaranty agency must also ensure that the order contains no captions or representations that the servicer or contractor is the party that issued, or was empowered by Federal law or by the agency to issue, the withholding order.
(U) As specified in section 488A(a)(8) of the Act, the borrower may seek judicial relief, including punitive damages, if the employer discharges, refuses to employ, or takes disciplinary action against the borrower due to the issuance of a withholding order.
(V) A guaranty agency is required to suspend a garnishment order when the agency receives a borrower's fifth qualifying payment under a loan rehabilitation agreement with the agency, unless otherwise directed by the borrower, in accordance with § 682.405(a)(3).
(ii) For purposes of paragraph (b)(9) of this section—
(A) “Borrower” includes all endorsers on a loan;
(B) “Day” means calendar day;
(C) “Disposable pay” means that part of a borrower's compensation for personal services, whether or not denominated as wages from an employer, that remains after the deduction of health insurance premiums and any amounts required by law to be withheld, and includes, but is not limited to, salary, bonuses, commissions, or vacation pay. “Amounts required by law to be withheld” include amounts for deductions such as Social Security taxes and withholding taxes, but do not include any amount withheld under a court order or other withholding order. All references to an amount of disposable pay refer to disposable pay calculated for a single week;
(D) “Employer” means a person or entity that employs the services of another and that pays the latter's wages or salary and includes, but is not limited to, State and local governments, but does not include an agency of the Federal Government;
(E) “Financial hardship” means an inability to meet basic living expenses for goods and services necessary for the survival of the borrower and the borrower's spouse and dependents;
(F) “Garnishment” means the process of withholding amounts from an employee's disposable pay and paying those amounts to a creditor in satisfaction of a withholding order; and
(G) “Withholding order” means any order for withholding or garnishment of pay issued by the guaranty agency and may also be referred to as “wage garnishment order” or “garnishment order.”
(10) Conflicts of interest. (i) A guaranty agency shall maintain and enforce written standards of conduct governing the performance of its employees, officers, directors, trustees, and agents engaged in the selection, award, and administration of contracts or agreements. The standards of conduct must, at a minimum, require disclosure of financial or other interests and must mandate disinterested decision-making. The standards must provide for appropriate disciplinary actions to be applied for violations of the standards by employees, officers, directors, trustees, or agents of the guaranty agency, and must include provisions to—
(A) Prohibit any employee, officer, director, trustee, or agent from participating in the selection, award, or decision-making related to the administration of a contract or agreement supported by the reserve fund described in paragraph (a) of this section, if that participation would create a conflict of interest. Such a conflict would arise if the employee, officer, director, trustee, or agent, or any member of his or her immediate family, his or her partner, or an organization that employs or is about to employ any of those parties has a financial or ownership interest in the organization selected for an award or would benefit from the decision made in the administration of the contract or agreement. The prohibitions described in this paragraph do not apply to employees of a State agency covered by codes of conduct established under State law;
(B) Ensure sufficient separation of responsibility and authority between its lender claims processing as a guaranty agency and its lending or loan servicing activities, or both, within the guaranty agency or between that agency and one or more affiliates, including independence in direct reporting requirements and such management and systems controls as may be necessary to demonstrate, in the independent audit required under § 682.410(b)(1), that claims filed by another arm of the guaranty agency or by an affiliate of that agency receive no more favorable treatment than that accorded the claims filed by a lender or servicer that is not an affiliate or part of the guaranty agency; and
(C) Prohibit the employees, officers, directors, trustees, and agents of the guaranty agency, his or her partner, or any member of his or her immediate family, from soliciting or accepting gratuities, favors, or anything of monetary value from contractors or parties to agreements, except that nominal and unsolicited gratuities, favors, or items may be accepted.
(ii) Guaranty agency restructuring. If the Secretary determines that action is necessary to protect the Federal fiscal interest because of an agency's failure to meet the requirements of § 682.410(b)(10)(i), the Secretary may require the agency to comply with any additional measures that the Secretary believes are appropriate, including the total divestiture of the agency's non-FFEL functions and the agency's interests in any affiliated organization.
(c) Enforcement requirements. A guaranty agency shall take such measures and establish such controls as are necessary to ensure its vigorous enforcement of all Federal, State, and guaranty agency requirements, including agreements, applicable to its loan guarantee program, including, at a minimum, the following:
(1) Conducting comprehensive biennial on-site program reviews, using statistically valid techniques to calculate liabilities to the Secretary that each review indicates may exist, of at least—
(i)(A) Each participating lender whose dollar volume of FFEL loans held by the lender and guaranteed by the agency in the preceding year—
(1) Equaled or exceeded two percent of the total of all loans guaranteed by the agency;
(2) Was one of the ten largest lenders whose loans were guaranteed by the agency; or
(3) Equaled or exceeded $10 million in the most recent fiscal year;
(B) Each lender described in section 435(d)(1)(D) or (J) of the Act that is located in any State in which the agency is the principal guarantor, and, at the option of each guaranty agency, the Student Loan Marketing Association; and
(C) Each school that participated in the guaranty agency's program, located in a State for which the guaranty agency is the principal guaranty agency, that has a cohort default rate, as described in subpart M of 34 CFR part 668, that includes FFEL Program loans, for either of the 2 immediately preceding fiscal years, as defined in 34 CFR 668.182, that exceeds 20 percent, unless the school is under a mandate from the Secretary under subpart M of 34 CFR part 668 to take specific default reduction measures or if the total dollar amount of loans entering repayment in each fiscal year on which the cohort default rate of over 20 percent is based does not exceed $100,000; or
(ii) The schools and lenders selected by the agency as an alternative to the reviews required by paragraphs (c)(1)(i)(A)-(C) of this section if the Secretary approves the agency's proposed alternative selection methodology.
(2) Demanding prompt repayment by the responsible parties to lenders, borrowers, the agency, or the Secretary, as appropriate, of all funds found in those reviews to be owed by the participants with regard to loans guaranteed by the agency, whether or not the agency holds the loans, and monitoring the implementation by participants of corrective actions, including these repayments, required by the agency as a result of those reviews.
(3) Referring to the Secretary for further enforcement action any case in which repayment of funds to the Secretary is not made in full within 60 days of the date of the agency's written demand to the school, lender, or other party for payment, together with all supporting documentation, any correspondence, and any other documentation submitted by that party regarding the repayment.
(4) Undertaking or arranging with State or local law enforcement agencies for the prompt and thorough investigation of all allegations and indications of criminal or other programmatic misconduct by its program participants, including violations of Federal law or regulations.
(5) Promptly referring to appropriate State and local regulatory agencies and to nationally recognized accrediting agencies and associations for investigation information received by the guaranty agency that may affect the retention or renewal of the license or accreditation of a program participant.
(6) Promptly reporting all of the allegations and indications of misconduct having a substantial basis in fact, and the scope, progress, and results of the agency's investigations thereof to the Secretary.
(7) Referring appropriate cases to State or local authorities for criminal prosecution or civil litigation.
(8) Promptly notifying the Secretary of—
(i) Any action it takes affecting the FFEL program eligibility of a participating lender or title IV eligibility of a school;
(ii) Information it receives regarding an action affecting the FFEL program eligibility of a participating lender or title IV eligibility of a school taken by a nationally recognized accrediting agency, association, or a State licensing agency;
(iii) Any judicial or administrative proceeding relating to the enforceability of FFEL loans guaranteed by the agency or in which tuition obligations of a school's students are directly at issue, other than a proceeding relating to a single borrower or student; and
(iv) Any petition for relief in bankruptcy, application for receivership, or corporate dissolution proceeding brought by or against a school or lender participating in its loan guarantee program.
(9) Cooperating with all program reviews, investigations, and audits conducted by the Secretary relating to the agency's loan guarantee program.
(10) Taking prompt action to protect the rights of borrowers and the Federal fiscal interest respecting loans that the agency has guaranteed when the agency learns that a school that participated in the FFEL Program or a holder of loans participating in the program is experiencing problems that threaten the solvency of the school or holder, including—
(i) Conducting on-site program reviews;
(ii) Providing training and technical assistance, if appropriate;
(iii) Filing a proof of claim with a bankruptcy court for recovery of any funds due the agency and any refunds due to borrowers on FFEL loans that it has guaranteed when the agency learns that a school has filed a bankruptcy petition;
(iv) Promptly notifying the Secretary that the agency has determined that a school or holder of loans is experiencing potential solvency problems; and
(v) Promptly notifying the Secretary of the results of any actions taken by the agency to protect Federal funds involving such a school or holder.
(a) General. In the event of delinquency on an FFEL Program loan, the lender must engage in at least the collection efforts described in paragraphs (c) through (n) of this section, except that in the case of a loan made to a borrower who is incarcerated, residing outside a State, Mexico, or Canada, or whose telephone number is unknown, the lender may send a forceful collection letter instead of each telephone effort required by this section.
(b) Delinquency. (1) For purposes of this section, delinquency on a loan begins on the first day after the due date of the first missed payment that is not later made. The due date of the first payment is established by the lender but must occur by the deadlines specified in § 682.209(a) or, if the lender first learns after the fact that the borrower has entered the repayment period, no later than 75 days after the day the lender so learns, except as provided in § 682.209(a)(2)(v) and (a)(3)(ii)(E). If a payment is made late, the first day of delinquency is the day after the due date of the next missed payment that is not later made. A payment that is within five dollars of the amount normally required to advance the due date may nevertheless advance the due date if the lender's procedures allow for that advancement.
(2) At no point during the periods specified in paragraphs (c), (d), and (e) of this section may the lender permit the occurrence of a gap in collection activity, as defined in paragraph (j) of this section, of more than 45 days (60 days in the case of a transfer).
(3) As part of one of the collection activities provided for in this section, the lender must provide the borrower with information on the availability of the Student Loan Ombudsman's office.
(c) 1-15 days delinquent. Except in the case in which a loan is brought into this period by a payment on the loan, expiration of an authorized deferment or forbearance period, or the lender's receipt from the drawee of a dishonored check submitted as a payment on the loan, the lender during this period must send at least one written notice or collection letter to the borrower informing the borrower of the delinquency and urging the borrower to make payments sufficient to eliminate the delinquency. The notice or collection letter sent during this period must include, at a minimum, a lender or servicer contact, a telephone number, and a prominent statement informing the borrower that assistance may be available if he or she is experiencing difficulty in making a scheduled repayment.
(d) 16-180 days delinquent (16-240 days delinquent for a loan repayable in installments less frequently than monthly). (1) Unless exempted under paragraph (d)(4) of this section, during this period the lender must engage in at least four diligent efforts to contact the borrower by telephone and send at least four collection letters urging the borrower to make the required payments on the loan. At least one of the diligent efforts to contact the borrower by telephone must occur on or before, and another one must occur after, the 90th day of delinquency. Collection letters sent during this period must include, at a minimum, information for the borrower regarding deferment, forbearance, income-sensitive repayment, income-based repayment and loan consolidation, and other available options to avoid default.
(2) At least two of the collection letters required under paragraph (d)(1) of this section must warn the borrower that, if the loan is not paid, the lender will assign the loan to the guaranty agency that, in turn, will report the default to each nationwide consumer reporting agency, and that the agency may institute proceedings to offset the borrower's State and Federal income tax refunds and other payments made by the Federal Government to the borrower or to garnish the borrower's wages, or to assign the loan to the Federal Government for litigation against the borrower.
(3) Following the lender's receipt of a payment on the loan or a correct address for the borrower, the lender's receipt from the drawee of a dishonored check received as a payment on the loan, the lender's receipt of a correct telephone number for the borrower, or the expiration of an authorized deferment or forbearance period, the lender is required to engage in only—
(i) Two diligent efforts to contact the borrower by telephone during this period, if the loan is less than 91 days delinquent (121 days delinquent for a loan repayable in installments less frequently than monthly) upon receipt of the payment, correct address, correct telephone number, or returned check, or expiration of the deferment or forbearance; or
(ii) One diligent effort to contact the borrower by telephone during this period if the loan is 91-120 days delinquent (121-180 days delinquent for a loan repayable in installments less frequently than monthly) upon receipt of the payment, correct address, correct telephone number, or returned check, or expiration of the deferment or forbearance.
(4) A lender need not attempt to contact by telephone any borrower who is more than 120 days delinquent (180 days delinquent for a loan repayable in installments less frequent than monthly) following the lender's receipt of—
(i) A payment on the loan;
(ii) A correct address or correct telephone number for the borrower;
(iii) A dishonored check received from the drawee as a payment on the loan; or
(iv) The expiration of an authorized deferment or forbearance.
(e) 181-270 days delinquent (241-330 days delinquent for a loan repayable in installments less frequently than monthly). During this period the lender must engage in efforts to urge the borrower to make the required payments on the loan. These efforts must, at a minimum, provide information to the borrower regarding options to avoid default and the consequences of defaulting on the loan.
(f) Final demand. On or after the 241st day of delinquency (the 301st day for loans payable in less frequent installments than monthly) the lender must send a final demand letter to the borrower requiring repayment of the loan in full and notifying the borrower that a default will be reported to each nationwide consumer reporting agency. The lender must allow the borrower at least 30 days after the date the letter is mailed to respond to the final demand letter and to bring the loan out of default before filing a default claim on the loan.
(g) Collection procedures when borrower's telephone number is not available. Upon completion of a diligent but unsuccessful effort to ascertain the correct telephone number of a borrower as required by paragraph (m) of this section, the lender is excused from any further efforts to contact the borrower by telephone, unless the borrower's number is obtained before the 211th day of delinquency (the 271st day for loans repayable in installments less frequently than monthly).
(h) Skip-tracing. (1) Unless the letter specified under paragraph (f) of this section has already been sent, within 10 days of its receipt of information indicating that it does not know the borrower's current address, the lender must begin to diligently attempt to locate the borrower through the use of effective commercial skip-tracing techniques. These efforts must include, but are not limited to, sending a letter to or making a diligent effort to contact each endorser, relative, reference, individual, and entity, identified in the borrower's loan file, including the schools the student attended. For this purpose, a lender's contact with a school official who might reasonably be expected to know the borrower's address may be with someone other than the financial aid administrator, and may be in writing or by phone calls. These efforts must be completed by the date of default with no gap of more than 45 days between attempts to contact those individuals or entities.
(2) Upon receipt of information indicating that it does not know the borrower's current address, the lender must discontinue the collection efforts described in paragraphs (c) through (f) of this section.
(3) If the lender is unable to ascertain the borrower's current address despite its performance of the activities described in paragraph (h)(1) of this section, the lender is excused thereafter from performance of the collection activities described in paragraphs (c) through (f) and (l)(1) through (l)(3) and (l)(5) of this section unless it receives communication indicating the borrower's address before the 241st day of delinquency (the 301st day for loans payable in less frequent installments than monthly).
(4) The activities specified by paragraph (m)(1)(i) or (ii) of this section (with references to the “borrower” understood to mean endorser, reference, relative, individual, or entity as appropriate) meet the requirement that the lender make a diligent effort to contact each individual identified in the borrower's loan file.
(i) Default aversion assistance. Not earlier than the 60th day and no later than the 120th day of delinquency, a lender must request default aversion assistance from the guaranty agency that guarantees the loan.
(j) Gap in collection activity. For purposes of this section, the term gap in collection activity means, with respect to a loan, any period—
(1) Beginning on the date that is the day after—
(i) The due date of a payment unless the lender does not know the borrower's address on that date;
(ii) The day on which the lender receives a payment on a loan that remains delinquent notwithstanding the payment;
(iii) The day on which the lender receives the correct address for a delinquent borrower;
(iv) The day on which the lender completes a collection activity;
(v) The day on which the lender receives a dishonored check submitted as a payment on the loan;
(vi) The expiration of an authorized deferment or forbearance period on a delinquent loan; or
(vii) The day the lender receives information indicating it does not know the borrower's current address; and
(2) Ending on the date of the earliest of—
(i) The day on which the lender receives the first subsequent payment or completed deferment request or forbearance agreement;
(ii) The day on which the lender begins the first subsequent collection activity;
(iii) The day on which the lender receives written communication from the borrower relating to his or her account; or
(iv) Default.
(k) Transfer. For purposes of this section, the term transfer with respect to a loan means any action, including, but not limited to, the sale of the loan, that results in a change in the system used to monitor or conduct collection activity on a loan from one system to another.
(l) Collection activity. For purposes of this section, the term collection activity with respect to a loan means—
(1) Mailing or otherwise transmitting to the borrower at an address that the lender reasonably believes to be the borrower's current address a collection letter or final demand letter that satisfies the timing and content requirements of paragraph (c), (d), (e), or (f) of this section;
(2) Making an attempt to contact the borrower by telephone to urge the borrower to begin or resume repayment;
(3) Conducting skip-tracing efforts, in accordance with paragraph (h)(1) or (m)(1)(iii) of this section, to locate a borrower whose correct address or telephone number is unknown to the lender;
(4) Mailing or otherwise transmitting to the guaranty agency a request for default aversion assistance available from the agency on the loan at the time the request is transmitted; or
(5) Any telephone discussion or personal contact with the borrower so long as the borrower is apprised of the account's past-due status.
(m) Diligent effort for telephone contact. (1) For purposes of this section, the term diligent effort with respect to telephone contact means—
(i) A successful effort to contact the borrower by telephone;
(ii) At least two unsuccessful attempts to contact the borrower by telephone at a number that the lender reasonably believes to be the borrower's correct telephone number; or
(iii) An unsuccessful effort to ascertain the correct telephone number of a borrower, including, but not limited to, a directory assistance inquiry as to the borrower's telephone number, and sending a letter to or making a diligent effort to contact each reference, relative, and individual identified in the most recent loan application or most recent school certification for that borrower held by the lender. The lender may contact a school official other than the financial aid administrator who reasonably may be expected to know the borrower's address or telephone number.
(2) If the lender is unable to ascertain the borrower's correct telephone number despite its performance of the activities described in paragraph (m)(1)(iii) of this section, the lender is excused thereafter from attempting to contact the borrower by telephone unless it receives a communication indicating the borrower's current telephone number before the 211th day of delinquency (the 271st day for loans repayable in installments less frequently than monthly).
(3) The activities specified by paragraph (m)(1) (i) or (ii) of this section (with references to “the borrower” understood to mean endorser, reference, relative, or individual as appropriate), meet the requirement that the lender make a diligent effort to contact each endorser or each reference, relative, or individual identified on the borrower's most recent loan application or most recent school certification.
(n) Due diligence for endorsers. (1) Before filing a default claim on a loan with an endorser, the lender must—
(i) Make a diligent effort to contact the endorser by telephone; and
(ii) Send the endorser on the loan two letters advising the endorser of the delinquent status of the loan and urging the endorser to make the required payments on the loan with at least one letter containing the information described in paragraph (d)(2) of this section (with references to “the borrower” understood to mean the endorser).
(2) On or after the 241st day of delinquency (the 301st day for loans payable in less frequent installments than monthly) the lender must send a final demand letter to the endorser requiring repayment of the loan in full and notifying the endorser that a default will be reported to each nationwide consumer reporting agency. The lender must allow the endorser at least 30 days after the date the letter is mailed to respond to the final demand letter and to bring the loan out of default before filing a default claim on the loan.
(3) Unless the letter specified under paragraph (n)(2) of this section has already been sent, upon receipt of information indicating that it does not know the endorser's current address or telephone number, the lender must diligently attempt to locate the endorser through the use of effective commercial skip-tracing techniques. This effort must include an inquiry to directory assistance.
(o) Preemption. The provisions of this section—
(1) Preempt any State law, including State statutes, regulations, or rules, that would conflict with or hinder satisfaction of the requirements or frustrate the purposes of this section; and
(2) Do not preempt provisions of the Fair Credit Reporting Act that provide relief to a borrower while the lender determines the legal enforceability of a loan when the lender receives a valid identity theft report or notification from a consumer reporting agency that information furnished is a result of an alleged identity theft as defined in § 682.402(e)(14).
(a) The lender shall immediately send to the borrower a final demand letter meeting the requirements of § 682.411(f) when it learns and can substantiate that the borrower or the student on whose behalf a parent has borrowed, without the lender or school's knowledge at the time the loan was made, provided false or erroneous information or took actions that caused the student or borrower—
(1) To be ineligible for all or a portion of a loan made under this part;
(2) To receive a Stafford loan subject to payment of Federal interest benefits for which he or she was ineligible; or
(3) To receive loan proceeds for a period of enrollment from which he or she has withdrawn or been expelled prior to the first day of classes or during which he or she failed to attend school and has not paid those funds to the school or repaid them to the lender.
(b) The lender shall neither bill the Secretary for nor be entitled to interest benefits on a loan after it learns that one of the conditions described in paragraph (a) of this section exists with respect to the loan.
(c) In the final demand letter transmitted under paragraph (a) of this section, the lender shall demand that within 30 days from the date the letter is mailed the borrower repay in full any principal amount for which the borrower is ineligible and any accrued interest, including interest and all special allowance paid by the Secretary.
(d) If the borrower repays the amounts described in paragraph (c) of this section within the 30-day period, the lender shall—
(1) On its next quarterly interest billing submitted under § 682.305, refund to the Secretary the interest benefits and special allowance repaid by the borrower and all other interest benefits and special allowance previously paid by the Secretary on the ineligible portion of the loan; and
(2) Treat that payment of the principal amount of the ineligible portion of the loan as a prepayment of principal.
(e) If a borrower fails to comply with the terms of a final demand letter described in paragraph (a) of this section, the lender shall treat the entire loan as in default, and—
(1) With its next quarterly interest billing submitted under § 682.305, refund to the Secretary the amount of the interest benefits received from the Secretary on the ineligible portion of the loan, whether or not repaid by the borrower; and
(2) Within the time specified in § 682.406(a)(5), file a default claim thereon with the guaranty agency for the entire unpaid balance of principal and accrued interest.
(a)(1) The Secretary requires a lender and its third-party servicer administering any aspect of the FFEL programs under a contract with the lender to repay interest benefits and special allowance or other compensation received on a loan guaranteed by a guaranty agency, pursuant to paragraph (a)(2) of this section—
(i) For any period beginning on the date of a failure by the lender or servicer, with respect to the loan, to comply with any of the requirements set forth in § 682.406(a)(1)-(a)(6), (a)(9), and (a)(12);
(ii) For any period beginning on the date of a failure by the lender or servicer, with respect to the loan, to meet a condition of guarantee coverage established by the guaranty agency, to the date, if any, on which the guaranty agency reinstated the guarantee coverage pursuant to policies and procedures established by the agency;
(iii) For any period in which the lender or servicer, with respect to the loan, violates the requirements of subpart C of this part; and
(iv) For any period beginning on the day after the Secretary's obligation to pay special allowance on the loan terminates under § 682.302(d).
(2) For purposes of this section, a lender and any applicable third-party servicer shall be considered jointly and severally liable for the repayment of any interest benefits and special allowance paid as a result of a violation of applicable requirements by the servicer in administering the lender's FFEL programs.
(3) For purposes of paragraph (a)(2) of this section, the relevant third-party servicer shall repay any outstanding liabilities under paragraph (a)(2) of this section only if—
(i) The Secretary has determined that the servicer is jointly and severally liable for the liabilities; and
(ii) (A) The lender has not repaid in full the amount of the liability within 30 days from the date the lender receives notice from the Secretary of the liability;
(B) The lender has not made other satisfactory arrangements to pay the amount of the liability within 30 days from the date the lender receives notice from the Secretary of the liability; or
(C) The Secretary is unable to collect the liability from the lender by offsetting the lender's bill to the Secretary for interest benefits or special allowance, if—
(1) The bill is submitted after the 30 day period specified in paragraph (a)(3)(ii)(A) of this section has passed; and
(2) The lender has not paid, or made satisfactory arrangements to pay, the liability.
(b)(1) The Secretary requires a guaranty agency to repay reinsurance payments received on a loan if the lender, third-party servicer, if applicable, or the agency failed to meet the requirements of § 682.406(a).
(2) The Secretary may require a guaranty agency to repay reinsurance payments received on a loan or to assign FFEL loans to the Department if the agency fails to meet the requirements of § 682.410.
(c)(1) In addition to requiring repayment of reinsurance payments pursuant to paragraph (b) of this section, the Secretary may take one or more of the following remedial actions against a guaranty agency or third-party servicer administering any aspect of the FFEL programs under a contract with the guaranty agency, that makes an incomplete or incorrect statement in connection with any agreement entered into under this part or violates any applicable Federal requirement:
(i) Require the agency to return payments made by the Secretary to the agency.
(ii) Withhold payments to the agency.
(iii) Limit the terms and conditions of the agency's continued participation in the FFEL programs.
(iv) Suspend or terminate agreements with the agency.
(v) Impose a fine on the agency or servicer. For purposes of assessing a fine on a third-party servicer, a repeated mechanical systemic unintentional error shall be counted as one violation, unless the servicer has been cited for a similar violation previously and had failed to make the appropriate corrections to the system.
(vi) Require repayment from the agency and servicer pursuant to paragraph (c)(2) of this section, of interest, special allowance, and reinsurance paid on Consolidation loan amounts attributed to Consolidation loans for which the required lender verification certification is not available.
(vii) Require repayment from the agency or servicer, pursuant to paragraph (c)(2) of this section, of any related payments that the Secretary became obligated to make to others as a result of an incomplete or incorrect statement or a violation of an applicable Federal requirement.
(2) For purposes of this section, a guaranty agency and any applicable third-party servicer shall be considered jointly and severally liable for the repayment of any interest benefits, special allowance, reinsurance paid, or other compensation on Consolidation loan amounts attributed to Consolidation loans as specified in § 682.413(c)(1)(vi) as a result of a violation by the servicer administering any aspect of the FFEL programs under a contract with that guaranty agency.
(3) For purposes of paragraph (c)(2) of this section, the relevant third-party servicer shall repay any outstanding liabilities under paragraph (c)(2) of this section only if—
(i) The Secretary has determined that the servicer is jointly and severally liable for the liabilities; and
(ii) (A) The guaranty agency has not repaid in full the amount of the liability within 30 days from the date the guaranty agency receives notice from the Secretary of the liability;
(B) The guaranty agency has not made other satisfactory arrangements to pay the amount of the liability within 30 days from the date the guaranty agency receives notice from the Secretary of the liability; or
(C) The Secretary is unable to collect the liability from the guaranty agency by offsetting the guaranty agency's first reinsurance claim to the Secretary, if—
(1) The claim is submitted after the 30-day period specified in paragraph (c)(3)(ii)(A) of this section has passed; and
(2) The guaranty agency has not paid, or made satisfactory arrangements to pay, the liability.
(d)(1) The Secretary follows the procedures described in 34 CFR part 668, subpart G, applicable to fine proceedings against schools, in imposing a fine against a lender, guaranty agency, or third-party servicer. References to “the institution” in those regulations shall be understood to mean the lender, guaranty agency, or third-party servicer, as applicable, for this purpose.
(2) The Secretary also follows the provisions of section 432(g) of the Act in imposing a fine against a guaranty agency or lender.
(e)(1)(i) The Secretary's decision to require repayment of funds, withhold funds, or to limit or suspend a lender, guaranty agency, or third party servicer from participation in the FFEL Program or to terminate a lender or third party from participation in the FFEL Program does not become final until the Secretary provides the lender, agency, or servicer with written notice of the intended action and an opportunity to be heard. The hearing is at a time and in a manner the Secretary determines to be appropriate to the resolution of the issues on which the lender, agency, or servicer requests the hearing.
(ii) The Secretary's decision to terminate a guaranty agency's participation in the FFEL Program after September 24, 1998 does not become final until the Secretary provides the agency with written notice of the intended action and provides an opportunity for a hearing on the record.
(2)(i) The Secretary may withhold payments from an agency or suspend an agreement with an agency prior to giving notice and an opportunity to be heard if the Secretary finds that emergency action is necessary to prevent substantial harm to Federal interests.
(ii) The Secretary follows the notice and show cause procedures described in § 682.704 applicable to emergency actions against lenders in taking an emergency action against a guaranty agency.
(3) The Secretary follows the procedures in 34 CFR 30.20-30.32 in collecting a debt by offset against payments otherwise due a guaranty agency or lender.
(f) Notwithstanding paragraphs (a)-(e) of this section, the Secretary may waive the right to require repayment of funds by a lender or agency if in the Secretary's judgment the best interests of the United States so require. The Secretary's waiver policy for violations of § 682.406(a)(3) or (a)(5) is set forth in appendix D to this part.
(g) The Secretary's final decision to require repayment of funds or to take other remedial action, other than a fine, against a lender or guaranty agency under this section is conclusive and binding on the lender or agency.
(h) In any action to require repayment of funds or to withhold funds from a guaranty agency, or to limit, suspend, or terminate a guaranty agency based on a violation of section 428(b)(3) of the Act, if the Secretary finds that the guaranty agency provided or offered the prohibited payments or activities, the Secretary applies a rebuttable presumption that the payments or activities were offered or provided to secure applications for FFEL loans or to secure FFEL loan volume. To reverse the presumption, the guaranty agency must present evidence that the activities or payments were provided for a reason unrelated to securing applications for FFEL loans or securing FFEL loan volume.
A decision by the Secretary under this section is subject to judicial review under 5 U.S.C. 706 and 41 U.S.C. 321-322.
(a) Records. (1)(i) The guaranty agency shall maintain current, complete, and accurate records of each loan that it holds, including, but not limited to, the records described in paragraph (a)(1)(ii) of this section. The records must be maintained in a system that allows ready identification of each loan's current status, updated at least once every 10 business days. Any reference to a guaranty agency under this section includes a third-party servicer that administers any aspect of the FFEL programs under a contract with the guaranty agency, if applicable.
(ii) The agency shall maintain—
(A) All documentation supporting the claim filed by the lender;
(B) Notices of changes in a borrower's address;
(C) A payment history showing the date and amount of each payment received from or on behalf of the borrower by the guaranty agency, and the amount of each payment that was attributed to principal, accrued interest, and collection costs and other charges, such as late charges;
(D) A collection history showing the date and subject of each communication between the agency and the borrower or endorser relating to collection of a defaulted loan, each communication between the agency and a consumer reporting agency regarding the loan, each effort to locate a borrower whose address was unknown at any time, and each request by the lender for default aversion assistance on the loan;
(E) Documentation regarding any wage garnishment actions initiated by the agency on the loan;
(F) Documentation of any matters relating to the collection of the loan by tax-refund offset; and
(G) Any additional records that are necessary to document its right to receive or retain payments made by the Secretary under this part and the accuracy of reports it submits to the Secretary.
(2) A guaranty agency must retain the records required for each loan for not less than 3 years following the date the loan is repaid in full by the borrower, or for not less than 5 years following the date the agency receives payment in full from any other source. However, in particular cases, the Secretary may require the retention of records beyond these minimum periods.
(3) A guaranty agency shall retain a copy of the audit report required under § 682.410(b) for not less than five years after the report is issued.
(4)(i) The guaranty agency shall require a participating lender to maintain current, complete, and accurate records of each loan that it holds, including, but not limited to, the records described in paragraph (a)(4)(ii) of this section. The records must be maintained in a system that allows ready identification of each loan's current status.
(ii) The lender shall keep—
(A) A copy of the loan application if a separate application was provided to the lender;
(B) A copy of the signed promissory note;
(C) The repayment schedule;
(D) A record of each disbursement of loan proceeds;
(E) Notices of changes in a borrower's address and status as at least a half-time student;
(F) Evidence of the borrower's eligibility for a deferment;
(G) The documents required for the exercise of forbearance;
(H) Documentation of the assignment of the loan;
(I) A payment history showing the date and amount of each payment received from or on behalf of the borrower, and the amount of each payment that was attributed to principal, interest, late charges, and other costs;
(J) A collection history showing the date and subject of each communication between the lender and the borrower or endorser relating to collection of a delinquent loan, each communication other than regular reports by the lender showing that an account is current, between the lender and a consumer reporting agency regarding the loan, each effort to locate a borrower whose address is unknown at any time, and each request by the lender for default aversion assistance on the loan;
(K) Documentation of any MPN confirmation process or processes; and
(L) Any additional records that are necessary to document the validity of a claim against the guarantee or the accuracy of reports submitted under this part.
(iii) Except as provided in paragraph (a)(4)(iv) of this section, a lender must retain the records required for each loan for not less than 3 years following the date the loan is repaid in full by the borrower, or for not less than five years following the date the lender receives payment in full from any other source. However, in particular cases, the Secretary or the guaranty agency may require the retention of records beyond this minimum period.
(iv) A lender shall retain a copy of the audit report required under § 682.305(c) for not less than five years after the report is issued.
(5)(i) A guaranty agency or lender may store the records specified in paragraphs (a)(4)(ii)(C)-(L) of this section in accordance with 34 CFR 668.24(d)(3)(i) through (iv).
(ii) If a promissory note was signed electronically, the guaranty agency or lender must store it electronically and it must be retrievable in a coherent format.
(iii) A lender or guaranty agency holding a promissory note must retain the original or a true and exact copy of the promissory note until the loan is paid in full or assigned to the Secretary. When a loan is paid in full by the borrower, the lender or guaranty agency must return either the original or a true and exact copy of the note to the borrower or notify the borrower that the loan is paid in full, and retain a copy for the prescribed period.
(iv) If a lender made a loan based on an electronically signed MPN, the holder of the original electronically signed MPN must retain that original MPN for at least 3 years after all the loans made on the MPN have been satisfied.
(6)(i) Upon the Secretary's request with respect to a particular loan or loans assigned to the Secretary and evidenced by an electronically signed promissory note, the guaranty agency and the lender that created the original electronically signed promissory note must cooperate with the Secretary in all activities necessary to enforce the loan or loans. The guaranty agency or lender must provide—
(A) An affidavit or certification regarding the creation and maintenance of the electronic records of the loan or loans in a form appropriate to ensure admissibility of the loan records in a legal proceeding. This affidavit or certification may be executed in a single record for multiple loans provided that this record is reliably associated with the specific loans to which it pertains; and
(B) Testimony by an authorized official or employee of the guaranty agency or lender, if necessary to ensure admission of the electronic records of the loan or loans in the litigation or legal proceeding to enforce the loan or loans.
(ii) The affidavit or certification described in paragraph (a)(6)(i)(A) of this section must include, if requested by the Secretary—
(A) A description of the steps followed by a borrower to execute the promissory note (such as a flow chart);
(B) A copy of each screen as it would have appeared to the borrower of the loan or loans the Secretary is enforcing when the borrower signed the note electronically;
(C) A description of the field edits and other security measures used to ensure integrity of the data submitted to the originator electronically;
(D) A description of how the executed promissory note has been preserved to ensure that it has not been altered after it was executed;
(E) Documentation supporting the lender's authentication and electronic signature process; and
(F) All other documentary and technical evidence requested by the Secretary to support the validity or the authenticity of the electronically signed promissory note.
(iii) The Secretary may request a record, affidavit, certification or evidence under paragraph (a)(6) of this section as needed to resolve any factual dispute involving a loan that has been assigned to the Secretary including, but not limited to, a factual dispute raised in connection with litigation or any other legal proceeding, or as needed in connection with loans assigned to the Secretary that are included in a Title IV program audit sample, or for other similar purposes. The guaranty agency must respond to any request from the Secretary within 10 business days.
(iv) As long as any loan made to a borrower under a MPN created by the lender is not satisfied, the holder of the original electronically signed promissory note is responsible for ensuring that all parties entitled to access to the electronic loan record, including the guaranty agency and the Secretary, have full and complete access to the electronic record.
(b) Reports. A guaranty agency shall accurately complete and submit to the Secretary the following reports:
(1) A report concerning the status of the agency's reserve fund and the operation of the agency's loan guarantee program at the time and in the manner that the Secretary may reasonably require. The Secretary does not pay the agency any funds, the amount of which are determined by reference to data in the report, until a complete and accurate report is received.
(2) Annually, for each State in which it operates, a report of the total guaranteed loan volume, default volume, and default rate for each of the following categories of originating lenders on all loans guaranteed after December 31, 1980:
(i) State or private nonprofit lenders.
(ii) Commercial financial institutions (banks, savings and loan associations, and credit unions).
(iii) All other types of lenders.
(3) By July 1 of each year, a report on—
(i) Its eligibility criteria for lenders;
(ii) Its procedures for the limitation, suspension, and termination of lenders;
(iii) Any actions taken in the preceding 12 months to limit, suspend, or terminate the participation of a lender in the agency's program; and
(iv) The steps the agency has taken to ensure its compliance with § 682.410(c), including the identity of any law enforcement agency with which the agency has made arrangements for that purpose.
(4) A report to the Secretary of the borrower's enrollment and loan status information, details related to the loans or borrower's deferments, forbearances, repayment plans, delinquency and contact information, or any title IV loan-related data required by the Secretary, by the deadline date established by the Secretary.
(5) Any other information concerning its loan insurance program requested by the Secretary.
(c) Inspection requirements. (1) For purposes of examination of records, references to an institution in 34 CFR 668.24(f) (1) through (3) shall mean a guaranty agency or its agent.
(2) A guaranty agency shall require in its agreement with a lender or in its published rules or procedures that the lender or its agent give the Secretary or the Secretary's designee and the guaranty agency access to the lender's records for inspection and copying in order to verify the accuracy of the information provided by the lender pursuant to § 682.401(b) (12) and (13), and the right of the lender to receive or retain payments made under this part, or to permit the Secretary or the agency to enforce any right acquired by the Secretary or the agency under this part.
(a) Standards for administrative capability. A third-party servicer is considered administratively responsible if it—
(1) Provides the services and administrative resources necessary to fulfill its contract with a lender or guaranty agency, and conducts all of its contractual obligations that apply to the FFEL programs in accordance with FFEL programs regulations;
(2) Has business systems including combined automated and manual systems, that are capable of meeting the requirements of part B of Title IV of the Act and with the FFEL programs regulations; and
(3) Has adequate personnel who are knowledgeable about the FFEL programs.
(b) Standards of financial responsibility. The Secretary applies the provisions of 34 CFR 668.15(b) (1)-(4) and (6)-(9) to determine that a third-party servicer is financially responsible under this part. References to “the institution” in those provisions shall be understood to mean the third-party servicer, for this purpose.
(c) Special review of third-party servicer. (1) The Secretary may review a third-party servicer to determine that it meets the administrative capability and financial responsibility standards in this section.
(2) In response to a request from the Secretary, the servicer shall provide evidence to demonstrate that it meets the administrative capability and financial responsibility standards in this section.
(3) The servicer may also provide evidence of why administrative action is unwarranted if it is unable to demonstrate that it meets the standards of this section.
(4) Based on the review of the materials provided by the servicer, the Secretary determines if the servicer meets the standards in this part. If the servicer does not, the Secretary may initiate an administrative proceeding under subpart G.
(d) Past performance of third-party servicer or persons affiliated with servicer. Notwithstanding paragraphs (b) and (c) of this section, a third-party servicer is not financially responsible if—
(1)(i) The servicer; its owner, majority shareholder, or chief executive officer; any person employed by the servicer in a capacity that involves the administration of a Title IV, HEA program or the receipt of Title IV, HEA program funds; any person, entity, or officer or employee of an entity with which the servicer contracts where that person, entity, or officer or employee of the entity acts in a capacity that involves the administration of a Title IV, HEA program or the receipt of Title IV, HEA program funds has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of Federal, State, or local government funds, or has been administratively or judicially determined to have committed fraud or any other material violation of law involving such funds, unless—
(A) The funds that were fraudulently obtained, or criminally acquired, used, or expended have been repaid to the United States, and any related financial penalty has been paid;
(B) The persons who were convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of the funds are no longer incarcerated for that crime; and
(C) At least five years have elapsed from the date of the conviction, nolo contendere plea, guilty plea, or administrative or judicial determination; or
(ii) The servicer, or any principal or affiliate of the servicer (as those terms are defined in 34 CFR part 85), is—
(A) Debarred or suspended under Executive Order (E.O.) 12549 (3 CFR, 1986 Comp., p. 189) or the Federal Acquisition Regulations (FAR), 48 CFR part 9, subpart 9.4; or
(B) Engaging in any activity that is a cause under 2 CFR 180.700 or 180.800, as those sections are adopted at 2 CFR 3485.12 for debarment or suspension under E.O. 12549 (3 CFR, 1986 Comp., p. 189) or the FAR, 48 CFR part 9, subpart 9.4; and
(2) Upon learning of a conviction, plea, or administrative or judicial determination described in paragraph (d)(1) of this section, the servicer does not promptly remove the person, agency, or organization from any involvement in the administration of the servicer's participation in title IV, HEA programs, including, as applicable, the removal or elimination of any substantial control, as determined under 34 CFR 668.15, over the servicer.
(e) Independent audits. (1) A third-party servicer shall arrange for an independent audit of its administration of the FFELP loan portfolio unless—
(i) The servicer contracts with only one lender or guaranty agency; and
(ii) The audit of that lender's or guaranty agency's FFEL programs involves every aspect of the servicer's administration of those FFEL programs.
(2) The audit must—
(i) Examine the servicer's compliance with the Act and applicable regulations;
(ii) Examine the servicer's financial management of its FFEL program activities;
(iii) Be conducted in accordance with the standards for audits issued by the United States General Accounting Office's (GAO's) Standards for Audit of Governmental Organizations, Programs, Activities, and Functions. (This publication is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.) Procedures for audits are contained in an audit guide developed by and available from the Office of Inspector General of the Department of Education; and
(iv) Except for the initial audit, be conducted at least annually and be submitted to the Secretary within six months of the end of the audit period. The initial audit must be an annual audit of the servicer's first full fiscal year beginning on or after July 1, 1994, and include any period from the beginning of the first full fiscal year. The audit report must be submitted to the Secretary within six months of the end of the audit period. Each subsequent audit must cover the servicer's activities for the one-year period beginning no later than the end of the period covered by the preceding audit.
(3) A third-party servicer must conduct the audit required by this paragraph in accordance with 31 U.S.C. 7502 and 2 CFR part 200, subpart F—Audit Requirements.
(4) [Reserved]
(f) Contract responsibilities. A lender that participates in the FFEL programs may not enter into a contract with a third-party servicer that the Secretary has determined does not meet the requirements of this section. The lender must provide the Secretary with the name and address of any third-party servicer with which the lender enters into a contract and, upon request by the Secretary, a copy of that contract. A third-party servicer that is under contract with a lender to perform any activity for which the records in § 682.414(a)(4)(ii) are relevant to perform the services for which the servicer has contracted shall maintain current, complete, and accurate records pertaining to each loan that the servicer is under contract to administer on behalf of the lender. The records must be maintained in a system that allows ready identification of each loan's current status.
(a) General. The procedures described in this section apply to a determination by the Secretary that—
(1) A guaranty agency must return to the Secretary a portion of its Federal Fund that the Secretary has determined is unnecessary to pay the program expenses and contingent liabilities of the agency; and
(2) A guaranty agency must require the return to the agency or the Secretary of Federal funds or assets within the meaning of section 422(g)(1) of the Act held by or under the control of any other entity that the Secretary determines are necessary to pay the program expenses and contingent liabilities of the agency or that are required for the orderly termination of the guaranty agency's operations and the liquidation of its assets.
(b) Return of unnecessary Federal funds. (1) The Secretary may initiate a process to recover unnecessary Federal funds under paragraph (a)(1) of this section if the Secretary determines that a guaranty agency's Federal Fund ratio under § 682.410(a)(10) for each of the two preceding Federal fiscal years exceeded 2.0 percent.
(2) If the Secretary initiates a process to recover unnecessary Federal funds, the Secretary requires the return of a portion of the Federal funds that the Secretary determines will permit the agency to—
(i) Have a Federal Fund ratio of at least 2.0 percent under § 682.410(a)(10) at the time of the determination; and
(ii) Meet the minimum Federal Fund requirements under § 682.410(a)(10) and retain sufficient additional Federal funds to perform its responsibilities as a guaranty agency during the current Federal fiscal year and the four succeeding Federal fiscal years.
(3)(i) The Secretary makes a determination of the amount of Federal funds needed by the guaranty agency under paragraph (b)(2) of this section on the basis of financial projections for the period described in that paragraph. If the agency provides projections for a period longer than the period referred to in that paragraph, the Secretary may consider those projections.
(ii) The Secretary may require a guaranty agency to provide financial projections in a form and on the basis of assumptions prescribed by the Secretary. If the Secretary requests the agency to provide financial projections, the agency must provide the projections within 60 days of the Secretary's request. If the agency does not provide the projections within the specified time period, the Secretary determines the amount of Federal funds needed by the agency on the basis of other information.
(c) Notice. (1) The Secretary or an authorized Departmental official begins a proceeding to order a guaranty agency to return a portion of its Federal funds, or to direct the return of Federal funds or assets subject to return, by sending the guaranty agency a notice by certified mail, return receipt requested.
(2) The notice—
(i) Informs the guaranty agency of the Secretary's determination that Federal funds or assets must be returned;
(ii) Describes the basis for the Secretary's determination and contains sufficient information to allow the guaranty agency to prepare and present an appeal;
(iii) States the date by which the return of Federal funds or assets must be completed;
(iv) Describes the process for appealing the determination, including the time for filing an appeal and the procedure for doing so; and
(v) Identifies any actions that the guaranty agency must take to ensure that the Federal funds or assets that are the subject of the notice are maintained and protected against use, expenditure, transfer, or other disbursement after the date of the Secretary's determination, and the basis for requiring those actions. The actions may include, but are not limited to, directing the agency to place the Federal funds in an escrow account. If the Secretary has directed the guaranty agency to require the return of Federal funds or assets held by or under the control of another entity, the guaranty agency must ensure that the agency's claims to those funds or assets and the collectability of the agency's claims will not be compromised or jeopardized during an appeal. The guaranty agency must also comply with all other applicable regulations relating to the use of Federal funds and assets.
(d) Appeal. (1) A guaranty agency may appeal the Secretary's determination that Federal funds or assets must be returned by filing a written notice of appeal within 20 days of the date of the guaranty agency's receipt of the notice of the Secretary's determination. If the agency files a notice of appeal, the requirement that the return of Federal funds or assets be completed by a particular date is suspended pending completion of the appeal process. If the agency does not file a notice of appeal within the period specified in this paragraph, the Secretary's determination is final.
(2) A guaranty agency must submit the information described in paragraph (d)(4) of this section within 45 days of the date of the guaranty agency's receipt of the notice of the Secretary's determination unless the Secretary agrees to extend the period at the agency's request. If the agency does not submit that information within the prescribed period, the Secretary's determination is final.
(3) A guaranty agency's appeal of a determination that Federal funds or assets must be returned is considered and decided by a Departmental official other than the official who issued the determination or a subordinate of that official.
(4) In an appeal of the Secretary's determination, the guaranty agency must—
(i) State the reasons the guaranty agency believes the Federal funds or assets need not be returned;
(ii) Identify any evidence on which the guaranty agency bases its position that Federal funds or assets need not be returned;
(iii) Include copies of the documents that contain this evidence;
(iv) Include any arguments that the guaranty agency believes support its position that Federal funds or assets need not be returned; and
(v) Identify the steps taken by the guaranty agency to comply with the requirements referred to in paragraph (c)(2)(v) of this section.
(5)(i) In its appeal, the guaranty agency may request the opportunity to make an oral argument to the deciding official for the purpose of clarifying any issues raised by the appeal. The deciding official provides this opportunity promptly after the expiration of the period referred to in paragraph (d)(2) of this section.
(ii) The agency may not submit new evidence at or after the oral argument unless the deciding official determines otherwise. A transcript of the oral argument is made a part of the record of the appeal and is promptly provided to the agency.
(6) The guaranty agency has the burden of production and the burden of persuading the deciding official that the Secretary's determination should be modified or withdrawn.
(e) Third-party participation. (1) If the Secretary issues a determination under paragraph (a)(1) of this section, the Secretary promptly publishes a notice in the
(2) If the guaranty agency to which the determination relates files a notice of appeal of the determination, the deciding official may consider any information submitted in response to the
(f) Adverse information. If the deciding official considers information in addition to the evidence described in the notice of the Secretary's determination that is adverse to the guaranty agency's position on appeal, the deciding official informs the agency and provides it a reasonable opportunity to respond to the information without regard to the period referred to in paragraph (d)(2) of this section.
(g) Decision. (1) The deciding official issues a written decision on the guaranty agency's appeal within 45 days of the date on which the information described in paragraphs (d)(4) and (d)(5)(ii) of this section is received, or the oral argument referred to in paragraph (d)(5) of this section is held, whichever is later. The deciding official mails the decision to the guaranty agency by certified mail, return receipt requested. The decision of the deciding official becomes the final decision of the Secretary 30 days after the deciding official issues it. In the case of a determination that a guaranty agency must return Federal funds, if the deciding official does not issue a decision within the prescribed period, the agency is no longer required to take the actions described in paragraph (c)(2)(v) of this section.
(2) A guaranty agency may not seek judicial review of the Secretary's determination to require the return of Federal funds or assets until the deciding official issues a decision.
(3) The deciding official's written decision includes the basis for the decision. The deciding official bases the decision only on evidence described in the notice of the Secretary's determination and on information properly submitted and considered by the deciding official under this section. The deciding official is bound by all applicable statutes and regulations and may neither waive them nor rule them invalid.
(h) Collection of Federal funds or assets. (1) If the deciding official's final decision requires the guaranty agency to return Federal funds, or requires the guaranty agency to require the return of Federal funds or assets to the agency or to the Secretary, the decision states a new date for compliance with the decision. The new date is no earlier than the date on which the decision becomes the final decision of the Secretary.
(2) If the guaranty agency fails to comply with the decision, the Secretary may recover the Federal funds from any funds due the agency from the Department without any further notice or procedure and may take any other action permitted or authorized by law to compel compliance.
(a) Establishment and control. A guaranty agency must establish and maintain a Federal Student Loan Reserve Fund (referred to as the “Federal Fund”) to be used only as permitted under paragraph (c) of this section. The assets of the Federal Fund and the earnings on those assets are, at all times, the property of the United States. The guaranty agency must exercise the level of care required of a fiduciary charged with the duty of protecting, investing, and administering the money of others.
(b) Deposits. The agency must deposit into the Federal Fund—
(1) All funds, securities, and other liquid assets of the reserve fund that existed under § 682.410;
(2) The total amount of insurance premiums or Federal default fees collected;
(3) Federal payments for default, bankruptcy, death, disability, closed school, false certification, and other claims;
(4) Federal payments for supplemental preclaims assistance activities performed before October 1, 1998;
(5) 70 percent of administrative cost allowances received on or after October 1, 1998 for loans upon which insurance was issued before October 1, 1998;
(6) All funds received by the guaranty agency from any source on FFEL Program loans on which a claim has been paid, within 48 hours of receipt of those funds, minus the portion the agency is authorized to deposit in its Operating Fund;
(7) Investment earnings on the Federal Fund;
(8) Revenue derived from the Federal portion of a nonliquid asset; and
(9) Other funds received by the guaranty agency from any source that are specifically designated for deposit in the Federal Fund.
(c) Uses. A guaranty agency may use the assets of the Federal Fund only—
(1) To pay insurance claims;
(2) To transfer default aversion fees to the agency's Operating Fund;
(3) To transfer account maintenance fees to the agency's Operating Fund, if directed by the Secretary;
(4) To refund payments made by or on behalf of a borrower on a loan that has been discharged in accordance with § 682.402;
(5) To pay the Secretary's share of borrower payments, in accordance with § 682.404(g);
(6) For transfers to the agency's Operating Fund, pursuant to section 422A(f) of the Act;
(7) To refund insurance premiums or Federal default fees related to loans cancelled or refunded, in whole or in part;
(8) To return to the Secretary portions of the Federal Fund required to be returned by the Act; and
(9) For any other purpose authorized by the Secretary.
(d) Prohibition against prepayment. A guaranty agency may not prepay obligations of the Federal Fund unless it demonstrates, to the satisfaction of the Secretary, that the prepayment is in the best interests of the United States.
(e) Minimum Federal Fund level. The guaranty agency must maintain a minimum Federal Fund level equal to at least 0.25 percent of its insured original principal amount of loans outstanding.
(f) Definitions. For purposes of this section—
(1) Federal Fund level means the total of Federal Fund assets identified in paragraph (b) of this section plus the amount of funds transferred from the Federal Fund that are in the Operating Fund, using an accrual basis of accounting.
(2) Original principal amount of loans outstanding means—
(i) The sum of—
(A) The original principal amount of all loans guaranteed by the agency; and
(B) The original principal amount of any loans on which the guarantee was transferred to the agency from another guarantor, excluding loan guarantees transferred to another agency pursuant to a plan of the Secretary in response to the insolvency of the agency;
(ii) Minus the original principal amount of all loans on which—
(A) The loan guarantee was cancelled;
(B) The loan guarantee was transferred to another agency;
(C) Payment in full has been made by the borrower;
(D) Reinsurance coverage has been lost and cannot be regained; and
(E) The agency paid claims.
(a) Establishment and control. A guaranty agency must establish and maintain an Operating Fund in an account separate from the Federal Fund. Except for funds that may have been transferred from the Federal Fund, the Operating Fund is considered the property of the guaranty agency.
(b) Deposits. The guaranty agency must deposit into the Operating Fund—
(1) Amounts authorized by the Secretary to be transferred from the Federal Fund;
(2) Account maintenance fees;
(3) Loan processing and issuance fees;
(4) Default aversion fees;
(5) 30 percent of administrative cost allowances received on or after October 1, 1998 for loans upon which insurance was issued before October 1, 1998;
(6) The portion of the amounts collected on defaulted loans that remains after the Secretary's share of collections has been paid and the complement of the reinsurance percentage has been deposited into the Federal Fund;
(7) The agency's share of the payoff amounts received from the consolidation or rehabilitation of defaulted loans; and
(8) Other receipts as authorized by the Secretary.
(c) Uses. A guaranty agency may use the Operating Fund for—
(1) Guaranty agency-related activities, including—
(i) Application processing;
(ii) Loan disbursement;
(iii) Enrollment and repayment status management;
(iv) Default aversion activities;
(v) Default collection activities;
(vi) School and lender training;
(vii) Financial aid awareness and related outreach activities; and
(viii) Compliance monitoring; and
(2) Other student financial aid-related activities for the benefit of students, as selected by the guaranty agency.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) A school shall certify that the information it provides in connection with a loan application about the borrower and, in the case of a parent borrower, the student for whom the loan is intended, is complete and accurate. Except as provided in 34 CFR part 668, subpart E, a school may rely in good faith upon statements made by the borrower and, in the case of a parent borrower of a PLUS loan, the student and the parent borrower.
(b) The information to be provided by the school about the borrower pertains to—
(1) The borrower's eligibility for a loan, as determined in accordance with §§ 682.201 and 682.204;
(2) For a subsidized Stafford loan, the student's eligibility for interest benefits as determined in accordance with § 682.301; and
(3) The schedule for disbursement of the loan proceeds, which must reflect the delivery of the loan proceeds as set forth in section 428G of the Act.
(c) Except as provided in paragraph (e) of this section, in certifying a loan, a school must certify a loan for the lesser of the borrower's request or the loan limits determined under § 682.204.
(d) Before certifying a PLUS loan application for a graduate or professional student borrower, the school must determine the borrower's eligibility for a Stafford loan. If the borrower is eligible for a Stafford loan but has not requested the maximum Stafford loan amount for which the borrower is eligible, the school must—
(1) Notify the graduate or professional student borrower of the maximum Stafford loan amount that he or she is eligible to receive and provide the borrower with a comparison of—
(i) The maximum interest rate for a Stafford loan and the maximum interest rate for a PLUS loan;
(ii) Periods when interest accrues on a Stafford loan and periods when interest accrues on a PLUS loan; and
(iii) The point at which a Stafford loan enters repayment and the point at which a PLUS loan enters repayment; and
(2) Give the graduate or professional student borrower the opportunity to request the maximum Stafford loan amount for which the borrower is eligible.
(e) A school may not certify a Stafford or PLUS loan, or a combination of loans, for a loan amount that—
(1) The school has reason to know would result in the borrower exceeding the annual or maximum loan amounts in § 682.204; or
(2) Exceeds the student's estimated cost of attendance for the period of enrollment, less—
(i) The student's estimated financial assistance for that period; and
(ii) In the case of a Subsidized Stafford loan, the borrower's expected family contribution for that period.
(f)(1)(i) The minimum period of enrollment for which a school may certify a loan application is—
(A) At a school that measures academic progress in credit hours and uses a semester, trimester, or quarter system, or has terms that are substantially equal in length with no term less than nine weeks in length, a single term (e.g., a semester or quarter); or
(B) Except as provided in paragraphs (f)(1)(ii) or (iii) of this section, at a school that measures academic progress in clock hours, or measures academic progress in credit hours but does not use a semester, trimester, or quarter system and does not have terms that are substantially equal in length with no term less than nine weeks in length, the lesser of—
(1) The length of the student's program (or the remaining portion of that program if the student has less than the full program remaining) at the school; or
(2) The academic year as defined by the school in accordance with 34 CFR 668.3.
(ii) For a student who transfers into a school with credit or clock hours from another school, and the prior school certified or originated a loan for a period of enrollment that overlaps the period of enrollment at the new school, the new school may certify a loan for the remaining portion of the program or academic year. In this case the school may certify a loan for an amount that does not exceed the remaining balance of the student's annual loan limit.
(iii) For a student who completes a program at a school, where the student's last loan to complete that program had been for less than an academic year, and the student then begins a new program at the same school, the school may certify a loan for the remainder of the academic year. In this case the school may certify a loan for an amount that does not exceed the remaining balance of the student's annual loan limit at the loan level associated with the new program.
(2) May not, for first-time borrowers, assign through award packaging or other methods, a borrower's loan to a particular lender;
(3) May refuse to certify a Stafford or PLUS loan or may reduce the borrower's determination of need for the loan if the reason for that action is documented and provided to the borrower in writing, provided that—
(i) The determination is made on a case-by-case basis; and
(ii) The documentation supporting the determination is retained in the student's file; and
(4) May not, under paragraph (f)(1), (2), and (3) of this section, engage in any pattern or practice that results in a denial of a borrower's access to FFEL loans because of the borrower's race, sex, color, religion, national origin, age, handicapped status, income, or selection of a particular lender or guaranty agency.
(g) The maximum period for which a school may certify a loan application is—
(1) Generally an academic year, as defined by 34 CFR 668.3, except that a guaranty agency may allow a school to use a longer period of time, corresponding to the period to which the agency applies the annual loan limits; or
(2) For a defaulted borrower who has regained eligibility under § 682.401(b)(1), the academic year in which the borrower regained eligibility.
(h) In certifying a Stafford or Unsubsidized Stafford loan amount in accordance with § 682.204—
(1) A program of study must be considered at least one full academic year if—
(i) The number of weeks of instructional time is at least 30 weeks; and
(ii) The number of clock hours is a least 900, the number of semester or trimester hours is at least 24, or the number of quarter hours is at least 36;
(2) A program of study must be considered two-thirds (2/3) of an academic year if—
(i) The number of weeks of instructional time is at least 20 weeks; and
(ii) The number of clock hours is at least 600, the number of semester or trimester hours is at least 16, or the number of quarter hours is at least 24;
(3) A program of study must be considered one-third (
(i) The number of weeks of instructional time is at least 10 weeks; and
(ii) The number of clock hours is at least 300, the number of semester or trimester hours is at least 8, or the number of quarter hours is at least 12; and
(4) In prorating a loan amount for a student enrolled in a program of study with less than a full academic year remaining, the school need not recalculate the amount of the loan if the number of hours for which an eligible student is enrolled changes after the school certifies the loan.
(i)(1) If a school measures academic progress in an educational program in credit hours and uses either standard terms (semesters, trimesters, or quarters) or nonstandard terms that are substantially equal in length, and each term is at least nine weeks of instructional time in length, a student is considered to have completed an academic year and progresses to the next annual loan limit when the academic year calendar period has elapsed.
(2) If a school measures academic progress in an educational program in credit hours and uses nonstandard terms that are not substantially equal in length or each term is not at least nine weeks of instructional time in length, or measures academic progress in credit hours and does not have academic terms, a student is considered to have completed an academic year and progresses to the next annual loan limit at the later of—
(i) The student's completion of the weeks of instructional time in the student's academic year; or
(ii) The date, as determined by the school, that the student has successfully completed the academic coursework in the student's academic year.
(3) If a school measures academic progress in an educational program in clock hours, a student is considered to have completed an academic year and progresses to the next annual loan limit at the later of—
(i) The student's completion of the weeks of instructional time in the student's academic year; or
(ii) The date, as determined by the school, that the student has successfully completed the clock hours in the student's academic year.
(4) For purposes of this section, terms in a loan period are substantially equal in length if no term in the loan period is more than two weeks of instructional time longer than any other term in that loan period.
(j)(1) A school must cease certifying loans based on the exceptions in section 428G(a)(3) of the Act no later than—
(i) 30 days after the date the school receives notification from the Secretary of an FFEL cohort default rate, calculated under subpart M of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in those paragraphs; or
(ii) October 1, 2002.
(2) A school must cease certifying loans based on the exceptions in section 428G(a)(3) of the Act no later than 30 days after the date the school receives notification from the Secretary of an FFEL cohort default rate, calculated under subpart M of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in those paragraphs.
(k) A school may not assess the borrower, or the student in the case of a parent PLUS loan, a fee for the completion or certification of any FFEL Program form or information or for providing any information necessary for a student or parent to receive a loan under part B of the Act or any benefits associated with such a loan.
(l) Pursuant to paragraph (b)(3) of this section, a school may not request the disbursement by the lender for loan proceeds earlier than the period specified in 34 CFR 668.167.
(a) Exit counseling. (1) A school must ensure that exit counseling is conducted with each Stafford Loan borrower and graduate or professional student PLUS Loan borrower either in person, by audiovisual presentation, or by interactive electronic means. In each case, the school must ensure that this counseling is conducted shortly before the student borrower ceases at least half-time study at the school, and that an individual with expertise in the title IV programs is reasonably available shortly after the counseling to answer the student borrower's questions. As an alternative, in the case of a student borrower enrolled in a correspondence program or a study-abroad program that the home institution approves for credit, written counseling materials may be provided by mail within 30 days after the student borrower completes the program. If a student borrower withdraws from school without the school's prior knowledge or fails to complete an exit counseling session as required, the school must, within 30 days after learning that the student borrower has withdrawn from school or failed to complete the exit counseling as required, ensure that exit counseling is provided through interactive electronic means, by mailing written counseling materials to the student borrower at the student borrower's last known address, or by sending written counseling materials to an email address provided by the student borrower that is not an email address associated with the school sending the counseling materials.
(2) The exit counseling must—
(i) Inform the student borrower of the average anticipated monthly repayment amount based on the student borrower's indebtedness or on the average indebtedness of student borrowers who have obtained Stafford loans, PLUS Loans, or student borrowers who have obtained both Stafford and PLUS loans, depending on the types of loans the student borrower has obtained, for attendance at the same school or in the same program of study at the same school;
(ii) Review for the student borrower available repayment plan options, including standard, graduated, extended, income sensitive and income-based repayment plans, including a description of the different features of each plan and sample information showing the average anticipated monthly payments, and the difference in interest paid and total payments under each plan;
(iii) Explain to the borrower the options to prepay each loan, to pay each loan on a shorter schedule, and to change repayment plans;
(iv) Provide information on the effects of loan consolidation including, at a minimum—
(A) The effects of consolidation on total interest to be paid, fees to be paid, and length of repayment;
(B) The effects of consolidation on a borrower's underlying loan benefits, including grace periods, loan forgiveness, cancellation, and deferment opportunities;
(C) The options of the borrower to prepay the loan and to change repayment plans; and
(D) That borrower benefit programs may vary among different lenders;
(v) Include debt-management strategies that are designed to facilitate repayment;
(vi) Explain to the borrower the use of a Master Promissory Note;
(vii) Emphasize to the student borrower the seriousness and importance of the repayment obligation the borrower has assumed;
(viii) Emphasize to the student borrower that the full amount of the loan (other than a loan made or originated by the school) must be repaid in full even if the student borrower does not complete the program, does not complete the program within the regular time for program completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services that the student borrower purchased from the school;
(ix) Describe the likely consequences of default, including adverse credit reports, delinquent debt collection procedures under Federal law, and litigation;
(x) Provide—
(A) A general description of the terms and conditions under which a borrower may obtain full or partial forgiveness or discharge of principal and interest, defer repayment of principal or interest, or be granted forbearance on a title IV loan, including forgiveness benefits or discharge benefits available to a FFEL borrower who consolidates his or her loan into the Direct Loan program; and
(B) A copy, either in print or by electronic means, of the information the Secretary makes available pursuant to section 485(d) of the HEA;
(xi) Require the student borrower to provide current information concerning name, address, social security number, references, and driver's license number and State of issuance, as well as the student borrower's expected permanent address, the address of the student borrower's next of kin, and the name and address of the student borrower's expected employer (if known). The school must ensure that this information is provided to the guaranty agency or agencies listed in the student borrower's records within 60 days after the student borrower provides the information;
(xii) Review for the student borrower information on the availability of the Student Loan Ombudsman's office;
(xiii) Inform the student borrower of the availability of title IV loan information in the National Student Loan Data System (NSLDS) and how NSLDS can be used to obtain title IV loan status information; and
(xiv) A general description of the types of tax benefits that may be available to borrowers.
(3) If exit counseling is conducted by electronic interactive means, the school must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the counseling.
(4) The school must maintain documentation substantiating the school's compliance with this section for each student borrower.
(5)(i) For students who have received both FFEL Program and Direct Loan Program loans for attendance at a school, the school's compliance with the exit counseling requirements in 34 CFR 685.304(b) satisfies the requirements of this section if the school ensures that the exit counseling also provides the borrower with the information described in paragraphs (a)(2)(i) and (a)(2)(ii) of this section.
(ii) A student's completion of electronic interactive exit counseling offered by the Secretary satisfies the requirements of this section, and for students who have also received Direct Loan Program loans for attendance at the school, the requirements of 34 CFR 685.304(b).
(b) [Reserved]
(a) Except in the case of a student who does not return for the next scheduled term following a summer break, which includes any summer term or terms in which classes are offered but students are not generally required to attend, a school must follow the procedures in § 668.22(b) or (c), as applicable, for determining the student's date of withdrawal. In the case of a student who does not return from a summer break, the school must follow the procedures in § 668.22(b) or (c), as applicable, except that the school shall determine the student's withdrawal date no later than 30 days after the first day of the next scheduled term.
(b) The school must use the withdrawal date determined under § 668.22(b) or (c), as applicable for the purpose of reporting to the lender and the Secretary the date that the student has withdrawn from the school.
(c) For the purpose of a school's reporting to a lender and the Secretary, a student's withdrawal date is the month, day and year of the withdrawal date.
(a) General. By applying for a FFEL loan, a borrower authorizes the school to pay directly to the lender that portion of a refund or return of title IV, HEA program funds from the school that is allocable to the loan upon the borrower's withdrawal. A school—
(1) Must pay that portion of the student's refund or return of title IV, HEA program funds that is allocable to a FFEL loan to—
(i) The original lender; or
(ii) A subsequent holder, if the loan has been transferred and the school knows the new holder's identity; and
(2) Must provide simultaneous written notice to the borrower if the school makes a payment of a refund or a return of title IV, HEA program funds to a lender on behalf of that student.
(b) Allocation of a refund or returned title IV, HEA program funds. In determining the portion of a refund or the return of title IV, HEA program funds upon a student's withdrawal for an academic period that is allocable to a FFEL loan received by the borrower for that academic period, the school must follow the procedures established in part 668 for allocating a refund or return of title IV, HEA program funds.
(c) Timely payment. A school must pay a refund or a return of title IV, HEA program funds that is due in accordance with the timeframe in § 668.22(j).
(a) The Secretary may require a school to repay funds paid to other program participants by the Secretary. The Secretary also may require a school to purchase from the holder of a FFEL loan that portion of the loan that is unenforceable, that the borrower was ineligible to receive, or for which the borrower was ineligible to receive interest benefits contrary to the school's certification, and to make arrangements acceptable to the Secretary for reimbursement of the amounts the Secretary will be obligated to pay to program participants respecting that loan in the future. The repayment of funds and purchase of loans may be required if the Secretary determines that the payment to program participants, the unenforceability of the loan, or the disbursement of loan amounts for which the borrower was ineligible or for which the borrower was ineligible for interest benefits, resulted in whole or in part from—
(1) The school's violation of a Federal statute or regulation; or
(2) The school's negligent or willful false certification.
(b) In requiring a school to repay funds to the Secretary or to another party or to purchase loans from a holder in connection with an audit or program review, the Secretary follows the procedures described in 34 CFR part 668, subpart H.
(c) Notwithstanding paragraph (a) of this section, the Secretary may waive the right to require repayment of funds or repurchase of loans by a school if, in the Secretary's judgment, the best interest of the United States so requires.
(d) The Secretary may impose a fine or take an emergency action against a school or limit, suspend, or terminate a school's participation in the FFEL programs, in accordance with 34 CFR part 668, subpart G.
(e) A school shall comply with any emergency action, limitation, suspension, or termination imposed by a guaranty agency in accordance with the agency's standards and procedures. A school shall repay funds to the Secretary or other party or purchase loans from a holder if a guaranty agency determines that the school improperly received or retained the funds in violation of a Federal law or regulation or a guaranty agency rule or regulation.
(a) General. Each school shall—
(1) Establish and maintain proper administrative and fiscal procedures and all necessary records as set forth in the regulations in this part and in 34 CFR part 668;
(2) Follow the record retention and examination provisions in this part and in 34 CFR 668.24; and
(3) Submit all reports required by this part and 34 CFR part 668 to the Secretary.
(b) Loan record requirements. In addition to records required by 34 CFR part 668, for each Stafford, SLS, or PLUS loan received by or on behalf of its students, a school must maintain—
(1) A copy of the loan certification or data electronically submitted to the lender, that includes the amount of the loan and the period of enrollment for which the loan was intended;
(2) The cost of attendance, estimated financial assistance, and estimated family contribution used to calculate the loan amount;
(3) For loans delivered to the school by check, the date the school endorsed each loan check, if required;
(4) The date or dates of delivery of the loan proceeds by the school to the student or to the parent borrower;
(5) For loans delivered by electronic funds transfer or master check, a copy of the borrower's required written authorization, if it was not provided in the loan application or MPN, to deliver the initial and subsequent disbursements of each FFEL Program loan; and
(6) Documentation of any MPN confirmation process or processes the school may have used.
(c) Enrollment reporting process. (1) Upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return the report to the Secretary—
(i) In the manner and format prescribed by the Secretary; and
(ii) Within the timeframe specified by the Secretary.
(2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date that the school discovers that—
(i) A loan under title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
(ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
(a) This subpart governs the limitation, suspension, or termination by the Secretary of the eligibility of an otherwise eligible lender to participate in the FFEL programs or the eligibility of a third-party servicer to enter into a contract with an eligible lender to administer any aspect of the lender's FFEL programs. The regulations in this subpart apply to a lender or third-party servicer that violates any statutory provision governing the FFEL programs or any regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA prescribed under the FFEL programs. These regulations apply to lenders that participate only in a guaranty agency program, lenders that participate in the FFEL programs, and third-party servicers that administer aspects of a lender's FFELP portfolio. These regulations also govern the Secretary's disqualification of a lender from participation in the FFEL programs under section 432(h)(2) of the Act.
(b) This subpart does not apply—
(1)(i) To a determination that an organization fails to meet the definition of “eligible lender” in section 435(d)(1) of the Act or the definition of “lender” in § 682.200, for any reason other than a violation of the prohibitions in section 435(d)(5) of the Act; or
(ii) To a determination that an organization fails to meet the standards in § 682.416; or
(2) To an administrative action by the Department of Education based on any alleged violation of—
(i) The Family Educational Rights and Privacy Act of 1974 (section 438 of the General Education Provisions Act), which is governed by 34 CFR part 99;
(ii) Title VI of the Civil Rights Act of 1964, which is governed by 34 CFR parts 100 and 101;
(iii) Section 504 of the Rehabilitation Act of 1973 (relating to discrimination on the basis of handicap), which is governed by 34 CFR part 104; or
(iv) Title IX of the Education Amendments of 1972 (relating to sex discrimination), which is governed by 34 CFR part 106.
(c) This subpart does not supplant any rights or remedies that the Secretary may have against participating lenders under other authorities.
The following definitions apply to terms used in this subpart:
Designated Departmental Official: An official of the Department of Education to whom the Secretary has delegated the responsibility for initiating and pursuing disqualification or limitation, suspension, or termination proceedings.
Disqualification. The removal of a lender's eligibility for an indefinite period of time by the Secretary on review of limitation, suspension, or termination action taken against the lender by a guaranty agency.
Limitation. The continuation of a lender's or third-party servicer's eligibility subject to compliance with special conditions established by agreement with the Secretary or a guaranty agency, as applicable, or imposed as the result of a limitation or termination proceeding.
Suspension. The removal of a lender's eligibility, or a third-party servicer's eligibility to contract with a lender or guaranty agency, for a specified period of time or until the lender or servicer fulfills certain requirements.
Termination. (1) The removal of a lender's eligibility for an indefinite period of time—
(i) By a guaranty agency; or
(ii) By the Secretary, based on an action taken by the Secretary, or a designated Departmental official under § 682.706; or
(2) The removal of a third-party servicer's eligibility to contract with a lender or guaranty agency for an indefinite period of time by the Secretary based on an action taken by the Secretary, or a designated Departmental official under § 682.706.
(a) Limitation, suspension, or termination proceedings by the Secretary do not affect a lender's responsibilities or rights to benefits and claim payments that are based on the lender's prior participation in the program, except as provided in § 682.709.
(b) A limitation imposes on a lender—
(1) A limit on the number or total amount of loans that a lender may purchase or hold under the FFEL Program; or
(2) Other reasonable requirements or conditions, including those described in § 682.709.
(c) A limitation imposes on a third-party servicer—
(1) A limit on the number of loans or accounts or total amount of loans that the servicer may service;
(2) A limit on the number of loans or accounts or total amount of loans that the servicer is administering under its contract with a lender or guaranty agency; or
(3) Other reasonable requirements or conditions, including those described in § 682.709.
(a) The Secretary may use the informal compliance procedure in paragraph (b) of this section if the Secretary receives a complaint or other reliable information indicating that a lender or third-party servicer may be in violation of applicable laws, regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA.
(b) Under the informal compliance procedure, the Secretary gives the lender or servicer a reasonable opportunity to—
(1) Respond to the complaint or information; and
(2) Show that the violation has been corrected or submit an acceptable plan for correcting the violation and preventing its recurrence.
(c) The Secretary does not delay limitation, suspension, or termination procedures during the informal compliance procedure if—
(1) The delay would harm the FFEL programs; or
(2) The informal compliance procedure will not result in correction of the alleged violation.
(a) The Secretary, or a designated Departmental official, may take emergency action to withhold payment of interest benefits and special allowance to a lender if the Secretary—
(1) Receives reliable information that the lender or a third-party servicer with which the lender contracts is in violation of applicable laws, regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA pertaining to the lender's portfolio of loans;
(2) Determines that immediate action is necessary to prevent the likelihood of substantial losses by the Federal Government, parent borrowers, or students; and
(3) Determines that the likelihood of loss exceeds the importance of following the procedures for limitation, suspension, or termination.
(b) The Secretary begins an emergency action by notifying the lender or third-party servicer, by certified mail, return receipt requested, of the action and the basis for the action.
(c) The action becomes effective on the date the notice is mailed to the lender or third-party servicer.
(d)(1) An emergency action does not exceed 30 days unless a limitation, suspension, or termination proceeding is begun before that time expires.
(2) If a limitation, suspension, or termination proceeding is begun before the expiration of the 30-day period—
(i) The emergency action may be extended until completion of the proceeding, including any appeal to the Secretary; and
(ii) Upon the written request of the lender or third-party servicer, the Secretary may provide the lender or servicer with an opportunity to demonstrate that the emergency action is unwarranted.
(a) Scope. (1) A suspension by the Secretary removes a lender's eligibility under the FFEL programs or a third-party servicer's ability to enter into contracts with eligible lenders, and the Secretary does not guarantee or reinsure a new loan serviced by the servicer during a period not to exceed 60 days from the date the suspension becomes effective, unless—
(i) The lender or servicer and the Secretary agree to an extension of the suspension period, if the lender or third-party servicer has not requested a hearing; or
(ii) The Secretary begins a limitation or a termination proceeding.
(2) If the Secretary begins a limitation or a termination proceeding before the suspension period ends, the Secretary may extend the suspension period until the completion of that proceeding, including any appeal to the Secretary.
(b) Notice. (1) The Secretary, or a designated Departmental official, begins a suspension proceeding by sending the lender or servicer a notice by certified mail with return receipt requested.
(2) The notice—
(i) Informs the lender or servicer of the Secretary's intent to suspend the lender's or servicer's eligibility for a period not to exceed 60 days;
(ii) Describes the consequences of a suspension;
(iii) Identifies the alleged violations on which the proposed suspension is based;
(iv) States the proposed date the suspension becomes effective, which is at least 20 days after the date of mailing of the notice;
(v) Informs the lender or servicer that the suspension will not take effect on the proposed date if the Secretary receives at least five days prior to that date a request for an oral hearing or written material showing why the suspension should not take effect; and
(vi) Asks the lender or servicer to correct voluntarily any alleged violations.
(a) Notice. (1) The Secretary, or a designated Departmental official, begins a limitation or termination proceeding, whether a suspension proceeding has begun, by sending the lender or third-party servicer a notice by certified mail with return receipt requested.
(2) The notice—
(i) Informs the lender or servicer of the Secretary's intent to limit or terminate the lender's or servicer's eligibility;
(ii) Describes the consequences of a limitation or termination;
(iii) Identifies the alleged violations on which the proposed limitation or termination is based;
(iv) States the limits which may be imposed, in the case of a limitation proceeding;
(v) States the proposed date the limitation or termination becomes effective, which is at least 20 days after the date of mailing of the notice;
(vi) Informs the lender or servicer that the limitation or termination will not take effect on the proposed date if the Secretary receives, at least five days prior to that date, a request for an oral hearing or written material showing why the limitation or termination should not take effect;
(vii) Asks the lender or servicer to correct voluntarily any alleged violations; and
(viii) Notifies the lender or servicer that the Secretary may collect any amount owed by means of offset against amounts owed to the lender by the Department and other Federal agencies.
(b) Hearing. (1) If the lender or servicer does not request an oral hearing but submits written material, the Secretary, or a designated Departmental official, considers the material and—
(i) Dismisses the proposed limitation or termination; or
(ii) Notifies the lender or servicer of the date the limitation or termination becomes effective.
(2) If the lender or servicer requests a hearing within the time specified in paragraph (a)(2)(vi) of this section, the Secretary schedules the date and place of the hearing. The date is at least 15 days after receipt of the request from the lender or servicer. No proposed limitation or termination takes effect until a hearing is held.
(3) The hearing is conducted by a presiding officer who—
(i) Ensures that a written record of the hearing is made;
(ii) Considers relevant written material presented before the hearing and other relevant evidence presented during the hearing; and
(iii) Issues an initial decision, based on findings of fact and conclusions of law, that may limit or terminate the lender's or servicer's eligibility if the presiding officer is persuaded that the limitation or termination is warranted by the evidence.
(4) The formal rules of evidence do not apply, and no discovery, as provided in the Federal Rules of Civil Procedure (28 U.S.C. appendix), is required.
(5) The presiding officer shall base findings of fact only on evidence presented at or before the hearing and matters given official notice.
(6) If a termination action is brought against a lender or third-party servicer and the presiding officer concludes that a limitation is more appropriate, the presiding officer may issue a decision imposing one or more limitations on a lender or third-party servicer rather than terminating the lender's or servicer's eligibility.
(7) In a termination action against a lender or third-party servicer based on a debarment under Executive Order 12549 or under the Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4 that does not meet the standards described in 2 CFR 3485.612(d), the presiding official finds that the debarment constitutes prima facie evidence that cause for debarment and termination under this subpart exists.
(8) The initial decision of the presiding officer is mailed to the lender or servicer.
(9) Any time schedule specified in this section may be shortened with the approval of the presiding officer and the consent of the lender or servicer and the Secretary or designated Departmental official.
(10) The presiding officer's initial decision automatically becomes the Secretary's final decision 20 days after it is issued and received by both parties unless the lender, servicer, or designated Departmental official appeals the decision to the Secretary within this period.
(c) Notwithstanding the other provisions of this section, if a lender or a lender's owner or officer or third-party servicer or servicer's owner or officer, respectively, is convicted of or pled nolo contendere or guilty to a crime involving the unlawful acquisition, use, or expenditure of FFEL program funds, that conviction or guilty plea is grounds for terminating the lender's or servicer's eligibility, respectively, to participate in the FFEL programs.
(a) If the lender, third-party servicer, or designated Departmental official appeals the initial decision of the presiding officer in accordance with § 682.706(b)(10)—
(1) An appeal is made to the Secretary by submitting to the Secretary and the opposing party within 15 days of the date of the appealing party's receipt of the presiding officer's decision, a brief or other written material explaining why the decision of the presiding officer should be overturned or modified; and
(2) The opposing party shall submit its brief or other written material to the Secretary and the appealing party within 15 days of its receipt of the brief or written material of the appealing party.
(b) The Secretary issues a final decision affirming, modifying, or reversing the initial decision, including a statement of the reasons for the Secretary's decision.
(c) Any party submitting material to the Secretary shall provide a copy to each party that participates in the hearing.
(d) If the presiding officer's initial decision would limit or terminate the lender's or servicer's eligibility, it does not take effect pending the appeal unless the Secretary determines that a stay of the date it becomes effective would seriously and adversely affect the FFEL programs or student or parent borrowers.
(a) All mailing dates and receipt dates referred to in this subpart must be substantiated by the original receipts from the U.S. Postal Service.
(b) If a lender or third-party servicer refuses to accept a notice mailed under this subpart, the Secretary considers the notice as being received on the date that the lender or servicer refuses to accept the notice.
(a) As part of a limitation or termination proceeding, the Secretary, or a designated Departmental official, may require a lender or third-party servicer to take reasonable corrective action to remedy a violation of applicable laws, regulations, special arrangements, agreements, or limitations entered into under the authority of statutes applicable to Title IV of the HEA.
(b) The corrective action may include payment to the Secretary or recipients designated by the Secretary of any funds, and any interest thereon, that the lender, or, in the case of a third-party servicer, the servicer or the lender that has a contract with a third-party servicer, improperly received, withheld, disbursed, or caused to be disbursed. A third-party servicer may be held liable up to the amounts specified in § 682.413(a)(2).
(c) If a final decision requires a lender, a lender that has a contract with a third-party servicer, or a third-party servicer to reimburse or make any payment to the Secretary, the Secretary may, without further notice or opportunity for a hearing, proceed to offset or arrange for another Federal agency to offset the amount due against any interest benefits, special allowance, or other payments due to the lender, the lender that has a contract with the third-party servicer, or the third-party servicer. A third-party servicer may be held liable up to the amounts specified in § 682.413(a)(2).
(d) In any action under this part based on a violation of the prohibitions in section 435(d)(5) of the Act, if the Secretary, the designated Department official, or the hearing official finds that the lender provided or offered the payments or activities described in paragraph (5)(i) of the definition of “lender” in § 682.200(b), the Secretary or the official applies a rebuttable presumption that the payments or activities were offered or provided to secure applications for FFEL loans. To reverse the presumption, the lender must present evidence that the activities or payments were provided for a reason unrelated to securing applications for FFEL loans or securing FFEL loan volume.
(a) A lender or third-party servicer may request removal of a limitation imposed by the Secretary in accordance with the regulations in this subpart at any time more than 12 months after the date the limitation becomes effective.
(b) The request must be in writing and must show that the lender or servicer has corrected any violations on which the limitation was based.
(c) Within 60 days after receiving the request, the Secretary—
(1) Grants the request;
(2) Denies the request; or
(3) Grants the request subject to other limitations.
(d)(1) If the Secretary denies the request or establishes other limitations, the lender or servicer, upon request, is given an opportunity to show why all limitations should be removed.
(2) A lender or third-party servicer may continue to participate in the FFEL programs, subject to any limitation imposed by the Secretary under paragraph (c)(3) of this section, pending a decision by the Secretary on a request under paragraph (d)(1) of this section.
(a) A lender or third-party servicer whose eligibility has been terminated by the Secretary in accordance with the procedures of this subpart may request reinstatement of its eligibility after the later of—
(1) Eighteen months from the effective date of the termination; or
(2) The expiration of the period of debarment under Executive Order 12459 or the Federal Acquisition Regulation (FAR), 48 CFR part 9, subpart 9.4.
(b) The request must be in writing and must show that—
(1) The lender or servicer has corrected any violations on which the termination was based; and
(2) The lender or servicer meets all requirements for eligibility.
(c) Within 60 days after receiving a request for reinstatement, the Secretary—
(1) Grants the request;
(2) Denies the request; or
(3) Grants the request subject to limitations.
(d)(1) If the Secretary denies the lender's or servicer's request or allows reinstatement subject to limitations, the lender or servicer, upon request, is given an opportunity to show why its eligibility should be reinstated and all limitations removed.
(2) A lender or third-party servicer whose eligibility to participate in the FFEL programs is reinstated subject to limitations imposed by the Secretary pursuant to paragraph (c)(3) of this section, may participate in those programs, subject to those limitations, pending a decision by the Secretary on a request under paragraph (d)(1) of this section.
(a) The Secretary reviews a limitation, suspension, or termination action taken by a guaranty agency against a lender participating in the FFEL programs to determine if national disqualification is appropriate. Upon completion of the Secretary's review, the Secretary notifies the guaranty agency and the lender of the Secretary's decision by mail.
(b) The Secretary disqualifies a lender from participation in the FFEL programs if—
(1) The lender waives review by the Secretary; or
(2) The Secretary conducts the review and determines that the limitation, suspension, or termination was imposed in accordance with section 428(b)(1)(U) of the Act.
(c)(1) Disqualification by the Secretary continues until the Secretary is satisfied that—
(i) The lender has corrected the failure that led to the limitation, suspension, or termination; and
(ii) There are reasonable assurances that the lender will comply with the requirements of the FFEL programs in the future.
(2) Revocation of disqualification by the Secretary does not remove any limitation, suspension, or termination imposed by the agency whose action resulted in the disqualification.
(d) A guaranty agency shall refer a limitation, suspension, or termination action that it takes against a lender to the Secretary within 30 days of its final decision to limit, suspend, or terminate the lender's eligibility to participate in the agency's program.
(e) The Secretary reviews an agency's limitation, suspension, or termination of a lender's eligibility only when the guaranty agency's action is final, e.g, the lender is not entitled to any further appeals within the guaranty agency. A subsequent court challenge to an agency's action does not by itself affect the timing of the Secretary's review.
(f) The guaranty agency's notice to the Secretary regarding a termination action must include a certified copy of the administrative record compiled by the agency with regard to the action. The record must include certified copies of the following documents:
(1) The guaranty agency's letter initiating the action.
(2) The lender's response.
(3) The transcript of the agency's hearing.
(4) The decision of the agency's hearing officer.
(5) The decision of the agency on appeal from the hearing officer's decision, if any.
(6) The regulations and written procedures of the agency under which the action was taken.
(7) The audit or lender review report or documented basis that led to the action.
(8) All other documents relevant to the action.
(g) The guaranty agency's referral notice to the Secretary regarding a limitation or suspension action must include—
(1) The documents described in paragraph (f) of this section; and
(2) Documents describing and substantiating the existence of one or more of the circumstances described in paragraph (i) of this section.
(h)(1) Within 60 days of the Secretary's receipt of a referral notice described in paragraph (f) or (g) of this section, the Secretary makes an initial assessment, based on the agency's record, as to whether the agency's action appears to comply with section 428(b)(1)(U) of the Act.
(2) In the case of a referral notice described in paragraph (g) of this section, the Secretary also determines whether one or more of the circumstances described in paragraph (i) of this section exist.
(3) If the Secretary concludes that the agency's action appears to comply with section 428(b)(1)(U) of the Act and, if applicable, one or more of the circumstances described in paragraph (i) of this section exist, the Secretary notifies the lender that the Secretary will review the guaranty agency's action to determine whether to disqualify the lender from further participation in the FFEL programs and affords the lender an opportunity—
(i) To waive the review and be disqualified immediately; or
(ii) To request a review.
(i) In the case of an action by an agency that limits or suspends a lender's eligibility to participate in the agency's program, the agency shall provide the Secretary with a referral as described in paragraph (g) of this section only if—
(1) The lender has not corrected the violation. A violation is corrected if, among other things, the lender has satisfied fully all liabilities incurred by the lender as a result of the violation, including its liability to the Secretary, or the lender has arranged to satisfy those liabilities in a manner acceptable to the parties to whom the liabilities are owed;
(2) The lender has not provided satisfactory assurances to the agency of future compliance with program requirements; or
(3) The guaranty agency determines that special circumstances warrant disqualification of the lender from the FFEL programs for a significant period, notwithstanding the agency's decision not to terminate the lender's eligibility to participate in the agency's program.
The following is a reprint of Bulletin 88-G-138, issued on March 11, 1988, with modifications made to reflect changes in the program regulations. For a loan that has lost reinsurance prior to December 1, 1992, this policy applies only through November 30, 1995. For a loan that loses reinsurance on or after December 1, 1992, this policy applies until 3 years after the default claim filing deadline. For the purpose of determining the 3-year deadline, reinsurance is lost on the later of (a) 3 years from the last date the claim could have been filed for claim payment with the guaranty agency for a claim that was not filed; or (b) 3 years from the date the guaranty agency rejected the claim, for a claim that was filed. These deadlines are extended by periods during which collection activities are suspended due to the filing of a bankruptcy petition.
(1) This letter sets forth the circumstances under which the Secretary, pursuant to sections 432(a)(5) and (6) of the Higher Education Act of 1965 and 34 CFR 682.406(b) and 682.413(f), will waive certain of the Secretary's rights and claims with respect to Stafford Loans, PLUS, Supplemental Loans for Students (SLS), and Consolidation Program loans made under a guaranty agency program that involve violations of Federal regulations pertaining to due diligence in collection or timely filing. (These programs are collectively referred to in this letter as the FFEL Program.) This policy applies to due diligence violations on loans for which the first day of delinquency occurred on or after March 10, 1987 (the effective date of the November 10, 1986 due diligence regulations) and to timely filing violations occurring on or after December 26, 1986, whether or not the affected loans have been submitted as claims to the guaranty agency.
(2) The Secretary has been implementing a variety of regulatory and administrative actions to minimize defaults in the FFEL Program. As a part of this effort, the Secretary published final regulations on November 10, 1986, requiring lenders and guaranty agencies to undertake specific due diligence activities to collect delinquent and defaulted loans, and establishing deadlines for the filing of claims by lenders with guaranty agencies. In recognition of the time required for agencies and lenders to modify their internal procedures, the Secretary delayed for four months the date by which lenders were required to comply with the new due diligence requirements. Thus, § 682.411 of the regulations, which established minimum due diligence procedures that a lender must follow in order for a guaranty agency to receive reinsurance on a loan, became effective for loans for which the first day of delinquency occurred on or after March 10, 1987. The regulations make clear that compliance with these minimum requirements, and with the new timely filing deadlines, is a condition for an agency's receiving or retaining reinsurance payments made by the Secretary on a loan. See 34 CFR 682.406(a)(3), (a)(5), (a)(6), and 682.413(b). The regulations also specify that a lender must comply with § 682.411 and with the applicable filing deadline as a condition for its right to receive or retain interest benefits and special allowance on a loan for certain periods. See 34 CFR 682.300(b)(2)(vii), 682.302(d)(1)(iv), 682.413(a)(1).
(3) The Department has received inquiries regarding the procedures by which a lender may cure a violation of § 682.411 regarding diligent loan collection, or of the 90-day deadline for the filing of default claims found in § 682.406(a)(3) and (a)(5), in order to reinstate the agency's right to reinsurance and the lender's right to interest benefits and special allowance. Preliminarily, please note that, absent an exercise of the Secretary's waiver authority, a guaranty agency may not receive or retain reinsurance payments on a loan on which the lender has violated the Federal due diligence or timely filing requirements, even if the lender has followed a cure procedure established by the agency. Under §§ 682.406(b) and 682.413(f), the Secretary—not the guaranty agency—decides whether to reinstate reinsurance coverage on a loan involving such a violation or any other violation of Federal regulations. A lender's violation of a guaranty agency's requirement that affects the agency's guarantee coverage also affects reinsurance coverage. See §§ 682.406(a)(7) and 682.413(b). As §§ 682.406(a)(7) and 682.413(b) make clear, a guaranty agency's cure procedures are relevant to reinsurance coverage only insofar as they allow for cure of violations of requirements established by the agency affecting the loan insurance it provides to lenders. In addition, all those requirements must be submitted to the Secretary for review and approval under 34 CFR 682.401(c).
(4) References throughout this letter to “due diligence and timely filing” rules, requirements, and violations should be understood to mean only the Federal rules cited above, unless the context clearly requires otherwise.
This letter outlines the Secretary's waiver policy regarding certain violations of Federal due diligence or timely filing requirements on a loan insured by a guaranty agency. Unless your agency receives notification to the contrary, or the lender's violation involves fraud or other intentional misconduct, you may treat as reinsured any otherwise reinsured loan involving such a violation that has been cured in accordance with this letter.
As noted above, a lender's violation of a guaranty agency's requirement that affects the agency's guarantee coverage also affects reinsurance coverage. Thus, as a general rule, an agency that fails to enforce such a requirement and pays a default claim involving a violation is not eligible to receive reinsurance on the underlying loan. However, in light of the waiver policy outlined below, which provides more stringent cure procedures for violations occurring on or after May 1, 1988 than for pre-May 1, 1988 violations, some guaranty agencies with more stringent policies than the policy outlined below for the pre-May 1 violations have indicated that they wish to relax their own policies for violations of agency rules during that period. While the Secretary does not encourage any agency to do so, the Secretary will permit an agency to take either of the following approaches to its enforcement of its own due diligence and timely filing rules for violations occurring before May 1, 1988.
(1) The agency may continue to enforce its rules, even if they result in the denial of guarantee coverage by the agency on otherwise reinsurable loans; or
(2) The agency may decline to enforce its rules as to any loan that would be reinsured under the retrospective waiver policy outlined below. In other words, for violations of a guaranty agency's due diligence and timely filing rules occurring before May 1, 1988, a guaranty agency is authorized, but not required, to retroactively revise its own due diligence and timely filing standards to treat as guaranteed any loan amount that is reinsured under the retrospective enforcement policy outlined in section I.C.1. However, for any violation of an agency's due diligence or timely filing rules occurring on or after May 1, 1988, the agency must resume enforcing those rules in accordance with their terms, in order to receive reinsurance payments on the underlying loan. For these post-April 30 violations, and for any other violation of an agency's rule affecting its guarantee coverage, the Secretary will treat as reinsured all loans on which the agency has engaged in, and documented, a case-by-case exercise of reasonable discretion allowing for guarantee coverage to be continued or reinstated notwithstanding the violation. But any agency that otherwise fails, or refuses, to enforce such a rule does so without the benefit of reinsurance coverage on the affected loans, and the lenders continue to be ineligible for interest benefits and special allowance thereon.
Under 34 CFR 682.200, default on a FFEL Program loan occurs when a borrower fails to make a payment when due, provided this failure persists for 270 days for loans payable in monthly installments, or for 330 days for loans payable in less frequent installments. The 270/330-day default period applies regardless of whether payments were missed consecutively or intermittently. For example, if the borrower, on a loan payable in monthly installments, makes his January 1st payment on time, his February 1st payment two months late (April 1st), his March 1st payment 3 months late (June 1st), and makes no further payments, the delinquency period begins on February 2nd, with the first delinquency, and default occurs on December 27th, when the April payment becomes 270 days past due. The lender must treat the payment made on April 1st as the February 1st payment, since the February 1st payment had not been made prior to that time. Similarly, the lender must treat the payment made on June 1st as the March 1st payment, since the March payment had not been made prior to that time.
Lenders are strongly encouraged to exercise forbearance, prior to default, for the benefit of borrowers who have missed payments intermittently but have otherwise indicated willingness to repay their loans. See 34 CFR 682.211. The forbearance process helps to reduce the incidence of default, and serves to emphasize for the borrower the importance of compliance with the repayment obligation.
(1) The 90-day filing period applicable to FFEL Program default claims is described in 34 CFR 682.406(a)(5). The 90-day filing period begins at the end of the 270/330-day default period. The lender ordinarily must file a default claim on a loan in default by the end of the filing period. However, the lender may, but need not, file a claim on that loan before the 360th day of delinquency (270-day default period plus 90-day filing period) if the borrower brings the account less than 270 days delinquent before the 360th day. Thus, in the above example, if the borrower makes the April 1st payment on December 28th, that payment makes the loan 241 days delinquent, and the lender may, but need not, file a default claim on the loan at that time. If, however, the loan again becomes 270 days delinquent, the lender must file a default claim within 90 days thereafter (unless the loan is again brought to less than 270 days delinquent prior to the end of that 90-day period). In other words, the Secretary will permit a lender to treat payments made during the filing period as curing the default if those payments are sufficient to make the loan less than 270 days delinquent.
(2) Section I of this letter outlines the Secretary's waiver policy for due diligence and timely filing violations. As noted above, to the extent that it results in the imposition of a lesser sanction than that available to the Secretary by statute or regulation, this policy reflects the exercise of the Secretary's authority to waive the Secretary's rights and claims in this area. Section II discusses the issue of the due date of the first payment on a loan and the application of the waiver policy to that issue. Section III provides guidance on several issues related to due diligence and timely filing as to which clarification has been requested by some program participants.
The following definitions apply to terms used throughout this letter:
Full payment means payment by the borrower, or another person (other than the lender) on the borrower's behalf, in an amount at least as great as the monthly payment amount required under the existing terms of the loan, exclusive of any forbearance agreement in force at the time of the default. (For example, if the original repayment schedule or agreement called for payments of $50 per month, but a forbearance agreement was in effect at the time of default that allowed the borrower to pay $25 per month for a specified time, and the borrower defaulted in making the reduced payments, a full payment would be $50, or two $25 payments in accordance with the original repayment schedule or agreement.) In the case of a payment made by cash, money order, or other means that do not identify the payor that is received by a lender after the date of this letter, that payment may constitute a full payment only if a senior officer of the lender or servicing agent certifies that the payment was not made by or on behalf of the lender or servicing agent.
Earliest unexcused violation means:
(a) In cases when reinsurance is lost due to a failure to timely establish a first payment due date, the earliest unexcused violation would be the 46th day after the date the first payment due date should have been established.
(b) In cases when reinsurance is lost due to a gap of 46 days, the earliest unexcused violation date would be the 46th day following the last collection activity.
(c) In cases when reinsurance is lost due to three or more due diligence violations of 6 days or more, the earliest unexcused violation would be the day after the date of default.
(d) In cases when reinsurance is lost due to a timely filing violation, the earliest unexcused violation would be the day after the filing deadline.
Reinstatement with respect to reinsurance coverage means the reinstatement of the guaranty agency's right to receive reinsurance payments on the loan after the date of reinstatement. Upon reinstatement of reinsurance, the borrower regains the right to receive forbearance or deferments, as appropriate. Reinstatement with respect to reinsurance on a loan also includes reinstatement of the lender's right to receive interest and special allowance payments on that loan.
Gap in collection activity on a loan means:
(a) The period between the initial delinquency and the first collection activity;
(b) The period between collection activities (a request for preclaims assistance is considered a collection activity);
(c) The period between the last collection activity and default; or
(d) The period between the date a lender discovers a borrower has “skipped” and the lender's first skip-tracing activity.
The concept of “gap” is used herein simply as one measure of collection activity. This definition applies to loans subject to the FFEL and PLUS programs regulations published on or after November 10, 1986. For those loans, not all gaps are violations of the due diligence rules.
Violation with respect to the due diligence requirements in § 682.411 means the failure to timely complete a required diligent phone contact effort, the failure to timely send a required letter (including a request for preclaims assistance), or the failure to timely engage in a required skip-tracing activity. If during the delinquency period a gap of more than 45 days occurs (more than 60 days for loans with a transfer), the lender must satisfy the requirement outlined in I.D.1. for reinsurance to be reinstated. The day after the 45-day gap (or 60 for loans with a transfer) will be considered the date that the violation occurred.
Transfer means any action, including, but not limited to, the sale of the loan, that results in a change in the system used to monitor or conduct collection activity on a loan from one system to another.
B. General
1. Resumption of Interest and Special Allowance Billing on Loans Involving Due Diligence or Timely Filing Violations. For any loan on which a cure is required under this letter in order for the agency to receive any reinsurance payment, the lender may resume billing for interest and special allowance on the loan only for periods following its completion of the required cure procedure.
2. Reservation of the Secretary's Right to Strict Enforcement. While this letter describes the Secretary's general waiver policy, the Secretary retains the option of refusing to permit or recognize cures, or of insisting on strict enforcement of the remedies established by statute or regulation, in cases where, in the Secretary's judgment, a lender has committed an excessive number of severe violations of due diligence or timely filing rules and in cases where the best interests of the United States otherwise require strict enforcement. More generally, this bulletin states the Secretary's general policy and is not intended to limit in any way the authority and discretion afforded the Secretary by statute or regulation.
3. Interest, Special Allowance, and Reinsurance Repayment Required as a Condition for Exercise of the Secretary's Waiver Authority. The Secretary's waiver of the right to recover or refuse to pay reinsurance, interest benefits, or special allowance payments, and recognition of cures for due diligence and timely filing violations, are conditioned on the following:
a. The guaranty agency and lender must ensure that the lender repays all interest benefits and special allowance received on loans involving violations occurring prior to May 1, 1988, for which the lender is ineligible under the waiver policy for the “retrospective period” described in section I.C.1., or under the waiver policy for timely filing violations described in section I.E.1., by an adjustment to one of the next three quarterly billings for interest benefits and special allowance submitted by the lender in a timely manner after May 1, 1988. The guaranty agency's responsibility in this regard is satisfied by receipt of a certification from the lender that this repayment has been made in full.
b. The guaranty agency, on or before October 1, 1988, must repay all reinsurance received on loans involving violations occurring prior to May 1, 1988, for which the agency is ineligible under the waiver policy for the “retrospective period” described in section I.C.1., or under the waiver policy for timely filing violations described in section I.E.1. Pending completion of the repayment described above, a lender or guaranty agency may submit billings to the Secretary on loans that are eligible for reinsurance under the waiver policy in this letter until it learns that repayment in full will not be made, or until the deadline for a repayment has passed without it being made, whichever is earlier. Of course, a lender or guaranty agency is prohibited from billing the Secretary for program payments on any loan amount that is not eligible for reinsurance under the waiver policy outlined in this letter. In addition to the repayments required above, any amounts received in the future in violation of this prohibition must immediately be repaid to the Secretary.
4. Applicability of the Waiver Policy to Particular Classes of Loans. The policy outlined in this letter applies only to a loan for which the first day of the 180/240-day or 270/330-day default period (as applicable) that ended with default by the borrower occurred on or after March 10, 1987, or, in the case of a timely filing violation, December 26, 1986, and that involves violations only of the due diligence or timely filing requirements or both. For a loan that has lost reinsurance prior to December 1, 1992, this policy applies only through November 30, 1995. For a loan that loses reinsurance on or after December 1, 1992, this policy applies until 3 years after the default claim filing deadline.
5. Excuse of Certain Due Diligence Violations. Except as noted in section II, if a loan has due diligence violations but was later cured and brought current, those violations will not be considered in determining whether a loan was serviced in accordance with 34 CFR 682.411. Guarantors must review the due diligence for the 180/240 or 270/330-day period (as applicable) prior to the default date ensuring the due date of the first payment not later made is the correct payment due date for the borrower.
6. Excuse of Timely Filing Violations Due to Performance of a Guaranty Agency's Cure Procedures. If, prior to May 1, 1988, and prior to the filing deadline, a lender commenced the performance of collection activities specifically required by the guaranty agency to cure a due diligence violation on a loan, the Secretary will excuse the lender's timely filing violation if the lender completes the additional activities within the time period permitted by the guaranty agency and files a default claim on the loan not more than 45 days after completing the additional activities.
7. Treatment of Accrued Interest on “Cured” Claims. For any loan involving any violation of the due diligence or timely filing rules for which a “cure” is required under section I.C. or I.E., for the agency to receive a reinsurance payment, the Secretary will not reimburse the guaranty agency for any unpaid interest accruing after the date of the earliest unexcused violation occurring after the last payment received before the cure is accomplished, and prior to the date of reinstatement of reinsurance coverage. The lender may capitalize unpaid interest accruing on the loan from the date of the earliest unexcused violation to the date of the reinstatement of reinsurance coverage. However, if the agency later files a claim for reinsurance on that loan, the agency must deduct this capitalized interest from the amount of the claim. Some cures will not reinstate coverage. For treatment of accrued interest in those cases, see section I.E.1.c.
C. Waiver Policy for Violations of the Federal Due Diligence in Collection Requirements (34 CFR 682.411)
A violation of the due diligence in collection rules occurs when a lender fails to meet the requirements found in 34 CFR 682.411. However, if a lender makes all required calls and sends all required letters during any of the delinquency periods described in that section, the lender is considered to be in compliance with that section for that period, even if the letters were sent before the calls were made. The special provisions for transfers apply whenever the violation(s) and, if applicable, the gap, were due to a transfer, as defined in section I.A.
1. Retrospective Period. For one or more due diligence violations occurring during the period March 10, 1987-April 30, 1988—
a. There will be no reduction or recovery by the Secretary of payments to the lender or guaranty agency if no gap of 46 days or more (61 days or more for a transfer) exists.
b. If a gap of 46-60 days (61-75 days for a transfer) exists, principal will be reinsured, but accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period are limited to amounts accruing through the date of default.
c. If a gap of 61 days or more (76 days or more for a transfer) exists, the borrower must be located after the gap, either by the agency or the lender, in order for reinsurance on the loan to be reinstated. (See section I.E.1.d., for a description of acceptable evidence of location.) In addition, if the loan is held by the lender or after March 15, 1988, the lender must follow the steps described in section I.E.1., or receive a full payment or a new signed repayment agreement, in order for the loan to again be eligible for reinsurance. The lender must repay all interest benefits and special allowance received for the period beginning with its earliest unexcused violation, occurring after the last payment received before the cure is accomplished, and ending with the date, if any, that reinsurance on the loan is reinstated.
2. Prospective Period. For due diligence violations occurring on or after May 1, 1988 based on due dates prior to October 6, 1998—
a. There will be no reduction or recovery by the Secretary of payments to the lender or guaranty agency if there is no violation of Federal requirements of 6 days or more (21 days or more for a transfer.)
b. If there exist not more than two violations of 6 days or more each (21 days or more for a transfer), and no gap of 46 days or more (61 days or more for a transfer) exists, principal will be reinsured, but accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to amounts accruing through the date of default. However, the lender must complete all required activities before the claim filing deadline, except that a preclaims assistance request must be made before the 240th day of delinquency. If the lender fails to make this request by the 240th day, the Secretary will not pay any accrued interest, interest benefits, and special allowance for the most recent 180 days prior to default. If the lender fails to complete any other required activity before the claim filing deadline, accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to amounts accruing through the 90th day before default.
c. If there exist three violations of 6 days or more each (21 days or more for a transfer) and no gap of 46 days or more (61 days or more for a transfer), the lender must satisfy the requirements outlined in I.E.1., or receive a full payment or a new signed repayment agreement in order for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished, and ending with the date, if any, that reinsurance on the loan is reinstated.
d. If there exist more than three violations of 6 days or more each (21 days or more for a transfer) of any type, or a gap of 46 days (61 days for a transfer) or more and at least one violation, the lender must satisfy the requirement outlined in section I.D.1., for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished, and ending with the date, if any, that reinsurance on the loan is reinstated.
3. Post 1998 Amendments. For due diligence violations based on due dates on or after October 6, 1998—
a. There will be no reduction or recovery by the Secretary of payments to the lender or guaranty agency if there is no violation of Federal requirements of 6 days or more (21 days or more for a transfer).
b. If there exist not more than two violations of 6 days or more each (21 days or more for a transfer), and no gap of 46 days or more (61 days or more for a transfer) exists, principal will be reinsured, but accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to amounts accruing through the date of default. However, the lender must complete all required activities before the claim filing deadline, except that a default aversion assistance request must be made before the 330th day of delinquency. If the lender fails to make this request by the 330th day, the Secretary will not pay any accrued interest, interest benefits, and special allowance for the most recent 270 days prior to default. If the lender fails to complete any other required activity before the claim filing deadline, accrued interest, interest benefits, and special allowance otherwise payable by the Secretary for the delinquency period will be limited to amounts accruing through the 90th day before default.
c. If there exist three violations of 6 days or more each (21 days or more for a transfer) and no gap of 46 days or more (61 days or more for a transfer), the lender must satisfy the requirements outlined in I.E.1. or receive a full payment or a new signed repayment agreement in order for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished, and ending with the date, if any, that reinsurance on the loan is reinstated.
d. If there exist more than three violations of 6 days or more each (21 days or more for a transfer) of any type, or a gap of 46 days (61 days for a transfer) or more and at least one violation, the lender must satisfy the requirement outlined in section I.D.1. for reinsurance on the loan to be reinstated. The Secretary does not pay any interest benefits or special allowance for the period beginning with the lender's earliest unexcused violation occurring after the last payment received before the cure is accomplished and ending with the date, if any, that reinsurance on the loan is reinstated.
D. Reinstatement of Reinsurance Coverage for Certain Egregious Due Diligence Violations.
1. Cures. In the case of a loan involving violations described in section I.C.2.d. or I.C.3.d., the lender may utilize either of the two procedures described in section I.D.1.a or I.D.1.b. for obtaining reinstatement of reinsurance coverage on the loan.
a. After the violations occur, the lender obtains a new repayment agreement signed by the borrower. The repayment agreement must comply with the repayment period limitations set out in 34 CFR 682.209(a)(8) and 682.209(h)(2); or
b. After the violations occur, the lender obtains one full payment. If the borrower later defaults, the guaranty agency must obtain evidence of this payment (e.g., a copy of the check) from the lender.
2. Borrower Deemed Current as of Date of Cure. On the date the lender receives a new signed repayment agreement or the curing payment under section I.D.1., reinsurance coverage on the loan is reinstated, and the borrower must be deemed by the lender to be current in repaying the loan and entitled to all rights and benefits available to borrowers who are not in default. The lender must then follow the collection and timely filing requirements applicable to the loan.
E. Cures for Timely Filing Violations and Certain Due Diligence Violations
1. Default Claims.
a. Reinstatement of Insurance Coverage. Except as noted in section I.B.6., in order to obtain reinstatement of reinsurance coverage on a loan in the case of a timely filing violation, a due diligence violation described in section I.C.2.c. or I.C.3.c., or a due diligence violation described in section I.C.1.c. where the lender holds the loan on or after March 15, 1988, the lender must first locate the borrower after the gap, or after the date of the last violation, as applicable. (See section I.E.1.d. for description of acceptable evidence of location.) Within 15 days thereafter, the lender must send to the borrower, at the address at which the borrower was located, (i) a new repayment agreement, to be signed by the borrower, that complies with the ten-year repayment limitations in 34 CFR 682.209(a)(7), along with (ii) a collection letter indicating in strong terms the seriousness of the borrower's delinquency and its potential effect on his or her credit rating if repayment is not commenced or resumed. If, within 15 days after the lender sends these items, the borrower fails to make a full payment or to sign and return the new repayment agreement, the lender must, within 5 days thereafter, diligently attempt to contact the borrower by telephone. Within 5-10 days after completing these efforts, the lender must again diligently attempt to contact the borrower by telephone. Finally, within 5-10 days after completing these efforts, the lender must send a forceful collection letter indicating that the entire unpaid balance of the loan is due and payable, and that, unless the borrower immediately contacts the lender to arrange repayment, the lender will be filing a default claim with the guaranty agency.
b. Borrower Deemed Current Under Certain Circumstances. If, at any time on or before the 30th day after the lender completes the additional collection efforts described in section I.E.1.a., or the 270th day of delinquency, whichever is later, the lender receives a full payment or a new signed repayment agreement, reinsurance coverage on the loan is reinstated on the date the lender receives the full payment or new agreement. The borrower must be deemed by the lender to be current in repaying the loan and entitled to all rights and benefits available to borrowers who are not in default. In the case of a timely filing violation on a loan for which the borrower is deemed current under this paragraph, the lender is ineligible to receive interest benefits and special allowance accruing from the date of the violation to the date of reinstatement of reinsurance coverage on the loan.
c. Borrower Deemed in Default Under Certain Circumstances. If the borrower does not make a full payment, or sign and return the new repayment agreement, on or before the 30th day after the lender completes the additional collection efforts described in section I.E.1.a., or the 270th day of delinquency, whichever is later, the lender must deem the borrower to be in default. The lender must then file a default claim on the loan, accompanied by acceptable evidence of location (see section I.E.1.d.), within 30 days after the end of the 30-day period. Reinsurance coverage, and therefore the lender's right to receive interest benefits and special allowance, is not reinstated on a loan involving these circumstances. However, the Secretary will honor reinsurance claims submitted in accordance with this paragraph on the outstanding principal balance of those loans, on unpaid interest as provided in section I.B.7., and for reimbursement of eligible supplemental preclaims assistance costs. In the case of a timely filing violation on a loan for which the borrower is deemed in default under this paragraph, the lender is ineligible to receive interest benefits and special allowance accruing from the date of the violation.
d. Acceptable Evidence of Location. Only the following documentation is acceptable as evidence that the lender has located the borrower:
(1) A postal receipt signed by the borrower not more than 15 days prior to the date on which the lender sent the new repayment agreement, indicating acceptance of correspondence from the lender by the borrower at the address shown on the receipt; or
(2) Documentation submitted by the lender showing—
(i) The name, identification number, and address of the lender;
(ii) The name and Social Security number of the borrower; and
(iii) A signed certification by an employee or agent of the lender, that—
(A) On a specified date, he or she spoke with or received written communication (attached to the certification) from the borrower on the loan underlying the default claim, or a parent, spouse, sibling, roommate, or neighbor of the borrower;
(B) The address and, if available, telephone number of the borrower were provided to the lender in the telephone or written communication; and
(C) In the case of a borrower whose address or telephone number was provided to the lender by someone other than the borrower, the new repayment agreement and the letter sent by the lender pursuant to section I.E.1.a., had not been returned undelivered as of 20 days after the date those items were sent, for due diligence violations described in section I.C.1.c. where the lender holds the loan on the date of this letter, and as of the date the lender filed a default claim on the cured loan, for all other violations.
2. Death, Disability, and Bankruptcy Claims. The Secretary will honor a death or disability claim on an otherwise eligible loan notwithstanding the lender's failure to meet the 60-day timely filing requirement (See 34 CFR 682.402(g)(2)(i)). However, the Secretary will not reimburse the guaranty agency if, before the date the lender determined that the borrower died or was totally and permanently disabled, the lender had violated the Federal due diligence or timely filing requirements applicable to that loan, except in accordance with the waiver policy described above. Interest that accrued on the loan after the expiration of the 60-day filing period remains ineligible for reimbursement by the Secretary, and the lender must repay all interest and special allowance received on the loan for periods after the expiration of the 60-day filing period. The Secretary has determined that, in the vast majority of cases, the failure of a lender to comply with the timely filing requirement applicable to bankruptcy claims (§ 682.402(g)(2)(iv)) causes irreparable harm to the guaranty agency's ability to contest the discharge of the loan by the court, or to otherwise collect from the borrower. Therefore, the Secretary has decided not to excuse violations of the timely filing requirement applicable to bankruptcy claims, except when the lender can demonstrate that the bankruptcy action has concluded and that the loan has not been discharged in bankruptcy or, if previously discharged, has been the subject of a reversal of the discharge. In that case, the lender must return the borrower to the appropriate status that existed prior to the filing of the bankruptcy claim unless the status has changed due solely to passage of time. In the latter case, the lender must place the borrower in the status that would exist had no bankruptcy claim been filed. If the borrower is delinquent after the loan is determined nondischargeable, the lender should grant administrative forbearance to bring the borrower's account current as provided in § 682.211(f)(4) and § 682.402(f)(5)(ii) and (f)(6). The Secretary will not reimburse the guaranty agency for interest for the period beginning on the filing deadline for the bankruptcy claim and ending on the date the loan becomes eligible again for reinsurance. Reinsurance is reinstated on the date the bankruptcy action concludes and the loan is not discharged or on the date a previous discharge is reversed.
II. Due Date of First Payment. Section 682.411(b)(1) refers to the “due date of the first missed payment not later made” as one way to determine the first day of delinquency on a loan. Section 682.209(a)(3) states that, generally, the repayment period on an FFEL Program loan begins some number of months after the month in which the borrower ceases at least half-time study. Where the borrower enters the repayment period with the lender's knowledge, the first payment due date may be set by the lender, provided it falls within a reasonable time after the first day of the month in which the repayment period begins. In this situation, the Secretary generally permits a lender to allow the borrower up to 45 days from the first day of repayment to make the first payment (unless the lender establishes the first day of repayment under § 682.209(a)(3)(ii)(E)).
1. In cases where the lender learns that the borrower has entered the repayment period after the fact, current § 682.411 treats the 30th day after the lender receives this information as the first day of delinquency. In the course of discussion with lenders, the Secretary has learned that many lenders have not been using the 30th day after receipt of notice that the repayment period has begun (“the notice”) as the first payment due date. In recognition of this apparently widespread practice, the Secretary has decided that, both retrospectively and prospectively, a lender should be allowed to establish a first payment due date within 60 days after receipt of the notice, to capitalize interest accruing up to the first payment due date, and to exercise forbearance with respect to the period during which the borrower was in the repayment period but made no payment. In effect, this means that, if the lender sends the borrower a coupon book, billing notice, or other correspondence establishing a new first payment due date, on or before the 60th day after receipt of the notice, the lender is deemed to have exercised forbearance up to the new first payment due date. The new first payment due date must fall no later than 75 days after receipt of the notice (unless the lender establishes the first day of repayment under § 682.209(a)(3)(ii)(E)). In keeping with the 5-day tolerance permitted under section I.C.2.a., for the “prospective period,” or section I.C.3.a., for the “post 1998 amendment period,” a lender that sends the above-described material on or before the 65th day after receipt of the notice will be held harmless. However, a lender that does so on the 66th day will have failed by more than 5 days to send both of the collection letters required by § 682.411(c) to be sent within the first 30 days of delinquency and will thus have committed two violations of more than five days of that rule.
2. If the lender fails to send the material establishing a new first payment due date on or before the 65th day after receipt of the notice, it may thereafter send material establishing a new first payment due date falling not more than 45 days after the materials are sent and will be deemed to have exercised forbearance up to the new first payment due date. However, all violations and gaps occurring prior to the date on which the material is sent are subject to the waiver policies described in section I for violations falling in either the retrospective or prospective periods. This is an exception to the general policy set forth in section I.B.5., that only violations occurring during the most recent 180 or 270 days (as applicable) of the delinquency period on a loan are relevant to the Secretary's examination of due diligence.
Please Note: References to the “65th day after receipt of the notice” and “66th day” in the preceding paragraphs should be amended to read “95th day” and “96th day” respectively for lenders subject to § 682.209(a)(3)(ii)(E).
III. Questions and Answers
The waiver policy outlined in this letter was developed after extensive discussion and consultation with participating lenders and guaranty agencies. In the course of these discussions, lenders and agencies raised a number of questions regarding the due diligence rules as applied to various circumstances. The Secretary's responses to these questions follow.
The answer to questions 1 and 4 are applicable only to loans subject to § 682.411 of the FFEL and PLUS program regulations published on or after November 10, 1986.
1. Q: Section 682.411 of the program regulations requires the lender to make “diligent efforts to contact the borrower by telephone” during each 30-day period of delinquency beginning after the 30th day of delinquency. What must a lender do to comply with this requirement?
A: Generally speaking, one actual telephone contact with the borrower, or two attempts to make such contact on different days and at different times, will satisfy the “diligent efforts” requirement for any of the 30-day delinquency periods described in the rule. However, the “diligent efforts” requirement is intended to be a flexible one, requiring the lender to act on information it receives in the course of attempting telephone contact regarding the borrower's actual telephone number, the best time to call to reach the borrower, etc. For instance, if the lender is told during its second telephone contact attempt that the borrower can be reached at another number or at a different time of day, the lender must then attempt to reach the borrower by telephone at that number or that time of day.
2. Q: What must a lender do when it receives conflicting information regarding the date a borrower ceased at least half-time study?
A: A lender must promptly attempt to reconcile conflicting information regarding a borrower's in-school status by making inquiries of appropriate parties, including the borrower's school. Pending reconciliation, the lender may rely on the most recent credible information it has.
3. Q: If a loan is transferred from one lender to another, is the transferee held responsible for information regarding the borrower's status that is received by the transferor but is not passed on to the transferee?
A: No. A lender is responsible only for information received by its agents and employees. However, if the transferee has reason to believe that the transferor has received additional information regarding the loan, the transferee must make a reasonable inquiry of the transferor as to the nature and substance of that information.
4. Q: What are a lender's due diligence responsibilities where a check received on a loan is dishonored by the bank on which it was drawn?
A: Upon receiving notice that a check has been dishonored, the lender must treat the payment as having never been made for purposes of determining the number of days that the borrower is delinquent at that time. The lender must then begin (or resume) attempting collection on the loan in accordance with § 682.411, commencing with the first 30-day delinquency period described in § 682.411 that begins after the 30-day delinquency period in which the notice of dishonor is received. The same result occurs when the lender successfully obtains a delinquent borrower's correct address through skip-tracing, or when a delinquent borrower leaves deferment or forbearance status.
(a) Under the William D. Ford Federal Direct Loan (Direct Loan) Program (formerly known as the Federal Direct Student Loan Program), the Secretary makes loans to enable a student or parent to pay the costs of the student's attendance at a postsecondary school. This part governs the Federal Direct Stafford/Ford Loan Program, the Federal Direct Unsubsidized Stafford/Ford Loan Program, the Federal Direct PLUS Program, and the Federal Direct Consolidation Loan Program. The Secretary makes loans under the following program components:
(1)(i) Federal Direct Stafford/Ford Loan Program (Direct Subsidized Loan Program), which provides loans to undergraduate, graduate, and professional students. Loans made under this program are referred to as Direct Subsidized Loans. Except as provided in paragraph (a)(1)(ii) of this section, the Secretary subsidizes the interest while the borrower is in an in-school, grace, or deferment period. Graduate and professional students are not eligible to receive Direct Subsidized Loans for any period of enrollment beginning on or after July 1, 2012.
(ii) The Secretary does not subsidize the interest that accrues during the grace period on any Direct Subsidized Loan for which the first disbursement is made on or after July 1, 2012 and before July 1, 2014.
(2) Federal Direct Unsubsidized Stafford/Ford Loan Program (Direct Unsubsidized Loan Program), which provides loans to undergraduate, graduate and professional students. Loans made under this program are referred to as Direct Unsubsidized Loans. The borrower is responsible for the interest that accrues during any period.
(3) Federal Direct PLUS Program (Direct PLUS Loan Program), which provides loans to parents of dependent students and to graduate or professional students. Loans made under this program are referred to as Direct PLUS Loans. The borrower is responsible for the interest that accrues during any period.
(4) Federal Direct Consolidation Loan Program (Direct Consolidation Loan Program), which provides loans to borrowers to consolidate certain Federal educational loans. Loans made under this program are referred to as Direct Consolidation Loans.
(b) The Secretary makes a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a Direct PLUS Loan only to a student or a parent of a student enrolled in a school that participates in the Direct Loan Program.
(c) The Secretary makes a Direct Consolidation Loan only to a borrower who is consolidating at least one loan made under the Direct Loan Program or the Federal Family Education Loan (FFEL) Program.
(a) Colleges, universities, graduate and professional schools, vocational schools, and proprietary schools may participate in the Direct Loan Program. Participation in the Direct Loan Program enables an eligible student or parent to obtain a loan to pay for the student's cost of attendance at the school.
(b)(1) An eligible undergraduate student who is enrolled at a school participating in the Direct Loan Program may borrow under the Direct Subsidized Loan and Direct Unsubsidized Loan programs.
(2) An eligible graduate or professional student enrolled at a school participating in the Direct Loan Program may borrow under the Direct Subsidized Loan, Direct Unsubsidized Loan, and Direct PLUS Loan programs, except that a graduate or professional student may not borrow under the Direct Subsidized Loan Program for any period of enrollment beginning on or after July 1, 2012.
(3) An eligible parent of an eligible dependent student enrolled at a school participating in the Direct Loan Program may borrow under the Direct PLUS Loan Program.
(a)(1) The definitions of the following terms used in this part are set forth in the Student Assistance General Provisions, 34 CFR part 668:
(2) The following definitions are set forth in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(b) The following definitions also apply to this part:
Act: The Higher Education Act of 1965, as amended, 20 U.S.C. 1071 et seq.
Default: The failure of a borrower and endorser, if any, to make an installment payment when due, or to meet other terms of the promissory note, if the Secretary finds it reasonable to conclude that the borrower and endorser, if any, no longer intend to honor the obligation to repay, provided that this failure persists for 270 days.
Endorser: An individual who signs a promissory note and agrees to repay the loan in the event that the borrower does not.
Estimated financial assistance. (1) The estimated amount of assistance for a period of enrollment that a student (or a parent on behalf of a student) will receive from Federal, State, institutional, or other sources, such as scholarships, grants, net earnings from need-based employment, or loans, including but not limited to—
(i) Except as provided in paragraph (2)(iii) of this definition, national service education awards or post-service benefits under title I of the National and Community Service Act of 1990 (AmeriCorps).
(ii) Except as provided in paragraph (2)(vii) of this definition, veterans' education benefits;
(iii) Any educational benefits paid because of enrollment in a postsecondary education institution, or to cover postsecondary education expenses;
(iv) Fellowships or assistantships, except non-need-based employment portions of such awards;
(v) Insurance programs for the student's education; and
(vi) The estimated amount of other Federal student financial aid, including but not limited to a Federal Pell Grant, campus-based aid, and the gross amount (including fees) of subsidized and unsubsidized Federal Stafford Loans, Direct Subsidized and Unsubsidized Loans, and Federal PLUS or Direct PLUS Loans.
(2) Estimated financial assistance does not include—
(i) Those amounts used to replace the expected family contribution (EFC), including the amounts of any TEACH Grants, unsubsidized Federal Stafford Loans or Direct Unsubsidized Loans, Federal PLUS or Direct PLUS Loans, and non-federal non-need-based loans, including private, state-sponsored, and institutional loans. However, if the sum of the amounts received that are being used to replace the student's EFC exceed the EFC, the excess amount must be treated as estimated financial assistance;
(ii) Federal Perkins loan and Federal Work-Study funds that the student has declined;
(iii) For the purpose of determining eligibility for a Direct Subsidized Loan, national service education awards or post-service benefits under title I of the National and Community Service Act of 1990 (AmeriCorps);
(iv) Any portion of the estimated financial assistance described in paragraph (1) of this definition that is included in the calculation of the student's EFC;
(v) Non-need-based employment earnings;
(vi) Assistance not received under a title IV, HEA program, if that assistance is designated to offset all or a portion of a specific amount of the cost of attendance and that component is excluded from the cost of attendance as well. If that assistance is excluded from either estimated financial assistance or cost of attendance, it must be excluded from both;
(vii) Federal veterans' education benefits paid under—
(A) Chapter 103 of title 10, United States Code (Senior Reserve Officers' Training Corps);
(B) Chapter 106A of title 10, United States Code (Educational Assistance for Persons Enlisting for Active Duty);
(C) Chapter 1606 of title 10, United States Code (Selected Reserve Educational Assistance Program);
(D) Chapter 1607 of title 10, United States Code (Educational Assistance Program for Reserve Component Members Supporting Contingency Operations and Certain Other Operations);
(E) Chapter 30 of title 38, United States Code (All-Volunteer Force Educational Assistance Program, also known as the “Montgomery GI Bill—active duty”);
(F) Chapter 31 of title 38, United States Code (Training and Rehabilitation for Veterans with Service-Connected Disabilities);
(G) Chapter 32 of title 38, United States Code (Post-Vietnam Era Veterans' Educational Assistance Program);
(H) Chapter 33 of title 38, United States Code (Post 9/11 Educational Assistance);
(I) Chapter 35 of title 38, United States Code (Survivors' and Dependents' Educational Assistance Program);
(J) Section 903 of the Department of Defense Authorization Act, 1981 (10 U.S.C. 2141 note) (Educational Assistance Pilot Program);
(K) Section 156(b) of the “Joint Resolution making further continuing appropriations and providing for productive employment for the fiscal year 1983, and for other purposes” (42 U.S.C. 402 note) (Restored Entitlement Program for Survivors, also known as “Quayle benefits”);
(L) The provisions of chapter 3 of title 37, United States Code, related to subsistence allowances for members of the Reserve Officers Training Corps; and
(M) Any program that the Secretary may determine is covered by section 480(c)(2) of the HEA; and
(viii) Iraq and Afghanistan Service Grants made under section 420R of the HEA.
Federal Direct Consolidation Loan Program (Direct Consolidation Loan Program): (1) A loan program authorized by title IV, part D of the Act that provides loans to borrowers who consolidate certain Federal educational loan(s), and one of the components of the Direct Loan Program. Loans made under this program are referred to as Direct Consolidation Loans.
(2) The term “Direct Subsidized Consolidation Loan” refers to the portion of a Direct Consolidation Loan attributable to certain subsidized title IV education loans that were repaid by the consolidation loan. Interest is not charged to the borrower during deferment periods, or, for a borrower whose consolidation application was received before July 1, 2006, during in-school and grace periods.
(3) The term “Direct Unsubsidized Consolidation Loan” refers to the portion of a Direct Consolidation Loan attributable to unsubsidized title IV education loans, certain subsidized title IV education loans, and certain other Federal education loans that were repaid by the consolidation loan. The borrower is responsible for the interest that accrues during any period.
(4) In the case of a Direct Consolidation Loan that entered repayment prior to July 1, 2006, the term “Direct PLUS Consolidation Loan” refers to the portion of a Direct Consolidation Loan attributable to Direct PLUS Loans, Direct PLUS Consolidation Loans, Federal PLUS Loans, and Parent Loans for Undergraduate Students that were repaid by the consolidation loan. The borrower is responsible for the interest that accrues during any period.
Federal Direct PLUS Program (Direct PLUS Loan Program): A loan program authorized by title IV, Part D of the Act that is one of the components of the Federal Direct Loan Program. The Federal Direct PLUS Program provides loans to parents of dependent students attending schools that participate in the Direct Loan Program. The Federal Direct PLUS Program also provides loans to graduate or professional students attending schools that participate in the Direct Loan Program. The borrower is responsible for the interest that accrues during any period. Loans made under this program are referred to as Direct PLUS Loans.
Federal Direct Stafford/Ford Loan Program (Direct Subsidized Loan Program): A loan program authorized by title IV, part D of the Act that provides loans to undergraduate, graduate, and professional students attending Direct Loan Program schools, and one of the components of the Direct Loan Program. The Secretary subsidizes the interest while the borrower is in an in-school, grace, or deferment period, except that the Secretary does not subsidize the interest that accrues during the grace period on a loan for which the first disbursement is made on or after July 1, 2012 and before July 1, 2014. Loans made under this program are referred to as Direct Subsidized Loans. Graduate and professional students are not eligible to receive Direct Subsidized Loans for any period of enrollment beginning on or after July 1, 2012.
Federal Direct Unsubsidized Stafford/Ford Loan Program (Direct Unsubsidized Loan Program): A loan program authorized by title IV, part D of the Act that provides loans to undergraduate, graduate, and professional students attending Direct Loan Program schools, and one of the components of the Direct Loan Program. The borrower is responsible for the interest that accrues during any period. Loans made under this program are referred to as Direct Unsubsidized Loans.
Federal Insured Student Loan Program: The loan program authorized by title IV, part B of the Act under which the Secretary directly insures lenders against losses.
Federal Stafford Loan Program: The loan program authorized by title IV, part B of the Act which encouraged the making of subsidized and unsubsidized loans to undergraduate, graduate, and professional students and is one of the Federal Family Education Loan programs.
Grace period: A six-month period that begins on the day after a Direct Subsidized Loan borrower, a Direct Unsubsidized Loan borrower, or, in some cases, a Direct Consolidation Loan borrower whose consolidation application was received before July 1, 2006, ceases to be enrolled as at least a half-time student at an eligible institution and ends on the day before the repayment period begins.
Guaranty agency: A State or private nonprofit organization that has an agreement with the Secretary under which it will administer a loan guarantee program under the Act.
Holder: The entity that owns a loan. For a FFEL Program loan, the term “holder” refers to an eligible lender owning a FFEL Program loan, including a Federal or State agency or an organization or corporation acting on behalf of such an agency and acting as a conservator, liquidator, or receiver of an eligible lender.
Interest rate: The annual interest rate that is charged on a loan, under title IV, part D of the Act.
Lender: As used in this part, the term “lender” has the meaning specified in section 435(d) of the Act for purposes of the FFEL Program.
Loan fee: A fee, payable by the borrower, that is used to help defray the costs of the Direct Loan Program.
Master Promissory Note (MPN): (1) A promissory note under which the borrower may receive loans for a single academic year or multiple academic years.
(2) For MPNs processed by the Secretary before July 1, 2003, loans may no longer be made under an MPN after the earliest of—
(i) The date the Secretary or the school receives the borrower's written notice that no further loans may be disbursed;
(ii) One year after the date of the borrower's first anticipated disbursement if no disbursement is made during that twelve-month period; or
(iii) Ten years after the date of the first anticipated disbursement, except that a remaining portion of a loan may be disbursed after this date.
(3) For MPNs processed by the Secretary on or after July 1, 2003, loans may no longer be made under an MPN after the earliest of—
(i) The date the Secretary or the school receives the borrower's written notice that no further loans may be made;
(ii) One year after the date the borrower signed the MPN or the date the Secretary receives the MPN, if no disbursements are made under that MPN; or
(iii) Ten years after the date the borrower signed the MPN or the date the Secretary receives the MPN, except that a remaining portion of a loan may be disbursed after this date.
(4) Unless the Secretary determines otherwise, a school may use a single MPN as the basis for all loans borrowed by a student or parent borrower for attendance at that school. If a school is not authorized by the Secretary for multi-year use of the MPN, a student or parent borrower must sign a new MPN for each academic year.
Nationwide consumer reporting agency: A consumer reporting agency as defined in 15 U.S.C. 1681a(p).
Payment data: An electronic record that is provided to the Secretary by an institution showing student disbursement information.
Period of enrollment: The period for which a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan is intended. The period of enrollment must coincide with one or more bona fide academic terms established by the school for which institutional charges are generally assessed (e.g., a semester, trimester, or quarter in weeks of instructional time; an academic year; or the length of the program of study in weeks of instructional time). The period of enrollment is also referred to as the loan period.
Satisfactory repayment arrangement: (1) For the purpose of regaining eligibility under section 428F(b) of the HEA, the making of six consecutive, voluntary, on-time, full monthly payments on a defaulted loan. A borrower may only obtain the benefit of this paragraph with respect to renewed eligibility once.
(2) For the purpose of consolidating a defaulted loan under § 685.220(d)(1)(ii)(A)(3)—
(i) The making of three consecutive, voluntary, on-time, full monthly payments on a defaulted loan prior to consolidation; or
(ii) Agreeing to repay the Direct Consolidation Loan under one of the income-driven repayment plans described in § 685.209.
(3) For the purpose of paragraph (2)(i) of this definition, the required monthly payment amount may not be more than is reasonable and affordable based on the borrower's total financial circumstances. “On-time” means a payment made within 20 days of the scheduled due date, and voluntary payments are payments made directly by the borrower and do not include payments obtained by Federal offset, garnishment, or income or asset execution.
(4) A borrower has not used the one opportunity to renew eligibility for title IV assistance if the borrower makes six consecutive, on-time, voluntary, full monthly payments under an agreement to rehabilitate a defaulted loan, but does not receive additional title IV assistance prior to defaulting on that loan again.
Substantial gainful activity: A level of work performed for pay or profit that involves doing significant physical or mental activities, or a combination of both.
Totally and permanently disabled: The condition of an individual who—
(1) Is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that—
(i) Can be expected to result in death;
(ii) Has lasted for a continuous period of not less than 60 months; or
(iii) Can be expected to last for a continuous period of not less than 60 months; or
(2) Has been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected disability.
(a) Subpart A contains general provisions regarding the purpose and scope of the Direct Loan Program.
(b) Subpart B contains provisions regarding borrowers in the Direct Loan Program.
(c) Subpart C contains certain requirements regarding schools in the Direct Loan Program.
(d) Subpart D of this part contains provisions regarding borrower defense to repayment in the Direct Loan Program.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
(a) Student Direct Subsidized or Direct Unsubsidized borrower. (1) A student is eligible to receive a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a combination of these loans, if the student meets the following requirements:
(i) The student is enrolled, or accepted for enrollment, on at least a half-time basis in a school that participates in the Direct Loan Program.
(ii) The student meets the requirements for an eligible student under 34 CFR part 668.
(iii) In the case of an undergraduate student who seeks a Direct Subsidized Loan or a Direct Unsubsidized Loan at a school that participates in the Federal Pell Grant Program, the student has received a determination of Federal Pell Grant eligibility for the period of enrollment for which the loan is sought.
(iv) In the case of a borrower whose previous loan or TEACH Grant service obligation was discharged due to total and permanent disability, the student—
(A) In the case of a borrower whose prior loan under title IV of the Act or TEACH Grant service obligation was discharged after a final determination of total and permanent disability, the borrower—
(1) Obtains a certification from a physician that the borrower is able to engage in substantial gainful activity; and
(2) Signs a statement acknowledging that neither the new Direct Loan the borrower receives nor any previously discharged loan on which the borrower is required to resume payment in accordance with paragraph (a)(1)(iv)(B) of this section can be discharged in the future on the basis of any impairment present when the new loan is made, unless that impairment substantially deteriorates;
(B) In the case of a borrower who receives a new Direct Loan, other than a Direct Consolidation Loan, within three years of the date that any previous title IV loan or TEACH Grant service obligation was discharged due to a total and permanent disability in accordance with § 685.213(b)(4)(iii), 34 CFR 674.61(b)(3)(v), 34 CFR 682.402(c)(3)(iv), or 34 CFR 686.42(b) based on a discharge request received on or after July 1, 2010, the borrower resumes repayment on the previously discharged loan in accordance with § 685.213(b)(7), 34 CFR 674.61(b)(6), or 34 CFR 682.402(c)(6), or acknowledges that he or she is once again subject to the terms of the TEACH Grant agreement to serve before receiving the new loan; and
(C) In the case of a borrower whose prior loan under title IV of the Act was conditionally discharged after an initial determination that the borrower was totally and permanently disabled based on a discharge request received prior to July 1, 2010—
(1) The suspension of collection activity on the prior loan has been lifted;
(2) The borrower complies with the requirement in paragraph (a)(1)(iv)(A)(1) of this section;
(3) The borrower signs a statement acknowledging that neither the new Direct Loan the borrower receives nor the loan that has been conditionally discharged prior to a final determination of total and permanent disability can be discharged in the future on the basis of any impairment present when the borrower applied for a total and permanent disability discharge or when the new loan is made, unless that impairment substantially deteriorates; and
(4) The borrower signs a statement acknowledging that the suspension of collection activity on the prior loan will be lifted.
(v) In the case of a student who was enrolled in a program of study prior to July 1, 2012 and who seeks a loan but does not have a certificate of graduation from a school providing secondary education or the recognized equivalent of such a certificate, the student meets the requirements under 34 CFR 668.32(e)(2), (3), (4), or (5).
(2)(i) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act.
(ii) [Reserved]
(b) Student PLUS borrower. (1) The student is enrolled, or accepted for enrollment, on at least a half-time basis in a school that participates in the Direct Loan Program.
(2) The student meets the requirements for an eligible student under 34 CFR part 668.
(3) The student meets the requirements of paragraphs (a)(1)(iv) and (a)(1)(v) of this section, if applicable.
(4) The student has received a determination of his or her annual loan maximum eligibility under the Direct Unsubsidized Loan Program and, for periods of enrollment beginning before July 1, 2012, the Direct Subsidized Loan Program; and
(5) The student meets the requirements that apply to a parent under paragraphs (c)(2)(viii)(A) through (G) of this section.
(c) Parent PLUS borrower—(1) Definitions. The following definitions apply to this paragraph (c):
(i) Charged off means a debt that a creditor has written off as a loss, but that is still subject to collection action.
(ii) In collection means a debt that has been placed with a collection agency by a creditor or that is subject to more intensive efforts by a creditor to recover amounts owed from a borrower who has not responded satisfactorily to the demands routinely made as part of the creditor's billing procedures.
(2) Eligibility. A parent is eligible to receive a Direct PLUS Loan if the parent meets the following requirements:
(i) The parent is borrowing to pay for the educational costs of a dependent undergraduate student who meets the requirements for an eligible student under 34 CFR part 668.
(ii) The parent provides his or her and the student's social security number.
(iii) The parent meets the requirements pertaining to citizenship and residency that apply to the student under 34 CFR 668.33.
(iv) The parent meets the requirements concerning defaults and overpayments that apply to the student in 34 CFR 668.32(g).
(v) The parent complies with the requirements for submission of a Statement of Educational Purpose that apply to the student under 34 CFR part 668, except for the completion of a Statement of Selective Service Registration Status.
(vi) The parent meets the requirements that apply to a student under paragraph (a)(1)(iv) of this section.
(vii) The parent has completed repayment of any title IV, HEA program assistance obtained by fraud, if the parent has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance.
(viii)(A) The parent—
(1) Does not have an adverse credit history;
(2) Has an adverse credit history, but has obtained an endorser who does not have an adverse credit history, and completes PLUS loan counseling offered by the Secretary; or
(3) Has an adverse credit history but documents to the satisfaction of the Secretary that extenuating circumstances exist and completes PLUS loan counseling offered by the Secretary.
(B) For purposes of this paragraph (c), an adverse credit history means that the parent—
(1) Has one or more debts with a total combined outstanding balance greater than $2,085, as may be adjusted by the Secretary in accordance with paragraphs (c)(2)(viii)(C) and (D) of this section, that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collection or charged off, as defined in paragraph (c)(1) of this section, during the two years preceding the date of the credit report; or
(2) Has been the subject of a default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a debt under title IV of the Act during the five years preceding the date of the credit report.
(C) The Secretary increases the amount specified in paragraph (c)(2)(viii)(B)(1) of this section, or its inflation-adjusted equivalent, when the Secretary determines that an inflation adjustment to that amount would result in an increase of $100 or more.
(D) In making the inflation adjustment described in paragraph (c)(2)(viii)(C) of this section, the Secretary:
(1) Uses the annual average percent change of the All Items Consumer Price Index for All Urban Consumers (CPI-U), before seasonal adjustment, as the measurement of inflation; and
(2) If the adjustment calculated under paragraph (c)(2)(viii)(D)(1) of this section is equal to or greater than $100, adding the adjustment to $2,085 threshold amount, or its inflation-adjusted equivalent, and rounding up to the nearest $5.
(E) The Secretary will publish a notice in the
(F) For purposes of this paragraph (c), the Secretary does not consider the absence of a credit history as an adverse credit history and does not deny a Direct PLUS loan on that basis.
(G) For purposes of this paragraph (c), the Secretary may determine that extenuating circumstances exist based on documentation that may include, but is not limited to—
(1) An updated credit report for the parent; or
(2) A statement from the creditor that the parent has repaid or made satisfactory arrangements to repay a debt that was considered in determining that the parent has an adverse credit history.
(3) For purposes of paragraph (c)(2) of this section, a “parent” includes the individuals described in the definition of “parent” in 34 CFR 668.2 and the spouse of a parent who remarried, if that spouse's income and assets would have been taken into account when calculating a dependent student's expected family contribution.
(d) Defaulted Perkins, FFEL, and Direct Loan program borrowers. Except as noted in § 685.220(d)(1)(ii)(A)(3), in the case of a student or parent borrower who is currently in default on a Perkins, FFEL, or Direct Loan program loan, the borrower must make satisfactory repayment arrangements, as described in paragraph (1) of the definition of that term under § 685.102(b), on the defaulted loan.
(e) Use of loan proceeds to replace expected family contribution. The amount of a Direct Unsubsidized Loan, a Direct PLUS loan, or a non-federal non-need based loan, including a private, state-sponsored, or institution loan, obtained for a loan period may be used to replace the expected family contribution for that loan period.
(a) Application for a Direct Subsidized Loan or a Direct Unsubsidized Loan. (1) To obtain a Direct Subsidized Loan or a Direct Unsubsidized Loan, a student must complete a Free Application for Federal Student Aid and submit it in accordance with instructions in the application.
(2) If the student is eligible for a Direct Subsidized Loan or a Direct Unsubsidized Loan, the school in which the student is enrolled must perform the following functions:
(i) Create a loan origination record and transmit the record to the Secretary.
(ii) Ensure that the loan is supported by a completed Master Promissory Note (MPN) and, if applicable, transmit the MPN to the Secretary.
(iii) In accordance with 34 CFR 668.162, draw down funds or receive funds from the Secretary, and disburse the funds to the student.
(b) Application for a Direct PLUS Loan. (1) For a parent to obtain a Direct PLUS Loan, the parent must complete the Direct PLUS Loan MPN and the dependent student on whose behalf the parent is borrowing must complete a Free Application for Federal Student Aid and submit it in accordance with instructions in the application.
(2) For a graduate or professional student to apply for a Direct PLUS Loan, the student must complete a Free Application for Federal Student Aid and submit it in accordance with instructions in the application. The graduate or professional student must also complete the Direct PLUS Loan MPN.
(3) For either a parent or student PLUS borrower, as applicable, the school must complete its portion of the Direct PLUS Loan MPN and, if applicable, submit it to the Secretary. The Secretary makes a determination as to whether the parent or graduate or professional student has an adverse credit history. The school performs the functions described in paragraph (a)(2) of this section.
(c) Application for a Direct Consolidation Loan. (1) To obtain a Direct Consolidation Loan, the applicant must complete the application and promissory note and submit it to the Secretary. The application and promissory note sets forth the terms and conditions of the Direct Consolidation Loan and informs the applicant how to contact the Secretary. The Secretary answers questions regarding the process of applying for a Direct Consolidation Loan and provides information about the terms and conditions of both Direct Consolidation Loans and the types of loans that may be consolidated.
(2) Once the applicant has submitted the completed application and promissory note to the Secretary, the Secretary makes the Direct Consolidation Loan under the procedures specified in § 685.220.
(a) Interest—(1) Interest rate for Direct Subsidized Loans and Direct Unsubsidized Loans first disbursed before July 1, 1995. During all periods, the interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 immediately preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 3.1 percentage points, but does not exceed 8.25 percent.
(2) Interest rate for Direct Subsidized Loans and Direct Unsubsidized Loans first disbursed on or after July 1, 1995, and before July 1, 1998—(i) During the in-school, grace, and deferment periods. The interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 immediately preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 2.5 percentage points, but does not exceed 8.25 percent.
(ii) During all other periods. The interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 immediately preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 3.1 percentage points, but does not exceed 8.25 percent.
(3) Interest Rate for Direct Subsidized Loans and Direct Subsidized Loans first disbursed on or after July 1, 1998, and before July 1, 2006. (i) During the in-school, grace, and deferment periods. The interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 immediately preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 1.7 percentage points, but does not exceed 8.25 percent.
(ii) During all other periods. The interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 immediately preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 2.3 percentage points, but does not exceed 8.25 percent.
(4) Interest rate for Direct Subsidized Loans made to undergraduate students for which the first disbursement is made on or after July 1, 2006, and before July 1, 2013. For a loan for which the first disbursement is made:
(i) On or after July 1, 2006, and before July 1, 2008, the interest rate is 6.8 percent on the unpaid principal balance of the loan.
(ii) On or after July 1, 2008, and before July 1, 2009, the interest rate is 6 percent on the unpaid principal balance of the loan.
(iii) On or after July 1, 2009, and before July 1, 2010, the interest rate is 5.6 percent on the unpaid principal balance of the loan.
(iv) On or after July 1, 2010, and before July 1, 2011, the interest rate is 4.5 percent on the unpaid principal balance of the loan.
(v) On or after July 1, 2011, and before July 1, 2013, the interest rate is 3.4 percent on the unpaid balance of the loan.
(5) Interest rate for Direct Subsidized Loans made to graduate or professional students for which the first disbursement is made on or after July 1, 2006, and before July 1, 2012. The interest rate is 6.8 percent.
(6) Interest rate for Direct Unsubsidized Loans first disbursed on or after July 1, 2006, and before July 1, 2013. The interest rate is 6.8 percent.
(7) Interest rate for Direct Subsidized Loans and Direct Unsubsidized Loans made to undergraduate students for which the first disbursement is made on or after July 1, 2013. The interest rate for loans first disbursed during any 12-month period beginning on July 1 and ending on June 30 is determined on the June 1 preceding that period and is a fixed rate for the life of the loan. The interest rate is the lesser of—
(i) A rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to the June 1 preceding the 12-month period, plus 2.05 percentage points, or
(ii) 8.25 percent.
(8) Interest rate for Direct Unsubsidized Loans made to graduate or professional students for which the first disbursement is made on or after July 1, 2013. The interest rate for loans first disbursed during any 12-month period beginning on July 1 and ending on June 30 is determined on the June 1 preceding that period and is a fixed rate for the life of the loan. The interest rate is the lesser of—
(i) A rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to the June 1 preceding the 12-month period, plus 3.6 percentage points, or
(ii) 9.5 percent.
(9) Interest rate for Direct PLUS Loans—(i) Direct PLUS Loans first disbursed before July 1, 1998—(A) Interest rates for periods ending before July 1, 2001. During all periods, the interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 preceding that period. The interest rate is equal to the bond equivalent rate of 52-week Treasury bills auctioned at the final auction held prior to that June 1 plus 3.1 percentage points, but does not exceed 9 percent.
(B) Interest rates for periods beginning on or after July 1, 2001. During all periods, the interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 26 preceding that period. The interest rate is equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before that June 26 plus 3.1 percentage points, but does not exceed 9 percent.
(ii) Direct PLUS Loans first disbursed on or after July 1, 1998, and before July 1, 2006. During all periods, the interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 3.1 percentage points, but does not exceed 9 percent.
(iii) Direct PLUS Loans first disbursed on or after July 1, 2006, and before July 1, 2013. The interest rate is 7.9 percent.
(iv) Direct PLUS Loans first disbursed on or after July 1, 2013. The interest rate for loans first disbursed during any 12-month period beginning on July 1 and ending on June 30 is determined on the June 1 preceding that period and is a fixed rate for the life of the loan. The interest rate is the lesser of—
(A) A rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to the June 1 preceding the 12-month period, plus 4.6 percentage points, or
(B) 10.5 percent.
(10) Interest rate for Direct Consolidation Loans—(i) Interest rate for Direct Subsidized Consolidation Loans and Direct Unsubsidized Consolidation Loans. (A) Loans first disbursed before July 1, 1995. The interest rate is the rate established for Direct Subsidized Loans and Direct Unsubsidized Loans in paragraph (a)(1) of this section.
(B) Loans first disbursed on or after July 1, 1995, and before July 1, 1998. The interest rate is the rate established for Direct Subsidized Loans and Direct Unsubsidized Loans in paragraph (a)(2) of this section.
(C) Loans for which the first disbursement is made on or after July 1, 1998, and prior to October 1, 1998, and loans for which the disbursement is made on or after October 1, 1998, for which the consolidation application was received by the Secretary before October 1, 1998. The interest rate is the rate established for Direct Subsidized Loans and Direct Unsubsidized Loans in paragraph (a)(3) of this section.
(D) Loans for which the consolidation application is received by the Secretary on or after October 1, 1998, and before February 1, 1999. During all periods, the interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 immediately preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 2.3 percentage points, but does not exceed 8.25 percent.
(E) Loans for which the consolidation application is received by the Secretary on or after February 1, 1999, and before July 1, 2013. During all periods, the interest rate is based on the weighted average of the interest rates on the loans being consolidated, rounded to the nearest higher one-eighth of one percent, but does not exceed 8.25 percent.
(F) Loans for which the consolidation application is received by the Secretary on or after July 1, 2013. During all periods, the interest rate is based on the weighted average of the interest rates on the loans being consolidated, rounded to the nearest higher one-eighth of one percent.
(ii) Interest rate for Direct PLUS Consolidation Loans—(A) Loans first disbursed before July 1, 1998. The interest rate is the rate established for Direct PLUS Loans in paragraph (a)(9)(i) of this section.
(B) Loans for which the first disbursement is made on or after July 1, 1998, and prior to October 1, 1998, and loans for which the disbursement is made on or after October 1, 1998, for which the consolidation application was received by the Secretary before October 1, 1998. The interest rate is the rate established for Direct PLUS Loans in paragraph (a)(9)(ii) of this section.
(C) Loans for which the consolidation application is received by the Secretary on or after October 1, 1998, and before February 1, 1999. During all periods, the interest rate during any twelve-month period beginning on July 1 and ending on June 30 is determined on the June 1 immediately preceding that period. The interest rate is equal to the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to that June 1 plus 2.3 percentage points, but does not exceed 8.25 percent.
(D) Loans for which the consolidation application is received by the Secretary on or after February 1, 1999, and before July 1, 2006. During all periods, the interest rate is based on the weighted average of the interest rates on the loans being consolidated, rounded to the nearest higher one-eighth of one percent, but does not exceed 8.25 percent.
(11) Applicability of the Servicemembers Civil Relief Act (SCRA)(50 U.S.C. 527, App. sec. 207). Notwithstanding paragraphs (a)(1) through (10) of this section, upon the Secretary's receipt of evidence of the borrower's military service, the maximum interest rate under 50 U.S.C. 527, App. section 207(a), on Direct Loan Program loans made prior to the borrower entering military service status is six percent while the borrower is in military service. For purposes of this paragraph, the interest rate includes any other charges or fees applied to the loan. For purposes of this paragraph (a)(11), the term “military service” means—
(i) In the case of a servicemember who is a member of the Army, Navy, Air Force, Marine Corps, or Coast Guard—
(A) Active duty, meaning full-time duty in the active military service of the United States. Such term includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. Such term does not include full-time National Guard duty.
(B) In the case of a member of the National Guard, including service under a call to active service, which means service on active duty or full-time National Guard duty, authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days for purposes of responding to a national emergency declared by the President and supported by Federal funds;
(ii) In the case of a servicemember who is a commissioned officer of the Public Health Service or the National Oceanic and Atmospheric Administration, active service; and
(iii) Any period during which a servicemember is absent from duty on account of sickness, wounds, leave, or other lawful cause.
(b) Capitalization. (1) The Secretary may add unpaid accrued interest to the borrower's unpaid principal balance. This increase in the principal balance of a loan is called “capitalization.”
(2) For a Direct Loan not eligible for interest subsidies during periods of deferment, the Secretary capitalizes the unpaid interest that has accrued on the loan upon the expiration of the deferment.
(c) Loan fee for Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans. The Secretary—
(1)(i) For a Direct Subsidized or Direct Unsubsidized loan first disbursed prior to February 8, 2006, charges a borrower a loan fee not to exceed 4 percent of the principal amount of the loan;
(ii) For a Direct Subsidized or Direct Unsubsidized loan first disbursed on or after February 8, 2006, but before July 1, 2007, charges a borrower a loan fee not to exceed 3 percent of the principal amount of the loan;
(iii) For a Direct Subsidized or Direct Unsubsidized loan first disbursed on or after July 1, 2007, but before July 1, 2008, charges a borrower a loan fee not to exceed 2.5 percent of the principal amount of the loan;
(iv) For a Direct Subsidized or Direct Unsubsidized loan first disbursed on or after July 1, 2008, but before July 1, 2009, charges the borrower a loan fee not to exceed 2 percent of the principal amount of the loan;
(v) For a Direct Subsidized or Direct Unsubsidized loan first disbursed on or after July 1, 2009, but before July 1, 2010, charges the borrower a loan fee not to exceed 1.5 percent of the principal amount of the loan;
(vi) For a Direct Subsidized or Direct Unsubsidized loan first disbursed on or after July 1, 2010, charges the borrower a loan fee not to exceed 1 percent of the principal amount of the loan; and
(vii) Charges a borrower a loan fee of four percent of the principal amount of the loan on a Direct PLUS loan.
(2) Deducts the loan fee from the proceeds of the loan;
(3) In the case of a loan disbursed in multiple installments, deducts a pro rated portion of the fee from each disbursement; and
(4) Applies to a borrower's loan balance the portion of the loan fee previously deducted from the loan that is attributable to any portion of the loan that is—
(i) Repaid or returned within 120 days of disbursement, unless—
(A) The borrower has no Direct Loans in repayment status and has requested, in writing, that the repaid or returned funds be used for a different purpose; or
(B) The borrower has a Direct Loan in repayment status, in which case the payment is applied in accordance with § 685.211(a) unless the borrower has requested, in writing, that the repaid or returned funds be applied as a cancellation of all or part of the loan; or
(ii) Returned by a school in order to comply with the Act or with applicable regulations.
(d) Late charge. (1) The Secretary may require the borrower to pay a late charge of up to six cents for each dollar of each installment or portion thereof that is late under the circumstances described in paragraph (d)(2) of this section.
(2) The late charge may be assessed if the borrower fails to pay all or a portion of a required installment payment within 30 days after it is due.
(e)(1) Collection charges before default. Notwithstanding any provision of State law, the Secretary may require that the borrower or any endorser pay costs incurred by the Secretary or the Secretary's agents in collecting installments not paid when due. These charges do not include routine collection costs associated with preparing letters or notices or with making personal contacts with the borrower (e.g., local and long-distance telephone calls).
(2) Collection charges after default. If a borrower defaults on a Direct Loan, the Secretary assesses collection costs on the basis of 34 CFR 30.60.
(a) Direct Subsidized Loans. (1) In the case of an undergraduate student who has not successfully completed the first year of a program of undergraduate education, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following:
(i) $3,500 for a program of study of at least a full academic year in length.
(ii) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $3,500 as the—
(iii) For a program of study that is less than a full academic year in length, the amount that is the same ratio to $3,500 as the lesser of the—
(2) In the case of an undergraduate student who has successfully completed the first year of an undergraduate program but has not successfully completed the second year of an undergraduate program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following:
(i) $4,500 for a program of study of at least a full academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $4,500 as the—
(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following:
(i) $5,500 for a program of study of at least an academic year in length.
(ii) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $5,500 as the—
(4) In the case of a student who has an associate or baccalaureate degree which is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (a)(3) of this section.
(5) In the case of a graduate or professional student for periods of enrollment beginning before July 1, 2012, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed $8,500.
(6) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or a certificate, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following:
(i) $2,625 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(ii) $5,500 for coursework necessary for enrollment in a graduate or professional degree or certification program for a student who has obtained a baccalaureate degree.
(7) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in coursework necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed $5,500.
(8) Except as provided in paragraph (a)(4) of this section, an undergraduate student who is enrolled in a program that is one academic year or less in length may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(1) of this section.
(9) Except as provided in paragraph (a)(4) of this section—
(i) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(1) of this section.
(ii) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (a)(2) of this section.
(b) Direct Unsubsidized Loans. (1) In the case of a dependent undergraduate student, except as provided in paragraph (c)(3) of this section, the total amount a student may borrow for any academic year of study under the Direct Unsubsidized Loan Program is the same as the amount determined under paragraph (a) of this section, less any amount received under the Direct Subsidized Loan Program, plus—
(i) $2,000 for a program of study of at least a full academic year in length.
(ii) For a program of study that is one academic year or more in length with less than a full academic year remaining, the amount that is the same ratio to $2,000 as the—
(iii) For a program of study that is less than a full academic year in length, the amount that is the same ratio to $2,000 as the lesser of the—
(2)(i) In the case of an independent undergraduate student or certain dependent undergraduate students under the conditions specified in paragraph (c)(1)(ii) of this section, except as provided in paragraph (c)(3) of this section, the total amount the student may borrow for any period of enrollment under the Direct Unsubsidized Loan Program may not exceed the amounts determined under paragraph (a) of this section less any amount received under the Direct Subsidized Loan Program in combination with the amounts determined under paragraph (c) of this section.
(ii) In the case of a graduate or professional student for a period of enrollment beginning before July 1, 2012, the total amount the student may borrow for any academic year of study under the Direct Unsubsidized Loan Program may not exceed the amount determined under paragraph (a)(5) of this section, less any amount received under the Direct Subsidized Loan Program.
(iii) In the case of a graduate or professional student for a period of enrollment beginning on or after July 1, 2012, the total amount the student may borrow for any academic year of study under the Direct Unsubsidized Loan Program may not exceed $8,500.
(c) Additional eligibility for Direct Unsubsidized Loans. (1)(i) An independent undergraduate student, graduate or professional student, and certain dependent undergraduate students may borrow amounts under the Direct Unsubsidized Loan Program in addition to any amount borrowed under paragraph (b) of this section, except as provided in paragraph (c)(3) for certain dependent undergraduate students.
(ii) In order for a dependent undergraduate student to receive this additional loan amount, the financial aid administrator must determine that the student's parent likely will be precluded by exceptional circumstances from borrowing under the Direct PLUS Loan Program and the student's family is otherwise unable to provide the student's expected family contribution. The financial aid administrator must base the determination on a review of the family financial information provided by the student and consideration of the student's debt burden and must document the determination in the school's file.
(iii) “Exceptional circumstances” under paragraph (c)(1)(ii) of this section include but are not limited to circumstances in which the student's parent receives only public assistance or disability benefits, the parent is incarcerated, the parent has an adverse credit history, or the parent's whereabouts are unknown. A parent's refusal to borrow a Direct PLUS Loan does not constitute “exceptional circumstances.”
(2) The additional amount that a student described in paragraph (c)(1)(i) of this section may borrow under the Direct Unsubsidized Loan Program for any academic year of study may not exceed the following:
(i) In the case of a student who has not successfully completed the first year of a program of undergraduate education—
(A) $6,000 for a program of study of at least a full academic year in length.
(B) For a one-year program of study with less than a full academic year remaining, the amount that is the same ratio to $6,000 as the—
(C) For a program of study that is less than a full academic year in length, an amount that is the same ratio to $6,000 as the lesser of the—
(ii) In the case of a student who has completed the first year of a program of undergraduate education but has not successfully completed the second year of a program of undergraduate education—
(A) $6,000 for a program of study of at least a full academic year in length.
(B) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $6,000 as the—
(iii) In the case of a student who has successfully completed the second year of a program of undergraduate education but has not completed the remainder of the program of study—
(A) $7,000 for a program of study of at least a full academic year in length.
(B) For a program of study with less than a full academic year remaining, an amount that is the same ratio to $7,000 as the—
(iv) In the case of a student who has an associate or baccalaureate degree which is required for admission into a program and who is not a graduate or professional student, the total amount the student may borrow for any academic year of study may not exceed the amounts in paragraph (c)(2)(iii) of this section.
(v) In the case of a graduate or professional student, $12,000.
(vi) In the case of a student enrolled for no longer than one consecutive 12-month period in a course of study necessary for enrollment in a program leading to a degree or a certificate—
(A) $6,000 for coursework necessary for enrollment in an undergraduate degree or certificate program.
(B) $7,000 for coursework necessary for enrollment in a graduate or professional degree or certification program for a student who has obtained a baccalaureate degree.
(vii) In the case of a student who has obtained a baccalaureate degree and is enrolled or accepted for enrollment in coursework necessary for a professional credential or certification from a State that is required for employment as a teacher in an elementary or secondary school in that State, $7,000.
(viii) Except as provided in paragraph (c)(2)(iv) of this section, an undergraduate student who is enrolled in a program that is one academic year or less in length may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (c)(2)(i) of this section.
(ix) Except as provided in paragraph (c)(2)(iv) of this section—
(A) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has not successfully completed the first year of that program may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (c)(2)(i) of this section.
(B) An undergraduate student who is enrolled in a program that is more than one academic year in length and who has successfully completed the first year of that program, but has not successfully completed the second year of the program, may not borrow an amount for any academic year of study that exceeds the amounts in paragraph (c)(2)(ii) of this section.
(3) A dependent undergraduate student who qualifies for additional Direct Unsubsidized Loan amounts under this section in accordance with paragraph (c)(1)(ii) is not eligible to receive the additional Direct Unsubsidized Loan amounts provided under paragraph (b)(1)(ii) of this section.
(d) Aggregate limits for subsidized loans. The aggregate unpaid principal amount of all Direct Subsidized Loans and Subsidized Federal Stafford Loans made to a student but excluding the amount of capitalized interest may not exceed the following:
(1) $23,000 in the case of any student who has not successfully completed a program of study at the undergraduate level.
(2) $65,500 in the case of a graduate or professional student, including loans for undergraduate study.
(e) Aggregate limits for unsubsidized loans. The total amount of Direct Unsubsidized Loans, Unsubsidized Federal Stafford Loans, and Federal SLS Loans, excluding the amount of capitalized interest, may not exceed the following:
(1) For a dependent undergraduate student, $31,000 minus any Direct Subsidized Loan and Subsidized Federal Stafford Loan amounts, unless the student qualifies under paragraph (c) of this section for additional eligibility or qualified for that additional eligibility under the Federal SLS Program.
(2) For an independent undergraduate or a dependent undergraduate who qualifies for additional eligibility under paragraph (c) of this section or qualified for this additional eligibility under the Federal SLS Program, $57,500 minus any Direct Subsidized Loan and Subsidized Federal Stafford Loan amounts.
(3) For a graduate or professional student, $138,500, including any loans for undergraduate study, minus any Direct Subsidized Loan, Subsidized Federal Stafford Loan, and Federal SLS Program loan amounts.
(f) Direct PLUS Loans annual limit. The total amount of all Direct PLUS Loans that a parent or parents may borrow on behalf of each dependent student, or that a graduate or professional student may borrow, for any academic year of study may not exceed the cost of attendance minus other estimated financial assistance for the student.
(g) Direct PLUS Loans aggregate limit. The total amount of all Direct PLUS Loans that a parent or parents may borrow on behalf of each dependent student, or that a graduate or professional student may borrow, for enrollment in an eligible program of study may not exceed the student's cost of attendance minus other estimated financial assistance for that student for the entire period of enrollment.
(h) Loan limit period. The annual loan limits apply to an academic year, as defined in 34 CFR 668.3.
(i) Treatment of Direct Consolidation Loans and Federal Consolidation Loans. The percentage of the outstanding balance on Direct Consolidation Loans or Federal Consolidation Loans counted against a borrower's aggregate loan limits is calculated as follows:
(1) For Direct Subsidized Loans, the percentage equals the percentage of the original amount of the Direct Consolidation Loan or Federal Consolidation Loan attributable to the Direct Subsidized and Subsidized Federal Stafford Loans.
(2) For Direct Unsubsidized Loans, the percentage equals the percentage of the original amount of the Direct Consolidation Loan or Federal Consolidation Loan attributable to the Direct Unsubsidized, Federal SLS, and Unsubsidized Federal Stafford Loans.
(j) Maximum loan amounts. In no case may a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan amount exceed the student's estimated cost of attendance for the period of enrollment for which the loan is intended, less—
(1) The student's estimated financial assistance for that period; and
(2) In the case of a Direct Subsidized Loan, the borrower's expected family contribution for that period.
(k) Any TEACH Grants that have been converted to Direct Unsubsidized Loans are not counted against any annual or aggregate loan limits under this section.
(a) General. (1) A Direct Subsidized Loan or Direct Subsidized Consolidation Loan borrower who meets the requirements described in paragraphs (b), (d), (e), (f), (g), (h), (i), or (j) of this section is eligible for a deferment during which periodic installments of principal and interest need not be paid.
(2) A Direct Unsubsidized Loan, Direct Unsubsidized Consolidation Loan, Direct PLUS Loan, or Direct PLUS Consolidation Loan borrower who meets the requirements described in paragraphs (b) through (j) of this section is eligible for a deferment during which periodic installments of principal need not be paid but interest does accrue and is capitalized or paid by the borrower. At or before the time a deferment is granted, the Secretary provides information, including an example, to assist the borrower in understanding the impact of capitalization of accrued, unpaid interest on the borrower's loan principal and on the total amount of interest to be paid over the life of the loan.
(3) A borrower whose loan is in default is not eligible for a deferment, unless the borrower has made payment arrangements satisfactory to the Secretary.
(4)(i) To receive a deferment, except as provided for in-school deferments under paragraphs (b)(2)(ii) through (iv) of this section, the borrower must request the deferment and, except as provided in paragraph (a)(5)(i) of this section, provide the Secretary with all information and documents required to establish eligibility for the deferment.
(ii) In the case of a military service deferment under paragraph (h) of this section, a borrower's representative may request the deferment and provide the required information and documents on behalf of the borrower. If the Secretary grants a military service deferment based on a request from a borrower's representative, the Secretary notifies the borrower that the deferment has been granted and that the borrower has the option to cancel the deferment and continue to make payments on the loan. The Secretary may also notify the borrower's representative of the outcome of the deferment request.
(5)(i) After receiving a borrower's written or verbal request for a deferment, the Secretary may grant a graduate fellowship deferment under paragraph (d), a rehabilitation training deferment under paragraph (e), an unemployment deferment under paragraph (f), an economic hardship deferment under paragraph (g), a military service deferment under paragraph (h), or a post-active duty student deferment under paragraph (i) of this section if the Secretary confirms that the borrower has received a deferment on a FFEL Program loan for the same reason and during the same time period.
(ii) The Secretary will grant a deferment based on the information obtained under paragraph (a)(5)(i) of this section when determining a borrower's eligibility for a deferment, unless the Secretary, as of the date of the determination, has information indicating that the borrower does not qualify for the deferment. The Secretary will resolve any discrepant information before granting a deferment under paragraph (a)(5)(i) of this section.
(iii) If the Secretary grants a deferment under paragraph (a)(5)(i) of this section, the Secretary notifies the borrower that the deferment has been granted and that the borrower has the option to cancel the deferment and continue to make payments on the loan.
(b) In-school deferment. (1) A Direct Loan borrower is eligible for a deferment during any period during which—
(i) The borrower is carrying at least one-half the normal full-time work load for the course of study that the borrower is pursuing, as determined by the eligible school the borrower is attending; and
(ii) The borrower is not serving in a medical internship or residency program, except for a residency program in dentistry.
(2) For the purpose of paragraph (b)(1) of this section, the Secretary processes a deferment when—
(i) The borrower submits a request to the Secretary along with documentation verifying the borrower's eligibility;
(ii) The Secretary receives information from the borrower's school indicating that the borrower is eligible to receive a new loan;
(iii) The Secretary receives student status information from the borrower's school, either directly or indirectly, indicating that the borrower is enrolled on at least a half-time basis; or
(iv) The Secretary confirms a borrower's half-time enrollment status through the use of the National Student Loan Data System if requested to do so by the school the borrower is attending.
(3)(i) Upon notification by the Secretary that a deferment has been granted based on paragraph (b)(2)(ii), (iii), or (iv) of this section, the borrower has the option to cancel the deferment and continue to make payments on the loan.
(ii) If the borrower elects to cancel the deferment and continue to make payments on the loan, the borrower has the option to make the principal and interest payments that were deferred. If the borrower does not make the payments, the Secretary applies a deferment for the period in which payments were not made and capitalizes the interest.
(c) In-school deferments for Direct PLUS Loan borrowers with loans first disbursed on or after July 1, 2008. (1)(i) A student Direct PLUS Loan borrower is eligible for a deferment on a Direct PLUS Loan first disbursed on or after July 1, 2008 during the six-month period that begins on the day after the student ceases to be enrolled on at least a half-time basis at an eligible institution.
(ii) If the Secretary grants an in-school deferment to a student Direct PLUS Loan borrower in accordance with § 685.204(b)(2)(ii), (iii), or (iv), the deferment period for a Direct PLUS Loan first disbursed on or after July 1, 2008 includes the six-month post-enrollment period described in paragraph (c)(1)(i) of this section.
(2) A parent Direct PLUS Loan borrower is eligible for a deferment on a Direct PLUS Loan first disbursed on or after July 1, 2008—
(i) Upon the request of the borrower, during the period when the student on whose behalf the loan was obtained is enrolled at an eligible institution on at least a half-time basis; and
(ii) Upon the request of the borrower, during the six-month period that begins on the later of the day after the student on whose behalf the loan was obtained ceases to be enrolled on at least a half-time basis or, if the parent borrower is also a student, the day after the parent borrower ceases to be enrolled on at least a half-time basis.
(d) Graduate fellowship deferment. (1) A Direct Loan borrower is eligible for a deferment during any period in which an authorized official of the borrower's graduate fellowship program certifies that the borrower is pursuing a course of study pursuant to an eligible graduate fellowship program in accordance with paragraph (d)(2) of this section.
(2)(i) To qualify for a deferment under paragraph (d)(1) of this section, a borrower must—
(A) Hold at least a baccalaureate degree conferred by an institution of higher education;
(B) Have been accepted or recommended by an institution of higher education for acceptance on a full-time basis into an eligible graduate fellowship program, as defined in paragraph (d)(2)(ii) of this section; and
(C) Not be serving in a medical internship or residency program, except for a residency program in dentistry.
(ii) An eligible graduate fellowship program is a fellowship program that—
(A) Provides sufficient financial support to graduate fellows to allow for full-time study for at least six months;
(B) Requires a written statement from each applicant explaining the applicant's objectives before the award of that financial support;
(C) Requires a graduate fellow to submit periodic reports, projects, or evidence of the fellow's progress; and
(D) In the case of a course of study at a foreign university, accepts the course of study for completion of the fellowship program.
(e) Rehabilitation training program deferment. (1) A Direct Loan borrower is eligible for a deferment during any period in which an authorized official of the borrower's rehabilitation training program certifies that the borrower is pursuing an eligible rehabilitation training program for individuals with disabilities in accordance with paragraph (e)(2) of this section.
(2) For purposes of paragraph (e)(1) of this section, an eligible rehabilitation training program for disabled individuals is a program that—
(i) Is licensed, approved, certified, or otherwise recognized as providing rehabilitation training to disabled individuals by—
(A) A State agency with responsibility for vocational rehabilitation programs;
(B) A State agency with responsibility for drug abuse treatment programs;
(C) A State agency with responsibility for mental health services programs;
(D) A State agency with responsibility for alcohol abuse treatment programs; or
(E) The Department of Veterans Affairs; and
(ii) Provides or will provide the borrower with rehabilitation services under a written plan that—
(A) Is individualized to meet the borrower's needs;
(B) Specifies the date on which the services to the borrower are expected to end; and
(C) Is structured in a way that requires a substantial commitment by the borrower to his or her rehabilitation. The Secretary considers a substantial commitment by the borrower to be a commitment of time and effort that normally would prevent an individual from engaging in full-time employment, either because of the number of hours that must be devoted to rehabilitation or because of the nature of the rehabilitation. For the purpose of this paragraph, full-time employment involves at least 30 hours of work per week and is expected to last at least three months.
(f) Unemployment deferment. (1) A Direct Loan borrower is eligible for a deferment during periods that, collectively, do not exceed three years in which the borrower is seeking and unable to find full-time employment.
(2) A borrower qualifies for an unemployment deferment by—
(i) Providing evidence of eligibility for unemployment benefits to the Secretary; or
(ii) Providing to the Secretary a written certification, or an equivalent as approved by the Secretary, that—
(A) The borrower has registered with a public or private employment agency, if one is available to the borrower within a 50-mile radius of the borrower's current address; and
(B) For all requests beyond the initial request, the borrower has made at least six diligent attempts during the preceding six-month period to secure full-time employment.
(3) For purposes of obtaining an unemployment deferment under paragraph (f)(2)(ii) of this section, the following rules apply:
(i) A borrower may qualify for an unemployment deferment whether or not the borrower has been previously employed.
(ii) An unemployment deferment is not justified if the borrower refuses to seek or accept employment in kinds of positions or at salary and responsibility levels for which the borrower feels overqualified by virtue of education or previous experience.
(iii) Full-time employment involves at least 30 hours of work a week and is expected to last at least three months.
(iv) The initial period of unemployment deferment may be granted for a period of unemployment beginning up to six months before the date the Secretary receives the borrower's request, and may be granted for up to six months after that date.
(4) The Secretary does not grant an unemployment deferment beyond the date that is six months after the date the borrower provides evidence of the borrower's eligibility for unemployment insurance benefits under paragraph (f)(2)(i) of this section or the date the borrower provides the written certification, or an approved equivalent, under paragraph (f)(2)(ii) of this section.
(g) Economic hardship deferment. (1)(i) A Direct Loan borrower is eligible for a deferment during periods that, collectively, do not exceed three years in which the borrower has experienced or will experience an economic hardship in accordance with paragraph (g)(2) of this section.
(ii) An economic hardship deferment is granted for periods of up to one year at a time, except that a borrower who receives a deferment under paragraph (g)(2)(iv) of this section may receive an economic hardship deferment for the lesser of the borrower's full term of service in the Peace Corps or the borrower's remaining period of economic hardship deferment eligibility under the 3-year maximum.
(2) A borrower qualifies for an economic hardship deferment if the borrower—
(i) Has been granted an economic hardship deferment under either the FFEL or the Federal Perkins Loan programs for the period of time for which the borrower has requested an economic hardship deferment for his or her Direct Loan;
(ii) Is receiving payment under a Federal or State public assistance program, such as Aid to Families with Dependent Children, Supplemental Security Income, Food Stamps, or State general public assistance;
(iii) Is working full-time (as defined in paragraph (g)(3)(iii) of this section) and has a monthly income (as defined in paragraph (g)(3)(iv) of this section) that does not exceed the greater of (as calculated on a monthly basis)—
(A) The minimum wage rate described in section 6 of the Fair Labor Standards Act of 1938; or
(B) An amount equal to 150 percent of the poverty guideline applicable to the borrower's family size (as defined in paragraph (g)(3)(v) of this section) as published annually by the Department of Health and Human Services pursuant to 42 U.S.C. 9902(2). If a borrower is not a resident of a State identified in the poverty guidelines, the poverty guideline to be used for the borrower is the poverty guideline (for the relevant family size) used for the 48 contiguous States; or
(iv) Is serving as a volunteer in the Peace Corps.
(3) The following rules apply to a deferment granted under paragraph (g)(2)(iii) of this section:
(i) For an initial period of deferment, the Secretary requires the borrower to submit evidence showing the amount of the borrower's monthly income.
(ii) To qualify for a subsequent period of deferment that begins less than one year after the end of a period of deferment under paragraph (g)(2)(iii) of this section, the Secretary requires the borrower to submit evidence showing the amount of the borrower's monthly income or a copy of the borrower's most recently filed Federal income tax return.
(iii) A borrower is considered to be working full-time if the borrower is expected to be employed for at least three consecutive months at 30 hours per week.
(iv) A borrower's monthly income is the gross amount of income received by the borrower from employment and from other sources, or one-twelfth of the borrower's adjusted gross income, as recorded on the borrower's most recently filed Federal income tax return.
(v) Family size means the number that is determined by counting the borrower, the borrower's spouse, and the borrower's children, including unborn children who will be born during the period covered by the deferment, if the children receive more than half their support from the borrower. A borrower's family size includes other individuals if, at the time the borrower requests the economic hardship deferment, the other individuals—
(A) Live with the borrower; and
(B) Receive more than half their support from the borrower and will continue to receive this support from the borrower for the year the borrower certifies family size. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.
(h) Military service deferment. (1) A Direct Loan borrower is eligible for a deferment during any period in which the borrower is—
(i) Serving on active duty during a war or other military operation or national emergency, as defined in paragraph (h)(5) of this section; or
(ii) Performing qualifying National Guard duty during a war or other military operation or national emergency, as defined in paragraph (h)(5) of this section.
(2) For a borrower whose active duty service includes October 1, 2007, or begins on or after that date, the deferment period ends 180 days after the demobilization date for each period of the service described in paragraphs (h)(1)(i) and (h)(1)(ii) of this section.
(3) Without supporting documentation, the military service deferment will be granted to an otherwise eligible borrower for a period not to exceed the initial 12 months from the date the qualifying eligible service began based on a request from the borrower or the borrower's representative.
(4) The provisions of paragraph (h) of this section do not authorize the refunding of any payments made by or on behalf of a borrower during a period for which the borrower qualified for a military service deferment.
(5) As used in paragraph (h) of this section—
(i) Serving on active duty during a war or other military operation or national emergency means service by an individual who is—
(A) A Reserve of an Armed Force ordered to active duty under 10 U.S.C. 12301(a), 12301(g), 12302, 12304, or 12306;
(B) A retired member of an Armed Force ordered to active duty under 10 U.S.C. 688 for service in connection with a war or other military operation or national emergency, regardless of the location at which such active duty service is performed; or
(C) Any other member of an Armed Force on active duty in connection with such emergency or subsequent actions or conditions who has been assigned to a duty station at a location other than the location at which the member is normally assigned;
(ii) Qualifying National Guard duty during a war or other operation or national emergency means service as a member of the National Guard on full-time National Guard duty, as defined in 10 U.S.C. 101(d)(5) under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under 32 U.S.C. 502(f) in connection with a war, other military operation, or national emergency declared by the President and supported by Federal funds;
(iii) Active duty means active duty as defined in 10 U.S.C. 101(d)(1) except that it does not include active duty for training or attendance at a service school;
(iv) Military operation means a contingency operation as defined in 10 U.S.C. 101(a)(13); and
(v) National emergency means the national emergency by reason of certain terrorist attacks declared by the President on September 14, 2001, or subsequent national emergencies declared by the President by reason of terrorist attacks.
(i) Post-active duty student deferment. (1) A Direct Loan borrower is eligible for a deferment for 13 months following the conclusion of the borrower's active duty military service and any applicable grace period if—
(i) The borrower is a member of the National Guard or other reserve component of the Armed Forces of the United States or a member of such forces in retired status; and
(ii) The borrower was enrolled on at least a half-time basis in a program of instruction at an eligible institution at the time, or within six months prior to the time, the borrower was called to active duty.
(2) As used in paragraph (i)(1) of this section, “active duty” means active duty as defined in 10 U.S.C. 101(d)(1) for at least a 30-day period, except that—
(i) Active duty includes active State duty for members of the National Guard under which a Governor activates National Guard personnel based on State statute or policy and the activities of the National Guard are paid for with State funds;
(ii) Active duty includes full-time National Guard duty under which a Governor is authorized, with the approval of the President or the U.S. Secretary of Defense, to order a member to State active duty and the activities of the National Guard are paid for with Federal funds;
(iii) Active duty does not include active duty for training or attendance at a service school; and
(iv) Active duty does not include employment in a full-time, permanent position in the National Guard unless the borrower employed in such a position is reassigned to active duty under paragraph (i)(2)(i) of this section or full-time National Guard duty under paragraph (i)(2)(ii) of this section.
(3) If the borrower returns to enrolled student status on at least a half-time basis during the grace period or the 13-month deferment period, the deferment expires at the time the borrower returns to enrolled student status on at least a half-time basis.
(4) If a borrower qualifies for both a military service deferment and a post-active duty student deferment, the 180-day post-demobilization military service deferment period and the 13-month post-active duty student deferment period apply concurrently.
(j) Additional deferments for Direct Loan borrowers with FFEL Program loans made before July 1, 1993. If, at the time of application for a borrower's first Direct Loan, a borrower has an outstanding balance of principal or interest owing on any FFEL Program loan that was made, insured, or guaranteed prior to July 1, 1993, the borrower is eligible for a deferment during—
(1) The periods described in paragraphs (b) through (i) of this section; and
(2) The periods described in 34 CFR 682.210(b), including those periods that apply to a “new borrower” as that term is defined in 34 CFR 682.210(b)(7).
(a) General. “Forbearance” means permitting the temporary cessation of payments, allowing an extension of time for making payments, or temporarily accepting smaller payments than previously scheduled. The borrower has the option to choose the form of forbearance. Except as provided in paragraph (b)(9) of this section, if payments of interest are forborne, they are capitalized. The Secretary grants forbearance if the borrower or endorser intends to repay the loan but requests forbearance and provides sufficient documentation to support this request, and—
(1) The Secretary determines that, due to poor health or other acceptable reasons, the borrower or endorser is currently unable to make scheduled payments;
(2) The borrower's payments of principal are deferred under § 685.204 and the Secretary does not subsidize the interest benefits on behalf of the borrower;
(3) The borrower is in a medical or dental internship or residency that must be successfully completed before the borrower may begin professional practice or service, or the borrower is serving in a medical or dental internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training;
(4) The borrower is serving in a national service position for which the borrower is receiving a national service education award under title I of the National and Community Service Act of 1990;
(5)(i) The borrower is performing the type of service that would qualify the borrower for loan forgiveness under the requirements of the teacher loan forgiveness program in § 685.217.
(ii) Before a forbearance is granted under § 685.205(a)(5)(i), the borrower must—
(A) Submit documentation for the period of the annual forbearance request showing the beginning and ending dates that the borrower is expected to perform, for that year, the type of service described in § 685.217(c); and
(B) Certify the borrower's intent to satisfy the requirements of § 685.217(c).
(iii) The Secretary grants forbearance under paragraph (a)(5) of this section only if the Secretary believes, at the time of the borrower's annual request, that the expected forgiveness amount under § 685.217(d) will satisfy the anticipated remaining outstanding balance on the borrower's loan at the time of the expected forgiveness;
(6) For not more than three years during which the borrower or endorser—
(i) Is currently obligated to make payments on loans under title IV of the Act; and
(ii) The sum of these payments each month (or a proportional share if the payments are due less frequently than monthly) is equal to or greater than 20 percent of the borrower's or endorser's total monthly gross income.
(7) The borrower is a member of the National Guard who qualifies for a post-active duty student deferment, but does not qualify for a military service or other deferment, and is engaged in active State duty for a period of more than 30 consecutive days, beginning—
(i) On the day after the grace period expires for a Direct Subsidized Loan or Direct Unsubsidized Loan that has not entered repayment; or
(ii) On the day after the borrower ceases enrollment on at least a half-time basis, for a Direct Loan in repayment.
(8)(i) The Secretary may grant a forbearance to permit a borrower or endorser to resume honoring the agreement to repay the debt after default. The terms of the forbearance agreement in this situation must include a new agreement to repay the debt signed by the borrower or endorser or a written or oral affirmation of the borrower's or endorser's obligation to repay the debt.
(ii) If the forbearance is based on the borrower's or endorser's oral affirmation of the obligation to repay the debt, the forbearance period is limited to 120 days, such a forbearance is not granted consecutively, and the Secretary will—
(A) Orally review with the borrower the terms and conditions of the forbearance, including the consequences of interest capitalization, and all other repayment options available to the borrower;
(B) Send a notice to the borrower or endorser that confirms the terms of the forbearance and the borrower's or endorser's affirmation of the obligation to repay the debt and that includes information on all other repayment options available to the borrower; and
(C) Retain a record of the terms of the forbearance and affirmation in the borrower's or endorser's file.
(iii) For purposes of this section, an “affirmation” means an acknowledgement of the loan by the borrower or endorser in a legally binding manner. The form of the affirmation may include, but is not limited to, the borrower's or endorser's—
(A) New signed repayment agreement or schedule, or another form of signed agreement to repay the debt;
(B) Oral acknowledgement and agreement to repay the debt documented by the Secretary in the borrower's or endorser's file and confirmed by the Secretary in a notice to the borrower; or
(C) A payment made on the loan by the borrower or endorser.
(9)(i) The borrower is performing the type of service that would qualify the borrower for a partial repayment of his or her loan under the Student Loan Repayment Programs administered by the Department of Defense under 10 U.S.C. 2171, 2173, 2174, or any other student loan repayment programs administered by the Department of Defense.
(ii) To receive a forbearance under this paragraph, the borrower must submit documentation showing the time period during which the Department of Defense considers the borrower to be eligible for a partial repayment of his or her loan under a student loan repayment program.
(b) Administrative forbearance. In certain circumstances, the Secretary grants forbearance without requiring documentation from the borrower. These circumstances include but are not limited to—
(1) A properly granted period of deferment for which the Secretary learns the borrower did not qualify;
(2) The period for which payments are overdue at the beginning of an authorized deferment or forbearance period;
(3) The period beginning when the borrower entered repayment without the Secretary's knowledge until the first payment due date was established;
(4) The period prior to a borrower's filing of a bankruptcy petition;
(5) A period after the Secretary receives reliable information indicating that the borrower (or the student in the case of a Direct PLUS Loan obtained by a parent borrower) has died, or the borrower has become totally and permanently disabled, until the Secretary receives documentation of death or total and permanent disability;
(6) Periods necessary for the Secretary to determine the borrower's eligibility for discharge—
(i) Under § 685.206(c) through (e);
(ii) Under § 685.214;
(iii) Under § 685.215;
(iv) Under § 685.216;
(v) Under § 685.217;
(vi) Under § 685.222;
(vii) Under subpart D of this part; or
(viii) Due to the borrower's or endorser's (if applicable) bankruptcy;
(7) A period of up to three years in cases where the effect of a variable interest rate on a fixed-amount or graduated repayment schedule causes the extension of the maximum repayment term;
(8) A period during which the Secretary has authorized forbearance due to a national military mobilization or other local or national emergency;
(9) A period of up to 60 days necessary for the Secretary to collect and process documentation supporting the borrower's request for a deferment, forbearance, change in repayment plan, or consolidation loan. Interest that accrues during this period is not capitalized; or
(10) For Direct PLUS Loans first disbursed before July 1, 2008, to align repayment with a borrower's Direct PLUS Loans that were first disbursed on or after July 1, 2008, or with Direct Subsidized Loans or Direct Unsubsidized Loans that have a grace period in accordance with § 685.207(b) or (c). The Secretary notifies the borrower that the borrower has the option to cancel the forbearance and continue paying on the loan.
(c) Period of forbearance. (1) The Secretary grants forbearance for a period of up to one year.
(2) The forbearance is renewable, upon request of the borrower, for the duration of the period in which the borrower meets the condition required for the forbearance.
(a) The borrower must give the school the following information as part of the origination process for a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan:
(1) A statement, as described in 34 CFR part 668, that the loan will be used for the cost of the student's attendance.
(2) Information demonstrating that the borrower is eligible for the loan.
(3) Information concerning the outstanding FFEL Program and Direct Loan Program loans of the borrower and, for a parent borrower, of the student, including any Federal Consolidation Loan or Direct Consolidation Loan.
(4) A statement authorizing the school to release to the Secretary information relevant to the student's eligibility to borrow or to have a parent borrow on the student's behalf (e.g., the student's enrollment status, financial assistance, and employment records).
(b)(1) The borrower must promptly notify the Secretary of any change of name, address, student status to less than half-time, employer, or employer's address; and
(2) The borrower must promptly notify the school of any change in address during enrollment.
(c) Borrower defense to repayment for loans first disbursed prior to July 1, 2017. (1) For loans first disbursed prior to July 1, 2017, the borrower may assert a borrower defense under this paragraph. A “borrower defense” refers to any act or omission of the school attended by the student that relates to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided that would give rise to a cause of action against the school under applicable State law, and includes one or both of the following:
(i) A defense to repayment of amounts owed to the Secretary on a Direct Loan, in whole or in part.
(ii) A claim to recover amounts previously collected by the Secretary on the Direct Loan, in whole or in part.
(2) The order of objections for defaulted Direct Loans are as described in § 685.222(a)(6). A borrower defense claim under this section must be asserted, and will be resolved, under the procedures in § 685.222(e) to (k).
(3) For an approved borrower defense under this section, except as provided in paragraph (c)(4) of this section, the Secretary may initiate an appropriate proceeding to collect from the school whose act or omission resulted in the borrower defense the amount of relief arising from the borrower defense, within the later of—
(i) Three years from the end of the last award year in which the student attended the institution; or
(ii) The limitation period that State law would apply to an action by the borrower to recover on the cause of action on which the borrower defense is based.
(4) The Secretary may initiate a proceeding to collect at any time if the institution received notice of the claim before the end of the later of the periods described in paragraph (c)(3) of this section. For purposes of this paragraph, notice includes receipt of—
(i) Actual notice from the borrower, from a representative of the borrower, or from the Department;
(ii) A class action complaint asserting relief for a class that may include the borrower; and
(iii) Written notice, including a civil investigative demand or other written demand for information, from a Federal or State agency that has power to initiate an investigation into conduct of the school relating to specific programs, periods, or practices that may have affected the borrower.
(d) Borrower defense to repayment for loans first disbursed on or after July 1, 2017, and before July 1, 2020. For borrower defense to repayment for loans first disbursed on or after July 1, 2017, and before July 1, 2020, a borrower asserts and the Secretary considers a borrower defense in accordance with § 685.222.
(e) Borrower defense to repayment for loans first disbursed on or after July 1, 2020, and before July 1, 2023. This paragraph (e) applies to borrower defense to repayment for loans first disbursed on or after July 1, 2020, and before July 1, 2023.
(1) Definitions. For the purposes of this paragraph (e), the following definitions apply:
(i) A “Direct Loan” under this paragraph (e) means a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a Direct PLUS Loan.
(ii) “Borrower” means:
(A) The borrower; and
(B) In the case of a Direct PLUS Loan, any endorsers, and for a Direct PLUS Loan made to a parent, the student on whose behalf the parent borrowed.
(iii) A “borrower defense to repayment” under this paragraph (e) includes—
(A) A defense to repayment of amounts owed to the Secretary on a Direct Loan, or a Direct Consolidation Loan that was used to repay a Direct Loan, FFEL Program Loan, Federal Perkins Loan, Health Professions Student Loan, Loan for Disadvantaged Students under subpart II of part A of title VII of the Public Health Service Act, Health Education Assistance Loan, or Nursing Loan made under part E of the Public Health Service Act; and
(B) Any accompanying request for reimbursement of payments previously made to the Secretary on the Direct Loan or on a loan repaid by the Direct Consolidation Loan.
(iv) The term “provision of educational services” under this paragraph (e) refers to the educational resources provided by the institution that are required by an accreditation agency or a State licensing or authorizing agency for the completion of the student's educational program.
(v) The terms “school” and “institution” under this paragraph (e) may be used interchangeably and include an eligible institution, one of its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs, or to provide marketing, advertising, recruiting, or admissions services.
(2) Federal standard for loans first disbursed on or after July 1, 2020, and before July 1, 2023. For a Direct Loan or Direct Consolidation Loan first disbursed on or after July 1, 2020, and before July 1, 2023, a borrower may assert a defense to repayment under this paragraph (e), if the borrower establishes by a preponderance of the evidence that—
(i) The institution at which the borrower enrolled made a misrepresentation, as defined in § 685.206(e)(3), of material fact upon which the borrower reasonably relied in deciding to obtain a Direct Loan, or a loan repaid by a Direct Consolidation Loan, and that directly and clearly relates to:
(A) Enrollment or continuing enrollment at the institution or
(B) The provision of educational services for which the loan was made; and
(ii) The borrower was financially harmed by the misrepresentation.
(3) Misrepresentation. A “misrepresentation,” for purposes of this paragraph (e), is a statement, act, or omission by an eligible school to a borrower that is false, misleading, or deceptive; that was made with knowledge of its false, misleading, or deceptive nature or with a reckless disregard for the truth; and that directly and clearly relates to enrollment or continuing enrollment at the institution or the provision of educational services for which the loan was made. Evidence that a misrepresentation defined in this paragraph (e) may have occurred includes, but is not limited to:
(i) Actual licensure passage rates materially different from those included in the institution's marketing materials, website, or other communications made to the student;
(ii) Actual employment rates materially different from those included in the institution's marketing materials, website, or other communications made to the student;
(iii) Actual institutional selectivity rates or rankings, student admission profiles, or institutional rankings that are materially different from those included in the institution's marketing materials, website, or other communications made to the student or provided by the institution to national ranking organizations;
(iv) The inclusion in the institution's marketing materials, website, or other communication made to the student of specialized, programmatic, or institutional certifications, accreditation, or approvals not actually obtained, or the failure to remove within a reasonable period of time such certifications or approvals from marketing materials, website, or other communication when revoked or withdrawn;
(v) The inclusion in the institution's marketing materials, website, or other communication made to the student of representations regarding the widespread or general transferability of credits that are only transferrable to limited types of programs or institutions or the transferability of credits to a specific program or institution when no reciprocal agreement exists with another institution, or such agreement is materially different than what was represented;
(vi) A representation regarding the employability or specific earnings of graduates without an agreement between the institution and another entity for such employment data, or sufficient evidence of past employment or earnings to justify such a representation, or without citing appropriate national, State, or regional data for earnings in the same field as provided by an appropriate Federal agency that provides such data. (In the event that national data are used, institutions should include a written, plain language disclaimer that national averages may not accurately reflect the earnings of workers in particular parts of the country and may include earners at all stages of their career and not just entry level wages for recent graduates.);
(vii) A representation regarding the availability, amount, or nature of any financial assistance available to students from the institution or any other entity to pay the costs of attendance at the institution that is materially different in availability, amount, or nature from the actual financial assistance available to the borrower from the institution or any other entity to pay the costs of attendance at the institution after enrollment;
(viii) A representation regarding the amount, method, or timing of payment of tuition and fees that the student would be charged for the program that is materially different in amount, method, or timing of payment from the actual tuition and fees charged to the student;
(ix) A representation that the institution, its courses, or programs are endorsed by vocational counselors, high schools, colleges, educational organizations, employment agencies, members of a particular industry, students, former students, governmental officials, Federal or State agencies, the United States Armed Forces, or other individuals or entities when the institution has no permission or is not otherwise authorized to make or use such an endorsement;
(x) A representation regarding the educational resources provided by the institution that are required for the completion of the student's educational program that are materially different from the institution's actual circumstances at the time the representation is made, such as representations regarding the institution's size; location; facilities; training equipment; or the number, availability, or qualifications of its personnel; and
(xi) A representation regarding the nature or extent of prerequisites for enrollment in a course or program offered by the institution that are materially different from the institution's actual circumstances at the time the representation is made, or that the institution knows will be materially different during the student's anticipated enrollment at the institution.
(4) Financial harm. Under this paragraph (e), financial harm is the amount of monetary loss that a borrower incurs as a consequence of a misrepresentation, as defined in paragraph (e)(3) of this section. Financial harm does not include damages for nonmonetary loss, such as personal injury, inconvenience, aggravation, emotional distress, pain and suffering, punitive damages, or opportunity costs. The Department does not consider the act of taking out a Direct Loan or a loan repaid by a Direct Consolidation Loan, alone, as evidence of financial harm to the borrower. Financial harm is such monetary loss that is not predominantly due to intervening local, regional, or national economic or labor market conditions as demonstrated by evidence before the Secretary or provided to the Secretary by the borrower or the school. Financial harm cannot arise from the borrower's voluntary decision to pursue less than full-time work or not to work or result from a voluntary change in occupation. Evidence of financial harm may include, but is not limited to, the following circumstances:
(i) Periods of unemployment upon graduating from the school's programs that are unrelated to national or local economic recessions;
(ii) A significant difference between the amount or nature of the tuition and fees that the institution represented to the borrower that the institution would charge or was charging, and the actual amount or nature of the tuition and fees charged by the institution for which the Direct Loan was disbursed or for which a loan repaid by the Direct Consolidation Loan was disbursed;
(iii) The borrower's inability to secure employment in the field of study for which the institution expressly guaranteed employment; and
(iv) The borrower's inability to complete the program because the institution no longer offers a requirement necessary for completion of the program in which the borrower enrolled and the institution did not provide for an acceptable alternative requirement to enable completion of the program.
(5) Exclusions. The Secretary will not accept the following as a basis for a borrower defense to repayment under this paragraph (e)—
(i) A violation by the institution of a requirement of the Act or the Department's regulations for a borrower defense to repayment under paragraph (c) or (d) of this section or under § 685.222, unless the violation would otherwise constitute the basis for a successful borrower defense to repayment under this paragraph (e); or
(ii) A claim that does not directly and clearly relate to enrollment or continuing enrollment at the institution or the provision of educational services for which the loan was made, including, but not limited to—
(A) Personal injury;
(B) Sexual harassment;
(C) A violation of civil rights;
(D) Slander or defamation;
(E) Property damage;
(F) The general quality of the student's education or the reasonableness of an educator's conduct in providing educational services;
(G) Informal communication from other students;
(H) Academic disputes and disciplinary matters; and
(I) Breach of contract unless the school's act or omission would otherwise constitute the basis for a successful defense to repayment under this paragraph (e).
(6) Limitations period. A borrower must assert a defense to repayment under this paragraph (e) within 3 years from the date the student is no longer enrolled at the institution. A borrower may only assert a defense to repayment under this paragraph (e) within the timeframes set forth in this paragraph (e)(6) and paragraph (e)(7) of this section.
(7) Extension of limitation periods and reopening of applications. For loans first disbursed on or after July 1, 2020, and before July 1, 2023, the Secretary may extend the time period when a borrower may assert a defense to repayment under § 685.206(e)(6) or may reopen a borrower's defense to repayment application to consider evidence that was not previously considered only if there is:
(i) A final, non-default judgment on the merits by a State or Federal Court that has not been appealed or that is not subject to further appeal and that establishes the institution made a misrepresentation, as defined in paragraph (e)(3) of this section; or
(ii) A final decision by a duly appointed arbitrator or arbitration panel that establishes that the institution made a misrepresentation, as defined in paragraph (e)(3) of this section.
(8) Application and forbearance. To assert a defense to repayment under this paragraph (e), a borrower must submit an application under penalty of perjury on a form approved by the Secretary and sign a waiver permitting the institution to provide the Department with items from the borrower's education record relevant to the defense to repayment claim. The form will note that pursuant to § 685.205(b)(6)(i), if the borrower is not in default on the loan for which a borrower defense has been asserted, the Secretary will grant forbearance and notify the borrower of the option to decline forbearance. The application requires the borrower to—
(i) Certify that the borrower received the proceeds of a loan, in whole or in part, to attend the named institution;
(ii) Provide evidence that supports the borrower defense to repayment application;
(iii) State whether the borrower has made a claim with any other third party, such as the holder of a performance bond, a public fund, or a tuition recovery program, based on the same act or omission of the institution on which the borrower defense to repayment is based;
(iv) State the amount of any payment received by the borrower or credited to the borrower's loan obligation through the third party, in connection with a borrower defense to repayment described in paragraph (e)(2) of this section;
(v) State the financial harm, as defined in paragraph (e)(4) of this section, that the borrower alleges to have been caused and provide any information relevant to assessing whether the borrower incurred financial harm, including providing documentation that the borrower actively pursued employment in the field for which the borrower's education prepared the borrower if the borrower is a recent graduate (failure to provide such information results in a presumption that the borrower failed to actively pursue employment in the field); whether the borrower was terminated or removed for performance reasons from a position in the field for which the borrower's education prepared the borrower, or in a related field; and whether the borrower failed to meet other requirements of or qualifications for employment in such field for reasons unrelated to the school's misrepresentation underlying the borrower defense to repayment, such as the borrower's ability to pass a drug test, satisfy driving record requirements, and meet any health qualifications; and
(vi) State that the borrower understands that in the event that the borrower receives a 100 percent discharge of the balance of the loan for which the defense to repayment application has been submitted, the institution may, if allowed or not prohibited by other applicable law, refuse to verify or to provide an official transcript that verifies the borrower's completion of credits or a credential associated with the discharged loan.
(9) Consideration of order of objections and of evidence in possession of the Secretary under this paragraph (e). (i) If the borrower asserts both a borrower defense to repayment and any other objection to an action of the Secretary with regard to a Direct Loan or a loan repaid by a Direct Consolidation Loan under this paragraph (e), the order in which the Secretary will consider objections, including a borrower defense to repayment under this paragraph (e), will be determined as appropriate under the circumstances.
(ii) With respect to the borrower defense to repayment application submitted under this paragraph (e), the Secretary may consider evidence otherwise in the possession of the Secretary, including from the Department's internal records or other relevant evidence obtained by the Secretary, as practicable, provided that the Secretary permits the institution and the borrower to review and respond to this evidence and to submit additional evidence.
(10) School response and borrower reply under this paragraph (e). (i) Upon receipt of a borrower defense to repayment application under this paragraph (e), the Department will notify the school of the pending application and provide a copy of the borrower's request and any supporting documents, a copy of any evidence otherwise in the possession of the Secretary, and a waiver signed by the student permitting the institution to provide the Department with items from the student's education record relevant to the defense to repayment claim to the school, and invite the school to respond and to submit evidence, within the specified timeframe included in the notice, which will be no less than 60 days.
(ii) Upon receipt of the school's response, the Department will provide the borrower a copy of the school's submission as well as any evidence otherwise in possession of the Secretary, which was provided to the school, and will give the borrower an opportunity to submit a reply within a specified timeframe, which will be no less than 60 days. The borrower's reply must be limited to issues and evidence raised in the school's submission and any evidence otherwise in the possession of the Secretary.
(iii) The Department will provide the school a copy of the borrower's reply.
(iv) There will be no other submissions by the borrower or the school to the Secretary unless the Secretary requests further clarifying information.
(11) Written decision under this paragraph (e). (i) After considering the borrower's application and all applicable evidence under this paragraph (e), the Secretary issues a written decision—
(A) Notifying the borrower and the school of the decision on the borrower defense to repayment under this paragraph (e);
(B) Providing the reasons for the decision; and
(C) Informing the borrower and the school of the relief, if any, that the borrower will receive, consistent with paragraph (e)(12) of this section and specifying the relief determination.
(ii) If the Department receives a borrower defense to repayment application that is incomplete and is within the limitations period in paragraph (e)(6) or (7) of this section, the Department will not issue a written decision on the application and instead will notify the borrower in writing that the application is incomplete and will return the application to the borrower.
(12) Borrower defense to repayment relief under this paragraph (e). (i) If the Secretary grants the borrower's request for relief based on a borrower defense to repayment under this paragraph (e), the Secretary notifies the borrower and the school that the borrower is relieved of the obligation to repay all or part of the loan and associated costs and fees that the borrower would otherwise be obligated to pay or will be reimbursed for amounts paid toward the loan voluntarily or through enforced collection. The amount of relief that a borrower receives under this paragraph (e) may exceed the amount of financial harm, as defined in paragraph (e)(4) of this section, that the borrower alleges in the application pursuant to paragraph (e)(8)(v) of this section. The Secretary determines the amount of relief and awards relief limited to the monetary loss that a borrower incurred as a consequence of a misrepresentation, as defined in paragraph (e)(3) of this section. The amount of relief cannot exceed the amount of the loan and any associated costs and fees and will be reduced by the amount of refund, reimbursement, indemnification, restitution, compensatory damages, settlement, debt forgiveness, discharge, cancellation, compromise, or any other financial benefit received by, or on behalf of, the borrower that was related to the borrower defense to repayment under this paragraph (e). In awarding relief under this paragraph (e), the Secretary considers the borrower's application, as described in paragraph (e)(8) of this section, which includes information about any payments received by the borrower and the financial harm alleged by the borrower. In awarding relief under this paragraph (e), the Secretary also considers the school's response, the borrower's reply, and any evidence otherwise in the possession of the Secretary, which was previously provided to the borrower and the school, as described in paragraph (e)(10) of this section. The Secretary also updates reports to consumer reporting agencies to which the Secretary previously made adverse credit reports with regard to the borrower's Direct Loan or loans repaid by the borrower's Direct Consolidation Loan under this paragraph (e).
(ii) The Secretary affords the borrower such further relief as the Secretary determines is appropriate under the circumstances. Further relief may include determining that the borrower is not in default on the loan and is eligible to receive assistance under title IV of the Act.
(13) Finality of borrower defense to repayment decisions under this paragraph (e). The determination of a borrower's defense to repayment by the Department included in the written decision referenced in paragraph (e)(11) of this section is the final decision of the Department and is not subject to appeal within the Department.
(14) Cooperation by the borrower under this paragraph (e). The Secretary may revoke any relief granted to a borrower under this section who refuses to cooperate with the Secretary in any proceeding under this paragraph (e) or under part 668, subpart G. Such cooperation includes, but is not limited to—
(i) Providing testimony regarding any representation made by the borrower to support a successful borrower defense to repayment under this paragraph (e); and
(ii) Producing, within timeframes established by the Secretary, any documentation reasonably available to the borrower with respect to those representations and any sworn statement required by the Secretary with respect to those representations and documents.
(15) Transfer to the Secretary of the borrower's right of recovery against third parties under this paragraph (e). (i) Upon the grant of any relief under this paragraph (e), the borrower is deemed to have assigned to, and relinquished in favor of, the Secretary any right to a loan refund (up to the amount discharged) that the borrower may have by contract or applicable law with respect to the loan or the provision of educational services for which the loan was received, against the school, its principals, its affiliates and their successors, or its sureties, and any private fund, including the portion of a public fund that represents funds received from a private party. If the borrower asserts a claim to, and recovers from, a public fund, the Secretary may reinstate the borrower's obligation to repay on the loan an amount based on the amount recovered from the public fund, if the Secretary determines that the borrower's recovery from the public fund was based on the same borrower defense to repayment and for the same loan for which the discharge was granted under this section.
(ii) The provisions of this paragraph (e)(15) apply notwithstanding any provision of State law that would otherwise restrict transfer of those rights by the borrower, limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(iii) Nothing in this paragraph (e)(15) limits or forecloses the borrower's right to pursue legal and equitable relief arising under applicable law against a party described in this paragraph (e)(15) for recovery of any portion of a claim exceeding that assigned to the Secretary or any other claims arising from matters unrelated to the claim on which the loan is discharged.
(16) Recovery from the school under this paragraph (e). (i) The Secretary may initiate an appropriate proceeding to require the school whose misrepresentation resulted in the borrower's successful borrower defense to repayment under this paragraph (e) to pay to the Secretary the amount of the loan to which the defense applies in accordance with part 668, subpart G. This paragraph (e)(16) would also be applicable for provisionally certified institutions.
(ii) Under this paragraph (e), the Secretary will not initiate such a proceeding more than 5 years after the date of the final determination included in the written decision referenced in paragraph (e)(11) of this section. The Department will notify the school of the borrower defense to repayment application within 60 days of the date of the Department's receipt of the borrower's application.
(a) Obligation of repayment in general. (1) A borrower is obligated to repay the full amount of a Direct Loan, including the principal balance, fees, any collection costs charged under § 685.202(e), and any interest not subsidized by the Secretary, unless the borrower is relieved of the obligation to repay as provided in this part.
(2) The borrower's repayment of a Direct Loan may also be subject to the deferment provisions in § 685.204, the forbearance provisions in § 685.205, the discharge provisions in § 685.212, and the loan forgiveness provisions in §§ 685.217 and 685.219.
(3) A borrower's first payment on a Direct Loan is due within 60 days of the beginning date of the repayment period as determined in accordance with paragraph (b), (c), (d), or (e) of this section.
(b) Direct Subsidized Loan repayment. (1) During the period in which a borrower is enrolled at an eligible school on at least a half-time basis, the borrower is in an “in-school” period and is not required to make payments on a Direct Subsidized Loan unless—
(i) The loan entered repayment before the in-school period began; and
(ii) The borrower has not been granted a deferment under § 685.204(b).
(2)(i) When a borrower ceases to be enrolled at an eligible school on at least a half-time basis, a six-month grace period begins, unless the grace period has been previously exhausted.
(ii)(A) Any borrower who is a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code and is called or ordered to active duty for a period of more than 30 days is entitled to have the active duty period excluded from the six-month grace period. The excluded period includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any single excluded period may not exceed 3 years.
(B) Any borrower who is in a grace period when called or ordered to active duty as specified in paragraph (b)(2)(ii)(A) of this section is entitled to a full six-month grace period upon completion of the excluded period.
(iii) During a grace period, the borrower is not required to make any principal payments on a Direct Subsidized Loan.
(3)(i) A borrower is not obligated to pay interest on a Direct Subsidized Loan during periods when the borrower is enrolled at an eligible school on at least a half-time basis unless the borrower is required to make payments on the loan during those periods under paragraph (b)(1) of this section.
(ii) Except as provided in paragraph (b)(3)(iii) of this section, a borrower is not obligated to pay interest on a Direct Subsidized Loan during grace periods.
(iii) In the case of a Direct Subsidized Loan for which the first disbursement is made on or after July 1, 2012 and before July 1, 2014, a borrower is responsible for the interest that accrues during the grace period.
(4) The repayment period for a Direct Subsidized Loan begins the day after the grace period ends. A borrower is obligated to repay the loan under paragraph (a) of this section during the repayment period.
(c) Direct Unsubsidized Loan repayment. (1) During the period in which a borrower is enrolled at an eligible school on at least a half-time basis, the borrower is in an “in-school” period and is not required to make payments of principal on a Direct Unsubsidized Loan unless—
(i) The loan entered repayment before the in-school period began; and
(ii) The borrower has not been granted a deferment under § 685.204.
(2)(i) When a borrower ceases to be enrolled at an eligible school on at least a half-time basis, a six-month grace period begins, unless the grace period has been previously exhausted.
(ii)(A) Any borrower who is a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code and is called or ordered to active duty for a period of more than 30 days is entitled to have the active duty period excluded from the six-month grace period. The excluded period includes the time necessary for the borrower to resume enrollment at the next available regular enrollment period. Any single excluded period may not exceed 3 years.
(B) Any borrower who is in a grace period when called or ordered to active duty as specified in paragraph (c)(2)(ii)(A) of this section is entitled to a full six-month grace period upon completion of the excluded period.
(iii) During a grace period, the borrower is not required to make any principal payments on a Direct Unsubsidized Loan.
(3) A borrower is responsible for the interest that accrues on a Direct Unsubsidized Loan during in-school and grace periods. Interest begins to accrue on the day the first installment is disbursed. Interest that accrues may be capitalized or paid by the borrower.
(4) The repayment period for a Direct Unsubsidized Loan begins the day after the grace period ends. A borrower is obligated to repay the loan under paragraph (a) of this section during the repayment period.
(d) Direct PLUS Loan repayment. The repayment period for a Direct PLUS Loan begins on the day the loan is fully disbursed. Interest begins to accrue on the day the first installment is disbursed. A borrower is obligated to repay the loan under paragraph (a) of this section during the repayment period.
(e) Direct Consolidation Loan repayment. (1) Except as provided in paragraphs (e)(2) and (e)(3) of this section, the repayment period for a Direct Consolidation Loan begins and interest begins to accrue on the day the loan is made. The borrower is obligated to repay the loan under paragraph (a) of this section during the repayment period.
(2) In the case of a borrower whose consolidation application was received before July 1, 2006, a borrower who obtains a Direct Subsidized Consolidation Loan during an in-school period will be subject to the repayment provisions in paragraph (b) of this section.
(3) In the case of a borrower whose consolidation application was received before July 1, 2006, a borrower who obtains a Direct Unsubsidized Consolidation Loan during an in-school period will be subject to the repayment provisions in paragraph (c) of this section.
(f) Determining the date on which the grace period begins for a borrower in a correspondence program. For a borrower of a Direct Subsidized or Direct Unsubsidized Loan who is a correspondence student, the grace period specified in paragraphs (b)(2) and (c)(2) of this section begins on the earliest of—
(1) The day after the borrower completes the program;
(2) The day after withdrawal as determined pursuant to 34 CFR 668.22; or
(3) 60 days following the last day for completing the program as established by the school.
(a) General. Under a fixed payment repayment plan, the borrower's required monthly payment amount is determined based on the amount of the borrower's Direct Loans, the interest rates on the loans, and the repayment plan's maximum repayment period.
(b) Standard repayment plan for all Direct Subsidized Loan, Direct Unsubsidized Loan, and Direct PLUS Loan borrowers, regardless of when they entered repayment, and for Direct Consolidation Loan borrowers who entered repayment before July 1, 2006. (1) Under this repayment plan, a borrower must repay a loan in full within ten years from the date the loan entered repayment by making fixed monthly payments.
(2) A borrower's payments under this repayment plan are at least $50 per month, except that a borrower's final payment may be less than $50.
(3) The number of payments or the fixed monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(c) Standard repayment plan for Direct Consolidation Loan borrowers entering repayment on or after July 1, 2006. (1) Under this repayment plan, a borrower must repay a loan in full by making fixed monthly payments over a repayment period that varies with the total amount of the borrower's student loans, as described in paragraph (j) of this section.
(2) A borrower's payments under this repayment plan are at least $50 per month, except that a borrower's final payment may be less than $50.
(d) Extended repayment plan for all Direct Loan borrowers who entered repayment before July 1, 2006. (1) Under this repayment plan, a borrower must repay a loan in full by making fixed monthly payments within an extended period of time that varies with the total amount of the borrower's loans, as described in paragraph (i) of this section.
(2) A borrower makes fixed monthly payments of at least $50, except that a borrower's final payment may be less than $50.
(3) The number of payments or the fixed monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(e) Extended repayment plan for all Direct Loan borrowers entering repayment on or after July 1, 2006. (1) Under this repayment plan, a new borrower with more than $30,000 in outstanding Direct Loans accumulated on or after October 7, 1998 must repay either a fixed annual or graduated repayment amount over a period not to exceed 25 years from the date the loan entered repayment. For this repayment plan, a new borrower is defined as an individual who has no outstanding principal or interest balance on a Direct Loan as of October 7, 1998, or on the date the borrower obtains a Direct Loan on or after October 7, 1998.
(2) A borrower's payments under this plan are at least $50 per month, and will be more if necessary to repay the loan within the required time period.
(3) The number of payments or the monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(f) Graduated repayment plan for all Direct Loan borrowers who entered repayment before July 1, 2006. (1) Under this repayment plan, a borrower must repay a loan in full by making payments at two or more levels within a period of time that varies with the total amount of the borrower's loans, as described in paragraph (i) of this section.
(2) The number of payments or the monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(3) No scheduled payment under this repayment plan may be less than the amount of interest accrued on the loan between monthly payments, less than 50 percent of the payment amount that would be required under the standard repayment plan described in paragraph (b) of this section, or more than 150 percent of the payment amount that would be required under the standard repayment plan described in paragraph (b) of this section.
(g) Graduated repayment plan for Direct Subsidized Loan, Direct Unsubsidized Loan, and Direct PLUS Loan borrowers entering repayment on or after July 1, 2006. (1) Under this repayment plan, a borrower must repay a loan in full by making payments at two or more levels over a period of time not to exceed ten years from the date the loan entered repayment.
(2) The number of payments or the monthly repayment amount may be adjusted to reflect changes in the variable interest rate identified in § 685.202(a).
(3) A borrower's payments under this repayment plan may be less than $50 per month. No single payment under this plan will be more than three times greater than any other payment.
(h) Graduated repayment plan for Direct Consolidation Loan borrowers entering repayment on or after July 1, 2006. (1) Under this repayment plan, a borrower must repay a loan in full by making monthly payments that gradually increase in stages over the course of a repayment period that varies with the total amount of the borrower's student loans, as described in paragraph (j) of this section.
(2) A borrower's payments under this repayment plan may be less than $50 per month. No single payment under this plan will be more than three times greater than any other payment.
(i) Repayment period for the extended and graduated plans described in paragraphs (d) and (f) of this section, respectively. Under these repayment plans, if the total amount of the borrower's Direct Loans is—
(1) Less than $10,000, the borrower must repay the loans within 12 years of entering repayment;
(2) Greater than or equal to $10,000 but less than $20,000, the borrower must repay the loans within 15 years of entering repayment;
(3) Greater than or equal to $20,000 but less than $40,000, the borrower must repay the loans within 20 years of entering repayment;
(4) Greater than or equal to $40,000 but less than $60,000, the borrower must repay the loans within 25 years of entering repayment; and
(5) Greater than or equal to $60,000, the borrower must repay the loans within 30 years of entering repayment.
(j) Repayment period for the standard and graduated repayment plans described in paragraphs (c) and (h) of this section, respectively. Under these repayment plans, if the total amount of the Direct Consolidation Loan and the borrower's other student loans, as defined in § 685.220(i), is—
(1) Less than $7,500, the borrower must repay the Consolidation Loan within 10 years of entering repayment;
(2) Equal to or greater than $7,500 but less than $10,000, the borrower must repay the Consolidation Loan within 12 years of entering repayment;
(3) Equal to or greater than $10,000 but less than $20,000, the borrower must repay the Consolidation Loan within 15 years of entering repayment;
(4) Equal to or greater than $20,000 but less than $40,000, the borrower must repay the Consolidation Loan within 20 years of entering repayment;
(5) Equal to or greater than $40,000 but less than $60,000, the borrower must repay the Consolidation Loan within 25 years of entering repayment; and
(6) Equal to or greater than $60,000, the borrower must repay the Consolidation Loan within 30 years of entering repayment.
(k) The repayment period for any of the repayment plans described in this section does not include periods of authorized deferment or forbearance.
(a) General. Income-driven repayment (IDR) plans are repayment plans that base the borrower's monthly payment amount on the borrower's income and family size. The four IDR plans are—
(1) The Revised Pay As You Earn (REPAYE) plan, which may also be referred to as the Saving on a Valuable Education (SAVE) plan;
(2) The Income-Based Repayment (IBR) plan;
(3) The Pay As You Earn (PAYE) Repayment plan; and
(4) The Income-Contingent Repayment (ICR) plan;
(b) Definitions. The following definitions apply to this section:
Discretionary income means the greater of $0 or the difference between the borrower's income as determined under paragraph (e)(1) of this section and—
(i) For the REPAYE plan, 225 percent of the applicable Federal poverty guideline;
(ii) For the IBR and PAYE plans, 150 percent of the applicable Federal poverty guideline; and
(iii) For the ICR plan, 100 percent of the applicable Federal poverty guideline.
Eligible loan, for purposes of determining partial financial hardship status and for adjusting the monthly payment amount in accordance with paragraph (g) of this section means—
(i) Any outstanding loan made to a borrower under the Direct Loan Program, except for a Direct PLUS Loan made to a parent borrower, or a Direct Consolidation Loan that repaid a Direct PLUS Loan or a Federal PLUS Loan made to a parent borrower; and
(ii) Any outstanding loan made to a borrower under the FFEL Program, except for a Federal PLUS Loan made to a parent borrower, or a Federal Consolidation Loan that repaid a Federal PLUS Loan or a Direct PLUS Loan made to a parent borrower.
Family size means, for all IDR plans, the number of individuals that is determined by adding together—
(i)(A) The borrower;
(B) The borrower's spouse, for a married borrower filing a joint Federal income tax return;
(C) The borrower's children, including unborn children who will be born during the year the borrower certifies family size, if the children receive more than half their support from the borrower and are not included in the family size for any other borrower except the borrower's spouse who filed jointly with the borrower; and
(D) Other individuals if, at the time the borrower certifies family size, the other individuals live with the borrower and receive more than half their support from the borrower and will continue to receive this support from the borrower for the year for which the borrower certifies family size.
(ii) The Department may calculate family size based on Federal tax information reported to the Internal Revenue Service.
Income means either—
(i) The borrower's and, if applicable, the spouse's, Adjusted Gross Income (AGI) as reported to the Internal Revenue Service; or
(ii) The amount calculated based on alternative documentation of all forms of taxable income received by the borrower and provided to the Secretary.
Income-driven repayment plan means a repayment plan in which the monthly payment amount is primarily determined by the borrower's income.
Monthly payment or the equivalent means—
(i) A required monthly payment as determined in accordance with paragraphs (k)(4)(i) through (iii) of this section;
(ii) A month in which a borrower receives a deferment or forbearance of repayment under one of the deferment or forbearance conditions listed in paragraphs (k)(4)(iv) of this section; or
(iii) A month in which a borrower makes a payment in accordance with procedures in paragraph (k)(6) of this section.
New borrower means—
(i) For the purpose of the PAYE plan, an individual who—
(A) Has no outstanding balance on a Direct Loan Program loan or a FFEL Program loan as of October 1, 2007, or who has no outstanding balance on such a loan on the date the borrower receives a new loan after October 1, 2007; and
(B) Receives a disbursement of a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Direct PLUS Loan made to a graduate or professional student, or a Direct Consolidation Loan on or after October 1, 2011, except that a borrower is not considered a new borrower if the Direct Consolidation Loan repaid a loan that would otherwise make the borrower ineligible under paragraph (1) of this definition.
(ii) For the purposes of the IBR plan, an individual who has no outstanding balance on a Direct Loan or FFEL Program loan on July 1, 2014, or who has no outstanding balance on such a loan on the date the borrower obtains a loan after July 1, 2014.
Partial financial hardship means—
(i) For an unmarried borrower or for a married borrower whose spouse's income and eligible loan debt are excluded for purposes of determining a payment amount under the IBR or PAYE plans in accordance with paragraph (e) of this section, a circumstance in which the Secretary determines that the annual amount the borrower would be required to pay on the borrower's eligible loans under the 10-year standard repayment plan is more than what the borrower would pay under the IBR or PAYE plan as determined in accordance with paragraph (f) of this section. The Secretary determines the annual amount that would be due under the 10-year Standard Repayment plan based on the greater of the balances of the borrower's eligible loans that were outstanding at the time the borrower entered repayment on the loans or the balances on those loans that were outstanding at the time the borrower selected the IBR or PAYE plan.
(ii) For a married borrower whose spouse's income and eligible loan debt are included for purposes of determining a payment amount under the IBR or PAYE plan in accordance with paragraph (e) of this section, the Secretary's determination of partial financial hardship as described in paragraph (1) of this definition is based on the income and eligible loan debt of the borrower and the borrower's spouse.
Poverty guideline refers to the income categorized by State and family size in the Federal poverty guidelines published annually by the United States Department of Health and Human Services pursuant to 42 U.S.C. 9902(2). If a borrower is not a resident of a State identified in the Federal poverty guidelines, the Federal poverty guideline to be used for the borrower is the Federal poverty guideline (for the relevant family size) used for the 48 contiguous States.
Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.
(c) Borrower eligibility for IDR plans. (1) Except as provided in paragraph (d)(2) of this section, defaulted loans may not be repaid under an IDR plan.
(2) Any Direct Loan borrower may repay under the REPAYE plan if the borrower has loans eligible for repayment under the plan;
(3)(i) Except as provided in paragraph (c)(3)(ii) of this section, any Direct Loan borrower may repay under the IBR plan if the borrower has loans eligible for repayment under the plan and has a partial financial hardship when the borrower initially enters the plan.
(ii) A borrower who has made 60 or more qualifying repayments under the REPAYE plan on or after July 1, 2024, may not enroll in the IBR plan.
(4) A borrower may repay under the PAYE plan only if the borrower—
(i) Has loans eligible for repayment under the plan;
(ii) Is a new borrower;
(iii) Has a partial financial hardship when the borrower initially enters the plan; and
(iv) Was repaying a loan under the PAYE plan on July 1, 2024. A borrower who was repaying under the PAYE plan on or after July 1, 2024 and changes to a different repayment plan in accordance with § 685.210(b) may not re-enroll in the PAYE plan.
(5)(i) Except as provided in (c)(5)(ii) or (c)(5)(iii) of this section, a borrower may enroll under the ICR plan only if the borrower—
(A) Has loans eligible for repayment under the plan; and
(B) Was repaying a loan under the ICR plan on July 1, 2024. A borrower who was repaying under the ICR plan on or after July 1, 2024, and changes to a different repayment plan in accordance with § 685.210(b) may not re-enroll in the ICR plan unless they meet the criteria in paragraph (c)(5)(ii) or (c)(5)(iii).
(ii) A borrower may choose the ICR plan to repay a Direct Consolidation Loan disbursed on or after July 1, 2006 and that repaid a parent Direct PLUS Loan or a parent Federal PLUS Loan.
(iii) A borrower who has a Direct Consolidation Loan disbursed on or after July 1, 2025, which repaid a Direct parent PLUS loan, a FFEL parent PLUS loan, or a Direct Consolidation Loan that repaid a consolidation loan that included a Direct parent PLUS or FFEL parent PLUS loan may not choose any IDR plan except the ICR plan.
(d) Loans eligible to be repaid under an IDR plan. (1) The following loans are eligible to be repaid under the REPAYE and PAYE plans: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans that did not repay a Direct parent PLUS Loan or a Federal parent PLUS Loan;
(2) The following loans, including defaulted loans, are eligible to be repaid under the IBR plan: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and Direct Consolidation Loans that did not repay a Direct parent PLUS Loan or a Federal parent PLUS Loan.
(3) The following loans are eligible to be repaid under the ICR plan: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans made to graduate or professional students, and all Direct Consolidation Loans (including Direct Consolidation Loans that repaid Direct parent PLUS Loans or Federal parent PLUS Loans), except for Direct PLUS Consolidation Loans made before July 1, 2006.
(e) Treatment of income and loan debt—(1) Income. (i) For purposes of calculating the borrower's monthly payment amount under the REPAYE, IBR, and PAYE plans—
(A) For an unmarried borrower, a married borrower filing a separate Federal income tax return, or a married borrower filing a joint Federal tax return who certifies that the borrower is currently separated from the borrower's spouse or is currently unable to reasonably access the spouse's income, only the borrower's income is used in the calculation.
(B) For a married borrower filing a joint Federal income tax return, except as provided in paragraph (e)(1)(i)(A) of this section, the combined income of the borrower and spouse is used in the calculation.
(ii) For purposes of calculating the monthly payment amount under the ICR plan—
(A) For an unmarried borrower, a married borrower filing a separate Federal income tax return, or a married borrower filing a joint Federal tax return who certifies that the borrower is currently separated from the borrower's spouse or is currently unable to reasonably access the spouse's income, only the borrower's income is used in the calculation.
(B) For married borrowers (regardless of tax filing status) who elect to repay their Direct Loans jointly under the ICR Plan or (except as provided in paragraph (e)(1)(ii)(A) of this section) for a married borrower filing a joint Federal income tax return, the combined income of the borrower and spouse is used in the calculation.
(2) Loan debt. (i) For the REPAYE, IBR, and PAYE plans, the spouse's eligible loan debt is included for the purposes of adjusting the borrower's monthly payment amount as described in paragraph (g) of this section if the spouse's income is included in the calculation of the borrower's monthly payment amount in accordance with paragraph (e)(1) of this section.
(ii) For the ICR plan, the spouse's loans that are eligible for repayment under the ICR plan in accordance with paragraph (d)(3) of this section are included in the calculation of the borrower's monthly payment amount only if the borrower and the borrower's spouse elect to repay their eligible Direct Loans jointly under the ICR plan.
(f) Monthly payment amounts. (1) For the REPAYE plan, the borrower's monthly payments are—
(i) $0 for the portion of the borrower's income, as determined under paragraph (e)(1) of this section, that is less than or equal to 225 percent of the applicable Federal poverty guideline; plus
(ii) 5 percent of the portion of income as determined under paragraph (e)(1) of this section that is greater than 225 percent of the applicable poverty guideline, prorated by the percentage that is the result of dividing the borrower's original total loan balance attributable to eligible loans received for the borrower's undergraduate study by the original total loan balance attributable to all eligible loans, divided by 12; plus
(iii) For loans not subject to paragraph (f)(1)(ii) of this section, 10 percent of the portion of income as determined under paragraph (e)(1) of this section that is greater than 225 percent of the applicable Federal poverty guidelines, prorated by the percentage that is the result of dividing the borrower's original total loan balance minus the original total loan balance of loans subject to paragraph (f)(1)(ii) of this section by the borrower's original total loan balance attributable to all eligible loans, divided by 12.
(2) For new borrowers under the IBR plan and for all borrowers on the PAYE plan, the borrower's monthly payments are the lesser of—
(i) 10 percent of the borrower's discretionary income, divided by 12; or
(ii) What the borrower would have paid on a 10-year standard repayment plan based on the eligible loan balances and interest rates on the loans at the time the borrower began paying under the IBR or PAYE plans.
(3) For those who are not new borrowers under the IBR plan, the borrower's monthly payments are the lesser of—
(i) 15 percent of the borrower's discretionary income, divided by 12; or
(ii) What the borrower would have paid on a 10-year standard repayment plan based on the eligible loan balances and interest rates on the loans at the time the borrower began paying under the IBR plan.
(4)(i) For the ICR plan, the borrower's monthly payments are the lesser of—
(A) What the borrower would have paid under a repayment plan with fixed monthly payments over a 12-year repayment period, based on the amount that the borrower owed when the borrower began repaying under the ICR plan, multiplied by a percentage based on the borrower's income as established by the Secretary in a
(B) 20 percent of the borrower's discretionary income, divided by 12.
(ii)(A) Married borrowers may repay their loans jointly under the ICR plan. The outstanding balances on the loans of each borrower are added together to determine the borrowers' combined monthly payment amount under paragraph (f)(4)(i) of this section;
(B) The amount of the payment applied to each borrower's debt is the proportion of the payments that equals the same proportion as that borrower's debt to the total outstanding balance, except that the payment is credited toward outstanding interest on any loan before any payment is credited toward principal.
(g) Adjustments to monthly payment amounts. (1) Monthly payment amounts calculated under paragraphs (f)(1) through (3) of this section will be adjusted in the following circumstances:
(i) In cases where the spouse's loan debt is included in accordance with paragraph (e)(2)(i) of this section, the borrower's payment is adjusted by—
(A) Dividing the outstanding principal and interest balance of the borrower's eligible loans by the couple's combined outstanding principal and interest balance on eligible loans; and
(B) Multiplying the borrower's payment amount as calculated in accordance with paragraphs (f)(1) through (3) of this section by the percentage determined under paragraph (g)(1)(i) of this section.
(ii) In cases where the borrower has outstanding eligible loans made under the FFEL Program, the borrower's calculated monthly payment amount, as determined in accordance with paragraphs (f)(1) through (3) of this section or, if applicable, the borrower's adjusted payment as determined in accordance with paragraph (g)(1) of this section is adjusted by—
(A) Dividing the outstanding principal and interest balance of the borrower's eligible loans that are Direct Loans by the borrower's total outstanding principal and interest balance on eligible loans; and
(B) Multiplying the borrower's payment amount as calculated in accordance with paragraphs (f)(1) through (3) of this section or the borrower's adjusted payment amount as determined in accordance with paragraph (g)(1) of this section by the percentage determined under paragraph (g)(2)(i) of this section.
(iii) In cases where the borrower's monthly payment amount calculated under paragraphs (f)(1) through (3) of this section or the borrower's adjusted monthly payment as calculated under paragraphs (g)(1)(i) or (g)(1)(ii) of this section is—
(A) Less than $5, the monthly payment is $0; or
(B) Equal to or greater than $5 but less than $10, the monthly payment is $10.
(2) Monthly payment amounts calculated under paragraph (f)(4) of this section will be adjusted to $5 in circumstances where the borrower's calculated payment amount is greater than $0 but less than or equal to $5.
(h) Interest. If a borrower's calculated monthly payment under an IDR plan is insufficient to pay the accrued interest on the borrower's loans, the Secretary charges the remaining accrued interest to the borrower in accordance with paragraphs (h)(1) through (3) of this section.
(1) Under the REPAYE plan, during all periods of repayment on all loans being repaid under the REPAYE plan, the Secretary does not charge the borrower's account any accrued interest that is not covered by the borrower's payment;
(2)(i) Under the IBR and PAYE plans, the Secretary does not charge the borrower's account with an amount equal to the amount of accrued interest on the borrower's Direct Subsidized Loans and Direct Subsidized Consolidation Loans that is not covered by the borrower's payment for the first three consecutive years of repayment under the plan, except as provided for the IBR and PAYE plans in paragraph (h)(2)(ii) of this section;
(ii) Under the IBR and PAYE plans, the 3-year period described in paragraph (h)(2)(i) of this section excludes any period during which the borrower receives an economic hardship deferment under § 685.204(g); and
(3) Under the ICR plan, the Secretary charges all accrued interest to the borrower.
(i) Changing repayment plans. A borrower who is repaying under an IDR plan may change at any time to any other repayment plan for which the borrower is eligible, except as otherwise provided in § 685.210(b).
(j) Interest capitalization. (1) Under the REPAYE, PAYE, and ICR plans, the Secretary capitalizes unpaid accrued interest in accordance with § 685.202(b).
(2) Under the IBR plan, the Secretary capitalizes unpaid accrued interest—
(i) In accordance with § 685.202(b);
(ii) When a borrower's payment is the amount described in paragraphs (f)(2)(ii) and (f)(3)(ii) of this section; and
(iii) When a borrower leaves the IBR plan.
(k) Forgiveness timeline. (1) In the case of a borrower repaying under the REPAYE plan who is repaying at least one loan received for graduate or professional study, or a Direct Consolidation Loan that repaid one or more loans received for graduate or professional study, a borrower repaying under the IBR plan who is not a new borrower, or a borrower repaying under the ICR plan, the borrower receives forgiveness of the remaining balance of the borrower's loan after the borrower has satisfied 300 monthly payments or the equivalent in accordance with paragraph (k)(4) of this section over a period of at least 25 years;
(2) In the case of a borrower repaying under the REPAYE plan who is repaying only loans received for undergraduate study, or a Direct Consolidation Loan that repaid only loans received for undergraduate study, a borrower repaying under the IBR plan who is a new borrower, or a borrower repaying under the PAYE plan, the borrower receives forgiveness of the remaining balance of the borrower's loans after the borrower has satisfied 240 monthly payments or the equivalent in accordance with paragraph (k)(4) of this section over a period of at least 20 years;
(3) Notwithstanding paragraphs (k)(1) and (k)(2) of this section, a borrower receives forgiveness if the borrower's total original principal balance on all loans that are being paid under the REPAYE plan was less than or equal to $12,000, after the borrower has satisfied 120 monthly payments or the equivalent, plus an additional 12 monthly payments or the equivalent over a period of at least 1 year for every $1,000 if the total original principal balance is above $12,000.
(4) For all IDR plans, a borrower receives a month of credit toward forgiveness by—
(i) Making a payment under an IDR plan or having a monthly payment obligation of $0;
(ii) Making a payment under the 10-year standard repayment plan under § 685.208(b);
(iii) Making a payment under a repayment plan with payments that are as least as much as they would have been under the 10-year standard repayment plan under § 685.208(b), except that no more than 12 payments made under paragraph (l)(9)(iii) of this section may count toward forgiveness under the REPAYE plan;
(iv) Deferring or forbearing monthly payments under the following provisions:
(A) A cancer treatment deferment under section 455(f)(3) of the Act;
(B) A rehabilitation training program deferment under § 685.204(e);
(C) An unemployment deferment under § 685.204(f);
(D) An economic hardship deferment under § 685.204(g), which includes volunteer service in the Peace Corps as an economic hardship condition;
(E) A military service deferment under § 685.204(h);
(F) A post active-duty student deferment under § 685.204(i);
(G) A national service forbearance under § 685.205(a)(4) on or after July 1, 2024;
(H) A national guard duty forbearance under § 685.205(a)(7) on or after July 1, 2024;
(I) A Department of Defense Student Loan Repayment forbearance under § 685.205(a)(9) on or after July 1, 2024;
(J) An administrative forbearance under § 685.205(b)(8) or (9) on or after July 1, 2024; or
(K) A bankruptcy forbearance under § 685.205(b)(6)(viii) on or after July 1, 2024 if the borrower made the required payments on a confirmed bankruptcy plan.
(v) Making a qualifying payment as described under § 685.219(c)(2),
(vi)(A) Counting payments a borrower of a Direct Consolidation Loan made on the Direct Loans or FFEL program loans repaid by the Direct Consolidation Loan if the payments met the criteria in paragraph (k)(4) of this section, the criteria in § 682.209(a)(6)(vi) that were based on a 10-year repayment period, or the criteria in § 682.215.
(B) For a borrower whose Direct Consolidation Loan repaid loans with more than one period of qualifying payments, the borrower receives credit for the number of months equal to the weighted average of qualifying payments made rounded up to the nearest whole month.
(C) For borrowers whose Joint Direct Consolidation Loan is separated into individual Direct Consolidation loans, each borrower receives credit for the number of months equal to the number of months that was credited prior to the separation; or,
(vii) Making payments under paragraph (k)(6) of this section.
(5) For the IBR plan only, a monthly repayment obligation for the purposes of forgiveness includes—
(i) A payment made pursuant to paragraph (k)(4)(i) or (k)(4)(ii) of this section on a loan in default;
(ii) An amount collected through administrative wage garnishment or Federal Offset that is equivalent to the amount a borrower would owe under paragraph (k)(4)(i) of this section, except that the number of monthly payment obligations satisfied by the borrower cannot exceed the number of months from the Secretary's receipt of the collected amount until the borrower's next annual repayment plan recertification date under IBR; or
(iii) An amount collected through administrative wage garnishment or Federal Offset that is equivalent to the amount a borrower would owe on the 10-year standard plan.
(6)(i) A borrower may obtain credit toward forgiveness as defined in paragraph (k) of this section for any months in which a borrower was in a deferment or forbearance not listed in paragraph (k)(4)(iv) of this section, other than periods in an in-school deferment, by making an additional payment equal to or greater than their current IDR payment, including a payment of $0, for a deferment or forbearance that ended within 3 years of the additional repayment date and occurred after July 1, 2024.
(ii) Upon request, the Secretary informs the borrower of the months for which the borrower can make payments under paragraph (k)(6)(i) of this section.
(l) Application and annual recertification procedures. (1) To initially enter or recertify their intent to repay under an IDR plan, a borrower provides approval for the disclosure of applicable tax information to the Secretary either as part of the process of completing a Direct Loan Master Promissory Note or a Direct Consolidation Loan Application and Promissory Note in accordance with sections 455(e)(8) and 493C(c)(2) of the Act or on application form approved by the Secretary;
(2) If a borrower does not provide approval for the disclosure of applicable tax information under sections 455(e)(8) and 493C(c)(2) of the Act when completing the promissory note or on the application form for an IDR plan, the borrower must provide documentation of the borrower's income and family size to the Secretary;
(3) If the Secretary has received approval for disclosure of applicable tax information, but cannot obtain the borrower's AGI and family size from the Internal Revenue Service, the borrower and, if applicable, the borrower's spouse, must provide documentation of income and family size to the Secretary;
(4) After the Secretary obtains sufficient information to calculate the borrower's monthly payment amount, the Secretary calculates the borrower's payment and establishes the 12-month period during which the borrower will be obligated to make a payment in that amount;
(5) The Secretary then sends to the borrower a repayment disclosure that—
(i) Specifies the borrower's calculated monthly payment amount;
(ii) Explains how the payment was calculated;
(iii) Informs the borrower of the terms and conditions of the borrower's selected repayment plan; and
(iv) Informs the borrower of how to contact the Secretary if the calculated payment amount is not reflective of the borrower's current income or family size;
(6) If the borrower believes that the payment amount is not reflective of the borrower's current income or family size, the borrower may request that the Secretary recalculate the payment amount. To support the request, the borrower must also submit alternative documentation of income or family size not based on tax information to account for circumstances such as a decrease in income since the borrower last filed a tax return, the borrower's separation from a spouse with whom the borrower had previously filed a joint tax return, the birth or impending birth of a child, or other comparable circumstances;
(7) If the borrower provides alternative documentation under paragraph (l)(6) of this section or if the Secretary obtains documentation from the borrower or spouse under paragraph (l)(3) of this section, the Secretary grants forbearance under § 685.205(b)(9) to provide time for the Secretary to recalculate the borrower's monthly payment amount based on the documentation obtained from the borrower or spouse;
(8) Once the borrower has 3 monthly payments remaining under the 12-month period specified in paragraph (l)(4) of this section, the Secretary follows the procedures in paragraphs (l)(3) through (l)(7) of this section.
(9) If the Secretary requires information from the borrower under paragraph (l)(3) of this section to recalculate the borrower's monthly repayment amount under paragraph (l)(8) of this section, and the borrower does not provide the necessary documentation to the Secretary by the time the last payment is due under the 12-month period specified under paragraph (l)(4) of this section—
(i) For the IBR and PAYE plans, the borrower's monthly payment amount is the amount determined under paragraph (f)(2)(ii) or (f)(3)(ii) of this section;
(ii) For the ICR plan, the borrower's monthly payment amount is the amount the borrower would have paid under a 10-year standard repayment plan based on the total balance of the loans being repaid under the ICR Plan when the borrower initially entered the ICR Plan; and
(iii) For the REPAYE plan, the Secretary removes the borrower from the REPAYE plan and places the borrower on an alternative repayment plan under which the borrower's required monthly payment is the amount the borrower would have paid on a 10-year standard repayment plan based on the current loan balances and interest rates on the loans at the time the borrower is removed from the REPAYE plan.
(10) At any point during the 12-month period specified under paragraph (l)(4) of this section, the borrower may request that the Secretary recalculate the borrower's payment earlier than would have otherwise been the case to account for a change in the borrower's circumstances, such as a loss of income or employment or divorce. In such cases, the 12-month period specified under paragraph (l)(4) of this section is reset based on the borrower's new information.
(11) The Secretary tracks a borrower's progress toward eligibility for forgiveness under paragraph (k) of this section and forgives loans that meet the criteria under paragraph (k) of this section without the need for an application or documentation from the borrower.
(m) Automatic enrollment in an IDR plan. The Secretary places a borrower on the IDR plan under this section that results in the lowest monthly payment based on the borrower's income and family size if—
(1) The borrower is otherwise eligible for the plan;
(2) The borrower has approved the disclosure of tax information under paragraph (l)(1) of this section;
(3) The borrower has not made a scheduled payment on the loan for at least 75 days or is in default on the loan and is not subject to a Federal offset, administrative wage garnishment under section 488A of the Act, or to a judgment secured through litigation; and
(4) The Secretary determines that the borrower's payment under the IDR plan would be lower than or equal to the payment on the plan in which the borrower is enrolled.
(n) Removal from default. The Secretary will no longer consider a borrower in default on a loan if—
(1) The borrower provides information necessary to calculate a payment under paragraph (f) of this section;
(2) The payment calculated pursuant to paragraph (f) of this section is $0; and
(3) The income information used to calculate the payment under paragraph (f) of this section includes the point at which the loan defaulted.
(a) Initial selection of a repayment plan. (1) Before a Direct Loan enters into repayment, the Secretary provides a borrower with a description of the available repayment plans and requests that the borrower select one. A borrower may select a repayment plan before the loan enters repayment by notifying the Secretary of the borrower's selection in writing.
(2) If a borrower does not select a repayment plan, the Secretary designates the standard repayment plan described in § 685.208(b) or (c) for the borrower, as applicable.
(3) All Direct Loans obtained by one borrower must be repaid together under the same repayment plan, except that—
(i) A borrower of a Direct PLUS Loan or a Direct Consolidation Loan that is not eligible for repayment under an IDR plan may repay the Direct PLUS Loan or Direct Consolidation Loan separately from other Direct Loans obtained by the borrower; and
(ii) A borrower of a Direct PLUS Consolidation Loan that entered repayment before July 1, 2006, may repay the Direct PLUS Consolidation Loan separately from other Direct Loans obtained by that borrower.
(b) Changing repayment plans. (1) A borrower who has entered repayment may change to any other repayment plan for which the borrower is eligible at any time by notifying the Secretary. However, a borrower who is repaying a defaulted loan under the IBR plan or who is repaying a Direct Consolidation Loan under an IDR plan in accordance with § 685.220(d)(1)(i)(A)(3) may not change to another repayment plan unless—
(i) The borrower was required to and did make a payment under the IBR plan or other IDR plan in each of the prior three months; or
(ii) The borrower was not required to make payments but made three reasonable and affordable payments in each of the prior 3 months; and
(iii) The borrower makes, and the Secretary approves, a request to change plans.
(2)(i) A borrower may not change to a repayment plan that would cause the borrower to have a remaining repayment period that is less than zero months, except that an eligible borrower may change to an IDR plan under § 685.209 at any time.
(ii) For the purposes of paragraph (b)(2)(i) of this section, the remaining repayment period is—
(A) For a fixed repayment plan under § 685.208 or an alternative repayment plan under § 685.221, the maximum repayment period for the repayment plan the borrower is seeking to enter, less the period of time since the loan has entered repayment, plus any periods of deferment and forbearance; and
(B) For an IDR plan under § 685.209, as determined under § 685.209(k).
(3) A borrower who made payments under the IBR plan and successfully completed rehabilitation of a defaulted loan may chose the REPAYE plan when the loan is returned to current repayment if the borrower is otherwise eligible for the REPAYE plan and if the monthly payment under the REPAYE plan is equal to or less than their payment on IBR.
(4)(i) If a borrower no longer wishes to pay under the IBR plan, the borrower must pay under the standard repayment plan and the Secretary recalculates the borrower's monthly payment based on—
(A) For a Direct Subsidized Loan, a Direct Unsubsidized Loan, or a Direct PLUS Loan, the time remaining under the maximum ten-year repayment period for the amount of the borrower's loans that were outstanding at the time the borrower discontinued paying under the IBR plan; or
(B) For a Direct Consolidation Loan, the time remaining under the applicable repayment period as initially determined under § 685.208(j) and the amount of that loan that was outstanding at the time the borrower discontinued paying under the IBR plan.
(ii) A borrower who no longer wishes to repay under the IBR plan and who is required to repay under the Direct Loan standard repayment plan in accordance with paragraph (b)(4)(i) of this section may request a change to a different repayment plan after making one monthly payment under the Direct Loan standard repayment plan. For this purpose, a monthly payment may include one payment made under a forbearance that provides for accepting smaller payments than previously scheduled, in accordance with § 685.205(a).
(a) Payment application and prepayment. (1)(i) Except as provided for the Income-Based Repayment plan in paragraph (a)(1)(ii) of this section, the Secretary applies any payment in the following order:
(A) Accrued charges and collection costs.
(B) Outstanding interest.
(C) Outstanding principal.
(ii) The Secretary applies any payment made under the Income-Based Repayment plan in the following order:
(A) Accrued interest.
(B) Collection costs.
(C) Late charges.
(D) Loan principal.
(2) A borrower may prepay all or part of a loan at any time without penalty. If a borrower pays any amount in excess of the amount due, the excess amount is a prepayment.
(3) If a prepayment equals or exceeds the monthly repayment amount under the borrower's repayment plan, the Secretary—
(i) Applies the prepaid amount according to paragraph (a)(1) of this section;
(ii) Advances the due date of the next payment unless the borrower requests otherwise; and
(iii) Notifies the borrower of any revised due date for the next payment.
(4) If a prepayment is less than the monthly repayment amount, the Secretary applies the prepayment according to paragraph (a)(1) of this section.
(b) Repayment incentives. To encourage on-time repayment, the Secretary may reduce the interest rate for a borrower who repays a loan under a system or on a schedule that meets requirements specified by the Secretary.
(c) Refunds and returns of title IV, HEA program funds from schools. The Secretary applies any refund or return of title IV, HEA program funds that the Secretary receives from a school under § 668.22 against the borrower's outstanding principal and notifies the borrower of the refund or return.
(d) Default—(1) Acceleration. If a borrower defaults on a Direct Loan, the entire unpaid balance and accrued interest are immediately due and payable.
(2) Collection charges. If a borrower defaults on a Direct Loan, the Secretary assesses collection charges in accordance with § 685.202(e).
(3) Collection of a defaulted loan. (i) The Secretary may take any action authorized by law to collect a defaulted Direct Loan including, but not limited to, filing a lawsuit against the borrower, reporting the default to nationwide consumer reporting agencies, requesting the Internal Revenue Service to offset the borrower's Federal income tax refund, and garnishing the borrower's wages.
(ii) If a borrower defaults on a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Direct Consolidation Loan, or a student Direct PLUS Loan, the Secretary may designate the income-contingent repayment plan or the income-based repayment plan for the borrower.
(e) Ineligible borrowers. (1) The Secretary determines that a borrower is ineligible if, at the time the loan was made and without the school's or the Secretary's knowledge, the borrower (or the student on whose behalf a parent borrowed) provided false or erroneous information, has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program funds, or took actions that caused the borrower or student—
(i) To receive a loan for which the borrower is wholly or partially ineligible;
(ii) To receive interest benefits for which the borrower was ineligible; or
(iii) To receive loan proceeds for a period of enrollment for which the borrower was not eligible.
(2) If the Secretary makes the determination described in paragraph (e)(1) of this section, the Secretary sends an ineligible borrower a demand letter that requires the borrower to repay some or all of a loan, as appropriate. The demand letter requires that within 30 days from the date the letter is mailed, the borrower repay any principal amount for which the borrower is ineligible and any accrued interest, including interest subsidized by the Secretary, through the previous quarter.
(3) If a borrower fails to comply with the demand letter described in paragraph (e)(2) of this section, the borrower is in default on the entire loan.
(4) A borrower may not consolidate a loan under § 685.220 for which the borrower is wholly or partially ineligible.
(f) Rehabilitation of defaulted loans. (1) A defaulted Direct Loan, except for a loan on which a judgment has been obtained, is rehabilitated if the borrower makes 9 voluntary, reasonable and affordable monthly payments within 20 days of the due date during 10 consecutive months. The Secretary determines the amount of a borrower's reasonable and affordable payment on the basis of a borrower's total financial circumstances.
(i) The Secretary initially considers the borrower's reasonable and affordable payment amount to be an amount equal to the minimum payment required under the IBR plan, except that if this amount is less than $5, the borrower's monthly payment is $5.
(ii) The Secretary may calculate the payment amount based on information provided orally by the borrower or the borrower's representative and provide the borrower with a rehabilitation agreement using that amount. The Secretary requires the borrower to provide documentation to confirm the borrower's AGI and family size. If the borrower does not provide the Secretary with any documentation requested by the Secretary to calculate or confirm the reasonable and affordable payment amount within a reasonable time deadline set by the Secretary, the rehabilitation agreement provided is null and void.
(iii) A reasonable and affordable payment amount is not—
(A) A required minimum loan payment amount (e.g., $50) if the Secretary determines that a smaller amount is reasonable and affordable;
(B) A percentage of the borrower's total loan balance; or
(C) Based on other criteria unrelated to the borrower's total financial circumstances.
(iv) Within 15 business days of the Secretary's determination of the borrower's loan rehabilitation payment amount, the Secretary provides the borrower with a written rehabilitation agreement which includes the borrower's reasonable and affordable payment amount, a prominent statement that the borrower may object orally or in writing to the reasonable and affordable payment amount with the method and timeframe for raising such an objection, a statement that the rehabilitation is null and void if the borrower does not provide the documentation required to calculate the reasonable and affordable payment amount, and an explanation of any other terms and conditions applicable to the required series of payments that must be made. To accept the agreement, the borrower must sign and return the agreement or accept the agreement electronically under a process provided by the Secretary. The Secretary does not impose any other conditions unrelated to the amount or timing of the rehabilitation payments in the rehabilitation agreement. The written rehabilitation agreement informs the borrower of the effects of having the loans rehabilitated (e.g., removal of the record of default from the borrower's credit history and return to normal repayment).
(2) The Secretary provides the borrower with a written statement confirming the borrower's reasonable and affordable payment amount, as determined by the Secretary, and explaining any other terms and conditions applicable to the required series of payments that must be made before the borrower's account can be rehabilitated. The statement informs the borrower that the borrower may object to the terms and conditions of the rehabilitation agreement, and explains the method and timeframe for objecting to the terms and conditions of the rehabilitation agreement.
(3) If the borrower objects to the monthly payment amount determined under paragraph (f)(1) of this section, the Secretary recalculates the payment based solely on information provided on a form approved by the Secretary and, if requested, supporting documentation from the borrower and other sources, and considers—
(i) The borrower's, and if applicable, the spouse's current disposable income, including public assistance payments, and other income received by the borrower and the spouse, such as welfare benefits, Social Security benefits, Supplemental Security Income, and workers' compensation. Spousal income is not considered if the spouse does not contribute to the borrower's household income;
(ii) Family size as defined in § 685.209; and
(iii) Reasonable and necessary expenses, which include—
(A) Food;
(B) Housing;
(C) Utilities;
(D) Basic communication expenses;
(E) Necessary medical and dental costs;
(F) Necessary insurance costs;
(G) Transportation costs;
(H) Dependent care and other work-related expenses;
(I) Legally required child and spousal support;
(J) Other title IV and non-title IV student loan payments; and
(K) Other expenses approved by the Secretary.
(4) The Secretary provides the borrower with a new written rehabilitation agreement confirming the borrower's recalculated reasonable and affordable payment amount. To accept the agreement, the borrower must sign and return the agreement or accept the agreement electronically under a process provided by the Secretary.
(5) The Secretary includes any payment made under paragraph (1) of the definition of “satisfactory repayment arrangement” in § 685.102(b) in determining whether the 9 out of 10 payments required under paragraph (f)(1) of this section have been made.
(6) A borrower may request that the monthly payment amount be adjusted due to a change in the borrower's total financial circumstances only upon providing the documentation specified in paragraph (f)(3) of this section.
(7) During the rehabilitation period, the Secretary limits contact with the borrower on the loan being rehabilitated to collection activities that are required by law or regulation and to communications that support the rehabilitation.
(8) If a defaulted loan is rehabilitated, the Secretary instructs any consumer reporting agency to which the default was reported to remove the default from the borrower's credit history.
(9) A defaulted Direct Loan on which a judgment has been obtained may not be rehabilitated.
(10) A Direct Loan obtained by fraud for which the borrower has been convicted of, or has pled nolo contendere or guilty to, a crime involving fraud in obtaining title IV, HEA program assistance may not be rehabilitated.
(11)(i) If a borrower's loan is being collected by administrative wage garnishment while the borrower is also making monthly payments on the same loan under a loan rehabilitation agreement, the Secretary continues collecting the loan by administrative wage garnishment until the borrower makes five qualifying monthly payments under the rehabilitation agreement, unless the Secretary is otherwise precluded from doing so.
(ii) After the borrower makes the fifth qualifying monthly payment, the Secretary, unless otherwise directed by the borrower, suspends the garnishment order issued to the borrower's employer.
(iii) A borrower may only obtain the benefit of a suspension of administrative wage garnishment while also attempting to rehabilitate a defaulted loan once.
(12) Effective for any defaulted Direct Loan that is rehabilitated on or after August 14, 2008, the borrower cannot rehabilitate the loan again if the loan returns to default status following the rehabilitation.
(13) A borrower who has a Direct Loan that is rehabilitated and which has been returned to repayment status on or after July 1, 2024, may be transferred to REPAYE by the Secretary if the borrower's minimum payment amount on REPAYE would be equal to or less than the minimum payment amount on the Income-Based Repayment Plan.
(a) Death. (1) If a borrower (or a student on whose behalf a parent borrowed a Direct PLUS Loan) dies, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan based on—
(i) An original or certified copy of the death certificate;
(ii) An accurate and complete photocopy of the original or certified copy of the death certificate;
(iii) An accurate and complete original or certified copy of the death certificate that is scanned and submitted electronically or sent by facsimile transmission; or
(iv) Verification of the borrower's or student's death through an authoritative Federal or State electronic database approved for use by the Secretary.
(2) Under exceptional circumstances and on a case-by-case basis, the Secretary discharges a loan based upon other reliable documentation of the borrower's or student's death that is acceptable to the Secretary.
(3) In the case of a Direct Consolidation Loan that repaid a Direct PLUS Loan or a Federal PLUS Loan obtained on behalf of a student who dies, the Secretary discharges an amount equal to the portion of the outstanding balance of the consolidation loan, as of the date of the student's death, attributable to that Direct PLUS Loan or Federal PLUS Loan.
(b) Total and permanent disability. If a borrower meets the requirements in § 685.213, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan.
(c) Bankruptcy. If a borrower's obligation to repay a loan is discharged in bankruptcy, the Secretary does not require the borrower to make any further payments on the loan.
(d) Closed schools. If a borrower meets the requirements in § 685.214, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan. In the case of a Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the discharge applicable to any loan disbursed, in whole or in part, on or after January 1, 1986 that was included in the consolidation loan.
(e) False certification and unauthorized disbursement. If a borrower meets the requirements in § 685.215, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the loan. In the case of a Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the discharge applicable to any loan disbursed, in whole or in part, on or after January 1, 1986 that was included in the consolidation loan.
(f) Unpaid refunds. If a borrower meets the requirements in § 685.216, the Secretary discharges the obligation of the borrower and any endorser to make any further payments on the amount of the loan equal to the unpaid refund and any accrued interest and other charges associated with the unpaid refund. In the case of a Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the unpaid refund owed on any loan disbursed, in whole or in part, on or after January 1, 1986 that was included in the consolidation loan.
(g) Payments received after eligibility for discharge—(1) For the discharge conditions in paragraphs (a), (c), (d), and (e) of this section. Upon receipt of acceptable documentation and approval of the discharge request, the Secretary returns to the sender, or, for a discharge based on death, the borrower's estate, any payments received after the date that the eligibility requirements for discharge were met.
(2) For the discharge condition in paragraph (b) of this section. Upon making a final determination of eligibility for discharge based on total and permanent disability, the Secretary returns to the sender any payments received after the date specified in § 685.213(b)(4)(iii) or 685.213(c)(2)(i), as applicable.
(3) For the discharge condition in paragraph (f) of this section. Upon receipt of acceptable documentation and approval of the discharge request, the Secretary returns to the sender payments received in excess of the amount owed on the loan after applying the unpaid refund.
(h) Teacher loan forgiveness program. If a new borrower meets the requirements in § 685.217, the Secretary repays up to $5,000, or up to $17,500, of the borrower's Direct Subsidized Loans, Direct Unsubsidized Loans, and, in certain cases, Direct Consolidation Loans.
(i) Public Service Loan Forgiveness Program. If a borrower meets the requirements in § 685.219, the Secretary cancels the remaining principal and accrued interest of the borrower's eligible Direct Subsidized Loan, Direct Unsubsidized Loan, Direct PLUS Loan, and Direct Consolidation Loan.
(j) September 11 survivors discharge. If a borrower meets the requirements in § 685.218, the Secretary discharges the obligation of the borrower and any endorser to make any further payments—
(1) On an eligible Direct Loan if the borrower qualifies as the spouse of an eligible public servant;
(2) On the portion of a joint Direct Consolidation Loan incurred on behalf of an eligible victim, if the borrower qualifies as the spouse of an eligible victim;
(3) On a Direct PLUS Loan incurred on behalf of an eligible victim if the borrower qualifies as an eligible parent; and
(4) On the portion of a Direct Consolidation Loan that repaid a PLUS loan incurred on behalf of an eligible victim, if the borrower qualifies as an eligible parent.
(k) Borrower defenses. (1) If a borrower defense is approved under § 685.206(c) or under § 685.206(d) and § 685.222—
(i) The Secretary discharges the obligation of the borrower in whole or in part in accordance with the procedures in §§ 685.206(c) and 685.222, respectively; and
(ii) The Secretary returns to the borrower payments made by the borrower or otherwise recovered on the loan that exceed the amount owed on that portion of the loan not discharged, if the borrower asserted the claim not later than—
(A) For a claim subject to § 685.206(c), the limitation period under applicable law to the claim on which relief was granted; or
(B) For a claim subject to § 685.222, the limitation period in § 685.222(b), (c), or (d), as applicable.
(2) In the case of a Direct Consolidation Loan, a borrower may assert a borrower defense under § 685.206(c) or § 685.222 with respect to a Direct Loan, FFEL Program Loan, Federal Perkins Loan, Health Professions Student Loan, Loan for Disadvantaged Students under subpart II of part A of title VII of the Public Health Service Act, Health Education Assistance Loan, or Nursing Loan made under part E of the Public Health Service Act that was repaid by the Direct Consolidation Loan.
(i) The Secretary considers a borrower defense claim asserted on a Direct Consolidation Loan by determining—
(A) Whether the act or omission of the school with regard to the loan described in this paragraph (k)(2), other than a Direct Subsidized, Unsubsidized, or PLUS Loan, constitutes a borrower defense under § 685.206(c), for a Direct Consolidation Loan made before July 1, 2017, or under § 685.222, for a Direct Consolidation Loan made on or after July 1, 2017, and before July 1, 2020; or
(B) Whether the act or omission of the school with regard to a Direct Subsidized, Unsubsidized, or PLUS Loan made on after July 1, 2017, and before July 1, 2020, that was paid off by the Direct Consolidation Loan, constitutes a borrower defense under § 685.222.
(ii) If the borrower defense is approved, the Secretary discharges the appropriate portion of the Direct Consolidation Loan.
(iii) The Secretary returns to the borrower payments made by the borrower or otherwise recovered on the Direct Consolidation Loan that exceed the amount owed on that portion of the Direct Consolidation Loan not discharged, if the borrower asserted the claim not later than—
(A) For a claim asserted under § 685.206(c), the limitation period under the law applicable to the claim on which relief was granted; or
(B) For a claim asserted under § 685.222, the limitation period in § 685.222(b), (c), or (d), as applicable.
(iv) The Secretary returns to the borrower a payment made by the borrower or otherwise recovered on the loan described in this paragraph (k)(2) only if—
(A) The payment was made directly to the Secretary on the loan; and
(B) The borrower proves that the loan to which the payment was credited was not legally enforceable under applicable law in the amount for which that payment was applied.
(3) If a borrower's application for a discharge of a loan based on a borrower defense is approved under § 685.206(e), the Secretary discharges the obligation of the borrower, in whole or in part, in accordance with the procedures described in § 685.206(e).
(4) If a borrower's application for a discharge of a loan based on a borrower defense is approved under 34 CFR part 685, subpart D, the Secretary discharges the obligation of the borrower, in accordance with the procedures described in subpart D of this part.
(a) General. (1) A borrower's Direct Loan is discharged if the borrower becomes totally and permanently disabled, as defined in § 685.102(b), and satisfies the eligibility requirements in this section.
(2) For a borrower who becomes totally and permanently disabled as described in paragraph (1) of the definition of that term in § 685.102(b), the borrower's loan discharge application is processed in accordance with paragraph (b) of this section.
(3) For veterans who are totally and permanently disabled as described in paragraph (2) of the definition of that term in § 685.102(b), the veteran's loan discharge application is processed in accordance with paragraph (c) of this section.
(4) For purposes of this section, a borrower's representative or a veteran's representative is a member of the borrower's family, the borrower's attorney, or another individual authorized to act on behalf of the borrower in connection with the borrower's total and permanent disability discharge application. References to a “borrower” or a “veteran” include, if applicable, the borrower's representative or the veteran's representative for purposes of applying for a total and permanent disability discharge, providing notifications or information to the Secretary, and receiving notifications from the Secretary.
(b) Discharge application process for a borrower who is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 685.102(b)—(1) Borrower application for discharge. Except as provided in paragraph (d)(2) of this section, to qualify for a discharge of a Direct Loan based on a total and permanent disability, a borrower must submit a discharge application to the Secretary on a form approved by the Secretary. If the borrower notifies the Secretary that the borrower claims to be totally and permanent disabled prior to submitting a total and permanent disability discharge application, the Secretary—
(i) Provides the borrower with information needed for the borrower to apply for a total and permanent disability discharge;
(ii) Suspends collection activity on any of the borrower's title IV loans held by the Secretary, and notifies the borrower's other title IV loan holders to suspend collection activity on the borrower's title IV loans for a period not to exceed 120 days; and
(iii) Informs the borrower that the suspension of collection activity will end after 120 days and collection will resume on the loans if the borrower does not submit a total and permanent disability discharge application to the Secretary within that time.
(2) Disability certification or Social Security Administration (SSA) disability determination. The application must contain—
(i) A certification by a physician, who is a doctor of medicine or osteopathy legally authorized to practice in a State, that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 685.102(b);
(ii) A certification by a nurse practitioner or physician assistant licensed by a State, or a certified psychologist at the independent practice level who are licensed to practice in the United States, that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 685.102(b); or
(iii) An SSA Benefit Planning Query (BPQY) or an SSA notice of award, or other documentation deemed acceptable by the Secretary, indicating that—
(A) The borrower qualifies for Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) based on disability, and the borrower's next continuing disability review has been scheduled between 5 and 7 years;
(B) The borrower qualifies for SSDI benefits or SSI based on disability and the borrower's next continuing disability review has been scheduled at 3 years;
(C) The borrower has an established onset date for SSDI benefits or SSI of at least 5 years prior to the application for a disability discharge or has been receiving SSDI benefits or SSI based on disability for at least 5 years prior to the application for a TPD discharge;
(D) The borrower qualifies for SSDI or SSI based on a compassionate allowance; or
(E) For borrowers currently receiving SSA retirement benefits, documentation that, prior to the borrower qualifying for SSA retirement benefits, the borrower met the requirements in paragraphs (b)(2)(iii)(A) through (D) of this section.
(3) Deadline for application submission. The borrower must submit the application described in paragraph (b)(1) of this section to the Secretary within 90 days of the date the physician, nurse practitioner, physician assistant, or psychologist certifies the application, if applicable. Upon receipt of the borrower's application, the Secretary—
(i) Identifies all title IV loans owed by the borrower, notifies the lenders that the Secretary has received a total and permanent disability discharge application from the borrower and directs the lenders to suspend collection activity or maintain the suspension of collection activity on the borrower's title IV loans;
(ii) If the application is incomplete, notifies the borrower of the missing information and requests the missing information from the borrower or the physician, nurse practitioner, physician assistant, or psychologist who certified the application, as appropriate, and does not make a determination of eligibility for discharge until the application is complete;
(iii) Notifies the borrower that no payments are due on the loan while the Secretary determines the borrower's eligibility for discharge; and
(iv) Explains the process for the Secretary's review of total and permanent disability discharge applications.
(4) Determination of eligibility. (i) If, after reviewing the borrower's completed application, the Secretary determines that the data described in paragraph (b)(2) of this section supports the conclusion that the borrower meets the criteria for a total and permanent disability discharge, as described in paragraph (1) of the definition of that term in § 685.102(b), the borrower is considered totally and permanently disabled—
(A) As of the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's application; or
(B) As of the date the Secretary received the SSA data described in paragraph (b)(2)(iii) of this section.
(ii) If the Secretary determines that the borrower's application does not support the conclusion that the borrower is totally and permanently disabled as described in paragraph (1) of the definition of that term in § 685.102(b), the Secretary may require the borrower to submit additional medical evidence. As part of the Secretary's review of the borrower's discharge application, the Secretary may require and arrange for an additional review of the borrower's condition by an independent physician or other medical professional identified by the Secretary at no expense to the borrower.
(iii) After determining that the borrower is totally and permanently disabled, as described in paragraph (1) of the definition of that term in § 685.102(b), the Secretary discharges the borrower's obligation to make any further payments on the loan, notifies the borrower that the loan has been discharged, and returns to the person who made the payments on the loan any payments received after the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's loan discharge application or the date the Secretary received the SSA data described in paragraph (b)(2)(iii) of this section. The notification to the borrower explains the terms and conditions under which the borrower's obligation to repay the loan will be reinstated, as specified in paragraph (b)(7)(i) of this section.
(iv) If the Secretary determines that the physician, nurse practitioner, physician assistant, or psychologist certification or the SSA data described in paragraph (b)(2)(iii) of this section provided by the borrower does not support the conclusion that the borrower is totally and permanently disabled, as described in paragraph (1) of the definition of that term in § 685.102(b), the Secretary notifies the borrower that the application for a disability discharge has been denied. The notification to the borrower includes—
(A) The reason or reasons for the denial;
(B) A statement that the loan is due and payable to the Secretary under the terms of the promissory note and that the loan will return to the status that would have existed if the total and permanent disability discharge application had not been received;
(C) The date that the borrower must resume making payments;
(D) An explanation that the borrower is not required to submit a new total and permanent disability discharge application if the borrower requests that the Secretary re-evaluate the borrower's application for discharge by providing, within 12 months of the date of the notification, additional information that supports the borrower's eligibility for discharge; and
(E) An explanation that if the borrower does not request re-evaluation of the borrower's prior discharge application within 12 months of the date of the notification, the borrower must submit a new total and permanent disability discharge application to the Secretary if the borrower wishes the Secretary to re-evaluate the borrower's eligibility for a total and permanent disability discharge.
(v) If the borrower requests re-evaluation in accordance with paragraph (b)(4)(iv)(D) of this section or submits a new total and permanent disability discharge application in accordance with paragraph (b)(4)(iv)(E) of this section, the request must include new information regarding the borrower's disabling condition that was not provided to the Secretary in connection with the prior application at the time the Secretary reviewed the borrower's initial application for total and permanent disability discharge.
(5) Treatment of disbursements made during the period from the date of the certification or the date the Secretary received the SSA data until the date of discharge. If a borrower received a title IV loan or TEACH Grant before the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's discharge application or before the date the Secretary received the SSA data described in paragraph (b)(2)(iii) of this section and a disbursement of that loan or grant is made during the period from the date of the physician, nurse practitioner, physician assistant, or psychologist certification or the receipt of the SSA data described in paragraph (b)(2)(iii) of this section until the date the Secretary grants a discharge under this section, the processing of the borrower's loan discharge request will be suspended until the borrower ensures that the full amount of the disbursement has been returned to the loan holder or to the Secretary, as applicable.
(6) Receipt of new title IV loans or TEACH Grants certification, on or after the date the Secretary received the SSA data. If a borrower receives a disbursement of a new title IV loan or receives a new TEACH Grant made on or after the date the physician, nurse practitioner, physician assistant, or psychologist certified the borrower's discharge application or on or after the date the Secretary received the SSA data described in paragraph (b)(2)(iii) of this section and before the date the Secretary grants a discharge under this section, the Secretary denies the borrower's discharge request and resumes collection on the borrower's loan.
(7) Conditions for reinstatement of a loan after a total and permanent disability discharge. (i) The Secretary reinstates a borrower's obligation to repay a loan that was discharged in accordance with paragraph (b)(4)(iii) of this section if, within 3 years after the date the Secretary granted the discharge, the borrower receives a new TEACH Grant or a new loan under the Direct Loan Program, except for a Direct Consolidation Loan that includes loans that were not discharged.
(ii) If the borrower's obligation to repay the loan is reinstated, the Secretary—
(A) Notifies the borrower that the borrower's obligation to repay the loan has been reinstated;
(B) Returns the loan to the status that would have existed if the total and permanent disability discharge application had not been received; and
(C) Does not require the borrower to pay interest on the loan for the period from the date the loan was discharged until the date the borrower's obligation to repay the loan was reinstated.
(iii) The Secretary's notification under paragraph (b)(7)(ii)(A) of this section will include—
(A) The reason or reasons for the reinstatement;
(B) An explanation that the first payment due date on the loan following reinstatement will be no earlier than 90 days after the date of the notification of reinstatement; and
(C) Information on how the borrower may contact the Secretary if the borrower has questions about the reinstatement or believes that the obligation to repay the loan was reinstated based on incorrect information.
(c) Discharge application process for veterans who are totally and permanently disabled as described in paragraph (2) of the definition of that term in § 685.102(b)—(1) Veteran's application for discharge. Except as provided in paragraph (d)(1) of this section, to qualify for a discharge of a Direct Loan based on a total and permanent disability as described in paragraph (2) of the definition of that term in § 685.102(b), a veteran must submit a discharge application to the Secretary on a form approved by the Secretary. The application must be accompanied by documentation from the Department of Veterans Affairs showing that the Department of Veterans Affairs has determined that the veteran is unemployable due to a service-connected disability. The Secretary does not require the veteran to provide any additional documentation related to the veteran's disability. Upon receipt of the veteran's application, the Secretary—
(i) Identifies all title IV loans owed by the veteran and notifies the lenders that the Secretary has received a total and permanent disability discharge application from the borrower;
(ii) If the application is incomplete, requests the missing information from the veteran and does not make a determination of eligibility for discharge until the application is complete;
(iii) Notifies the veteran that no payments are due on the loan while the Secretary determines the veteran's eligibility for discharge; and
(iv) Explains the Secretary's process for reviewing total and permanent disability discharge applications.
(2) Determination of eligibility. (i) If the Secretary determines, based on a review of the documentation from the Department of Veterans Affairs, that the veteran is totally and permanently disabled as described in paragraph (2) of the definition of that term in § 685.102(b), the Secretary discharges the veteran's obligation to make any further payments on the loan and returns to the person who made the payments on the loan any payments received on or after the effective date of the determination by the Department of Veterans Affairs that the veteran is unemployable due to a service-connected disability.
(ii) If the Secretary determines, based on a review of the documentation from the Department of Veterans Affairs, that the veteran is not totally and permanently disabled as described in paragraph (2) of the definition of that term in § 685.102(b), the Secretary notifies the veteran that the application for a disability discharge has been denied. The notification to the veteran includes—
(A) The reason or reasons for the denial;
(B) An explanation that the loan is due and payable to the Secretary under the terms of the promissory note and that the loan will return to the status it was in at the time the veteran applied for a total and permanent disability discharge;
(C) The date that the veteran must resume making payments;
(D) An explanation that the veteran is not required to submit a new total and permanent disability discharge application if the veteran requests that the Secretary re-evaluate the veteran's application for discharge by providing, within 12 months of the date of the notification, additional documentation from the Department of Veterans Affairs that supports the veteran's eligibility for discharge; and
(E) Information on how the veteran may reapply for a total and permanent disability discharge in accordance with the procedures described in paragraph (b) of this section if the documentation from the Department of Veterans Affairs does not indicate that the veteran is totally and permanently disabled as described in paragraph (2) of the definition of that term in § 685.102(b), but indicates that the veteran may be totally and permanently disabled as described in paragraph (1) of the definition of that term.
(d) Discharge without an application. (1) The Secretary will discharge a loan under this section without an application or any additional documentation from the borrower if the Secretary:
(i) Obtains data from the Department of Veterans Affairs showing that the borrower is unemployable due to a service-connected disability; or
(ii) Obtains data from the Social Security Administration (SSA) described in paragraph (b)(2)(iii) of this section
(2) [Reserved]
(e) Notification to the borrower. (1) After determining that a borrower qualifies for a total and permanent disability discharge under paragraph (d) of this section, the Secretary sends a notification to the borrower informing the borrower that the Secretary will discharge the borrower's title IV loans unless the borrower notifies the Secretary, by a date specified in the Secretary's notification, that the borrower does not wish to receive the loan discharge.
(2) Unless the borrower notifies the Secretary that the borrower does not wish to receive the discharge the Secretary discharges the loan:
(i) In accordance with paragraph (b)(4)(iii) of this section for a discharge based on data from the SSA; or
(ii) In accordance with paragraph (c)(2)(i) of this section for a discharge based on data from VA.
(3) If the borrower notifies the Secretary that they do not wish to receive the discharge, the borrower will remain responsible for repayment of the borrower's loans in accordance with the terms and conditions of the promissory notes that the borrower signed.
(a) General. (1) The Secretary discharges the borrower's (and any endorser's) obligation to repay a Direct Loan in accordance with the provisions of this section if the borrower (or the student on whose behalf a parent borrowed) did not complete the program of study for which the loan was made because the school at which the borrower (or student) was enrolled closed, as described in paragraph (d) of this section.
(2) For purposes of this section—
(i) If a school has closed, the school's closure date is the earlier of: the date, determined by the Secretary, that the school ceased to provide educational instruction in programs in which most students at the school were enrolled, or a date determined by the Secretary that reflects when the school ceased to provide educational instruction for all of its students;
(ii) “School” means a school's main campus or any location or branch of the main campus, regardless of whether the school or its location or branch is considered title IV eligible;
(iii) “Program” means the credential defined by the level and Classification of Instructional Program code in which a student is enrolled, except that the Secretary may define a borrower's program as multiple levels or Classification of Instructional Program codes if:
(A) The enrollment occurred at the same institution in closely proximate periods;
(B) The school granted a credential in a program while the student was enrolled in a different program; or
(C) The programs must be taken in a set order or were presented as necessary for borrowers to complete in order to succeed in the relevant field of employment;
(b) Relief pursuant to discharge. (1) Discharge under this section relieves the borrower of any past or present obligation to repay the loan and any accrued charges or collection costs with respect to the loan.
(2) The discharge of a loan under this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on the loan.
(3) The Secretary does not regard a borrower who has defaulted on a loan discharged under this section as in default on the loan after discharge, and such a borrower is eligible to receive assistance under programs authorized by title IV of the Act.
(4) The Secretary reports the discharge of a loan under this section to all consumer reporting agencies to which the Secretary previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(c) Discharge without an application. (1) If the Secretary determines based on information in the Secretary's possession that the borrower qualifies for the discharge of a loan under this section, the Secretary discharges the loan without an application or any statement from the borrower 1 year after the institution's closure date if the borrower did not complete the program at another branch or location of the school or through a teach-out agreement at another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency.
(2) If a borrower accepts but does not complete a continuation of the program at another branch or location of the school or a teach-out agreement at another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency, then the Secretary discharges the loan 1 year after the borrower's last date of attendance at the other branch or location or in the teach-out program.
(d) Borrower qualification for discharge. (1) Except as provided in paragraphs (c) and (h) of this section, to qualify for discharge of a loan under this section, a borrower must submit to the Secretary a completed application and the factual assertions in the application must be true and must be made by the borrower under penalty of perjury. The application explains the procedures and eligibility criteria for obtaining a discharge and requires the borrower to—
(i) State that the borrower (or the student on whose behalf a parent borrowed)—
(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986, to attend a school;
(B) Did not complete the program of study at that school because the school closed while the student was enrolled, or the student withdrew from the school not more than 180 calendar days before the school closed. The Secretary may extend the 180-day period if the Secretary determines that exceptional circumstances, as described in paragraph (h) of this section, justify an extension; and
(C) On or after July 1, 2023, state that the borrower did not complete the program at another branch or location of the school or through a teach-out agreement at another school, approved by the school's accrediting agency and, if applicable, the school's State authorizing agency.
(ii) State whether the borrower (or student) has made a claim with respect to the school's closing with any third party, such as the holder of a performance bond or a tuition recovery program, and, if so, the amount of any payment received by the borrower (or student) or credited to the borrower's loan obligation; and
(iii) State that the borrower (or student)—
(A) Agrees to provide to the Secretary upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(B) Agrees to cooperate with the Secretary in enforcement actions in accordance with paragraph (e) of this section and to transfer any right to recovery against a third party to the Secretary in accordance with paragraph (f) of this section.
(2) [Reserved]
(e) Cooperation by borrower in enforcement actions. (1) To obtain a discharge under this section, a borrower must cooperate with the Secretary in any judicial or administrative proceeding brought by the Secretary to recover amounts discharged or to take other enforcement action with respect to the conduct on which the discharge was based. At the request of the Secretary and upon the Secretary's tendering to the borrower the fees and costs that are customarily provided in litigation to reimburse witnesses, the borrower must—
(i) Provide testimony regarding any representation made by the borrower to support a request for discharge;
(ii) Produce any documents reasonably available to the borrower with respect to those representations; and
(iii) If required by the Secretary, provide a sworn statement regarding those documents and representations.
(2) The Secretary denies the request for a discharge or revokes the discharge of a borrower who—
(i) Fails to provide the testimony, documents, or a sworn statement required under paragraph (d)(1) of this section; or
(ii) Provides testimony, documents, or a sworn statement that does not support the material representations made by the borrower to obtain the discharge.
(f) Transfer to the Secretary of borrower's right of recovery against third parties. (1) Upon discharge under this section, the borrower is deemed to have assigned to and relinquished in favor of the Secretary any right to a loan refund (up to the amount discharged) that the borrower (or student) may have by contract or applicable law with respect to the loan or the enrollment agreement for the program for which the loan was received, against the school, its principals, its affiliates and their successors, its sureties, and any private fund, including the portion of a public fund that represents funds received from a private party.
(2) The provisions of this section apply notwithstanding any provision of State law that would otherwise restrict transfer of those rights by the borrower (or student), limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(3) Nothing in this section limits or forecloses the borrower's (or student's) right to pursue legal and equitable relief regarding disputes arising from matters unrelated to the discharged Direct Loan.
(g) Discharge procedures. (1) After confirming the date of a school's closure, the Secretary identifies any Direct Loan borrower (or student on whose behalf a parent borrowed) who appears to have been enrolled at the school on the school closure date or to have withdrawn not more than 180 days prior to the closure date.
(2) If the borrower's current address is known, the Secretary mails the borrower a discharge application and an explanation of the qualifications and procedures for obtaining a discharge. The Secretary also promptly suspends any efforts to collect from the borrower on any affected loan. The Secretary may continue to receive borrower payments.
(3) If the borrower's current address is unknown, the Secretary attempts to locate the borrower and determines the borrower's potential eligibility for a discharge under this section by consulting with representatives of the closed school, the school's licensing agency, the school's accrediting agency, and other appropriate parties. If the Secretary learns the new address of a borrower, the Secretary mails to the borrower a discharge application and explanation and suspends collection, as described in paragraph (g)(2) of this section.
(4) If a borrower fails to submit the application described in paragraph (d) of this section within 90 days of the Secretary's providing the discharge application, the Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended.
(5) Upon resuming collection on any affected loan, the Secretary provides the borrower another discharge application and an explanation of the requirements and procedures for obtaining a discharge.
(6) If the Secretary determines that a borrower who requests a discharge meets the qualifications for a discharge, the Secretary notifies the borrower in writing of that determination.
(7) If the Secretary determines that a borrower who requests a discharge does not meet the qualifications for a discharge, the Secretary notifies the borrower in writing of that determination and the reasons for the determination.
(h) Exceptional circumstances. For purposes of this section, exceptional circumstances include, but are not limited to—
(1) The revocation or withdrawal by an accrediting agency of the school's institutional accreditation;
(2) The school is or was placed on probation or issued a show-cause order, or was placed on an equivalent accreditation status, by its accrediting agency for failing to meet one or more of the agency's standards;
(3) The revocation or withdrawal by the State authorization or licensing authority to operate or to award academic credentials in the State;
(4) The termination by the Department of the school's participation in a title IV, HEA program;
(5) A finding by a State or Federal government agency that the school violated State or Federal law related to education or services to students;
(6) A State or Federal court judgment that a School violated State or Federal law related to education or services to students;
(7) The teach-out of the student's educational program exceeds the 180-day look-back period for a closed school discharge;
(8) The school responsible for the teach-out of the student's educational program fails to perform the material terms of the teach-out plan or agreement, such that the student does not have a reasonable opportunity to complete his or her program of study;
(9) The school discontinued a significant share of its academic programs;
(10) The school permanently closed all or most of its in-person locations while maintaining online programs; and
(11) The school was placed on the heightened cash monitoring payment method as defined in § 668.162(d)(2) of this chapter.
(a) Basis for discharge—(1) False certification. The Secretary discharges a borrower's (and any endorser's) obligation to repay a Direct Loan in accordance with the provisions of this section if a school falsely certifies the eligibility of the borrower (or the student on whose behalf a parent borrowed) to receive the proceeds of a Direct Loan. The Secretary considers a student's eligibility to borrow to have been falsely certified by the school if the school—
(i) Certified the eligibility of a student who—
(A) Reported not having a high school diploma or its equivalent; and
(B) Did not satisfy the alternative to graduation from high school requirements under section 484(d) of the Act and 34 CFR 668.32(e) of this chapter that were in effect when the loan was originated;
(ii) Certified the eligibility of a student who is not a high school graduate based on—
(A) A high school graduation status falsified by the school; or
(B) A high school diploma falsified by the school or a third party to which the school referred the borrower;
(iii) Signed the borrower's name on the loan application or promissory note without the borrower's authorization;
(iv) Certified the eligibility of the student who, because of a physical or mental condition, age, criminal record, or other reason accepted by the Secretary, would not meet State requirements for employment (in the student's State of residence when the loan was originated) in the occupation for which the training program supported by the loan was intended; or
(v) Certified the eligibility of a student for a Direct Loan as a result of the crime of identity theft committed against the individual, as that crime is defined in paragraph (c)(6) of this section.
(2) Unauthorized payment. The Secretary discharges a borrower's (and any endorser's) obligation to repay a Direct Loan if the school, without the borrower's authorization, endorsed the borrower's loan check or signed the borrower's authorization for electronic funds transfer, unless the proceeds of the loan were delivered to the student or applied to charges owed by the student to the school.
(3) Loan origination. For purposes of this section, a loan is originated when the school submits the loan record to the Department's Common Origination and Disbursement (COD) System. Before originating a Direct Loan, a school must determine the student's or parent's eligibility for the loan. For each Direct Loan that a school disburses to a student or parent, the school must first submit a loan award record to the COD system and receive an accepted response.
(b) Relief pursuant to discharge. (1) Discharge for false certification under paragraph (a)(1) of this section relieves the borrower of any past or present obligation to repay the loan and any accrued charges and collection costs with respect to the loan.
(2) Discharge for unauthorized payment under paragraph (a)(2) of this section relieves the borrower of the obligation to repay the amount of the payment discharged.
(3) The discharge under this section qualifies the borrower for reimbursement of amounts paid voluntarily or through enforced collection on the discharged loan or payment.
(4) The Secretary does not regard a borrower who has defaulted on a loan discharged under this section as in default on the loan after discharge, and such a borrower is eligible to receive assistance under programs authorized by title IV of the Act.
(5) The Secretary reports the discharge under this section to all consumer reporting agencies to which the Secretary previously reported the status of the loan, so as to delete all adverse credit history assigned to the loan.
(c) Borrower qualification for discharge. To qualify for discharge under this paragraph, the borrower must submit to the Secretary an application for discharge on a form approved by the Secretary. The application need not be notarized but must be made by the borrower under penalty of perjury; and in the application, the borrower's responses must demonstrate to the satisfaction of the Secretary that the requirements in paragraphs (c)(1) through (7) of this section have been met. If the Secretary determines the application does not meet the requirements, the Secretary notifies the applicant and explains why the application does not meet the requirements.
(1) High school diploma or equivalent. In the case of a borrower requesting a discharge based on not having a high school diploma and not having met the alternative to graduation from high school eligibility requirements under section 484(d) of the Act and 34 CFR 668.32(e) of this chapter as applicable when the loan was originated, and the school or a third party to which the school referred the borrower falsified the student's high school diploma, the borrower must state in the application that the borrower (or the student on whose behalf a parent received a PLUS loan)—
(i) Reported not having a valid high school diploma or its equivalent when the loan was originated; and
(ii) Did not satisfy the alternative to graduation from high school statutory or regulatory eligibility requirements identified on the application form and applicable when the loan was originated.
(2) Disqualifying condition. In the case of a borrower requesting a discharge based on a condition that would disqualify the borrower from employment in the occupation that the training program for which the borrower received the loan was intended, the borrower must state in the application that the borrower (or student for whom a parent received a PLUS loan) did not meet State requirements for employment in the student's State of residence in the occupation that the training program for which the borrower received the loan was intended because of a physical or mental condition, age, criminal record, or other reason accepted by the Secretary.
(3) Unauthorized loan. In the case of a borrower requesting a discharge because the school signed the borrower's name on the loan application or promissory note without the borrower's authorization, the borrower must state that he or she did not sign the document in question or authorize the school to do so.
(4) Unauthorized payment. In the case of a borrower requesting a discharge because the school, without the borrower's authorization, endorsed the borrower's loan check or signed the borrower's authorization for electronic funds transfer, the borrower must—
(i) State that he or she did not endorse the loan check or sign the authorization for electronic funds transfer or authorize the school to do so; and
(ii) State that the proceeds of the contested disbursement were not delivered to the student or applied to charges owed by the student to the school.
(5) Identity theft. In the case of an individual whose eligibility to borrow was falsely certified because he or she was a victim of the crime of identity theft and is requesting a discharge, the individual must—
(i) Certify that the individual did not sign the promissory note, or that any other means of identification used to obtain the loan was used without the authorization of the individual claiming relief;
(ii) Certify that the individual did not receive or benefit from the proceeds of the loan with knowledge that the loan had been made without the authorization of the individual; and
(iii) Provide a statement of facts and supporting evidence that demonstrate, to the satisfaction of the Secretary, that eligibility for the loan in question was falsely certified as a result of identity theft committed against that individual. Supporting evidence may include—
(A) A judicial determination of identity theft relating to the individual;
(B) A Federal Trade Commission identity theft affidavit;
(C) A police report alleging identity theft relating to the individual;
(D) Documentation of a dispute of the validity of the loan due to identity theft filed with at least three major consumer reporting agencies; and
(E) Other evidence acceptable to the Secretary.
(6) Definition of identity theft. (i) For purposes of this section, identity theft is defined as the unauthorized use of the identifying information of another individual that is punishable under 18 U.S.C. 1028, 1028A, 1029, or 1030, or substantially comparable State or local law.
(ii) Identifying information includes, but is not limited to—
(A) Name, Social Security number, date of birth, official State or government issued driver's license or identification number, alien registration number, government passport number, and employer or taxpayer identification number;
(B) Unique biometric data, such as fingerprints, voiceprint, retina or iris image, or unique physical representation;
(C) Unique electronic identification number, address, or routing code; or
(D) Telecommunication identifying information or access device (as defined in 18 U.S.C. 1029(e)).
(7) Claim to third party. The borrower must state whether the borrower (or student) has made a claim with respect to the school's false certification or unauthorized payment with any third party, such as the holder of a performance bond or a tuition recovery program, and, if so, the amount of any payment received by the borrower (or student) or credited to the borrower's loan obligation.
(8) Cooperation with Secretary. The borrower must state that the borrower (or student)—
(i) Agrees to provide to the Secretary upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(ii) Agrees to cooperate with the Secretary in enforcement actions as described in § 685.214(d) and to transfer any right to recovery against a third party to the Secretary as described in § 685.214(e).
(9) Discharge without an application. The Secretary discharges all or part of a loan as appropriate under this section without an application from the borrower if the Secretary determines, based on information in the Secretary's possession, that the borrower qualifies for a discharge. Such information includes, but is not limited to, evidence that the school has falsified the Satisfactory Academic Progress of its students, as described in § 668.34.
(10) Application for group discharge. A State Attorney General or nonprofit legal services representative may submit to the Secretary an application for a group discharge under this section.
(d) Discharge procedures. (1) If the Secretary determines that a borrower's Direct Loan may be eligible for a discharge under this section, the Secretary provides the borrower an application and an explanation of the qualifications and procedures for obtaining a discharge. The Secretary also promptly suspends any efforts to collect from the borrower on any affected loan. The Secretary may continue to receive borrower payments.
(2) If the borrower fails to submit the application for discharge and supporting information described in paragraph (c) of this section within 60 days of the Secretary's providing the application, the Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended.
(3) If the borrower submits an application for discharge that the Secretary determines is incomplete, the Secretary notifies the borrower of that determination and allows the borrower an additional 30-days to amend their application and provide supplemental information. If the borrower does not amend their application within 30 days of receiving the notification from the Secretary, the borrower's application is closed as incomplete and the Secretary resumes collection of the loan and grants forbearance of principal and interest for the period in which collection activity was suspended.
(4) If the borrower submits a completed application described in paragraph (c) of this section, the Secretary determines whether the available evidence supports the claim for discharge. Available evidence includes evidence provided by the borrower and any other relevant information from the Secretary's records and gathered by the Secretary from other sources, including guaranty agencies, other Federal agencies, State authorities, test publishers, independent test administrators, school records, and cognizant accrediting associations. The Secretary issues a decision that explains the reasons for any adverse determination on the application, describes the evidence on which the decision was made, and provides the borrower, upon request, copies of the evidence. The Secretary considers any response from the borrower and any additional information from the borrower and notifies the borrower whether the determination is changed.
(5) If the Secretary determines that the borrower meets the applicable requirements for a discharge under paragraph (c) of this section, the Secretary notifies the borrower in writing of that determination.
(6) If the Secretary determines that the borrower does not qualify for a discharge, the Secretary notifies the borrower in writing of that determination and the reasons for the determination.
(7) A borrower is not precluded from re-applying for a discharge under paragraph (c) of this section if the discharge request is closed as incomplete, or if the Secretary determines that the borrower does not qualify for a discharge if the borrower provides additional supporting evidence.
(a)(1) Unpaid refunds in closed school situations. In the case of a school that has closed, the Secretary discharges a former or current borrower's (and any endorser's) obligation to repay that portion of a Direct Loan equal to the refund that should have been made by the school under applicable law and regulations, including this section. Any accrued interest and other charges associated with the unpaid refund are also discharged.
(2) Unpaid refunds in open school situations. (i) In the case of a school that is open, the Secretary discharges a former or current borrower's (and any endorser's) obligation to repay that portion of a Direct Loan equal to the refund that should have been made by the school under applicable law and regulations, including this section, if—
(A) The borrower (or the student on whose behalf a parent borrowed) is not attending the school that owes the refund;
(B) The borrower has been unable to resolve the unpaid refund with the school; and
(C) The Secretary is unable to resolve the unpaid refund with the school within 120 days from the date the borrower submits a complete application in accordance with paragraph (c)(1) of this section regarding the unpaid refund. Any accrued interest and other charges associated with the unpaid refund are also discharged.
(ii) For the purpose of paragraph (a)(2)(i)(C) of this section, within 60 days of the date notified by the Secretary, the school must submit to the Secretary documentation demonstrating that the refund was made by the school or that the refund was not required to be made by the school.
(b) Relief to borrower following discharge. (1) If the borrower receives a discharge of a portion of a loan under this section, the borrower is reimbursed for any amounts paid in excess of the remaining balance of the loan (including accrued interest and other charges) owed by the borrower at the time of discharge.
(2) The Secretary reports the discharge of a portion of a loan under this section to all consumer reporting agencies to which the Secretary previously reported the status of the loan.
(c) Borrower qualification for discharge. (1) Except as provided in paragraph (c)(2) of this section, to receive a discharge of a portion of a loan under this section, a borrower must submit a written application to the Secretary. The application requests the information required to calculate the amount of the discharge and requires the borrower to sign a statement swearing to the accuracy of the information in the application. The statement need not be notarized but must be made by the borrower under penalty of perjury. In the statement, the borrower must—
(i) State that the borrower (or the student on whose behalf a parent borrowed)—
(A) Received the proceeds of a loan, in whole or in part, on or after January 1, 1986 to attend a school;
(B) Did not attend, withdrew, or was terminated from the school within a timeframe that entitled the borrower to a refund; and
(C) Did not receive the benefit of a refund to which the borrower was entitled either from the school or from a third party, such as the holder of a performance bond or a tuition recovery program;
(ii) State whether the borrower (or student) has any other application for discharge pending for this loan; and
(iii) State that the borrower (or student)—
(A) Agrees to provide to the Secretary upon request other documentation reasonably available to the borrower that demonstrates that the borrower meets the qualifications for discharge under this section; and
(B) Agrees to cooperate with the Secretary in enforcement actions as described in § 685.214(d) and to transfer any right to recovery against a third party to the Secretary as described in § 685.214(e).
(2) The Secretary may discharge a portion of a loan under this section without an application if the Secretary determines, based on information in the Secretary's possession, that the borrower qualifies for a discharge.
(d) Determination of amount eligible for discharge. (1) The Secretary determines the amount eligible for discharge based on information showing the refund amount or by applying the appropriate refund formula to information that the borrower provides or that is otherwise available to the Secretary. For purposes of this section, all unpaid refunds are considered to be attributed to loan proceeds.
(2) If the information in paragraph (d)(1) of this section is not available, the Secretary uses the following formulas to determine the amount eligible for discharge:
(i) In the case of a student who fails to attend or whose withdrawal or termination date is before October 7, 2000 and who completes less than 60 percent of the loan period, the Secretary discharges the lesser of the institutional charges unearned or the loan amount. The Secretary determines the amount of the institutional charges unearned by—
(A) Calculating the ratio of the amount of time remaining in the loan period after the student's last day of attendance to the actual length of the loan period; and
(B) Multiplying the resulting factor by the institutional charges assessed the student for the loan period.
(ii) In the case of a student who fails to attend or whose withdrawal or termination date is on or after October 7, 2000 and who completes less than 60 percent of the loan period, the Secretary discharges the loan amount unearned. The Secretary determines the loan amount unearned by—
(A) Calculating the ratio of the amount of time remaining in the loan period after the student's last day of attendance to the actual length of the loan period; and
(B) Multiplying the resulting factor by the total amount of title IV grants and loans received by the student, or, if unknown, the loan amount.
(iii) In the case of a student who completes 60 percent or more of the loan period, the Secretary does not discharge any amount because a student who completes 60 percent or more of the loan period is not entitled to a refund.
(e) Discharge procedures. (1) Except as provided in paragraph (c)(2) of this section, if the Secretary learns that a school did not make a refund of loan proceeds owed under applicable law and regulations, the Secretary sends the borrower a discharge application and an explanation of the qualifications and procedures for obtaining a discharge. The Secretary also promptly suspends any efforts to collect from the borrower on any affected loan. The Secretary may continue to receive borrower payments.
(2) If a borrower who is sent a discharge application fails to submit the application within 60 days of the Secretary's sending the discharge application, the Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(3) If a borrower qualifies for a discharge, the Secretary notifies the borrower in writing. The Secretary resumes collection and grants forbearance of principal and interest on the portion of the loan not discharged for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(4) If a borrower does not qualify for a discharge, the Secretary notifies the borrower in writing of the reasons for the determination. The Secretary resumes collection and grants forbearance of principal and interest for the period in which collection activity was suspended. The Secretary may capitalize any interest accrued and not paid during that period.
(a) General. (1) The teacher loan forgiveness program is intended to encourage individuals to enter and continue in the teaching profession. For new borrowers, the Secretary repays the amount specified in this paragraph (a) on the borrower's Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, and in certain cases, Direct Consolidation Loans or Federal Consolidation Loans. The forgiveness program is only available to a borrower who has no outstanding loan balance under the Direct Loan Program or the FFEL Program on October 1, 1998, or who has no outstanding loan balance on the date he or she obtains a loan after October 1, 1998.
(2)(i) The borrower must have been employed at an eligible elementary or secondary school that serves low-income families or by an educational service agency that serves low-income families as a full-time teacher for five consecutive complete academic years. The required five years of teaching may include any combination of qualifying teaching service at an eligible elementary or secondary school or for an eligible educational service agency.
(ii) Teaching for an eligible elementary or secondary school may be counted toward the required five consecutive complete academic years only if for least one year of teaching was after the 1997-1998 academic year.
(iii) Teaching at an eligible educational service agency may be counted toward the required five consecutive complete academic years only if the consecutive five-year period includes qualifying service at an eligible educational service agency performed after the 2007-2008 academic year.
(3) All borrowers eligible for teacher loan forgiveness may receive loan forgiveness of up to a combined total of $5,000 on the borrower's eligible Direct Loan and FFEL Program loans.
(4) A borrower may receive loan forgiveness of up to a combined total of $17,500 on the borrower's eligible Direct Loan and FFEL Program loans if the borrower was employed for five consecutive years—
(i) At an eligible secondary school as a highly qualified mathematics or science teacher, or by an eligible educational service agency as a highly qualified teacher of mathematics or science to secondary school students; or
(ii) At an eligible elementary or secondary school or by an eligible educational service agency as a highly qualified special education teacher.
(5) The loan for which the borrower is seeking forgiveness must have been made prior to the end of the borrower's fifth year of qualifying teaching service.
(b) Definitions. The following definitions apply to this section:
Academic year means one complete school year at the same school, or two complete and consecutive half years at different schools, or two complete and consecutive half years from different school years at either the same school or different schools. Half years exclude summer sessions and generally fall within a twelve-month period. For schools that have a year-round program of instruction, a minimum of nine months is considered an academic year.
Educational service agency means a regional public multiservice agency authorized by State statute to develop, manage, and provide services or programs to local educational agencies, as defined in section 9101 of the Elementary and Secondary Education Act of 1965, as amended.
Elementary school means a public or nonprofit private school that provides elementary education as determined by State law or the Secretary if that school is not in a State.
Full-time means the standard used by a State in defining full-time employment as a teacher. For a borrower teaching in more than one school, the determination of full-time is based on the combination of all qualifying employment.
Highly qualified means highly qualified as defined in section 9101 of the Elementary and Secondary Education Act of 1965, as amended.
Secondary school means a public or nonprofit private school that provides secondary education as determined by State law or the Secretary if the school is not in a State.
Teacher means a person who provides direct classroom teaching or classroom-type teaching in a non-classroom setting, including Special Education teachers.
(c) Borrower eligibility. (1) A borrower who has been employed at an elementary or secondary school or by an educational service agency as a full-time teacher for five consecutive complete academic years may obtain loan forgiveness under this program if the elementary or secondary school or educational service agency—
(i) Is in a school district that qualifies for funds under title I of the Elementary and Secondary Education Act of 1965, as amended;
(ii) Has been selected by the Secretary based on a determination that more than 30 percent of the school's or educational service agency's total enrollment is made up of children who qualify for services provided under title I; and
(iii) Is listed in the Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits. If this directory is not available before May 1 of any year, the previous year's directory may be used.
(2) The Secretary considers all elementary and secondary schools operated by the Bureau of Indian Education (BIE) or operated on Indian reservations by Indian tribal groups under contract with the BIE to qualify as schools serving low-income students.
(3) If the school or educational service agency at which the borrower is employed meets the requirements specified in paragraph (c)(1) of this section for at least one year of the borrower's five consecutive complete academic years of teaching and fails to meet those requirements in subsequent years, those subsequent years of teaching qualify for purposes of this section for that borrower.
(4) In the case of a borrower whose five consecutive complete years of qualifying teaching service began before October 30, 2004, the borrower—
(i) May receive up to $5,000 of loan forgiveness if the borrower—
(A) Demonstrated knowledge and teaching skills in reading, writing, mathematics, and other areas of the elementary school curriculum, as certified by the chief administrative officer of the eligible elementary school or educational service agency where the borrower was employed; or
(B) Taught in a subject area that is relevant to the borrower's academic major as certified by the chief administrative officer of the eligible secondary school or educational service agency where the borrower was employed.
(ii) May receive up to $17,500 of loan forgiveness if the borrower—
(A) Taught mathematics or science on a full-time basis at an eligible secondary school, or taught mathematics or science to secondary school students on a full-time basis for an eligible educational service agency, and was a highly qualified mathematics or science teacher; or
(B) Taught as a special education teacher on a full-time basis to children with disabilities at an eligible elementary or secondary school or for an eligible educational service agency and was a highly qualified special education teacher whose special education training corresponded to the children's disabilities and who has demonstrated knowledge and teaching skills in the content areas of the elementary or secondary school curriculum.
(iii) Teaching service performed at an eligible educational service agency may be counted toward the required five years of teaching only if the consecutive five-year period includes qualifying service at an eligible educational service agency performed after the 2007-2008 academic year.
(5) In the case of a borrower whose five consecutive years of qualifying teaching service began on or after October 30, 2004, the borrower—
(i) May receive up to $5,000 of loan forgiveness if the borrower taught full time at an eligible elementary or secondary school or educational service agency and was a highly qualified elementary or secondary school teacher.
(ii) May receive up to $17,500 of loan forgiveness if the borrower—
(A) Taught mathematics or science on a full-time basis at an eligible secondary school, or taught mathematics or science on a full-time basis to secondary school students for an eligible educational service agency, and was a highly qualified mathematics or science teacher; or
(B) Taught as a special education teacher on a full-time basis to children with disabilities at an eligible elementary or secondary school or for an eligible educational service agency and was a highly qualified special education teacher whose special education training corresponded to the children's disabilities and who has demonstrated knowledge and teaching skills in the content areas of the elementary or secondary school curriculum.
(iii) Teaching service performed for an eligible educational service agency may be counted toward the required five years of teaching only if the consecutive five-year period includes qualifying service for an eligible educational service agency performed after the 2007-2008 academic year.
(6) To qualify for loan forgiveness as a highly qualified teacher, the teacher must have been a highly qualified teacher for all five years of eligible teaching service.
(7) For teacher loan forgiveness applications received by the Secretary on or after July 1, 2006, a teacher in a private, non-profit elementary or secondary school who is exempt from State certification requirements (unless otherwise applicable under State law) may qualify for loan forgiveness under paragraphs (c)(4)(ii) or (c)(5) of this section if—
(i) The private school teacher is permitted to and does satisfy rigorous subject knowledge and skills tests by taking competency tests in applicable grade levels and subject areas;
(ii) The competency tests are recognized by 5 or more States for the purposes of fulfilling the highly qualified teacher requirements under section 9101 of the Elementary and Secondary Education Act of 1965; and
(iii) The private school teacher achieves a score on each test that equals or exceeds the average passing score for those 5 states.
(8) The academic year may be counted as one of the borrower's five consecutive complete academic years if the borrower completes at least one-half of the academic year and the borrower's employer considers the borrower to have fulfilled his or her contract requirements for the academic year for the purposes of salary increases, tenure, and retirement if the borrower is unable to complete an academic year due to—
(i) A return to postsecondary education, on at least a half-time basis, that is directly related to the performance of the service described in this section;
(ii) A condition that is covered under the Family and Medical Leave Act of 1993 (FMLA) (29 U.S.C. 2601, et seq.); or
(iii) A call or order to active duty status for more than 30 days as a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code.
(9) A borrower's period of postsecondary education, qualifying FMLA condition, or military active duty as described in paragraph (c)(8) of this section, including the time necessary for the borrower to resume qualifying teaching no later than the beginning of the next regularly scheduled academic year, does not constitute a break in the required five consecutive years of qualifying teaching service.
(10) A borrower who was employed as a teacher at more than one qualifying school, for more than one qualifying educational service agency, or a combination of both during an academic year and demonstrates that the combined teaching was the equivalent of full-time, as supported by the certification of one or more of the chief administrative officers of the schools or educational service agencies involved, is considered to have completed one academic year of qualifying teaching.
(11) A borrower is not eligible for teacher loan forgiveness on a defaulted loan unless the borrower has made satisfactory repayment arrangements to re-establish title IV eligibility, as defined in § 685.200(b).
(12) A borrower may not receive loan forgiveness for the same qualifying teaching service under this section if the borrower receives a benefit for the same teaching service under—
(i) Subtitle D of title I of the National and Community Service Act of 1990;
(ii) 34 CFR 685.219; or
(iii) Section 428 K of the Act.
(13) A borrower may request forbearance during each of the five years of qualifying teaching service in accordance with § 685.205(a)(5).
(d) Forgiveness amount. (1) A qualified borrower is eligible for forgiveness of up to $5,000, or up to $17,500 if the borrower meets the requirements of paragraph (c)(4)(ii) or (c)(5)(ii) of this section. The forgiveness amount is deducted from the aggregate amount of the borrower's Direct Subsidized Loan or Direct Unsubsidized Loan or Direct Consolidation Loan obligation that is outstanding after the borrower completes his or her fifth consecutive complete academic year of teaching as described in paragraph (c) of this section. Only the outstanding portion of the Direct Consolidation Loan that was used to repay an eligible Direct Subsidized Loan, an eligible Direct Unsubsidized Loan, or an eligible Subsidized or Unsubsidized Federal Stafford Loan qualifies for loan forgiveness under this section.
(2) A borrower may not receive more than a total of $5,000, or $17,500 if the borrower meets the requirements of paragraph (c)(4)(ii) or (c)(5)(ii) of this section, in loan forgiveness for outstanding principal and accrued interest under both this section and under section 34 CFR 682.216.
(3) The Secretary does not refund payments that were received from or on behalf of a borrower who qualifies for loan forgiveness under this section.
(e) Application. (1) A borrower, after completing the qualifying teacher service, must request loan forgiveness from the Secretary on a form provided by the Secretary.
(2) If the Secretary determines that the borrower meets the eligibility requirements for loan forgiveness under this section, the Secretary—
(i) Notifies the borrower of this determination; and
(ii) Unless otherwise instructed by the borrower, applies the proceeds of the loan forgiveness first to any outstanding Direct Unsubsidized Loan balances, next to any outstanding Direct Subsidized Loan balances, next to any qualifying Direct Unsubsidized Consolidation Loan balances, and last to any qualifying outstanding Direct Subsidized Consolidation Loan balances.
(3) If the Secretary determines that the borrower does not meet the eligibility requirements for loan forgiveness under this section, the Secretary notifies the borrower of this determination.
(a) Definition of terms. As used in this section—
(1) Eligible public servant means an individual who—
(i) Served as a police officer, firefighter, other safety or rescue personnel, or as a member of the Armed Forces; and
(ii)(A) Died due to injuries suffered in the terrorist attacks on September 11, 2001; or
(B) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(2) Eligible victim means an individual who died due to injuries suffered in the terrorist attacks on September 11, 2001 or became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(3) Eligible parent means the parent of an eligible victim if—
(i) The parent owes a Direct PLUS Loan incurred on behalf of an eligible victim; or
(ii) The parent owes a Direct Consolidation Loan that was used to repay a Direct PLUS Loan or a FFEL PLUS Loan incurred on behalf of an eligible victim.
(4) Died due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001, and the individual died as a direct result of these crashes.
(5) Became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 means the individual was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of or in the immediate aftermath of the terrorist-related aircraft crashes on September 11, 2001 and the individual became permanently and totally disabled as a direct result of these crashes.
(i) An individual is considered permanently and totally disabled if—
(A) The disability is the result of a physical injury to the individual that was treated by a medical professional within 72 hours of the injury having been sustained or within 72 hours of the rescue;
(B) The physical injury that caused the disability is verified by contemporaneous medical records created by or at the direction of the medical professional who provided the medical care; and
(C) The individual is unable to work and earn money due to the disability and the disability is expected to continue indefinitely or result in death.
(ii) If the injuries suffered due to the terrorist-related aircraft crashes did not make the individual permanently and totally disabled at the time of or in the immediate aftermath of the attacks, the individual may be considered to be permanently and totally disabled for purposes of this section if the individual's medical condition has deteriorated to the extent that the individual is permanently and totally disabled.
(6) Immediate aftermath means, except in the case of an eligible public servant, the period of time from the aircraft crashes until 12 hours after the crashes. With respect to eligible public servants, the immediate aftermath includes the period of time from the aircraft crashes until 96 hours after the crashes.
(7) Present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site means physically present at the time of the terrorist-related aircraft crashes or in the immediate aftermath—
(i) In the buildings or portions of the buildings that were destroyed as a result of the terrorist-related aircraft crashes;
(ii) In any area contiguous to the crash site that was sufficiently close to the site that there was a demonstrable risk of physical harm resulting from the impact of the aircraft or any subsequent fire, explosions, or building collapses. Generally, this includes the immediate area in which the impact occurred, fire occurred, portions of buildings fell, or debris fell upon and injured persons; or
(iii) On board American Airlines flights 11 or 77 or United Airlines flights 93 or 175 on September 11, 2001.
(b) September 11 survivors discharge. (1) The Secretary discharges the obligation of a borrower and any endorser to make any further payments on an eligible Direct Loan if the borrower was, at the time of the terrorist attacks on September 11, 2001, and currently is, the spouse of an eligible public servant, unless the eligible public servant has died. If the eligible public servant has died, the borrower must have been the spouse of the eligible public servant at the time of the terrorist attacks on September 11, 2001 and until the date the eligible public servant died.
(2) The Secretary discharges the obligation of a borrower and any endorser to make any further payments towards the portion of a joint Direct Consolidation Loan incurred on behalf of an eligible victim if the borrower was, at the time of the terrorist attacks on September 11, 2001, and currently is, the spouse of an eligible victim, unless the eligible victim has died. If the eligible victim has died, the borrower must have been the spouse of the eligible victim at the time of the terrorist attacks on September 11, 2001 and until the date the eligible victim died.
(3) If the borrower is an eligible parent—
(i) The Secretary discharges the obligation of a borrower and any endorser to make any further payments on a Direct PLUS Loan incurred on behalf of an eligible victim.
(ii) The Secretary discharges the obligation of the borrower and any endorser to make any further payments towards the portion of a Direct Consolidation Loan that repaid a PLUS Loan incurred on behalf of an eligible victim.
(4) The parent of an eligible public servant may qualify for a discharge of a Direct PLUS loan incurred on behalf of the eligible public servant, or the portion of a Direct Consolidation Loan that repaid a Direct or FFEL PLUS Loan incurred on behalf of the eligible public servant, under the procedures, eligibility criteria, and documentation requirements described in this section for an eligible parent applying for a discharge of a loan incurred on behalf of an eligible victim.
(c) Applying for discharge. (1) In accordance with the procedures in paragraphs (c)(2) through (c)(4) of this section, the Secretary discharges—
(i) A Direct Loan owed by the spouse of an eligible public servant;
(ii) A Direct PLUS Loan incurred on behalf of an eligible victim;
(iii) The portion of a Direct Consolidation Loan that repaid a PLUS loan incurred on behalf of an eligible victim; and
(iv) The portion of a joint Direct Consolidation Loan incurred on behalf of an eligible victim.
(2) After being notified by the borrower that the borrower claims to qualify for a discharge under this section, the Secretary suspends collection activity on the borrower's eligible Direct Loans and requests that the borrower submit a request for discharge on a form approved by the Secretary.
(3) If the Secretary determines that the borrower does not qualify for a discharge under this section, or the Secretary does not receive the completed discharge request form from the borrower within 60 days of the borrower notifying the Secretary that the borrower claims to qualify for a discharge, the Secretary resumes collection and grants forbearance of payment of both principal and interest for the period in which collection activity was suspended. The Secretary notifies the borrower that the application for the discharge has been denied, provides the basis for the denial, and informs the borrower that the Secretary will resume collection on the loan. The Secretary may capitalize any interest accrued and not paid during this period.
(4) If the Secretary determines that the borrower qualifies for a discharge under this section, the Secretary notifies the borrower that the loan has been discharged or, in the case of a partial discharge of a Direct Consolidation Loan, partially discharged. Except in the case of a partial discharge of a Direct Consolidation Loan, the Secretary returns to the sender any payments received by the Secretary after the date the loan was discharged.
(5) The Secretary discharges a Direct Loan owed by an eligible victim or an eligible public servant under the procedures in § 685.212 for a discharge based on death or under the procedures in § 685.213 for a discharge based on a total and permanent disability.
(d) Documentation that an eligible public servant or eligible victim died due to injuries suffered in the terrorist attacks on September 11, 2001. (1) Documentation that an eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) A certification from an authorized official that the individual was a member of the Armed Forces, or was employed as a police officer, firefighter, or other safety or rescue personnel, and was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes; and
(ii) The inclusion of the individual on an official list of the individuals who died in the terrorist attacks on September 11, 2001.
(2) If the individual is not included on an official list of the individuals who died in the terrorist attacks on September 11, 2001, the borrower must provide—
(i) The certification described in paragraph (d)(1)(i) of this section;
(ii) An original or certified copy of the individual's death certificate; and
(iii) A certification from a physician or a medical examiner that the individual died due to injuries suffered in the terrorist attacks on September 11, 2001.
(3) If the individual owed a Direct Loan, a FFEL Program Loan, or a Perkins Loan at the time of the terrorist attacks on September 11, 2001, documentation that the individual's loans were discharged by the Secretary, the lender, or the institution due to death may be substituted for the original or certified copy of a death certificate.
(4) Documentation that an eligible victim died due to injuries suffered in the terrorist attacks on September 11, 2001 is the inclusion of the individual on an official list of the individuals who died in the terrorist attacks on September 11, 2001.
(5) If the eligible victim is not included on an official list of the individuals who died in the terrorist attacks on September 11, 2001, the borrower must provide—
(i) The documentation described in paragraphs (d)(2)(ii) or (d)(3), and (d)(2)(iii) of this section; and
(ii) A certification signed by the borrower that the eligible victim was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes.
(6) If the borrower is the spouse of an eligible public servant, and has been granted a discharge on another Direct Loan, a FFEL Program Loan, or a Perkins Loan because the eligible public servant died due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraphs (d)(1) through (d)(3) of this section.
(7) If the borrower is the spouse or parent of an eligible victim, and has been granted a discharge on another Direct Loan or a FFEL Program Loan because the eligible victim died due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraphs (d)(4) and (d)(5) of this section.
(8) The Secretary may discharge the loan based on other reliable documentation that establishes, to the Secretary's satisfaction, that the eligible public servant or the eligible victim died due to injuries suffered in the September 11, 2001 attacks. The Secretary discharges a loan based on documentation other than the documentation specified in paragraphs (d)(1) through (d)(5) of this section only under exceptional circumstances and on a case-by-case basis.
(e) Documentation that an eligible public servant or eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001. (1) Documentation that an eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) A certification from an authorized official that the individual was a member of the Armed Forces or was employed as a police officer, firefighter or other safety or rescue personnel, and was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes;
(ii) Copies of contemporaneous medical records created by or at the direction of a medical professional who provided medical care to the individual within 72 hours of the injury having been sustained or within 72 hours of the rescue; and
(iii) A certification by a physician, who is a doctor of medicine or osteopathy and legally authorized to practice in a state, that the individual became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001.
(2) Documentation that an eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 must include—
(i) The documentation described in paragraphs (e)(1)(ii) and (e)(1)(iii) of this section; and
(ii) A certification signed by the borrower that the eligible victim was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site at the time of the terrorist-related aircraft crashes or in the immediate aftermath of these crashes.
(3) If the borrower is the spouse of an eligible public servant, and has been granted a discharge on a Perkins Loan, a FFEL Program loan, or another Direct Loan because the eligible public servant became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraph (e)(1) of this section.
(4) If the borrower is the spouse or parent of an eligible victim, and has been granted a discharge on a FFEL Program Loan, or another Direct Loan because the eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001, documentation of the discharge may be used as an alternative to the documentation in paragraph (e)(2) of this section.
(f) Additional information. (1) The Secretary may require the borrower to submit additional information that the Secretary deems necessary to determine the borrower's eligibility for a discharge under this section.
(2) To establish that the eligible public servant or eligible victim was present at the World Trade Center in New York City, New York, at the Pentagon in Virginia, or at the Shanksville, Pennsylvania site, such additional information may include but is not limited to—
(i) Records of employment;
(ii) Contemporaneous records of a federal, state, city, or local government agency;
(iii) An affidavit or declaration of the eligible public servant's or eligible victim's employer; or
(iv) A sworn statement (or an unsworn statement complying with 28 U.S.C. 1746) regarding the presence of the eligible public servant or eligible victim at the site.
(3) To establish that the disability of the eligible public servant or eligible victim is due to injuries suffered in the terrorist attacks on September 11, 2001, such additional information may include but is not limited to—
(i) Contemporaneous medical records of hospitals, clinics, physicians, or other licensed medical personnel;
(ii) Registries maintained by federal, state, or local governments; or
(iii) Records of all continuing medical treatment.
(4) To establish the borrower's relationship to the eligible public servant or eligible victim, such additional information may include but is not limited to—
(i) Copies of relevant legal records including court orders, letters of testamentary or similar documentation;
(ii) Copies of wills, trusts, or other testamentary documents; or
(iii) Copies of approved joint Direct Loan or FFEL Consolidation Loan applications or an approved Direct or FFEL PLUS Loan application.
(g) Limitations on discharge. (1) Only outstanding Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans for which amounts were owed on September 11, 2001, or outstanding Direct Consolidation Loans incurred to pay off loan amounts that were owed on September 11, 2001, are eligible for discharge under this section.
(2)(i) Eligibility for a discharge under this section does not qualify a borrower for a refund of any payments made on the borrower's Direct Loan prior to the date the loan was discharged.
(ii) A borrower may apply for a partial discharge of a joint Direct Consolidation loan due to death or total and permanent disability under the procedures in § 685.212(a) or § 685.213. If the borrower is granted a partial discharge under the procedures in § 685.212(a) or § 685.213 the borrower may qualify for a refund of payments in accordance with § 685.212(g)(1) or § 685.212(g)(2).
(iii) A borrower may apply for a discharge of a Direct PLUS loan due to the death of the student for whom the borrower received the PLUS loan under the procedures in § 685.212(a). If a borrower is granted a discharge under the procedures in § 685.212(a), the borrower may qualify for a refund of payments in accordance with § 685.212(g)(1).
(3) A determination that an eligible public servant or an eligible victim became permanently and totally disabled due to injuries suffered in the terrorist attacks on September 11, 2001 for purposes of this section does not qualify the eligible public servant or the eligible victim for a discharge based on a total and permanent disability under § 685.213.
(4) The spouse of an eligible public servant or eligible victim may not receive a discharge under this section if the eligible public servant or eligible victim has been identified as a participant or conspirator in the terrorist-related aircraft crashes on September 11, 2001. An eligible parent may not receive a discharge on a Direct PLUS Loan or on a Direct Consolidation Loan that was used to repay a Direct Loan or FFEL Program PLUS Loan incurred on behalf of an individual who has been identified as a participant or conspirator in the terrorist-related aircraft crashes on September 11, 2001.
(a) Purpose. The Public Service Loan Forgiveness Program is intended to encourage individuals to enter and continue in full-time public service employment by forgiving the remaining balance of their Direct loans after they satisfy the public service and loan payment requirements of this section.
(b) Definitions. The following definitions apply to this section:
AmeriCorps service means service in a position approved by the Corporation for National and Community Service under section 123 of the National and Community Service Act of 1990 (42 U.S.C. 12573).
Civilian service to the military means providing services to or on behalf of members, veterans, or the families or survivors of deceased members of the U.S. Armed Forces or the National Guard that is provided to a person because of the person's status in one of those groups.
Early childhood education program means an early childhood education program as defined in section 103(8) of the Act (20 U.S.C. 1003).
Eligible Direct Loan means a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Direct PLUS Loan, or a Direct Consolidation Loan.
Emergency management services means services that help remediate, lessen, or eliminate the effects or potential effects of emergencies that threaten human life or health, or real property.
Employee or employed means an individual—
(i) To whom an organization issues an IRS Form W-2;
(ii) Who receives an IRS Form W-2 from an organization that has contracted with a qualifying employer to provide payroll or similar services for the qualifying employer, and which provides the Form W-2 under that contract;
(iii) who works as a contracted employee for a qualifying employer in a position or providing services which, under applicable state law, cannot be filled or provided by a direct employee of the qualifying employer.
Full-time means:
(i) Working in qualifying employment in one or more jobs—
(A) A minimum average of 30 hours per week during the period being certified,
(B) A minimum of 30 hours per week throughout a contractual or employment period of at least 8 months in a 12-month period, such as elementary and secondary school teachers and professors and instructors, in higher education, in which case the borrower is deemed to have worked full time; or
(C) The equivalent of 30 hours per week as determined by multiplying each credit or contact hour taught per week by at least 3.35 in non-tenure track employment at an institution of higher education.
(ii) Routine paid vacation or paid leave time provided by the employer, and leave taken under the Family and Medical Leave Act of 1993 (29 U.S.C. 2612(a)(1)) will be considered when determining if the borrower is working full-time.
Law enforcement means service that is publicly funded and whose principal activities pertain to crime prevention, control or reduction of crime, or the enforcement of criminal law.
Military service means “active duty” service or “full-time National Guard duty” as defined in section 101(d)(1) and (d)(5) of title 10 in the United States Code and does not include active duty for training or attendance at a service school.
Non-governmental public service means services provided by employees of a non-governmental qualified employer where the employer has devoted a majority of its full-time equivalent employees to working in at least one of the following areas (as defined in this section): emergency management, civilian service to military personnel, military service, public safety, law enforcement, public interest law services, early childhood education, public service for individuals with disabilities or the elderly, public health, public education, public library services, school library, or other school-based services. Service as a member of the U.S. Congress is not qualifying public service employment for purposes of this section.
Non-tenure track employment means work performed by adjunct, contingent or part time faculty, teachers, or lecturers who are paid based on the credit hours they teach at institutions of higher education.
Other school-based service means the provision of services to schools or students in a school or a school-like setting that are not public education services, such as school health services and school nurse services, social work services in schools, and parent counseling and training.
Peace Corps position means a full-time assignment under the Peace Corps Act as provided for under 22 U.S.C. 2504.
Public education service means the provision of educational enrichment or support to students in a public school or a public school-like setting, including teaching.
Public health means those engaged in the following occupations (as those terms are defined by the Bureau of Labor Statistics): physicians, nurse practitioners, nurses in a clinical setting, health care practitioners, health care support, counselors, social workers, and other community and social service specialists.
Public interest law means legal services that are funded in whole or in part by a local, State, Federal, or Tribal government.
Public library service means the operation of public libraries or services that support their operation.
Public safety service means services that seek to prevent the need for emergency management services.
Public service for individuals with disabilities means services performed for or to assist individuals with disabilities (as defined in the Americans with Disabilities Act (42 U.S.C. 12102)) that is provided to a person because of the person's status as an individual with a disability.
Public service for the elderly means services that are provided to individuals who are aged 62 years or older and that are provided to a person because of the person's status as an individual of that age.
Qualifying employer means:
(i) A United States-based Federal, State, local, or Tribal government organization, agency, or entity, including the U.S. Armed Forces or the National Guard;
(ii) A public child or family service agency;
(iii) An organization under section 501(c)(3) of the Internal Revenue Code of 1986 that is exempt from taxation under section 501(a) of the Internal Revenue Code;
(iv) A Tribal college or university; or
(v) A nonprofit organization that—
(A) Provides a non-governmental public service as defined in this section, attested to by the employer on a form approved by the Secretary; and
(B) Is not a business organized for profit, a labor union, or a partisan political organization.
Qualifying repayment plan means:
(i) An income-driven repayment plan under § 685.209;
(ii) The 10-year standard repayment plan under § 685.208(b) or the consolidation loan standard repayment plan with a 10-year repayment term under § 685.208(c); or
(iii) Except for the alternative repayment plan, any other repayment plan if the monthly payment amount is not less than what would have been paid under the 10-year standard repayment plan under § 685.208(b).
School library services means the operations of school libraries or services that support their operation.
(c) Borrower eligibility. (1) A borrower may obtain loan forgiveness under this program if the borrower—
(i) Is not in default on the loan at the time forgiveness is requested;
(ii) Is employed full-time by a qualifying employer or serving in a full-time AmeriCorps or Peace Corps position—
(A) When the borrower satisfied the 120 monthly payments described under paragraph (c)(1)(iii) of this section; and
(B) At the time the borrower applies for forgiveness under paragraph (e) of this section; and
(iii) Satisfies the equivalent of 120 monthly payments after October 1, 2007, as described in paragraph (c)(2) of this section, on eligible Direct loans.
(2) A borrower will be considered to have made monthly payments under paragraph (c)(1)(iii) of this section by—
(i) Paying at least the full scheduled amount due for a monthly payment under the qualifying repayment plan;
(ii) Paying in multiple installments that equal the full scheduled amount due for a monthly payment under the qualifying repayment plan;
(iii) For a borrower on an income-driven repayment plan under § 685.209, paying a lump sum or monthly payment amount that is equal to or greater than the full scheduled amount in advance of the borrower's scheduled payment due date for a period of months not to exceed the period from the Secretary's receipt of the payment until the borrower's next annual repayment plan recertification date under the qualifying repayment plan in which the borrower is enrolled;
(iv) For a borrower on the 10-year standard repayment plan under § 685.208(b) or the consolidation loan standard repayment plan with a 10-year repayment term under § 685.208(c), paying a lump sum or monthly payment amount that is equal to or greater than the full scheduled amount in advance of the borrower's scheduled payment due date for a period of months not to exceed the period from the Secretary's receipt of the payment until the lesser of 12 months from that date or the date upon which the Secretary receives the borrower's next submission under subsection (e).
(v) Receiving one of the following deferments or forbearances for the month:
(A) Cancer treatment deferment under section 455(f)(3) of the Act;
(B) Economic hardship deferment under § 685.204(g);
(C) Military service deferment under § 685.204(h);
(D) Post-active-duty student deferment under § 685.204(i);
(E) AmeriCorps forbearance under § 685.205(a)(4);
(F) National Guard Duty forbearance under § 685.205(a)(7);
(G) U.S. Department of Defense Student Loan Repayment Program forbearance under § 685.205(a)(9);
(H) Administrative forbearance or mandatory administrative forbearance under § 685.205(b)(8) or (9); and
(vi) Being employed full-time with a qualifying employer, as defined in this section, at any point during the month for which the payment is credited.
(3) If a borrower consolidates one or more Direct Loans into a Direct Consolidation Loan, including a Direct PLUS Loan made to a parent borrower, the weighted average of the payments the borrower made on the Direct Loans prior to consolidating and that met the criteria in paragraphs (c)(2)(i) through (vi) of this section will count as qualifying payments on the Direct Consolidation Loan.
(d) Forgiveness amount. The Secretary forgives the principal and accrued interest that remains on all loans for which the borrower meets the requirements of paragraph (c) of this section as of the date the borrower satisfied the last required monthly payment obligation.
(e) Application process. (1) Notwithstanding paragraph (f) of this section, after making the 120 monthly qualifying payments on the eligible loans for which loan forgiveness is requested while working the 120 months of qualifying service, a borrower may request loan forgiveness by filing an application approved by the Secretary.
(2) If the Secretary has sufficient information to determine the borrower's qualifying employer and length of employment, the Secretary informs the borrower if the borrower is eligible for forgiveness.
(3) If the Secretary does not have sufficient information to make a determination of the borrower's eligibility for forgiveness, the borrower must provide additional information about the borrower's employment and employer on a form approved by the Secretary.
(4) If the borrower is unable to secure a certification of employment from a qualifying employer, the Secretary may determine the borrower's qualifying employment or payments based on other documentation provided by the borrower at the Secretary's request.
(5) The Secretary may request reasonable additional documentation pertaining to the borrower's employer or employment before providing a determination.
(6) The Secretary may substantiate an employer's attestation of information provided on the form in paragraph (e)(3) of this section based on a review of information about the employer.
(7) If the Secretary determines that the borrower meets the eligibility requirements for loan forgiveness under this section, the Secretary—
(i) Notifies the borrower of this determination; and
(ii) Forgives the outstanding balance of the eligible loans.
(8) If the Secretary determines that the borrower does not meet the eligibility requirements for loan forgiveness under this section, grants forbearance of payment on both principal and interest for the period in which collection activity was suspended. The Secretary notifies the borrower that the application has been denied, provides the basis for the denial, and informs the borrower that the Secretary will resume collection of the loan. The Secretary does not capitalize any interest accrued and not paid during this period.
(f) Application not required. The Secretary forgives a loan under this section without an application from the borrower if the Secretary has sufficient information in the Secretary's possession to determine the borrower has satisfied the requirements for forgiveness under this section.
(g) Reconsideration process. (1) Within 90 days of the date the Secretary sent the notice of denial of forgiveness under paragraph (e)(8) of this section to the borrower, the borrower may request that the Secretary reconsider whether the borrower's employer or any payment meets the requirements for credit toward forgiveness by requesting reconsideration on a form approved by the Secretary. Borrowers who were denied loan forgiveness under this section after October 1, 2017, and prior to July 1, 2023, have 180 days from the effective date of this Final Rule to request reconsideration.
(2) To evaluate a reconsideration request, the Secretary considers—
(i) Any relevant evidence that is obtained by the Secretary; and
(ii) Additional supporting documentation not previously provided by the borrower or employer.
(3) The Secretary notifies the borrower of the reconsideration decision and the reason for the Secretary's determination.
(4) If the Secretary determines that the borrower qualifies for forgiveness, the Secretary adjusts the borrower's number of qualifying payments or forgives the loan, as appropriate.
(5) After the Secretary makes a decision on the borrower's reconsideration request, the Secretary's decision is final, and the borrower will not receive additional reconsideration unless the borrower presents additional evidence.
(6) For any months in which a borrower postponed monthly payments under a deferment or forbearance and was employed full-time at a qualifying employer as defined in this section but was in a deferment or forbearance status besides those listed in paragraph (c)(2)(v) of this section, the borrower may obtain credit toward forgiveness for those months, as defined in paragraph (d) of this section, for any months in which the borrower—
(i) Makes an additional payment equal to or greater than the amount they would have paid at that time on a qualifying repayment plan or
(ii) Otherwise qualified for a $0 payment on an income-driven repayment plan under § 685.209.
(a) Direct Consolidation Loans. A borrower may consolidate education loans made under certain Federal programs into a Direct Consolidation Loan. Loans consolidated into a Direct Consolidation Loan are discharged when the Direct Consolidation Loan is originated.
(b) Loans eligible for consolidation. The following loans may be consolidated into a Direct Consolidation Loan:
(1) Subsidized Federal Stafford Loans.
(2) Guaranteed Student Loans.
(3) Federal Insured Student Loans (FISL).
(4) Direct Subsidized Loans.
(5) Direct Subsidized Consolidation Loans.
(6) Federal Perkins Loans.
(7) National Direct Student Loans (NDSL).
(8) National Defense Student Loans (NDSL).
(9) Federal PLUS Loans.
(10) Parent Loans for Undergraduate Students (PLUS).
(11) Direct PLUS Loans.
(12) Direct PLUS Consolidation Loans.
(13) Federal Consolidation Loans.
(14) Unsubsidized Federal Stafford Loans.
(15) Federal Supplemental Loans for Students (SLS).
(16) Direct Unsubsidized Loans.
(17) Direct Unsubsidized Consolidation Loans.
(18) Auxiliary Loans to Assist Students (ALAS).
(19) Health Professions Student Loans (HPSL) and Loans for Disadvantaged Students (LDS) made under subpart II of part A of title VII of the Public Health Service Act.
(20) Health Education Assistance Loans (HEAL).
(21) Nursing loans made under part E of title VIII of the Public Health Service Act.
(c) Components of Direct Consolidation Loans—(1) Subsidized component of Direct Consolidation Loans. The term “Direct Subsidized Consolidation Loan” refers to the portion of a Direct Consolidation Loan attributable to—
(i) The loans identified in paragraphs (b)(1) through (b)(5) of this section; and
(ii) The portion of a Federal Consolidation Loan under paragraph (b)(13) of this section that is eligible for interest benefits during a deferment period under section 428C(b)(4)(C) of the Act.
(2) Unsubsidized component of Direct Consolidation Loans. Except as provided in paragraph (c)(3) of this section, the term “Direct Unsubsidized Consolidation Loan” refers to the portion of a Direct Consolidation Loan attributable to—
(i) The loans identified in paragraphs (b)(6) through (b)(12) of this section;
(ii) The portion of a Federal Consolidation Loan under paragraph (b)(13) of this section that is not eligible for interest benefits during a deferment period under section 428C(b)(4)(C) of the Act; and
(iii) The loans identified in paragraphs (b)(14) through (b)(21) of this section.
(3) PLUS component of Direct Consolidation Loans. In the case of a Direct Consolidation Loan made before July 1, 2006, the term “Direct PLUS Consolidation Loan” refers to the portion of a Direct Consolidation Loan attributable to the loans identified in paragraphs (b)(9) through (b)(12) of this section.
(d) Eligibility for a Direct Consolidation Loan. (1) A borrower may obtain a Direct Consolidation Loan if the borrower meets the following requirements:
(i) On the loans being consolidated, the borrower is—
(A) At the time the borrower applies for the Direct Consolidation Loan—
(1) In the grace period;
(2) In a repayment period but not in default; or
(3) In default but has made satisfactory repayment arrangements in accordance with paragraph (2) of the definition of that term in § 685.102(b);
(B) Not subject to a judgment secured through litigation, unless the judgment has been vacated; or
(C) Not subject to an order for wage garnishment under section 488A of the Act, unless the order has been lifted.
(ii) The borrower agrees to notify the Secretary of any change in address.
(2) A borrower may not consolidate a Direct Consolidation Loan or a Federal Consolidation Loan into a new consolidation loan under this section unless at least one additional eligible loan is included in the consolidation, except that a borrower may consolidate a Federal Consolidation Loan into a new consolidation loan under this section without including any additional loans if—
(i) The borrower has a Federal Consolidation Loan that is in default or has been submitted to the guaranty agency by the lender for default aversion, and the borrower wants to consolidate the Federal Consolidation Loan into the Direct Loan Program for the purpose of obtaining an income-contingent repayment plan or an income-based repayment plan; or
(ii) The borrower has a Federal Consolidation Loan and the borrower wants to consolidate that loan into the Direct Loan Program for the purpose of using the Public Service Loan Forgiveness Program or the no accrual of interest benefit for active duty service.
(3) Eligible loans received before or after the date a Direct Consolidation Loan is made may be added to a subsequent Direct Consolidation Loan.
(e) Application for a Direct Consolidation Loan. To obtain a Direct Consolidation Loan, a borrower must submit a completed application to the Secretary. A borrower may add eligible loans to a Direct Consolidation Loan by submitting a request to the Secretary within 180 days after the date on which the Direct Consolidation Loan is originated.
(f) Origination of a consolidation loan. (1)(i) The holder of a loan that a borrower wishes to consolidate into a Direct Loan must complete and return the Secretary's request for certification of the amount owed within 10 business days of receipt or, if it is unable to provide the certification, provide to the Secretary a written explanation of the reasons for its inability to provide the certification.
(ii) If the Secretary approves an application for a consolidation loan, the Secretary pays to each holder of a loan selected for consolidation the amount necessary to discharge the loan.
(iii) For a Direct Loan Program or FFEL Program loan that is in default, the Secretary limits collection costs that may be charged to the borrower to a maximum of 18.5 percent of the outstanding principal and interest amount of the defaulted loan. For any other defaulted Federal education loan, all collection costs that are owed may be charged to the borrower.
(2) Upon receipt of the proceeds of a Direct Consolidation Loan, the holder of a consolidated loan must promptly apply the proceeds to fully discharge the borrower's obligation on the consolidated loan. The holder of a consolidated loan must notify the borrower that the loan has been paid in full.
(3) The principal balance of a Direct Consolidation Loan is equal to the sum of the amounts paid to the holders of the consolidated loans.
(4) If the amount paid by the Secretary to the holder of a consolidated loan exceeds the amount needed to discharge that loan, the holder of the consolidated loan must promptly refund the excess amount to the Secretary to be credited against the outstanding balance of the Direct Consolidation Loan.
(5) If the amount paid by the Secretary to the holder of the consolidated loan is insufficient to discharge that loan, the holder must notify the Secretary in writing of the remaining amount due on the loan. The Secretary promptly pays the remaining amount due.
(g) Interest rate. The interest rate on a Direct Subsidized Consolidation Loan or a Direct Unsubsidized Consolidation Loan is the rate established in § 685.202(a)(10)(i). The interest rate on a Direct PLUS Consolidation Loan is the rate established in § 685.202(a)(10)(ii).
(h) Repayment plans. A borrower may choose a repayment plan for a Direct Consolidation Loan in accordance with §§ 685.208, 685.209, and 685.221, and may change repayment plans in accordance with § 685.210(b).
(i) Repayment period. (1) Except as noted in paragraph (i)(4) of this section, the repayment period for a Direct Consolidation Loan begins on the day the loan is disbursed.
(2)(i) Borrowers who entered repayment before July 1, 2006. The Secretary determines the repayment period under § 685.208(i) on the basis of the outstanding balances on all of the borrower's loans that are eligible for consolidation and the balances on other education loans except as provided in paragraphs (i)(3)(i), (ii), and (iii) of this section.
(ii) Borrowers entering repayment on or after July 1, 2006. The Secretary determines the repayment period under § 685.208(j) on the basis of the outstanding balances on all of the borrower's loans that are eligible for consolidation and the balances on other education loans except as provided in paragraphs (i)(3)(i) through (iii) of this section.
(3)(i) The total amount of outstanding balances on the other education loans used to determine the repayment period under §§ 685.208(i) and (j) may not exceed the amount of the Direct Consolidation Loan.
(ii) The borrower may not be in default on the other education loan unless the borrower has made satisfactory repayment arrangements with the holder of the loan.
(iii) The lender of the other educational loan may not be an individual.
(4) A Direct Consolidation Loan that was made based on an application received before July 1, 2006 receives a grace period if it includes a Direct Loan Program or FFEL Program loan for which the borrower was in an in-school period at the time of consolidation. The repayment period begins the day after the grace period ends.
(j) Repayment schedule. (1) The Secretary provides a borrower of a Direct Consolidation Loan a repayment schedule before the borrower's first payment is due. The repayment schedule identifies the borrower's monthly repayment amount under the repayment plan selected.
(2) If a borrower adds an eligible loan to the consolidation loan under paragraph (e) of this section, the Secretary makes appropriate adjustments to the borrower's monthly repayment amount and repayment period.
(k) Refunds and returns of title IV, HEA program funds received from schools. If a lender receives a refund or return of title IV, HEA program funds from a school on a loan that has been consolidated into a Direct Consolidation Loan, the lender must transmit the refund or return and an explanation of the source of the refund or return to the Secretary within 30 days of receipt.
(l) Special provisions for joint consolidation loans. The provisions of paragraphs (l)(1) through (3) of this section apply to a Direct Consolidation Loan obtained by two married borrowers in accordance with the regulations that were in effect for consolidation applications received prior to July 1, 2006.
(1) Deferment. To obtain a deferment on a joint Direct Consolidation Loan under § 685.204, both borrowers must meet the requirements of that section.
(2) Forbearance. To obtain forbearance on a joint Direct Consolidation Loan under § 685.205, both borrowers must meet the requirements of that section.
(3) Discharge. (i) If a borrower dies and the Secretary receives the documentation described in § 685.212(a), the Secretary discharges an amount equal to the portion of the outstanding balance of the consolidation loan, as of the date of the borrower's death, attributable to any of that borrower's loans that were repaid by the consolidation loan.
(ii) If a borrower meets the requirements for total and permanent disability discharge under § 685.212(b), the Secretary discharges an amount equal to the portion of the outstanding balance of the consolidation loan, as of the date the borrower became totally and permanently disabled, attributable to any of that borrower's loans that were repaid by the consolidation loan.
(iii) If a borrower meets the requirements for discharge under § 685.212(d), (e), or (f) on a loan that was consolidated into a joint Direct Consolidation Loan, the Secretary discharges the portion of the consolidation loan equal to the amount of the loan that would be eligible for discharge under the provisions of § 685.212(d), (e), or (f) as applicable, and that was repaid by the consolidation loan.
(iv) If a borrower meets the requirements for loan forgiveness under § 685.212(h) on a loan that was consolidated into a joint Direct Consolidation Loan, the Secretary repays the portion of the outstanding balance of the consolidation loan attributable to the loan that would be eligible for forgiveness under the provisions of § 685.212(h), and that was repaid by the consolidation loan.
(a) The Secretary may provide an alternative repayment plan to a borrower who demonstrates to the Secretary's satisfaction that the terms and conditions of the repayment plans specified in §§ 685.208 and 685.209 are not adequate to accommodate the borrower's exceptional circumstances.
(b) The Secretary may require a borrower to provide evidence of the borrower's exceptional circumstances before permitting the borrower to repay a loan under an alternative repayment plan.
(c) If the Secretary agrees to permit a borrower to repay a loan under an alternative repayment plan, the Secretary notifies the borrower in writing of the terms of the plan. After the borrower receives notification of the terms of the plan, the borrower may accept the plan or choose another repayment plan.
(d) A borrower must repay a loan under an alternative repayment plan within 30 years of the date the loan entered repayment, not including periods of deferment and forbearance.
(a) General. (1) For loans first disbursed prior to July 1, 2017, a borrower asserts and the Secretary considers a borrower defense in accordance with the provisions of § 685.206(c), unless otherwise noted in § 685.206(c).
(2) For loans first disbursed on or after July 1, 2017, and before July 1, 2020, a borrower asserts and the Secretary considers a borrower defense in accordance with this section. To establish a borrower defense under this section, a preponderance of the evidence must show that the borrower has a borrower defense that meets the requirements of this section.
(3) A violation by the school of an eligibility or compliance requirement in the Act or its implementing regulations is not a basis for a borrower defense under either this section or § 685.206(c) unless the violation would otherwise constitute a basis for a borrower defense under this section or § 685.206(c), as applicable.
(4) For the purposes of this section and § 685.206(c), “borrower” means—
(i) The borrower; and
(ii) In the case of a Direct PLUS Loan, any endorsers, and for a Direct PLUS Loan made to a parent, the student on whose behalf the parent borrowed.
(5) For the purposes of this section and § 685.206(c), a “borrower defense” refers to an act or omission of the school attended by the student that relates to the making of a Direct Loan for enrollment at the school or the provision of educational services for which the loan was provided, and includes one or both of the following:
(i) A defense to repayment of amounts owed to the Secretary on a Direct Loan, in whole or in part; and
(ii) A right to recover amounts previously collected by the Secretary on the Direct Loan, in whole or in part.
(6) If the borrower asserts both a borrower defense and any other objection to an action of the Secretary with regard to that Direct Loan, the order in which the Secretary will consider objections, including a borrower defense, will be determined as appropriate under the circumstances.
(b) Judgment against the school. The borrower has a borrower defense under this section if the borrower, whether as an individual or as a member of a class, or a governmental agency, has obtained against the school a nondefault, favorable contested judgment based on State or Federal law in a court or administrative tribunal of competent jurisdiction. A borrower may assert a borrower defense under this paragraph at any time.
(c) Breach of contract by the school. The borrower has a borrower defense under this section if the school the borrower received the Direct Loan to attend failed to perform its obligations under the terms of a contract with the student. A borrower may assert a defense to repayment of amounts owed to the Secretary under this paragraph at any time after the breach by the school of its contract with the student. A borrower may assert a right to recover amounts previously collected by the Secretary under this paragraph not later than six years after the breach by the school of its contract with the student.
(d) Substantial misrepresentation by the school. (1) A borrower has a borrower defense under this section if the school or any of its representatives, or any institution, organization, or person with whom the school has an agreement to provide educational programs, or to provide marketing, advertising, recruiting, or admissions services, made a substantial misrepresentation in accordance with 34 CFR part 668, subpart F, that the borrower reasonably relied on to the borrower's detriment when the borrower decided to attend, or to continue attending, the school or decided to take out a Direct Loan. A borrower may assert, at any time, a defense to repayment under this paragraph (d) of amounts owed to the Secretary. A borrower may assert a claim under this paragraph (d) to recover funds previously collected by the Secretary not later than six years after the borrower discovers, or reasonably could have discovered, the information constituting the substantial misrepresentation.
(2) For the purposes of this section, a designated Department official pursuant to paragraph (e) of this section or a hearing official pursuant to paragraph (f), (g), or (h) of this section may consider, as evidence supporting the reasonableness of a borrower's reliance on a misrepresentation, whether the school or any of the other parties described in paragraph (d)(1) engaged in conduct such as, but not limited to:
(i) Demanding that the borrower make enrollment or loan-related decisions immediately;
(ii) Placing an unreasonable emphasis on unfavorable consequences of delay;
(iii) Discouraging the borrower from consulting an adviser, a family member, or other resource;
(iv) Failing to respond to the borrower's requests for more information including about the cost of the program and the nature of any financial aid; or
(v) Otherwise unreasonably pressuring the borrower or taking advantage of the borrower's distress or lack of knowledge or sophistication.
(e) Procedure for an individual borrower. (1) To assert a borrower defense under this section, an individual borrower must—
(i) Submit an application to the Secretary, on a form approved by the Secretary—
(A) Certifying that the borrower received the proceeds of a loan, in whole or in part, to attend the named school;
(B) Providing evidence that supports the borrower defense; and
(C) Indicating whether the borrower has made a claim with respect to the information underlying the borrower defense with any third party, such as the holder of a performance bond or a tuition recovery program, and, if so, the amount of any payment received by the borrower or credited to the borrower's loan obligation; and
(ii) Provide any other information or supporting documentation reasonably requested by the Secretary.
(2) Upon receipt of a borrower's application submitted under this section, the Secretary—
(i) If the borrower is not in default on the loan for which a borrower defense has been asserted, grants forbearance and—
(A) Notifies the borrower of the option to decline the forbearance and to continue making payments on the loan; and
(B) Provides the borrower with information about the availability of the income-contingent repayment plans under § 685.209 and the income-based repayment plan under § 685.221; or
(ii) Provides the borrower with information about the availability of the income-driven repayment plans under § 685.209;
(3) The Secretary designates a Department official to review the borrower's application submitted under this section to determine whether the application states a basis for a borrower defense, and resolves the claim through a fact-finding process conducted by the Department official.
(i) As part of the fact-finding process, the Department official notifies the school of the borrower defense application and considers any evidence or argument presented by the borrower and also any additional information, including—
(A) Department records;
(B) Any response or submissions from the school; and
(C) Any additional information or argument that may be obtained by the Department official.
(ii) For borrower defense applications under this section, upon the borrower's request, the Department official identifies to the borrower the records the Department official considers relevant to the borrower defense. The Secretary provides to the borrower any of the identified records upon reasonable request of the borrower.
(4) At the conclusion of the fact-finding process under this section, the Department official issues a written decision as follows:
(i) If the Department official approves the borrower defense in full or in part, the Department official notifies the borrower in writing of that determination and of the relief provided as described in paragraph (i) of this section.
(ii) If the Department official denies the borrower defense in full or in part, the Department official notifies the borrower of the reasons for the denial, the evidence that was relied upon, any portion of the loan that is due and payable to the Secretary, and whether the Secretary will reimburse any amounts previously collected, and informs the borrower that if any balance remains on the loan, the loan will return to its status prior to the borrower's submission of the application. The Department official also informs the borrower of the opportunity to request reconsideration of the claim based on new evidence pursuant to paragraph (e)(5)(i) of this section.
(5) The decision of the Department official under this section is final as to the merits of the claim and any relief that may be granted on the claim. Notwithstanding the foregoing—
(i) If the borrower defense is denied in full or in part, the borrower may request that the Secretary reconsider the borrower defense upon the identification of new evidence in support of the borrower's claim. “New evidence” is relevant evidence that the borrower did not previously provide and that was not identified in the final decision as evidence that was relied upon for the final decision. If accepted for reconsideration by the Secretary, the Secretary follows the procedure in paragraph (e)(2) of this section for granting forbearance and for defaulted loans; and
(ii) The Secretary may reopen a borrower defense application at any time to consider evidence that was not considered in making the previous decision. If a borrower defense application is reopened by the Secretary, the Secretary follows the procedure paragraph (e)(2) of this section for granting forbearance and for defaulted loans.
(6) The Secretary may consolidate applications filed under this paragraph (e) that have common facts and claims, and resolve the borrowers' borrower defense claims as provided in paragraphs (f), (g), and (h) of this section.
(7) The Secretary may initiate a proceeding to collect from the school the amount of relief resulting from a borrower defense under this section—
(i) Within the six-year period applicable to the borrower defense under paragraph (c) or (d) of this section;
(ii) At any time, for a borrower defense under paragraph (b) of this section; or
(iii) At any time if during the period described in paragraph (e)(7)(i) of this section, the institution received notice of the claim. For purposes of this paragraph, notice includes receipt of—
(A) Actual notice from the borrower, a representative of the borrower, or the Department of a claim, including notice of an application filed pursuant to this section or § 685.206(c);
(B) A class action complaint asserting relief for a class that may include the borrower for underlying facts that may form the basis of a claim under this section or § 685.206(c);
(C) Written notice, including a civil investigative demand or other written demand for information, from a Federal or State agency that has power to initiate an investigation into conduct of the school relating to specific programs, periods, or practices that may have affected the borrower, for underlying facts that may form the basis of a claim under this section or § 685.206(c).
(f) Group process for borrower defense, generally. (1) Upon consideration of factors including, but not limited to, common facts and claims, fiscal impact, and the promotion of compliance by the school or other title IV, HEA program participant, the Secretary may initiate a process to determine whether a group of borrowers, identified by the Secretary, has a borrower defense under this section.
(i) The members of the group may be identified by the Secretary from individually filed applications pursuant to paragraph (e)(6) of this section or from any other source.
(ii) If the Secretary determines that there are common facts and claims that apply to borrowers who have not filed an application under paragraph (e) of this section, the Secretary may identify such borrowers as members of a group.
(2) Upon the identification of a group of borrowers under paragraph (f)(1) of this section, the Secretary—
(i) Designates a Department official to present the group's claim in the fact-finding process described in paragraph (g) or (h) of this section, as applicable;
(ii) Provides each identified member of the group with notice that allows the borrower to opt out of the proceeding;
(iii) If identified members of the group are borrowers who have not filed an application under paragraph (f)(1)(ii) of this section, follows the procedures in paragraph (e)(2) of this section for granting forbearance and for defaulted loans for such identified members of the group, unless an opt-out by such a member of the group is received; and
(iv) Notifies the school of the basis of the group's borrower defense, the initiation of the fact-finding process described in paragraph (g) or (h) of this section, and of any procedure by which the school may request records and respond. No notice will be provided if notice is impossible or irrelevant due to a school's closure.
(3) For a group of borrowers identified by the Secretary, for which the Secretary determines that there may be a borrower defense under paragraph (d) of this section based upon a substantial misrepresentation that has been widely disseminated, there is a rebuttable presumption that each member reasonably relied on the misrepresentation.
(g) Procedures for group process for borrower defenses with respect to loans made to attend a closed school. For groups identified by the Secretary under paragraph (f) of this section, for which the borrower defense under this section is asserted with respect to a Direct Loan to attend a school that has closed and has provided no financial protection currently available to the Secretary from which to recover any losses arising from borrower defenses, and for which there is no appropriate entity from which the Secretary can otherwise practicably recover such losses—
(1) A hearing official resolves the borrower defense under this section through a fact-finding process. As part of the fact-finding process, the hearing official considers any evidence and argument presented by the Department official on behalf of the group and, as necessary to determine any claims at issue, on behalf of individual members of the group. The hearing official also considers any additional information the Department official considers necessary, including any Department records or response from the school or a person affiliated with the school as described in § 668.174(b), if practicable. The hearing official issues a written decision as follows:
(i) If the hearing official approves the borrower defense in full or in part, the written decision states that determination and the relief provided on the basis of that claim as determined under paragraph (i) of this section.
(ii) If the hearing official denies the borrower defense in full or in part, the written decision states the reasons for the denial, the evidence that was relied upon, the portion of the loans that are due and payable to the Secretary, and whether reimbursement of amounts previously collected is granted, and informs the borrowers that if any balance remains on the loan, the loan will return to its status prior to the group claim process.
(iii) The Secretary provides copies of the written decision to the members of the group and, as practicable, to the school.
(2) The decision of the hearing official is final as to the merits of the group borrower defense and any relief that may be granted on the group claim.
(3) After a final decision has been issued, if relief for the group has been denied in full or in part pursuant to paragraph (g)(1)(ii) of this section, an individual borrower may file a claim for relief pursuant to paragraph (e)(5)(i) of this section.
(4) The Secretary may reopen a borrower defense application at any time to consider evidence that was not considered in making the previous decision. If a borrower defense application is reopened by the Secretary, the Secretary follows the procedure in paragraph (e)(2) of this section for granting forbearance and for defaulted loans.
(h) Procedures for group process for borrower defenses with respect to loans made to attend an open school. For groups identified by the Secretary under paragraph (f) of this section, for which the borrower defense under this section is asserted with respect to Direct Loans to attend a school that is not covered by paragraph (g) of this section, the claim is resolved in accordance with the procedures in this paragraph (h).
(1) A hearing official resolves the borrower defense and determines any liability of the school through a fact-finding process. As part of the fact-finding process, the hearing official considers any evidence and argument presented by the school and the Department official on behalf of the group and, as necessary to determine any claims at issue, on behalf of individual members of the group. The hearing official issues a written decision as follows:
(i) If the hearing official approves the borrower defense in full or in part, the written decision establishes the basis for the determination, notifies the members of the group of the relief as described in paragraph (i) of this section, and notifies the school of any liability to the Secretary for the amounts discharged and reimbursed.
(ii) If the hearing official denies the borrower defense for the group in full or in part, the written decision states the reasons for the denial, the evidence that was relied upon, the portion of the loans that are due and payable to the Secretary, and whether reimbursement of amounts previously collected is granted, and informs the borrowers that their loans will return to their statuses prior to the group borrower defense process. The decision notifies the school of any liability to the Secretary for any amounts discharged or reimbursed.
(iii) The Secretary provides copies of the written decision to the members of the group, the Department official, and the school.
(2) The decision of the hearing official becomes final as to the merits of the group borrower defense and any relief that may be granted on the group borrower defense within 30 days after the decision is issued and received by the Department official and the school unless, within that 30-day period, the school or the Department official appeals the decision to the Secretary. In the case of an appeal—
(i) The decision of the hearing official does not take effect pending the appeal; and
(ii) The Secretary renders a final decision.
(3) After a final decision has been issued, if relief for the group has been denied in full or in part pursuant to paragraph (h)(1)(ii) of this section, an individual borrower may file a claim for relief pursuant to paragraph (e)(5)(i) of this section.
(4) The Secretary may reopen a borrower defense application at any time to consider evidence that was not considered in making the previous decision. If a borrower defense application is reopened by the Secretary, the Secretary follows the procedure in paragraph (e)(2) of this section for granting forbearance and for defaulted loans.
(5)(i) The Secretary collects from the school any liability to the Secretary for any amounts discharged or reimbursed to borrowers under this paragraph (h).
(ii) For a borrower defense under paragraph (b) of this section, the Secretary may initiate a proceeding to collect at any time.
(iii) For a borrower defense under paragraph (c) or (d) of this section, the Secretary may initiate a proceeding to collect within the limitation period that would apply to the borrower defense, provided that the Secretary may bring an action to collect at any time if, within the limitation period, the school received notice of the borrower's borrower defense claim. For purposes of this paragraph, the school receives notice of the borrower's claim by receipt of—
(A) Actual notice of the claim from the borrower, a representative of the borrower, or the Department, including notice of an application filed pursuant to this section or § 685.206(c);
(B) A class action complaint asserting relief for a class that may include the borrower for underlying facts that may form the basis of a claim under this section or § 685.206(c); or
(C) Written notice, including a civil investigative demand or other written demand for information, from a Federal or State agency that has power to initiate an investigation into conduct of the school relating to specific programs, periods, or practices that may have affected the borrower, of underlying facts that may form the basis of a claim under this section or § 685.206(c).
(i) Relief. If a borrower defense is approved under the procedures in paragraph (e), (g), or (h) of this section, the following procedures apply:
(1) The Department official or the hearing official deciding the claim determines the appropriate amount of relief to award the borrower, which may be a discharge of all amounts owed to the Secretary on the loan at issue and may include the recovery of amounts previously collected by the Secretary on the loan, or some lesser amount.
(2) For a borrower defense brought on the basis of—
(i) A substantial misrepresentation, the Department official or the hearing official will factor the borrower's cost of attendance to attend the school, as well as the value of the education the borrower received, the value of the education that a reasonable borrower in the borrower's circumstances would have received, and/or the value of the education the borrower should have expected given the information provided by the institution, into the determination of appropriate relief. A borrower may be granted full, partial, or no relief. Value will be assessed in a manner that is reasonable and practicable. In addition, the Department official or the hearing official deciding the claim may consider any other relevant factors;
(ii) A judgment against the school—
(A) Where the judgment awards specific financial relief, relief will be the amount of the judgment that remains unsatisfied, subject to the limitation provided for in § 685.222(i)(8) and any other reasonable considerations; and
(B) Where the judgment does not award specific financial relief, the Department will rely on the holding of the case and applicable law to monetize the judgment; and
(iii) A breach of contract, relief will be determined according to the common law of contracts, subject to the limitation provided for in § 685.222(i)(8) and any other reasonable considerations.
(3) In a fact-finding process brought against an open school under paragraph (h) of this section on the basis of a substantial misrepresentation, the school has the burden of proof as to any value of the education.
(4) In determining the relief, the Department official or the hearing official deciding the claim may consider—
(i) Information derived from a sample of borrowers from the group when calculating relief for a group of borrowers; and
(ii) The examples in appendix A to this subpart.
(5) In the written decision described in paragraphs (e), (g), and (h) of this section, the designated Department official or hearing official deciding the claim notifies the borrower of the relief provided and—
(i) Specifies the relief determination;
(ii) Advises that there may be tax implications; and
(iii) Advises the borrower of the requirements to file a request for reconsideration upon the identification of new evidence.
(6) Consistent with the determination of relief under paragraph (i)(1) of this section, the Secretary discharges the borrower's obligation to repay all or part of the loan and associated costs and fees that the borrower would otherwise be obligated to pay and, if applicable, reimburses the borrower for amounts paid toward the loan voluntarily or through enforced collection.
(7) The Department official or the hearing official deciding the case, or the Secretary as applicable, affords the borrower such further relief as appropriate under the circumstances. Such further relief includes, but is not limited to, one or both of the following:
(i) Determining that the borrower is not in default on the loan and is eligible to receive assistance under title IV of the Act.
(ii) Updating reports to consumer reporting agencies to which the Secretary previously made adverse credit reports with regard to the borrower's Direct Loan.
(8) The total amount of relief granted with respect to a borrower defense cannot exceed the amount of the loan and any associated costs and fees and will be reduced by the amount of any refund, reimbursement, indemnification, restitution, compensatory damages, settlement, debt forgiveness, discharge, cancellation, compromise, or any other financial benefit received by, or on behalf of, the borrower that was related to the borrower defense. The relief to the borrower may not include non-pecuniary damages such as inconvenience, aggravation, emotional distress, or punitive damages.
(j) Cooperation by the borrower. To obtain relief under this section, a borrower must reasonably cooperate with the Secretary in any proceeding under paragraph (e), (g), or (h) of this section. The Secretary may revoke any relief granted to a borrower who fails to satisfy his or her obligations under this paragraph (j).
(k) Transfer to the Secretary of the borrower's right of recovery against third parties. (1) Upon the granting of any relief under this section, the borrower is deemed to have assigned to, and relinquished in favor of, the Secretary any right to a loan refund (up to the amount discharged) that the borrower may have by contract or applicable law with respect to the loan or the contract for educational services for which the loan was received, against the school, its principals, its affiliates, and their successors, its sureties, and any private fund. If the borrower asserts a claim to, and recovers from, a public fund, the Secretary may reinstate the borrower's obligation to repay on the loan an amount based on the amount recovered from the public fund, if the Secretary determines that the borrower's recovery from the public fund was based on the same borrower defense and for the same loan for which the discharge was granted under this section.
(2) The provisions of this paragraph (k) apply notwithstanding any provision of State law that would otherwise restrict transfer of those rights by the borrower, limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(3) Nothing in this paragraph (k) limits or forecloses the borrower's right to pursue legal and equitable relief against a party described in this paragraph (k) for recovery of any portion of a claim exceeding that assigned to the Secretary or any other claims arising from matters unrelated to the claim on which the loan is discharged.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
As provided in 34 CFR 685.222(i)(4), the Department official or the hearing official deciding a borrower defense claim determines the amount of relief to award the borrower, which may be a discharge of all amounts owed to the Secretary on the loan at issue and may include the recovery of amounts previously collected by the Secretary on the loan, or some lesser amount. The following are some conceptual examples demonstrating relief. The actual relief awarded will be determined by the Department official or the hearing official deciding the claim, who shall not be bound by these examples.
1. A school represents to prospective students, in widely disseminated materials, that its educational program will lead to employment in an occupation that requires State licensure. The program does not in fact meet minimum education requirements to enable its graduates to sit for the exam necessary for them to obtain licensure. The claims are adjudicated in a group process.
Appropriate relief: Borrowers who enrolled in this program during the time that the misrepresentation was made should receive full relief. As a result of the schools' misrepresentation, the borrowers cannot work in the occupation in which they reasonably expected to work when they enrolled. Accordingly, borrowers received limited or no value from this educational program because they did not receive the value that they reasonably expected.
2. A school states to a prospective student that its medical assisting program has a faculty composed of skilled nurses and physicians and offers internships at a local hospital. The borrower enrolls in the school in reliance on that statement. In fact, none of the teachers at the school other than the Director is a nurse or physician. The school has no internship program. The teachers at the school are not qualified to teach medical assisting and the student is not qualified for medical assistant jobs based on the education received at the school.
Appropriate relief: This borrower should receive full relief. None of the teachers at the school are qualified to teach medical assisting, and there was no internship. In contrast to reasonable students' expectations, based on information provided by the school, the typical borrower received no value from the program.
3. An individual interested in becoming a registered nurse meets with a school's admissions counselor who explains that the school does not have a nursing program but that completion of a medical assisting program is a prerequisite for any nursing program. Based on this information, the borrower enrolls in the school's medical assisting program rather than searching for another nursing program, believing that completing a medical assisting program is a necessary step towards becoming a nurse. After one year in the program, the borrower realizes that it is not necessary to become a medical assistant before entering a nursing program. The borrower's credits are not transferrable to a nursing program.
Appropriate relief: This borrower should receive full relief. Because it is not necessary to become a medical assistant prior to entering a nursing program, she has made no progress towards the career she sought, and in fact has received an education that cannot be used for its intended purpose.
4. A school tells a prospective student, who is actively seeking an education, that the cost of the program will be $20,000. Relying on that statement, the borrower enrolls. The student later learns the cost for that year was $25,000. There is no evidence of any other misrepresentations in the enrollment process or of any deficiency in value in the school's education.
Appropriate relief: This borrower should receive partial relief of $5,000. The borrower received precisely the value that she expected. The school provides the education that the student was seeking but misrepresented the price.
5. A school represents in its marketing materials that three of its undergraduate faculty members in a particular program have received the highest award in their field. A borrower choosing among two comparable, selective programs enrolls in that program in reliance on the representation about its faculty. However, although the program otherwise remains the same, the school had failed to update the marketing materials to reflect the fact that the award-winning faculty had left the school.
Appropriate relief: Although the borrower reasonably relied on a misrepresentation about the faculty in deciding to enroll at this school, she still received the value that she expected. Therefore, no relief is appropriate.
6. An individual wishes to enroll in a selective, regionally accredited liberal arts school. The school gives inflated data to a well-regarded school ranking organization regarding the median grade point average of recent entrants and also includes that inflated data in its own marketing materials. This inflated data raises the place of the school in the organization's rankings in independent publications. The individual enrolls in the school and graduates. Soon after graduating, the individual learns from the news that the school falsified admissions data. Notwithstanding this issue, degrees from the school continue to serve as effective, well-regarded liberal arts credentials.
The Department also determines that the school violated the title IV requirement that it not make substantial misrepresentations pursuant to 34 CFR 668.71, which constitutes an enforceable violation separate and apart from any borrower defense relief.
Appropriate Relief: The borrower relied on the misrepresentation about the admissions data to his detriment, because the misrepresentation factored into the borrower's decision to choose the school over others. However, the borrower received a selective liberal arts education which represents the value that he could reasonably expect, and gets no relief.
(a) General. Participation of a school in the Direct Loan Program means that eligible students at the school may receive Direct Loans. To participate in the Direct Loan Program, a school must—
(1) Demonstrate to the satisfaction of the Secretary that the school meets the requirements for eligibility under the Act and applicable regulations; and
(2) Enter into a written program participation agreement with the Secretary.
(b) Program participation agreement. In the program participation agreement, the school must promise to comply with the Act and applicable regulations and must agree to—
(1) Identify eligible students who seek student financial assistance at the institution in accordance with section 484 of the Act;
(2) Estimate the need of each of these students as required by part F of the Act for an academic year. For purposes of estimating need, a Direct Unsubsidized Loan, a Direct PLUS Loan, or any loan obtained under any State-sponsored or private loan program may be used to offset the expected family contribution of the student for that year;
(3) Certify that the amount of the loan for any student under part D of the Act is not in excess of the annual limit applicable for that loan program and that the amount of the loan, in combination with previous loans received by the borrower, is not in excess of the aggregate limit for that loan program;
(4) Set forth a schedule for disbursement of the proceeds of the loan in installments, consistent with the requirements of section 428G of the Act;
(5) On a monthly basis, reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary;
(6) Provide timely and accurate information to the Secretary for the servicing and collecting of loans—
(i) Concerning the status of student borrowers (and students on whose behalf parents borrow) while these students are in attendance at the school;
(ii) Upon request by the Secretary, concerning any new information of which the school becomes aware for these students (or their parents) after the student leaves the school; and
(iii) Concerning student eligibility and need, for the alternative origination of loans to eligible students and parents in accordance with part D of the Act;
(7) Provide assurances that the school will comply with loan information requirements established by the Secretary with respect to loans made under the Direct Loan Program;
(8) Accept responsibility and financial liability stemming from its failure to perform its functions pursuant to the agreement;
(9) Provide for the implementation of a quality assurance system, as established by the Secretary and developed in consultation with the school, to ensure that the school is complying with program requirements and meeting program objectives;
(10) Provide that the school will not charge any fees of any kind, however described, to student or parent borrowers for origination activities or for the provision of information necessary for a student or parent to receive a loan under part D of the Act or for any benefits associated with such a loan;
(11) Comply with the provisions of paragraphs (d) through (i) of this section regarding student claims and disputes;
(12) Comply with other provisions that the Secretary determines are necessary to protect the interests of the United States and to promote the purposes of part D of the Act; and
(13) Accept responsibility and financial liability stemming from losses incurred by the Secretary for repayment of amounts discharged by the Secretary pursuant to §§ 685.206, 685.214, 685.215, 685.216, 685.222, and subpart D of this part.
(c) Origination. A school that originates loans in the Direct Loan Program must originate loans to eligible students and parents in accordance with part D of the Act. The note or evidence of the borrower's obligation on the loan originated by the school is the property of the Secretary.
(d) Borrower defense claims in an internal dispute process. The school will not compel any student to pursue a complaint based on allegations that would provide a basis for a borrower defense claim through an internal dispute process before the student presents the complaint to an accrediting agency or government agency authorized to hear the complaint.
(e) Class action bans. (1) The school will not seek to rely in any way on a pre-dispute arbitration agreement or on any other pre-dispute agreement with a student who has obtained or benefited from a Direct Loan, with respect to any aspect of a class action that is related to a borrower defense claim, unless and until the presiding court has ruled that the case may not proceed as a class action and, if that ruling may be subject to appellate review on an interlocutory basis, the time to seek such review has elapsed or the review has been resolved.
(2) Reliance on a pre-dispute arbitration agreement, or on any other pre-dispute agreement, with a student, with respect to any aspect of a class action includes, but is not limited to, any of the following:
(i) Seeking dismissal, deferral, or stay of any aspect of a class action;
(ii) Seeking to exclude a person or persons from a class in a class action;
(iii) Objecting to or seeking a protective order intended to avoid responding to discovery in a class action;
(iv) Filing a claim in arbitration against a student who has filed a claim on the same issue in a class action;
(v) Filing a claim in arbitration against a student who has filed a claim on the same issue in a class action after the trial court has denied a motion to certify the class but before an appellate court has ruled on an interlocutory appeal of that motion, if the time to seek such an appeal has not elapsed or the appeal has not been resolved; and
(vi) Filing a claim in arbitration against a student who has filed a claim on the same issue in a class action, after the trial court in that class action has granted a motion to dismiss the claim and noted that the consumer has leave to refile the claim on a class basis, if the time to refile the claim has not elapsed.
(3) Required provisions and notices: (i) After the effective date of this regulation, the school must include the following provision in any agreements with a student recipient of a Direct Loan for attendance at the school, or a student for whom the PLUS loan was obtained, that include pre-dispute arbitration or any other pre-dispute agreement addressing class actions: “We agree that this agreement cannot be used to stop you from being part of a class action lawsuit in court. You may file a class action lawsuit in court, or you may be a member of a class action lawsuit even if you do not file it. This provision applies only to class action claims concerning our acts or omissions regarding the making of the Direct Loan or our provision of educational services for which the Direct Loan was obtained. We agree that the court has exclusive jurisdiction to decide whether a claim asserted in the lawsuit is a claim regarding the making of the Federal Direct Loan or the provision of educational services for which the loan was obtained.”
(ii) When a pre-dispute arbitration agreement or any other pre-dispute agreement addressing class actions has been entered into before the effective date of this regulation and does not contain the provision described in paragraph (e)(3)(i) of this section, the school must either ensure the agreement is amended to contain that provision or provide the student to whom the agreement applies with written notice of that provision.
(iii) The school must ensure the agreement described in paragraph (e)(3)(ii) of this section is amended to contain the provision set forth in paragraph (e)(3)(i) or must provide the notice to students specified in that paragraph no later than the exit counseling required under § 685.304(b), or the date on which the school files its initial response to a demand for arbitration or service of a complaint from a student who has not already been sent a notice or amendment, whichever is earlier.
(A) Agreement provision. “We agree that neither we, nor anyone else who later becomes a party to this agreement, will use it to stop you from being part of a class action lawsuit in court. You may file a class action lawsuit in court, or you may be a member of a class action lawsuit in court even if you do not file it. This provision applies only to class action claims concerning our acts or omissions regarding the making of the Federal Direct Loan or the provision by us of educational services for which the Federal Direct Loan was obtained. We agree that the court has exclusive jurisdiction to decide whether a claim asserted in the lawsuit is a claim regarding the making of the Federal Direct Loan or the provision of educational services for which the loan was obtained.”
(B) Notice provision. “We agree not to use any pre-dispute agreement to stop you from being part of a class action lawsuit in court. You may file a class action lawsuit in court, or you may be a member of a class action lawsuit even if you do not file it. This provision applies only to class action claims concerning our acts or omissions regarding the making of the Federal Direct Loan or the provision by us of educational services for which the Federal Direct Loan was obtained. We agree that the court has exclusive jurisdiction to decide whether a claim asserted in the lawsuit is a claim regarding the making of the Federal Direct Loan or the provision of educational services for which the loan was obtained.”
(f) Pre-dispute arbitration agreements. (1)(i) The school will not enter into a pre-dispute agreement to arbitrate a borrower defense claim or rely in any way on a pre-dispute arbitration agreement with respect to any aspect of a borrower defense claim.
(ii) A student may enter into a voluntary post-dispute arbitration agreement with a school to arbitrate a borrower defense claim.
(2) Reliance on a pre-dispute arbitration agreement with a student with respect to any aspect of a borrower defense claim includes, but is not limited to, any of the following:
(i) Seeking dismissal, deferral, or stay of any aspect of a judicial action filed by the student, including joinder with others in an action;
(ii) Objecting to or seeking a protective order intended to avoid responding to discovery in a judicial action filed by the student; and
(iii) Filing a claim in arbitration against a student who has filed a suit on the same claim.
(3) Required provisions and notices: (i) The school must include the following provision in any pre-dispute arbitration agreements with a student recipient of a Direct Loan for attendance at the school, or, with respect to a Parent PLUS Loan, a student for whom the PLUS loan was obtained, that include any agreement regarding arbitration and that are entered into after the effective date of this regulation: “We agree that neither we nor anyone else will use this agreement to stop you from bringing a lawsuit concerning our acts or omissions regarding the making of the Federal Direct Loan or the provision by us of educational services for which the Federal Direct Loan was obtained. You may file a lawsuit for such a claim, or you may be a member of a class action lawsuit for such a claim even if you do not file it. This provision does not apply to lawsuits concerning other claims. We agree that only the court is to decide whether a claim asserted in the lawsuit is a claim regarding the making of the Federal Direct Loan or the provision of educational services for which the loan was obtained.”
(ii) When a pre-dispute arbitration agreement has been entered into before the effective date of this regulation, that did not contain the provision specified in paragraph (f)(3)(i) of this section, the school must either ensure the agreement is amended to contain the provision specified in paragraph (f)(3)(iii)(A) of this section or provide the student to whom the agreement applies with the written notice specified in paragraph (f)(3)(iii)(B) of this section.
(iii) The school must ensure the agreement described in paragraph (f)(3)(ii) of this section is amended to contain the provision specified in paragraph (f)(3)(iii)(A) of this section or must provide the notice specified in paragraph (f)(3)(iii)(B) of this section to students no later than the exit counseling required under § 685.304(b), or the date on which the school files its initial response to a demand for arbitration or service of a complaint from a student who has not already been sent a notice or amendment, whichever is earlier.
(A) Agreement provision. “We agree that neither we, nor anyone else who later becomes a party to this pre-dispute arbitration agreement, will use it to stop you from bringing a lawsuit concerning our acts or omissions regarding the making of the Federal Direct Loan or the provision by us of educational services for which the Federal Direct Loan was obtained. You may file a lawsuit for such a claim, or you may be a member of a class action lawsuit for such a claim even if you do not file it. This provision does not apply to other claims. We agree that only the court is to decide whether a claim asserted in the lawsuit is a claim regarding the making of the Federal Direct Loan or the provision of educational services for which the loan was obtained.”
(B) Notice provision. “We agree not to use any pre-dispute arbitration agreement to stop you from bringing a lawsuit concerning our acts or omissions regarding the making of the Federal Direct Loan or the provision by us of educational services for which the Federal Direct Loan was obtained. You may file a lawsuit regarding such a claim, or you may be a member of a class action lawsuit regarding such a claim even if you do not file it. This provision does not apply to any other claims. We agree that only the court is to decide whether a claim asserted in the lawsuit is a claim regarding the making of the Direct Loan or the provision of educational services for which the loan was obtained.”
(g) Submission of arbitral records. (1) A school must submit a copy of the following records to the Secretary, in the form and manner specified by the Secretary, in connection with any borrower defense claim filed in arbitration by or against the school:
(i) The initial claim and any counterclaim;
(ii) The arbitration agreement filed with the arbitrator or arbitration administrator;
(iii) The judgment or award, if any, issued by the arbitrator or arbitration administrator;
(iv) If an arbitrator or arbitration administrator refuses to administer or dismisses a claim due to the school's failure to pay required filing or administrative fees, any communication the school receives from the arbitrator or arbitration administrator related to such a refusal; and
(v) Any communication the school receives from an arbitrator or an arbitration administrator related to a determination that a pre-dispute arbitration agreement regarding educational services provided by the school does not comply with the administrator's fairness principles, rules, or similar requirements, if such a determination occurs;
(2) A school must submit any record required pursuant to paragraph (g)(1) of this section within 60 days of filing by the school of any such record with the arbitrator or arbitration administrator and within 60 days of receipt by the school of any such record filed or sent by someone other than the school, such as the arbitrator, the arbitration administrator, or the student.
(3) The Secretary will publish the records submitted by schools in paragraph (g)(1) of this section in a centralized database accessible to the public.
(h) Submission of judicial records. (1) A school must submit a copy of the following records to the Secretary, in the form and manner specified by the Secretary, in connection with any borrower defense claim filed in a lawsuit by the school against the student or by any party, including a government agency, against the school:
(i) The complaint and any counterclaim;
(ii) Any dispositive motion filed by a party to the suit; and
(iii) The ruling on any dispositive motion and the judgment issued by the court;
(2) A school must submit any record required pursuant to paragraph (h)(1) of this section within 30 days of filing or receipt, as applicable, of the complaint, answer, or dispositive motion, and within 30 days of receipt of any ruling on a dispositive motion or a final judgment;
(3) The Secretary will publish the records submitted by schools in paragraph (h)(1) in a centralized database accessible to the public.
(i) Definitions. For the purposes of paragraphs (d) through (h) of this section, the term—
(1) Borrower defense claim means a claim based on an act or omission that is or could be asserted as a borrower defense as defined in:
(i) § 685.206(c)(1);
(ii) § 685.222(a)(5);
(iii) § 685.206(e)(1)(iii); or
(iv) § 685.401(a);
(2) Class action means a lawsuit in which one or more parties seek class treatment pursuant to Federal Rule of Civil Procedure 23 or any State process analogous to Federal Rule of Civil Procedure 23;
(3) Dispositive motion means a motion asking for a court order that entirely disposes of one or more claims in favor of the party who files the motion without need for further court proceedings;
(4) Pre-dispute arbitration agreement means any agreement, regardless of its form or structure, between a school or a party acting on behalf of a school and a student that provides for arbitration of any future dispute between the parties.
(a) Determining eligibility and loan amount. (1) A school participating in the Direct Loan Program must ensure that any information it provides to the Secretary in connection with loan origination is complete and accurate. A school must originate a Direct Loan while the student meets the borrower eligibility requirements of § 685.200. Except as provided in 34 CFR part 668, subpart E, a school may rely in good faith upon statements made by the borrower and, in the case of a parent Direct PLUS Loan borrower, the student and the parent borrower.
(2) A school must provide to the Secretary borrower information that includes but is not limited to—
(i) The borrower's eligibility for a loan, as determined in accordance with §§ 685.200 and 685.203;
(ii) The student's loan amount; and
(iii) The anticipated and actual disbursement date or dates and disbursement amounts of the loan proceeds, as determined in accordance with § 685.303(d).
(3) Before originating a Direct PLUS Loan for a graduate or professional student borrower, the school must determine the borrower's eligibility for a Direct Subsidized and a Direct Unsubsidized Loan. If the borrower is eligible for a Direct Subsidized or Direct Unsubsidized Loan, but has not requested the maximum Direct Subsidized or Direct Unsubsidized Loan amount for which the borrower is eligible, the school must—
(i) Notify the graduate or professional student borrower of the maximum Direct Subsidized or Direct Unsubsidized Loan amount that he or she is eligible to receive and provide the borrower with a comparison of—
(A) The maximum interest rate for a Direct Subsidized Loan and a Direct Unsubsidized Loan and the maximum interest rate for a Direct PLUS Loan;
(B) Periods when interest accrues on a Direct Subsidized Loan and a Direct Unsubsidized Loan, and periods when interest accrues on a Direct PLUS Loan; and
(C) The point at which a Direct Subsidized Loan and a Direct Unsubsidized Loan enters repayment, and the point at which a Direct PLUS Loan enters repayment; and
(ii) Give the graduate or professional student borrower the opportunity to request the maximum Direct Subsidized or Direct Unsubsidized Loan amount for which the borrower is eligible.
(4) A school may not originate a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan, or a combination of loans, for an amount that—
(i) The school has reason to know would result in the borrower exceeding the annual or maximum loan amounts in § 685.203; or
(ii) Exceeds the student's estimated cost of attendance less—
(A) The student's estimated financial assistance for that period; and
(B) In the case of a Direct Subsidized Loan, the borrower's expected family contribution for that period.
(5)(i) A school determines a Direct Subsidized or Direct Unsubsidized Loan amount in accordance with § 685.203.
(ii) When prorating a loan amount for a student enrolled in a program of study with less than a full academic year remaining, the school need not recalculate the amount of the loan if the number of hours for which an eligible student is enrolled changes after the school originates the loan.
(6) The date of loan origination is the date a school creates the electronic loan origination record.
(7) If a student has received a determination of need for a Direct Subsidized Loan that is $200 or less, a school may choose not to originate a Direct Subsidized Loan for that student and to include the amount as part of a Direct Unsubsidized Loan.
(8) A school may refuse to originate a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan or may reduce the borrower's determination of need for the loan if the reason for that action is documented and provided to the borrower in writing, and if—
(i) The determination is made on a case-by-case basis;
(ii) The documentation supporting the determination is retained in the student's file; and
(iii) The school does not engage in any pattern or practice that results in a denial of a borrower's access to Direct Loans because of the borrower's race, gender, color, religion, national origin, age, disability status, or income.
(9) A school may not assess a fee for the completion or certification of any Direct Loan Program forms or information or for the origination of a Direct Loan.
(10)(i) The minimum period of enrollment for which a school may originate a Direct Loan is—
(A) At a school that measures academic progress in credit hours and uses a semester, trimester, or quarter system, or that has terms that are substantially equal in length with no term less than nine weeks in length, a single academic term (e.g., a semester or quarter); or
(B) Except as provided in paragraph (a)(10)(ii) or (iii) of this section, at a school that measures academic progress in clock hours, or measures academic progress in credit hours but does not use a semester, trimester, or quarter system and does not have terms that are substantially equal in length with no term less than nine weeks in length, the lesser of—
(1) The length of the student's program (or the remaining portion of that program if the student has less than the full program remaining) at the school; or
(2) The academic year as defined by the school in accordance with 34 CFR 668.3.
(ii) For a student who transfers into a school from another school and the prior school originated a loan for a period of enrollment that overlaps the period of enrollment at the new school, the new school may originate a loan for the remaining portion of the program or academic year. In this case the school may originate a loan for an amount that does not exceed the remaining balance of the student's annual loan limit.
(iii) For a student who completes a program at a school, where the student's last loan to complete that program had been for less than an academic year, and the student then begins a new program at the same school, the school may originate a loan for the remainder of the academic year. In this case the school may originate a loan for an amount that does not exceed the remaining balance of the student's annual loan limit at the loan level associated with the new program.
(iv) The maximum period for which a school may originate a Direct Loan is—
(A) Generally an academic year, as defined by the school in accordance with 34 CFR 668.3, except that the school may use a longer period of time corresponding to the period to which the school applies the annual loan limits under § 685.203; or
(B) For a defaulted borrower who has regained eligibility, the academic year in which the borrower regained eligibility.
(b) Promissory note handling. (1) The Secretary provides promissory notes for use in the Direct Loan Program. A school may not modify, or make any additions to, the promissory note without the Secretary's prior written approval.
(2) A school that originates a loan must ensure that the loan is supported by a completed promissory note as proof of the borrower's indebtedness.
(c) Reporting to the Secretary. The Secretary accepts a student's Payment Data that is submitted in accordance with procedures established through publication in the
(a) Purpose. This section establishes rules governing a school's processing of a borrower's Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan proceeds. The school must also comply with any rules for processing loan proceeds contained in 34 CFR part 668.
(b) General—(1) A school may not disburse loan proceeds to a borrower unless the borrower has executed a legally enforceable promissory note.
(2) The Secretary provides Direct Loan funds to a school in accordance with 34 CFR 668.162.
(3)(i) Except in the case of a late disbursement under paragraph (f) of this section, or as provided in paragraph (b)(3)(iii) of this section, a school may disburse loan proceeds only to a student, or a parent in the case of a Direct PLUS Loan obtained by a parent borrower, if the school determines the student has continuously maintained eligibility in accordance with the provisions of § 685.200 from the beginning of the loan period for which the loan was intended.
(ii) If a student delays attending school for a period of time, the school may consider that student to have maintained eligibility for the loan from the first day of the period of enrollment. However, the school must comply with the requirements under paragraph (b)(4) of this section.
(iii) If, after a school makes the first disbursement to a borrower, the student becomes ineligible due solely to the school's loss of eligibility to participate in the title IV programs or the Direct Loan Program, the school may make subsequent disbursements to the borrower as permitted by 34 CFR part 668.
(iv) If, prior to making any disbursement to a borrower, the student temporarily ceases to be enrolled on at least a half-time basis, the school may make a disbursement and any subsequent disbursement to the student if the school determines and documents in the student's file—
(A) That the student has resumed enrollment on at least a half-time basis;
(B) The student's revised cost of attendance; and
(C) That the student continues to qualify for the entire amount of the loan, notwithstanding any reduction in the student's cost of attendance caused by the student's temporary cessation of enrollment on at least a half-time basis.
(4) If a student does not begin attendance in the period of enrollment, disbursed loan proceeds must be handled in accordance with 34 CFR 668.21.
(5)(i) If a student is enrolled in the first year of an undergraduate program of study and has not previously received a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Subsidized or Unsubsidized Federal Stafford Loan, or a Federal Supplemental Loan for Students, a school may not disburse the proceeds of a Direct Subsidized or Direct Unsubsidized Loan until 30 days after the first day of the student's program of study unless—
(A)(1) Except as provided in paragraph (b)(5)(i)(A)(2) of this section, the school has a cohort default rate, calculated under subpart M of 34 CFR part 668, or weighted average cohort rate of less than 10 percent for each of the three most recent fiscal years for which data are available; or
(2) For loans first disbursed on or after October 1, 2011, the school in which the student is enrolled has a cohort default rate, calculated under either subpart M or N of 34 CFR part 668 of less than 15 percent for each of the three most recent fiscal years for which data are available;
(B) The school is an eligible home institution originating a loan to cover the cost of attendance in a study abroad program and has a Direct Loan Program cohort rate, FFEL cohort default rate, or weighted average cohort rate of less than 5 percent for the single most recent fiscal year for which data are available.
(ii) Paragraphs (b)(5)(i)(A) and (B) of this section do not apply to any loans originated by the school beginning 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under subpart M or subpart N of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in paragraph (b)(5)(i)(A) or (B) of this section, as applicable.
(iii) Paragraph (b)(5)(i)(B) of this section does not apply to any loans originated by the school beginning 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under subpart M or subpart N of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in that paragraph.
(c) Processing of the proceeds of a Direct Loan. Schools must follow the procedures for disbursing funds in 34 CFR 668.164.
(d) Determining disbursement dates and amounts. (1) Before disbursing a loan, a school must determine that all information required by the promissory note has been provided by the borrower and, if applicable, the student.
(2) An institution must disburse the loan proceeds on a payment period basis in accordance with 34 CFR 668.164(b).
(3) Unless paragraph (d)(4) or (d)(6) of this section applies—
(i) If a loan period is more than one payment period, the school must disburse loan proceeds at least once in each payment period; and
(ii) If a loan period is one payment period, the school must make at least two disbursements during that payment period.
(A) For a loan originated under § 685.301(a)(10)(i)(A), the school may not make the second disbursement until the calendar midpoint between the first and last scheduled days of class of the loan period.
(B) For a loan originated under § 685.301(a)(10)(i)(B), the school may not make the second disbursement until the student successfully completes half of the number of credit hours or clock hours and half of the number of weeks of instructional time in the payment period.
(4)(i) If one or more payment periods have elapsed before a school makes a disbursement, the school may include in the disbursement loan proceeds for completed payment periods.
(ii) If the loan period is equal to one payment period and more than one-half of it has elapsed, the school may include in the disbursement loan proceeds for the entire payment period.
(5) The school must disburse loan proceeds in substantially equal installments, and no installment may exceed one-half of the loan.
(6)(i) A school is not required to make more than one disbursement if—
(A)(1) The loan period is not more than one semester, one trimester, one quarter, or, for non term-based schools or schools with non-standard terms, 4 months; and
(2)(i) Except as provided in paragraph (d)(6)(i)(A)(2)(ii) of this section, the school has a cohort default rate, calculated under subpart M of 34 CFR part 668 of less than 10 percent for each of the three most recent fiscal years for which data are available; or
(ii) For loan disbursements made on or after October 1, 2011, the school in which the student is enrolled has a cohort default rate, calculated under either subpart M or subpart N of 34 CFR part 668, of less than 15 percent for each of the three most recent fiscal years for which data are available; or
(B) The school is an eligible home institution originating a loan to cover the cost of attendance in a study abroad program and has a cohort default rate, calculated under subpart M or subpart N of 34 CFR part 668, of less than five percent for the single most recent fiscal year for which data are available.
(ii) Paragraphs (d)(6)(i)(A) and (B) of this section do not apply to any loans originated by the school beginning 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under subpart M or subpart N of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in paragraph (d)(6)(i)(A) or (B) of this section, as applicable.
(iii) Paragraph (d)(6)(i)(B) of this section does not apply to any loans originated by the school beginning 30 days after the date the school receives notification from the Secretary of a cohort default rate, calculated under subpart M or subpart N of 34 CFR part 668, that causes the school to no longer meet the qualifications outlined in that paragraph.
(e) Annual loan limit progression based on completion of an academic year. (1) If a school measures academic progress in an educational program in credit hours and uses either standard terms (semesters, trimesters, or quarters) or nonstandard terms that are substantially equal in length, and each term is at least nine weeks of instructional time in length, a student is considered to have completed an academic year and progresses to the next annual loan limit when the academic year calendar period has elapsed.
(2) If a school measures academic progress in an educational program in credit hours and uses nonstandard terms that are not substantially equal in length or each term is not at least nine weeks of instructional time in length, or measures academic progress in credit hours and does not have academic terms, a student is considered to have completed an academic year and progresses to the next annual loan limit at the later of—
(i) The student's completion of the weeks of instructional time in the student's academic year; or
(ii) The date, as determined by the school, that the student has successfully completed the academic coursework in the student's academic year.
(3) If a school measures academic progress in an educational program in clock hours, a student is considered to have completed an academic year and progresses to the next annual loan limit at the later of—
(i) The student's completion of the weeks of instructional time in the student's academic year; or
(ii) The date, as determined by the school, that the student has successfully completed the clock hours in the student's academic year.
(4) For purposes of this section, terms in a loan period are substantially equal in length if no term in the loan period is more than two weeks of instructional time longer than any other term in that loan period.
(f) Late Disbursement. A school may make a late disbursement according to the provisions found under 34 CFR 668.164(g).
(g) Treatment of excess loan proceeds. Before the disbursement of any Direct Subsidized Loan, Direct Unsubsidized Loan, or Direct PLUS Loan proceeds, if a school learns that the borrower will receive or has received financial aid for the period of enrollment for which the loan was intended that exceeds the amount of assistance for which the student is eligible (except for Federal Work-Study Program funds up to $300), the school must reduce or eliminate the overaward by either—
(1) Using the student's Direct Unsubsidized Loan, Direct PLUS Loan, or State-sponsored or another non-Federal loan to cover the expected family contribution, if not already done; or
(2) Reducing one or more subsequent disbursements to eliminate the overaward.
(a) Entrance counseling. (1) Except as provided in paragraph (a)(8) of this section, a school must ensure that entrance counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan student borrower prior to making the first disbursement of the proceeds of a loan to a student borrower unless the student borrower has received a prior Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized or Unsubsidized Federal Stafford Loan, or Federal SLS Loan.
(2) Except as provided in paragraph (a)(8) of this section, a school must ensure that entrance counseling is conducted with each graduate or professional student Direct PLUS Loan borrower prior to making the first disbursement of the loan unless the student borrower has received a prior student Direct PLUS Loan or student Federal PLUS Loan.
(3) Entrance counseling for Direct Subsidized Loan, Direct Unsubsidized Loan, and graduate or professional student Direct PLUS Loan borrowers must provide the borrower with comprehensive information on the terms and conditions of the loan and on the responsibilities of the borrower with respect to the loan. This information may be provided to the borrower—
(i) During an entrance counseling session, conducted in person;
(ii) On a separate written form provided to the borrower that the borrower signs and returns to the school; or
(iii) Online or by interactive electronic means, with the borrower acknowledging receipt of the information.
(A) Online or by interactive electronic means, with the borrower acknowledging receipt of the information.
(B) If a standardized interactive electronic tool is used to provide entrance counseling to the borrower, the school must provide to the borrower any elements of the required information that are not addressed through the electronic tool:
(1) In person; or
(2) On a separate written or electronic document provided to the borrower.
(4) If entrance counseling is conducted online or through interactive electronic means, the school must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the entrance counseling, which may include completion of any interactive program that tests the borrower's understanding of the terms and conditions of the borrower's loans.
(5) A school must ensure that an individual with expertise in the title IV programs is reasonably available shortly after the counseling to answer the student borrower's questions. As an alternative, in the case of a student borrower enrolled in a correspondence, distance education, or study-abroad program approved for credit at the home institution, the student borrower may be provided with written counseling materials before the loan proceeds are disbursed.
(6) Entrance counseling for Direct Subsidized Loan and Direct Unsubsidized Loan borrowers must—
(i) Explain the use of a Master Promissory Note (MPN);
(ii) Emphasize to the borrower the seriousness and importance of the repayment obligation the student borrower is assuming;
(iii) Describe the likely consequences of default, including adverse credit reports, delinquent debt collection procedures under Federal law, and litigation;
(iv) Emphasize that the student borrower is obligated to repay the full amount of the loan even if the student borrower does not complete the program, does not complete the program within the regular time for program completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services that the student borrower purchased from the school;
(v) Inform the student borrower of sample monthly repayment amounts based on—
(A) A range of student levels of indebtedness of Direct Subsidized Loan and Direct Unsubsidized Loan borrowers, or student borrowers with Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans depending on the types of loans the borrower has obtained; or
(B) The average indebtedness of other borrowers in the same program at the same school as the borrower;
(vi) To the extent practicable, explain the effect of accepting the loan to be disbursed on the eligibility of the borrower for other forms of student financial assistance;
(vii) Provide information on how interest accrues and is capitalized during periods when the interest is not paid by either the borrower or the Secretary;
(viii) Inform the borrower of the option to pay the interest on a Direct Unsubsidized Loan while the borrower is in school;
(ix) Explain the definition of half-time enrollment at the school, during regular terms and summer school, if applicable, and the consequences of not maintaining half-time enrollment;
(x) Explain the importance of contacting the appropriate offices at the school if the borrower withdraws prior to completing the borrower's program of study so that the school can provide exit counseling, including information regarding the borrower's repayment options and loan consolidation;
(xi) Provide information on the National Student Loan Data System and how the borrower can access the borrower's records; and
(xii) Provide the name of and contact information for the individual the borrower may contact if the borrower has any questions about the borrower's rights and responsibilities or the terms and conditions of the loan.
(7) Entrance counseling for graduate or professional student Direct PLUS Loan borrowers must—
(i) Inform the student borrower of sample monthly repayment amounts based on—
(A) A range of student levels or indebtedness of graduate or professional student PLUS loan borrowers, of student borrowers with Direct PLUS Loans and Direct Subsidized Loans or Direct Unsubsidized Loans, depending on the types of loans the borrower has obtained; or
(B) The average indebtedness of other borrowers in the same program at the same school;
(ii) Inform the borrower of the option to pay interest on a PLUS Loan while the borrower is in school;
(iii) For a graduate or professional student Direct PLUS Loan borrower who has received a prior Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized Federal Stafford Loan, or Unsubsidized Federal Stafford Loan, provide the information specified in § 685.301(a)(3)(i)(A) through (a)(3)(i)(C); and
(iv) For a graduate or professional student Direct PLUS Loan borrower who has not received a prior Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized Federal Stafford Loan, or Unsubsidized Federal Stafford Loan, provide the information specified in paragraph (a)(6)(i) through paragraph (a)(6)(xii) of this section.
(8) A school may adopt an alternative approach for entrance counseling as part of the school's quality assurance plan described in § 685.300(b)(9). If a school adopts an alternative approach, it is not required to meet the requirements of paragraphs (a)(1) through (a)(7) of this section unless the Secretary determines that the alternative approach is not adequate for the school. The alternative approach must—
(i) Ensure that each student borrower subject to entrance counseling under paragraph (a)(1) or (a)(2) of this section is provided written counseling materials that contain the information described in paragraphs (a)(6)(i) through (a)(6)(v) of this section;
(ii) Be designed to target those student borrowers who are most likely to default on their repayment obligations and provide them more intensive counseling and support services; and
(iii) Include performance measures that demonstrate the effectiveness of the school's alternative approach. These performance measures must include objective outcomes, such as levels of borrowing, default rates, and withdrawal rates.
(9) The school must maintain documentation substantiating the school's compliance with this section for each student borrower.
(b) Exit counseling. (1) A school must ensure that exit counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan borrower and graduate or professional student Direct PLUS Loan borrower shortly before the student borrower ceases at least half-time study at the school.
(2) The exit counseling must be in person, by audiovisual presentation, or by interactive electronic means. In each case, the school must ensure that an individual with expertise in the title IV programs is reasonably available shortly after the counseling to answer the student borrower's questions. As an alternative, in the case of a student borrower enrolled in a correspondence program or a study-abroad program approved for credit at the home institution, the student borrower may be provided with written counseling materials within 30 days after the student borrower completes the program.
(3) If a student borrower withdraws from school without the school's prior knowledge or fails to complete the exit counseling as required, exit counseling must, within 30 days after the school learns that the student borrower has withdrawn from school or failed to complete the exit counseling as required, be provided either through interactive electronic means, by mailing written counseling materials to the student borrower at the student borrower's last known address, or by sending written counseling materials to an email address provided by the student borrower that is not an email address associated with the school sending the counseling materials.
(4) The exit counseling must—
(i) Inform the student borrower of the average anticipated monthly repayment amount based on the student borrower's indebtedness or on the average indebtedness of student borrowers who have obtained Direct Subsidized Loans and Direct Unsubsidized Loans, student borrowers who have obtained only Direct PLUS Loans, or student borrowers who have obtained Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans, depending on the types of loans the student borrower has obtained, for attendance at the same school or in the same program of study at the same school;
(ii) Review for the student borrower available repayment plan options including the standard repayment, extended repayment, graduated repayment, income-contingent repayment, and income-based repayment plans, including a description of the different features of each plan and sample information showing the average anticipated monthly payments, and the difference in interest paid and total payments under each plan;
(iii) Explain to the borrower the options to prepay each loan, to pay each loan on a shorter schedule, and to change repayment plans;
(iv) Provide information on the effects of loan consolidation including, at a minimum—
(A) The effects of consolidation on total interest to be paid, fees to be paid, and length of repayment;
(B) The effects of consolidation on a borrower's underlying loan benefits, including grace periods, loan forgiveness, cancellation, and deferment opportunities;
(C) The options of the borrower to prepay the loan and to change repayment plans; and
(D) That borrower benefit programs may vary among different lenders;
(v) Include debt-management strategies that are designed to facilitate repayment;
(vi) Explain to the student borrower how to contact the party servicing the student borrower's Direct Loans;
(vii) Meet the requirements described in paragraphs (a)(6)(i), (a)(6)(ii), and (a)(6)(iv) of this section;
(viii) Describe the likely consequences of default, including adverse credit reports, delinquent debt collection procedures under Federal law, and litigation;
(ix) Provide—
(A) A general description of the terms and conditions under which a borrower may obtain full or partial forgiveness or discharge of principal and interest, defer repayment of principal or interest, or be granted forbearance on a title IV loan; and
(B) A copy, either in print or by electronic means, of the information the Secretary makes available pursuant to section 485(d) of the HEA;
(x) Review for the student borrower information on the availability of the Department's Student Loan Ombudsman's office;
(xi) Inform the student borrower of the availability of title IV loan information in the National Student Loan Data System (NSLDS) and how NSLDS can be used to obtain title IV loan status information;
(xii) A general description of the types of tax benefits that may be available to borrowers; and
(xiii) Require the student borrower to provide current information concerning name, address, social security number, references, and driver's license number and State of issuance, as well as the student borrower's expected permanent address, the address of the student borrower's next of kin, and the name and address of the student borrower's expected employer (if known).
(5) The school must ensure that the information required in paragraph (b)(4)(xiii) of this section is provided to the Secretary within 60 days after the student borrower provides the information.
(6) If exit counseling is conducted through interactive electronic means, a school must take reasonable steps to ensure that each student borrower receives the counseling materials, and participates in and completes the exit counseling.
(7) The school must maintain documentation substantiating the school's compliance with this section for each student borrower.
(8)(i) For students who have received loans under both the FFEL Program and the Direct Loan Program for attendance at a school, the school's compliance with the exit counseling requirements in paragraph (b) of this section satisfies the exit counseling requirements in 34 CFR 682.604(a) if the school ensures that the exit counseling also provides the borrower with the information described in 34 CFR 682.604(a)(2)(i) and (ii).
(ii) A student's completion of electronic interactive exit counseling offered by the Secretary satisfies the requirements of paragraph (b) of this section and, for students who have also received FFEL Program loans for attendance at the school, 34 CFR 682.604(a).
(a) Except as provided in paragraph (b) of this section, a school must follow the procedures in § 668.22(b) or (c), as applicable, for determining the student's date of withdrawal.
(b) For a student who does not return for the next scheduled term following a summer break, which includes any summer term(s) in which classes are offered but students are not generally required to attend, a school must follow the procedures in § 668.22(b) or (c), as applicable, for determining the student's date of withdrawal except that the school must determine the student's date of withdrawal no later than 30 days after the start of the next scheduled term.
(c) The school must use the date determined under paragraph (a) or (b) of this section for the purpose of reporting to the Secretary the student's date of withdrawal and for determining when a refund or return of title IV, HEA program funds must be paid under § 685.306.
(a) General. By applying for a Direct Loan, a borrower authorizes the school to pay directly to the Secretary that portion of a refund or return of title IV, HEA program funds from the school that is allocable to the loan. A school—
(1) Must pay that portion of the student's refund or return of title IV, HEA program funds that is allocable to a Direct Loan to the Secretary; and
(2) Must provide simultaneous writ-ten notice to the borrower if the school pays a refund or return of title IV, HEA program funds to the Secretary on be-half of that student.
(b) Determination, allocation, and payment of a refund or return of title IV, HEA program funds. In determining the portion of a student's refund or return of title IV, HEA program funds that is allocable to a Direct Loan, the school must follow the procedures established in 34 CFR 668.22 for allocating and paying a refund or return of title IV, HEA program funds that is due.
(a) A school participating in the Direct Loan Program may withdraw from the program by providing written notice to the Secretary.
(b) A participating school that intends to withdraw from the Direct Loan Program must give at least 60 days notice to the Secretary.
(c) Unless the Secretary approves an earlier date, the withdrawal is effective on the later of—
(1) 60 days after the school notifies the Secretary; or
(2) The date designated by the school.
(a) General. The Secretary may require the repayment of funds and the purchase of loans by the school if the Secretary determines that the school is liable as a result of—
(1) The school's violation of a Federal statute or regulation;
(2) The school's negligent or willful false certification under § 685.215; or
(3) The school's actions that gave rise to a successful claim for which the Secretary discharged a loan, in whole or in part, pursuant to § 685.206, § 685.214, § 685.216, § 685.222, or subpart D of this part.
(b) In requiring a school to repay funds to the Secretary or to purchase loans from the Secretary in connection with an audit or program review, the Secretary follows the procedures described in 34 CFR part 668, subpart H.
(c) The Secretary may impose a fine or take an emergency action against a school or limit, suspend, or terminate a school's participation in the Direct Loan Program in accordance with 34 CFR part 668, subpart G.
(a) General. A participating school must—
(1) Establish and maintain proper administrative and fiscal procedures and all necessary records as set forth in this part and in 34 CFR part 668; and
(2) Submit all reports required by this part and 34 CFR part 668 to the Secretary.
(b) Enrollment reporting process. (1) Upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return the report to the Secretary—
(i) In the manner and format prescribed by the Secretary; and
(ii) Within the timeframe prescribed by the Secretary.
(2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that—
(i) A loan under title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
(ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
(c) Record retention requirements. An institution must follow the record retention and examination requirements in this part and in 34 CFR 668.24.
(d) Accounting requirements. A school must follow accounting requirements in 34 CFR 668.24(b).
(e) Direct Loan Program bank account. Schools must follow the procedures for maintaining funds established in 34 CFR 668.163.
(f) Division of functions. Schools must follow the procedures for division of functions in 34 CFR 668.16(c).
(g) Limit on use of funds. Funds received by a school under this part may be used only to make Direct Loans to eligible borrowers and may not be used or hypothecated for any other purpose.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
This subpart sets forth the provisions under which a borrower defense to repayment may be asserted and applies to borrower defense applications pending with the Secretary on July 1, 2023, or received by the Secretary on or after July 1, 2023.
(a) Definitions. For the purposes of this subpart, the following definitions apply:
Borrower means
(i) The borrower; and
(ii) In the case of a Direct PLUS Loan, any endorsers, and for a Direct PLUS Loan made to a parent, the student on whose behalf the parent borrowed.
Borrower defense to repayment means an act or omission of the school attended by the student that relates to the making of a Direct Loan for enrollment at the school or the provision of educational services for which the loan was provided and that caused the borrower detriment warranting relief in the form of:
(i) A defense to repayment of all amounts owed to the Secretary on a Direct Loan including a Direct Consolidation Loan that was used to repay a Direct Loan, a FFEL Program Loan, Federal Perkins Loan, Health Professions Student Loan, Loan for Disadvantaged Students under subpart II of part A of title VII of the Public Health Service Act, Health Education Assistance Loan, or Nursing Loan made under part E of the Public Health Service Act;
(ii) Reimbursement of all payments previously made to the Secretary on the Direct Loan or on a loan repaid by the Direct Consolidation Loan;
(iii) For borrowers in default, determining that the borrower is not in default on the loan and is eligible to receive assistance under title IV of the Act; and
(iv) Updating or deleting adverse reports the Secretary previously made to consumer reporting agencies regarding the borrower's Direct Loan.
Covered loan means a Direct Loan or other Federal student loan that is or could be consolidated into a Federal Direct Consolidation Loan.
Department official means an employee of the Department who administers the group process described in § 685.402, the individual process as described in § 685.403, and the institutional response process in § 685.405.
Direct Loan means a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Direct PLUS Loan, or a Direct Consolidation Loan.
Legal assistance organization means a legal assistance organization that:
(i) employs attorneys who:
(A) Are full-time employees;
(B) Provide civil legal assistance on a full-time basis; and
(C) Are continually licensed to practice law; and,
(ii) Is a nonprofit organization that provides legal assistance with respect to civil matters to low-income individuals without a fee.
Legal representation authority means a written agreement entered into between a borrower and a legal assistance organization that authorizes the legal assistance organization to represent the borrower in connection with a claim for borrower defense or a court order appointing the legal assistance organization class counsel for a certified class that includes the borrower in an action asserting claims with elements substantially similar to the elements of a claim for borrower defense.
School and institution may be used interchangeably and include an eligible institution as defined in 34 CFR 600.2, one of its representatives, or any ineligible institution, organization, or person with whom the eligible institution has an agreement to provide educational programs or to provide marketing, advertising, recruiting, or admissions services.
State requestor means a State as defined in 34 CFR 600.2, a State attorney general, a State oversight entity, a State agency responsible for approving educational institutions in the State, or a regulatory agency with the authority from that State.
Third-party requestor means a State requestor or legal assistance organization as defined in § 685.401(a).
(b) Federal standard for borrower defense applications received on or after July 1, 2023, and for applications pending with the Secretary on July 1, 2023. A borrower with a balance due on a covered loan will be determined to have a defense to repayment of a Direct Loan under this subpart, if at any time the Department concludes by a preponderance of the evidence that the institution committed an actionable act or omission and, as a result, the borrower suffered detriment of a nature and degree warranting the relief provided by a borrower defense to repayment as defined in this section. An actionable act or omission means—
(1) The institution made a substantial misrepresentation as defined in 34 CFR part 668, subpart F, that misled the borrower in connection with the borrower's decision to attend, or to continue attending, the institution or the borrower's decision to take out a covered loan;
(2) The institution made a substantial omission of fact, as defined in 34 CFR part 668, subpart F, in connection with the borrower's decision to attend, or to continue attending, the institution or the borrower's decision to take out a covered loan;
(3) The institution failed to perform its obligations under the terms of a contract with the student and such obligation was undertaken as consideration or in exchange for the borrower's decision to attend, or to continue attending, the institution, for the borrower's decision to take out a covered loan, or for funds disbursed in connection with a covered loan;
(4) The institution engaged in aggressive and deceptive recruitment conduct or tactics as defined in 34 CFR part 668, subpart R, in connection with the borrower's decision to attend, or to continue attending, the institution or the borrower's decision to take out a covered loan; or,
(5)(i) The borrower, whether as an individual or as a member of a class, or a governmental agency has obtained against the institution a favorable judgment based on State or Federal law in a court or administrative tribunal of competent jurisdiction based on the institution's act or omission relating to the making of covered loan, or the provision of educational services for which the loan was provided; or,
(ii) The Secretary sanctioned or otherwise took adverse action against the institution at which the borrower enrolled under 34 CFR part 668, subpart G, by denying the institution's application for recertification, or revoking the institution's provisional program participation agreement under 34 CFR 668.13, based on the institution's acts or omissions that could give rise to a borrower defense claim under paragraphs (b)(1) through (4) of this section.
(c) Violation of State law. For loans first disbursed prior to July 1, 2017, a borrower has a borrower defense to repayment under this subpart if the Secretary concludes by a preponderance of the evidence that the school attended by the student committed any act or omission that relates to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided that would give rise to a cause of action against the school under applicable State law without regard to any State statute of limitations, but only upon reconsideration described under § 685.407(a)(1)(ii) or (a)(2)(i).
(d) Exclusions. An institution's violation of an eligibility or compliance requirement in the Act or its implementing regulations is not a basis for a borrower defense under this subpart unless the violation would otherwise constitute a basis for a borrower defense under this subpart.
(e) Circumstances warranting relief. In determining whether a detriment caused by an institution's act or omission warrants relief under this section, the Secretary will consider the totality of the circumstances, including the nature and degree of the acts or omissions and of the detriment caused to borrowers. For borrowers who attended a closed school shown to have committed actionable acts or omissions that caused the borrower detriment, there will be a rebuttable presumption that the detriment suffered warrants relief under this section.
(a) Group process, generally. Upon consideration of factors including, but not limited to, the existence of common facts and claims by borrowers, the likelihood of actionable acts or omissions that were pervasive or widely disseminated, and the promotion of compliance by an institution or other title IV, HEA program participant, the Secretary may determine whether a group of borrowers from one institution or commonly owned institutions identified by the Secretary has a borrower defense under this subpart.
(b) Group process initiated by the Secretary. The Secretary may identify and form a group based upon information from sources that include but are not limited to—
(1) Actions by the Federal Government, State attorneys general, other State agencies or officials, or other law enforcement activity;
(2) Lawsuits related to educational programs filed against the institutions that are the subject of the claims or judgments rendered against the institutions; or,
(3) Individual borrower defense claims pursuant to § 685.403.
(c) Group process initiated in response to a third-party requestor application. The Secretary will consider a request to form a group from a third-party requestor that complies with the requirements of this section. To comply with the requirements of this section, the requestor—
(1) Submits an application to the Secretary, under penalty of perjury, and on a form approved by the Secretary that—
(i) Identifies the requested group, including at minimum:
(A) The name of the institution or commonly owned institutions;
(B) The campuses or programs which are the subject of the claim, if applicable;
(C) A description of the conduct that forms the basis for the group borrower defense claim under the Federal standard in § 685.401(b);
(D) An analysis of why the conduct should result in an approved group borrower defense claim under the Federal standard in § 685.401(b); and,
(E) The period during which the activity in (c)(1)(i)(C) of this section occurred;
(ii) Provides evidence beyond sworn borrower statements that supports each element of the claim made in this paragraph (c)(1), including but not limited to evidence demonstrating the actionable acts or omissions asserted were pervasive or widely disseminated;
(iii) Provides the names and other identifying information of borrowers in the group to the extent available; and
(iv) For requests submitted by a legal assistance organization, includes a certification that the requestor has entered into a legal representation authority with each borrower identified as a member of the group; and,
(2) Provides any other information or supporting documentation reasonably requested by the Secretary within 90 days of the Secretary's request.
(3) The Secretary may consolidate multiple group applications related to the same institution or commonly owned institutions.
(4) Once the Secretary determines that the third-party requestor's application is materially complete, the Secretary will provide notice to the institution of the third-party requestor's application. The institution will have 90 days to respond to the Secretary regarding the third-party requestor's application request to form a group under this paragraph (c).
(5) The Secretary will provide a response to any materially complete third-party requestor group request under this paragraph (c) within two years of receipt. That response will be sent to the third-party requestor and the institution and includes:
(i) Whether the Secretary will choose to form a group and a definition of the group formed; and
(ii) Any additional information needed from the third-party requestor to continue the third-party requestor requested group process.
(6)(i) If the Secretary denies in whole or in part a third-party requestor's request to form a group under the process described in this paragraph (c), for reasons other than that the Secretary already has formed a group that includes the members of the proposed group or has findings that cover the members of the proposed group, the third-party requestor submitting the group claim may request that the Secretary reconsider the decision upon the identification of new evidence that was not previously available to the Secretary in forming the group.
(ii) The third-party requestor submitting the group claim under this paragraph (c) must request reconsideration of the group formation no later than 90 days from the date of the Secretary's initial decision regarding formation of the group.
(iii) The Secretary will provide a response to the third-party requestor that requested reconsideration of the group's formation and the institution after reaching a decision on the reconsideration request.
(d) Process after group formation. Upon formation of a group of borrowers under this section, the Secretary—
(1) Designates a Department official to present the group's claim in the institutional response process described in § 685.405;
(2) For borrowers who have an application pending with the Secretary prior to the formation of the group, notifies those borrowers that they are an identified member of the group formed under this section and follows § 685.403(d) or (e) as appropriate;
(3) For borrowers whose names were submitted by the third-party requestor and that can be identified by the Secretary, or that can otherwise be identified by the Secretary, if the borrower is not in default and does not have a separate application pending with the Secretary, follows the procedures under § 685.403(d) except that interest on the loan will stop accumulating immediately;
(4) For borrowers whose names were submitted by the third-party requestor and that can be identified by the Secretary, or that can otherwise be identified by the Secretary, if the borrower is in default and does not have a separate application pending with the Secretary, follows the procedures under § 685.403(e) except that the interest on the loan will stop accumulating immediately;
(5) For possible group members that the Secretary cannot identify, takes reasonable steps to identify and notify potential members of the group, and if the Secretary ultimately is able to identify any additional members, follows the process under paragraphs (d)(3) and (4) of this section to allow those additional members to opt-in the group formed; and,
(6) If the Secretary later identifies a borrower that should have received the benefits as described under paragraph (d)(3) or (4) of this section, either prior to the adjudication of the group or after an adjudication that results in the approval of a group borrower defense, retrospectively applies the benefits available to the borrower under those subparagraphs and no other consequences will apply.
(a) Individual process, generally. (1) If § 685.402 does not apply to an individual borrower who has submitted a borrower defense application, the Secretary will initiate a process to determine whether the individual borrower has a borrower defense under this subpart.
(2) If § 685.402 applies to an individual borrower who is covered under a group borrower defense application being considered by the Secretary, that group borrower defense application will toll the timelines under § 685.406 on adjudicating the individual borrower application.
(3) Paragraph (a)(1) of this section will not apply to claims covered by a group claim under § 685.402, including claims submitted prior to the formation of such a group, until after the Secretary makes a decision on that group claim.
(b) Individual process. (1) The Secretary will consider a borrower defense claim from an individual borrower to be materially complete when the borrower—
(i) Submits an application to the Secretary, under penalty of perjury and on a form approved by the Secretary with the following information:
(A) A description of one or more acts or omissions by the institution;
(B) The school or school representative attributed with the act or omission;
(C) Approximately when the act or omission occurred;
(D) How the act or omission impacted their decision to attend, to continue attending, or to take out the loan for which they are asserting a defense to repayment; and,
(E) A description of the detriment they suffered as a result of the institution's act or omission;
(ii) Provides additional supporting evidence for the claims made under subparagraph (b)(1)(i) of this section, if any;
(2) The individual must provide any other information or supporting documentation reasonably requested by the Secretary.
(c) Individual borrower status. Upon receipt of a materially complete application under this section, the Secretary—
(1) Designates a Department official to present the individual's claim in the institutional response process described in § 685.405;
(2) Notifies the borrower that the Department will adjudicate the claim under § 685.406(c); and
(3) Places all the borrower's loans in forbearance in accordance with paragraph (d) of this section or stopped enforcement collections in accordance with paragraph (e) of this section, as applicable.
(d) Forbearance. The Secretary grants forbearance on all of the borrower's title IV loans that are not in default in accordance with § 685.205 and—
(1) Provides the borrower with information about the availability of the income-driven repayment plans under § 685.209;
(2) Does not charge interest on the borrower's loans beginning 180 days from the date the borrower was initially granted forbearance under this paragraph (d) if the Secretary has failed to make a determination on the borrower's claim by that date and continuing until the Department notifies the borrower of the decision.
(e) Loan collection activities during adjudication of borrower defense claim. The Secretary—
(1) Suspends collection activity on all defaulted title IV loans until the Secretary issues a decision on the borrower defense claim;
(2) Does not charge interest on the borrower's loans beginning 180 days from the date the Secretary initially suspended collection activity under subparagraph (e)(1) of this section if the Secretary has not made a determination on the borrower's claim by that date and continuing until the Department notifies the borrower of the decision;
(3) Notifies the borrower of the suspension of collection activity and explains that collection activity will resume no earlier than 90 days following final adjudication of the borrower defense claim if the Secretary determines that the borrower does not qualify for a full discharge; and
(4) Notifies the borrower of the option to begin or continue making payments under a rehabilitation agreement or other repayment agreement on the defaulted loan.
(a) For purposes of forming a Secretary-initiated group process in accordance with § 685.402(b), the Department official may consider final actions as described in § 685.401(b)(5)(ii).
(b) For groups based on prior Secretarial final actions in accordance with this section, § 685.405 will not apply to the affected institutions.
(a) For purposes of adjudicating a borrower defense claim other than those based on prior Secretarial final actions in accordance with § 685.404, the Department official notifies the institution of the group claim under § 685.402 or individual claim under § 685.403 and requests a response from the school. Such notification also may include, but is not limited to, requests for documentation to substantiate the school's response.
(b)(1) The notification in paragraph (a) of this section tolls any limitation period by which the Secretary may recover from the institution under § 685.409.
(2) The Department official requests a response from the institution, which will have 90 days to respond from the date of the Department official's notification.
(c) With its response, the institution must submit an affidavit, on a form approved by the Secretary, certifying under penalty of perjury that the information submitted to the Department official is true and correct.
(d) If the institution does not respond to the Department official's information request within 90 days, the Department official will presume that the institution does not contest the borrower defense to repayment claim.
(a) Adjudication. The Department official adjudicates a borrower defense claim in accordance with this section.
(b) Group process, adjudication. (1) For a group formed under § 685.402, the Department official makes a recommendation to the Secretary regarding adjudication after considering any evidence related to the claim, including materials submitted as part of the group application, individual claims that are part of the group, evidence in the Secretary's possession, evidence provided by the institution during the institutional response process described in § 685.405, and any other relevant information.
(2) For a group of borrowers under § 685.402 for which the Department official determines that there may be a borrower defense under § 685.401(b), there is a rebuttable presumption that the act or omission giving rise to the borrower defense affected each member of the group in deciding to attend, or continue attending, the institution, and that such reliance was reasonable.
(c) Individual process, adjudication. For an individual process under § 685.403, the Department official adjudicates the borrower defense using the information available to the official and makes a recommendation to the Secretary regarding adjudication. The Department official considers any evidence related to the claim, including materials submitted as part of the individual application, evidence in the Secretary's possession, evidence provided by the institution during the institutional response process described in § 685.405, and any other relevant information.
(d) Additional information needed from the school or individual. If the Department official requests additional information from the school, the school must respond to the Department official's information request within 90 days. If the Department official requests additional information from the individual, the individual must respond to the Department official's information request within 90 days.
(e) Secretary decision. The Secretary makes a final decision after taking into account the Department official's recommendation and the record compiled under §§ 685.402, 685.403, 685.404, 685.405, and 685.407, as applicable.
(f) Written decision. The Secretary issues a written decision as follows:
(1) Approval of a Borrower Defense Claim. If the Secretary approves the borrower defense claim—
(i) The written decision states the Secretary's determination and the relief provided as defined in § 685.401 on the basis of that claim.
(ii) The Secretary places a borrower's Direct Loans associated with a group borrower defense claim into forbearance until the Secretary discharges the loan obligations under § 685.212(k). If any balance remains on the Direct Loans not associated with the borrower defense claim, those loans will return to their status prior to the claim process. The Secretary resumes collection activities on those Direct Loans not associated with the borrower defense claim no earlier than 90 days from the date the Department official issues a written decision. No interest will be charged on the loans during the forbearance period.
(2) Denial of a Borrower Defense Claim—(i) Denial, group. If the Secretary denies the borrower defense claim, the written decision states the reasons for the denial, the evidence upon which the decision was based, and the loans that are due and payable to the Secretary. The Secretary informs the borrowers that for the Direct Loans associated with the group borrower defense claim, those loans will return to their status prior to the group claim process. The Secretary resumes collection activities on the Direct Loans associated with the group borrower defense claim no earlier than 90 days from the date the Secretary issues a written decision. The Secretary also informs individual borrowers from the group claim initially adjudicated under § 685.406(b)(1) of their option to file a new borrower defense application under an individual process in accordance with § 685.403.
(ii) Denial, individual. If the Secretary denies the borrower defense claim, the written decision states the reasons for the denial and the evidence upon which the decision was based. The Secretary informs the borrowers that their loans will return to their status prior to the claim process. The Secretary resumes collection activities on the loans under which a forbearance or stopped collection was granted during adjudication of the claim in accordance with §§ 685.403(d) and (e), no earlier than 90 days from the date the Secretary issues a written decision. The Secretary also informs the borrower of the opportunity to request reconsideration of the claim pursuant to § 685.407.
(3) Copies of written decisions. The Secretary provides copies of the written decision in this subsection to:
(i) An individual whose claim was adjudicated under § 685.406(c), as applicable;
(ii) The members of the group whose claims were adjudicated under § 685.406(b)(1), as applicable;
(iii) The school; and,
(iv) The third-party requestor who requested the group claims process, as applicable.
(g) Adjudication, timelines. (1) The Secretary will issue a decision on a group or individual borrower defense claim under the following timelines:
(i) For a group claim under § 685.402(c), within 1 year of the date the Department official notified the third-party requestor under § 685.402(c)(5).
(ii) For an individual claim under § 685.403, within the later of July 1, 2026 or 3 years after the date the Department determines the borrower submitted a materially complete application.
(2) The timelines in paragraph (g)(1) of this section will not apply for additional adjudications carried out as part of the reconsideration process in § 685.407.
(3) An individual claim under § 685.403 that is included in a group claim under § 685.402 will be subject to the adjudication timeline for that group under paragraph (g)(1)(i) of this section, and any timelines associated with individual adjudication in paragraph (g)(1)(ii) of this section will be tolled until the Secretary renders a decision on the claim under § 685.402.
(4) The Department official will provide an interim update to the individual borrower submitting a claim under § 685.403, the third-party requestor requesting a group process under § 685.402, and the institution contacted for the institutional response under § 685.405 no later than 1 year after receipt of a materially complete application. Such notification will—
(i) Indicate the Department official's progress in adjudicating the claim or claims; and,
(ii) Provide an expected timeline for rendering a decision on the claim.
(5) If the Secretary does not issue a written decision under paragraph (e) of this section on loans covered by certain claims by the dates identified in paragraph (g)(1) of this section, the loans, or portion of the loans in the case of a Direct Consolidation Loan, will not be enforceable by the Department against the borrower and the school will not be liable for the loan amount.
(a) The decision of the Secretary is final as to the merits of the borrower defense and any discharge that may be granted on the claim. Notwithstanding the foregoing—
(1) If the borrower defense is denied, an individual may request that the Secretary reconsider their individual borrower defense claim on the following grounds:
(i) Administrative or technical errors;
(ii) Consideration under an otherwise applicable State law standard under § 685.401(c) but only for loans first disbursed before July 1, 2017; or,
(iii) Identification of evidence that was not previously provided by the borrower and that was not identified in the final decision as a basis for the Department official's determination;
(2)(i) If the borrower defense is denied for a group claim adjudicated under § 685.406(b)(1), any of the third-party requestors that requested to form a group under § 685.402(c) may request that the Secretary reconsider the borrower defense for the reasons provided under (a)(1)(i) through (iii) of this section. A third-party requestor's reconsideration request made in accordance with subparagraph (a)(1)(ii) of this section must provide:
(A) The applicable State law standard;
(B) Why the third-party requestor requests use of such State law standard;
(C) Why application of the State law standard would result in a different outcome for the group than adjudication under the Federal standard; and
(D) Why the applicable State law standard would lead to a borrower defense.
(ii) An individual borrower from a group claim initially adjudicated under § 685.406(b)(1) may not file a reconsideration request under this section.
(3) The borrower or third-party requestor that requested to form a group under § 685.402(c) must request reconsideration under this section no later than 90 days from the date of the Department official's written decision, for any decisions issued on or after the effective date of these regulations.
(4)(i) The Secretary will consider a reconsideration request under paragraph (a)(1) or (a)(2)(i) of this section in which the individual or third-party requestor—
(A) Submits an application under penalty of perjury to the Secretary, on a form approved by the Secretary; and,
(B) Provides additional supporting evidence for the reconsideration claims made in this paragraph (a)(4)(i), if any; and
(ii) The borrower or third-party requestor submitting the reconsideration request must provide any other information or supporting documentation reasonably requested by the Secretary regarding the reconsideration request.
(b) The Secretary designates a different Department official for the reconsideration process than the one who conducted the initial adjudication.
(c) If accepted for reconsideration by the Secretary, the Department official follows the procedures in § 685.405 to notify the institution of the claim and the basis for the group's borrower defense under § 685.402 or individual's borrower defense under § 685.403 for purposes of adjudicating reconsideration of the borrower defense claim and to request a response from the school to the reconsideration request.
(d) If accepted for reconsideration by the Secretary, the Secretary follows the procedures in § 685.403(d) for granting forbearance and § 685.403(e) for defaulted loans, as applicable.
(e) The Department official adjudicates the borrower's reconsideration request under § 685.406, makes a recommendation to the Secretary, and the Secretary provides notice of the final decision upon reconsideration in accordance with § 685.406(f).
(f)(1) The Secretary may reopen at any time a borrower defense application that was denied. If a borrower defense application is reopened by the Secretary, the Secretary follows the procedures in § 685.403(d) for granting forbearance and for § 685.403(e) for defaulted loans, as applicable.
(2) Upon reopening a borrower defense application under paragraph (f) of this section, the Department official adjudicates the claim under § 685.406, makes a recommendation to the Secretary, and the Secretary provides notice of the final decision on the reopened case in accordance with § 685.406(f).
(a) The Secretary discharges the obligation of the borrower in accordance with the procedures described in subpart D of this part.
(b) Members of a group that received a written notice of an approved borrower defense claim in accordance with § 685.406(f)(1) may request to opt out of the discharge for the group.
(a)(1) For loans first disbursed on or after July 1, 2023, the Secretary may collect from the school, or in the case of a closed school, a person affiliated with the school as described in § 668.174(b) of this chapter, any liability to the Secretary for any amounts discharged or reimbursed to borrowers for claims approved under § 685.406.
(2) Notwithstanding paragraph (a) of this section, the Secretary may choose not to collect from the school, or in the case of a closed school, a person affiliated with the school as described in § 668.174(b) of this chapter, any liability to the Secretary for any amounts discharged or reimbursed to borrowers under the discharge process described in § 685.408, under conditions such as:
(i) The cost of collecting would exceed the amounts received; or
(ii) The claims were approved outside of the limitations period in paragraph (c) of this section;
(b) The Secretary will not collect from the school any liability to the Secretary for any amounts discharged or reimbursed to borrowers for an approved claim under § 685.406 for loans first disbursed prior to July 1, 2023, unless:
(1) For loans first disbursed before July 1, 2017, the claim would have been approved under the standard in § 685.206(c)(1);
(2) For loans first disbursed on or after July 1, 2017, and before July 1, 2020, the claim would have been approved under the standard in §§ 685.222(b) through (d); or
(3) For loans first disbursed on or after July 1, 2020, and before July 1, 2023, the claim would have been approved under the standard in § 685.206(e)(2).
(c)(1) The Secretary will initiate a proceeding to collect from the school the amount of discharge or reimbursement for the borrower resulting from a borrower defense under § 685.408 no later than 6 years after the borrower's last date of attendance at the institution;
(2) The limitations period described in paragraph (c)(1) of this section will not apply if at any time prior to the end of the limitations period—
(i) The Department official notifies the school of the borrower's claim in accordance with § 685.405(b);
(ii) A class that may include the borrower is certified in a case against the institution asserting relief that may form the basis of a claim in accordance with this subpart; or
(iii) The institution receives written notice, including a civil investigative demand or other written demand for information, from a Federal or State agency that has power to initiate an investigation into conduct of the school relating to specific programs, periods, or practices that may have affected the borrower, for underlying facts that may form the basis of a claim under this subpart.
(3) For a borrower defense under § 685.401(b)(5), the Secretary may initiate a proceeding to collect at any time.
(4) The tolling of the limitations period described in paragraph (c)(2) of this section will cease upon the issuance of a written decision denying an application under § 685.406(f)(2).
(d) In requiring an institution to repay funds to the Secretary based on successful borrower defense claims under this subpart, the Secretary follows the procedures described in 34 CFR part 668, subpart H.
To obtain a discharge under this subpart, a borrower must reasonably cooperate with the Secretary in any proceeding under this subpart.
(a) Upon the granting of any discharge under this subpart, the borrower is deemed to have assigned to, and relinquished in favor of, the Secretary any right to a loan refund (up to the amount discharged) that the borrower may have by contract or applicable law with respect to the loan or the contract for educational services for which the loan was received, against the school, its principals, its affiliates, and their successors, its sureties, and any private fund.
(b) The provisions of this section apply notwithstanding any provision of State law that would otherwise restrict transfer of those rights by the borrower, limit or prevent a transferee from exercising those rights, or establish procedures or a scheme of distribution that would prejudice the Secretary's ability to recover on those rights.
(c) Nothing in this section limits or forecloses the borrower's right to pursue legal and equitable relief against a party described in this section for recovery of any portion of a claim exceeding that assigned to the Secretary or any other claims arising from matters unrelated to the claim on which the loan is discharged.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
The TEACH Grant program awards grants to students who intend to teach, to help meet the cost of their postsecondary education. In exchange for the grant, the student must agree to serve as a full-time teacher in a high-need field in a school serving low-income students, or as a full-time teacher in a high-need field for an educational service agency serving low-income students, for at least four academic years within eight years of ceasing enrollment at the institution where the student received the grant or, in the case of a student who receives a TEACH Grant at one institution and subsequently transfers to another institution and enrolls in another TEACH Grant-eligible program, within eight years of ceasing enrollment at the other institution. The eight-year period for completing the required four years of teaching does not include periods of suspension in accordance with § 686.41. If the student does not satisfy the service obligation, the amounts of the TEACH Grants received are treated as a Direct Unsubsidized Loan and must be repaid with interest charged from the date of each TEACH Grant disbursement. A TEACH Grant that has been converted to a Direct Unsubsidized Loan can be reconverted to a grant only in accordance with § 686.43.
(a) Definitions for the following terms used in this part are in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, (HEA) 34 CFR part 600:
(b) Definitions for the following terms used in this part are in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(c) Definitions for the following terms used in this part are in 34 CFR part 77:
(d) Other terms used in this part are defined as follows:
Academic year or its equivalent for elementary and secondary schools (elementary or secondary academic year):
(1) One complete school year, or two complete and consecutive half-years from different school years, excluding summer sessions, that generally fall within a 12-month period.
(2) If a school has a year-round program of instruction, the Secretary considers a minimum of nine consecutive months to be the equivalent of an academic year.
Agreement to serve or repay: An agreement under which the individual receiving a TEACH Grant commits to meet the service obligation or repay the loan as described in § 686.12 and to comply with notification and other provisions of the agreement.
Annual award: The maximum TEACH Grant amount a student would receive for enrolling as a full-time, three-quarter-time, half-time, or less-than-half-time student and remaining in that enrollment status for a year.
Bilingual education: An educational program in which two languages are used to provide content matter instruction.
Educational service agency: A regional public multiservice agency authorized by State statute to develop, manage, and provide services or programs to local educational agencies (LEAs).
Elementary school: A nonprofit institutional day or residential school, including a public elementary charter school, that provides elementary education, as determined under State law.
English language acquisition: The process of acquiring English as a second language.
Full-time teacher: A teacher who meets the standard used by a State in defining full-time employment as a teacher. For an individual teaching in more than one school, the determination of full-time is based on the combination of all qualifying employment.
High-need field: Includes the following:
(1) Bilingual education and English language acquisition.
(2) Foreign language.
(3) Mathematics.
(4) Reading specialist.
(5) Science, including, but not limited to, computer science.
(6) Special education.
(7) Another field documented as high-need by the Federal Government, a State government or an LEA, and approved by the Secretary and listed in the Department's annual Teacher Shortage Area Nationwide Listing (Nationwide List).
Highly qualified: Has the meaning set forth in paragraphs (i) through (iv) of this definition, or the meaning set forth in section 602(10) of the Individuals With Disabilities Education Act.
(i) When used with respect to any public elementary school or secondary school teacher in a State, means that—
(A) The teacher has obtained full State certification as a teacher (including certification obtained through alternative routes to certification) or passed the State teacher licensing examination, and holds a license to teach in such State, except that when used with respect to any teacher teaching in a public charter school, the term means that the teacher meets the requirements set forth in the State's public charter school law; and
(B) The teacher has not had certification or licensure requirements waived on an emergency, temporary, or provisional basis.
(ii) When used with respect to—
(A) An elementary school teacher who is new to the profession, means that the teacher—
(1) Holds at least a bachelor's degree; and
(2) Has demonstrated, by passing a rigorous State test, subject knowledge and teaching skills in reading, writing, mathematics, and other areas of the basic elementary school curriculum (which may consist of passing a State-required certification or licensing test or tests in reading, writing, mathematics, and other areas of the basic elementary school curriculum); or
(B) A middle or secondary school teacher who is new to the profession, means that the teacher holds at least a bachelor's degree and has demonstrated a high level of competency in each of the academic subjects in which the teacher teaches by—
(1) Passing a rigorous State academic subject test in each of the academic subjects in which the teacher teaches (which may consist of a passing level of performance on a State-required certification or licensing test or tests in each of the academic subjects in which the teacher teaches); or
(2) Successful completion, in each of the academic subjects in which the teacher teaches, of an academic major, a graduate degree, coursework equivalent to an undergraduate academic major, or advanced certification or credentialing.
(iii) When used with respect to an elementary, middle, or secondary school teacher who is not new to the profession, means that the teacher holds at least a bachelor's degree and—
(A) Has met the applicable standard in paragraph (ii) of this definition, which includes an option for a test; or
(B) Demonstrates competence in all the academic subjects in which the teacher teaches based on a highly objective uniform State standard of evaluation that—
(1) Is set by the State for both grade-appropriate academic subject matter knowledge and teaching skills;
(2) Is aligned with challenging State academic content and student academic achievement standards and developed in consultation with core content specialists, teachers, principals, and school administrators;
(3) Provides objective, coherent information about the teacher's attainment of core content knowledge in the academic subjects in which a teacher teaches;
(4) Is applied uniformly to all teachers in the same academic subject and the same grade level throughout the State;
(5) Takes into consideration, but is not based primarily on, the time the teacher has been teaching in the academic subject;
(6) Is made available to the public upon request; and
(7) May involve multiple, objective measures of teacher competency.
(iv)(A) When used with respect to any public, or other non-profit private, elementary or secondary school teacher who is exempt from State certification requirements means that the teacher is permitted to and does satisfy rigorous subject knowledge and skills tests by taking competency tests in the applicable grade levels and subject areas.
(B) For purposes of paragraph (iv)(A) of this definition, the competency tests taken by a private school teacher must be recognized by five or more States for the purpose of fulfilling the highly qualified teacher requirements as described in paragraphs (i) through (iii) of this definition, and the score achieved by the teacher on each test must equal or exceed the average passing score of those five States.
Institutional Student Information Record (ISIR): An electronic record that the Secretary transmits to an institution that includes an applicant's—
(1) Personal identification information;
(2) Application data used to calculate the applicant's EFC; and
(3) EFC.
Numeric equivalent: (1) If an otherwise eligible program measures academic performance using an alternative to standard numeric grading procedures, the institution must develop and apply an equivalency policy with a numeric scale for purposes of establishing TEACH Grant eligibility. The institution's equivalency policy must be in writing and available to students upon request and must include clear differentiations of student performance to support a determination that a student has performed at a level commensurate with at least a 3.25 GPA on a 4.0 scale in that program.
(2) A grading policy that includes only “satisfactory/unsatisfactory”, “pass/fail”, or other similar nonnumeric assessments qualifies as a numeric equivalent only if—
(i) The institution demonstrates that the “pass” or “satisfactory” standard has the numeric equivalent of at least a 3.25 GPA on a 4.0 scale awarded in that program, or that a student's performance for tests and assignments yielded a numeric equivalent of a 3.25 GPA on a 4.0 scale; and
(ii) For an eligible institution, the institution's equivalency policy is consistent with any other standards the institution may have developed for academic and other title IV, HEA program purposes, such as graduate school applications, scholarship eligibility, and insurance certifications, to the extent such standards distinguish among various levels of a student's academic performance.
Payment Data: An electronic record that is provided to the Secretary by an institution showing student disbursement information.
Post-baccalaureate program: A program of instruction for individuals who have completed a baccalaureate degree, that—
(1) Does not lead to a graduate degree;
(2) Consists of courses required by a State in order for a student to receive a professional certification or licensing credential that is required for employment as a teacher in an elementary school or secondary school in that State, except that it does not include any program of instruction offered by a TEACH Grant-eligible institution that offers a baccalaureate degree in education; and
(3) Is treated as an undergraduate program of study for the purposes of title IV of the HEA.
Retiree: An individual who has decided to change his or her occupation for any reason and who has expertise, as determined by the institution, in a high-need field.
Scheduled Award: The maximum amount of a TEACH Grant that a full-time student could receive for a year.
School or educational service agency serving low-income students (low-income school): An elementary school, secondary school, or educational service agency that is listed in the Department's Teacher Cancellation Low-Income (TCLI) Directory. The Secretary considers all elementary and secondary schools and educational service agencies operated by the Bureau of Indian Education (BIE) in the Department of the Interior or operated on Indian reservations by Indian Tribal groups under contract or grant with the BIE to qualify as schools or educational service agencies serving low-income students.
Secondary school: A nonprofit institutional day or residential school, including a public secondary charter school, that provides secondary education, as determined under State law, except that the term does not include any education beyond grade 12.
Student Aid Report (SAR): A report provided to an applicant by the Secretary showing the amount of his or her expected family contribution.
TEACH Grant-eligible institution: An eligible institution as defined in 34 CFR part 600 that meets financial responsibility standards established in 34 CFR part 668, subpart L, or that qualifies under an alternative standard in 34 CFR 668.175 and—
(1) Provides a high-quality teacher preparation program at the baccalaureate or master's degree level that—
(i)(A) Is accredited by a specialized accrediting agency recognized by the Secretary for the accreditation of professional teacher education programs; or
(B) Is approved by a State and includes a minimum of 10 weeks of full-time pre-service clinical experience, or its equivalent, and provides either pedagogical coursework or assistance in the provision of such coursework; and
(ii) Provides supervision and support services to teachers, or assists in the provision of services to teachers, such as—
(A) Identifying and making available information on effective teaching skills or strategies;
(B) Identifying and making available information on effective practices in the supervision and coaching of novice teachers; and
(C) Mentoring focused on developing effective teaching skills and strategies;
(2) Provides a two-year program that—
(i) Is acceptable for full credit in a baccalaureate teacher preparation program of study offered by an institution described in paragraph (1) of this definition, as demonstrated by the institutions; or
(ii) Is acceptable for full credit in a baccalaureate degree program in a high-need field at an institution described in paragraph (3) of this definition, as demonstrated by the institutions;
(3) Offers a baccalaureate degree that, in combination with other training or experience, will prepare an individual to teach in a high-need field as defined in this part and has entered into an agreement with an institution described in paragraphs (1) or (4) of this definition to provide courses necessary for its students to begin a career in teaching; or
(4) Provides a post-baccalaureate program of study.
TEACH Grant-eligible program: An eligible program, as defined in 34 CFR 668.8, is a program of study at a TEACH Grant-eligible institution that is designed to prepare an individual to teach as a highly qualified teacher in a high-need field and leads to a baccalaureate or master's degree, or is a post-baccalaureate program of study. A two-year program of study that is acceptable for full credit toward a baccalaureate degree is considered to be a program of study that leads to a baccalaureate degree.
Teacher: A person who provides direct classroom teaching or classroom-type teaching in a non-classroom setting, including special education teachers and reading specialists.
Teacher preparation program: A State-approved course of study, the completion of which signifies that an enrollee has met all the State's educational or training requirements for initial certification or licensure to teach in the State's elementary or secondary schools. A teacher preparation program may be a regular program or an alternative route to certification, as defined by the State. For purposes of a TEACH Grant, the program must be provided by an institution of higher education.
Teacher Shortage Area Nationwide Listing (Nationwide List): A list of teacher shortage areas, as defined in 34 CFR 682.210(q)(8)(vii), in each State.
(a) An undergraduate or post-baccalaureate student enrolled in a TEACH Grant-eligible program may receive the equivalent of up to four Scheduled Awards during the period required for the completion of the first undergraduate baccalaureate program of study and first post-baccalaureate program of study combined.
(b) A graduate student is eligible to receive the equivalent of up to two Scheduled Awards during the period required for the completion of a TEACH Grant-eligible master's degree program of study.
(a) A TEACH Grant-eligible institution that offers one or more TEACH Grant-eligible programs may elect to participate in the TEACH Grant program.
(b) If an institution begins participation in the TEACH Grant program during an award year, a student enrolled at and attending that institution is eligible to receive a grant under this part for the payment period during which the institution begins participation and any subsequent payment period.
(c) If an institution ceases to participate in the TEACH Grant program or becomes ineligible to participate in the TEACH Grant program during an award year, a student who was attending the institution and who submitted a SAR with an official EFC to the institution, or for whom the institution obtained an ISIR with an official EFC, before the date the institution became ineligible will receive a TEACH Grant for that award year for—
(1) The payment periods that the student completed before the institution ceased participation or became ineligible to participate; and
(2) The payment period in which the institution ceased participation or became ineligible to participate.
(d) An institution that ceases to participate in the TEACH Grant program or becomes ineligible to participate in the TEACH Grant program must, within 45 days after the effective date of the loss of eligibility, provide to the Secretary—
(1) The name and other student identifiers as required by the Secretary of each eligible student under § 686.11 who, during the award year, submitted a SAR with an official EFC to the institution or for whom it obtained an ISIR with an official EFC before it ceased to participate in the TEACH Grant program or became ineligible to participate;
(2) The amount of funds paid to each student for that award year;
(3) The amount due each student eligible to receive a grant through the end of the payment period during which the institution ceased to participate in the TEACH Grant program or became ineligible to participate; and
(4) An accounting of the TEACH Grant program expenditures for that award year to the date of termination.
(a) If, in addition to regular coursework, a student takes correspondence courses from either his or her own institution or another institution having an arrangement for this purpose with the student's institution, the correspondence work may be included in determining the student's enrollment status to the extent permitted under paragraph (b) of this section.
(b) Except as noted in paragraph (c) of this section, the correspondence work that may be included in determining a student's enrollment status is that amount of work that—
(1) Applies toward a student's degree or post-baccalaureate program of study or is remedial work taken by the student to help in his or her TEACH Grant-eligible program;
(2) Is completed within the period of time required for regular coursework; and
(3) Does not exceed the amount of a student's regular coursework for the payment period for which enrollment status is being calculated.
(c)(1) Notwithstanding the limitation in paragraph (b)(3) of this section, a student who would be a half-time student based solely on his or her correspondence work is considered a half-time student unless the calculation in paragraph (b) of this section produces an enrollment status greater than half-time.
(2) A student who would be a less-than-half-time student based solely on his or her correspondence work or a combination of correspondence work and regular coursework is considered a less-than-half-time student.
(d) The following chart provides examples of the application of the regulations set forth in this section. It assumes that the institution defines full-time enrollment as 12 credits per term, making half-time enrollment equal to six credits per term.
| Under § 686.5 | No. of credit
hours regular work | No. of credit
hours correspondence | Total course
load in credit hours to determine enrollment status | Enrollment status |
|---|---|---|---|---|
| (b)(3) | 3 | 3 | 6 | Half-time. |
| (b)(3) | 3 | 6 | 6 | Half-time. |
| (b)(3) | 3 | 9 | 6 | Half-time. |
| (b)(3) | 6 | 3 | 9 | Three-quarter-time. |
| (b)(3) | 6 | 6 | 12 | Full-time. |
| (b)(3) and (c) | 2 | 6 | 6 | Half-time. |
| (c) * | Less-than-half-time. |
* Any combination of regular and correspondence work that is greater than zero, but less than six hours.
A student may not receive grant payments under this part concurrently from more than one institution.
To receive a grant under this part, a student must—
(a) Complete and submit the Free application for Federal student aid (FAFSA) in accordance with the instructions in the FAFSA;
(b) Complete and sign an agreement to serve or repay in accordance with § 686.12; and
(c) Provide any additional information requested by the Secretary and the institution.
(a) Undergraduate, post-baccalaureate, and graduate students. (1) Except as provided in paragraph (b) of this section, a student who meets the requirements of 34 CFR part 668, subpart C, is eligible to receive a TEACH Grant if the student—
(i) Has met the application requirements in § 686.10;
(ii) Is enrolled in a TEACH Grant-eligible institution in a TEACH Grant-eligible program;
(iii) Is completing coursework and other requirements necessary to begin a career in teaching or plans to complete such coursework and requirements prior to graduating; and
(iv) Has—
(A) If the student is in the first year of a program of undergraduate education as determined by the institution—
(1) A final cumulative secondary school grade point average (GPA) upon graduation of at least 3.25 on a 4.0 scale, or the numeric equivalent; or
(2) A cumulative GPA of at least 3.25 on a 4.0 scale, or the numeric equivalent, based on courses taken at the institution through the most-recently completed payment period;
(B) If the student is beyond the first year of a program of undergraduate education as determined by the institution, a cumulative undergraduate GPA of at least 3.25 on a 4.0 scale, or the numeric equivalent, through the most recently completed payment period;
(C) If the student is a graduate student during the first payment period, a cumulative undergraduate GPA of at least 3.25 on a 4.0 scale, or the numeric equivalent;
(D) If the student is a graduate student beyond the first payment period, a cumulative graduate GPA of at least 3.25 on a 4.0 scale, or the numeric equivalent, through the most-recently completed payment period; or
(E) A score above the 75th percentile of scores achieved by all students taking the test during the period the student took the test on at least one of the batteries from a nationally-normed standardized undergraduate, graduate, or post-baccalaureate admissions test, except that such test may not include a placement test.
(2)(i) An institution must document the student's secondary school GPA under § 686.11(a)(1)(v)(A) using—
(A) Documentation provided directly to the institution by the cognizant authority; or
(B) Documentation from the cognizant authority provided by the student.
(ii) A cognizant authority includes, but is not limited to—
(A) An LEA;
(B) An SEA or other State agency; or
(C) A public or private secondary school.
(iii) A home-schooled student's parent or guardian is the cognizant authority for purposes of providing the documentation of a home-schooled student's secondary school GPA.
(iv) If an institution has reason to believe the documentation provided by a student under paragraph (a)(2)(i)(B) of this section is inaccurate or incomplete, the institution must confirm the student's grades by using documentation provided directly to the institution by the cognizant authority.
(b) Current or former teachers or retirees. A student who has met the application requirements in § 686.10 and meets the requirements of 34 CFR part 668, subpart C, is eligible to receive a TEACH Grant if the student—
(1) Is a current teacher or retiree who is applying for a grant to obtain a master's degree or is or was a teacher who is pursuing certification through a high-quality alternative certification route; and
(2) Is enrolled in a TEACH Grant-eligible institution in a TEACH Grant-eligible program during the period required for the completion of a master's degree.
(c) Transfer students. If a student transfers from one institution to the current institution and does not qualify under § 686.11(a)(1)(v)(E), the current institution must determine that student's eligibility for a TEACH Grant for the first payment period using either the method described in paragraph (c)(1) of this section or the method described in paragraph (c)(2) of this section, whichever method coincides with the current institution's academic policy. For an eligible student who transfers to an institution that—
(1) Does not incorporate grades from coursework that it accepts on transfer into the student's GPA at the current institution, the current institution, for the courses accepted upon transfer—
(i) Must calculate the student's GPA for the first payment period of enrollment using the grades earned by the student in the coursework from any prior postsecondary institution that it accepts; and
(ii) Must, for all subsequent payment periods, apply its academic policy and not incorporate the grades from the coursework that it accepts on transfer into the GPA at the current institution; or
(2) Incorporates grades from the coursework that it accepts on transfer into the student's GPA at the current institution, the current institution must use the grades assigned to the coursework accepted by the current institution as the student's cumulative GPA to determine eligibility for the first payment period of enrollment and all subsequent payment periods in accordance with its academic policy.
(a) General. A student who meets the eligibility requirements in § 686.11 may receive a TEACH Grant only after he or she signs an agreement to serve or repay provided by the Secretary and receives counseling in accordance with § 686.32.
(b) Contents of the agreement to serve or repay. The agreement to serve or repay—
(1) Provides that, for each TEACH Grant-eligible program for which the student received TEACH Grant funds, the grant recipient must fulfill a service obligation by performing creditable teaching service by serving—
(i) As a full-time teacher for a total of not less than four elementary or secondary academic years within eight years after the date the recipient ceased to be enrolled at the institution where the recipient received the TEACH Grant, or in the case of a student who receives a TEACH Grant at one institution and subsequently transfers to another institution and enrolls in another TEACH Grant-eligible program, within eight years of ceasing enrollment at the other institution;
(ii) In a low-income school as defined in § 686.2(d) and subject to the requirements under § 686.40(a)(3);
(iii) As a highly qualified teacher as defined in § 686.2(d); and
(iv) In a high-need field in the majority of classes taught during each elementary and secondary academic year;
(2) Requires the grant recipient to submit, upon completion of each year of service, documentation of the service in the form of a certification by a chief administrative officer of the school;
(3) Explains that the eight-year period for completing the service obligation does not include periods of suspension in accordance with § 686.41;
(4) Explains the conditions under which a TEACH Grant may be converted to a Direct Unsubsidized Loan, as described in § 686.43;
(5) Explains that, if a TEACH Grant is converted to a Direct Unsubsidized Loan, the grant recipient must repay the loan in full, with interest charged from the date of each TEACH Grant disbursement; and
(6) Explains that to avoid further accrual of interest as described in paragraph (b)(5) of this section, a grant recipient who decides not to teach in a qualified school or field, or who for any other reason no longer intends to satisfy the service obligation, may request that the Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan so that the grant recipient may begin repaying immediately, instead of waiting for the TEACH Grant to be converted to a loan under the condition described in § 686.43(a)(1)(ii); and
(7) Explains that a grant recipient whose TEACH Grant was converted to a Direct Unsubsidized Loan based on a request from the recipient in accordance with § 686.43(a)(1)(i) may request that the Secretary reconvert the recipient's loan to a TEACH Grant as provided in § 686.43(a)(8); and
(8) Requires the grant recipient to comply with the terms, conditions, and other requirements consistent with §§ 686.40 through 686.43 that the Secretary determines to be necessary.
(c) Completion of the service obligation. (1) A grant recipient must complete one service obligation for all TEACH Grants received for undergraduate study, and one service obligation for all TEACH Grants received for graduate study. Each service obligation begins when the grant recipient ceases enrollment at the institution where the TEACH Grants were received, or, in the case of a grant recipient who receives a TEACH Grant at one institution and subsequently transfers to another institution, within eight years from the date the grant recipient ceases enrollment at the other institution. However, creditable teaching service, a suspension approved under § 686.41(a)(2), or a military discharge granted under § 686.42(c)(2) may apply to more than one service obligation.
(2) Unless paragraph (c)(3) of this section applies—
(i) In the case of a TEACH Grant recipient who withdraws from an institution before completing a baccalaureate or post-baccalaureate program of study for which he or she received TEACH Grants, but later re-enrolls at the same institution or at a different institution in either the same baccalaureate or post-baccalaureate program or in a different TEACH Grant-eligible baccalaureate or post-baccalaureate program prior to the date that his or her TEACH Grants are converted to Direct Unsubsidized Loans under § 686.43(a)(1)(ii) and receives additional TEACH Grants or the Secretary otherwise confirms that the grant recipient has re-enrolled in a TEACH Grant-eligible program, the Secretary adjusts the starting date of the period for completing the service obligation to begin when the grant recipient ceases to be enrolled at the institution where he or she has re-enrolled; and
(ii) In the case of a TEACH Grant recipient who withdraws from an institution before completing a master's degree program of study for which he or she received TEACH Grants, but later re-enrolls at the same institution or at a different institution in either the same master's degree program or in a different TEACH Grant eligible master's degree program prior to the date that his or her TEACH Grants are converted to Direct Unsubsidized Loans under § 686.43(a)(1)(ii) and receives additional TEACH Grants or the Secretary otherwise confirms that the grant recipient has re-enrolled in a TEACH Grant-eligible program, the Secretary adjusts the starting date of the period for completing the service obligation to begin when the grant recipient ceases to be enrolled at the institution where he or she has re-enrolled.
(3) In the case of a TEACH Grant recipient covered under paragraph (c)(2)(i) or (ii) of this section who completed one or more complete academic years of creditable teaching service as described in § 686.12(b) during the period between the grant recipient's withdrawal and re-enrollment—
(i) The Secretary does not adjust the starting date of the period for completing the service obligation unless requested by the recipient;
(ii) The completed teaching service counts toward satisfaction of the grant recipient's service obligation under paragraph (c)(2)(i) of this section; and
(iii) If the grant recipient continues to perform creditable teaching service after re-enrolling in a TEACH Grant-eligible program, the grant recipient may receive credit toward satisfaction of the service obligation for any complete academic years of creditable teaching performed while the recipient is concurrently enrolled in the TEACH Grant-eligible program only if the recipient does not request and receive a temporary suspension of the period for completing the service obligation under § 686.41(a)(1)(i).
(d) Teaching in a high-need field listed in the Nationwide List. For a grant recipient's teaching service in a high-need field listed in the Nationwide List to count toward satisfying the recipient's service obligation, the high-need field in which he or she prepared to teach must be listed in the Nationwide List for the State in which the grant recipient teaches—
(1) For teaching service performed before July 1, 2010, at the time the grant recipient begins teaching in that field, even if that field subsequently loses its high-need designation for that State; or
(2) For teaching service performed on or after July 1, 2010—
(i) At the time the grant recipient begins teaching in that field, even if that field subsequently loses its high-need designation for that State; or
(ii) At the time the grant recipient signed the agreement to serve or repay or received the TEACH Grant, even if that field subsequently loses its high-need designation for that State before the grant recipient begins teaching in that field.
(a) Submission process. (1) Except as provided in paragraph (a)(2) of this section, an institution must disburse a TEACH Grant to a student who is eligible under § 686.11 and is otherwise qualified to receive that disbursement and electronically transmit disbursement data to the Secretary for that student if—
(i) The student submits a SAR with an official EFC to the institution; or
(ii) The institution obtains an ISIR with an official EFC for the student.
(2) In determining a student's eligibility to receive a grant under this part, an institution is entitled to assume that the SAR information or ISIR information is accurate and complete except under the conditions set forth in 34 CFR 668.16(f).
(b) SAR or ISIR deadline. Except as provided in 34 CFR 668.164(g), for a student to receive a grant under this part in an award year, the student must submit the relevant parts of the SAR with an official EFC to his or her institution or the institution must obtain an ISIR with an official EFC by the earlier of—
(1) The last date that the student is still enrolled and eligible for payment at that institution; or
(2) By the deadline date established by the Secretary through publication of a notice in the
(a)(1)(i) The Scheduled Award for a TEACH Grant for an eligible student is $4,000.
(ii) Each Scheduled Award remains available to an eligible student until the $4,000 is disbursed.
(2)(i) The total amount that a student may receive in TEACH Grants for undergraduate and post-baccalaureate study may not exceed $16,000.
(ii) The total amount that a student may receive in TEACH Grants for graduate study may not exceed $8,000.
(b) The annual award for—
(1) A full-time student is $4,000;
(2) A three-quarter-time student is $3,000;
(3) A half-time student is $2,000; and
(4) A less-than-half-time student is $1,000.
(c) Except as provided in paragraph (d) of this section, the amount of a student's grant under this part, in combination with the other student financial assistance available to the student, including the amount of a Federal Pell Grant for which the student is eligible, may not exceed the student's cost of attendance at the TEACH Grant-eligible institution. Other student financial assistance is estimated financial assistance, as defined in 34 CFR 673.5(c).
(d) A TEACH Grant may replace a student's EFC, but the amount of the grant that exceeds the student's EFC is considered estimated financial assistance, as defined in 34 CFR 673.5(c).
(e) In determining a student's payment for a payment period, an institution must include—
(1) In accordance with 34 CFR 668.20, any noncredit or reduced credit courses that an institution determines are necessary—
(i) To help a student be prepared for the pursuit of a first undergraduate baccalaureate or post-baccalaureate degree or certificate; or
(ii) In the case of English language instruction, to enable the student to utilize already existing knowledge, training, or skills; and
(2) In accordance with 34 CFR 668.5, a student's participation in a program of study abroad if it is approved for credit by the home institution at which the student is enrolled.
(a) Eligibility for payment formula—(1) Programs using standard terms with at least 30 weeks of instructional time. A student's grant for a payment period is calculated under paragraph (b) or (d) of this section if—
(i) The student is enrolled in an eligible program that—
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters; and
(C)(1) For an undergraduate student, requires the student to enroll for at least 12 credit hours in each term in the award year to qualify as a full-time student; or
(2) For a graduate student, each term in the award year meets the minimum full-time enrollment status established by the institution for a semester, trimester, or quarter; and
(ii) The program uses an academic calendar that provides at least 30 weeks of instructional time in—
(A) Two semesters or trimesters in the fall through the following spring, or three quarters in the fall, winter, and spring, none of which overlaps any other term (including a summer term) in the program; or
(B) Any two semesters or trimesters, or any three quarters where—
(1) The institution starts its terms for different cohorts of students on a periodic basis (e.g., monthly);
(2) The program is offered exclusively in semesters, trimesters, or quarters; and
(3) Students are not allowed to be enrolled simultaneously in overlapping terms and must stay with the cohort in which they start unless they withdraw from a term (or skip a term) and reenroll in a subsequent term.
(2) Programs using standard terms with less than 30 weeks of instructional time. A student's payment for a payment period is calculated under paragraph (c) or (d) of this section if—
(i) The student is enrolled in an eligible program that—
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters;
(C)(1) For an undergraduate student, requires the student to enroll in at least 12 credit hours in each term in the award year to qualify as a full-time student; or
(2) For a graduate student, each term in the award year meets the minimum full-time enrollment status established by the institution for a semester, trimester, or quarter; and
(D) Is not offered with overlapping terms; and
(ii) The institution offering the program—
(A) Provides the program using an academic calendar that includes two semesters or trimesters in the fall through the following spring, or three quarters in the fall, winter, and spring; and
(B) Does not provide at least 30 weeks of instructional time in the terms specified in paragraph (a)(2)(ii)(A) of this section.
(3) Other programs using terms and credit hours. A student's payment for a payment period is calculated under paragraph (d) of this section if the student is enrolled in an eligible program that—
(i) Measures progress in credit hours; and
(ii) Is offered in academic terms other than those described in paragraphs (a)(1) and (2) of this section.
(4) Programs not using terms or using clock hours. A student's payment for any payment period is calculated under paragraph (e) of this section if the student is enrolled in an eligible program that—
(i) Is offered in credit hours but is not offered in academic terms; or
(ii) Is offered in clock hours.
(5) Programs for which an exception to the academic year definition has been granted under 34 CFR 668.3. If an institution receives a waiver from the Secretary of the 30 weeks of instructional time requirement under 34 CFR 668.3, an institution may calculate a student's payment for a payment period using the following methodologies:
(i) If the program is offered in terms and credit hours, the institution uses the methodology in—
(A) Paragraph (b) of this section provided that the program meets all the criteria in paragraph (a)(1) of this section, except that in lieu of meeting the requirements in paragraph (a)(1)(ii)(B) of this section, the program provides at least the same number of weeks of instructional time in the terms specified in paragraph (a)(1)(ii)(A) of this section as are in the program's academic year; or
(B) Paragraph (d) of this section.
(ii) The institution uses the methodology described in paragraph (e) of this section if the program is offered in credit hours without terms.
(b) Programs using standard terms with at least 30 weeks of instructional time. The payment for a payment period, i.e., an academic term, for a student in a program using standard terms with at least 30 weeks of instructional time in two semesters or trimesters or in three quarters as described in paragraph (a)(1)(ii) of this section, is calculated by—
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her annual award; and
(3) Dividing the amount described in paragraph (b)(2) of this section by—
(i) Two at institutions using semesters or trimesters or three at institutions using quarters; or
(ii) The number of terms over which the institution chooses to distribute the student's annual award if—
(A) An institution chooses to distribute all of the student's annual award determined under paragraph (b)(2) of this section over more than two terms at institutions using semesters or trimesters or more than three quarters at institutions using quarters; and
(B) The number of weeks of instructional time in the terms, including the additional term or terms, equals the weeks of instructional time in the program's academic year.
(c) Programs using standard terms with less than 30 weeks of instructional time. The payment for a payment period, i.e., an academic term, for a student in a program using standard terms with less than 30 weeks of instructional time in two semesters or trimesters or in three quarters as described in paragraph (a)(2)(ii)(A) of this section, is calculated by—
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her annual award;
(3) Multiplying his or her annual award determined under paragraph (c)(2) of this section by the following fraction as applicable:
(i) In a program using semesters or trimesters—
The number of weeks of instructional time offered in the program in the fall and spring semesters or trimesters
The number of weeks in the program's academic year
(ii) In a program using quarters—
(4)(i) Dividing the amount determined under paragraph (c)(3) of this section by two for programs using semesters or trimesters or three for programs using quarters; or
(ii) Dividing the student's annual award determined under paragraph (c)(2) of this section by the number of terms over which the institution chooses to distribute the student's annual award if—
(A) An institution chooses to distribute all of the student's annual award determined under paragraph (c)(2) of this section over more than two terms for programs using semesters or trimesters or more than three quarters for programs using quarters; and
(B) The number of weeks of instructional time in the terms, including the additional term or terms, equals the weeks of instructional time in the program's academic year definition.
(d) Other programs using terms and credit hours. The payment for a payment period, i.e., an academic term, for a student in a program using terms and credit hours, other than those described in paragraph (a)(1) or (2) of this section, is calculated by—
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her annual award; and
(3) Multiplying his or her annual award determined under paragraph (d)(2) of this section by the following fraction:
(e) Programs using credit hours without terms or clock hours. The payment for a payment period for a student in a program using credit hours without terms or using clock hours is calculated by multiplying the Scheduled Award by the lesser of—
(1)
(2)
(f) Maximum disbursement. A single disbursement may not exceed 50 percent of an award determined under paragraph (d) of this section. If a payment for a payment period calculated under paragraph (d) of this section would require the disbursement of more than 50 percent of a student's annual award in that payment period, the institution must make at least two disbursements to the student in that payment period. The institution may not disburse an amount that exceeds 50 percent of the student's annual award until the student has completed the period of time in the payment period that equals, in terms of weeks of instructional time, 50 percent of the weeks of instructional time in the program's academic year.
(g) Minimum payment. No payment for a payment period as determined under this section or § 686.25 may be less than $25.
(h) Definition of academic year. For purposes of this section and § 686.25, an institution must define an academic year—
(1) For each of its TEACH Grant-eligible undergraduate programs of study, including post-baccalaureate programs of study, in terms of the number of credit or clock hours and weeks of instructional time in accordance with the requirements of 34 CFR 668.3; and
(2) For each of its TEACH Grant-eligible master's degree programs of study in terms of the number of weeks of instructional time in accordance with the requirements of 34 CFR 668.3 and the minimum number of credit or clock hours a full-time student would be expected to complete in the weeks of instructional time of the program's academic year.
(i) Payment period completing a Scheduled Award. In a payment period, if a student is completing a Scheduled Award, the student's payment for the payment period—
(1) Is calculated based on the total credit or clock hours and weeks of instructional time in the payment period; and
(2) Is the remaining amount of the Scheduled Award being completed plus an amount from the next Scheduled Award, if available, up to the payment for the payment period.
If a student enrolls in a payment period that is scheduled to occur in two award years—
(a) The entire payment period must be considered to occur within one award year;
(b) The institution must determine for each TEACH Grant recipient the award year in which the payment period will be placed subject to the restriction set forth in paragraph (c) of this section;
(c) The institution must place a payment period with more than six months scheduled to occur within one award year in that award year;
(d) If the institution places the payment period in the first award year, it must pay a student with funds from the first award year; and
(e) If the institution places the payment period in the second award year, it must pay a student with funds from the second award year.
(a) If a student who receives a TEACH Grant at one institution subsequently enrolls at a second institution, the student may receive a grant at the second institution only if—
(1) The student submits a SAR with an official EFC to the second institution; or
(2) The second institution obtains an ISIR with an official EFC.
(b) The second institution must calculate the student's award in accordance with § 686.22 or § 686.25.
(c) The second institution may pay a TEACH Grant only for that period in which a student is enrolled in a TEACH Grant-eligible program at that institution.
(d) The student's TEACH Grant for each payment period is calculated according to the procedures in § 686.22 or § 686.25 unless the remaining balance of the Scheduled Award at the second institution is the balance of the student's last Scheduled Award and is less than the amount the student would normally receive for that payment period.
(e) A transfer student must repay any amount received in an award year that exceeds the amount which he or she was eligible to receive.
(a) An institution calculates a TEACH Grant for a payment period for a student in a program of study offered by correspondence courses without terms, but not including any residential component, by—
(1) Using the half-time annual award; and
(2) Multiplying the half-time annual award by the lesser of—
(i)
(ii)
(b) For purposes of paragraph (a) of this section—
(1) The institution must make the first payment to a student for an academic year, as calculated under paragraph (a) of this section, after the student submits 25 percent of the lessons or otherwise completes 25 percent of the work scheduled for the program or the academic year, whichever occurs last; and
(2) The institution must make the second payment to a student for an academic year, as calculated under paragraph (a) of this section, after the student submits 75 percent of the lessons or otherwise completes 75 percent of the work scheduled for the program or the academic year, whichever occurs last.
(c) In a program of correspondence study offered by correspondence courses using terms but not including any residential component—
(1) The institution must prepare a written schedule for submission of lessons that reflects a workload of at least 30 hours of preparation per semester hour or 20 hours of preparation per quarter hour during the term;
(2)(i) If the student is enrolled in at least six credit hours that commence and are completed in that term, the half-time annual award is used to calculate the payment for the payment period; or
(ii) If the student is enrolled in less than six credit hours that commence and are completed in that term the less-than-half-time annual award is used to calculate the payment for the payment period;
(3) A payment for a payment period is calculated using the formula in § 686.22(d) except that paragraphs (c)(1) and (2) of this section are used in lieu of § 686.22(d)(1) and (2), respectively; and
(4) The institution must make the payment to a student for a payment period after that student completes 50 percent of the lessons or otherwise completes 50 percent of the work scheduled for the term, whichever occurs last.
(d) Payments for periods of residential training must be calculated under § 686.22(d) if the residential training is offered using terms and credit hours or under § 686.22(e) if the residential training is offered using credit hours without terms or clock hours.
This subpart deals with TEACH Grant program administration by a TEACH Grant-eligible institution.
(a) For each payment period, an institution may pay a grant under this part to an eligible student only after it determines that the student—
(1) Is eligible under § 686.11;
(2) Has completed the relevant initial or subsequent counseling as required in § 686.32;
(3) Has signed an agreement to serve or repay as described in § 686.12;
(4) Is enrolled in a TEACH Grant-eligible program; and
(5) If enrolled in a credit-hour program without terms or a clock-hour program, has completed the payment period, as defined in 34 CFR 668.4, for which he or she has been paid a grant.
(b)(1) If an institution determines at the beginning of a payment period that a student is not maintaining satisfactory progress, but changes that determination before the end of the payment period, the institution may pay a TEACH Grant to the student for the entire payment period.
(2) If an institution determines at the beginning of a payment period that a student enrolled in a TEACH Grant-eligible program is not maintaining the required GPA for a TEACH Grant under § 686.11 or is not pursuing a career in teaching, but changes that determination before the end of the payment period, the institution may pay a TEACH Grant to the student for the entire payment period.
(c) If an institution determines at the beginning of a payment period that a student is not maintaining satisfactory progress or the necessary GPA for a TEACH Grant under § 686.11 or is not pursuing a career in teaching, but changes that determination after the end of the payment period, the institution may not pay the student a TEACH Grant for that payment period or make adjustments in subsequent payments to compensate for the loss of aid for that period.
(d) An institution may make one disbursement for a payment period to an otherwise eligible student if—
(1)(i) The student's final high school GPA is not yet available; or
(ii) The student's cumulative GPA through the prior payment period under § 686.11 is not yet available; and
(2) The institution assumes liability for any overpayment if the student fails to meet the required GPA to qualify for the disbursement.
(e)(1) In accordance with 34 CFR 668.165, before disbursing a TEACH Grant for any award year, an institution must—
(i) Notify the student of the amount of TEACH Grant funds that the student is eligible to receive, how and when those funds will be disbursed, and the student's right to cancel all or a portion of the TEACH Grant; and
(ii) Return the TEACH Grant proceeds, cancel the TEACH Grant, or both, if the institution receives a TEACH Grant cancellation request from the student by the later of the first day of a payment period or 14 days after the date it notifies the student of his or her right to cancel all or a portion of a TEACH Grant.
(2)(i) If a student requests cancellation of a TEACH Grant after the period of time in paragraph (e)(1)(ii) of this section, but within 120 days of the TEACH Grant disbursement date, the institution may return the TEACH Grant proceeds, cancel the TEACH Grant, or do both.
(ii) If the institution does not return the TEACH Grant proceeds, or cancel the TEACH Grant, the institution must notify the student that he or she may contact the Secretary to request that the TEACH Grant be converted to a Direct Unsubsidized Loan Direct Unsubsidized Loan.
(a) Initial counseling. (1) An institution must ensure that initial counseling is conducted with each TEACH Grant recipient prior to making the first disbursement of the grant.
(2) The initial counseling must be in person, by audiovisual presentation, or by interactive electronic means. In each case, the institution must ensure that an individual with expertise in title IV, HEA programs is reasonably available shortly after the counseling to answer the student's questions. As an alternative, in the case of a student enrolled in a correspondence program of study or a study-abroad program of study approved for credit at the home institution, the student may be provided with written counseling materials before the grant is disbursed.
(3) The initial counseling must—
(i) Explain the terms and conditions of the TEACH Grant agreement to serve or repay as described in § 686.12;
(ii) Provide the grant recipient with information about how to identify low-income schools and documented high-need fields;
(iii) Inform the grant recipient that, for the teaching to count towards the recipient's service obligation, the high-need field in which he or she has prepared to teach must be—
(A) One of the six high-need fields listed in § 686.2; or
(B) A high-need field that is listed in the Nationwide List for the State in which the grant recipient teaches—
(1) At the time the grant recipient begins teaching in that field, even if that field subsequently loses its high-need designation for that State; or
(2) For teaching service performed on or after July 1, 2010, at the time the grant recipient signed the agreement to serve or repay or received the TEACH Grant, even if that field subsequently loses its high-need designation for that State before the grant recipient begins teaching in that field;
(iv) Inform the grant recipient of the opportunity to request a suspension of the eight-year period for completion of the agreement to serve or repay and the conditions under which a suspension may be granted in accordance with § 686.41;
(v) Explain to the grant recipient that conditions, such as conviction of a felony, could preclude the grant recipient from completing the service obligation;
(vi) Emphasize to the grant recipient that if the grant recipient fails or refuses to complete the service obligation contained in the agreement to serve or repay or any other condition of the agreement to serve or repay—
(A) The TEACH Grant must be repaid as a Direct Unsubsidized Loan; and
(B) The grant recipient will be obligated to repay the full amount of each grant and the accrued interest from each disbursement date;
(vii) Explain the circumstances, as described in § 686.43, under which a TEACH Grant will be converted to a Direct Unsubsidized Loan;
(viii) Explain that to avoid further accrual of interest as described in § 686.12(b)(4)(ii), a grant recipient who decides not to teach in a qualified school or field, or who for any other reason no longer intends to satisfy the service obligation, may request that the Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan that the grant recipient may begin repaying immediately, instead of waiting for the TEACH Grant to be converted to a loan under the condition described in § 686.43(a)(1)(ii);
(ix) Emphasize that, once a TEACH Grant is converted to a Direct Unsubsidized Loan, it may be reconverted to a grant only if—
(A) The Secretary determines, based on documentation provided by the recipient or in the Secretary's records, that the grant recipient was satisfying the service obligation as described in § 686.12 or that the grant was converted to a loan in error; or
(B) In the case of a grant recipient whose TEACH Grant was converted to a Direct Unsubsidized Loan in accordance with § 686.43(a)(1)(i), the grant recipient requests that the Secretary reconvert the loan to a grant and is determined to be eligible for reconversion in accordance with § 686.43(a)(8);
(x) Review for the grant recipient information on the availability of the Department's Federal Student Aid Ombudsman's office;
(xi) Describe the likely consequences of loan default, including adverse credit reports, garnishment of wages, Federal offset, and litigation; and
(xii) Inform the grant recipient of sample monthly repayment amounts based on a range of student loan indebtedness.
(b) Subsequent counseling. (1) If a student receives more than one TEACH Grant, the institution must ensure that the student receives additional counseling prior to the first disbursement of each subsequent TEACH Grant award.
(2) Subsequent counseling may be in person, by audiovisual presentation, or by interactive electronic means. In each case, the institution must ensure that an individual with expertise in title IV, HEA programs is reasonably available shortly after the counseling to answer the student's questions. As an alternative, in the case of a student enrolled in a correspondence program of study or a study-abroad program of study approved for credit at the home institution, the student may be provided with written counseling materials before the grant is disbursed.
(3) Subsequent counseling must—
(i) Review the terms and conditions of the TEACH Grant agreement to serve or repay as described in § 686.12;
(ii) Emphasize to the grant recipient that if the grant recipient fails or refuses to complete the service obligation contained in the agreement to serve or repay or any other condition of the agreement to serve or repay—
(A) The TEACH Grant must be repaid as a Direct Unsubsidized Loan; and
(B) The grant recipient will be obligated to repay the full amount of the grant and the accrued interest from the disbursement date;
(iii) Explain the circumstances, as described in § 686.43, under which a TEACH Grant will be converted to a Direct Unsubsidized Loan;
(iv) Explain that to avoid further accrual of interest as described in § 686.12(b)(4)(ii), a grant recipient who decides not to teach in a qualified school or field, or who for any other reason no longer intends to satisfy the service obligation, may request that the Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan that the grant recipient may begin repaying immediately, instead of waiting for the TEACH Grant to be converted to a loan under the condition described in § 686.43(a)(1)(ii);
(v) Emphasize that, once a TEACH Grant is converted to a Direct Unsubsidized Loan, it may be reconverted to a grant only if—
(A) The Secretary determines, based on documentation provided by the recipient or in the Secretary's records, that the grant recipient was satisfying the service obligation as described in § 686.12 or that the grant was converted to a loan in error; or
(B) In the case of a grant recipient whose TEACH Grant was converted to a Direct Unsubsidized Loan in accordance with § 686.43(a)(1)(i), the grant recipient requests that the Secretary reconvert the loan to a grant and is determined to be eligible for reconversion in accordance with § 686.43(a)(8); and
(vi) Review for the grant recipient information on the availability of the Department's Federal Student Aid Ombudsman's office.
(c) Exit counseling. (1) An institution must ensure that exit counseling is conducted with each grant recipient before he or she ceases to attend the institution at a time determined by the institution.
(2) The exit counseling must be in person, by audiovisual presentation, or by interactive electronic means. In each case, the institution must ensure that an individual with expertise in title IV, HEA programs is reasonably available shortly after the counseling to answer the grant recipient's questions. As an alternative, in the case of a grant recipient enrolled in a correspondence program of study or a study-abroad program of study approved for credit at the home institution, the grant recipient may be provided with written counseling materials within 30 days after he or she completes the TEACH Grant-eligible program.
(3) Within 30 days of learning that a grant recipient has withdrawn from the institution without the institution's knowledge, or from a TEACH Grant-eligible program, or failed to complete exit counseling as required, exit counseling must be provided either in-person, through interactive electronic means, or by mailing written counseling materials to the grant recipient's last known address.
(4) The exit counseling must—
(i) Review the terms and conditions of the TEACH Grant agreement to serve or repay as described in § 686.12 and emphasize to the grant recipient that the four-year service obligation must be completed within the eight-year period described in § 686.12;
(ii) Explain the treatment of a grant recipient who withdraws from and then reenrolls in a TEACH Grant-eligible program at a TEACH Grant eligible institution as described in § 686.12(c);
(iii) Inform the grant recipient of the opportunity to request a suspension of the eight-year period for completion of the service obligation and the conditions under which a suspension may be granted in accordance with § 686.41;
(iv) Provide the grant recipient with information about how to identify low-income schools and documented high-need fields;
(v) Inform the grant recipient that, for the teaching to count towards the recipient's service obligation, the high-need field in which he or she has prepared to teach must be—
(A) One of the six high-need fields listed in § 686.2; or
(B) A high-need field that is listed in the Nationwide List for the State in which the grant recipient teaches—
(1) At the time the grant recipient begins teaching in that field, even if that field subsequently loses its high-need designation for that State; or
(2) For teaching service performed on or after July 1, 2010, at the time the grant recipient signed the agreement to serve or repay or received the TEACH Grant, even if that field subsequently loses its high-need designation for that State before the grant recipient begins teaching in that field;
(vi) Emphasize to the grant recipient that if the grant recipient fails or refuses to complete the service obligation contained in the agreement to serve or repay or fails to meet any other condition of the agreement to serve or repay—
(A) The TEACH Grant must be repaid as a Direct Unsubsidized Loan; and
(B) The grant recipient will be obligated to repay the full amount of each grant and the accrued interest from each disbursement date;
(vii) Explain to the grant recipient that the Secretary will, at least annually during the service obligation period, send the recipient the notice described in § 686.43(a)(2);
(viii) Explain the circumstances, as described in § 686.43, under which a TEACH Grant will be converted to a Direct Unsubsidized Loan;
(ix) Explain that to avoid further accrual of interest as described in § 686.12(b)(4)(ii), a grant recipient who decides not to teach in a qualified school or field, or who for any other reason no longer intends to satisfy the service obligation, may request that the Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan that the grant recipient may begin repaying immediately, instead of waiting for the TEACH Grant to be converted to a loan under the condition described in § 686.43(a)(1)(ii);
(x) Emphasize that once a TEACH Grant is converted to a Direct Unsubsidized Loan it may be reconverted to a grant only if—
(A) The Secretary determines, based on documentation provided by the recipient or in the Secretary's records, that the grant recipient was satisfying the service obligation as described in § 686.12 or that the grant was converted to a loan in error; or
(B) In the case of a grant recipient whose TEACH Grant was converted to a Direct Unsubsidized Loan in accordance with § 686.43(a)(1)(i), the grant recipient requests that the Secretary reconvert the loan to a grant and is determined to be eligible for reconversion in accordance with § 686.43(a)(8); and
(xi) Explain to the grant recipient how to contact the Secretary.
(5) If exit counseling is conducted through interactive electronic means, an institution must take reasonable steps to ensure that each grant recipient receives the counseling materials and participates in and completes the exit counseling.
(5) If exit counseling is conducted through interactive electronic means, an institution must take reasonable steps to ensure that each grant recipient receives the counseling materials and participates in and completes the exit counseling.
(d) Compliance. The institution must maintain documentation substantiating the institution's compliance with paragraphs (a) through (c) of this section for each TEACH Grant recipient.
(e) Conversion counseling. (1) At the time a TEACH Grant recipient's TEACH Grant is converted to a Direct Unsubsidized Loan, the Secretary conducts conversion counseling with the recipient by interactive electronic means and by mailing written counseling materials to the most recent address provided by the recipient.
(2) The conversion counseling—
(i) Informs the borrower of the average anticipated monthly repayment amount based on the borrower's indebtedness;
(ii) Reviews for the borrower available repayment plan options, including standard, graduated, extended, income-contingent, and income-based repayment plans, including a description of the different features of each plan and the difference in interest paid and total payments under each plan;
(iii) Explains to the borrower the options to prepay each loan, to pay each loan on a shorter schedule, and to change repayment plans;
(iv) Provides information on the effects of loan consolidation including, at a minimum—
(A) The effects of consolidation on total interest to be paid, and length of repayment;
(B) The effects of consolidation on a borrower's underlying loan benefits, including grace periods, loan forgiveness, cancellation, and deferment opportunities; and
(C) The options of the borrower to prepay the loan and to change repayment plans;
(v) Includes debt-management strategies that are designed to facilitate repayment;
(vi) Explains to the borrower the availability of Public Service Loan Forgiveness and teacher loan forgiveness;
(vii) Explains how the borrower may request reconsideration of the conversion of the TEACH Grant to a Direct Unsubsidized Loan if the borrower believes that the grant was converted to a loan in error, or if the borrower can provide documentation showing that he or she was satisfying the service obligation as described in § 686.12;
(viii) Describes the likely consequences of default, including adverse credit reports, delinquent debt collection procedures under Federal law, and litigation;
(ix) Informs the borrower of the grace period as described in § 686.43(c);
(x) Provides—
(A) A general description of the terms and conditions under which a borrower may obtain full or partial forgiveness or discharge of the loan (including under the Public Service Loan Forgiveness Program), defer repayment of the loan, or be granted a forbearance on repayment of the loan; and
(B) A copy, either in print or by electronic means, of the information the Secretary makes available pursuant to section 485(d) of the HEA;
(xi) Requires the borrower to provide current information concerning name, address, Social Security number, and driver's license number and State of issuance, as well as the borrower's permanent address;
(xii) Reviews for the borrower information on the availability of the Federal Student Aid Ombudsman's office;
(xiii) Informs the borrower of the availability of title IV loan information in the National Student Loan Data System (NSLDS) and how NSLDS can be used to obtain title IV loan status information;
(xiv) Provides a general description of the types of tax benefits that may be available to borrowers;
(xv) Informs the borrower of the amount of interest that has accrued on the converted TEACH Grants and explains that any unpaid interest will be capitalized at the end of the grace period; and
(xvi) In the case of a borrower whose TEACH Grant was converted to a Direct Unsubsidized Loan in accordance with § 686.43(a)(1)(i), explains that the borrower may request that the Secretary reconvert the loan to a grant as provided in § 686.43(a)(8).
(a) In each payment period, an institution may pay a student at such times and in such installments as it determines will best meet the student's needs.
(b) The institution may pay funds in one lump sum for all the prior payment periods for which the student was eligible under § 686.11 within the award year as long as the student has signed the agreement to serve prior to disbursement of the TEACH Grant. The student's enrollment status must be determined according to work already completed.
(a)(1) Except as provided in paragraphs (a)(2) and (3) of this section, a student is liable for any TEACH Grant overpayment made to him or her.
(2) The institution is liable for a TEACH Grant overpayment if the overpayment occurred because the institution failed to follow the procedures set forth in this part or in 34 CFR part 668. The institution must restore an amount equal to the overpayment to its TEACH Grant account.
(3) A student is not liable for, and the institution is not required to attempt recovery of or refer to the Secretary, a TEACH Grant overpayment if the amount of the overpayment is less than $25 and is not a remaining balance.
(b)(1) Except as provided in paragraph (a)(3) of this section, if an institution makes a TEACH Grant overpayment for which it is not liable, it must promptly send a written notice to the student requesting repayment of the overpayment amount. The notice must state that failure to make the requested repayment, or to make arrangements satisfactory to the holder of the overpayment debt to repay the overpayment, makes the student ineligible for further title IV, HEA program funds until final resolution of the TEACH Grant overpayment.
(2) If a student objects to the institution's TEACH Grant overpayment determination, the institution must consider any information provided by the student and determine whether the objection is warranted.
(c) Except as provided in paragraph (a)(3) of this section, if the student fails to repay a TEACH Grant overpayment or make arrangements satisfactory to the holder of the overpayment debt to repay the TEACH Grant overpayment, after the institution has taken the action required by paragraph (b) of this section, the institution must refer the overpayment to the Secretary for collection in accordance with procedures required by the Secretary. After referring the TEACH Grant overpayment to the Secretary under this section, the institution need make no further efforts to recover the overpayment.
(a) Change in enrollment status. (1) If the student's enrollment status changes from one academic term to another academic term within the same award year, the institution must recalculate the TEACH Grant award for the new payment period taking into account any changes in the cost of attendance.
(2)(i) If the student's projected enrollment status changes during a payment period after the student has begun attendance in all of his or her classes for that payment period, the institution may (but is not required to) establish a policy under which the student's award for the payment period is recalculated. Any such recalculations must take into account any changes in the cost of attendance. In the case of an undergraduate or post-baccalaureate program of study, if such a policy is established, it must be the same policy that the institution established under 34 CFR 690.80(b) for the Federal Pell Grant Program and it must apply to all students in the TEACH Grant-eligible program.
(ii) If a student's projected enrollment status changes during a payment period before the student begins attendance in all of his or her classes for that payment period, the institution must recalculate the student's enrollment status to reflect only those classes for which he or she actually began attendance.
(b) Change in cost of attendance. If the student's cost of attendance changes at any time during the award year and his or her enrollment status remains the same, the institution may, but is not required to, establish a policy under which the student's TEACH Grant award for the payment period is recalculated. If such a policy is established, it must apply to all students in the TEACH Grant-eligible program.
(a) An institution must follow the provisions for maintaining general fiscal records in this section and in 34 CFR 668.24(b).
(b) An institution must maintain funds received under this section in accordance with the requirements in 34 CFR 668.164.
(a) An institution must provide to the Secretary information about each TEACH Grant recipient that includes but is not limited to—
(1) The student's eligibility for a TEACH Grant, as determined in accordance with §§ 686.11 and 686.31;
(2) The student's TEACH Grant amounts; and
(3) The anticipated and actual disbursement date or dates and disbursement amounts of the TEACH Grant funds.
(b) The Secretary accepts a student's Payment Data that is submitted in accordance with procedures established through publication in the
(a) An institution must follow the record retention and examination provisions in this part and in 34 CFR 668.24.
(b) For any disputed expenditures in any award year for which the institution cannot provide records, the Secretary determines the final authorized level of expenditures.
(a) If a grant recipient is performing full-time teaching service in accordance with the agreement to serve or repay, or agreements to serve or repay if more than one agreement exists, the grant recipient must, upon completion of each of the four required elementary or secondary academic years of teaching service, provide to the Secretary documentation of that teaching service on a form approved by the Secretary and certified by the chief administrative officer of the school or educational service agency in which the grant recipient is teaching. The documentation must show that the grant recipient—
(1) Taught full-time in a low-income school as a highly qualified teacher as defined in § 686.2(d); and
(2)(i) Taught a majority of classes during the period being certified in any of the high-need fields of mathematics, science, a foreign language, bilingual education, English language acquisition, special education, or as a reading specialist; or
(ii) Taught a majority of classes during the period being certified in another high-need field designated by that State and listed in the Nationwide List, in accordance with § 686.12(d).
(b) For purposes of completing the service obligation, the elementary or secondary academic year may be counted as one of the grant recipient's four complete elementary or secondary academic years if the grant recipient completes at least one-half of the elementary or secondary academic year and the grant recipient's school employer considers the grant recipient to have fulfilled his or her contract requirements for the elementary or secondary academic year for the purposes of salary increases, tenure, and retirement if the grant recipient is unable to complete an elementary or secondary academic year due to—
(1) A condition that is a qualifying reason for leave under the Family and Medical Leave Act of 1993 (FMLA) (29 U.S.C. 2612(a)(1) and (3));
(2) A call or order to Federal or State active duty, or Active Service as a member of a Reserve Component of the Armed Forces named in 10 U.S.C. 10101, or service as a member of the National Guard on full-time National Guard duty, as defined in 10 U.S.C. 101(d)(5); or
(3) Residing in or being employed in a federally declared major disaster area as defined in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122(2)).
(c)(1) A grant recipient who taught in more than one qualifying school or qualifying educational service agency during an elementary or secondary academic year and demonstrates that the combined teaching service was the equivalent of full-time, as supported by the certification of one or more of the chief administrative officers of the schools or educational service agencies involved, is considered to have completed one elementary or secondary academic year of qualifying teaching.
(2) If the school or educational service agency at which the grant recipient is employed meets the requirements of a low-income school in the first year of the grant recipient's four elementary or secondary academic years of teaching and the school or educational service agency fails to meet those requirements in subsequent years, those subsequent years of teaching qualify for purposes of satisfying the service obligation described in § 686.12(b).
(a)(1) A grant recipient who has completed or who has otherwise ceased enrollment in a TEACH Grant-eligible program for which he or she received TEACH Grant funds may request a suspension from the Secretary of the eight-year period for completion of the service obligation based on—
(i) Enrollment in a program of study for which the recipient would be eligible for a TEACH Grant or in a program of study that has been determined by a State to satisfy the requirements for certification or licensure to teach in the State's elementary or secondary schools;
(ii) Receiving State-required instruction or otherwise fulfilling requirements for licensure to teach in a State's elementary or secondary schools;
(iii) A condition that is a qualifying reason for leave under the FMLA;
(iv) A call to order to Federal or State active duty or Active Service as a member of a Reserve Component of the Armed Forces named in 10 U.S.C. 10101, or service as a member of the National Guard on full-time National Guard duty, as defined in 10 U.S.C. 101(d)(5);
(v) Military orders for the recipient's spouse for—
(A) Deployment with a military unit or as an individual in support of a call to Federal or State Active Duty, or Active Service; or
(B) A change of permanent duty station from a location in the continental United States to a location outside of the continental United States or from a location in a State to any location outside of that State; or
(vi) Residing in or being employed in a federally declared major disaster area as defined in the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122(2)).
(2) A grant recipient may receive a suspension described in paragraphs (a)(1)(i) through (vi) of this section in one-year increments that—
(i) Does not exceed a combined total of three years under paragraphs (a)(1)(i) through (iii) of this section;
(ii) Does not exceed a total of three years under paragraph (a)(1)(iv) of this section;
(iii) Does not exceed a total of three years under paragraph (a)(1)(v) of this section; or
(iv) Does not exceed a total of three years under paragraph (a)(1)(vi) of this section.
(b) A grant recipient, or his or her representative in the case of a grant recipient who qualifies under paragraph (a)(1)(iv) or (vi) of this section, must apply for a suspension on a form approved by the Secretary, prior to being subject to any of the conditions under § 686.43(a)(1) through (5) that would cause the TEACH Grant to convert to a Direct Unsubsidized Loan.
(c) A grant recipient, or his or her representative in the case of a grant recipient who qualifies under paragraph (a)(1)(iv) or (vi) of this section, must provide the Secretary with documentation supporting the suspension request as well as current contact information including home address and telephone number.
(d) On a case-by-case basis, the Secretary may grant a temporary suspension of the period for completing the service obligation if the Secretary determines that a grant recipient was unable to complete a full academic year of teaching or begin the next academic year of teaching due to exceptional circumstances significantly affecting the operation of the school or educational service agency where the grant recipient was employed or the grant recipient's ability to teach.
(e) The Secretary notifies the grant recipient regarding the outcome of the application for suspension.
(a) Death. (1) If a grant recipient dies, the Secretary discharges the obligation to complete the agreement to serve or repay based on—
(i) An original or certified copy of the death certificate;
(ii) An accurate and complete photocopy of the original or certified copy of the death certificate;
(iii) An accurate and complete original or certified copy of the death certificate that is scanned and submitted electronically or sent by facsimile transmission; or
(iv) Verification of the grant recipient's death through an authoritative Federal or State electronic database approved for use by the Secretary.
(2) Under exceptional circumstances and on a case-by-case basis, the Secretary discharges the obligation to complete the agreement to serve or repay based on other reliable documentation of the grant recipient's death that is acceptable to the Secretary.
(b) Total and permanent disability. (1) A grant recipient's agreement to serve or repay is discharged if the recipient becomes totally and permanently disabled, as defined in 34 CFR 685.102(b), and the grant recipient applies for and satisfies the eligibility requirements for a total and permanent disability discharge in accordance with 34 CFR 685.213.
(2) If at any time the Secretary determines that the grant recipient does not meet the requirements of the three-year period following the discharge as described in 34 CFR 685.213(b)(7), the Secretary will notify the grant recipient that the grant recipient's obligation to satisfy the terms of the agreement to serve or repay is reinstated.
(3) The Secretary's notification under paragraph (b)(2) of this section will—
(i) Include the reason or reasons for reinstatement;
(ii) Provide information on how the grant recipient may contact the Secretary if the grant recipient has questions about the reinstatement or believes that the agreement to serve or repay was reinstated based on incorrect information; and
(iii) Inform the TEACH Grant recipient that he or she must satisfy the service obligation within the portion of the eight-year period that remained after the date of the discharge.
(4) If the TEACH Grant made to a recipient whose TEACH Grant agreement to serve or repay is reinstated is later converted to a Direct Unsubsidized Loan, the recipient will not be required to pay interest that accrued on the TEACH Grant disbursements from the date the agreement to serve or repay was discharged until the date the agreement to serve or repay was reinstated.
(c) Military discharge. (1) A grant recipient who has completed or who has otherwise ceased enrollment in a TEACH Grant-eligible program for which he or she received TEACH Grant funds and has exceeded the period of time allowed under § 686.41(a)(2)(ii), may qualify for a proportional discharge of his or her service obligation due to an extended call or order to active duty status. To apply for a military discharge, a grant recipient or his or her representative must submit a written request to the Secretary.
(2) A grant recipient described in paragraph (c)(1) of this section may receive a—
(i) One-year discharge of his or her service obligation if a call or order to active duty status is for more than three years;
(ii) Two-year discharge of his or her service obligation if a call or order to active duty status is for more than four years;
(iii) Three-year discharge of his or her service obligation if a call or order to active duty status is for more than five years; or
(iv) Full discharge of his or her service obligation if a call or order to active duty status is for more than six years.
(3) A grant recipient or his or her representative must provide the Secretary with—
(i) A written statement from the grant recipient's commanding or personnel officer certifying—
(A) That the grant recipient is on active duty in the Armed Forces of the United States;
(B) The date on which the grant recipient's service began; and
(C) The date on which the grant recipient's service is expected to end; or
(ii)(A) A copy of the grant recipient's official military orders; and
(B) A copy of the grant recipient's military identification.
(4) For the purpose of this section, the Armed Forces means the Army, Navy, Air Force, Marine Corps, the Coast Guard, a reserve component of the Armed Forces named in 10 U.S.C. 10101, or the National Guard.
(5) Based on a request for a military discharge from the grant recipient or his or her representative, the Secretary will notify the grant recipient or his or her representative of the outcome of the discharge request. For the portion on the service obligation that remains, the grant recipient remains responsible for fulfilling his or her service obligation in accordance with § 686.12.
(a)(1) The TEACH Grant amounts disbursed to the recipient will be converted into a Direct Unsubsidized Loan, with interest accruing from the date that each grant disbursement was made and be collected by the Secretary in accordance with the relevant provisions of subpart A of 34 CFR part 685 if—
(i) The grant recipient, regardless of enrollment status, requests that the TEACH Grant be converted into a Direct Unsubsidized Loan because he or she has decided not to teach in a qualified school or educational service agency, or not to teach in a high-need field, or for any other reason; or
(ii) The grant recipient does not begin or maintain qualified employment within the timeframe that would allow that individual to complete the service obligation within the number of years required under § 686.12.
(2) At least annually during the service obligation period under § 686.12, the Secretary notifies the grant recipient of—
(i) The terms and conditions that the grant recipient must meet to satisfy the service obligation;
(ii) The requirement for the grant recipient to provide to the Secretary, upon completion of each of the four required elementary or secondary academic years of teaching service, documentation of that teaching service on a form approved by the Secretary and certified by the chief administrative officer of the school or educational service agency in which the grant recipient taught and emphasizes the necessity to keep copies of this information and copies of the recipient's own employment documentation;
(iii) The service years completed and the remaining timeframe within which the grant recipient must complete the service obligation;
(iv) The conditions under which the grant recipient may request a temporary suspension of the period for completing the service obligation;
(v) The conditions as described under paragraph (a)(1) of this section under which the TEACH Grant amounts disbursed to the recipient will be converted into a Direct Unsubsidized Loan;
(vi) The potential total interest accrued;
(vii) The process by which the recipient may contact the Secretary to request reconsideration of the conversion, the deadline by which the grant recipient must submit the request for reconsideration, and a list of the specific documentation required by the Secretary to reconsider the conversion; and
(viii) An explanation that to avoid further accrual of interest as described in § 686.12(b)(4)(ii), a grant recipient who decides not to teach in a qualified school or field, or who for any other reason no longer intends to satisfy the service obligation, may request that the Secretary convert his or her TEACH Grant to a Direct Unsubsidized Loan that the grant recipient may begin repaying immediately, instead of waiting for the TEACH Grant to be converted to a loan under the condition described in paragraph (a)(1)(ii) of this section.
(3) On or about 90 days before the date that a grant recipient's TEACH Grants would be converted to Direct Unsubsidized Loans in accordance with paragraph (a)(1)(ii) of this section, the Secretary notifies the grant recipient of the date by which the recipient must submit documentation showing that the recipient is satisfying the obligation.
(4) If the TEACH Grant amounts disbursed to a recipient are converted to a Direct Unsubsidized Loan, the Secretary notifies the recipient of the conversion and offers conversion counseling as described in § 686.32(e).
(5) Except as provided in paragraph (a)(8) of this section, if a grant recipient's TEACH Grant was converted to a Direct Unsubsidized Loan, the Secretary will reconvert the loan to a TEACH Grant based on documentation provided by the recipient or in the Secretary's records demonstrating that the recipient was satisfying the service obligation as described in § 686.12 or that the grant was converted to a loan in error.
(6) If a grant recipient who requests reconsideration demonstrates to the satisfaction of the Secretary that a TEACH Grant was converted to a loan in error, the Secretary—
(i) Reconverts the loan to a TEACH Grant;
(ii) Applies any academic years of qualifying teaching service that the grant recipient completed before or during the period when the grant was incorrectly in loan status toward the grant recipient's four-year service obligation requirement;
(iii) Upon reconversion of the loan to a TEACH Grant, provides the grant recipient with an additional period of time, equal to eight years minus the number of full academic years of teaching that the recipient completed prior to the reconversion of the loan to a TEACH Grant, including any years of qualifying teaching completed during the period when the TEACH Grant was incorrectly in loan status, to complete the remaining portion of the service obligation.
(iv) Ensures that the grant recipient receives credit for any payments that were made on the Direct Unsubsidized Loan that was reconverted to a TEACH Grant;
(v) Notifies the recipient of the reconversion to a grant and explains that the recipient is once again responsible for meeting all requirements of the service obligation under § 686.12; and
(vi) Requests deletion of any derogatory information reported to the consumer reporting agencies related to the grant while it was in loan status and furnishes a statement confirming that the grant was converted to a loan in error that the recipient may provide to creditors until the recipient's credit history has been corrected.
(7) If a grant recipient who requests reconsideration does not demonstrate to the satisfaction of the Secretary that a TEACH Grant was converted to a loan in error, the Secretary—
(i) Notifies the recipient that the loan cannot be converted to a TEACH Grant;
(ii) Explains the reason or reasons why the loan cannot be converted to a TEACH Grant; and
(iii) Explains how the recipient may contact the Federal Student Aid Ombudsman if he or she continues to believe that the TEACH Grant was converted to a loan in error.
(8) In the case of a grant recipient whose TEACH Grant was converted to a Direct Unsubsidized Loan in accordance with paragraph (a)(1)(i) of this section, the Secretary will reconvert the loan to a grant and restore the recipient's service obligation if—
(i) The grant recipient submits a request to the Secretary to reconvert the loan to a TEACH Grant;
(ii) Excluding any periods of suspension granted under § 686.41, there is sufficient time remaining for the grant recipient to complete the required four academic years of qualifying teaching service within eight years from the date the grant recipient ceased enrollment at the institution where the recipient received the grant or, in the case of a student who received a TEACH Grant at one institution and subsequently transferred to another institution and enrolled in another TEACH Grant-eligible program, within eight years from the date the recipient ceased enrollment at the other institution; and
(iii) In the case of a recipient who would not have sufficient time remaining to complete the service obligation within the eight-year period as described in paragraph (a)(8)(ii) of this section unless the recipient qualifies for a suspension under § 686.40, which may be granted retroactively, the recipient requests and is determined to be eligible for the suspension.
(9) A TEACH Grant recipient remains obligated to meet all requirements of the service obligation under § 686.12, even if the recipient does not receive the notices from the Secretary as described in paragraph (a)(2) of this section.
(b) A TEACH Grant that is converted to a loan, and is treated as a Direct Unsubsidized Loan, is not counted against the grant recipient's annual or aggregate loan limits under 34 CFR 685.203.
(c) A grant recipient whose TEACH Grant has been converted to a Direct Unsubsidized Loan—
(1) Enters a six-month grace period prior to entering repayment, and
(2) Is eligible for all of the benefits of the Direct Loan Program.
The Federal Pell Grant Program awards grants to help financially needy students meet the cost of their postsecondary education.
(a) The following definitions are contained in the regulations for Institutional Eligibility under the Higher Education Act of 1965, as amended, 34 CFR part 600:
(b) The following definitions are contained in subpart A of the Student Assistance General Provisions, 34 CFR part 668:
(c) Other terms used in this part are:
Annual award: The Federal Pell Grant award amount a full-time student would receive under the Payment Schedule for a full academic year in an award year, and the amount a three-quarter-time, half-time, and less-than-half-time student would receive under the appropriate Disbursement Schedule for being enrolled in that enrollment status for a full academic year in an award year.
Central processor: An organization under contract with the Secretary that calculates an applicant's expected family contribution based on the applicant's application information, transmits an ISIR to each institution designated by the applicant, and submits reports to the Secretary on the correctness of its computations of the expected family contribution amounts and the accuracy of the answers to questions on application forms for the previous award year cycle.
Disbursement Schedule: A table showing the annual awards that three-quarter, half-time, and less-than-half-time students at term-based institutions using credit hours would receive for an academic year. This table is published annually by the Secretary and is based on—
(1) A student's expected family contribution, as determined in accordance with title IV, part F of the HEA; and
(2) A student's attendance costs as defined in title IV, part F of the HEA.
(3) The amount of funds available for making Federal Pell Grants.
Electronic Data Exchange: An electronic exchange system between the central processor and an institution under which—
(1) A student is able to transmit his or her application information to the central processor through his or her institution and an ISIR is transmitted back to the institution;
(2) A student through his or her institution is able to transmit any changes in application information to the central processor; and
(3) An institution is able to receive an ISIR from the central processor for a student.
Eligible student: An eligible student as described in 34 CFR part 668, subpart C.
Enrollment status: Full-time, three-quarter-time, half-time, or less-than-half-time depending on a student's credit-hour work load per academic term at an institution using semesters, trimesters, quarters, or other academic terms and measuring progress by credit hours.
Institution of higher education (Institution). An institution of higher education, or a proprietary institution of higher education, or a postsecondary vocational institution as defined in 34 CFR part 600.
Payment Data: An electronic record that is provided to the Secretary by an institution showing student disbursement information.
Payment Schedule: A table showing a full-time student's Scheduled Federal Pell Grant for an academic year. This table, published annually by the Secretary, is based on—
(1) The student's EFC; and
(2) The student's cost of attendance as defined in part F of title IV of the HEA.
Scheduled Federal Pell Grant: The amount of a Federal Pell Grant which would be paid to a full-time student for a full academic year.
(a) Except as provided in paragraphs (c) and (d) of this section, a student is eligible to receive a Federal Pell Grant for the period of time required to complete his or her first undergraduate baccalaureate course of study.
(b) An institution shall determine when the student has completed the academic curriculum requirements for that first undergraduate baccalaureate course of study. Any noncredit or remedial course taken by a student, including a course in English language instruction, is not included in the institution's determination of that student's period of Federal Pell Grant eligibility.
(c) An otherwise eligible student who has a baccalaureate degree and is enrolled in a postbaccalaureate program is eligible to receive a Federal Pell Grant for the period of time necessary to complete the program if—
(1) The postbaccalaureate program consists of courses that are required by a State for the student to receive a professional certification or licensing credential that is required for employment as a teacher in an elementary or secondary school in that State;
(2) The postbaccalaureate program does not lead to a graduate degree;
(3) The institution offering the postbaccalaureate program does not also offer a baccalaureate degree in education;
(4) The student is enrolled as at least a half-time student; and
(5) The student is pursuing an initial teacher certification or licensing credential within a State.
(d) An institution must treat a student who receives a Federal Pell Grant under paragraph (c) of this section as an undergraduate student enrolled in an undergraduate program for title IV purposes.
(e) A student may receive no more than six Scheduled Awards, as determined by the Secretary.
(a) If an institution begins participation in the Federal Pell Grant Program during an award year, a student enrolled and attending that institution is eligible to receive a Federal Pell Grant for the payment period during which the institution enters into a program participation agreement with the Secretary and any subsequent payment period.
(b) If an institution becomes ineligible to participate in the Federal Pell Grant Program during an award year, an eligible student who was attending the institution and who submitted a valid SAR to the institution, or for whom the institution obtained a valid ISIR, before the date the institution became ineligible is paid a Federal Pell Grant for that award year for—
(1) The payment periods that the student completed before the institution became ineligible; and
(2) The payment period in which the institution became ineligible.
(c)(1) If an institution loses its eligibility to participate in the Direct Loan program under the provisions of subpart M or N of 34 CFR part 668, it also loses its eligibility to participate in the Federal Pell Grant Program for the same period of time.
(2) That loss of eligibility must be in accordance with the provisions of 668.187(d) or 668.206(d).
(d) An institution which becomes ineligible shall, within 45 days after the effective date of loss of eligibility, provide to the Secretary—
(1) The name and enrollment status of each eligible student who, during the award year, submitted a valid SAR to the institution or for whom the institution obtained a valid ISIR before it became ineligible;
(2) The amount of funds paid to each Federal Pell Grant recipient for that award year;
(3) The amount due each student eligible to receive a Federal Pell Grant through the end of the payment period during which the institution became ineligible; and
(4) An accounting of the Federal Pell Grant expenditures for that award year to the date of termination.
(a) If, in addition to regular coursework, a student takes correspondence courses from either his or her own institution or another institution having an agreement for this purpose with the student's institution, the correspondence work may be included in determining the student's enrollment status to the extent permitted under paragraph (b) of this section.
(b) Except as noted in paragraph (c) of this section, the correspondence work that may be included in determining a student's enrollment status is that amount of work which—
(1) Applies toward a student's degree or certificate or is remedial work taken by the student to help in his or her course of study;
(2) Is completed within the period of time required for regular course work; and
(3) Does not exceed the amount of a student's regular course work for the payment period for which the student's enrollment status is being calculated.
(c)(1) Notwithstanding the limitation in paragraph (b)(3) of this section, a student who would be a half-time student based solely on his or her correspondence work is considered a half-time student unless the calculation in paragraph (b) of this section produces an enrollment status greater than half-time.
(2) A student who would be a less-than-half-time student based solely on his or her correspondence work or a combination of correspondence work and regular course work is considered a less-than-half-time student.
(d) The following chart provides examples of the rules set forth in this section. It assumes that the institution defines full-time enrollment as 12 credits per term, making the half-time enrollment equal to 6 credits per term.
| Under § 690.8 | No. of credit hours regular work | No. of credit hours correspondence | Total course load in credit hours to determine enrollment status | Enrollment status |
|---|---|---|---|---|
| (b)(3) | 3 | 3 | 6 | Half-time. |
| (b)(3) | 3 | 6 | 6 | Half-time. |
| (b)(3) | 3 | 9 | 6 | Half-time. |
| (b)(3) | 6 | 3 | 9 | Three-quarter-time. |
| (b)(3) | 6 | 6 | 12 | Full-time. |
| (b)(3) and (c) | 2 | 6 | 6 | Half-time. |
| (c) 1 | Less-than-half-time. |
1 Any combination of regular and correspondence work that is greater than 0, but less than 6 hours.
(a) Subject to available appropriations, the Secretary pays to each participating institution $5.00 for each student who receives a Federal Pell Grant at that institution for an award year.
(b) All funds an institution receives under this section must be used solely to pay the institution's cost of administering the Federal Pell Grant, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant programs.
(c) If an institution enrolls a significant number of students who are attending less-than-full-time or are independent students, the institution shall use a reasonable proportion of these funds to make financial aid services available during times and in places that will most effectively accommodate the needs of those students.
A student is not entitled to receive Federal Pell Grant payments concurrently from more than one institution or from the Secretary and an institution.
(a) As the first step to receiving a Federal Pell Grant, a student shall apply on an approved application form to the Secretary to have his or her expected family contribution calculated. A copy of this form is not acceptable.
(b) The student shall submit an application to the Secretary by—
(1) Providing the application form, signed by all appropriate family members, to the institution at which the student attends or plans to attend so that the institution can transmit electronically the application information to the Secretary under EDE; or
(2) Sending an approved application form to the Secretary.
(c) The student shall provide the address of his or her residence unless the student is incarcerated and the educational institution has made special arrangements with the Secretary to receive relevant correspondence on behalf of the student. If such an arrangement is made, the student shall provide the address indicated by the institution.
(d) For each award year the Secretary, through publication in the
The Secretary sends a student's application information and EFC as calculated by the central processor to the student on an SAR and allows each institution designated by the student to obtain an ISIR for that student.
(a) An applicant may request that the Secretary recalculate his or her expected family contribution if—
(1) He or she believes a clerical or arithmetic error has occurred; or
(2) The information he or she submitted was inaccurate when the application was signed.
(b) The applicant shall request that the Secretary make the recalculation described in paragraph (a) of this section by—
(1) Having his or her institution transmit that request to the Secretary under EDE; or
(2) Sending to the Secretary an approved form, certified by the student, and one of the student's parents if the student is a dependent student.
(c) If an institution transmits electronically the student's recalculation request to the Secretary, the corrected information must be supported by—
(1) Information contained on an approved form, that is certified by the student, and if the student is a dependent student, one of the student's parents; or
(2) Verification documentation provided by a student under subpart E of part 668 of this chapter.
(d) The recalculation request must be received by the Secretary no later than the deadline date established by the Secretary through publication in the
(a) Submission process. (1) Except as provided in paragraph (a)(2) of this section, an institution must disburse a Federal Pell Grant to an eligible student who is otherwise qualified to receive that disbursement and electronically transmit Federal Pell Grant disbursement data to the Secretary for that student if—
(i) The student submits a valid SAR to the institution; or
(ii) The institution obtains a valid ISIR for the student.
(2) In determining a student's eligibility to receive his or her Federal Pell Grant, an institution is entitled to assume that SAR information or ISIR information is accurate and complete except under the conditions set forth in 34 CFR 668.16(f) and 668.60.
(b) Valid Student Aid Report or Valid Institutional Student Information Record deadline. Except as provided in the verification provisions of § 668.60 and the late disbursement provisions of § 668.164(g) of this chapter, for a student to receive a Federal Pell Grant for an award year, the student must submit the relevant parts of the valid SAR to his or her institution or the institution must obtain a valid ISIR by the earlier of—
(1) The last date that the student is still enrolled and eligible for payment at that institution; or
(2) By the deadline date established by the Secretary through publication of a notice in the
(a) The amount of a student's Pell Grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year.
(b)(1)(i) For a confined or incarcerated individual enrolled in an eligible prison education program, no Federal Pell Grant may exceed the cost of attendance (as defined in section 472 of the HEA) at the institution that student attends.
(ii) If an institution determines that the amount of a Federal Pell Grant for that student exceeds the cost of attendance for that year, the amount of the Federal Pell Grant must be reduced until the Federal Pell Grant does not exceed the cost of attendance at such institution and does not result in a title IV credit balance under 34 CFR 668.164(h).
(2)(i) If a confined or incarcerated individual's Pell Grant, combined with any other financial assistance, exceeds the student's cost of attendance, the financial assistance other than the Pell Grant must be reduced by the amount that the total financial assistance exceeds the student's cost of attendance.
(ii) If the confined or incarcerated individual's other financial assistance cannot be reduced, the student's Pell Grant must be reduced by the amount that the student's total financial assistance exceeds the student's cost of attendance.
(a)(1) Programs using standard terms with at least 30 weeks of instructional time. A student's Federal Pell Grant for a payment period is calculated under paragraphs (b) or (d) of this section if—
(i) The student is enrolled in an eligible program that—
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters; and
(C) Requires the student to enroll for at least 12 credit hours in each term in the award year to qualify as a full-time student; and
(ii) The program uses an academic calendar that provides at least 30 weeks of instructional time in—
(A) Two semesters or trimesters in the fall through the following spring, or three quarters in the fall, winter, and spring, none of which overlaps any other term (including a summer term) in the program; or
(B) Any two semesters or trimesters, or any three quarters where—
(1) The institution starts its terms for different cohorts of students on a periodic basis (e.g., monthly);
(2) The program is offered exclusively in semesters, trimesters, or quarters; and
(3) Students are not allowed to be enrolled simultaneously in overlapping terms and must stay with the cohort in which they start unless they withdraw from a term (or skip a term) and re-enroll in a subsequent term.
(2) Programs using standard terms with less than 30 weeks of instructional time. A student's Federal Pell Grant for a payment period is calculated under paragraph (c) or (d) of this section if—
(i) The student is enrolled in an eligible program that—
(A) Measures progress in credit hours;
(B) Is offered in semesters, trimesters, or quarters;
(C) Requires the student to enroll in at least 12 credit hours in each term in the award year to qualify as a full-time student; and
(D) Is not offered with overlapping terms; and
(ii) The institution offering the program—
(A) Provides the program using an academic calendar that includes two semesters or trimesters in the fall through the following spring, or three quarters in the fall, winter, and spring; and
(B) Does not provide at least 30 weeks of instructional time in the terms specified in paragraph (a)(2)(ii)(A) of this section.
(3) Other programs using terms and credit hours. A student's Federal Pell Grant for a payment period is calculated under paragraph (d) of this section if the student is enrolled in an eligible program that—
(i) Measures progress in credit hours; and
(ii) Is offered in academic terms other than those described in paragraphs (a)(1) and (a)(2) of this section.
(4) Programs not using terms or using clock hours. A student's Federal Pell Grant for any payment period is calculated under paragraph (e) of this section if the student is enrolled in an eligible program that—
(i) Is offered in credit hours but is not offered in academic terms; or
(ii) Is offered in clock hours.
(5) Programs of study offered by correspondence. A student's Federal Pell Grant payment for a payment period is calculated under § 690.66 if the program is offered by correspondence courses.
(6) Programs for which an exception to the academic year definition has been granted under 34 CFR 668.3. If an institution receives a waiver from the Secretary of the 30 weeks of instructional time requirement under 34 CFR 668.3, an institution may calculate a student's Federal Pell Grant payment for a payment period using the following methodologies:
(i) If the program is offered in terms and credit hours, the institution uses the methodology in—
(A) Paragraph (b) of this section provided that the program meets all the criteria in paragraph (a)(1) of this section, except that in lieu of paragraph (a)(1)(ii)(B) of this section, the program provides at least the same number of weeks of instructional time in the terms specified in paragraph (a)(1)(ii)(A) of this section as are in the program's academic year; or
(B) Paragraph (d) of this section.
(ii) The institution uses the methodology described in paragraph (e) of this section if the program is offered in credit hours without terms or clock hours.
(iii) The institution uses the methodology described in § 690.66 if the program is correspondence study.
(b) Programs using standard terms with at least 30 weeks of instructional time. The Federal Pell Grant for a payment period, i.e., an academic term, for a student in a program using standard terms with at least 30 weeks of instructional time in two semesters or trimesters or in three quarters as described in paragraph (a)(1)(ii)(A) of this section, is calculated by—
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her annual award from the Payment Schedule for full-time students or the Disbursement Schedule for three-quarter-time, half-time, or less-than-half-time students; and
(3) Dividing the amount described under paragraph (b)(2) of this section by—
(i) Two at institutions using semesters or trimesters or three at institutions using quarters; or
(ii) The number of terms over which the institution chooses to distribute the student's annual award if—
(A) An institution chooses to distribute all of the student's annual award determined under paragraph (b)(2) of this section over more than two terms at institutions using semesters or trimesters or more than three quarters at institutions using quarters; and
(B) The number of weeks of instructional time in the terms, including the additional term or terms, equals the weeks of instructional time in the program's academic year.
(c) Programs using standard terms with less than 30 weeks of instructional time. The Federal Pell Grant for a payment period, i.e., an academic term, for a student in a program using standard terms with less than 30 weeks of instructional time in two semesters or trimesters or in three quarters as described in paragraph (a)(2)(ii)(A) of this section, is calculated by—
(1) Determining his or her enrollment status for the term;
(2) Based upon that enrollment status, determining his or her annual award from the Payment Schedule for full-time students or the Disbursement Schedule for three-quarter-time, half-time, or less-than-half-time students;
(3) Multiplying his or her annual award determined under paragraph (c)(2) of this section by the following fraction as applicable:
In a program using semesters or trimesters—
In a program using quarters—
(4)(i) Dividing the amount determined under paragraph (c)(3) of this section by two for programs using semesters or trimesters or three for programs using quarters; or
(ii) Dividing the student's annual award determined under paragraph (c)(2) of this section by the number of terms over which the institution chooses to distribute the student's annual award if—
(A) An institution chooses to distribute all of the student's annual award determined under paragraph (c)(2) of this section over more than two terms for programs using semesters or trimesters or more than three quarters for programs using quarters; and
(B) The number of weeks of instructional time in the terms, including the additional term or terms, equals the weeks of instructional time in the program's academic year definition.
(d) Other programs using terms and credit hours. The Federal Pell Grant for a payment period, i.e., an academic term, for a student in a program using terms and credit hours, other than those described in paragraphs (a)(1) or (a)(2) of this section, is calculated by—
(1) Determining his or her enrollment status for the term;
(i) [Reserved]
(ii) For a student enrolled in a term other than a semester, trimester, or quarter, determining his or her enrollment status for the term by—
(A) Dividing the number of weeks of instructional time in the term by the number of weeks of instructional time in the program's academic year;
(B) Multiplying the fraction determined under paragraph (d)(1)(ii)(A) of this section by the number of credit hours in the program's academic year to determine the number of hours required to be enrolled to be considered a full-time student; and
(C) Determining a student's enrollment status by comparing the number of hours in which the student enrolls in the term to the number of hours required to be considered full-time under paragraph (d)(1)(ii)(B) of this section for that term;
(2) Based upon that enrollment status, determining his or her annual award from the Payment Schedule for full-time students or the Disbursement Schedule for three-quarter-time, half-time, or less-than-half-time student; and
(3) Multiplying his or her annual award determined under paragraph (d)(2) of this section by the following fraction:
(e) Programs using credit hours without terms or clock hours. The Federal Pell Grant for a payment period for a student in a program using credit hours without terms or using clock hours is calculated by—
(1) Determining the student's Scheduled Federal Pell Grant using the Payment Schedule; and
(2) Multiplying the amount determined under paragraph (e)(1) of this section by the lesser of—
(i)
(ii)
(f) Calculating payments that exceed 50 percent of a student's annual award. A single disbursement may not exceed 50 percent of any award determined under paragraphs (d) and (g)(2) of this section. If a payment for a payment period calculated under paragraphs (d) and (g)(2) of this section would require the disbursement of more than 50 percent of a student's annual award in that payment period, the institution must make at least two disbursements to the student in that payment period. The institution may not disburse an amount that exceeds 50 percent of the student's annual award until the student has completed the period of time in the payment period that equals, in terms of weeks of instructional time, 50 percent of the weeks of instructional time in the program's academic year.
(g) Additional Federal Pell Grant funds and defining an academic year. (1) Notwithstanding paragraphs (b), (c), (d), and (e) of this section and § 690.66, the amount of a student's award for an award year may not exceed one and one-half of his or her Scheduled Federal Pell Grant award for that award year.
(2) A student's payment for the payment period may include the remaining amount of the student's Scheduled Award plus an amount from the additional Federal Pell Grant funds not to exceed one-half of a student's Scheduled Award.
(3) For purposes of this section and § 690.66, an institution must define an academic year for each of its eligible programs in terms of the number of credit or clock hours and weeks of instructional time in accordance with the requirements of 34 CFR 668.3.
(h) [Reserved]
(a) If a student enrolls in a payment period that is scheduled to occur in two award years—
(1) The entire payment period must be considered to occur within one award year;
(2) The institution must determine for each Federal Pell Grant recipient the award year in which the payment period will be placed;
(3) If an institution places the payment period in the first award year, it must pay a student with funds from the first award year; and
(4) If an institution places the payment period in the second award year, it must pay a student with funds from the second award year.
(b) An institution may not make a payment which will result in the student receiving more than one and one-half of his or her Scheduled Federal Pell Grant for an award year.
(a) If a student who receives a Federal Pell Grant at one institution subsequently enrolls at a second institution in the same award year, the student may receive a Federal Pell Grant at the second institution only if—
(1) The student submits a valid SAR to the second institution; or
(2) The second institution obtains a valid ISIR.
(b) The second institution shall calculate the student's award according to § 690.63.
(c) The second institution may pay a Federal Pell Grant only for that portion of the academic year in which a student is enrolled at that institution. The grant amount must be adjusted, if necessary, to ensure that the grant does not exceed one and one-half of the student's Scheduled Federal Pell Grant for that award year.
(d) If a student's Scheduled Federal Pell Grant at the second institution differs from the Scheduled Federal Pell Grant at the first institution, the grant amount at the second institution is calculated as follows—
(1) The amount received at the first institution is compared to the Scheduled Federal Pell Grant at the first institution to determine the percentage of the Scheduled Federal Pell Grant that the student has received.
(2) That percentage is subtracted from 100 percent or 150 percent, if the student is eligible to receive additional Federal Pell Grant funds in an amount up to one-half of a Scheduled Award during a single award year.
(3) The remaining percentage is the percentage of the Scheduled Federal Pell Grant at the second institution to which the student is entitled.
(e) The student's Federal Pell Grant for each payment period is calculated according to the procedures in § 690.63 unless the remaining percentage of the Scheduled Federal Pell Grant at the second institution, referred to in paragraph (d)(3) of this section, is less than the amount the student would normally receive for that payment period. In that case, the student's Federal Pell Grant is equal to that remaining percentage.
(f) A transfer student shall repay any amount received in an award year that exceeds his or her Scheduled Federal Pell Grant, or one and one-half of his or her Scheduled Federal Pell Grant, whichever is applicable.
(a) An institution calculates the Federal Pell Grant for a payment period for a student in a program of study offered by correspondence courses without terms, but not including any residential component, by—
(1) Determining the student's annual award using the half-time Disbursement Schedule; and
(2) Multiplying the annual award determined from the Disbursement Schedule for a half-time student by the lesser of—
(i)
(ii)
(b) For purposes of paragraph (a) of this section—
(1) The institution shall make the first payment to a student for an academic year, as calculated under paragraph (a) of this section, after the student submits 25 percent of the lessons or otherwise completes 25 percent of the work scheduled for the program or the academic year, whichever occurs last; and
(2) The institution shall make the second payment to a student for an academic year, as calculated under paragraph (a) of this section, after the student submits 75 percent of the lessons or otherwise completes 75 percent of the work scheduled for the program or the academic year, whichever occurs last.
(c) In a program of correspondence study offered by correspondence courses using terms but not including any residential component—
(1) The institution must prepare a written schedule for submission of lessons that reflects a workload of at least 30 hours of preparation per semester hour or 20 hours of preparation per quarter hour during the term;
(2)(i) If the student is enrolled in at least 6 credit hours that commence and are completed in that term, the Disbursement Schedule for a half-time student is used to calculate the payment for the payment period; or
(ii) If the student is enrolled in less than 6 credit hours that commence and are completed in that term the Disbursement Schedule for a less-than-half-time student is used to calculate the payment for the payment period;
(3) A payment for a payment period is calculated using the formula in § 690.63(d) except that paragraphs (c) (1) and (2) of this section are used in lieu of § 690.63(d) (1) and (2) respectively; and
(4) The institution shall make the payment to a student for a payment period after that student completes 50 percent of the lessons or otherwise completes 50 percent of the work scheduled for the term, whichever occurs last.
(d) Payments for periods of residential training shall be calculated under § 690.63(d) if the residential training is offered using terms and credit hours or § 690.63(e) if the residential training is offered using credit hours without terms.
An institution awards additional Federal Pell Grant funds up to one-half of a Scheduled Award to a student in an award year if the student is enrolled—
(a) In an eligible program leading to a bachelor's or associate's degree or other recognized educational credential, except as provided in 34 CFR part 668, subpart O, for students with intellectual disabilities, for one or more additional payment periods during the same award year that are not fully covered by the student's initial Federal Pell Grant Scheduled Award; and
(b) At least as a half-time student in the payment period(s) for which the student receives any portion of the additional Federal Pell Grant funds.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice will not be affected thereby.
This subpart deals with program administration by an institution of higher education.
(a) For each payment period, an institution may pay a Federal Pell Grant to an eligible student only after it determines that the student—
(1) Qualifies as an eligible student under 34 CFR part 668, subpart C;
(2) Is enrolled in an eligible program as an undergraduate student; and
(3) If enrolled in a credit hour program without terms or a clock hour program, has completed the payment period as defined in § 668.4 for which he or she has been paid a Federal Pell Grant.
(b) If an institution determines at the beginning of a payment period that a student is not maintaining satisfactory progress, but reverses that determination before the end of the payment period, the institution may pay a Federal Pell Grant to the student for the entire payment period.
(c) If an institution determines at the beginning of a payment period that a student is not maintaining satisfactory progress, but reverses that determination after the end of the payment period, the institution may neither pay the student a Federal Pell Grant for that payment period nor make adjustments in subsequent Federal Pell Grant payments to compensate for the loss of aid for that period.
(a) In each payment period, an institution may pay a student at such times and in such installments as it determines will best meet the student's needs.
(b) The institution may pay funds in one lump sum for all the prior payment periods for which the student was an eligible student within the award year. The student's enrollment status must be determined according to work already completed.
(a)(1) Except as provided in paragraphs (a)(2) and (a)(3) of this section, a student is liable for any Federal Pell Grant overpayment made to him or her.
(2) The institution is liable for a Federal Pell Grant overpayment if the overpayment occurred because the institution failed to follow the procedures set forth in this part or 34 CFR Part 668. The institution must restore an amount equal to the overpayment to its Federal Pell Grant account.
(3) A student is not liable for, and the institution is not required to attempt recovery of or refer to the Secretary, a Federal Pell Grant overpayment if the amount of the overpayment is less than $25 and is not a remaining balance.
(b)(1) Except as provided in paragraph (a)(3) of this section, if an institution makes a Federal Pell Grant overpayment for which it is not liable, it must promptly send a written notice to the student requesting repayment of the overpayment amount. The notice must state that failure to make that repayment, or to make arrangements satisfactory to the holder of the overpayment debt to repay the overpayment, makes the student ineligible for further title IV, HEA program funds until final resolution of the Federal Pell Grant overpayment.
(2) If a student objects to the institution's Federal Pell Grant overpayment determination on the grounds that it is erroneous, the institution must consider any information provided by the student and determine whether the objection is warranted.
(c) Except as provided in paragraph (a)(3) of this section, if the student fails to repay a Federal Pell Grant overpayment or make arrangements satisfactory to the holder of the overpayment debt to repay the Federal Pell Grant overpayment, after the institution has taken the action required by paragraph (b) of this section, the institution must refer the overpayment to the Secretary for collection purposes in accordance with procedures required by the Secretary. After referring the Federal Pell Grant overpayment to the Secretary under this section, the institution need make no further efforts to recover the overpayment.
(a) Change in expected family contribution. (1) The institution shall recalculate a Federal Pell Grant award for the entire award year if the student's expected family contribution changes at any time during the award year. The change may result from—
(i) The correction of a clerical or arithmetic error under § 690.14; or
(ii) A correction based on information required as a result of verification under 34 CFR part 668, subpart E.
(2) Except as described in 34 CFR 668.60(c), the institution shall adjust the student's award when an overaward or underaward is caused by the change in the expected family contribution. That adjustment must be made—
(i) Within the same award year—if possible—to correct any overpayment or underpayment; or
(ii) During the next award year to correct any overpayment that could not be adjusted during the year in which the student was overpaid.
(b) Change in enrollment status. (1) If the student's enrollment status changes from one academic term to another term within the same award year, the institution shall recalculate the Federal Pell Grant award for the new payment period taking into account any changes in the cost of attendance.
(2)(i) If the student's projected enrollment status changes during a payment period after the student has begun attendance in all of his or her classes for that payment period, the institution may (but is not required to) establish a policy under which the student's award for the payment period is recalculated. Any such recalculations must take into account any changes in the cost of attendance. If such a policy is established, it must apply to all students.
(ii) If a student's projected enrollment status changes during a payment period before the student begins attendance in all of his or her classes for that payment period, the institution shall recalculate the student's enrollment status to reflect only those classes for which the student actually began attendance.
(c) Change in cost of attendance. If the student's cost of attendance changes at any time during the award year and his or her enrollment status remains the same, the institution may (but is not required to) establish a policy under which the student's award for the payment period is recalculated. If such a policy is established, it must apply to all students.
(a) An institution shall follow provisions for maintaining general fiscal records in this part and in 34 CFR 668.24(b).
(b) An institution shall maintain funds received under this part in accordance with the requirements in § 668.164.
(a) An institution shall follow the record retention and examination provisions in this part and in 34 CFR 668.24.
(b) For any disputed expenditures in any award year for which the institution cannot provide records, the Secretary determines the final authorized level of expenditures.
(a)(1) An institution may receive either a payment from the Secretary for an award to a Federal Pell Grant recipient, or a corresponding reduction in the amount of Federal funds received in advance for which it is accountable, if—
(i) The institution submits to the Secretary the student's Payment Data for that award year in the manner and form prescribed in paragraph (a)(2) of this section by September 30 following the end of the award year in which the grant is made, or, if September 30 falls on a weekend, on the first weekday following September 30; and
(ii) The Secretary accepts the student's Payment Data.
(2) The Secretary accepts a student's Payment Data that is submitted in accordance with procedures established through publication in the
(3) An institution that does not comply with the requirements of this paragraph may receive a payment or reduction in accountability only as provided in paragraph (d) of this section.
(b)(1) An institution shall report to the Secretary any change in the amount of a grant for which a student qualifies including any related Payment Data changes by submitting to the Secretary the student's Payment Data that discloses the basis and result of the change in award for each student. The institution shall submit the student's Payment Data reporting any change to the Secretary by the reporting deadlines published by the Secretary in the
(2) An institution shall submit, in accordance with deadline dates established by the Secretary, through publication in the
(3) An institution that timely submits, and has accepted by the Secretary, the Payment Data for a student in accordance with this section shall report a reduction in the amount of a Federal Pell Grant award that the student received when it determines that an overpayment has occurred, unless that overpayment is one for which the institution is not liable under § 690.79(a).
(c) In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the requirements specified in paragraphs (a) or (b) of this section.
(d)(1) Notwithstanding paragraphs (a) or (b) of this section, if an institution demonstrates to the satisfaction of the Secretary that the institution has provided Federal Pell Grants in accordance with this part but has not received credit or payment for those grants, the institution may receive payment or a reduction in accountability for those grants in accordance with paragraphs (d)(4) and either (d)(2) or (d)(3) of this section.
(2) The institution must demonstrate that it qualifies for a credit or payment by means of a finding contained in an audit report of an award year that was the first audit of that award year and that was conducted after December 31, 1988 and timely submitted to the Secretary under 34 CFR 668.23(b).
(3) An institution that timely submits the Payment Data for a student in accordance with paragraph (a) of this section but does not timely submit to the Secretary, or have accepted by the Secretary, the Payment Data necessary to document the full amount of the award to which the student is entitled, may receive a payment or reduction in accountability in the full amount of that award, if—
(i) A program review demonstrates to the satisfaction of the Secretary that the student was eligible to receive an amount greater than that reported in the student's Payment Data timely submitted to, and accepted by the Secretary; and
(ii) The institution seeks an adjustment to reflect an underpayment for that award that is at least $100.
(4) In determining whether the institution qualifies for a payment or reduction in accountability, the Secretary takes into account any liabilities of the institution arising from that audit or program review or any other source. The Secretary collects those liabilities by offset in accordance with 34 CFR part 30.
The Leveraging Educational Assistance Partnership (LEAP) Program assists States in providing grants and work-study assistance to eligible students who attend institutions of higher education and have substantial financial need. The work-study assistance is provided through campus-based community service work learning study programs, hereinafter referred to as community service-learning job programs.
(a) State participation. A State that meets the requirements in §§ 692.20 and 692.21 is eligible to receive payments under the LEAP program.
(b) Student participation. A student must meet the requirements of § 692.40 to be eligible to receive assistance from a State under the LEAP program.
The following regulations apply to the LEAP Program:
(a) The regulations in this part 692.
(b) The Education Department General Administrative Regulations (EDGAR) as follows:
(1) 34 CFR 75.60-75.62 (Ineligibility of Certain Individuals to Receive Assistance).
(2) 34 CFR part 76 (State-Administered Programs).
(3) 34 CFR part 77 (Definitions That Apply to Department Regulations).
(4) 34 CFR part 79 (Intergovernmental Review of Department of Education Programs and Activities).
(5) [Reserved]
(6) 34 CFR part 82 (New Restrictions on Lobbying).
(7) 34 CFR part 84 (Governmentwide Requirements For Drug-Free Workplace (Financial Assistance)).
(8) 34 CFR part 86 (Drug and Alcohol Abuse Prevention).
(c) The Student Assistance General Provisions in 34 CFR part 668.
(d)(1) 2 CFR part 180 (OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement)), as adopted at 2 CFR part 3485; and
(2) 2 CFR part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards), as adopted at 2 CFR part 3474.
The following definitions apply to the regulations in this part:
(a) The definitions of the following terms under 34 CFR part 600:
Postsecondary vocational institution (§ 600.6).
Public or private nonprofit institution of higher education (§ 600.4).
Secretary (§ 600.2).
State (§ 600.2).
(b) The definitions of the following terms under 34 CFR part 668:
Academic year (§ 668.2).
Enrolled (§ 668.2).
HEA (§ 668.2).
Institution (§ 668.1(b)).
(c) The definitions of the following terms also apply to the LEAP Program:
Full-time student means a student carrying a full-time academic workload—other than by correspondence—as measured by both of the following:
(1) Coursework or other required activities, as determined by the institution that the student attends or by the State.
(2) The tuition and fees normally charged for full-time study by that institution.
Nonprofit has the same meaning under this part as the same term defined in 34 CFR 77.1 of EDGAR.
(a)(1) The Secretary allots to each State participating in the LEAP program an amount which bears the same ratio to the Federal LEAP funds appropriated as the number of students in that State who are “deemed eligible” to participate in the State's LEAP program bears to the total number of students in all States who are “deemed eligible” to participate in the LEAP program, except that no State may receive less than it received in fiscal year 1979 for the programs under this part.
(2) For the programs under this part, if the Federal funds appropriated for a fiscal year are not sufficient to allot to each State the amount of Federal funds it received in fiscal year 1979, the Secretary allots to each State an amount which bears the same ratio to the amount of Federal funds appropriated as the amount of Federal funds that State received in fiscal year 1979 bears to the amount of Federal funds all States received in fiscal year 1979.
(b) For the purpose of paragraph (a)(1) of this section, the Secretary determines the number of students “deemed eligible” to participate in a State's LEAP Program by dividing the amount of that State's LEAP expenditures, including both its Federal allotment and the State funds matching the allotment, by the average grant award per student of all participating States. The Secretary determines the “average grant award per student” by dividing the total number of student recipients for all States into the total amount of LEAP expenditures for all States, including both the Federal allotments and the State funds matching those allotments. In making this determination, the Secretary uses the most current available data reported by each State.
A State may use the funds it receives under the LEAP Program only to make grants to students and to pay wages or salaries to students in community service-learning jobs.
(a) For each fiscal year that it wishes to participate, a State shall submit an application that contains information that shows that its Leveraging Educational Assistance Partnership Program meets the requirements of § 692.21.
(b)(1) Except as provided in paragraph (b)(2) of this section, the State must submit its application through the State agency designated to administer its Leveraging Educational Assistance Partnership Program as of July 1, 1985.
(2) If the Governor of the State so designates, and notifies the Secretary in writing, the State may submit its application under paragraph (a) of this section through an agency that did not administer its Leveraging Educational Assistance Partnership Program as of July 1, 1985.
To receive a payment under the LEAP Program for any fiscal year, a State must have a program that—
(a) Is administered by a single State agency;
(b) Provides assistance only to students who meet the eligibility requirements in § 692.40;
(c) Provides that assistance under this program to a full-time student will not be more than the lesser of $12,500 or the student's cost of attendance under section 472 of the HEA for each academic year;
(d) Provides for the selection of students to receive assistance on the basis of substantial financial need determined annually by the State on the basis of standards that the State establishes and the Secretary approves;
See § 692.41.
(e) Provides that no student or parent shall be charged a fee that is payable to an organization other than the State for the purpose of collecting data to make a determination of financial need in accordance with paragraph (d) of this section;
(f) Provides that all public or private nonprofit institutions of higher education and all postsecondary vocational institutions in the State are eligible to participate unless that participation is in violation of—
(1) The constitution of the State; or
(2) A State statute that was enacted before October 1, 1978;
(g) Provides that, if a State awards grants to independent students or to students who are less-than-full-time students enrolled in an institution, a reasonable portion of the State's allocation must be awarded to those students;
(h) Provides that—
(1) The State will pay an amount for grants and work-study jobs under this part for each fiscal year that is not less than the payment to the State under this part for that fiscal year; and
(2) The amount that the State expends during a fiscal year for grants and work-study jobs under the LEAP Program represents an additional amount for grants and work-study jobs for students attending institutions over the amount expended by the State for those activities during the fiscal year two years prior to the fiscal year in which the State first received funds under the LEAP Program;
(i) Provides for State expenditures under the State program of an amount that is not less than—
(1) The average annual aggregate expenditures for the preceding three fiscal years; or
(2) The average annual expenditure per full-time equivalent student for those years;
(j) Provides that, to the extent practicable, the proportion of the funds awarded to independent students in the LEAP Program shall be the same proportion of funds awarded to independent students as is in the State program or programs of which the State's LEAP Program is a part;
(k) Notifies eligible students that the grants are—
(1) Leveraging Educational Assistance Partnership Grants; and
(2) Funded by the Federal Government, the State, and, where applicable, other contributing partners; and
(l) Provides for reports to the Secretary that are necessary to carry out the Secretary's functions under the LEAP Program.
(a)(1) Each year, a State may use up to 20 percent of its allotment for a community service-learning job program that satisfies the conditions set forth in paragraph (b) of this section.
(2) A student who receives assistance under this section must receive compensation for work and not a grant.
(b)(1) The community service-learning job program must be administered by institutions in the State.
(2) Each student employed under the program must be employed in work in the public interest by an institution itself or by a Federal, State, or local public agency or a private nonprofit organization under an arrangement between the institution and the agency or organization.
(c) Each community service-learning job must—
(1) Provide community service as described in paragraph (d) of this section;
(2) Provide participating students community service-learning opportunities related to their educational or vocational programs or goals;
(3) Not result in the displacement of employed workers or impair existing contracts for services;
(4) Be governed by conditions of employment that are considered appropriate and reasonable, based on such factors as type of work performed, geographical region, and proficiency of the employee;
(5) Not involve the construction, operation, or maintenance of so much of any facility as is used or is to be used for sectarian instruction or as a place for religious worship; and
(6) Not pay any wage to a student that is less than the current Federal minimum wage as mandated by section 6(a) of the Fair Labor Standards Act of 1938.
(d) For the purpose of paragraph (c)(1) of this section, “community service” means direct service, planning, or applied research that is—
(1) Identified by an institution through formal or informal consultation with local nonprofit, governmental, and community-based organizations; and
(2) Designed to improve the quality of life for residents of the community served, particularly low-income residents, in such fields as health care, child care, education, literacy training, welfare, social services, public safety, crime prevention and control, transportation, recreation, housing and neighborhood improvement, rural development, and community improvement.
(e) For the purpose of paragraph (d)(2) of this section, “low-income residents” means—
(1) Residents whose taxable family income for the year before the year in which they are scheduled to receive assistance under the LEAP Program did not exceed 150 percent of the amount equal to the poverty level determined by using criteria of poverty established by the United States Census Bureau; or
(2) Residents who are considered low-income residents by the State.
To be eligible for assistance, a student must—
(a) Meet the relevant eligibility requirements contained in 34 CFR 668.32; and
(b) Have substantial financial need as determined annually in accordance with the State's criteria approved by the Secretary.
(a) A State determines whether a student has substantial financial need on the basis of criteria it establishes that are approved by the Secretary. A State may define substantial financial need in terms of family income, expected family contribution, and relative need as measured by the difference between the student's cost of attendance and the resources available to meet that cost. To determine substantial need, the State may use—
(1) A system for determining a student's financial need under part F of title IV of the HEA;
(2) The State's own needs analysis system if approved by the Secretary; or
(3) A combination of these systems, if approved by the Secretary.
(b) The Secretary generally approves a need-analysis system under paragraph (a) (2) or (3) of this section only if the need-analysis system applies the term “independent student” as defined under section 480(d) of the HEA. However, for good cause shown, the Secretary may approve, on a case-by-case basis, a State's need analysis system that uses a definition for “independent student” that varies from that term as defined in section 480(d) of the HEA.
The Special Leveraging Educational Assistance Partnership (SLEAP) Program assists States in providing grants, scholarships, and community service work-study assistance to eligible students who attend institutions of higher education and demonstrate financial need.
The regulations listed in § 692.3 also apply to the SLEAP Program.
The definitions listed in § 692.4 apply to the SLEAP Program.
To receive SLEAP Program funds for any fiscal year, a State must—
(a) Participate in the LEAP Program;
(b) Meet the requirements in § 692.60; and
(c) Have a program that satisfies the requirements in § 692.21(a), (b), (d), (e), (f), (g), (j), and (k).
To receive assistance under the SLEAP Program, a student must meet the eligibility requirements contained in § 692.40.
To receive an allotment under the SLEAP Program, a State must—
(a) Submit an application in accordance with the provisions in § 692.20;
(b) Identify the activities in § 692.71 for which it plans to use the SLEAP Federal and non-Federal funds;
(c) Ensure that the non-Federal funds used as matching funds represent dollars that are in excess of the total dollars that a State spent for need-based grants, scholarships, and work-study assistance for fiscal year 1999, including the State funds reported as part of its LEAP Program;
(d) Provide an assurance that for the fiscal year prior to the fiscal year for which the State is requesting Federal funds, the amount the State expended from non-Federal sources per student, or the aggregate amount the State expended, for all the authorized activities in § 692.71 will be no less than the amount the State expended from non-Federal sources per student, or in the aggregate, for those activities for the second fiscal year prior to the fiscal year for which the State is requesting Federal funds; and
(e) Ensure that the Federal share will not exceed one-third of the total funds expended under the SLEAP Program.
For fiscal year 2010-2011, the Secretary allots to each eligible State that applies for SLEAP funds an amount in accordance with the provisions in § 692.10 prior to calculating allotments for States applying for GAP funds under subpart C of this part.
A State may use the funds it receives under the SLEAP Program for one or more of the following activities:
(a) Supplement LEAP grant awards to eligible students who demonstrate financial need by—
(1) Increasing the LEAP grant award amounts for students; or
(2) Increasing the number of students receiving LEAP grant awards.
(b) Supplement LEAP community service work-study awards to eligible students who demonstrate financial need by—
(1) Increasing the LEAP community service work-study award amounts for students; or
(2) Increasing the number of students receiving LEAP community service work-study awards.
(c) Award scholarships to eligible students who demonstrate financial need and who—
(1) Demonstrate merit or academic achievement; or
(2) Wish to enter a program of study leading to a career in—
(i) Information technology;
(ii) Mathematics, computer science, or engineering;
(iii) Teaching; or
(iv) Other fields determined by the State to be critical to the State's workforce needs.
A State may not use any of the funds it receives under the SLEAP Program to pay any administrative costs.
When administering its community service work-study program, a State must follow the provisions in § 692.30, other than the provisions of paragraph (a)(1) of that section.
The Grants for Access and Persistence (GAP) Program assists States in establishing partnerships to provide eligible students with LEAP Grants under GAP to attend institutions of higher education and to encourage increased participation in early information and intervention, mentoring, or outreach programs.
The regulations listed in § 692.3 also apply to the GAP Program.
The definitions listed in § 692.4 also apply to the GAP Program.
(a) States. States that meet the requirements in §§ 692.94 and 692.100 are eligible to receive payments under the GAP Program.
(b) Degree-granting institutions of higher education. Degree-granting institutions of higher education that meet the requirements in § 692.101 are eligible to participate in a partnership under the GAP Program.
(c) Early information and intervention, mentoring, or outreach programs. Early information and intervention, mentoring, or outreach programs that meet the requirements in § 692.101 are eligible to participate in a partnership under the GAP Program.
(d) Philanthropic organizations or private corporations. Philanthropic organizations or private corporations that meet the requirements in § 692.101 are eligible to participate in a partnership under the GAP Program.
(e) Students. Students who meet the requirements of § 692.120 are eligible to receive assistance or services from a partnership under the GAP Program.
To receive GAP Program funds for any fiscal year—
(a) A State must—
(1) Participate in the LEAP Program;
(2) Establish a State partnership with—
(i) At least—
(A) One public degree-granting institution of higher education that is located in the State; and
(B) One private degree-granting institution of higher education, if at least one exists in the State that may be eligible to participate in the State's LEAP Program under subpart A of this part;
(ii) New or existing early information and intervention, mentoring, or outreach programs located in the State; and
(iii) At least one philanthropic organization located in, or that provides funding in, the State, or private corporation located in, or that does business in, the State;
(3) Meet the requirements in § 692.100; and
(4) Have a program under this subpart that satisfies the requirements in § 692.21(a), (e), (f), (g), and (j).
(b) A State may provide an early information and intervention, mentoring, or outreach program under paragraph (a)(2)(ii) of this section.
For a State to receive an allotment under the GAP Program, the State agency that administers the State's LEAP Program under subpart A of this part must—
(a) Submit an application on behalf of a partnership in accordance with the provisions in § 692.20 at such time, in such manner, and containing such information as the Secretary may require including—
(1) A description of—
(i) The State's plan for using the Federal funds allotted under this subpart and the non-Federal matching funds; and
(ii) The methods by which matching funds will be paid;
(2) An assurance that the State will provide matching funds in accordance with § 692.113;
(3) An assurance that the State will use Federal GAP funds to supplement, and not supplant, Federal and State funds available for carrying out the activities under Title IV of the HEA;
(4) An assurance that early information and intervention, mentoring, or outreach programs exist within the State or that there is a plan to make these programs widely available;
(5) A description of the organizational structure that the State has in place to administer the program, including a description of how the State will compile information on degree completion of students receiving grants under this subpart;
(6) A description of the steps the State will take to ensure, to the extent practicable, that students who receive a LEAP Grant under GAP persist to degree completion;
(7) An assurance that the State has a method in place, such as acceptance of the automatic zero expected family contribution under section 479(c) of the HEA, to identify eligible students and award LEAP Grants under GAP to such students;
(8) An assurance that the State will provide notification to eligible students that grants under this subpart are LEAP Grants and are funded by the Federal Government and the State, and, where applicable, other contributing partners.
(b) Serve as the primary administrative unit for the partnership;
(c) Provide or coordinate non-Federal share funds, and coordinate activities among partners;
(d) Encourage each institution of higher education in the State that participates in the State's LEAP Program under subpart A of this part to participate in the partnership;
(e) Make determinations and early notifications of assistance;
(f) Ensure that the non-Federal funds used as matching funds represent dollars that are in excess of the total dollars that a State spent for need-based grants, scholarships, and work-study assistance for fiscal year 1999, including the State funds reported for the programs under this part;
(g) Provide an assurance that, for the fiscal year prior to the fiscal year for which the State is requesting Federal funds, the amount the State expended from non-Federal sources per student, or the aggregate amount the State expended, for all the authorized activities in § 692.111 will be no less than the amount the State expended from non-Federal sources per student, or in the aggregate, for those activities for the second fiscal year prior to the fiscal year for which the State is requesting Federal funds; and
(h) Provide for reports to the Secretary that are necessary to carry out the Secretary's functions under the GAP Program.
(a) State. A State that is receiving an allotment under this subpart must meet the requirements under §§ 692.94 and 692.100.
(b) Degree-granting institution of higher education. A degree-granting institution of higher education that is in a partnership under this subpart—
(1) Must participate in the State's LEAP Program under subpart A of this part;
(2) Must recruit and admit participating eligible students and provide additional institutional grant aid to participating students as agreed to with the State agency;
(3) Must provide support services to students who receive LEAP Grants under GAP and are enrolled at the institution;
(4) Must assist the State in the identification of eligible students and the dissemination of early notifications of assistance as agreed to with the State agency; and
(5) May provide funding or services for early information and intervention, mentoring, or outreach programs.
(c) Early information and intervention, mentoring, or outreach program. An early information and intervention, mentoring, or outreach program that is in a partnership under this subpart shall provide direct services, support, and information to participating students.
(d) Philanthropic organization or private corporation. A philanthropic organization or private corporation in a partnership under this subpart shall provide non-Federal funds for LEAP Grants under GAP for participating students or provide funds or support for early information and intervention, mentoring, or outreach programs.
(a)(1) The Secretary allots to each State participating in the GAP Program an amount of the funds available for the GAP Program based on the ratio used to allot the State's Federal LEAP funds under § 692.10(a).
(2) If a State meets the requirements of § 692.113(b) for a fiscal year, the number of students under § 692.10(a) for the State is increased to 125 percent in determining the ratio in paragraph (a) of this section for that fiscal year.
(3) Notwithstanding paragraph (a)(1) and (2) of this section—
(i) If the Federal GAP funds available from the appropriation for a fiscal year are sufficient to allot to each State that participated in the prior year the same amount of Federal GAP funds allotted in the prior fiscal year, but are not sufficient both to allot the same amount of Federal GAP funds allotted in the prior fiscal year to these States and also to allot additional funds to additional States in accordance with the ratio used to allot the States' Federal LEAP funds under § 692.10(a), the Secretary allots—
(A) To each State that participated in the prior year, the amount the State received in the prior year; and
(B) To each State that did not participate in the prior year, an amount of Federal GAP funds available to States based on the ratio used to allot the State's Federal LEAP funds under § 692.10(a); and
(ii) If the Federal GAP funds available from the appropriation for a fiscal year are not sufficient to allot to each State that participated in the prior year at least the amount of Federal GAP funds allotted in the prior fiscal year, the Secretary allots to each State an amount which bears the same ratio to the amount of Federal GAP funds available as the amount of Federal GAP funds allotted to each State in the prior fiscal year bears to the amount of Federal GAP funds allotted to all States in the prior fiscal year.
(4) For fiscal year 2011, the prior fiscal year allotment to a State for purposes of paragraph (a)(3) of this section shall include any fiscal year 2010 allotment made to that State under subpart B of this part.
(b) The Secretary allots funds available for reallotment in a fiscal year in accordance with the provisions of paragraph (a) of this section used to calculate initial allotments for the fiscal year.
(c) Any funds made available for the program under this subpart but not expended may be allotted or reallotted for the program under subpart A of this part.
(a) Establishment of a partnership. Each State receiving an allotment under this subpart shall use the funds to establish a partnership to award grants to eligible students in order to increase the amount of financial assistance students receive under this subpart for undergraduate education expenses.
(b) Amount of LEAP Grants under GAP. (1) The amount of a LEAP Grant under GAP by a State to an eligible student shall be not less than—
(i) The average undergraduate in-State tuition and mandatory fees for full-time students at the public institutions of higher education in the State where the student resides that are the same type of institution that the student attends (four-year degree-granting, two-year degree-granting, or non-degree-granting); minus
(ii) Other Federal and State aid the student receives.
(2) The Secretary determines the average undergraduate in-State tuition and mandatory fees for full-time students at public institutions in a State weighted by enrollment using the most recent data reported by institutions in the State to the Integrated Postsecondary Education Data System (IPEDS) administered by the National Center for Educational Statistics.
(c) Institutional participation. (1) A State receiving an allotment under this subpart may restrict the use of LEAP Grants under GAP only to students attending institutions of higher education that are participating in the partnership.
(2) If a State provides LEAP Grants under subpart A of this part to students attending institutions of higher education located in another State, LEAP Grants under GAP may be used at institutions of higher education located in another State.
(d) Early notification to potentially eligible students. (1) Each State receiving an allotment under this subpart shall annually notify potentially eligible students in grades 7 through 12 in the State, and their families, of their potential eligibility for student financial assistance, including a LEAP Grant under GAP, to attend a LEAP-participating institution of higher education.
(2) The notice shall include—
(i) Information about early information and intervention, mentoring, or outreach programs available to the student;
(ii) Information that a student's eligibility for a LEAP Grant under GAP is enhanced through participation in an early information and intervention, mentoring, or outreach program;
(iii) An explanation that student and family eligibility for, and participation in, other Federal means-tested programs may indicate eligibility for a LEAP Grant under GAP and other student aid programs;
(iv) A nonbinding estimate of the total amount of financial aid that an eligible student with a similar income level may expect to receive, including an estimate of the amount of a LEAP Grant under GAP and an estimate of the amount of grants, loans, and all other available types of aid from the major Federal and State financial aid programs;
(v) An explanation that in order to be eligible for a LEAP Grant under GAP, at a minimum, a student shall—
(A) Meet the eligibility requirements under § 692.120; and
(B) Enroll at a LEAP-participating institution of higher education in the State of the student's residence or an out-of-state institution if the State elects to make LEAP Grants under GAP for attendance at out-of-State institutions in accordance with paragraph (c)(2) of this section;
(vi) Any additional requirements that the State may require for receipt of a LEAP Grant under GAP in accordance with § 692.120(a)(4); and
(vii) An explanation that a student is required to file a Free Application for Federal Student Aid to determine his or her eligibility for Federal and State financial assistance and may include a provision that eligibility for an award is subject to change based on—
(A) A determination of the student's financial eligibility at the time of the student's enrollment at a LEAP-participating institution of higher education or an out-of-State institution in accordance with paragraph (c)(2) of this section;
(B) Annual Federal and State spending for higher education; and
(C) Other aid received by the student at the time of the student's enrollment at the institution of higher education.
(e) Award notification. (1) Once a student, including a student who has received early notification under paragraph (d) of this section, applies for admission to an institution that is a partner in the partnership of the State of the student's residence, files a Free Application for Federal Student Aid and any related State form, and is determined eligible by the State, the State shall—
(i) Issue the student a preliminary award certificate for a LEAP Grant under GAP with estimated award amounts; and
(ii) Inform the student that the payment of the grant is subject to certification of enrollment and eligibility by the institution.
(2) If a student enrolls in an institution that is not a partner in the partnership of the student's State of residence but the State has not restricted eligibility to students enrolling in partner institutions, including, if applicable, out-of-State institutions, the State shall, to the extent practicable, follow the procedures of paragraph (e)(1) of this section.
(a) A State that receives an allotment under this subpart may reserve not more than two percent of the funds made available annually for State administrative functions required for administering the partnership and other program activities.
(b) A State must use not less than ninety-eight (98) percent of an allotment under this subpart to make LEAP Grants under GAP.
(a) The matching funds of a partnership—
(1) Shall be funds used for making LEAP Grants to eligible students under this subpart;
(2) May be—
(i) Cash; or
(ii) A noncash, in-kind contribution that—
(A) Is fairly evaluated;
(B) Has monetary value, such as a tuition waiver or provision of room and board, or transportation;
(C) Helps a student meet the cost of attendance at an institution of higher education; and
(D) Is considered to be estimated financial assistance under 34 CFR 673.5(c); and
(3) May be funds from the State, institutions of higher education, or philanthropic organizations or private corporations that are used to make LEAP Grants under GAP.
(b) The non-Federal match of the Federal allotment shall be—
(1) Forty-three percent of the expenditures under this subpart if a State applies for a GAP allotment in partnership with—
(i) Any number of degree-granting institutions of higher education in the State whose combined full-time enrollment represents less than a majority of all students attending institutions of higher education in the State as determined by the Secretary using the most recently available data from IPEDS; and
(ii) One or both of the following—
(A) Philanthropic organizations that are located in, or that provide funding in, the State; or
(B) Private corporations that are located in, or that do business in, the State; and
(2) Thirty-three and thirty-four one-hundredths percent of the expenditures under this subpart if a State applies for a GAP allotment in partnership with—
(i) Any number of degree-granting institutions of higher education in the State whose combined full-time enrollment represents a majority of all students attending institutions of higher education in the State as determined by the Secretary using the most recently available data from IPEDS; and
(ii) One or both of the following—
(A) Philanthropic organizations that are located in, or that provide funding in, the State; or
(B) Private corporations that are located in, or that do business in, the State.
(c) Nothing in this part shall be interpreted as limiting a State or other member of a partnership from expending funds to support the activities of a partnership under this subpart that are in addition to the funds matching the Federal allotment.
(a) Eligibility. A student is eligible to receive a LEAP Grant under GAP if the student—
(1) Meets the relevant eligibility requirements contained in 34 CFR 668.32;
(2) Has graduated from secondary school or, for a home-schooled student, has completed a secondary education;
(3)(i) Has received, or is receiving, a LEAP Grant under GAP for each year the student remains eligible for assistance under this subpart; or
(ii) Meets at least two of the following criteria—
(A) As designated by the State, either has an EFC equal to zero, as determined under part F of the HEA, or a comparable alternative based on the State's approved criteria for the LEAP Program under subpart A of this part;
(B) Qualifies for the State's maximum undergraduate award for LEAP Grants under subpart A of this part in the award year in which the student is receiving an additional LEAP Grant under GAP; or
(C) Is participating in, or has participated in, a Federal, State, institutional, or community early information and intervention, mentoring, or outreach program, as determined by the State agency administering the programs under this part; and
(4) Any additional requirements that the State may require for receipt of a LEAP Grant under GAP.
(b) Priority. In awarding LEAP Grants under GAP, a State shall give priority to students meeting all the criteria in paragraph (a)(3)(i) of this section.
(c) Duration of eligibility. (1) A student may receive a LEAP Grant under GAP if the student continues to demonstrate that he or she is financially eligible by meeting the provisions of paragraph (a)(3)(ii)(A) or (B) of this section.
(2) A State may impose reasonable time limits to degree completion.
(a) The Secretary may grant, upon the request of an institution participating in a partnership that meets the requirements of § 692.113(b)(2), a waiver for the institution from statutory or regulatory requirements that inhibit the ability of the institution to successfully and efficiently participate in the activities of the partnership.
(b) An institution must submit a request for a waiver through the State agency administering the partnership.
(c) The State agency must forward to the Secretary, in a timely manner, the request made by the institution and may include any additional information or recommendations that it deems appropriate for the Secretary's consideration.
(a) Partnership grants. The Secretary may establish the maximum amount that may be awarded each fiscal year for a GEAR UP Partnership grant in a notice published in the
(1) $800; by
(2) The number of students the Partnership proposes to serve that year, as stated in the Partnership's plan.
(b) State grants. The Secretary establishes the maximum amount that may be awarded each fiscal year for a GEAR UP State grant in a notice published in the
A Partnership, or a State that chooses to use a cohort approach in its GEAR UP early intervention component, must, except as provided in § 694.4—
(a) Provide services to at least one entire grade level (cohort) of students (subject to § 694.3(b)) beginning not later than the 7th grade;
(b) Ensure that supplemental appropriate services are targeted to the students with the greatest needs; and
(c) Ensure that services are provided through the 12th grade to those students.
(a) In general. Each cohort to be served by a Partnership or State must be from a participating school—
(1) That has a 7th grade; and
(2) In which at least 50 percent of the students are eligible for free or reduced-price lunch under the National School Lunch Act; or
(b) Public housing exception. If the Partnership or State determines it would promote program effectiveness, a cohort may consist of all of the students in a particular grade level at one or more participating schools who reside in public housing, as defined in section 3(b)(1) of the United States Housing Act of 1937.
(a) At the school where the cohort began. A Partnership or State must serve, as part of the cohort, any additional students who—
(1) Are at the grade level of the students in the cohort; and
(2) Begin attending the participating school at which the cohort began to receive GEAR UP services.
(b) At a subsequent participating school. If not all of the students in the cohort attend the same school after the cohort completes the last grade level offered by the school at which the cohort began to receive GEAR UP services, a Partnership or a State—
(1) May continue to provide GEAR UP services to all students in the cohort; and
(2) Must continue to provide GEAR UP services to at least those students in the cohort who attend one or more participating schools that together enroll a substantial majority of the students in the cohort.
(a) Secular, neutral, and nonideological services or benefits. Educational services or other benefits, including materials and equipment, provided under GEAR UP by a Partnership or State that chooses to provide those services or benefits to students attending private schools, must be secular, neutral, and nonideological.
(b) Control of funds. In the case of a Partnership or State that chooses to provide services under GEAR UP to students attending private schools, the fiscal agent (in the case of a Partnership) or a State agency (in the case of a State) must—
(1) Control the funds used to provide services under GEAR UP to those students;
(2) Hold title to materials, equipment, and property purchased with GEAR UP funds for GEAR UP program uses and purposes related to those students; and
(3) Administer those GEAR UP funds and property.
(a) GEAR UP services to students attending private schools must be provided—
(1) By employees of a public agency; or
(2) Through contract by the public agency with an individual, association, agency, or organization.
(b) When providing GEAR UP services to students attending private schools, the employee, individual, association, agency, or organization must be employed or contracted independently of the private school that the students attend, and of any other organization affiliated with the school, and that employment or contract must be under the control and supervision of the public agency.
(a) In order to be eligible for GEAR UP funding—
(1) An applicant must state in its application the percentage of the cost of the GEAR UP project the applicant will provide for each year from non-Federal funds, subject to the requirements in paragraph (b) of this section; and
(2) A grantee must make substantial progress towards meeting the matching percentage stated in its approved application for each year of the project period.
(b) Except as provided in §§ 694.8 and 694.9, the non-Federal share of the cost of the GEAR UP project must be not less than 50 percent of the total cost of the project (i.e., one dollar of non-Federal contributions for every one dollar of Federal funds obligated for the project) over the project period.
(c) The non-Federal share of the cost of a GEAR UP project may be provided in cash or in-kind.
(a) The Secretary may approve a Partnership applicant's request for a waiver of up to 75 percent of the matching requirement for up to two years if the applicant demonstrates in its application a significant economic hardship that stems from a specific, exceptional, or uncontrollable event, such as a natural disaster, that has a devastating effect on the members of the Partnership and the community in which the project would operate.
(b)(1) The Secretary may approve a Partnership applicant's request to waive up to 50 percent of the matching requirement for up to two years if the applicant demonstrates in its application a pre-existing and an on-going significant economic hardship that precludes the applicant from meeting its matching requirement.
(2) In determining whether an applicant is experiencing an on-going economic hardship that is significant enough to justify a waiver under this paragraph, the Secretary considers documentation of such factors as:
(i) Severe distress in the local economy of the community to be served by the grant (e.g., there are few employers in the local area, large employers have left the local area, or significant reductions in employment in the local area).
(ii) Local unemployment rates that are higher than the national average.
(iii) Low or decreasing revenues for State and County governments in the area to be served by the grant.
(iv) Significant reductions in the budgets of institutions of higher education that are participating in the grant.
(v) Other data that reflect a significant economic hardship for the geographical area served by the applicant.
(3) At the time of application, the Secretary may provide tentative approval of an applicant's request for a waiver under paragraph (b)(1) of this section for all remaining years of the project period. Grantees that receive tentative approval of a waiver for more than two years under this paragraph must submit to the Secretary every two years by such time as the Secretary may direct documentation that demonstrates that—
(i) The significant economic hardship upon which the waiver was granted still exists; and
(ii) The grantee tried diligently, but unsuccessfully, to obtain contributions needed to meet the matching requirement.
(c) The Secretary may approve a Partnership applicant's request in its application to match its contributions to its scholarship fund, established under section 404E of the HEA, on the basis of two non-Federal dollars for every one Federal dollar of GEAR UP funds.
(d) The Secretary may approve a request by a Partnership applicant that has three or fewer institutions of higher education as members to waive up to 70 percent of the matching requirement if the Partnership applicant includes—
(1) A fiscal agent that is eligible to receive funds under title V, or Part B of title III, or section 316 or 317 of the HEA, or a local educational agency;
(2) Only participating schools with a 7th grade cohort in which at least 75 percent of the students are eligible for free or reduced-price lunch under the Richard B. Russell National School Lunch Act; and
(3) Only local educational agencies in which at least 50 percent of the students enrolled are eligible for free or reduced-price lunch under the Richard B. Russell National School Lunch Act.
(a) After a grant is awarded, the Secretary may approve a Partnership grantee's written request for a waiver of up to—
(1) 50 percent of the matching requirement for up to two years if the grantee demonstrates that—
(i) The matching contributions described for those two years in the grantee's approved application are no longer available; and
(ii) The grantee has exhausted all funds and sources of potential contributions for replacing the matching funds.
(2) 75 percent of the matching requirement for up to two years if the grantee demonstrates that matching contributions from the original application are no longer available due to an uncontrollable event, such as a natural disaster, that has a devastating economic effect on members of the Partnership and the community in which the project would operate.
(b) In determining whether the grantee has exhausted all funds and sources of potential contributions for replacing matching funds, the Secretary considers the grantee's documentation of key factors such as the following and their direct impact on the grantee:
(1) A reduction of revenues from State government, County government, or the local educational agency (LEA).
(2) An increase in local unemployment rates.
(3) Significant reductions in the operating budgets of institutions of higher education that are participating in the grant.
(4) A reduction of business activity in the local area (e.g., large employers have left the local area).
(5) Other data that reflect a significant decrease in resources available to the grantee in the local geographical area served by the grantee.
(c) If a grantee has received one or more waivers under this section or under § 694.8, the grantee may request an additional waiver of the matching requirement under this section no earlier than 60 days before the expiration of the grantee's existing waiver.
(d) The Secretary may grant an additional waiver request for up to 50 percent of the matching requirement for a period of up to two years beyond the expiration of any previous waiver.
Although any member of a Partnership may organize the project, a Partnership must designate as the fiscal agent for its project under GEAR UP—
(a) A local educational agency; or
(b) An institution of higher education.
Notwithstanding 34 CFR 75.560-75.562 and 2 CFR part 200, subpart E—Cost Principles, the maximum indirect cost rate that an agency of a State or local government receiving funds under GEAR UP may use to charge indirect costs to these funds is the lesser of—
(a) The rate established by the negotiated indirect cost agreement; or
(b) Eight percent of a modified total direct cost base.
(a)(1) State Grantees. All State grantees must establish or maintain a financial assistance program that awards section 404E scholarships to students in accordance with the requirements of § 694.13 or § 694.14, as applicable.
(2) Partnership Grantees. Partnerships may, but are not required, to award scholarships to eligible students. If a Partnership awards scholarships to eligible students pursuant to section 404E of the HEA, it must comply with the requirements of § 694.13 or § 694.14, as applicable.
(b)(1) Section 404E scholarship awards for grantees whose initial GEAR UP grant awards were made prior to August 14, 2008. A State or Partnership grantee making section 404E scholarship awards using funds from GEAR UP grant awards that were made prior to August 14, 2008, must provide such scholarship awards in accordance with the requirements of § 694.13 unless it elects to provide the scholarships in accordance with the requirements of § 694.14 pursuant to paragraph (b)(2) of this section.
(2) Election to use § 694.14 requirements. A State or Partnership grantee making section 404E scholarship awards using funds from GEAR UP grant awards that were made prior to August 14, 2008, may provide such scholarship awards in accordance with the requirements of § 694.14 (rather than the requirements of § 694.13) provided that the grantee—
(i) Informs the Secretary, in writing, of its election to make the section 404E scholarship awards in accordance with the requirements of § 694.14; and
(ii) Such election does not decrease the amount of the scholarship promised to any individual student under the grant.
(c) Section 404E scholarship awards for grantees whose initial GEAR UP grant awards were made on or after August 14, 2008. A State or Partnership grantee making section 404E scholarship awards using funds from GEAR UP grant awards that were made on or after August 14, 2008, must provide such scholarship awards in accordance with the requirements of § 694.14.
The following requirements apply to section 404E scholarship awards for grantees whose initial GEAR UP grant awards were made prior to August 14, 2008 unless the grantee elects to provide such scholarship awards in accordance with the requirements of § 694.14 pursuant to § 694.12(b)(2).
(a)(1) The maximum scholarship amount that an eligible student may receive under this section must be established by the grantee.
(2) The minimum scholarship amount that an eligible student receives in a fiscal year pursuant to this section must not be less than the lesser of—
(i) 75 percent of the average cost of attendance for an in-State student, in a four-year program of instruction, at public institutions of higher education in the student's State; or
(ii) The maximum Federal Pell Grant award funded under section 401 of the HEA for the award year in which the scholarship is awarded.
(3) If an eligible student who is awarded a GEAR UP scholarship attends an institution of higher education on a less than full-time basis during any award year, the State or Partnership awarding the GEAR UP scholarship may reduce the scholarship amount, but in no case may the percentage reduction in the scholarship be greater than the percentage reduction in tuition and fees charged to that student.
(b) Scholarships provided under this section may not be considered for the purpose of awarding Federal grant assistance under title IV of the HEA, except that in no case may the total amount of student financial assistance awarded to a student under title IV of the HEA exceed the student's total cost of attendance.
(c) Grantees providing section 404E scholarship awards in accordance with this section—
(1) Must award GEAR UP scholarships first to students who will receive, or are eligible to receive, a Federal Pell Grant during the award year in which the GEAR UP scholarship is being awarded; and
(2) May, if GEAR UP scholarship funds remain after awarding scholarships to students under paragraph (c)(1) of this section, award GEAR UP scholarships to other eligible students (i.e., students who are not eligible to receive a Federal Pell Grant) after considering the need of those students for GEAR UP scholarships.
(d) For purposes of this section, an eligible student is a student who—
(1) Is less than 22 years old at the time of award of the student's first GEAR UP scholarship;
(2) Has received a secondary school diploma or its recognized equivalent on or after January 1, 1993;
(3) Is enrolled or accepted for enrollment in a program of undergraduate instruction at an institution of higher education that is located within the State's boundaries, except that, at the grantee's option, a State or Partnership may offer scholarships to students who attend institutions of higher education outside the State; and
(4) Has participated in activities under § 694.21 or § 694.22.
(e) A State using a priority approach may award scholarships under paragraph (a) of this section to eligible students identified by priority at any time during the grant award period rather than reserving scholarship funds for use only in the seventh year of a project or after the grant award period.
(f) A State or a Partnership that makes scholarship awards from GEAR UP funds in accordance with this section must award continuation scholarships in successive award years to each student who received an initial scholarship and who is enrolled or accepted for enrollment in a program of undergraduate instruction at an institution of higher education.
The following requirements apply to section 404E scholarship awards provided by grantees whose initial GEAR UP grant awards were made on or after August 14, 2008 and any section 404E scholarship awards for grantees whose initial GEAR UP grant awards were issued prior to August 14, 2008, but who, pursuant to § 694.12(b)(2), elected to use the § 694.14 requirements (rather than the § 694.13 requirements).
(a)(1) The maximum scholarship amount that an eligible student may receive under section 404E of the HEA must be established by the grantee.
(2) The minimum scholarship amount that an eligible student receives in a fiscal year must not be less than the minimum Federal Pell Grant award under section 401 of the HEA at the time of award.
(3) If an eligible student who is awarded a GEAR UP scholarship attends an institution of higher education on a less than full-time basis during any award year, the State or Partnership awarding the GEAR UP scholarship may reduce the scholarship amount, but in no case may the percentage reduction in the scholarship be greater than the percentage reduction in tuition and fees charged to that student.
(b) For purposes of this section, an eligible student is a student who—
(1) Is less than 22 years old at the time of award of the first GEAR UP scholarship;
(2) Has received a secondary school diploma or its recognized equivalent on or after January 1, 1993;
(3) Is enrolled or accepted for enrollment in a program of undergraduate instruction at an institution of higher education that is located within the State's boundaries, except that, at the grantee's option, a State or Partnership may offer scholarships to students who attend institutions of higher education outside the State; and
(4) Has participated in the activities required under § 694.21.
(c)(1) By the time students who have received services from a State grant have completed the twelfth grade, a State that has not received a waiver under section 404E(b)(2) of the HEA of the requirement to spend at least 50 percent of its GEAR UP funds on scholarships must have in reserve an amount that is not less than the minimum Federal Pell Grant multiplied by the number of students the State estimates will enroll in an institution of higher education.
(2) Consistent with paragraph (a) of this section and § 694.16(a), States must use funds held in reserve to make scholarships to eligible students.
(3) Scholarships must be made to all students who are eligible under the definition in paragraph (b) of this section. A grantee may not impose additional eligibility criteria that would have the effect of limiting or denying a scholarship to an eligible student.
(d) A State using a priority approach may award scholarships under paragraph (a) of this section to eligible students identified by priority at any time during the grant award period rather than reserving scholarship funds for use only in the seventh year of a project or after the grant award period.
(e) States providing scholarships must provide information on the eligibility requirements for the scholarships to all participating students upon the students' entry into the GEAR UP program.
(f) A State must provide scholarship funds as described in this section to all eligible students who attend an institution of higher education in the State, and may provide these scholarship funds to eligible students who attend institutions of higher education outside the State.
(g) A State or a Partnership that chooses to participate in the scholarship component in accordance with section 404E of the HEA may award continuation scholarships in successive award years to each student who received an initial scholarship and who is enrolled or accepted for enrollment in a program of undergraduate instruction at an institution of higher education.
(h) A GEAR UP scholarship, provided under section 404E of the HEA, may not be considered in the determination of a student's eligibility for other grant assistance provided under title IV of the HEA, except that in no case may the total amount of student financial assistance awarded to a student under title IV of the HEA exceed the student's total cost of attendance.
A GEAR UP Partnership that does not participate in the GEAR UP scholarship component may provide financial assistance for postsecondary education with non-Federal funds, and those funds may be used to satisfy the matching requirement.
The following requirements apply only to section 404E scholarship awards for grantees whose initial GEAR UP grant awards were made on or after August 14, 2008, and to any section 404E scholarship awards for grantees whose initial GEAR UP grant awards were made prior to August 14, 2008, but who, pursuant to § 694.12(b)(2), elect to use the § 694.14 requirements (rather than the § 694.13 requirements):
(a) Scholarship funds held in reserve by States under § 694.14(c) or by Partnerships under section 404D(b)(7) of the HEA that are not used by eligible students as defined in § 694.14(b) within six years of the students' scheduled completion of secondary school may be redistributed by the grantee to other eligible students.
(b) Any Federal scholarship funds that are not used by eligible students within six years of the students' scheduled completion of secondary school, and are not redistributed by the grantee to other eligible students, must be returned to the Secretary within 45 days after the six-year period for expending the scholarship funds expires.
(c) Grantees that reserve funds for scholarships must annually furnish information, as the Secretary may require, on the amount of Federal and non-Federal funds reserved and held for GEAR UP scholarships and the disbursement of these scholarship funds to eligible students until these funds are fully expended or returned to the Secretary.
(d) A scholarship fund is subject to audit or monitoring by authorized representatives of the Secretary throughout the life of the fund.
The Governor of a State must designate which State agency applies for, and administers, a State grant under GEAR UP.
(a) A State or Partnership must provide, in accordance with procedures the Secretary may specify, a 21st Century Scholar Certificate to each student participating in its GEAR UP project.
(b) 21st Century Scholarship Certificates must be personalized and indicate the amount of Federal financial aid for college and the estimated amount of any scholarship provided under section 404E of the HEA, if applicable, that a student may be eligible to receive.
The Secretary awards competitive preference priority points to an eligible applicant for a State grant that has both—
(a) Carried out a successful State GEAR UP grant prior to August 14, 2008, determined on the basis of data (including outcome data) submitted by the applicant as part of its annual and final performance reports, and the applicant's history of compliance with applicable statutory and regulatory requirements; and
(b) A prior, demonstrated commitment to early intervention leading to college access through collaboration and replication of successful strategies.
(a) The Secretary authorizes an eligible State or Partnership to provide GEAR UP services to students attending an institution of higher education if the State or Partnership—
(1) Applies for and receives a new GEAR UP award after August 14, 2008, and
(2) In its application, requested a seventh year so that it may continue to provide services to students through their first year of attendance at an institution of higher education.
(b) A State grantee that uses a priority (rather than or in addition to a cohort) approach to identify participating students may, consistent with its approved application and at any time during the project period, provide services to students during their first year of attendance at an institution of higher education, provided that the grantee continues to provide all required services throughout the Federal budget period to GEAR UP students still enrolled in a local educational agency.
(c) If a grantee is awarded a seven year grant, consistent with the grantee's approved application, during the seventh year of the grant the grantee—
(1) Must provide services to students in their first year of attendance at an institution of higher education; and
(2) May choose to provide services to high school students who have yet to graduate.
(d) Grantees that continue to provide services under this part to students through their first year of attendance at an institution of higher education must, to the extent practicable, coordinate with other campus programs, including academic support services to enhance, not duplicate service.
A grantee must provide comprehensive mentoring, outreach, and supportive services to students participating in the GEAR UP program. These services must include the following activities:
(a) Providing information regarding financial aid for postsecondary education to eligible participating students.
(b) Encouraging student enrollment in rigorous and challenging curricula and coursework, in order to reduce the need for remedial coursework at the postsecondary level.
(c) Implementing activities to improve the number of participating students who—
(1) Obtain a secondary school diploma, and
(2) Complete applications for, and enroll in, a program of postsecondary education.
(d) In the case of a State grantee that has not received a 100-percent waiver under section 404E(b)(2) of the HEA, providing scholarships in accordance with section 404E of the HEA.
A grantee may use grant funds to carry out one or more of the following services and activities:
(a) Providing tutors and mentors, who may include adults or former participants in a GEAR UP program, for eligible students.
(b) Conducting outreach activities to recruit priority students (identified in section 404D(d) of the HEA) to participate in program activities.
(c) Providing supportive services to eligible students.
(d) Supporting the development or implementation of rigorous academic curricula, which may include college preparatory, Advanced Placement, or International Baccalaureate programs, and providing participating students access to rigorous core academic courses that reflect challenging State academic standards.
(e) Supporting dual or concurrent enrollment programs between the secondary school and institution of higher education partners of a GEAR UP Partnership, and other activities that support participating students in—
(1) Meeting challenging State academic standards;
(2) Successfully applying for postsecondary education;
(3) Successfully applying for student financial aid; and
(4) Developing graduation and career plans, including career awareness and planning assistance as they relate to a rigorous academic curriculum.
(f) Providing special programs or tutoring in science, technology, engineering, or mathematics.
(g) For Partnerships, providing scholarships described in section 404E of the HEA, and for all grantees providing appropriate administrative support for GEAR UP scholarships.
(h) Introducing eligible students to institutions of higher education, through trips and school-based sessions.
(i) Providing an intensive extended school day, school year, or summer program that offers—
(1) Additional academic classes; or
(2) Assistance with college admission applications.
(j) Providing other activities designed to ensure secondary school completion and postsecondary education enrollment of at-risk children, such as:
(1) Identification of at-risk children.
(2) After-school and summer tutoring.
(3) Assistance to at-risk children in obtaining summer jobs.
(4) Academic counseling.
(5) Financial and economic literacy education or counseling.
(6) Volunteer and parent involvement.
(7) Encouraging former or current participants of a GEAR UP program to serve as peer counselors.
(8) Skills assessments.
(9) Personal and family counseling, and home visits.
(10) Staff development.
(11) Programs and activities that are specially designed for students who are limited English proficient.
(k) Enabling eligible students to enroll in Advanced Placement or International Baccalaureate courses, or college entrance examination preparation courses.
(l) Providing services to eligible students in the participating cohort described in § 694.3 through the first year of attendance at an institution of higher education.
(m) Fostering and improving parent and family involvement in elementary and secondary education by promoting the advantages of a college education, and emphasizing academic admission requirements and the need to take college preparation courses, through parent engagement and leadership activities.
(n) Disseminating information that promotes the importance of higher education, explains college preparation and admission requirements, and raises awareness of the resources and services provided by the eligible entities to eligible students, their families, and communities.
(o) For a GEAR UP Partnership grant, in the event that matching funds described in the approved application are no longer available, engaging other potential partners in a collaborative manner to provide matching resources and to participate in other activities authorized in §§ 694.21, 694.22, and 694.23.
In addition to the required and permissible activities identified in §§ 694.21 and 694.22, a State may use grant funds to carry out one or more of the following services and activities:
(a) Providing technical assistance to—
(1) Secondary schools that are located within the State; or
(2) Partnerships that are eligible to apply for a GEAR UP grant and that are located within the State.
(b) Providing professional development opportunities to individuals working with eligible cohorts of students.
(c) Providing administrative support to help build the capacity of Partnerships to compete for and manage grants awarded under the GEAR UP program.
(d) Providing strategies and activities that align efforts in the State to prepare eligible students to attend and succeed in postsecondary education, which may include the development of graduation and career plans.
(e) Disseminating information on the use of scientifically valid research and best practices to improve services for eligible students.
(f)(1) Disseminating information on effective coursework and support services that assist students in achieving the goals described in paragraph (f)(2)(ii) of this section, and
(2) Identifying and disseminating information on best practices with respect to—
(i) Increasing parental involvement; and
(ii) Preparing students, including students with disabilities and students who are limited English proficient, to succeed academically in, and prepare financially for, postsecondary education.
(g) Working to align State academic standards and curricula with the expectations of postsecondary institutions and employers.
(h) Developing alternatives to traditional secondary school that give students a head start on attaining a recognized postsecondary credential (including an industry-recognized certificate, an apprenticeship, or an associate's or a bachelor's degree), including school designs that give students early exposure to college-level courses and experiences and allow students to earn transferable college credits or an associate's degree at the same time as a secondary school diploma.
(i) Creating community college programs for individuals who have dropped out of high school that are personalized drop-out recovery programs, and that allow drop-outs to complete a secondary school diploma and begin college-level work.
Consistent with their approved applications and § 694.20, a grantee may provide any services to students in their first year of attendance at an institution of higher education that will help those students succeed in school, and that do not duplicate services otherwise available to them. Examples of services that may be provided include—
(a) Orientation services including introduction to on-campus services and resources;
(b) On-going counseling to students either in person or though electronic or other means of correspondence;
(c) Assistance with course selection for the second year of postsecondary education;
(d) Assistance with choosing and declaring an academic major;
(e) Assistance regarding academic, social, and personal areas of need;
(f) Referrals to providers of appropriate services;
(g) Tutoring, mentoring, and supplemental academic support;
(h) Assistance with financial planning;
(i) Career counseling and advising services; or
(j) Advising students about transferring to other schools.
If a Partnership or State is awarded a GEAR UP grant on or after August 14, 2008 (i.e., initial grant), the grant ends before all students who received GEAR UP services under the grant have completed the twelfth grade, and the grantee receives a new award in a subsequent GEAR UP competition (i.e., new grant), the grantee must—
(a) Continue to provide services required by or authorized under §§ 694.21, 694.22, and 694.23 to all students who received GEAR UP services under the initial grant and remain enrolled in secondary schools until they complete the twelfth grade; and
(b) Provide the services specified in paragraph (a) of this section by using Federal GEAR UP funds awarded for the new grant or funds from the non-Federal matching contribution required under the new grant.
The purpose of this part is to effectuate section 119 of the Rehabilitation, Comprehensive Services, and Developmental Disabilities Amendments of 1978, which amended section 504 of the Rehabilitation Act of 1973 to prohibit discrimination on the basis of handicap in programs or activities conducted by Executive agencies or the United States Postal Service.
This part (§§ 1200.101-1200.170) applies to all programs or activities conducted by the agency, except for programs or activities conducted outside the United States that do not involve individuals with handicaps in the United States.
For purposes of this part, the term—
Assistant Attorney General means the Assistant Attorney General, Civil Rights Division, United States Department of Justice.
Auxiliary aids means services or devices that enable persons with impaired sensory, manual, or speaking skills to have an equal opportunity to participate in, and enjoy the benefits of, programs or activities conducted by the agency. For example, auxiliary aids useful for persons with impaired vision include readers, Brailled materials, audio recordings, and other similar services and devices. Auxiliary aids useful for persons with impaired hearing include telephone handset amplifiers, telephones compatible with hearing aids, telecommunication devices for deaf persons (TTD's), interpreters, notetakers, written materials, and other similar services and devices.
Complete complaint means a written statement that contains the complainant's name and address and describes the agency's alleged discriminatory action in sufficient detail to inform the agency of the nature and date of the alleged violation of section 504. It shall be signed by the complainant or by someone authorized to do so on his or her behalf. Complaints filed on behalf of classes or third parties shall describe or identify (by name, if possible) the alleged victims of discrimination.
Facility means all or any portion of buildings, structures, equipment, roads, walks, parking lots, rolling stock or other conveyances, or other real or personal property.
Historic preservation programs means programs conducted by the agency that have preservation of historic properties as a primary purpose.
Historic properties means those properties that are listed or eligible for listing in the National Register of Historic Places or properties designated as historic under a statute of the appropriate State or local government body.
Individual with handicaps means any person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such an impairment, or is regarded as having such an impairment. As used in this definition, the phrase:
(1) Physical or mental impairment includes—
(i) Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: Neurological; musculoskeletal; special sense organs; respiratory, including speech organs; cardiovascular; reproductive; digestive; genitourinary; hemic and lymphatic; skin; and endocrine; or
(ii) Any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. The term “physical or mental impairment” includes, but is not limited to, such diseases and conditions as orthopedic, visual, speech, and hearing impairments, cerebral palsy, epilepsy, muscular dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental retardation, emotional illness, HIV disease (whether symptomatic or asymptomatic), and drug addiction and alcoholism.
(2) Major life activities include functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.
(3) Has a record of such an impairment means has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.
(4) Is regarded as having an impairment means—
(i) Has a physical or mental impairment that does not substantially limit major life activities but is treated by the agency as constituting such a limitation;
(ii) Has a physical or mental impairment that substantially limits major life activities only as a result of the attitudes of others toward such impairment; or
(iii) Has none of the impairments defined in paragraph (1) of this definition but is treated by the agency as having such an impairment.
Qualified individual with handicaps means—
(1) With respect to preschool, elementary, or secondary education services provided by the agency, an individual with handicaps who is a member of a class of persons otherwise entitled by statute, regulation, or agency policy to receive education services from the agency;
(2) With respect to any other agency program or activity under which a person is required to perform services or to achieve a level of accomplishment, an individual with handicaps who meets the essential eligibility requirements and who can achieve the purpose of the program or activity without modifications in the program or activity that the agency can demonstrate would result in a fundamental alteration in its nature;
(3) With respect to any other program or activity, an individual with handicaps who meets the essential eligibility requirements for participation in, or receipt of benefits from, that program or activity; and
(4) Qualified handicapped person as that term is defined for purposes of employment in 29 CFR 1614.203(a)(6), which is made applicable to this part by § 1200.140.
Section 504 means section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended. As used in this part, section 504 applies only to programs or activities conducted by Executive agencies and not to federally assisted programs.
Substantial impairment means a significant loss of the integrity of finished materials, design quality, or special character resulting from a permanent alteration.
(a) The agency shall, by November 28, 1994, evaluate its current policies and practices, and the effects thereof, that do not or may not meet the requirements of this part and, to the extent modification of any such policies and practices is required, the agency shall proceed to make the necessary modifications.
(b) The agency shall provide an opportunity to interested persons, including individuals with handicaps or organizations representing individuals with handicaps, to participate in the self-evaluation process by submitting comments (both oral and written).
(c) The agency shall, for at least three years following completion of the self-evaluation, maintain on file and make available for public inspection:
(1) A description of areas examined and any problems identified; and
(2) A description of any modifications made.
The agency shall make available to employees, applicants, participants, beneficiaries, and other interested persons such information regarding the provisions of this part and its applicability to the programs or activities conducted by the agency, and make such information available to them in such manner as the head of the agency finds necessary to apprise such persons of the protections against discrimination assured them by section 504 and this part.
(a) No qualified individual with handicaps shall, on the basis of handicap, be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity conducted by the agency.
(b)(1) The agency, in providing any aid, benefit, or service, may not, directly or through contractual, licensing, or other arrangements, on the basis of handicap—
(i) Deny a qualified individual with handicaps the opportunity to participate in or benefit from the aid, benefit, or service;
(ii) Afford a qualified individual with handicaps an opportunity to participate in or benefit from the aid, benefit, or service that is not equal to that afforded others;
(iii) Provide a qualified individual with handicaps with an aid, benefit, or service that is not as effective in according equal opportunity to obtain the same result, to gain the same benefit, or to reach the same level of achievement as that provided to others;
(iv) Provide different or separate aid, benefits, or services to individuals with handicaps or to any class of individuals with handicaps than is provided to others unless such action is necessary to provide qualified individuals with handicaps with aid, benefits, or services that are as effective as those provided to others;
(v) Deny a qualified individual with handicaps the opportunity to participate as a member of planning or advisory boards;
(vi) Otherwise limit a qualified individual with handicaps in the enjoyment of any right, privilege, advantage, or opportunity enjoyed by others receiving the aid, benefit, or service.
(2) The agency may not deny a qualified individual with handicaps the opportunity to participate in programs or activities that are no separate or different, despite the existence of permissibly separate or different programs or activities.
(3) The agency may not, directly or through contractual or other arrangements, utilize criteria or methods of administration the purpose or effect of which would—
(i) Subject qualified individuals with handicaps to discrimination on the basis of handicap; or
(ii) Defeat or substantially impair accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(4) The agency may not, in determining the site or location of a facility, make selections the purpose or effect of which would—
(i) Exclude individuals with handicaps from, deny them the benefits of, or otherwise subject them to discrimination under any program or activity conducted by the agency; or
(ii) Defeat or substantially impair the accomplishment of the objectives of a program or activity with respect to individuals with handicaps.
(5) The agency, in the selection of procurement contractors, may not use criteria that subject qualified individuals with handicaps to discrimination on the basis of handicap.
(6) The agency may not administer a licensing or certification program in a manner that subjects qualified individuals with handicaps to discrimination on the basis of handicap, nor may the agency establish requirements for the programs or activities of licensees or certified entities that subject qualified individuals with handicaps to discrimination on the basis of handicap. However, the programs or activities of entities that are licensed or certified by the agency are not, themselves, covered by this part.
(c) The exclusion of nonhandicapped persons from the benefits of a program limited by Federal statute or Executive order to individuals with handicaps or the exclusion of a specific class of individuals with handicaps from a program limited by Federal statute or Executive order to a different class of individuals with handicaps is not prohibited by this part.
(d) The agency shall administer programs and activities in the most integrated setting appropriate to the needs of qualified individuals with handicaps.
No qualified individual with handicaps shall, on the basis of handicap, be subjected to discrimination in employment under any program or activity conducted by the agency. The definitions, requirements, and procedures of section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791), as established by the Equal Employment Opportunity Commission in 29 CFR part 1614, shall apply to employment in federally conducted programs or activities.
Except as otherwise provided in § 1200.150, no qualified individual with handicaps shall, because the agency's facilities are inaccessible to or unusable by individuals with handicaps, be denied the benefits of, be excluded from participation in, or otherwise be subjected to discrimination under any program or activity conducted by the agency.
(a) General. The agency shall operate each program or activity so that the program or activity, when viewed in its entirety, is readily accessible to and usable by individuals with handicaps. This paragraph does not—
(1) Necessarily require the agency to make each of its existing facilities accessible to and usable by individuals with handicaps;
(2) In the case of historic preservation programs, require the agency to take any action that would result in a substantial impairment of significant historic features of an historic property; or
(3) Require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 1200.150(a) would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity, and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action would result in such an alteration or such burdens, the agency shall take any other action that result in such an alteration or such burdens but would nevertheless ensure that individuals with handicaps receive the benefits and services of the program or activity.
(b) Methods—(1) General. The agency may comply with the requirements of this section through such means as redesign of equipment, reassignment of services to accessible buildings, assignment of aides to beneficiaries, home visits, delivery of services at alternate accessible sites, alteration of existing facilities and construction of new facilities, use of accessible rolling stock, or any other methods that result in making its programs or activities readily accessible to and usable by individuals with handicaps. The agency is not required to make structural changes in existing facilities where other methods are effective in achieving compliance with this section. The agency, in making alterations to existing buildings, shall meet accessibility requirements to the extent compelled by the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), and any regulations implementing it. In choosing among available methods for meeting the requirements of this section, the agency shall give priority to those methods that offer programs and activities to qualified individuals with handicaps in the most integrated setting appropriate.
(2) Historic preservation programs. In meeting the requirements of § 1200.150(a) in historic preservation programs, the agency shall give priority to methods that provide physical access to individuals with handicaps. In cases where a physical alteration to an historic property is not required because of § 1200.150(a)(2) or (a)(3), alternative methods of achieving program accessibility include—
(i) Using audio-visual materials and devices to depict those portions of an historic property that cannot otherwise be made accessible;
(ii) Assigning persons to guide individuals with handicaps into or through portions of historic properties that cannot otherwise be made accessible; or
(iii) Adopting other innovative methods.
(c) Time period for compliance. The agency shall comply with the obligations established under this section by January 24, 1994, except that where structural changes in facilities are undertaken, such changes shall be made by November 26, 1996, but in any event as expeditiously as possible.
(d) Transition plan. In the event that structural changes to facilities will be undertaken to achieve program accessibility, the agency shall develop, by May 26, 1994, a transition plan setting forth the steps necessary to complete such changes. The agency shall provide an opportunity to interested persons, including individuals with handicaps or organizations representing individuals with handicaps, to participate in the development of the transition plan by submitting comments (both oral and written). A copy of the transition plan shall be made available for public inspection. The plan shall, at a minimum—
(1) Identify physical obstacles in the agency's facilities that limit the accessibility of its programs or activities to individuals with handicaps;
(2) Describe in detail the methods that will be used to make the facilities accessible;
(3) Specify the schedule for taking the steps necessary to achieve compliance with this section and, if the time period of the transition plan is longer than one year, identify steps that will be taken during each year of the transition period; and
(4) Indicate the official responsible for implementation of the plan.
Each building or part of a building that is constructed or altered by, on behalf of, or for the use of the agency shall be designed, constructed, or altered so as to be readily accessible to and usable by individuals with handicaps. The definitions, requirements, and standards of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established in 41 CFR 101-19.600 to 101-19.607, apply to buildings covered by this section.
(a) The agency shall take appropriate steps to ensure effective communication with applicants, participants, personnel of other Federal entities, and members of the public.
(1) The agency shall furnish appropriate auxiliary aids where necessary to afford an individual with handicaps an equal opportunity to participate in, and enjoy the benefits of, a program or activity conducted by the agency.
(i) In determining what type of auxiliary aid is necessary, the agency shall give primary consideration to the requests of the individual with handicaps.
(ii) The agency need not provide individually prescribed devices, readers for personal use or study, or other devices of a personal nature.
(2) Where the agency communicates with applicants and beneficiaries by telephone, telecommunication devices for deaf persons (TDD's) or equally effective telecommunication systems shall be used to communicate with persons with impaired hearing.
(b) The agency shall ensure that interested persons, including persons with impaired vision or hearing, can obtain information as to the existence and location of accessible services, activities, and facilities.
(c) The agency shall provide signage at a primary entrance to each of its inaccessible facilities, directing users to a location at which they can obtain information about accessible facilities. The international symbol for accessibility shall be used at each primary entrance of an accessible facility.
(d) This section does not require the agency to take any action that it can demonstrate would result in a fundamental alteration in the nature of a program or activity or in undue financial and administrative burdens. In those circumstances where agency personnel believe that the proposed action would fundamentally alter the program or activity or would result in undue financial and administrative burdens, the agency has the burden of proving that compliance with § 1200.160 would result in such alteration or burdens. The decision that compliance would result in such alteration or burdens must be made by the agency head or his or her designee after considering all agency resources available for use in the funding and operation of the conducted program or activity and must be accompanied by a written statement of the reasons for reaching that conclusion. If an action required to comply with this section would result in such an alteration or such burdens, the agency shall take any other action that would not result in such an alteration or such burdens but would nevertheless ensure that, to the maximum extent possible, individuals with handicaps receive the benefits and services of the program or activity.
(a) Except as provided in paragraph (b) of this section, this section applies to all allegations of discrimination on the basis of handicap in programs and activities conducted by the agency.
(b) The agency shall process complaints alleging violations of section 504 with respect to employment according to the procedures established by the Equal Employment Opportunity Commission in 29 CFR part 1614 pursuant to section 501 of the Rehabilitation Act of 1973 (29 U.S.C. 791).
(c) The Executive Director shall be responsible for coordinating implementation of this section. Complaints may be sent to the National Council on Disability, 800 Independence Avenue, SW., suite 814, Washington, DC 20591.
(d) The agency shall accept and investigate all complete complaints for which it has jurisdiction. All complete complaints must be filed within 180 days of the alleged act of discrimination. The agency may extend this time period for good cause.
(e) If the agency receives a complaint over which it does not have jurisdiction, it shall promptly notify the complainant and shall make reasonable efforts to refer the complaint to the appropriate Government entity.
(f) The agency shall notify the Architectural and Transportation Barriers Compliance Board upon receipt of any complaint alleging that a building or facility that is subject to the Architectural Barriers Act of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to and usable by individuals with handicaps.
(g) Within 180 days of the receipt of a complete complaint for which it has jurisdiction, the agency shall notify the complainant of the results of the investigation in a letter containing—
(1) Findings of fact and conclusions of law;
(2) A description of a remedy for each violation found; and
(3) A notice of the right to appeal.
(h) Appeals of the findings of fact and conclusions of law or remedies must be filed by the complainant within 90 days of receipt from the agency of the letter required by § 1200.170(g). The agency may extend this time for good cause.
(i) Timely appeals shall be accepted and processed by the head of the agency.
(j) The head of the agency shall notify the complainant of the results of the appeal within 60 days of the receipt of the request. If the head of the agency determines that additional information is needed from the complainant, he or she shall have 60 days from the date of receipt of the additional information to make his or her determination on the appeal.
(k) The time limits cited in paragraphs (g) and (j) of this section may be extended with the permission of the Assistant Attorney General.
(l) The agency may delegate its authority for conducting complaint investigations to other Federal agencies, except that the authority for making the final determination may not be delegated to another agency.